UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q





Quarterly
Report Under Section 13 or 15(d) of


The
Securities Exchange Act of 1934











For
      quarter ended: March 31, 2009
                Commission
      File No. 0-11178











UTAH
MEDICAL PRODUCTS, INC.


(Exact
name of Registrant as specified in its charter)








UTAH
              87-0342734(State
      or other jurisdiction of
              (I.R.S.
      Employerincorporation
      or organization)
              Identification
      No.)











7043
South 300 West


Midvale,
Utah  84047


Address
of principal executive offices








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








Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Sections 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.   YesxNoo





Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.


Large accelerated
      filer o
            Accelerated
      filer x
            Non-accelerated
      filer o
            Smaller reporting
      company o





Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Act).  Yes o   No x





Indicate the number of shares
outstanding of each of the issuer’s classes of common stock as of May 8, 2009:
3,603,000.











UTAH MEDICAL PRODUCTS,
INC.


INDEX TO FORM
10-Q














PART
      I - FINANCIAL INFORMATION
                                                                                                  PAGEItem
      1.
                                                                                                  Financial
      StatementsConsolidated
      Condensed Balance Sheets as ofMarch
      31, 2009 and December 31, 2008
                                                                                                  1Consolidated
      Condensed Statements of Income for thethree
      months ended March 31, 2009 and March 31, 2008
                                                                                                  2Consolidated
      Condensed Statements of Cash Flows forthree
      months ended March 31, 2009 and March 31, 2008
                                                                                                  3Notes
      to Consolidated Condensed Financial Statements
                                                                                                  4Item
      2.
                                                                                                  Management’s
      Discussion and Analysis ofFinancial
      Condition and Results of Operations
                                                                                                  7Item
      3.
                                                                                                  Quantitative
      and Qualitative Disclosures about Market Risk
                                                                                                  11Item
      4.
                                                                                                  Controls
      and Procedures
                                                                                                  11PART
      II – OTHER INFORMATIONItem
      1A.
                                                                                                  Risk
      Factors
                                                                                                  12Item
      2.
                                                                                                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                                                                                                  12Item
      6.
                                                                                                  Exhibits
                                                                                                  12SIGNATURES
                                                                                                  12










PART
I - FINANCIAL INFORMATION
 Item
1.  Financial Statements
  UTAH MEDICAL PRODUCTS,
      INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED
      BALANCE SHEETS AS OFMARCH 31, 2009 AND
      DECEMBER 31, 2008(in
      thousands)(unaudited)
                                                                                      
                                                                                      
                                                                                      (audited)ASSETS
                                                                                      
                                                                                      MARCH 31, 2009
                                                                                      
                                                                                      
                                                                                      DECEMBER 31, 2008Current
      assets:Cash
                                                                                      
                                                                                      $
                                                                                      855
                                                                                      
                                                                                      
                                                                                      $
                                                                                      97Investments,
      available-for-sale
                                                                                      
                                                                                      
                                                                                      17,205
                                                                                      
                                                                                      
                                                                                      
                                                                                      15,927Accounts
      & other receivables - net
                                                                                      
                                                                                      
                                                                                      3,200
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,517Inventories
                                                                                      
                                                                                      
                                                                                      3,703
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,275Other
      current assets
                                                                                      
                                                                                      
                                                                                      600
                                                                                      
                                                                                      
                                                                                      
                                                                                      463Total
      current assets
                                                                                      
                                                                                      
                                                                                      25,564
                                                                                      
                                                                                      
                                                                                      
                                                                                      23,280Property
      and equipment - net
                                                                                      
                                                                                      
                                                                                      7,811
                                                                                      
                                                                                      
                                                                                      
                                                                                      8,127Goodwill
                                                                                      
                                                                                      
                                                                                      7,191
                                                                                      
                                                                                      
                                                                                      
                                                                                      7,191Other
      intangible assets
                                                                                      
                                                                                      
                                                                                      2,656
                                                                                      
                                                                                      
                                                                                      
                                                                                      2,653Other
      intangible assets - accumulated amortization
                                                                                      
                                                                                      
                                                                                      (2,438
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (2,430
                                                                                      )Other
      intangible assets - net
                                                                                      
                                                                                      
                                                                                      217
                                                                                      
                                                                                      
                                                                                      
                                                                                      223TOTAL
                                                                                      
                                                                                      $
                                                                                      40,783
                                                                                      
                                                                                      
                                                                                      $
                                                                                      38,821LIABILITIES AND
      STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
                                                                                      
                                                                                      $
                                                                                      600
                                                                                      
                                                                                      
                                                                                      $
                                                                                      418Accrued
      expenses
                                                                                      
                                                                                      
                                                                                      2,636
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,086Current
      portion of note payable
                                                                                      
                                                                                      
                                                                                      242
                                                                                      
                                                                                      
                                                                                      
                                                                                      265Total
      current liabilities
                                                                                      
                                                                                      
                                                                                      3,478
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,768Note
      payable
                                                                                      
                                                                                      
                                                                                      1,509
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,828Deferred
      income taxes
                                                                                      
                                                                                      
                                                                                      405
                                                                                      
                                                                                      
                                                                                      
                                                                                      420Total
      liabilities
                                                                                      
                                                                                      
                                                                                      5,391
                                                                                      
                                                                                      
                                                                                      
                                                                                      4,016Stockholders'
      equity:Preferred
      stock - $.01 par value; authorized - 5,000shares;
      no shares issued or outstandingCommon
      stock - $.01 par value; authorized - 50,000shares;
      issued - March 31, 2009, 3,608 shares andDecember
      31, 2008, 3,603 shares
                                                                                      
                                                                                      
                                                                                      36
                                                                                      
                                                                                      
                                                                                      
                                                                                      36Accumulated
      other comprehensive income
                                                                                      
                                                                                      
                                                                                      (1,357
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (1,122
                                                                                      )Retained
      earnings
                                                                                      
                                                                                      
                                                                                      36,713
                                                                                      
                                                                                      
                                                                                      
                                                                                      35,892Total
      stockholders' equity
                                                                                      
                                                                                      
                                                                                      35,392
                                                                                      
                                                                                      
                                                                                      
                                                                                      34,805TOTAL
                                                                                      
                                                                                      $
                                                                                      40,783
                                                                                      
                                                                                      
                                                                                      $
                                                                                      38,821see
      notes to consolidated condensed financial statements





- 1
-




UTAH MEDICAL PRODUCTS,
      INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED
      STATEMENTS OF INCOME FOR THETHREE MONTHS ENDED
      MARCH 31, 2009 AND MARCH 31, 2008(in
      thousands, except per share amounts)(unaudited)THREE
      MONTHS ENDEDMARCH
      31,2009
                                                                                          
                                                                                          
                                                                                          2008Sales,
      net
                                                                                          
                                                                                          $
                                                                                          6,445
                                                                                          
                                                                                          
                                                                                          $
                                                                                          6,890Cost
      of goods sold
                                                                                          
                                                                                          
                                                                                          2,945
                                                                                          
                                                                                          
                                                                                          
                                                                                          3,139Gross
      profit
                                                                                          
                                                                                          
                                                                                          3,500
                                                                                          
                                                                                          
                                                                                          
                                                                                          3,750Operating
      expenseSelling,
      general and administrative
                                                                                          
                                                                                          
                                                                                          952
                                                                                          
                                                                                          
                                                                                          
                                                                                          1,118Research
      & development
                                                                                          
                                                                                          
                                                                                          89
                                                                                          
                                                                                          
                                                                                          
                                                                                          92Total
                                                                                          
                                                                                          
                                                                                          1,041
                                                                                          
                                                                                          
                                                                                          
                                                                                          1,210Operating
      income
                                                                                          
                                                                                          
                                                                                          2,459
                                                                                          
                                                                                          
                                                                                          
                                                                                          2,540Other
      income
                                                                                          
                                                                                          
                                                                                          9
                                                                                          
                                                                                          
                                                                                          
                                                                                          203Income
      before provision for income taxes
                                                                                          
                                                                                          
                                                                                          2,468
                                                                                          
                                                                                          
                                                                                          
                                                                                          2,743Provision
      for income taxes
                                                                                          
                                                                                          
                                                                                          876
                                                                                          
                                                                                          
                                                                                          
                                                                                          852Net
      income
                                                                                          
                                                                                          $
                                                                                          1,592
                                                                                          
                                                                                          
                                                                                          $
                                                                                          1,891Earnings
      per common share (basic)
                                                                                          
                                                                                          $
                                                                                          0.44
                                                                                          
                                                                                          
                                                                                          $
                                                                                          0.49Earnings
      per common share (diluted)
                                                                                          
                                                                                          $
                                                                                          0.44
                                                                                          
                                                                                          
                                                                                          $
                                                                                          0.48Shares
      outstanding - basic
                                                                                          
                                                                                          
                                                                                          3,606
                                                                                          
                                                                                          
                                                                                          
                                                                                          3,887Shares
      outstanding - diluted
                                                                                          
                                                                                          
                                                                                          3,619
                                                                                          
                                                                                          
                                                                                          
                                                                                          3,930see
      notes to consolidated condensed financial statements





- 2
-





UTAH MEDICAL PRODUCTS,
      INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED
      STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS
      ENDED MARCH 31, 2009 AND MARCH 31, 2008(in
      thousands - unaudited)MARCH
      31,2009
                                                                                
                                                                                
                                                                                2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
                                                                                
                                                                                $
                                                                                1,592
                                                                                
                                                                                
                                                                                $
                                                                                1,891Adjustments
      to reconcile net income to netcash
      provided by operating activities:Depreciation
      and amortization
                                                                                
                                                                                
                                                                                143
                                                                                
                                                                                
                                                                                
                                                                                147Gain
      on investments
                                                                                
                                                                                
                                                                                (47
                                                                                )
                                                                                
                                                                                
                                                                                (128
                                                                                )Provision
      for losses on accounts receivable
                                                                                
                                                                                
                                                                                (5
                                                                                )
                                                                                
                                                                                
                                                                                (10
                                                                                )Loss
      on disposal of assets
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                0Deferred
      income taxes
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (77
                                                                                )Stock-based
      compensation expense
                                                                                
                                                                                
                                                                                31
                                                                                
                                                                                
                                                                                
                                                                                31Changes
      in operating assets and liabilities:Accounts
      receivable - trade
                                                                                
                                                                                
                                                                                293
                                                                                
                                                                                
                                                                                
                                                                                97Accrued
      interest and other receivables
                                                                                
                                                                                
                                                                                3
                                                                                
                                                                                
                                                                                
                                                                                (200
                                                                                )Inventories
                                                                                
                                                                                
                                                                                (449
                                                                                )
                                                                                
                                                                                
                                                                                (457
                                                                                )Prepaid
      expenses and other current assets
                                                                                
                                                                                
                                                                                (113
                                                                                )
                                                                                
                                                                                
                                                                                (92
                                                                                )Accounts
      payable
                                                                                
                                                                                
                                                                                182
                                                                                
                                                                                
                                                                                
                                                                                92Accrued
      expenses
                                                                                
                                                                                
                                                                                726
                                                                                
                                                                                
                                                                                
                                                                                446Total
      adjustments
                                                                                
                                                                                
                                                                                765
                                                                                
                                                                                
                                                                                
                                                                                (151
                                                                                )Net
      cash provided by operating activities
                                                                                
                                                                                
                                                                                2,357
                                                                                
                                                                                
                                                                                
                                                                                1,740CASH
      FLOWS FROM INVESTING ACTIVITIES:Capital
      expenditures for:Property
      and equipment
                                                                                
                                                                                
                                                                                (83
                                                                                )
                                                                                
                                                                                
                                                                                (85
                                                                                )Intangible
      assets
                                                                                
                                                                                
                                                                                (3
                                                                                )
                                                                                
                                                                                
                                                                                (4
                                                                                )Purchases
      of investments
                                                                                
                                                                                
                                                                                (1,300
                                                                                )
                                                                                
                                                                                
                                                                                (1,000
                                                                                )Proceeds
      from sale of investments
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                921Net
      cash used in investing activities
                                                                                
                                                                                
                                                                                (1,386
                                                                                )
                                                                                
                                                                                
                                                                                (168
                                                                                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of common stock - options
                                                                                
                                                                                
                                                                                25
                                                                                
                                                                                
                                                                                
                                                                                133Common
      stock purchased and retired
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (921
                                                                                )Tax
      benefit attributable to exercise of stock options
                                                                                
                                                                                
                                                                                3
                                                                                
                                                                                
                                                                                
                                                                                36Repayments
      of note payable
                                                                                
                                                                                
                                                                                (231
                                                                                )
                                                                                
                                                                                
                                                                                (251
                                                                                )Payment
      of dividends
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (880
                                                                                )Net
      cash used in financing activities
                                                                                
                                                                                
                                                                                (202
                                                                                )
                                                                                
                                                                                
                                                                                (1,883
                                                                                )Effect
      of exchange rate changes on cash
                                                                                
                                                                                
                                                                                (11
                                                                                )
                                                                                
                                                                                
                                                                                44NET
      INCREASE (DECREASE) IN CASH
                                                                                
                                                                                
                                                                                758
                                                                                
                                                                                
                                                                                
                                                                                (267
                                                                                )CASH
      AT BEGINNING OF PERIOD
                                                                                
                                                                                
                                                                                97
                                                                                
                                                                                
                                                                                
                                                                                1,251CASH
      AT END OF PERIOD
                                                                                
                                                                                $
                                                                                855
                                                                                
                                                                                
                                                                                $
                                                                                984SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the period for income taxes
                                                                                
                                                                                $
                                                                                -
                                                                                
                                                                                
                                                                                $
                                                                                -Cash
      paid during the period for interest
                                                                                
                                                                                $
                                                                                16
                                                                                
                                                                                
                                                                                $
                                                                                66see
      notes to consolidated condensed financial statements





- 3
-





UTAH MEDICAL PRODUCTS,
INC.


NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS


(unaudited)







(1)    
The unaudited financial statements have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the information and note
disclosures required by accounting principles generally accepted in the United
States.  These statements should be read in conjunction with the
financial statements and notes included in the Utah Medical Products, Inc.
("UTMD" or "the Company") annual report on Form 10-K for the year ended December
31, 2008.  In the opinion of management, the accompanying financial
statements include all adjustments (consisting only of normal recurring
adjustments) necessary to summarize fairly the Company's financial position and
results of operations.   Dollar amounts are in thousands except
per-share amounts and where noted.







(2)   
 Inventories at March 31, 2009 and December 31, 2008 consisted of the
following:





March
      31,
                                
                                
                                December
      31,2009
                                
                                
                                2008Finished
      goods
                                
                                $
                                1,364
                                
                                
                                $
                                1,353Work-in-process
                                
                                
                                935
                                
                                
                                
                                817Raw
      materials
                                
                                
                                1,404
                                
                                
                                
                                1,105Total
                                
                                $
                                3,703
                                
                                
                                $
                                3,275





(3)    
Stock-Based Compensation.  At March 31, 2009, the Company has
stock-based employee compensation plans which authorize the grant of stock
options to eligible employees and directors.  The Company accounts for
stock compensation under Statement of Financial Accounting Standards 123R, Share-Based
Payment.  This statement requires the Company to recognize
compensation cost based on the grant date fair value of options granted to
employees and directors.  In first quarter (1Q) 2009, the Company
recognized $31 in compensation cost, the same as in 1Q 2008.







(4)    
Comprehensive Income.  Comprehensive income for the three months
ending March 31, 2009 and 2008 was $1,432 and $1,817, net of taxes,
respectively.  The components used to calculate comprehensive income
were foreign currency translation adjustments of ($117) and $46 in 2009 and
2008, respectively, and unrealized holding losses of ($43) and ($120) in 2009
and 2008, respectively.







(5)    
Warranty Reserve.   The Company accrues provisions for estimated
costs that are likely to be incurred for product warranties and uncollectible
accounts.  The amount of the provision is adjusted, as required, to
reflect historical experience.  The following table summarizes changes
to UTMD’s warranty reserve during 1Q 2009:





Beginning
      Balance, January 1, 2009
                              
                              $
                              0Changes in Warranty
      Reserve during 1Q 2009:Aggregate
      reductions for warranty repairs
                              
                              
                              -Aggregate
      changes for warranties issued during reporting period
                              
                              
                              -Aggregate
      changes in reserve related to preexisting warranties
                              
                              
                              -Ending
      Balance, March 31, 2009
                              
                              $
                              0


- 4
-


(6)    
Investments.  As of March 31, 2009, the Company’s investments are held
in Fidelity Cash Reserves (FDRXX), Citigroup (C) and General Electric
(GE).  Changes in the unrealized holding gain on investment securities
available-for-sale and reported as a separate component of accumulated other
comprehensive income are as follows:




1Q 2009
                            
                            
                            
                            1Q 2008Balance,
      beginning of period
                            
                            $
                            (250
                            )
                            
                            $
                            (156
                            )Realized
      loss from securities included in beginning balance
                            
                            
                            5
                            
                            
                            
                            -Gross
      unrealized holding gains (losses), in equity securities
                            
                            
                            (75
                            )
                            
                            
                            (197
                            )Deferred
      income taxes on unrealized holding loss
                            
                            
                            27
                            
                            
                            
                            77Balance,
      end of period
                            
                            $
                            (293
                            )
                            
                            $
                            (276
                            )





(7)    
Fair Value Measurements.  In September 2006, the Financial Accounting
Standards Board (“FASB”) issued Statement of Financial Accounting Standards
(“SFAS”) No. 157 “Fair Value Measurements.”   This
statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles and expands disclosures about fair
value measurements.  SFAS 157 is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal
years.  UTMD adopted the requirements of SFAS 157 on January 1,
2008.







The
following table provides financial assets carried at fair value measured as of
March 31, 2009:




Fair
      Value Measurements UsingDescription
                              
                              Total Fair
                                Value at
                                3/31/2009
                              
                              
                              Quoted
      Prices in Active
                                Markets
      for Identical
                                Assets
                                (Level 1)
                              
                              
                              Significant
      Other
                                Observable
      Inputs
                                (Level 2)
                              
                              
                              Significant
                                Unobservable
                                Inputs
                                (Level 3 )Available-for-sale
      securities
                              $
                              17,205
                              
                              
                              $
                              17,205
                              
                              
                              $
                              0
                              
                              
                              $
                              0




(8)    
Forward-Looking Information.   This report contains certain
forward-looking statements and information relating to the Company that are
based on the beliefs of management as well as assumptions made by management
based on information currently available.  When used in this document,
the words “anticipate,” “believe,” “project,” “estimate,” “expect,” “intend” and
similar expressions, as they relate to the Company or its management, are
intended to identify forward-looking statements.  Such statements
reflect the current view of the Company respecting future events and are subject
to certain risks, uncertainties, and assumptions, including the risks and
uncertainties noted throughout this 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.  Financial estimates are
subject to change and are not intended to be relied upon as predictions of
future operating results, and the Company assumes no obligation to update or
disclose revisions to those estimates.


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


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


- 5
-




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


Risk factors, in addition to the risks
outlined in the previous paragraphs and elsewhere in this report that may impact
the Company’s assets and liabilities, as well as cash flows, include: risks
inherent to companies manufacturing products used in healthcare, including
claims resulting from the improper use of devices and other product liability
claims; defense of the Company’s intellectual property and infringement claims
of others; 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 or may not require external
funding.





- 6
-





Item 2.   Management's Discussion and Analysis
of Financial Condition and Results of Operations





General


UTMD manufactures and markets a
well-established range of specialty medical devices.  The Company’s
Form 10-K Annual Report for the year ended December 31, 2008 provides a detailed
description of products, technologies, markets, regulatory issues, business
initiatives, resources and business risks, among other details, and should be
read in conjunction with this report.  Because of the relatively short
span of time, results for any given three month period in comparison with a
previous three month period may not be indicative of comparative results for the
year as a whole.  Dollar amounts in the report are in thousands,
except per-share amounts or where otherwise noted.





Analysis
of Results of Operations


a)  Overview


In first quarter (1Q) 2009, UTMD’s
consolidated global sales decreased 6% compared to 1Q 2008.  UTMD
achieved the following profitability measures for 1Q 2009 and 1Q
2008:




1Q 09
                            
                            
                            
                            1Q 08Gross
      Profit Margin:
                            
                            
                            54.3%
                            
                            
                            
                            54.4%Operating
      Profit Margin:
                            
                            
                            38.1%
                            
                            
                            
                            36.9%Net
      (Income) Margin:
                            
                            
                            24.7%
                            
                            
                            
                            27.5%





1Q 2009 earnings per share (EPS) were
$.440 compared to $.481 in 1Q 2008.





b)  Revenues


The Company believes that revenue
should be recognized at the time of shipment as title generally passes to the
customer at the time of shipment.  Revenue recognized by UTMD is based
upon documented arrangements and fixed contracts in which the selling price is
fixed prior to completion of an order.  Revenue from product and
service sales is generally recognized at the time the product is shipped or
service completed and invoiced, and collectibility is reasonably
assured.  There are circumstances under which revenue may be
recognized when product is not shipped, all of which meet the criteria of SAB
104: the Company provides engineering services, for example, design and
production of manufacturing tooling that may be used in subsequent UTMD
manufacturing of custom components for other companies.   This
revenue is recognized when UTMD’s service has been completed according to a
contractual agreement.


Total sales in 1Q 2009 were about 6%
lower than in 1Q 2008.  Domestic sales decreased 1% while
international sales, after several years of rapid growth, decreased
17%.  The primary reason for the lower sales was the loss of $478 in
combined sales to UTMD’s largest and third largest international customers. Part
of the change appears temporary. This portion has to do with inventory
adjustments made as a result of the worldwide economic downturn. The loss of
sales of custom blood pressure monitoring (BPM) kits to UTMD’s largest
international customer, however, may not be temporary.  Sales of BPM
kits to that customer in the full year of 2008 were about $1,700. After more
than 10 years using UTMD’s BPM kits, that international OEM customer may be
finally implementing its plan to bring production in-house.


Domestic sales were comprised of
domestic direct sales (sales of finished devices to users or distributors) and
domestic OEM sales (sales of components to other companies for use in their
products), each down 1%.  Domestic direct sales of obstetric devices,
the product category most affected by restrictive GPO agreements, declined
$151.  On the other hand, domestic direct sales of Gesco neonatal
devices increased $96.  Domestic OEM sales and international sales
have an uneven quarter-to-quarter sales pattern because customers tend to
purchase several months’ supply of products at a time to minimize transportation
and import costs.


Trade shipments from UTMD’s Ireland
facility were down 22% in EURO terms, and down 33% in USD terms due to a
stronger U.S. Dollar.  The loss of 1Q sales to the two largest
international distributors were all in the BPM category and are all manufactured
in UTMD’s Ireland facility.




- 7
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The
following table provides sales dollar amounts divided into general product
categories for total sales and the subset of international sales:





Global
revenues by product category:


1Q 2009
                                              
                                              
                                              %
                                              
                                              
                                              
                                              1Q 2008
                                              
                                              
                                              %Obstetrics
                                              
                                              $
                                              1,597
                                              
                                              
                                              
                                              25
                                              
                                              
                                              $
                                              1,729
                                              
                                              
                                              
                                              25Gynecology/
      Electrosurgery/ Urology
                                              
                                              
                                              1,586
                                              
                                              
                                              
                                              25
                                              
                                              
                                              
                                              1,562
                                              
                                              
                                              
                                              23Neonatal
                                              
                                              
                                              1,872
                                              
                                              
                                              
                                              29
                                              
                                              
                                              
                                              1,760
                                              
                                              
                                              
                                              25Blood
      Pressure Monitoring and Accessories*
                                              
                                              
                                              1,390
                                              
                                              
                                              
                                              21
                                              
                                              
                                              
                                              1,839
                                              
                                              
                                              
                                              27Total:
                                              
                                              $
                                              6,445
                                              
                                              
                                              
                                              100
                                              
                                              
                                              $
                                              6,890
                                              
                                              
                                              
                                              100*includes
      molded components sold to OEM customers.




International
revenues by product category:


1Q 2009
                                      
                                      
                                      %
                                      
                                      
                                      
                                      1Q 2008
                                      
                                      
                                      %Obstetrics
                                      
                                      $
                                      113
                                      
                                      
                                      
                                      6
                                      
                                      
                                      $
                                      94
                                      
                                      
                                      
                                      4Gynecology/
      Electrosurgery/ Urology
                                      
                                      
                                      586
                                      
                                      
                                      
                                      33
                                      
                                      
                                      
                                      567
                                      
                                      
                                      
                                      26Neonatal
                                      
                                      
                                      235
                                      
                                      
                                      
                                      13
                                      
                                      
                                      
                                      202
                                      
                                      
                                      
                                      9Blood
      Pressure Monitoring and Accessories*
                                      
                                      
                                      873
                                      
                                      
                                      
                                      48
                                      
                                      
                                      
                                      1,322
                                      
                                      
                                      
                                      61Total:
                                      
                                      $
                                      1,807
                                      
                                      
                                      
                                      100
                                      
                                      
                                      $
                                      2,185
                                      
                                      
                                      
                                      100*includes
      molded components sold to OEM customers.




For the rest of 2009, UTMD’s sales
depend on its continued ability to retain medical staff involvement in
purchasing decisions for UTMD’s “physician-preference” products used in U.S.
hospitals where administrators are increasingly making the product decisions,
expanded clinical acceptance of its newer specialty products, release of new
products after FDA concurrence with premarketing submissions and continued
viability of UTMD’s international distribution channels.  The
Company’s beginning of year disclosure that it hoped to achieve 2009 sales
approximately the same as in 2008 now appears overly optimistic, in the absence
of an acquisition.





c)  Gross
Profit


UTMD’s average gross profit margin
(GPM), gross profits as a percentage of sales, was 54.3% in 1Q 2009, compared to
54.4% 1Q 2008.  Achieving a 1Q 2009 GPM approximately the same as in
1Q 2008 despite lower sales and thus less absorption of fixed overhead costs was
primarily due to the fact that the net decline in sales came from the portion of
UTMD’s business with the lowest GPMs.  Sales of devices from UTMD’s
Ireland facility dropped from 48% of total international sales in 1Q 2008 to 39%
of 1Q 2009 international sales in U.S. Dollar terms.  International
sales, at lower average unit selling prices because other entities provide the
direct sales and marketing efforts, were down 17%, while domestic sales were
down just 1%.  As a result of the change in distribution mix, despite
lower sales, the Company is currently targeting an overall GPM in 2009 about the
same as in 2008.


OEM sales are sales of UTMD
components and subassemblies that are marketed by other companies as part of
their product offerings.  UTMD utilizes OEM sales as a means to help
maximize utilization of its capabilities established to satisfy its direct sales
business.  As a general rule, prices for OEM sales expressed as a
multiple of direct variable manufacturing expenses are lower than for direct
sales because, in the OEM and international channels, UTMD’s business partners
incur significant expenses of sales and marketing.  Because of UTMD’s
small size and period-to-period fluctuations in OEM business activity,
allocation of fixed manufacturing overhead expenses cannot be meaningfully
allocated between direct and OEM sales.  Therefore, UTMD does not
report GPM by sales channels.





d)  Operating
Income


Operating income, or income from
operations, is the surplus after operating expenses are subtracted from gross
profits.  Operating expenses include sales and marketing (S&M)
expenses, product development (R&D) expenses and general and administrative
(G&A) expenses.  Combined operating expenses in 1Q 2009 were lower
than 1Q 2008 by $169 as a result of lower sales expenses, lower legal expenses,
lower accrual of projected 2009-ending management bonuses and lower G&A
expenses in Ireland primarily because of a stronger US Dollar.  Option
compensation expense included in G&A expenses in both 1Q 2009 and 1Q 2008
was $31.  The operating profit margin in 1Q 2009 was 38.1% compared to
36.9% in 1Q 2008.  For the remainder of 2009, UTMD expects to control
operating expenses, excluding consideration for litigation expenses which are
less predictable, at a level yielding an operating profit margin for the year
about the same as in 2008.




- 8
-





S&M expenses in 1Q 2009 were $386
or 6.0% of sales compared to $449 or 6.5% of sales in 1Q 2008.  The
lower S&M expenses resulted primarily from fewer U.S. direct sales
representatives.  Because UTMD sells internationally through third
party distributors, its S&M expenses are predominantly for U.S. business
activity where it sells directly to clinical users.


R&D expenses in 1Q 2009 were $89
or 1.4% of sales compared to $92 or 1.3% of sales in 1Q 2008.  UTMD
will opportunistically invest in R&D as projects are identified that may
help its product development pipeline.


G&A expenses in 1Q 2009 were $565
or 8.8% of sales compared to $669 or 9.7% of 1Q 2008 sales.  In
addition to litigation costs, G&A expenses include the cost of outside
auditors and corporate governance activities relating to the implementation of
SEC rules resulting from the Sarbanes-Oxley Act, as well as estimated
stock-based compensation cost as required by SFAS 123R.





e)  Non-operating
income


Non-operating income in 1Q 2009 was
$9 compared to $203 in 1Q 2008.  UTMD did not receive royalty income
in 1Q 2009 compared to $113 in 1Q 2008 because of applicable patent expirations.
UTMD received $48 in 1Q 2009 compared to $141 in 1Q 2008 in interest, dividends
and capital gains/losses income from investing cash balances.  The
decline was primarily due to the fact that interest rates in the U.S. have
declined substantially compared to one year ago.  In 1Q 2009, UTMD
incurred $16 in interest expense compared to $66 in 1Q 2008 due to lower
interest rates on its loan in Ireland, lower average loan balances and favorable
foreign exchange conversion as a result of a stronger US Dollar.  The
lower non-operating income was aided by a $15 IRS penalty for late filing of
UTMD’s 2007 annual report for its U.S. employee health plan. This expense was
also not tax deductible. Unless cash balances decline substantially as a result
of significant share repurchases or alternative investment such as an
acquisition, UTMD expects its quarterly non-operating income will improve during
the remaining quarters of 2009, but likely end up about $100 less for the year
as a whole compared to 2008.





f)   Earnings Before
Income Taxes


1Q 2009 earnings before income taxes
(EBT) decreased to $2,468 compared to $2,743 in 1Q 2008.  1Q 2009 EBT
margin was 38.3% of sales compared to 39.8% in 1Q 2008.





g)  Net Income and Earnings
per Share


UTMD’s net income decreased to $1,592
in 1Q 2009 compared to $1,891 in 1Q 2008.  Net profit margins (NPM),
which are net income (after income tax provision) expressed as a percentage of
sales, were 24.7% in 1Q 2009 compared to 27.5% in 1Q 2008.  The income
tax provision rate in 1Q 2009 was 35.5% compared to 31.1% in 1Q
2008.  The lower tax provision rate in 2008 resulted primarily from
one-time refunds on amended 2004-2006 income tax returns in
Ireland.  Diluted 1Q 2009 Earnings per Share (EPS) decreased to $.440
compared to $.481 in 1Q 2008. UTMD previously targeted 2009 EPS about equal to
the $1.86 achieved in 2008.  Incorporating the current view that UTMD
expects lower sales in 2009, an EPS projection in the range of $1.76 - $1.80 for
the year appears more likely.


1Q 2009 weighted average number of
diluted common shares (the number used to calculate diluted EPS) were 3,618,937
compared to 3,929,501 shares in 1Q 2008.  The Company did not
repurchase any of its shares in the open market in 1Q
2009.   Exercises of employee options in 1Q 2009 added 5,112
shares (net of 544 shares swapped by an employee as payment for the option
exercise cost).  Employees exercised a total of 5,656 option shares
during 1Q 2009.  Options outstanding at March 31, 2009 were about
257,600 shares at an average exercise price of $23.56 per share.


Increases and decreases in UTMD’s
stock price impact EPS as a result of the dilution calculation for unexercised
options with exercise prices below the average stock market value during each
period. The dilution calculation added 12,500 shares to actual weighted average
shares outstanding in 1Q 2009 compared to 42,700 in 1Q 2008.  The
decrease in 2009 dilution is primarily due to elimination of about 178,900
outstanding options from the dilution calculation because their exercise prices
are above the average market value.  Actual outstanding common shares
as of the end of 1Q 2009 were 3,607,900 compared to 3,885,400 at the end of 1Q
2008.




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-





h)  Return on
Equity


Return on equity (ROE) is the portion
of net income retained by UTMD (after payment of dividends) to internally
finance its growth, divided by the average accumulated shareholder equity during
the applicable time period.  Annualized ROE (after payment of
dividends) in 1Q 2009 was 18%, compared to 10% in 1Q
2008.  The  higher ROE resulted because no dividend was paid
during 1Q 2009.  The dividend that typically would have been paid in
January 2009 was paid early in late December 2008.  The ROE in 1Q 2009
was also impacted by 16% lower net profits and 10% lower average equity to date
in 2009.  Share repurchases have a beneficial impact on ROE as long as
the Company sustains net profit performance because shareholder equity is
reduced by the cost of the shares repurchased.  UTMD
expects  ROE for the remainder of 2009 comparable to the 10% achieved
for all of 2008 as a result of lower net profits, higher dividends and lower
average shareholder equity.




Liquidity
and Capital Resources


i)   Cash
flows


Net cash provided by operating
activities, including adjustments for depreciation and other non-cash operating
expenses along with changes in working capital, totaled $2,357 in 1Q 2009
compared to $1,740 in 1Q 2008.  A $280 larger increase in accrued
expenses, a $3 decrease in accrued interest and other receivables compared to a
$200 increase during 1Q 2008, and a $196 larger decrease in accounts receivable
were the most significant differences in the two periods.


The Company’s use of cash for
investing activities was primarily as a result of purchases of short-term
investments, in an effort to maximize returns on excess cash balances while
maintaining safety and liquidity.  Capital expenditures for property
and equipment were $83 in 1Q 2009 compared to $85 in 1Q 2008.  This
rate of investing in new property and equipment is required to keep facilities,
equipment and tooling in good working condition.


In 1Q 2009, UTMD received $25 and
issued 5,112 shares of stock upon the exercise of employee stock
options.  Employees exercised a total of 5,656 option shares in 1Q
2009, with 544 shares immediately being retired as a result of the individuals
trading the shares in payment of the exercise price of the
options.  UTMD did not repurchase any shares of stock in the open
market during 1Q 2009.  Option exercises in 1Q 2009 were at an average
price of $6.78 per share.  In comparison, the Company received $133
from issuing 11,451 shares of stock on the exercise of employee stock options in
1Q 2008, net of 1,800 shares retired upon employees trading those shares in
payment of the stock option exercise price.  UTMD repurchased 31,343
shares of stock in the open market at a cost of $921 during 1Q
2008.


UTMD Ltd. made payments of $231 on
its note payable during 1Q 2009, compared to $251 during 1Q
2008.  UTMD paid $0 in cash dividends during 1Q 2009 compared to $880
in 1Q 2008.


Management believes that future
income from operations and effective management of working capital will provide
the liquidity needed to finance internal growth plans.  Planned
capital expenditures during the remainder of 2009 are expected to be about $350
to keep facilities, equipment and tooling in good working
order.  Also, UTMD will use at least an additional $350 in cash in
2009 for a technological upgrade and a packaging capability
upgrade.  In addition ,the Company may use cash for marketing or
product manufacturing rights to broaden the Company's product offerings; for
continued share repurchases when the price of the stock is undervalued; and if
available for a reasonable price, an acquisition that might strategically fit
UTMD’s business and be accretive to performance.





j)   Assets and
Liabilities


March 31, 2009 total assets were
$1,962 higher than at December 31, 2008.  The increase resulted
primarily from a $2,036 increase in cash and investments and a $428 increase in
inventories.  Cash and investments increased more rapidly than in past
periods because there were no stock repurchases during the
quarter.  Inventories increased as a result of bulk raw materials
purchases to offset incrementally rising costs.  Although raw material
inventory balances should decline, WIP/FG inventory balances during the
remainder of 2009 will depend on the realized amount of sales as the Company
intends to maintain the productivity of its current production resources without
a reduction in force. UTMD’s management targets an inventory turn of
4.0.


Working capital was $22,086 at March
31, 2009, a $574 increase from 2008 year-end.  Working capital
continues well in excess of UTMD’s normal operating needs.  Current
liabilities increased $1,710 primarily from higher accrued
expenses.  The increase resulted from the fact that in the first
quarter, unlike other calendar quarters, estimated income tax payments are due
after the end of the quarter and because of the early payment of the dividend at
the end of 2008.  As a result of the working capital changes, UTMD’s
current ratio decreased to 7.4 on March 31, 2009 from 13.2 at year-end
2008.  The current ratio was 8.2 on March 31, 2008.




- 10
-





Net property and equipment decreased
$316 in 1Q 2009 after additions of $83 and a decrease in the dollar-denominated
value of Ireland P&E and depreciation of $135.  Goodwill resulting
from prior acquisitions remained the same. Net intangible assets excluding
goodwill decreased $6 as a result of $9 amortization of intellectual property
offset by $3 additions to intangibles.  At March 31, 2009, net
intangible assets including goodwill were 18% of total assets compared to 19% at
year-end 2008.


UTMD’s long term liabilities are
comprised of the Ireland note payable ($1,509 on March 31, 2009) and deferred
income taxes ($405 on March 31, 2009).  As of December 31, 2008, the
respective long term liabilities were $1,828 and $420.  The note
payable, denominated in Euros, declined $319 in USD book value despite actual
principal payments of $231 because the USD increased in value against the
Euro.  In Euros, the note declined 11% from €1,485 to €1,322 (both in
thousands) during the quarter.   As of March 31, 2009, UTMD’s
total debt ratio (total liabilities/ total assets) increased to 13% from 10% on
December 31, 2008.  UTMD’s total debt ratio on March 31, 2008 was
17%.





k)    Management's
Outlook.


As
outlined in its December 31, 2008 10-K report, UTMD’s plan for 2009 is
to


1)  work to retain its
significant global market shares of established key specialty
products


2)  accelerate revenue growth
of newer products;


3)  develop additional
proprietary products helpful to clinicians through internal new product
development;


4)  continue achieving
excellent overall financial operating performance;


5)  look for new acquisitions
to augment sales growth;  and


6)  utilize current cash
balances in shareholders’ best long-term interest, including continued cash
dividends and open market share repurchases





Despite expected lower sales primarily
from two international customers, UTMD’s objective for 2009 remains the same as
above.





l)    Accounting
Policy Changes.


None.








Item 3.  Quantitative and Qualitative
Disclosures about Market Risk





UTMD has manufacturing
operations, including related assets, in Ireland denominated in the EURO, and
sells products under agreements denominated in other Western European
currencies.  The EURO and other currencies are subject to exchange
rate fluctuations that are beyond the control of UTMD.  The exchange
rate was 0.7549 EURO per USD as of March 31, 2009, and 0.6336 EURO per USD as of
March 31, 2008.    UTMD manages its foreign currency risk
without separate hedging transactions by converting currencies to USD as
transactions occur.








Item
4.  Controls and Procedures





The
company’s management, under the supervision and with the participation of the
Chief Executive Officer and the Principal Financial Officer, evaluated the
effectiveness of the company’s disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of
March 31, 2009. Based on this evaluation, the Chief Executive Officer and
Principal Financial Officer concluded that, as of March 31, 2009, the company’s
disclosure controls and procedures were effective.


There were no changes in
the company’s internal controls over financial reporting that occurred during
the quarter ended March 31, 2009, that have materially affected, or are
reasonably likely to materially affect, the company’s internal controls over
financial reporting.




- 11
-





PART II -
OTHER INFORMATION





Item
1A.  Risk Factors





In addition to the other information
set forth in this report, investors should carefully consider the factors
discussed in Part I, “Item 1A. Risk Factors” in UTMD’s Annual Report on Form
10-K for the year ended December 31, 2008, which could materially affect its
business, financial condition or future results.  The risks described in
the Annual Report on Form 10-K are not the only risks facing the Company. 
Additional risks and uncertainties not currently known to UTMD or currently
deemed to be immaterial also may materially adversely affect the Company’s
business, financial condition and/or operating results.








Item
2.   Unregistered Sales of Equity Securities and Use of
Proceeds





UTMD did not purchase any of its own
securities during 1Q 2009.








Item
6.   Exhibits





Exhibit
      #
                    SECReference #
                    Title of
      Document1
                    31
                    Certification
      of CEO pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 20022
                    31
                    Certification
      of Principal Financial Officer pursuant to Rule 13a-14(a) as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  20023
                    32
                    Certification
      of CEO pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 20024
                    32
                    Certification
      of Principal Financial Officer pursuant to 18 U.S.C. §1350, as Adopted
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002






SIGNATURES
 
 Pursuant to the requirements of the
Securities Exchanges Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
 
 
 UTAH MEDICAL PRODUCTS,
      INC.REGISTRANTDate:
      5/8/09
                    By:
                    /s/ Kevin L. CornwellKevin
      L. CornwellCEODate:
      5/8/09
                    By:
                    /s/ Paul O. RichinsPaul
      O. RichinsPrincipal
      Financial Officer


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