Utah Medical Correspondence August 23, 2005

UTSE 0001

Confidential Treatment Requested by Greg A. LeClaire

3	August 23, 2005

5	Ms. Kate Tillan

6	Assistant Chief Accountant

7	Mail Stop 6010

8	Division of Corporation Finance

9	U.S. Securities and Exchange Commission

10	Washington, D.C. 20549-6010

VIA EDGAR

14	Re: Utah Medical Products, Inc. (UTMD)

15	Form 10-K/A for the Fiscal Year Ended December 31, 2004

16	Filed July 19, 2005

17	Form 10-Q/A for the Fiscal Quarter Ended March 31, 2005

18	Form 10-Q for the Fiscal Quarter Ended June 30, 2005

19	File No. 001-12575

21	Dear Ms. Tillan:

Thank you for your continued dialogue regarding the above filings. This letter is UTMD’s response to SEC

written comments dated August 10, 2005, which will also be filed on EDGAR as private correspondence with

the SEC. For ease of reference in the following, I have incorporated the August 10, 2005 comments in italics

followed by UTMD’s responses.

26	Amendment No. 1 to Form 10-K for the Fiscal Year Ended December 31, 2004 filed on July 19, 2005

27	Consolidated Financial Statements, page F-1

28	Report of Independent Registered Public Accounting Firm, pages F-3 and F-5

We note that you restated your financial statements to reclassify the amounts related to your gain

from the settlement of a patent dispute from extraordinary income to other non-operating income

within your statement of income. Please tell us why you did not label the financial statements as

restated, disclose the reasons for the revision in a note to the financial statements and provide the

other disclosures required by paragraph 37 of APB 20. Please also tell us why your auditors do not

refer to the restatement in the auditors report and dual date report.

35	UTMD Response to Item 1.:

Pursuant to Greg LeClaire’s August 19, 2005 teleconference with Tara Harkins and you, UTMD understands

that the SEC has retracted its last request for UTMD to label its financial statements as restated. Therefore,

UTMD will not issue any SEC filings, amended or otherwise, with the “restatement label,” in response to the

August 10, 2005 SEC comment letter.

41	Consolidated Statement of Income and Comprehensive Income, page F-8

We note from your response to prior comment 11 from our June 15, 2005 letter and your amendment

that you reclassified $6,060,000 in 2004 and $24,884,000 in 2003 related to your gain from the

settlement of the Tyco patent infringement from extraordinary income to other non-operating income.

As previously noted and based upon your disclosure and responses to our comments, since these

patents relate to your operations these costs should be classified within operating income.

Accordingly, please amend your Form 10-K and subsequent Forms 10-Q to classify the gain within

operating income.

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Confidential Treatment Requested by Greg A. LeClaire

49	UTMD Response to Item 2.:

Pursuant to Greg LeClaire’s August 19, 2005 teleconference with Tara Harkins and you, UTMD understands

that the SEC is not requiring UTMD to file any amended 10-Ks or 10-Qs to reclassify the Tyco patent

infringement gain from non-operating to operating income. Therefore UTMD will not issue any amended SEC

filings related to this item. In accordance with the SEC’s request, however, UTMD’s future filings will classify

this gain as operating income.

In addition, please tell us and amend the Form 10-K to include a discussion of the nature, timing and

measurement of the gain from the patent infringement settlement in the notes to the consolidated

financial statements.

59	UTMD Response to Item 3.:

Pursuant to Greg LeClaire’s August 19, 2005 teleconference with Tara Harkins and you, UTMD understands

the reason for the SEC’s request for an expanded discussion to be included in the notes to the consolidated

financial statements in future filings. From the teleconference, we understand that SEC has agreed that UTMD

will not issue an amended filing to include a discussion of the nature, timing and measurement of the gain in the

notes to the consolidated financial statements.

66	Note 1. Summary of Significant Accounting Policies, page F-12

67	Revenue Recognition, page F-13

We note your response to prior comment 6 from our June 15, 2005 letter. Since sales with terms of

FOB destination should be recognized as revenue when received by the customer upon transfer of title

and not when the product is shipped, you should revise your revenue recognition policy with respect to

these transactions in future periods and restate your financial statements for prior periods to correct

this error, if material. Your assessment of materiality should include each reporting period, including

2002 and 2003, and you should perform your assessment on both a quantitative and qualitative basis.

The quantitative analysis should consider each relevant quantitative measure, including gross profit,

and not just the error as a percentage of sales.

76	UTMD Response to Item 4.:

77	[*******UTMD’s response to Item 4 is redacted*************]

We note your disclosure that you believe”…that revenue should be recognized at the time of shipment

as title generally passes to the customer at the time of shipment.” Please tell us and revise to disclose

why you use the term generally. Disclose when you record revenue at the time of shipment when title

has not transferred and why this policy complies with U.S. GAAP.

84	UTMD Response to Item 5.:

UTMD uses the term generally in its revenue recognition disclosure since there are circumstances under which

revenue may be recognized when product is not shipped, all of which meet the criteria of SAB 104. UTMD

believes its existing 10-K/A disclosure adequately address these circumstances which are described below.

First, 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.

UTMD believes this complies with U.S. GAAP pursuant to Concepts Statement 5, paragraph 84(d) which states

that “If services are rendered…continuously over time…reliable measures based on contractual prices

established in advance are commonly available…revenues may be recognized as earned as time passes.”

Second, the Company manufactures products for other companies (OEM customers) according to fixed longer

term supply contracts which are not cancelable or changeable. Occasionally, an OEM customer will request the

Company to bill completed products according to the contract, but hold shipment for some business purpose of

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Confidential Treatment Requested by Greg A. LeClaire

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the customer (e.g. awaiting some mating component from another supplier). UTMD believes this complies with

U.S. GAAP pursuant to SAB 104 which states, among other things, that “1. The risks of ownership must have

passed to the buyer; 2. The customer must have made a fixed commitment to purchase the goods, preferably in

written documentation; 3. The buyer, not the seller, must request that the transaction be on a bill and hold basis;

and 4. There must be a fixed schedule for delivery of the goods.”

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Third, The Company manufactures products for foreign companies according to fixed contracts which are not

cancelable or changeable. Occasionally, a foreign customer under a prepay obligation will request the

Company to bill completed products according to the contract, but hold shipment until payment will be made.

UTMD believes this complies with U.S. GAAP pursuant to the bill and hold arrangements discussed in the

preceding paragraph.

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We note your response to prior comment 6 from our June 15, 2005 letter. Please tell us the amount of

revenue recognized in fiscal 2002, 2003, 2004 and the first six months of 2005 related to bill and hold

sales. Please explain to us how you evaluated all of the criteria related to revenue recognition for bill

and hold sales discussed in SAB Topic 13.A.3(a). Please also address why you believe it is appropriate

to recognize revenue on transactions with customers that are obligated to prepay for products when

you bill those customers. Address how this policy meets the criteria of SAB Topic 13.A.1, as well as

13.A.3(a).

119	UTMD Response to Item 6.:

121	[********UTMD’s response to Item 6 is redacted*********]

122	Note 5. Note Payable, page F-18

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Under Item 10(e)(1)(ii) of Regulation S-K, you should not present non-GAAP financial measures on

the face of your financial statements prepared in accordance with GAAP or in the accompanying

notes. As such, please amend to delete your presentation of the non-GAAP measures for EBITDA for

the years ended December 31, 2003 and 2004 in the notes to your financial statements.

127	UTMD Response to Item 7.:

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UTMD included the EBITDA reference for the sole purpose of disclosing a principal financial loan covenant in

the loan agreement of its unsecured bank line-of-credit. UTMD did not present the EBITDA reference as a

financial measure for investors to use in direct unison with its financial statements but rather as a disclosure for

investors to understand a key provision by its bank lender in its loan agreement.

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Pursuant to the Greg LeClaire August 19, 2005 teleconference with Tara Harkins and you, UTMD understands

the SEC’s position that EBITDA, regardless of the reason for presenting it, should not be included in the notes

to consolidated financial statements. Accordingly, UTMD will not reference EBITDA in its notes to

consolidated financial statements in future filings. In addition, UTMD understands that the SEC does not

request that UTMD amend any prior SEC filings to delete this EBITDA reference.

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138	Representations

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Please refer to comment 15 in our June 15, 2005 letter. We note your statement that “UTMD provided

a qualified acknowledgement of the third bullet point…” and you “…believe that [the] SEC’s

comments could be material to UTMD’s defense in an enforcement proceeding, and therefore cannot

acknowledge the third bullet point as written.” Please note that you many not change, qualify or

condition the requested representations in this manner. Please provide all three acknowledgements in

the form previously requested.

145	UTMD Response to Item 8.:

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Very respectfully, upon careful review with legal counsel, UTMD believes that the third bullet point

acknowledgement may be a violation of its civil rights under the U.S. Constitution. As a matter of principle,

taking our fiduciary responsibilities to U.S. public shareholders very seriously, we cannot make the requested

acknowledgement. We do acknowledge that UTMD cannot assert that SEC has agreed with its amendments in

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a subsequent enforcement proceeding. We sincerely hope that this form of acknowledgement satisfies the

substance of your request. The acknowledgement issue is hopefully moot, if SEC concludes that UTMD is

complying with the applicable regulations.

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It is our information and belief that UTMD’s responses are now complete to the satisfaction of the SEC. Thank

you for your review and assistance.

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157	Sincerely,

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/s/ Greg A. LeClaire

Greg A. LeClaire

Chief Financial Officer

/s/ Kevin L. Cornwell

Kevin L. Cornwell

Chairman & CEO