----

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**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,        D.C. 20549**

**FORM        10-Q**

|   | **x** | **Quarterly                  Report Pursuant To Section 13 or 15(d) of the Securities Exchange                  Act of                  1934 for the Quarterly Period Ended March 31,                  2007** |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **or** |
|--------|--------|

|   | ** ̈** | **Transition                  Report Pursuant to Section 13 or 15(d) of the Securities Exchange                  Act of                  1934 for the Transition Period                  from    to** |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Commission        File Number 0-10763**

**Atrion        Corporation**

|   | **Delaware**                                                                    |   | **63-0821819**                                        |   |
|--------|---------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|   | (State                  or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S.                  Employer Identification No.) |   |

|   | **One                  Allentown Parkway, Allen, Texas**  | **75002**                   |   |
|--------|-----------------------------------------------------------|-----------------------------|--------|
|   | (Address                  of Principal Executive Offices) | (Zip                  Code) |   |

|                                                                                          |  **(972)                  390-9800** |   |
|-----------------------------------------------------------------------------------------------|-------------------------------------------|--------|
|   (Registrant’s                  Telephone Number, Including Area Code)  |

| Large                  accelerated filer   ̈ | Accelerated                  filer x | Non-accelerated                  filer  ̈ |
|------------------------------------------------------------|--------------------------------------|-----------------------------------------------|

|  **Title                  of Each Class**               |   | **Number                  of Shares Outstanding at****April                  27, 2007** |
|--------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|
| **Common                  stock, Par Value $0.10 per share** |   | **1,887,607**                                                                           |

----

----

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**ATRION        CORPORATION AND SUBSIDIARIES**

**TABLE        OF CONTENTS**

| **PART                  I.    Financial                  Information** | **2**  |
|--------------------------------------------------------------------------------------------|--------|
|                                                                                       |   |   |   |
| **Item                  1.**                                                               |   | Financial                  Statements |   |
|                                                                                       |   |   |   |
|                                                                                       |   | Consolidated                  Statements of Income (Unaudited)                  For                  the Three Months Ended March 31, 2007 and                  2006 | 3 |
|                                                                                       |   |   |   |
|                                                                                       |   | Consolidated                  Balance Sheets (Unaudited) March                  31, 2007 and December 31, 2006 | 4 |
|                                                                                       |   |   |   |
|                                                                                       |   | Consolidated                  Statements of Cash Flows (Unaudited)                  For                  the Three Months Ended March 31, 2007 and                  2006 | 5 |
|                                                                                       |   |   |   |
|                                                                                       |   | Notes                  to Consolidated Financial Statements                  (Unaudited) | 6 |
|                                                                                       |   |   |   |
| **Item                  2.**                                                               |   | Management's                  Discussion and Analysis of Financial Condition                  and Results of Operations | 9 |
|                                                                                       |   |   |   |
| **Item                  3**.                                                               |   | Quantitative                  and Qualitative Disclosures About Market                  Risk | 12 |
|                                                                                       |   |   |   |
| **Item                  4.**                                                               |   | Controls                  and Procedures | 12 |
|                                                                                       |   |   |   |
| **PART                  II.    Other                  Information**    | **13** |
|                                                                                       |   |   |   |
| **Item                  6.**                                                               |   | Exhibits                  and Reports on Form 8-K | 13 |
|                                                                                       |   |   |   |
| **SIGNATURES**                                                                             | **14** |

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*Table            of Contents*

**PART        I**

**FINANCIAL        INFORMATION**

----

*Table            of Contents*

| **Item                  1.** | **Financial                  Statements** |
|------------------------------|-------------------------------------------|

**ATRION        CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF INCOME**

**(Unaudited)**

|                                                             |   | **Three                      Months Ended****March                      31** |   |
|------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                                             |   | **2007**                                                                     |   |   | **2006** |   |
|                                                             |   |  (In                      thousands, except per share data)             |   |
| Revenues                                                         |   | $                                                                            | 23,037 |   |   | $ | 19,503 |   |
| Cost                      of goods sold                          |   |                                                                         | 13,377 |   |   |   | 12,155 |   |
| Gross                      profit                                |   |                                                                         | 9,660  |   |   |   | 7,348 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Operating                      expenses:                         |   |                                                                         |   |   |   |   |   |   |
| Selling                                                          |   |                                                                         | 1,651  |   |   |   | 1,615 |   |
| General                      and administrative                  |   |                                                                         | 2,616  |   |   |   | 2,004 |   |
| Research                      and development                    |   |                                                                         | 656    |   |   |   | 677 |   |
|                                                             |   |                                                                         | 4,923  |   |   |   | 4,296 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Operating                      income                            |   |                                                                         | 4,737  |   |   |   | 3,052 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Other                      income:                               |   |                                                                         |   |   |   |   |   |   |
| Interest                      income                             |   |                                                                         | 9      |   |   |   | 10 |   |
| Interest                      expense                            |   |                                                                         | (141   | ) |   |   | -- |   |
| Other                      income                                |   |                                                                         | --     |   |   |   | -- |   |
|                                                             |   |                                                                         | (132   | ) |   |   | 10 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Income                      before provision for income taxes    |   |                                                                         | 4,605  |   |   |   | 3,062 |   |
| Provision                      for income taxes                  |   |                                                                         | (1,469 | ) |   |   | (956 | ) |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Net                      income                                  |   | $                                                                            | 3,136  |   |   | $ | 2,106 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Income                      per basic share                      |   | $                                                                            | 1.68   |   |   | $ | 1.15 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Weighted                      average basic shares outstanding   |   |                                                                         | 1,872  |   |   |   | 1,835 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Income                      per diluted share                    |   | $                                                                            | 1.59   |   |   | $ | 1.08 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Weighted                      average diluted shares outstanding |   |                                                                         | 1,975  |   |   |   | 1,945 |   |
|                                                             |   |                                                                         |   |   |   |   |   |   |
| Dividends                      per common share                  |   | $                                                                            | 0.20   |   |   | $ | 0.17 |   |

----

*Table              of Contents*

**ATRION          CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED          BALANCE SHEETS**

**(in          thousands)**

| **Assets**                                                                                                                                       |   | **March                    31,****2007****(unaudited)** |    |   | **December                    31,****2006****(unaudited)** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|---------|--------|------------------------------------------------------------|--------|
| Current                    assets:                                                                                                               |   |                                                    |    |   |                                                       |   |
| Cash                    and cash equivalents                                                                                                     |   | $                                                       | 307     |   |                                                       | $      | 333 |   |
| Accounts                    receivable                                                                                                           |   |                                                    | 11,077  |   |                                                       |   | 10,542 |   |
| Inventories                                                                                                                                      |   |                                                    | 17,208  |   |                                                       |   | 17,115 |   |
| Prepaid                    expenses                                                                                                              |   |                                                    | 530     |   |                                                       |   | 1,530 |   |
| Other                                                                                                                                            |   |                                                    | 1,138   |   |                                                       |   | 1,138 |   |
|                                                                                                                                             |   |                                                    | 30,260  |   |                                                       |   | 30,658 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
| Property,                    plant and equipment                                                                                                 |   |                                                    | 83,477  |   |                                                       |   | 82,536 |   |
| Less                    accumulated depreciation and amortization                                                                                |   |                                                    | 31,784  |   |                                                       |   | 31,094 |   |
|                                                                                                                                             |   |                                                    | 51,693  |   |                                                       |   | 51,442 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
| Other                    assets and deferred charges:                                                                                            |   |                                                    |    |   |                                                       |   |   |   |
| Patents                                                                                                                                          |   |                                                    | 2,186   |   |                                                       |   | 2,264 |   |
| Goodwill                                                                                                                                         |   |                                                    | 9,730   |   |                                                       |   | 9,730 |   |
| Other                                                                                                                                            |   |                                                    | 1,769   |   |                                                       |   | 1,678 |   |
|                                                                                                                                             |   |                                                    | 13,685  |   |                                                       |   | 13,672 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
|                                                                                                                                             |   | $                                                       | 95,638  |   |                                                       | $      | 95,772 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
| **Liabilities                    and Stockholders’ Equity**                                                                                |   |                                                    |    |   |                                                       |   |   |   |
| Current                    liabilities:                                                                                                          |   |                                                    |    |   |                                                       |   |   |   |
| Accounts                    payable and accrued liabilities                                                                                      |   | $                                                       | 6,381   |   |                                                       | $      | 6,041 |   |
| Accrued                    income and other taxes                                                                                                |   |                                                    | 1,111   |   |                                                       |   | 882 |   |
|                                                                                                                                             |   |                                                    | 7,492   |   |                                                       |   | 6,923 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
| Line                    of credit                                                                                                                |   |                                                    | 6,502   |   |                                                       |   | 11,399 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
| Other                    non-current liabilities                                                                                                 |   |                                                    | 7,580   |   |                                                       |   | 6,555 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
| Stockholders’                    equity:                                                                                                   |   |                                                    |    |   |                                                       |   |   |   |
| Common                    shares, par value $0.10 per share; authorized 10,000 shares,                    issued 3,420                    shares |   |                                                    | 342     |   |                                                       |   | 342 |   |
| Paid-in                    capital                                                                                                               |   |                                                    | 14,477  |   |                                                       |   | 14,140 |   |
| Accumulated                    other comprehensive loss                                                                                          |   |                                                    | (892    | )      |                                                       |   | (892 | ) |
| Retained                    earnings                                                                                                             |   |                                                    | 94,451  |   |                                                       |   | 91,708 |   |
| Treasury                    shares,1,537 at March 31, 2007 and 1,546 at December 31, 2006,                    at                    cost         |   |                                                    | (34,314 | )      |                                                       |   | (34,403 | ) |
|  Total                    stockholders’ equity                                                                                        |   |                                                    | 74,064  |   |                                                       |   | 70,895 |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
|                                                                                                                                             |   |                                                    |    |   |                                                       |   |   |   |
|                                                                                                                                             |   | $                                                       | 95,638  |   |                                                       | $      | 95,772 |   |

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*Table              of Contents*

**ATRION            CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED            STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                                   |   |  **Three                    Months Ended****March                    31,**    |    |
|------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|---------|
|                                                                                                                   |   | **2007**                                                                                          |    |   | **2006** |   |
|                                                                                                                   |   | (In                    thousands)                                                                 |    |
| Cash                    flows from operating activities:                                                               |   |                                                                                              |    |   |   |   |
| Net                    income                                                                                          |   | $                                                                                                 | 3,136   |   |   | $ | 2,106 |   |
| Adjustments                    to reconcile net income tonet cash provided by operating                    activities: |   |                                                                                              |    |   |   |   |   |   |
| Depreciation                    and amortization                                                                       |   |                                                                                              | 1,305   |   |   |   | 1,160 |   |
| Deferred                    income taxes                                                                               |   |                                                                                              | 67      |   |   |   | (18 | ) |
| Stock-based                    compensation                                                                            |   |                                                                                              | 55      |   |   |   | 14 |   |
|                                                                                                                   |   |                                                                                              | 4,563   |   |   |   | 3,262 |   |
|                                                                                                                   |   |                                                                                              |    |   |   |   |   |   |
| Changes                    in operating assets and liabilities:                                                        |   |                                                                                              |    |   |   |   |   |   |
| Accounts                    receivable                                                                                 |   |                                                                                              | (536    | ) |   |   | (1,294 | ) |
| Inventories                                                                                                            |   |                                                                                              | (93     | ) |   |   | 315 |   |
| Prepaid                    expenses                                                                                    |   |                                                                                              | 1,000   |   |   |   | 196 |   |
| Other                    non-current assets                                                                            |   |                                                                                              | (91     | ) |   |   | 352 |   |
| Accounts                    payable and current liabilities                                                            |   |                                                                                              | 350     |   |   |   | 812 |   |
| Accrued                    income and other taxes                                                                      |   |                                                                                              | 1,161   |   |   |   | 28 |   |
| Other                    non-current liabilities                                                                       |   |                                                                                              | --      |   |   |   | (23 | ) |
|                                                                                                                   |   |                                                                                              | 6,354   |   |   |   | 3,648 |   |
|                                                                                                                   |   |                                                                                              |    |   |   |   |   |   |
| Cash                    flows from investing activities:                                                               |   |                                                                                              |    |   |   |   |   |   |
| Property,                    plant and equipment additions                                                             |   |                                                                                              | (1,478  | ) |   |   | (7,343 | ) |
|                                                                                                                   |   |                                                                                              |    |   |   |   |   |   |
| Cash                    flows from financing activities:                                                               |   |                                                                                              |    |   |   |   |   |   |
| Line                    of credit advances                                                                             |   |                                                                                              | 6,104   |   |   |   | 10,586 |   |
| Line                    of credit repayments                                                                           |   |                                                                                              | (11,001 | ) |   |   | (6,284 | ) |
| Exercise                    of stock options                                                                           |   |                                                                                              | 204     |   |   |   | 462 |   |
| Purchase                    of treasury stock                                                                          |   |                                                                                              | --      |   |   |   | (1,594 | ) |
| Tax                    benefit related to stock options                                                                |   |                                                                                              | 168     |   |   |   | 502 |   |
| Dividends                    paid                                                                                      |   |                                                                                              | (377    | ) |   |   | (313 | ) |
|                                                                                                                   |   |                                                                                              | (4,902  | ) |   |   | 3,359 |   |
|                                                                                                                   |   |                                                                                              |    |   |   |   |   |   |
| Net                    change in cash and cash equivalents                                                             |   |                                                                                              | (26     | ) |   |   | (336 | ) |
| Cash                    and cash equivalents at beginning of period                                                    |   |                                                                                              | 333     |   |   |   | 525 |   |
| Cash                    and cash equivalents at end of period                                                          |   | $                                                                                                 | 307     |   |   | $ | 189 |   |
|                                                                                                                   |   |                                                                                              |    |   |   |   |   |   |
|                                                                                                                   |   |                                                                                              |    |   |   |   |   |   |
|                                                                                                                   |   |                                                                                              |    |   |   |   |   |   |
| Cash                    paid for:                                                                                      |   |                                                                                              |    |   |   |   |   |   |
| Interest                    (net of capitalization)                                                                    |   | $                                                                                                 | 158     |   |   | $ | -- |   |
| Income                    taxes                                                                                        |   | $                                                                                                 | (760    | ) |   | $ | 260 |   |

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*Table          of Contents*

**ATRION          CORPORATION AND SUBSIDIARIES**

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

| **(1)** | **Basis                of Presentation** |
|---------|------------------------------------------|

|   | In                the opinion of management, all adjustments necessary for a fair                presentation of results of operations for the periods presented have                been                included in the accompanying unaudited consolidated financial statements                of Atrion Corporation and its subsidiaries (the “Company”). Such                adjustments consist of normal recurring items. The accompanying financial                statements have been prepared in accordance with the instructions                to Form                10-Q and include the information and notes required by such instructions.                Accordingly, the consolidated financial statements and notes thereto                should be read in conjunction with the financial statements and notes                included in the Company’s 2006 Annual Report on Form                10-K. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **(2)** | **Inventories** |
|---------|-----------------|

|   | Inventories                are stated at the lower of cost or market. Cost is determined by                using the                first-in, first-out method. The following table details the major                components of inventories (in                thousands): |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | **March                31,****2007** |       |   | **December                31,****2006** |   |
|----------------------------------|--------|--------------------------------------|------------|--------|-----------------------------------------|--------|
| Raw                materials     |   | **$**                                | **7,448**  |   |                                    | $      | 7,194 |   |
| Work                in process   |   |                                 | **4,326**  |   |                                    |   | 4,084 |   |
| Finished                goods    |   |                                 | **5,434**  |   |                                    |   | 5,837 |   |
| Total                inventories |   | **$**                                | **17,208** |   |                                    | $      | 17,115 |   |

| **(3)** | **Income                per share** |
|---------|-------------------------------------|

|   | The                following is the computation for basic and diluted income per                share: |
|--------|--------------------------------------------------------------------------------------------------------|

|                                                                   |   | **Three                months ended March 31,**         |   |
|------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                   |   | **2007**                                                |   |   | **2006** |   |
|                                                                   |   | (in                thousands, except per share amounts) |   |
| Net                Income                                              |   | $                                                       | 3,136  |   |   | $ | 2,106 |   |
|                                                                   |   |                                                    |   |   |   |   |   |   |
| Weighted                average basic shares outstanding               |   |                                                    | 1,872  |   |   |   | 1,835 |   |
| Add:  Effect                of dilutive securities (options) |   |                                                    | 103    |   |   |   | 110 |   |
| Weighted                average diluted shares outstanding             |   |                                                    | 1,975  |   |   |   | 1,945 |   |

| **Income                per share:** |   |   |   |   |   |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|
| Basic                                |   | $      | 1.68   |   |   | $      | 1.15 |   |
| Diluted                              |   | $      | 1.59   |   |   | $      | 1.08 |   |

|   | There                were no outstanding options to purchase shares of common stock that                were                not included in the diluted income per share calculations because                their                effect would be anti-dilutive for the three-month periods ended March                31,                2007 and 2006. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**ATRION            CORPORATION AND SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

| **(4)** | **Pension                Benefits** |
|---------|-------------------------------------|

|   | The                components of net periodic pension cost are as follows for the three                months ended March 31, 2007 and March 31, 2006 (in                thousands): |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                           |       | **Three                Months ended****March                31,** |     |
|------------------------------------------------|------------|-------------------------------------------------------------------|----------|
|                                           |       | **2007**                                                          |     |   | **2006** |   |
| Service                cost                    | ** ** | **$**                                                             | **65**   |   |   | $ | 69 |   |
| Interest                cost                   |       |                                                              | **80**   |   |   |   | 83 |   |
| Expected                return on assets       |       |                                                              | **(123** | **)** |   |   | (111 | ) |
| Prior                service cost amortization |       |                                                              | **(9**   | **)** |   |   | (9 | ) |
| Actuarial                loss                  |       |                                                              | **15**   |   |   |   | 29 |   |
|                                           |       |                                                              |     |   |   |   |   |   |
| Net                periodic pension cost       | ** ** | **$**                                                             | **28**   |   |   | $ | 61 |   |

| **(5)** | **Recent                Accounting Pronouncements** |
|---------|-----------------------------------------------------|

|   | In                September 2006, the FASB issued SFAS No. 157, “Fair Value                Measurements” (“SFAS 157”), which provides guidance for measuring the fair                value of assets and liabilities, as well as requires expanded disclosures                about fair value measurements. SFAS 157 indicates that fair value                should                be determined based on the assumptions marketplace participants would                use                in pricing the asset or liability, and provides additional guidelines                to                consider in determining the market-based measurement. The Company                will be                required to adopt SFAS 157 on January 1, 2008. The Company is                currently evaluating the impact of adopting SFAS 157 on its consolidated                financial statements. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In                February 2007, the FASB issued SFAS 159, “The Fair Value Option for                Financial Assets and Financial Liabilities - Including an amendment                of                FASB Statement No. 115” (“SFAS 159”), which allows measurement at fair                value of eligible financial assets and liabilities that are not otherwise                measured at fair value.  If the fair value option for an eligible                item is elected, unrealized gains and losses for that item shall                be                reported in current earnings at each subsequent reporting date.  SFAS                159 also establishes presentation and disclosure requirements designed                to                draw comparison between the different measurement attributes the                Company                elects for similar types of assets and liabilities. SFAS 159 is effective                for fiscal years beginning after November 15, 2007.  Early adoption                is permitted.  The Company is currently assessing the impact of SFAS                159 on its financial statements. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **(6)** | **Income                Taxes** |
|---------|---------------------------------|

|   | The                Company adopted the provisions of Financial Accounting Standards                Board                Interpretation 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes                - an interpretation of FASB Statement No. 109,” on January 1, 2007. As a                result of the implementation of FIN 48, the Company recorded $959,000                of                unrecognized tax benefits as “Other non-current liabilities” on the                consolidated balance sheet, with no net impact to the consolidated                statement of operations. Of this amount, approximately $17,000 was                accounted for as a reduction to the January 1, 2007 balance of retained                earnings, in accordance with the adoption of FIN 48. Included in                the                unrecognized tax benefits are $959,000 of uncertain tax positions                that                would impact the effective tax rate if recognized. Approximately                $404,000 of unrecognized tax benefits relate to items that are affected                by                expiring statute of limitations within the next 12                months. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**ATRION            CORPORATION AND SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

|   | The                unrecognized tax benefits mentioned above of $959,000 includes an                aggregate $57,000 of interest expense. Interest was computed on the                difference between the tax position recognized in accordance with                FIN 48                and the amount previously taken or expected to be taken in the tax                returns. Upon adoption of FIN 48, the Company has elected an accounting                policy to classify interest expense on underpayments of income taxes                and                accrued penalties related to unrecognized tax benefits in the income                tax                provision. Prior to the adoption of FIN 48, the Company’s policy was to                classify interest expense on underpayments of income taxes as interest                expense and to classify penalties as an operating expense in arriving                at                pretax income. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                Company and its subsidiaries are subject to U.S. federal income tax                as                well as to income tax of multiple state jurisdictions.  The Company                has concluded all U.S. federal income tax matters for years through                2002.  All material state and local income tax matters have been                concluded for years through                2002.  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

| **Item                2.** | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations** |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------|

**Overview**

|   | Ÿ | Focusing                on customer needs; |
|--------|--------|--------------------------------------------|

|   | Ÿ | Expanding                existing product lines and developing new                products; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | Ÿ | Maintaining                a culture of controlling cost; and |
|--------|--------|---------------------------------------------------------------|

|   | Ÿ | Preserving                and fostering a collaborative, entrepreneurial management                structure. |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

**Results      for the three months ended March 31, 2007**

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*Table          of Contents*

|                          |   | Three                Months endedMarch                31, |   |
|-------------------------------|--------|-----------------------------------------------------------|--------|
|                          |   | 2007                                                      |   |   | 2006 |   |
|                          |   |                                                      |   |   |   |   |
| Fluid                Delivery |   | $                                                         | 7,215  |   |   | $ | 6,436 |   |
| Cardiovascular                |   |                                                      | 6,051  |   |   |   | 5,724 |   |
| Ophthalmology                 |   |                                                      | 4,654  |   |   |   | 2,813 |   |
| Other                         |   |                                                      | 5,117  |   |   |   | 4,530 |   |
| Total                         |   | $                                                         | 23,037 |   |   | $ | 19,503 |   |

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*Table          of Contents*

**Liquidity      and Capital Resources**

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*Table          of Contents*

**Forward-Looking      Statements**

| **Item                3.** | **Quantitative                and Qualitative Disclosures About Market                Risk** |
|----------------------------|----------------------------------------------------------------------------------------------|

| **Item                4.** | **Controls                and Procedures** |
|----------------------------|--------------------------------------------|

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*Table          of Contents*

**PART      II**

**OTHER      INFORMATION**

| **Item                  6.** | **Exhibits                  and Reports on Form 8-K** |
|------------------------------|-------------------------------------------------------|

|  | (a) | Exhibits |
|--|-----|----------|

|  | 31.1 | Sarbanes-Oxley                  Act Section 302 Certification of Chief Executive                  Officer |
|--|------|-----------------------------------------------------------------------------------------------------------|

|  | 31.2 | Sarbanes-Oxley                  Act Section 302 Certification of Chief Financial                  Officer |
|--|------|-----------------------------------------------------------------------------------------------------------|

|  | 32.1 | Certification                  Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section                  906 of                  The Sarbanes – Oxley Act Of 2002 |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 32.2 | Certification                  Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section                  906 of                  The Sarbanes – Oxley Act Of                  2002 |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Reports                on Form 8-K |
|--|-----|------------------------------------|

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*Table              of Contents*

**SIGNATURES**

|                                        | Atrion                Corporation |   |                                   |
|---------------------------------------------|-----------------------------------|--------|----------------------------------------|
|                                        | (Registrant)                      |   |                                   |
|                                        |                              |   |                                   |
|                                        |                              |   |                                   |
| Date:  May                9, 2007 |                              |   | /s/                Emile A. Battat     |
|                                        |                              |   | Emile                A. Battat         |
|                                        |                              |   | Chairman,                President and |
|                                        |                              |   | Chief                Executive Officer |
|                                        |                              |   |                                   |
|                                        |                              |   |                                   |
|                                        |                              |   |                                   |
| Date:  May                9, 2007 |                              |   | /s/                Jeffery Strickland  |
|                                        |                              |   | Jeffery                Strickland      |
|                                        |                              |   | Vice                President and      |
|                                        |                              |   | Chief                Financial Officer |

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