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UTMD Reports Financial Performance for Fourth Quarter and Year 2012

UTMD Reports Financial Performance for Fourth Quarter and Year 2012

SALT LAKE CITY, Jan. 31, 2013 (GLOBE NEWSWIRE) -- In the fourth calendar
quarter (4Q) 2012 and year of 2012, Utah Medical Products, Inc.'s
(Nasdaq:UTMD) changes in financial results compared to the same time period in
the prior calendar year were as follows:

                   4Q                    Year
                    (October – December) (January – December)
Sales:              (1%)                  +10%
Gross Profit:       +2%                   +13%
Operating Income:   +23%                  +28%
Net Income:         +22%                  +37%
Earnings Per Share: +19%                  +35%

Earnings per share for the 2012 calendar year were $2.74. Excluding the
noncash effects of depreciation, amortization of intangible assets and
non-cash stock option expense and asset impairment expense, 2012 consolidated
earnings before taxes plus interest expense were $18,703. Currency amounts
throughout this report are in thousands, except per share amounts and where
noted.

Profitability measures compared to the same time periods in the prior calendar
year were as follows:

                              4Q12  4Q11  2012  2011
Gross Profit Margin (GPM):     61.2% 59.7% 60.9% 59.2%
Operating Profit Margin (OPM): 36.3% 29.4% 36.6% 31.3%
Net Profit Margin (NPM):       23.0% 18.8% 24.5% 19.6%

According to CEO Kevin Cornwell,

  "UTMD obviously had an outstanding financial year in 2012 in a difficult
  economic environment for medical device companies, particularly in the U.S.
  After acquiring Femcare Holdings Limited in March 2011, UTMD was able to
  achieve profit margins more typical of its long term historical performance
  by realizing operating synergies from the combination of the entities. In
  2013, UTMD will have the additional burden of the Obamacare medical device
  excise tax, which will be 2.3% of finished medical device sales in the U.S.
  If the excise tax were applied to 2012 revenues, it would have reduced net
  profits by about $210, reducing eps 6 cents per share. By achieving
  additional operating efficiencies, obtaining the benefit of a further
  lowered corporate income tax rate in the UK and continuing to focus our
  resources in more growth-oriented environments outside the U.S. where the
  tax is not applicable, UTMD hopes to mitigate the negative impact of the new
  tax on shareholder value in 2013.

  As you know, one of management's top priorities has been to eliminate the
  debt which resulted from the Femcare acquisition. UTMD has been repaying
  faster than required. In a year and nine months following the acquisition,
  over half the almost $27 million acquisition loan principal has been repaid.
  During 2012, UTMD reduced its loan balances by $8.7 million.

  We invite shareholders to read UTMD's SEC Form 10-K which will be published
  by March 18 to obtain more details regarding 2012 performance and management
  projections for 2013. UTMD's focus remains on creating excellent long term
  shareholder value through providing highly reliable devices that help
  clinicians improve care and lower overall health care costs. We appreciate
  the continued confidence that our shareholders have demonstrated in the
  Company's prospects for future success."

Sales.

Total consolidated sales were up 10% in 2012 primarily because UTMD had the
benefit of Femcare's added sales for the full year compared to about 80% of
the prior year. Domestic U.S. sales in 2012 were $19,955 (48% of total sales)
compared to $18,853 (50% of total sales) in 2011.In 4Q 2012, domestic U.S.
sales were $4,434 (45% of total sales) compared to $4,647 (47% of total sales)
in 4Q 2011. International sales in 2012 were $21,596 compared to $19,007 in
2011.In 4Q 2012, international sales were $5,398 compared to $5,259 in 4Q
2011.Looking forward to 2013, UTMD expects continued growth in international
sales to offset modest declines in U.S. domestic sales, with the exception of
projected Filshie Clip sales by Femcare to Cooper Surgical in the U.S.

U.S. dollar (USD) denominated sales of devices to international customers by
UTMD's Ireland facility (excluding intercompany sales) were up 39% in 2012
compared to 2011, and were up 44% for 4Q 2012 compared to 4Q 2011. In Euro
terms, UTMD Ltd (Ireland) 2012 sales were up 50% for the year and up 52% for
4Q.A stronger U.S. dollar (USD) reduced the impact of growth in Ireland
subsidiary sales. The average currency exchange rate in 2012 was 1.289
USD/Euro compared to 1.394 USD/Euro in 2011.The average currency exchange
rate was 1.282 USD/Euro in 4Q 2012 compared to 1.355 USD/Euro in 4Q 2011.The
growth in sales occurred both from improved orders for preexisting products,
and also from direct (non-UK) international sales of products previously
manufactured for Femcare by external suppliers and sold by Femcare to
customers outside the UK.UTMD projects continued substantial growth in
Ireland subsidiary sales in 2013 as the facility continues to expand its
direct distribution of products.

U.S. dollar (USD) denominated sales of devices to domestic and international
customers by Femcare Group, Ltd (Femcare-Nikomed Ltd. and Femcare-Australia
Ltd.), excluding intercompany sales, were up 24% in 2012 compared to 2011, and
were down 14% for 4Q 2012 compared to 4Q 2011. The annual increase was due to
the fact that UTMD had the benefit of Femcare's added sales for the full year
compared to about 80% of the prior year. The 4Q decrease was due to a weak
quarter for direct hospital sales within the UK.In British Pound (GBP) terms,
Femcare's 2012 sales were up 26% for the year and down 16% for 4Q.The average
currency exchange rate in 2012 was 1.584 USD/GBP compared to 1.606 USD/GBP in
2011.The average currency exchange rate was 1.606 USD/GBP in 4Q 2012 compared
to 1.572 USD/GBP in 4Q 2011.UTMD projects about 5% lower sales for Femcare in
2013, based on a projection by Femcare's largest customer, Cooper Surgical,
for purchases of Filshie Clips for distribution in the U.S., that is $650
lower than in 2012. 

Gross Profit.

UTMD's 2012 average gross profit margin (GPM) improved because of a more
favorable product mix over a full year compared to 80% of the prior year,
substantially better utilization of manufacturing direct labor and overhead
costs in Ireland, and better efficiencies in Utah molding operations from
providing a greater volume of molded part components both to intercompany as
well as external OEM customers.

Operating Profit.

Operating Profit results from subtracting operating expenses from gross
profit. Operating expenses in 2012 were 24.3% of sales compared to 27.9% of
sales in 2011. Operating expenses in 4Q 2012 were 24.9% of sales compared to
30.3% of sales in 4Q 2011. Operating expenses are comprised of general and
administrative (G&A) expenses, sales and marketing (S&M) expenses and product
development (R&D) expenses. In USD terms, 2012 operating expenses were
$10,111 compared to $10,558 in 2011.G&A expenses were $6,877 (16.6% of 2012
sales) compared to $7,225 (19.1% of 2011 sales).G&A expenses in 2011 included
$341 in Femcare acquisition expenses which did not recur in 2012.Amortization
of the acquired Femcare identifiable intangible assets (IIA) is part of G&A
expenses. Amortization of Femcare IIA were 6.2% of 2012 sales, compared to
5.4% of 2011 sales. IIA amortization, a noncash expense, of about $2.6 million
per year, depending on the USD/GBP exchange rate, will continue for the
fifteen year estimated useful life of the Femcare IIA (or until the value of
remaining IIA becomes impaired) from the March 2011 acquisition date. S&M
expenses were $2,671 (6.4% of 2012 sales) compared to $2,815 (7.4% of 2011
sales). S&M expenses were down as a result from UTMD consolidating its S&M
resources with Femcare. R&D expenses were $563 (1.4% of 2012 sales) compared
to $518 (1.4% of 2011 sales).A higher gross profit margin combined with lower
operating expense ratio leveraged UTMD's operating profit margin. Operating
profit in 2012 was $15,196 (36.6% of sales) compared to $11,842 in 2011 (31.3%
of sales). In 4Q 2012, UTMD's operating profit was $3,570 (36.3% of sales)
compared to 4Q 2011 operating profit of $2,913 (29.4% of sales).

EBT.

Earnings Before Tax (EBT) results from subtracting non-operating expenses from
operating profit. Non-operating expenses in 2012 were $659 compared to $762 in
2011.The largest component of non-operating expense was interest on UTMD's
loans required to acquire Femcare. Interest on the acquisition loans only
accrued for 80% of 2011 compared to all of 2012. Nevertheless, interest
expense in 2012 was just $652 compared to $859 in 2011 because of UTMD's rate
of reduction of its debt balance. The total reduction in non-operating expense
was less than the reduction in interest as a result of a $177 write-down of
assets due to impairment, offset by $52 more non-operating income in 2012 from
renting an unused portion of the Ireland facility.2012 EBT was $14,537
compared to $11,080 in 2011. EBT in 2013 will continue to benefit from lower
interest expense.

Net Profit.

Net profit results from subtracting estimated income taxes from EBT.The
consolidated income tax provision rate for 2012 was 30.0% compared to 33.1% in
2011.The substantially lower tax provision rate was due mainly to an
enlightened government in the UK which continued to lower corporate income
taxes in order to promote growth in that country, but also to UTMD's shift of
business from a substantially higher taxed sovereignty in the U.S. to lower
taxed sovereignties in Ireland and the UK. UTMD's net profit 2012 was $10,169
(24.5% of consolidated sales) compared to $7,414 in 2011 (19.6% of sales), due
to expansion of its operating profit margin, lower non-operating expenses and
lower consolidated income tax rate.In 4Q 2012, UTMD's net profit was $2,259
(23.0% of sales) compared to $1,858 (18.8% of sales) in 4Q 2011.The higher
net profit margin drove UTMD's Return on Shareholder Equity for the year of
2012 (prior to the payment of cash dividends) to 22% from 19% in 2011.

Earnings Per Share (EPS).

Outstanding shares at the end of 2012 were 3,703,000 compared to 3,640,000 at
the end of 2011. The number of shares used for calculating earnings per share
was higher than ending shares because of a time-weighted calculation of
average outstanding shares plus dilution from unexercised employee and
director options.The total number of outstanding unexercised employee and
outside director options at December 31, 2012 was 149,500 shares at an average
exercise price of $26.68/ share, including shares awarded but not vested. This
compares to 238,300 unexercised option shares outstanding at the end of 2011.
The decrease was due to options exercised by employees after a substantial
increase in share price during the year. UTMD's dilution from unexercised
option shares added to actual weighted average outstanding shares for purposes
of calculating eps was 33,900 in 4Q 2012 compared to 11,800 in 4Q 2011, and
34,000 for the year 2012 compared to 14,100 in 2011.The increase in dilution
was due to the 34% higher share price at the end of 2012 compared to the end
of 2011.

UTMD paid $3,555 in cash dividends ($.965/share) to its shareholders in 2012
compared to $3,433 ($.945/share) in 2011.Dividends paid to shareholders
during 2012 were 35% of net profits and EPS.

During 4Q 2012, UTMD repurchased 15,000 of its shares in the open market at
$33.57 per share including commissions. UTMD did not repurchase shares in the
open market during the first three quarters of 2012 or in 2011. The Company
retains the financial ability for repurchasing its shares when they seem
undervalued. The closing share price at the end of 2012 was $36.05, up 34%
from the $27.00 closing price at the end of 2011.

Changes in UTMD's Balance Sheet at the end of 2012 from the end of 2011 again
represented significant improvement. At the end of 2012, UTMD owned $77
million in total assets including $9 million in cash, offset by about $13
million in debt. Intangible assets represented 65% of total assets.
Stockholders' Equity was $51 million.In comparison, at the end of 2011, UTMD
had almost $7 million in cash and equivalents as part of $76 million in total
assets, and $22 million in debt. Intangible assets were 66% of total assets,
and Stockholders' Equity was less than $41 million.

Some other highlights regarding changes in UTMD's Balance Sheet during 2012
include:

1)Cash and investments balances increased $2.3 million even though the
Company distributed $3.6 million in cash payments to shareholders, used $0.5
million to repurchase shares and reduced loan principal balances in USD terms
by $8.7 million.

2)The Ireland loan was repaid in full.

3)Inventories, which were too high after the acquisition of Femcare, were
reduced 13% or $652, achieving year end inventory turns at 3.7.

4) Accounts Receivable over 90 days from date of invoice were less than 1% of
trade receivables.

Financial ratios as of December 31, 2012 which may be of interest to
shareholders follow:

1)Current Ratio = 2.0

2)Days in Trade Receivables (based on 4Q sales activity) = 35

3)Average Inventory Turns (based on 4Q CGS) = 3.4

4)2012 ROE = 22% (prior to payment of dividends)

Investors are cautioned that this press release contains forward looking
statements and that actual events may differ from those projected.Risk
factors that could cause results to differ materially from those projected
include market acceptance of products, timing of regulatory approval of new
products, regulatory intervention in current operations, government health
care "reforms", the Company's ability to efficiently manufacture, market, and
sell its products, among other factors that have been and will be outlined in
UTMD's public disclosure filings with the SEC.

Utah Medical Products, Inc., with particular interest in health care for women
and their babies, develops, manufactures, assembles and markets a broad range
of disposable and reusable specialty medical devices designed for better
health outcomes for patients and their care-providers.For more information
about Utah Medical Products, Inc., visit UTMD's website at www.utahmed.com.

Utah Medical Products, Inc.                                                
                                                       
INCOME STATEMENT, Fourth Quarter (3 months ended December                
31)
(in thousands except earnings per share):                                  
                                 4Q 2012     4Q 2011     Percent Change
Net Sales                         $9,832      $9,907      (0.7%)
Gross Profit                      6,021       5,913       +1.8%
Operating Income                  3,570       2,913       +22.5%
Income Before Tax                 3,322       2,711       +22.5%
Net Income                        2,259       1,858       +21.6%
Earnings Per Share                $0.606      $0.509      +19.1%
Shares Outstanding (diluted)      3,727       3,651       

                                                                      
INCOME STATEMENT, Year (12 months ended December                       
31)
(in thousands except earnings per share):                                  
                                   2012         2011   Percent Change
Net Sales                           $41,552       $37,860 +9.8%
Gross Profit                        25,307        22,400  +13.0%
Operating Income                    15,196        11,842  +28.3%
Income Before Tax                   14,537        11,080  +31.2%
Net Income                          10,169        7,414   +37.2%
Earnings Per Share                  $2.740        $2.034  +34.7%
Shares Outstanding (diluted)        3,711         3,645   

                                                               
BALANCE SHEET                                                   
(in thousands)                          (audited)    (unaudited) (audited)
                                       DEC 31, 2012 SEP 30, 2012 DEC 31, 2011
Assets                                                          
Cash & Investments                      $8,913       $9,369       $6,599
Accounts & Other Receivables, Net       4,341        5,037        4,734
Inventories                             4,353        4,707        5,005
Other Current Assets                    928          944          678
Total Current Assets                    18,535       20,057       17,016
Property & Equipment, Net               8,428        8,449        8,805
Intangible Assets, Net                  49,972       50,297       50,568
Total Assets                            $76,935      $78,803      $76,389
                                                               
Liabilities & Shareholders' Equity                              
A/P & Accrued Liabilities               $3,821       $5,965       $4,201
Current Portion of Notes Payable        5,402        5,450        5,430
Total Current Liabilities               9,223        11,415       9,631
Notes Payable (excluding current        7,603        9,415        16,242
portion)
Other LT Liabilities                    363          450          434
Deferred Tax Liability – Intangibles    7,890        8,053        8,549
Deferred Revenue and Income Taxes       884          760          777
Stockholders' Equity                    50,972       48,710       40,756
Total Liabilities & Shareholders'       $76,935      $78,803      $76,389
Equity

CONTACT: Paul Richins
         (801) 566-1200
 
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