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, 2008
            
            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 incorporation or organization)
              
              (I.R.S. Employer
      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 9, 2008: 3,876,000.







UTAH MEDICAL PRODUCTS,
INC.


INDEX TO FORM
10-Q













PART I
      - FINANCIAL INFORMATION
            PAGEItem
      1.
            Financial StatementsConsolidated Condensed Balance Sheets as of March 31, 2008 and
      December 31, 2007
            1Consolidated Condensed Statements of Income for the three
      months ended March 31, 2008 and March 31, 2007
            2Consolidated Condensed Statements of Cash Flows for three
      months ended March 31, 2008 and March 31, 2007
            3Notes
      to Consolidated Condensed Financial Statements
            4Item
      2.
            Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
            6Item
      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
            13SIGNATURES
            13











PART
      I  -  FINANCIAL INFORMATIONItem
      1. Financial StatementsUTAH MEDICAL PRODUCTS,
      INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED
      BALANCE SHEETS AS OFMARCH 31, 2008 AND
      DECEMBER 31, 2007(in
      thousands)




(unaudited)
            
            
            (audited)ASSETS
            MARCH 31, 2008
            
            DECEMBER
      31, 2007Current
      assets:Cash
            
            $
            984
            
            
            $
            1,251Investments,
      available-for-sale
            
            
            21,139
            
            
            
            21,121Accounts
      & other receivables - net
            
            
            4,073
            
            
            
            3,905Inventories
            
            
            3,642
            
            
            
            3,153Other
      current assets
            
            
            768
            
            
            
            502Total
      current assets
            
            
            30,606
            
            
            
            29,931Property
      and equipment - net
            
            
            8,883
            
            
            
            8,606Goodwill
            
            
            7,191
            
            
            
            7,191Other
      intangible assets
            
            
            2,644
            
            
            
            2,640Other
      intangible assets - accumulated amortization
            
            
            (2,395
            )
            
            
            (2,382
            )Other
      intangible assets - net
            
            
            249
            
            
            
            258TOTAL
            
            $
            46,930
            
            
            $
            45,986LIABILITIES AND
      STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
            
            $
            487
            
            
            $
            393Accrued
      expenses
            
            
            2,805
            
            
            
            2,349Current
      portion of note payable
            
            
            449
            
            
            
            423Total
      current liabilities
            
            
            3,741
            
            
            
            3,165Note
      payable
            
            
            3,687
            
            
            
            3,689Deferred
      income taxes
            
            
            461
            
            
            
            343Total
      liabilities
            
            
            7,889
            
            
            
            7,197Stockholders'
      equity:Preferred
      stock - $.01 par value; authorized - 5,000shares; no shares issued
      or outstandingCommon
      stock - $.01 par value; authorized - 50,000 shares; issued - March 31,
      2008, 3,885 shares and December 31, 2007, 3,905 shares
            
            
            39
            
            
            
            39Accumulated
      other comprehensive income
            
            
            (834
            )
            
            
            (789
            )Retained
      earnings
            
            
            39,835
            
            
            
            39,539Total
      stockholders' equity
            
            
            39,041
            
            
            
            38,789TOTAL
            
            $
            46,930
            
            
            $
            45,986


see
notes to consolidated condensed financial statements


-1-




UTAH MEDICAL PRODUCTS,
      INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED
      STATEMENTS OF INCOME FOR THETHREE MONTHS ENDED
      MARCH 31, 2008 AND MARCH 31, 2007(in
      thousands, except per share amounts)(unaudited)THREE
      MONTHS ENDEDMARCH
      31,2008
              
              
              2007Sales,
      net
              
              $
              6,890
              
              
              $
              7,118Cost
      of goods sold
              
              
              3,139
              
              
              
              3,181Gross
      margin
              
              
              3,750
              
              
              
              3,937Operating
      expenseSelling,
      general and administrative
              
              
              1,118
              
              
              
              1,150Research
      & development
              
              
              92
              
              
              
              96Total
              
              
              1,210
              
              
              
              1,246Income
      from operations
              
              
              2,540
              
              
              
              2,691Other
      income
              
              
              203
              
              
              
              300Income
      before provision for income taxes
              
              
              2,743
              
              
              
              2,991Provision
      for income taxes
              
              
              852
              
              
              
              1,047Net
      income
              
              $
              1,891
              
              
              $
              1,944Earnings
      per common share (basic)
              
              $
              0.49
              
              
              $
              0.49Earnings
      per common share (diluted)
              
              $
              0.48
              
              
              $
              0.48Shares
      outstanding - basic
              
              
              3,887
              
              
              
              3,941Shares
      outstanding - duluted
              
              
              3,930
              
              
              
              4,016




see
notes to consolidated condensed financial statements


-2-




UTAH MEDICAL PRODUCTS,
      INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED
      STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS
      ENDED MARCH 31, 2008 AND MARCH 31, 2007(in
      thousands - unaudited)MARCH
      31,2008
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
              
              $
              1,891
              
              
              $
              1,944Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
              
              
              147
              
              
              
              151Gain
      on investments
              
              
              (128
              )
              
              
              (248
              )Provision
      for losses on accounts receivable
              
              
              (10
              )
              
              
              0Loss
      on disposal of assets
              
              
              0
              
              
              
              -Deferred
      income taxes
              
              
              (77
              )
              
              
              -Stock-based
      compensation expense
              
              
              31
              
              
              
              19Changes
      in operating assets and liabilities:Accounts
      receivable - trade
              
              
              97
              
              
              
              (385
              )Accrued
      interest and other receivables
              
              
              (200
              )
              
              
              (149
              )Inventories
              
              
              (457
              )
              
              
              (172
              )Prepaid
      expenses and other current assets
              
              
              (92
              )
              
              
              (100
              )Accounts
      payable
              
              
              92
              
              
              
              49Accrued
      expenses
              
              
              446
              
              
              
              838Total
      adjustments
              
              
              (151
              )
              
              
              4Net
      cash provided by operating activities
              
              
              1,740
              
              
              
              1,948CASH
      FLOWS FROM INVESTING ACTIVITIES:Capital
      expenditures for:Property
      and equipment
              
              
              (85
              )
              
              
              (85
              )Intangible
      assets
              
              
              (4
              )
              
              
              (8
              )Purchases
      of investments
              
              
              (1,000
              )
              
              
              (900
              )Proceeds
      from sale of investments
              
              
              921
              
              
              
              544Net
      cash used in investing activities
              
              
              (168
              )
              
              
              (449
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of common stock - options
              
              
              133
              
              
              
              102Common
      stock purchased and retired
              
              
              (921
              )
              
              
              (544
              )Tax
      benefit attributable to exercise of stock options
              
              
              36
              
              
              
              30Repayments
      of note payable
              
              
              (251
              )
              
              
              (225
              )Payment
      of dividends
              
              
              (880
              )
              
              
              (829
              )Net
      cash used in financing activities
              
              
              (1,883
              )
              
              
              (1,466
              )Effect
      of exchange rate changes on cash
              
              
              44
              
              
              
              (10
              )NET
      INCREASE (DECREASE) IN CASH
              
              
              (267
              )
              
              
              23CASH
      AT BEGINNING OF PERIOD
              
              
              1,251
              
              
              
              610CASH
      AT END OF PERIOD
              
              $
              984
              
              
              $
              634SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the period for income taxes
              
              $
              -
              
              
              $
              -Cash
      paid during the period for interest
              
              $
              66
              
              
              $
              65


see
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, 2007.  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,
2008 and December 31, 2007 consisted of the following:




March
      31,
              2008
            
            
            December 31,
              2007Finished goods
            
            $
            1,190
            
            
            $
            1,245Work-in-process
            
            
            852
            
            
            
            694Raw
      materials
            
            
            1,599
            
            
            
            1,214Total
            
            $
            3,641
            
            
            $
            3,153




(3)The Company adopted the
provisions of FIN 48 “Accounting for Uncertainty in Income Taxes—an
interpretation of FASB Statement No. 109.” on January 1,
2007.   UTMD did not make any adjustment to opening retained
earnings as a result of the implementation.  The Company recognizes
interest accrued related to unrecognized tax benefits along with penalties in
operating expenses.  During the quarters ended March 31, 2008 and
2007, the Company did not recognize any interest and penalties relating to
income taxes.  UTMD did not have any accrual for the payment of
interest and penalties at March 31, 2008 or December 31, 2007.




(4)Comprehensive
Income.  Comprehensive income for the three months ending March 31,
2008 and 2007 was $1,817 and $1,940, net of taxes, respectively.  The
components used to calculate comprehensive income were foreign currency
translation adjustments of $46 and ($4) in 2008 and 2007, respectively, and
unrealized holding losses of ($120) in 2008.




(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 2008:





Beginning
      Balance, January 1, 2008
            
            $
            40Changes in Warranty
      Reserve during 1Q 2008: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, 2008
            
            $
            40




-4-


(6)Investments.  As of
March 31, 2008, the Company’s investments are held in Fidelity Instl Treas Port
Cl I (FISXX), Fidelity US Gov’t Reserves (FGRXX), Fidelity Cash Reserves
(FDRXX), Citigroup (C) and Washington Mutual (WM).  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 2008
            
            
            1Q 2007Balance,
      beginning of period
            
            $
            (156
            )
            
            $
            -Realized
      gain from securities included in beginning balance
            
            
            -
            
            
            
            -Gross
      unrealized holding gains (losses), in equity securities
            
            
            (197
            )
            
            
            -Deferred
      income taxes on unrealized holding loss
            
            
            77
            
            
            
            -Balance,
      end of period
            
            $
            (276
            )
            
            $
            -





(7)Forward-Looking
Information.   This report contains certain forward-looking
statements and information relating to the Company that are based on the beliefs
of management as well as assumptions made by, and information currently
available to, management.  When used in this document, the words
“anticipate,” “believe,” “should,”  “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 distribution partners, and loss of
key personnel


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 or claims of patent infringement by 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.




-5-


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, 2007 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 1Q
2008, UTMD’s consolidated global sales decreased 3% compared to 1Q
2007.  UTMD achieved the following profitability measures for 1Q 2008,
in comparison with 1Q 2007:






1Q
      08
            
            
            
            1Q
      07Gross
      Profit Margin:
            
            
            54.4
            %
            
            
            55.3
            %Operating Profit Margin:
            
            
            36.9
            %
            
            
            37.8
            %Net
      (Income) Margin:
            
            
            27.5
            %
            
            
            27.3
            %




1Q 2008
earnings per share (EPS) were $.481 compared to $.484 in 1Q 2007.




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 fixed contractual agreement.


Total
sales in 1Q 2008 were about 3% lower than in 1Q 2007.  International
sales increased 5% while domestic sales decreased 7%.  Domestic sales
were comprised of domestic direct sales (sales of finished devices to users or
distributors) which were down 9%, and domestic OEM sales (sales of components to
other companies for use in their products) which were up 35%. 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 costs.


Trade
shipments from UTMD’s Ireland facility were down 20% in EURO terms, and down 6%
in USD terms.


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
    2008
            
            
            %
            
            
            
            1Q
    2007
            
            
            %Obstetrics
            
            $
            1,729
            
            
            
            25
            
            
            $
            2,260
            
            
            
            32Gynecology/
      Electrosurgery/ Urology
            
            
            1,562
            
            
            
            23
            
            
            
            1,561
            
            
            
            22Neonatal
            
            
            1,760
            
            
            
            25
            
            
            
            1,744
            
            
            
            24Blood
      Pressure Monitoring and Accessories*
            
            
            1,839
            
            
            
            27
            
            
            
            1,553
            
            
            
            22Total:
            
            $
            6,890
            
            
            
            100
            
            
            $
            7,118
            
            
            
            100


*includes molded components sold to
OEM customers.




-6-




International
revenues by product category:




1Q
    2008
            
            
            %
            
            
            
            1Q
    2007
            
            
            %Obstetrics
            
            $
            94
            
            
            
            4
            
            
            $
            292
            
            
            
            14Gynecology/
      Electrosurgery/ Urology
            
            
            567
            
            
            
            26
            
            
            
            457
            
            
            
            22Neonatal
            
            
            202
            
            
            
            9
            
            
            
            182
            
            
            
            9Blood
      Pressure Monitoring and Accessories*
            
            
            1,322
            
            
            
            61
            
            
            
            1,146
            
            
            
            55Total:
            
            $
            2,185
            
            
            
            100
            
            
            $
            2,077
            
            
            
            100


*includes molded components sold to
OEM customers.





For the
rest of 2008, 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 development of UTMD’s international distribution
channels.




c)   Gross Profit


UTMD’s
average gross profit margin (GPM), gross profits as a percentage of sales, was
54.4% in 1Q 2008, compared to 55.3% 1Q 2007.  As a result of the
combination of lower sales and lower GPM, gross profits declined
5%.  This was primarily due to the mix shift in distribution channels.
International sales and domestic OEM sales, at more heavily discounted prices
because other entities provide the direct sales and marketing efforts, were
together up 9%, while domestic direct sales at less discounted prices were down
9%. In addition, devices manufactured in Ireland, at a lower average GPM in EURO
terms, diluted UTMD’s average gross margins in U.S. Dollar (USD) terms due to
the weaker USD.  A weak USD enhances UTMD’s international revenues but
dilutes gross profits because about 50% of devices sold overseas are
manufactured in Ireland with costs in EURO terms. The third factor negatively
affecting GPM was the higher cost of crude oil, which translated into higher
costs of raw materials for plastic devices, as well as substantially higher
freight costs.  UTMD continues to retain facilities and other
manufacturing capabilities in excess of its needs.  As a result, it
projects that the dilution of fixed overhead costs that will occur with
anticipated increased sales during the remainder of 2008 will help mitigate a
continuing expected increase in incremental direct material and labor costs
together with increased competitive pressure on prices.  The Company
expects an overall GPM in 2008 slightly lower than in 2007.


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 Profit


Operating
Profit, or income from operations, is the surplus after operating expenses are
subtracted from gross profits.  Operating expenses include sales and
marketing (S&M) expenses, product development (R&D) expenses and general
and administrative (G&A) expenses.  Combined operating expenses in
1Q 2008 were lower than 1Q 2007 by $36 mainly as a result of lower sales
expenses when selling through international distributors.  Option
compensation expense included in G&A expenses in 1Q 2008 was $31 compared to
$19 in 1Q 2007.  Operating profit margin in 1Q 2008 was 36.9% compared
to 37.8% of sales in 1Q 2007.  For the remainder of 2008, UTMD expects
to control operating expenses, excluding consideration for litigation expenses
which are less predictable, at a level below 19% of sales, yielding an operating
profit margin slightly lower than in 2007, consistent with the decline in
GPM.


S&M
expenses in 1Q 2008 were $449 or 6.5% of sales compared to $485, or 6.8% of
sales in 1Q 2007.  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.  During the
remainder of 2008, UTMD intends to continue to manage S&M expenses to less
than 8% of total sales.




-7-




R&D
expenses in 1Q 2008 were $92 or 1.3% of sales compared to $96 or 1.4% of sales
in 1Q 2007.  UTMD will opportunistically invest in R&D as projects
are identified that may help its product development pipeline.  During
the remainder of 2008, UTMD plans to continue R&D spending approximately the
same as a percentage of sales.


G&A
expenses in 1Q 2008 were $669 or 9.7% of sales compared to $664 or 9.3% of 1Q
2007 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 of 2002, as
well as estimated stock-based compensation cost as required by SFAS
123R.  Excluding any currently unexpected litigation costs, UTMD plans
to continue to hold G&A expenses in 2008 at a level less than 10% of
sales.




e)   Non-operating income


Non-operating
income in 1Q 2008 was $203 compared to $300 in 1Q 2007.  UTMD received
$141 in 1Q 2008 compared to $254 in 1Q 2007 in interest, dividends and capital
gains income from investing cash balances.  The decline was primarily
due to the fact that interest rates in the U.S. have declined substantially,
reducing interest earned on cash balances.  In 1Q 2008, UTMD paid $66
for interest expense compared to $65 in 1Q 2007.  The interest expense
resulted from UTMD’s Ireland subsidiary borrowing €4.5 million ($5,336) in
December 2005 to allow the repatriation of profits generated by its Ireland
operations between 1996 and 2005.  The loan is being paid by the
Ireland subsidiary from profits generated there.  It should take about
3 more years to repay the loan.  Royalty income, which UTMD receives
from licensing its technology to other companies, was the same in both
years.  Management currently estimates that total 2008 non-operating
income will be about $500 lower than in 2007.  The actual amount of
2008 non-operating income may be even lower if UTMD utilizes its excess cash for
an acquisition, unexpected litigation costs or substantial share
repurchases.




f)    Earnings Before Income Taxes


1Q 2008
earnings before income taxes (EBT) decreased to $2,743 compared to $2,991 in 1Q
2007.  1Q 2008 EBT margin was 39.8% of sales compared to 42.0% in 1Q
2007.




g)   Net Income and Earnings per Share


UTMD’s net income decreased to
$1,891 in 1Q 2008 compared to $1,944 in 1Q 2007.  Net profit margins
(NPM), which are net income (after tax) expressed as a percentage of sales, were
27.5% in 1Q 2008 compared to 27.3% in 1Q 2007.  The income tax
provision rate in 1Q 2008 was 31.1% compared to 35.0% in 1Q 2007.  The
lower tax provision rate resulted primarily from refunds on amended 2004-2006
tax returns for Ireland.  UTMD expects its consolidated income tax
rate for the rest of 2008 will be about the same as in 2007, which was 34.3% for
the year.


Diluted
1Q 2008 Earnings per Share (EPS) decreased slightly to $.481 from $.484 in 1Q
2007. 1Q 2008 weighted average number of diluted common shares (the number used
to calculate diluted EPS) were 3,929,501 compared to 4,015,955 shares in 1Q
2007.  The Company repurchased 31,343 of its shares in the open market
in 1Q 2008.   Exercises of employee options in 1Q 2008 added
11,451 shares (net of 1,800 shares swapped by employees as payment for the
option exercise cost).  Employees exercised a total of 13,251 option
shares during 1Q 2008.  Options outstanding at March 31, 2008 were
about 210,300 shares at an average exercise price of $22.62 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 43,000 shares to
actual weighted average shares outstanding in 1Q 2008 compared to 74,000 in 1Q
2007.  The decrease in 2008 dilution is primarily due to elimination
of about 32,800 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 2008 were 3,885,400 compared to
3,946,400 at the end of 1Q 2007.




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 2008 was 10%, compared to 12% in 1Q
2007.  The lower ROE in 1Q 2008 was due to 3% lower net profits, 6%
higher dividends and 5% higher average equity to date in 2008.  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 continued lower ROE in 2008 compared
to 2007 as a result of lower net profits, higher dividends and higher average
shareholder equity.




-8-


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
$1,740 in 1Q 2008 compared to $1,948 in 1Q 2007.  A $392 smaller
increase in accrued expenses and a $285 larger increase in inventories during 1Q
2008 compared to 1Q 2007 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 $85 in both
periods.  This rate of investing in new property and equipment is
required to keep facilities, equipment and tooling in good working
condition.


In 1Q
2008, UTMD received $133 and issued 11,451 shares of stock upon the exercise of
employee stock options.  Employees exercised a total of 13,251 option
shares in 1Q 2008, with 1,800 shares immediately being retired as a result of
the individuals trading the shares in payment of the exercise price of the
options.  UTMD repurchased 31,343 shares of stock in the open market
at a cost of $921 during 1Q 2008.  Option exercises in 1Q 2008 were at
an average price of $14.13 per share.  Share repurchases in the open
market were at an average cost of $29.38 per share, including commissions and
fees.  In comparison, the Company received $102 from issuing 19,723
shares of stock on the exercise of employee stock options in 1Q 2007, net of
6,197 shares retired upon employees trading those shares in payment of the stock
option exercise price.  UTMD repurchased 16,900 shares of stock in the
open market at a cost of $544 during 1Q 2007.


UTMD Ltd.
made payments of $251 on its note payable during 1Q 2008, compared to $225
during 1Q 2007.  UTMD paid $880 in cash dividends during 1Q 2008
compared to $829 in 1Q 2007.


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 2008 are
expected to be less than $400 to keep facilities, equipment and tooling in good
working order.  In addition, UTMD may use cash in 2008 for selective
infusions of technological, 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,
acquisitions that may strategically fit UTMD’s business and are accretive to
performance.




j)    Assets and Liabilities


March 31,
2008 total assets were $944 higher than at December 31, 2007.  The
increase resulted primarily from a $488 increase in inventories, a $168 increase
in net receivables, and a $303 increase in US Dollar-valued net property and
equipment in Ireland.  Inventories increased as a result of bulk
purchases to offset incremental rising direct materials costs. The Company
expects 2008-ending inventory balances to be about the same as 2007-ending
balances.  Cash and investment balances decreased just $248 despite
paying $880 in dividends, $921 to repurchase shares and $251 in repayments of
the note payable in Ireland.


Working
capital was $26,865 at March 31, 2008, a $98 increase from 2007
year-end.  Working capital continues in excess of UTMD’s normal
operating needs.  Current liabilities increased $576 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.  As a result of the working capital
changes, UTMD’s current ratio decreased to 8.2 on March 31, 2008 from 9.5 at
year-end 2007.  The current ratio was 7.0 on March 31,
2007.


Net
property and equipment increased $277 in 1Q 2008 after additions of $85 and an
increase in the dollar-denominated value of Ireland P&E, offset by
depreciation of $135.  Goodwill resulting from prior acquisitions
remained the same. Net intangible assets excluding goodwill decreased $9 as a
result of amortization of intellectual property of $13 offset by additions of
intangibles of $4.  At March 31, 2008, net intangible assets including
goodwill were 16% of total assets, the same as at year-end 2007.


UTMD’s
long term liabilities are comprised of the Ireland note payable ($3,687 on March
31, 2008) and deferred income taxes ($461 on March 31, 2008).  As of
December 31, 2007, the respective long term liabilities were $3,689 and
$343.  The note payable, denominated in Euros, declined just $2 in USD
book value despite actual principal payments of $251 because the Euro increased
about 7% against the USD.  In Euros, the note declined 6% from €2,791
to €2,620 (both in thousands) during the quarter.   As of March
31, 2008, UTMD’s total debt ratio (total liabilities/ total assets) increased to
17% from 16% on December 31, 2007.  UTMD’s total debt ratio on March
31, 2007 was 19%.




-9-




k)   Management's Outlook.


As outlined in its December 31, 2007
10-K report, UTMD’s plan for 2008 is to


1)
            retain
      the significant U.S. market shares of key products, and continue growth of
      newer products;2)
            add
      proprietary products helpful to clinicians through internal new product
      development;3)
            continue
      to disproportionately increase international sales;4)
            make
      effective adjustments to intracompany manufacturing operations to minimize
      consolidated manufacturing costs;5)
            continue
      outstanding overall financial operating performance;6)
            look
      for new acquisitions to augment sales growth;  and7)
            utilize
      current cash balances in shareholders’ best long-term
  interest.




Other
than a substantial loss in domestic market share of Intran Plus, UTMD
accomplished its 1Q 2008 objective for item 1).  For the other items,
UTMD believes its performance is on track after one quarter in 2008. UTMD does
not announce its new product development initiatives until after it achieves
applicable premarketing regulatory concurrences, or acquisition initiatives
until after a transaction agreement is done.




l)    Accounting Policy Changes.


None.




-10-


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 0.6336 EURO per USD as of March 31, 2008, and 0.7505 EURO per
USD as of March 31, 2007.    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, 2008. Based on this evaluation, the Chief Executive Officer and
Principal Financial Officer concluded that, as of March 31, 2008, 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, 2008, 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, 2007, 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





The following table details purchases
by UTMD of its own securities during 1Q 2008.





ISSUER
PURCHASES OF EQUITY SECURITIES





Period
            
            Total
      Numberof
      SharesPurchased
      (1)
            
            
            AveragePrice
      Paidper
      Share
            
            
            Total
      Number ofShares
      Purchased asPart
      of PubliclyAnnounced
      Plans orPrograms
      (1)
            
            
            Maximum
      Number (orApproximate
      Dollar Value)of
      Shares that May bePurchased
      Under the Plans orPrograms
      (1)1/01/08
      - 1/31/08
            
            
            25,343
            
            
            $
            29.27
            
            
            
            25,3432/01/08
      - 2/29/08
            
            
            6,000
            
            
            
            29.86
            
            
            
            6,0003/01/08
      - 3/31/08
            
            
            -
            
            
            
            -
            
            
            
            -Total
            
            
            31,343
            
            
            $
            29.38
            
            
            
            31,343





(1)In 1Q 2008 UTMD
repurchased the above shares pursuant to a continued open market repurchase
program initially announced in August 1992.  Since 1993 through 1Q
2008, the Company has repurchased 6.4 million shares at an average cost of
$11.95 per share including broker commissions and fees in open market
transactions.  In addition, the Company conducted tender offer
transactions in which it purchased an additional 2.8 million shares at an
average cost of $9.76 per share including fees and administrative
costs.  In total, UTMD has repurchased over 9.2 million of its shares
at an average price of $11.29 per share since 1993.  To complete the
picture relating to current shares outstanding, since 1993 the Company’s
employees and directors have exercised and purchased 1.6 million option shares
at an average price of $9.00 per share.  All options were awarded at
the market value of the stock on the date of the award.




The
frequency of UTMD’s open market share repurchases depends on the availability of
sellers and the price of the stock.  The board of directors has not
established an expiration date or a maximum dollar or share limit for UTMD’s
continuing and long term pattern of open market share repurchases.




The
purpose of UTMD’s ongoing share repurchases is to maximize the value of the
Company for its continuing shareholders, and maximize its return on shareholder
equity by employing excess cash generated by effectively managing its
business.  UTMD does not intend to repurchase shares that would result
in terminating its Nasdaq Global Market listing.





-12-





Item
6. Exhibits





Exhibit
      #
            SEC
              Reference
      #
            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:
      5/9/08
            By: /s/ Kevin L. CornwellKevin
      L. Cornwell
              CEODate:
      5/9/08
            By: /s/
      Paul O. Richins
              Paul O. Richins
              Principal Financial
  Officer