\===============================================================================
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

[x]         Annual  report  pursuant  to Section  13 or 15(d) of the  Securities
            Exchange Act of 1934 for the fiscal year ended December 31, 2000 or

[ ]         Transition  report pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934.


                           MERIT MEDICAL SYSTEMS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Utah                           0-18592               87-0447695
 ---------------------------      ---------------------    ------------------
(State or other jurisdiction      (Commission File No.)      (IRS Employer
    of incorporation)                                      Identification No.)

                             1600 West Merit Parkway
                            South Jordan, Utah 84095
          ------------------------------------------------------------
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (801) 253-1600

         Securities registered pursuant to Section 12(b) of the Act:

                                      None
                                      ----

         Securities registered pursuant to Section 12(g) of the Act:

                                 Title of Class
                           --------------------------
                           Common Stock, No Par Value

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 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.

Yes [ ]   No [X]

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the  Registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |X|

         The aggregate  market value of the Common Stock held by  non-affiliates
of the Registrant,  based upon the closing sale price of the Common Stock on the
NASDAQ National Market System on March 28, 2001, was approximately  $48,274,801.
Shares of Common  Stock held by each officer and director and by each person who
may be deemed to be an affiliate have been excluded.

         As of March 28,  2001 the  Registrant  had  7,801,988  shares of Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the following  documents are  incorporated  by reference in
Parts II, III and IV of this Report: the Registrant's definitive Proxy Statement
relating to the Annual Meeting of Shareholders  scheduled for May 23, 2001 (Part
III).
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                                TABLE OF CONTENTS

                                                                                                              
          PART I................................................................................................. 1
Disclosure regarding forward-looking statements.................................................................. 1
-----------------------------------------------
Item 1.   Business............................................................................................... 1
          --------
          GENERAL ............................................................................................... 1
          PRODUCTS............................................................................................... 2
                  Inflation Devices.............................................................................. 2
                  Control Syringes............................................................................... 3
                  Specialty Syringes............................................................................. 3
                  High Pressure Contrast Injection Line and Sherlock Connectors.................................. 3
                  Manifolds...................................................................................... 3
                  Waste Containment Systems...................................................................... 4
                  Hemostasis Valves.............................................................................. 4
                  Torque Device.................................................................................. 4
                  Marquis Series Stopcock........................................................................ 4
                  Contrast Management Systems.................................................................... 4
                  Majestik Angiographic Needles.................................................................. 4
                  Fountain Infusion Catheter..................................................................... 4
                  Tomcat (PTCA) Guide Wire ...................................................................... 4
                  Squirt Wound Irrigation ....................................................................... 4
                  Angiography Pigtail Catheter .................................................................. 4
                  Pericardiocentesis............................................................................. 4
                  Meritrans Pressure Transducers ................................................................ 5
                  ShortStop ..................................................................................... 5
                  Custom Kits.................................................................................... 5
                  Diagnostic Cardiology Catheters ............................................................... 5
                  Diagnostic Radiology Catheters................................................................. 5
                  Vessel-Sizing Catheters ....................................................................... 5
                  Percutaneous Sheath Introducers................................................................ 5
                  Diagnostic Guide Wires......................................................................... 5
                  Guide Catheters................................................................................ 5
                  MARKETING AND SALES............................................................................ 5
                  Market Strategy................................................................................ 5
                  U.S. Sales..................................................................................... 6
                  International Sales............................................................................ 6
          CUSTOMERS.............................................................................................. 6
          RESEARCH AND DEVELOPMENT............................................................................... 7
          MANUFACTURING.......................................................................................... 7
          COMPETITION............................................................................................ 7
          PATENTS, PATENT APPLICATIONS, LICENSES, TRADEMARKS AND COPYRIGHTS...................................... 8
          REGULATION............................................................................................. 9
          EMPLOYEES.............................................................................................. 9
          FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND
                   EXPORT  SALES................................................................................. 9
Item 2.   Properties............................................................................................. 9
          ----------

Item 3.   Legal Proceedings..................................................................................... 10
          -----------------

Item 4.   Submission of Matters to a Vote of Security Holders................................................... 10
          ---------------------------------------------------

PART II   ...................................................................................................... 11

Item 5.   Market for Registrant's Common Stock and Related Shareholder Matters.................................. 11
          --------------------------------------------------------------------

Item 6.   Selected Financial Data............................................................................... 11
          -----------------------

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations................. 12
          -------------------------------------------------------------------------------------

Item 7A. Quantitative and Qualitative Disclosure About Market Risk ............................................. 14
         ---------------------------------------------------------



                                       ii




(Continued)



                                                                                                             
Item 8.   Financial Statements and Supplementary Data........................................................... 15
          -------------------------------------------

Item 9.   Changes and Disagreements with Accountants on Accounting and Financial Disclosure..................... 37
          ---------------------------------------------------------------------------------

PART III  ...................................................................................................... 37

Items 10, 11, 12 and 13......................................................................................... 37

PART IV   ...................................................................................................... 37

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K....................................... 37
          ---------------------------------------------------------------

SIGNATURES...................................................................................................... 39


                                       iii






                                     PART I

DISCLOSURE REGARDING FORWARD -LOOKING STATEMENTS

          This Report includes  "Forward-Looking  Statements" within the meaning
of Section 27A of the  Securities Act of 1933, as amended and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.  All  statements  other  than
statements of historical fact are  "Forward-Looking  Statements" for purposes of
these  provisions,  including  any  projections  of earnings,  revenues or other
financial  items,  any  statements of the plans and objectives of management for
future operations,  any statements concerning proposed new products or services,
any statements  regarding  future economic  conditions or  performance,  and any
statements of assumptions underlying any of the foregoing.  All Forward- Looking
Statements  included  in this  document  are made as of the date  hereof and are
based on  information  available  to Merit as of such  date.  Merit  assumes  no
obligation   to  update   any   Forward-Looking   Statement.   In  some   cases,
Forward-Looking  Statements can be identified by the use of terminology  such as
"may,"  "will,"  "expects,"  "plans,"  "anticipates,"  "intends" or  "believes,"
"estimates,"  "potential,"  or  "continue,"  or the  negative  thereof  or other
comparable  terminology.  Although the Company  believes  that the  expectations
reflected in the  Forward-Looking  Statements  contained  herein are reasonable,
there can be no assurance that such  expectations or any of the Forward- Looking
Statements will prove to be correct,  and actual results could differ materially
from  those  projected  or  assumed in the  Forward-Looking  Statements.  Future
financial  condition and results of operations,  as well as any Forward- Looking
Statements are subject to inherent  risks and  uncertainties,  including  market
acceptance of the Company's products,  product  introductions  potential product
recalls, delays in obtaining regulatory approvals, cost increases,  fluctuations
in and obsolescence of inventory, price and product competition, availability of
labor and materials,  development of new products and techniques that render the
Company's products obsolete,  foreign currency  fluctuations,  changes in health
care  markets  related  to health  care  reform  initiatives  and other  factors
referred  to in  the  Company's  press  releases  and  reports  filed  with  the
Securities and Exchange  Commission.  All subsequent Forward- Looking Statements
attributable  to the  Company  or persons  acting on its  behalf  are  expressly
qualified in their entirety by these cautionary statements.

Item 1.   Business.
          ---------

GENERAL

          Merit  Medical  Systems,  Inc. (the  "Company")  was formed in 1987 by
members  of its  current  management  for the  purpose of  producing  single-use
medical  products  of high  quality  and  superior  value  primarily  for use in
diagnosis and treatment of cardiovascular  disease.  The Company's  products are
designed to provide  physicians and other health care professionals with devices
that enable them to perform  interventional and diagnostic procedures safely and
effectively.  Initially,  the  Company's  expertise  in  product  design and its
proprietary  technology and skills in injection and insert molding enabled it to
introduce  innovative  new products and capture  significant  market share.  The
Company   subsequently   combined  its  plastics  molding  capability  with  the
application of proprietary electronics and sensor-based  technologies to develop
a line of angioplasty  inflation  products with  electronic  sensing and display
features.  These  devices are now included in a group of  sensor-based  products
that address a broad range of needs  related to  diagnostic  and  interventional
catheterization  procedures  performed in hospitals.  Since 1997 the Company has
expanded  its  product  offerings  to include  catheters,  guide  wires,  sheath
introducers, needles and drug infusion devices.

          The  Company's  strategy  is to  offer  a broad  line  of  innovative,
disposable  products for diagnosis and intervention in radiology and cardiology.
Merit  continues to increase  market  acceptance  and  penetration  for both its
existing and new products in the U.S. and in international markets. Longer term,
the  Company's  strategy  is to  extend  the  application  of  its  sensor-based
technologies,   plastics   molding,   catheter,   guide  wire,   and  electronic
capabilities  and  to  develop   products  for  diagnostic  and   interventional
procedures  in  additional  markets  such as  neuroradiology,  nephrology,  pain
management  and critical care.  The Company's  sales of stand-alone  products in
combination  with custom kits have  increased as additions have been made to the
Company's product lines. In 2000,  approximately 53% of the Company's sales were
made  directly to U.S.  hospitals  and  approximately  22% of sales were made to
custom packagers,  distributors and O.E.M. companies who also distribute to U.S.
hospitals.  Approximately  25% of the  Company's  sales  in  2000  were  made in
international markets.

                                        1






          The Company was organized in July 1987 as a Utah corporation.  In July
1994,  the  Company  purchased  a  controlling   interest  in  Sentir,  Inc.,  a
California-based manufacturer of silicon sensors, ("Sentir") and during 1999 the
Company  purchased  the  remaining  interest.  The Company also has  established
subsidiaries in Ireland,  Germany,  France, the United Kingdom,  Belgium, and in
the case of Sentir,  the Netherlands to conduct its international  business.  On
January 31, 1997, the Company  purchased the operating  assets and product lines
of Universal Medical  Instruments Corp.  ("UMI"). On August 20, 1999 the Company
purchased the operating  assets and product lines of the Angleton Texas division
of  Mallinckrodt  Inc.  ("Mallinckrodt").  The Company's  principal  offices are
located in a manufacturing and office facility at 1600 West Merit Parkway, South
Jordan, Utah 84095, and its telephone number is (801) 253-1600.
See "Item 2. Properties."

PRODUCTS

          The Company's products have been designed and developed in response to
the needs of customers and patients.  These needs have been identified primarily
through  observation of procedures in the cardiac  catheterization and radiology
laboratories,  consultation  with the Company's medical advisors and consultants
and through direct  communication  with  customers.  Since 1988, the Company has
developed and introduced  several  product  lines,  including  control  syringes
(CCS(TM)and  Smart Tip(TM)),  inflation  devices  (Intellisystem(R)  Monarch(R),
Basix(TM), and basixCOMPAK(TM) including new 25-atmosphere versions),  specialty
syringes  (Medallion(R),and  VacLok(R)),  high-pressure  tubing  and  connectors
(Excite(TM),  flexible,  braided, rigid, pvc, and Sherlock(TM)) , waste handling
and disposal products (Merit Disposal  Depot(R) and  Backstop(R)),  a disposable
blood pressure transducer (Meritrans(R)), disposable hemostasis valves (MBA(TM),
Passage(R),  Access-9,(TM) Access Plus(TM),  Double-Play(TM) and Inspector(TM)),
manifolds  and  stopcocks   (Marquis(R)  Series),  a  torque  device,   contrast
management  systems  (Miser(R)  and  In-Line  Contrast  Management  System(TM)),
angiography needles (Majestik(R) Series),  blood containment devices (Captiva(R)
), pericardiocentesis catheters and procedure trays, PTCA guide wires (TomCat(R)
)  and  extension  wires,   thrombolytic  infusion  catheters  (Fountain(R)  and
Mistique(TM))  and accessories  (Squirt(TM)),  diagnostic  angiographic  pigtail
catheters,  and diagnostic cardiology and radiology catheters,  (SofTouch(R) and
Performa(R),  sheath  introducers  (DialEase(TM))  and  diagnostic  guide wires,
RadStat(TM) and  BackStop(TM).  These products are sold separately and in custom
kits consisting primarily of selected combinations of products.

          The Company has not experienced any product liability claims; however,
the sale and use of its products entails an inherent risk that product liability
claims may be  asserted  against the  Company.  The  Company  maintains  product
liability  insurance  in the  amount of  $5,000,000  per  occurrence  and in the
aggregate,  which may not be  adequate  for  expenses  or  liabilities  actually
incurred.

          Inflation Devices.  Inflation devices are large,  specialized syringes
used  in  interventional  catheterization  procedures  to  inflate  and  deflate
balloon-tipped catheters. The Company has received 510(k) approval from the U.S.
Food  and Drug  Administration  ("the  FDA")  for use of its  digital  inflation
devices  for  a  wide  range  of  additional   clinical   applications  such  as
discography,  esophageal dilitation,  trigeminal nerve compression,  and retinal
detachment.  Each  of  the  Company's  inflation  devices  and  universal  fluid
dispensing  syringes  incorporates  patented,  proprietary design features which
contribute  to ease of use,  including  allowing  the  clinicians  to  engage or
release the syringe  plunger with one hand while  increasing or  decreasing  the
pressure.  Each  syringe  also  provides  a clear  view of the  fluid  path that
simplifies debubbling and contributes to accurate measurement of pressure.

          The  Company's  IntelliSystem(R)  25 inflation  device,  which was the
first such  device to  incorporate  electronic  sensing  and  display  features,
consists  of a  disposable  20cc  inflation  syringe  and an  integral  pressure
transducer which connects to an electronic monitor outside of the sterile field.
To aid the marketing  process and encourage use of the Company's  products,  the
electronic  monitor is provided  without charge to large volume  customers using
the  IntelliSystem.  The IntelliSystem  measures,  times,  records and digitally
displays  information  concerning  the  pressure,  duration  and  number of each
inflation and deflation of the angioplasty balloon.  When used in other clinical
applications such as discography,  the Intellisystem  accurately dispenses fluid
while documenting and graphing  pressures in the disc. The Company believes that
electronic  sensing and display of such  information  is much more  accurate and
precise than that which can be obtained from  conventional  analog  gauges.  The
data is stored and may be displayed, retrieved, graphed and printed.

                                        2






          The patented  IntelliSystem  II color  monitor is the most advanced on
the market and gives physicians several highly desirable options.  These include
a large,  touch screen and display,  an instant display of positive and negative
pressures and enlarged  graphing  display to show  extremely  subtle  changes in
pressure  measurements.  In addition the display and  readouts are  available in
four  languages by touching  the screen.  Merit is the only company with digital
technology sensitive enough to show minute changes in pressure.

           The  Monarch 25 is a  disposable  inflation  device  which  digitally
displays data concerning pressure and duration of inflations and deflations on a
small  electronic  monitor mounted on the barrel of the inflation  syringe.  The
monitor does not offer all of the same display, storage or printing capabilities
of the  IntelliSystem & IntelliSystem  II but offers the convenience of portable
operation.

           The  Basix(R) 25 and the new  BasixCOMPAK  are  disposable  inflation
devices which  incorporate a conventional  analog  pressure gauge mounted on the
barrel of the  inflation  syringe.  The Basix  more  closely  resembles  devices
marketed by the Company's  competitors  but includes the  Company's  proprietary
design  features  and  benefits.   The  Company  believes  that  the  Basix  and
BasixCOMPAK  represent a significant  addition to its line of inflation  devices
that will  contribute to sales where both  clinical and economic  outcomes are a
priority.

          Control  Syringes.  The  Company's  disposable  control  syringes  are
utilized for  one-handed  control of the  injection of contrast  media and other
fluids during angiography, angioplasty and stent placement. The control syringes
are molded from  polycarbonate  material  which is stronger than glass and other
plastics used in the industry.  The Company offers different models and sizes of
the control syringes with varying features,  according to physician  preference.
These features include different configurations of syringe handles, plungers and
connectors which allow operation of the syringe in a fixed or rotating  position
and  varying  volume  sizes,  including  a popular  8ml mode,  Inject8(TM).  (In
response to customer  demand,  Merit  launched  latex-free  control  syringes in
1998).

          Specialty Syringes.  Merit's Medallion syringes, a line of disposable,
latex-free,   color-coded   specialty   syringes  are  used  for   injection  of
medications,  flushing of manifolds and other general  purposes.  These syringes
are molded of  polycarbonate  material for added  strength and are  available in
hundreds of sizes,  colors and custom  printing  combinations.  The color coding
allows a clinician to assign a color for each  medication to be dispensed and to
differentiate  syringes  by their  contents.  The  syringes  can also be  custom
printed to the specifications of the user. In response to customer requests, the
Company has developed and added additional sizes of its specialty syringes which
have applications in dispensing various medications  required in a broader range
of peripheral procedures. The Company believes that the design, color coding and
materials used in its specialty  syringes  contribute to patient safety and more
efficient  procedures.  The specialty  syringes are sold  separately  and are an
important component of the Company's custom kits.

          High-Pressure Contrast Injection Line and Sherlock Connectors.  During
angiographic  and  diagnostic  radiology  procedures,  contrast  media  must  be
injected   through  a  catheter  into  the  blood  vessel.   This  is  sometimes
accomplished  by a mechanical  injector which can generate  pressures up to 1200
pounds per square inch ("psi"),  and requires  tubing that can  withstand  these
pressures.  The Company offers high-pressure,  specialty tubing with proprietary
Sherlock  connectors.  In 1998 the Company  launched  Excite(TM),  a new line of
clear,  flexible  high-pressure  tubing  that  combines  the  features of tubing
clarity and  strength.  Sherlock  connectors  allow  coupling and  uncoupling of
tubing  with  injectors,  syringes  and  manifolds  without  over-tightening  or
breakage.  The Company is currently  offering  specialty  tubing that can handle
pressures  ranging  from 500 to 1200 psi.  The  specialty  tubing with  Sherlock
connectors is an important component of custom kits.

          Manifolds.  The administration of saline,  imaging and contrast fluids
and the  management  of  blood-pressure  monitoring,  fluid  injection and waste
collection in angiography or angioplasty  procedures is  accomplished  through a
series of valves on a  manifold  which  control  the flow of  various  fluids in
different  directions.  The Company has designed its own manifold  consisting of
two,  three,  four or five valves.  The Company  believes  its  manifold  offers
greater ease of use,  simplified  identification of flow direction and leak-free
operation  under the pressures of manual or mechanical  injection of fluids when
compared to manifolds sold by competitors. The Merit Manifold is sold separately
but is also a key component of the Company's custom kits.

                                        3






          Waste  Containment  Systems.  Because of  heightened  awareness of the
risks  associated with blood and related waste  materials,  hospitals have moved
toward closed systems whenever possible. To address these concerns,  the Company
has designed a waste  containment  bag which connects to a manifold and collects
waste materials such as blood and other fluids during  angiography,  angioplasty
or other procedures.  The Merit Disposal Depot(TM) is self-contained for ease of
disposal and reduces risk of  contamination.  The  Backstop(TM)  is a unique and
proprietary  alternative  fluid disposal  basin  designed to reduce  exposure to
blood-borne pathogens.

          Hemostasis   Valves.   The  MBA,  Passage,   Access  9,  Access  Plus,
Double-Play,  and Inspector  hemostasis  valves are used in conjunction with the
Company's  inflation  devices and as a component  of the  Company's  angioplasty
packs.  These valves are made of  polycarbonate  plastic for clarity and include
Sherlock connectors. The devices differ in size and function. The MBA features a
valve mechanism that minimizes  blood loss during  exchange of wires,  catheters
and other tools through the valve.

          Torque  Device.  The Merit torque device is a guide wire steering tool
with a tapered design and contrasting colors for improved visibility. The torque
device typically is included as a component of the Company's angioplasty packs.

          Marquis(TM)  Series  Stopcock.  The Company's  Marquis Series Stopcock
offers  improvements to competitive  stopcock  devices,  including a large, easy
grip handle.  The Marquis  Series  Stopcock is used in connection  with Sherlock
connectors to provide improved connections during procedures.

          Contrast  Management  Systems.  The Miser(TM) and the In-Line Contrast
Management   System  have  been   designed  to  increase   catheterization   lab
efficiencies by reducing contrast media waste.

          Majestik(TM)  Angiographic Needles. The angiography needle creates the
percutaneous  (through the skin) access site for all angiography and angioplasty
procedures.  This site is the point of entry for the  introducer  sheath,  guide
wires, catheters and any other interventional devices. The Merit Majestik Needle
helps the physician achieve  precision  vascular access with one of the sharpest
angiography needles on the market.

          Fountain(TM)   Infusion  Catheter.   The  Fountain  catheter  delivers
therapeutic  solutions to dissolve blood clots (thrombi) in peripheral  vessels.
This  catheter is used to treat  peripheral  arterial  occlusions,  hemodialysis
graft  occlusions,  and deep vein  thrombosis.  This  product  incorporates  the
Squirt(TM) fluid dispensing system for controlled fluid delivery.

          Tomcat(TM)   (PTCA)  Guide  Wire.  Tomcat  guide  wires  are  used  in
percutaneous  transluminal  coronary  angioplasty  (PTCA)  and stent  deployment
procedures.  Guide  wires are used to guide and place  balloon  angioplasty  and
stent deployment catheters into coronary arteries.  This product complements our
existing lines of inflation  devices and  accessories  currently used in balloon
angioplasty  procedures  and was  designed,  developed and  manufactured  in the
Company's Ireland facility.

          Squirt Wound Irrigation. In any traumatic wound, the risk of infection
is greatly  decreased  by the  removal of bacteria  and foreign  matter from the
site. Merit launched a line of Squirt wound irrigation products in 1998 designed
for the emergency room to deliver large volumes of irrigation fluid. The product
features a proprietary,  one-handed Squirt fluid delivery syringe, an adjustable
nozzle and splash protecting shield.

          Angiography Pigtail Catheter. In 1997 Merit acquired new product lines
and  technologies  from UMI, a small  specialty  medical  manufacturing  firm in
upstate  New  York.  At that  time the  Company  began  marketing  a new line of
thin-wall,  FEP (Teflon),  high-flow,  pigtail  angiographic  catheters  ideally
suited for smaller patients.

          Pericardiocentesis.  Merit  offers a complete  pericardiocentesis  kit
which combines a high-flow drainage catheter and virtually all components needed
to place  the  device  in the  pericardial  sack.  This  combination  saves  the
physician both time and money by having all  components in one convenient  tray.
On occasion,  the sack surrounding the heart becomes filled with blood or fluid.

                                        4





To remove the fluid and the  potential  for  cardiac  tamponade,  a catheter  is
placed in the pericardial sack. The Company designed,  manufactured and launched
two proprietary kits (pigtail and straight) including the catheter and necessary
components to perform the procedure.

          Meritrans(TM)   Pressure   Transducers.   Diagnostic   blood  pressure
monitoring is a clinical priority in virtually all diagnostic and interventional
procedures.   The  Meritrans  provides  clinicians  with  reliable  and  precise
blood-pressure  measurement.  The clear,  flow-through design makes flushing and
debubbling  simple and safe.  The  transducer  is a critical  component  in many
custom kit configurations.

          ShortStop(TM).  In  2000,  Merit  introduced  the  ShortStop,  a small
container  with an adhesive  base that fits on the back table in a clinical lab.
It is used for the temporary  containment  of needles,  scalpels and other sharp
tools to and in the prevention of inadvertent needles sticks .

          Custom  Kits.  Custom  kits allow  physicians  to obtain  the  medical
devices and accessories they most frequently use during angiography, angioplasty
and similar  procedures in a convenient,  pre-packaged and  pre-assembled  form.
Custom kits also provide cost savings over purchasing single products and reduce
the hospital's  administrative costs associated with maintaining an inventory of
individual, sterile products.

          Diagnostic Cardiology Catheters.  Cardiac catheterization is performed
to diagnose the nature,  severity,  and precise  location of blockages and other
abnormalities  of the  heart.  This  technique  represents  the  most  essential
diagnostic tool in the management of patients with cardiovascular  disease.  The
Company  manufactures and sells a complete line of diagnostic catheters used for
these procedures.

          Diagnostic Radiology Catheters. Radiology catheters are engineered and
designed with distinct tip  configurations to access specific vessels and organs
outside  the heart  (head,  kidneys,  etc).  Merit  acquired a strong  radiology
catheter product portfolio from Mallickrodt's Angleton Division in 1999.

          Vessel-Sizing  Catheters.  In 2000 Merit introduced a complete line of
vessel-sizing  catheters,  which are used by radiology physicians to measure the
internal diameter and length of a blood vessel under fluoroscopy.  Procedures in
which these  catheters  are used  include  angioplasty,  embolization,  abnormal
aortic  aneurysm  (AAA)  stent-grafts  and vena cava filter  placements.  In the
fourth quarter,  Merit  introduced its most popular model,  the 20-band version,
for use in measuring the aorta in a AAA stent-graft procedure.

          Percutaneous Sheath Introducers. Sheaths are used to create the access
through which guide wires and catheters  are passed into the  vasculature.  Most
sheaths  incorporate  a valve hub to minimize  bleeding and a side port for drug
delivery.  (The Company  acquired the Performa line of sheath  introducers  from
Mallinckrodt in 1999).

          Diagnostic Guide Wires. Guide wires are relatively simple, spring-type
products that provide the necessary firmness and control to advance catheters to
the site where  angiograms  will be taken.  Guide wires vary in length,  outside
diameter and tip configuration.  The Company  distributes an OEM guide wire made
to exact specifications.

          Guide Catheters.  Coronary  angioplasty  requires the use of a guiding
catheter  to place the  balloon  within the  arterial  system.  The  catheter is
inserted through the sheath into the arterial system. Once in place, the guiding
catheter acts as a conduit for the guide wire,  the dilating  balloon  catheter,
coronary  stents and the  radiopaque  dye that is used to  provide  fluoroscopic
visualization during the procedure. The Mallinckrodt acquisition brought with it
a line of high- quality guide catheters used in cardiology.  The Company intends
to dedicate resources to expand this offering.

MARKETING AND SALES

          Market Strategy.  The Company's marketing strategy is strongly focused
on identifying and introducing highly profitable,  differentiated  products that
meet customer needs. The Company has targeted  selected hospital market segments
in cardiology  and radiology  where its products are used.  Suggestions  for new
products  and  product  improvements  may come from  engineers,  sales  persons,
physicians and technicians who perform the clinical procedures.

                                        5






          When  a  product  suggestion   demonstrates   sustainable  competitive
advantage, meets customer needs, fits strategically and technologically, and has
good potential  financial return, a "project team" is chartered with individuals
from the Company's marketing,  engineering,  manufacturing and quality assurance
departments . This team  identifies  the customer  requirements,  integrates the
design,  compiles  all  necessary  documentation  and testing and  prepares  the
product for market  introduction.  The Company strongly believes that one of its
marketing strengths is its capacity to rapidly conceive,  design,  develop,  and
introduce new products.

          Cardiovascular  disease is the  number-one  health problem in the U.S.
According to American Heart Association estimates,  nearly 60 million Americans,
or  approximately  25% of the population,  has one or more types of the disease.
Cardiovascular  disease  accounts for an estimated one million deaths  annually,
more than 40% of the U.S. total.  Transcatheter  modalities  currently represent
the greatest potential to diagnose and treat the disease. The Company intends to
leverage its strong market  position in both catheter  technology  and accessory
products to continue sales growth.

          The  global  market  for  transcatheter  products  stands  at a  major
crossroad,  even when  considering the continued  dynamic  evolution in vascular
stent  placement.  Laser  techniques have not  demonstrated the success that was
expected in the last few years. The core diagnostic and therapeutic applications
for basic transcatheter  technologies  (balloons,  stents and defect repair) are
well  established,  with the future growth of procedures and products  dependent
upon demographic trends. This has not, however, prevented significant investment
of new technologies  and  applications  designed to enhance patient outcomes and
enable the treatment of new populations that have been traditionally  limited to
surgical  intervention.  The Company  believes it is well  positioned to monitor
these trends and launch  catheters and accessories to support  growing  clinical
applications.

          There  are a  large  number  of  projects  focused  on  improving  the
diagnosis of cardiovascular  disease,  solving the issue of restenosis and other
less invasive  alternatives to open-heart  surgery.  In recent years researchers
have focused  their  interests  on  technologies  and products  that support the
growth of  transcatheter  approaches  to reducing the morbidity and mortality of
cardiovascular disease, including:  radiated stents and balloons,  anti-platelet
therapy,  gene therapy,  percutaneous  coronary thrombectomy and transmyocardial
revascularization.  One area of specific  interest to the Company is transradial
catheterization.  The Company  will  continue  to develop and launch  innovative
products to support these clinical trends.

          U.S. Sales. The Company's  direct sales force currently  consists of a
vice  president of sales,  two executive  sales  managers,  five regional  sales
managers and 46 direct sales representatives located in major metropolitan areas
throughout the U.S. The Company's sales people are trained by Company  personnel
at the  Company's  facilities,  by a senior  sales  person  in their  respective
territories,  at regular  national and  regional  sales  meetings by  consulting
cardiologists and employees of the Company,  and by observation of procedures in
catheterization laboratories.

          International  Sales.  Outside of the U.S., the Company's products are
presently  sold by 42  independent  dealer  organizations  and 15  direct  sales
representatives  in  Germany,  France,  the  United  Kingdom,  Canada,  Belgium,
Netherlands, and Ireland. In 2000, the Company's international sales grew by 26%
and accounted for  approximately 25% of total sales. The Company has appointed a
vice president for  international  sales and established an international  sales
and  distribution  office in Maastricht,  The  Netherlands.  With the recent and
planned additions to its product lines, the Company believes that  international
sales will continue to increase.

          International  dealers are  required to  inventory  products  and sell
directly to customers  within defined sales  territories.  Each of the Company's
products  must be approved for sale under the laws of the country in which it is
sold.  International  dealers are responsible for compliance with all applicable
laws and regulations in their respective countries.

CUSTOMERS

          The  Company  serves   hospital-based   cardiologists,   radiologists,
anesthesiologists,  physiatrists (pain management), neurologists, ER physicians,
technicians  and  nurses who  influence  the  purchasing  decision  for  Merit's
products.  Hospitals  also purchase the Company's  products in the U.S.  through
custom  packagers  and packers who assemble and combine  products in custom kits

                                        6





and packs. The Company's  customers outside the U.S. are hospitals and other end
users in those countries where a direct sales force has been established, and in
other  countries  are  independent  dealers  in medical  products  who resell to
hospitals and other customers.

            In 2000,  approximately  53% of the Company sales were made directly
to  domestic  hospitals,  22%  to  custom  packagers  and  packers  and  25%  to
international markets. Sales to the Company's single largest customer, a foreign
dealer,  accounted  for 6.0% of total sales  during the year ended  December 31,
2000. Merit manufactures  products for other medical device companys through its
OEM program.  In 2000, OEM sales represented 5.4% of Merit's total revenue.  The
Company is investing  heavily in people and programs to expand the OEM business.
Merit recognizes the growth opportunity in this area.

RESEARCH AND DEVELOPMENT

          The  Company  believes  that  one of its  important  strengths  is its
ability to quickly adapt its expertise and  experience in injection  molding and
to apply its  electronic and sensor  technologies  to a perceived need for a new
product or product improvement.  The Company's development efforts are presently
focused on disposable,  innovative  single-patient or single-use items which can
be  included  in the  Company's  custom  kits  or sold  separately.  Longer-term
projects  include use of sensor-based  technologies in a variety of applications
and additional inflation devices with added capacities and features.  There is a
new focus on  interventional  vascular access products,  such as needles,  guide
wires, and catheters.  Certain of the Company's executive officers also devote a
substantial  portion of their time to research  and  development.  Research  and
development  expenses were  $3,864,171,  $3,618,041 and $3,244,477 in 2000, 1999
and  1998,   respectively.   There  was  no   customer-sponsored   research  and
development. The Company anticipates that its research and developement expenses
will range between approximately 4.0% and 5% of net sales for 2001.

MANUFACTURING

          Many  of  the  Company's  products  are  manufactured   utilizing  its
proprietary  technology and expertise in plastic  injection and insert  molding.
Tooling of molds is contracted  with third parties,  but the Company designs and
owns all of its molds.  The Company  utilizes its  experience  in injection  and
insert molding  technologies in the manufacture of most of the custom components
used in its products.

          The   electronic   monitors   and  sensors   used  in  the   Company's
IntelliSystem   and  Monarch  inflation  devices  are  assembled  from  standard
electronic  components or purchased from  suppliers.  (In July 1994, the Company
acquired a 73%  interest and in August 1999 the Company  acquired the  remaining
interest in Sentir,  which is engaged in  development  and  marketing of silicon
sensors.  Sentir is presently providing virtually all of the sensors utilized by
the Company in its digital inflation devices).

     The Company's  products are  manufactured at several  facilities  including
South Jordan,  Utah;  Galway,  Ireland;  Angleton,  Texas and a leased expansion
facility in Murray, Utah. See "Item 2. Properties."


COMPETITION

          The  principal  competitive  factors  in  the  markets  in  which  the
Company's  products are sold are quality,  performance,  service and price.  The
Company believes that its products have achieved rapid market acceptance due, in
part, to the quality of materials and workmanship, innovative design and ease of
operation,  and the  Company's  prompt  attention  to  customer  inquiries.  The
Company's products are priced competitively,  but generally not below prices for
competing products.

          There are several  companies  which are in the business of  designing,
manufacturing and marketing devices similar to the Company's  products,  most of
which have substantially  greater financial,  technical and marketing  resources
than the Company.  The Company believes,  based on available  industry data with
respect  to the  number of  procedures  performed,  that it is one of two market
leaders in the U.S. for control  syringes,  tubing and manifold  kits  (together


                                        7





with NAMIC USA  Corporation,  a  subsidiary  of Boston  Scientific),  and is the
leader in the U.S. market for inflation devices and hemostasis accessories.  The
Company also believes that the recent and planned additions to its product lines
will  enable it to  compete  more  effectively  in both U.S.  and  international
markets.   The  Company's  new   IntelliSystem(R)   II  color  monitor  provides
considerable   improvements,   including   sensitivity,   in  existing   digital
technology.  The Company is the only provider of digital inflation technology in
the world.  There is no  assurance,  however,  that the Company  will be able to
maintain its existing  competitive  advantages or to compete successfully in the
future.

          A substantial majority of the Company's revenues are presently derived
from sales of products used in coronary angiography and angioplasty  procedures.
Other procedures, devices and drugs for the treatment and prevention of coronary
artery  disease have been  developed and are currently  being used such as laser
angioplasty,  atherectomy procedures and drug therapies, the effect of which may
be to render certain of the Company's  products obsolete or to limit the markets
for its  products.  However,  with the  advent  of  vascular  stents  and  other
procedures such as discography,  the Company has experienced continued growth in
its  proprietary  inflation  technology.  The radiology and  cardiology  markets
encompass a large  number of  suppliers  of many  different  sizes.  The Company
competes  with  small  firms,  such as  Possis  Medical  and  Microtherapeutics;
medium-sized   companies  like  Cook,  Arrow  and  Angio  Dynamics;  and  large,
international, multi-supply medical companies, such as Johnson & Johnson, Boston
Scientific, Guidant, Medtronic and C.R. Bard.

PATENTS, PATENT APPLICATIONS, LICENSES, TRADEMARKS AND COPYRIGHTS

          The Company  considers its  proprietary  technology to be important in
the  development  and  manufacture  of its  products  and seeks to  protect  its
technology through a combination of patents and confidentiality  agreements with
its  employees  and others.  Two U.S.  patents were issued in 1991  covering the
mechanical aspects of the Company's  angioplasty  inflation devices which relate
to the  ability  of the user to engage or  release  the  syringe  plunger  while
increasing or decreasing  pressure,  and two U.S.  patents were obtained in 1992
and  1993  covering  digital  control  aspects  of the  Company's  IntelliSystem
inflation device and for displaying,  storing and retrieving inflation data. The
Company  has  obtained  other  patents  covering  each of its  Monarch and Basix
inflation devices and additional features of the IntelliSystem.

          Corresponding patent applications  covering the claims included in the
Company's U.S.  patents and patent  applications  have been initiated in several
foreign  countries.  The Company  deems its  patents  and patents  pending to be
materially  important  to its  business  but does not  believe  its  business is
dependent on securing  such  patents.  The Company  negotiated a license in 1992
with respect to patents concerning  technology utilized in its IntelliSystem and
Monarch  inflation  devices in consideration of a 5.75% ongoing royalty,  not to
exceed  $450,000  annually.  Royalties paid in each of 2000,  1999 and 1998 were
$450,000.

          While the Company has obtained U.S.  patents and filed additional U.S.
and foreign patent  applications as discussed  above,  there can be no assurance
that issued  patents will provide the Company with any  significant  competitive
advantages  or will not be  challenged  by third  parties or that the patents of
others will not have an adverse  effect on the ability of the Company to conduct
its business.  The Company could incur substantial costs in seeking  enforcement
of its patents against  infringement or the  unauthorized use of its proprietary
technology by others or in defending  itself  against  similar claims of others.
Insofar as the  Company  relies on trade  secrets  and  proprietary  know-how to
maintain its competitive position, there can be no assurance that others may not
independently develop similar or superior technologies.

          The Company has  registered  or applied  for  registration  of several
tradenames  or  trademarks.  See  "Products."  (Page 2). The Company also places
copyright  notices  on its  instructional  and  advertising  materials  and  has
registered  copyrights  relating  to  certain  software  used in its  electronic
inflation devices.

                                        8






REGULATION

          The development, testing, packaging, labeling and marketing of medical
devices and the manufacturing procedures relating to these devices are regulated
under  the  Federal  Food,  Drug and  Cosmetic  Act and  additional  regulations
promulgated  thereunder by the FDA. In general,  these statutes and  regulations
require that  manufacturers  adhere to certain standards  designed to ensure the
safety and  effectiveness of medical devices.  The Company employs a director of
regulatory  affairs who is responsible  for  compliance  with all applicable FDA
regulations.   Although  the  Company  believes  it  is  currently  in  material
compliance with all applicable FDA requirements, the Company's business could be
adversely  affected  by  failure  to comply  with all  applicable  FDA and other
government regulations presently existing or promulgated in the future.

          The  FDA's  Good  Manufacturing   Practices   standards  regulate  the
Company's  manufacturing  processes,  require the maintenance of certain records
and provide for  unscheduled  inspections of the Company's  facilities.  Certain
requirements of state, local and foreign  governments must also be complied with
in the manufacture and marketing of the Company's products.

          New medical  devices may also be subject to either the Section  510(k)
Pre-Market   Notification   regulations  or  the  Pre-Market   Approval  ("PMA")
regulations of the FDA and similar regulatory  authorities in foreign countries.
New  products  in  either  category  require  extensive  documentation,  careful
engineering and manufacturing  controls to ensure quality.  Products needing PMA
approval  require  extensive  pre-clinical and clinical testing and clearance by
the FDA prior to marketing.  Products subject to the Section 510(k)  regulations
require FDA clearance prior to marketing.  To date, the Company's  products have
required only  compliance  with the Section  510(k)  regulations.  The Company's
products are subject to foreign regulatory approvals before they may be marketed
abroad. The Company places the "CE" mark on devices and products sold in Europe.
The Company has received ISO 9001  certification  for its South Jordan facility,
as well ISO 9002 certification for its Galway, Ireland facility.

EMPLOYEES

          As of March 20, 2001, the Company  employed  1,038 persons,  including
800 in manufacturing,  101 in sales and marketing,  66 in engineering,  research
and development and 71 in administration.

          Many of the  Company's  present  employees  are  highly  skilled.  The
Company's  failure or success will depend,  in part,  upon its ability to retain
such employees.  Management is of the opinion that an adequate supply of skilled
employees  is  available.  The Company has from time to time  experienced  rapid
turnover among its entry level assembly workers as well as occasional  shortages
of such workers,  resulting in increased labor costs and administrative expenses
related to hiring and training of replacement and new entry-level employees. The
Company has confidentiality agreements with its key employees, including each of
its executive  officers.  None of the Company's  employees is  represented  by a
union or  other  collective  bargaining  group  and  management  of the  Company
believes that its relations with its employees are good.

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

          For  financial  information  relating  to the  Company's  foreign  and
domestic sales,  transfers between geographic areas, net income and identifiable
assets,  see Note 9 to the  Consolidated  Financial  Statements  incorporated by
reference in this report.

Item 2.   Properties.
          -----------

          The Company is the owner of  approximately  35 acres of real  property
situated in the City of South  Jordan,  Utah,  which  surrounds  the site of its
175,000  square  foot  principal  office  and  manufacturing  facility  where it
relocated and  consolidated its operations in November 1994. The Company sold to
the  developer  ten  acres of land on which the  facility  was  constructed  and
entered  into a 25-year  lease  agreement to finance the new  facility.  Monthly


                                        9





lease payments are approximately  $122,000.  The Company also holds an option to
purchase the facility,  exercisable  at market value after ten years and, if not
exercised,  after  25  years.  The new  facility  has  been  constructed  to the
Company's  specifications  and is presently  estimated to be estimated to be 80%
utilized.

          The Company is leasing a building of approximately  26,500 square feet
in Galway,  County  Galway,  Republic  of Ireland  as its  principal  office and
manufacturing  facility for European  operations.  This  facility is used as the
administrative  headquarters  to support the European  direct  sales force.  The
facility also houses a research and  development  team which has developed a new
PTCA guide wire and is developing  other new  products.  Beginning in the fourth
quarter of 1997, the Company initiated manufacturing  operations for several new
and existing  products at the Galway facility,  including custom kits, the BASIX
inflation  device and the  Company's  PTCA guide  wire.  In 1998 Merit began the
manufacture of the hemostasis  valve products in Ireland.  The property has been
improved  and  equipped on terms  favorable  to the Company in  connection  with
economic   development  grant  incentives  and  grants  provided  by  the  Irish
Government.  This lease is for 20 years at approximately $135,000 per year, less
a 40% subsidy from the Irish  government,  available  through 2000.  The Company
also has a purchase option  exercisable on terms deemed favorable to the Company
through the term of the lease.

          In October  1997,  the Company  began  manufacturing  operations  in a
facility of  approximately  25,000 square feet of  manufacturing  space formerly
occupied by the Company in Murray,  Utah and shifted production of several well-
established products to this facility.  In 1998 Merit added an additional 25,000
square  feet of  manufacturing  space to its  Murray  location.  The  additional
manufacturing  space was  obtained  to create  room at the  Company's  principal
manufacturing facility for production of new products. The leases are for a term
of five years with monthly lease payments of approximately $27,000.

          In  August  1999,  the  Company  purchased  the  operating  assets  of
Mallinckrodt's Angleton division, including approximately 19 acres of land and a
75,000 square feet building in Angleton, Texas.

          The Company  believes that its facilities  are generally  adequate for
its present level of operations  and for  anticipated  increases in the level of
operations.

Item 3.   Legal Proceedings.
          ------------------

          In the course of business,  the Company is involved in litigation  and
claims which  management  believes will not have a materially  adverse effect on
the Company's operations.

Item 4.   Submission of Matters to a Vote of Security Holders.
          ---------------------------------------------------

          No matters  were  submitted to a vote of security  holders  during the
fourth quarter of the fiscal year covered by this report.

                                       10






                                     PART II

Item 5.   Market for Registrant's Common Stock and Related Shareholder Matters.
          --------------------------------------------------------------------

          The "Market  Information"  included in the Company's  Annual Report to
Shareholders  for the year ended  December 31, 2000,  furnished  herewith to the
Commission as Exhibit 13.1 to this Report, is incorporated herein by reference.

Item 6.   Selected Financial Data.
          ------------------------



                                                                  Year Ended December 31,
                           ------------------------------------------------------------------------------------------------------
                                    2000               1999                 1998                 1997                   1996
                           -----------------------------------    -------------------       ---------------------      ----------

                                                                                                       
Operating Data:
   Sales                        $91,447,512         $77,959,576         $68,377,357          $60,579,011              $50,455,766
   Cost of  Sales                60,823,459          47,917,815          42,433,873           37,766,116               29,319,617
   Gross Profit                  30,624,053          30,041,761          25,943,484           22,812,895               21,136,149
   Selling, General
      and  Administrative
      Expenses                   23,300,352          20,406,927          17,528,002           15,726,651               14,311,049
   Research and Develop-
      ment Expenses               3,864,171           3,618,041           3,244,477            4,446,795                2,533,171
   Severance Costs                  330,975
   Income from operations         3,128,555           6,016,793           5,171,005            2,639,449               4,291,929
   Other Expense                  2,354,710           1,255,364             880,659              863,933                  661,777
   Income Before Income
       Tax Expense                  773,845           4,761,429           4,290,346            1,775,516                3,630,152
   Income Tax Benefit
       (Expense)                     52,712          (1,454,762)         (1,687,379)            (944,981)              (1,277,431)
   Minority Interest in Income
       of Subsidiary                                     81,077             151,808               33,003                  190,113
   Net Income                       826,557           3,225,590           2,451,159              797,532                2,162,608
   Net Income Per Share         $      0.11         $      0.43         $      0.33          $      0.11              $      0.31
   Weighted Average Shares
       Outstanding (Diluted)      7,860,905           7,565,673           7,488,225            7,369,668                7,051,911

Balance Sheet Data:
   Working Capital              $32,447,007         $33,933,698         $15,779,725          $14,737,971              $12,761,211
   Total Assets                  71,446,631          72,360,469          50,664,786           45,269,678               41,718,553
   Long-Term Debt                24,011,778          27,817,308           3,388,835            3,913,686                4,822,126
Stockholders' Equity            $34,772,702         $32,690,136         $29,086,368          $25,802,149              $22,487,123



                                       11






Item 7.   Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations.
          ----------------------------------------------------------------------

OVERVIEW

            The year 2000 has been a year of growth,  challenges  and transition
for the Company and its employees.  The Company has added  significantly  to its
product offering through  acquisition,  internal  development and a distribution
agreement. Merit has overcome some important challenges in its operations,  with
a new integrated business management software system as a long-term  foundation,
and is poised for many more improvements in capacities and efficiency than we've
seen to date. The Company is positioned to reap the benefits of a larger, stable
sales force with an expanded product offering.

          The year 2000 has been a time for adjustment from excess inventory and
manufacturing  capacity and their associated effects on margins.  This past year
in Europe has  continued  to be  difficult  financially,  particularly  with the
dramatic rise of the dollar against the Euro and its negative effect on revenues
and gross  margins  for this  sector of the  business.  In  response  the entire
organization  has had a renewed focus on cost  reduction and  efficiency.  While
sales grew 17% in 2000 the average head count declined by approximately 100, and
the  inventory  went down by $2.3  million  while we added  over $1  million  in
inventory for new product  introductions.  The Company's  line of credit balance
has declined from its high of $30.4 million on August 24, 2000 to  approximately
$18.9  million  on March 21,  2001.  So while  the  Company  must  report a very
disappointing  year in  terms  of  margins  and  net  income,  it is  also  very
optimistic about what was accomplished this year and how Merit is positioned for
improvements  in almost every area.  There are still  challenges to grow the top
line,  to get new products to market,  to get Europe's  direct sales  operations
profitable,  and to balance the production  capacities of the Angleton  catheter
facility.  Management  believes  that gross margins net income and cash flow are
all on their  way up,  and  interest  costs  and tax  rates are going to also be
favorable.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated,  certain  operational
data as a percentage of sales:



                                                     2000                 1999                  1998
                                                     ----                 ----                  ----
                                                                                      
Sales                                               100.0%               100.0%                100.0%
Gross profit                                         33.5                 38.5                  37.9
Selling, general and administrative                  25.5                 26.2                  25.6
Research and development                              4.2                  4.6                   4.7
Income from operations                                3.4                  7.7                   7.6
Income before income tax expense                       .8                  6.1                   6.3
Net Income                                             .9                  4.1                   3.6


     Sales increased by $13,487,936 or 17.3%, in 2000 compared to an increase of
$9,582,219, or 14.0%, in 1999, and an increase of $7,798,346, or 12.9%, in 1998.
Incremental  sales of $7.1 million from the August 1999  Angleton  catheter line
acquisition was the largest contributing factor to the sales rise in 2000. Sales
growth from 1998 through 2000 was also favorably affected by the introduction of
new  products and  increased  sales of existing  products  sold  separately  and
packaged in custom  kits,  and  increased  penetration  of the market by Merit's
inflation devices.  International sales in 2000 were approximately $23.0 million
or 25%, compared to $18.3 million, or 24%, in 1999, and $15.2 million or 22%, in
1998.  These  increases  were primarily a result of the addition of the Angleton
product lines,  ongoing growth in the direct sales in Europe, as well as greater
acceptance  of the Company's  products in other  international  markets.  Direct
sales in France,  Germany,  the U.K.,  Belgium,  the Netherlands and Canada were
$8,621,681, $8,217,814, and $7,334,793 in 2000, 1999 and 1998, respectively.

     Gross  profit as a percent  of sales was 33.5%,  38.5%,  and 37.9% in 2000,
1999, and 1998, respectively.  The Company is operating in a generally declining
price market. There is also a general cost-increasing manufacturing environment.

                                       12






Merit has been able to battle  this  difficult  situation  with  ever-increasing
production  volumes until 2000.  Beginning in early 1999,  the Company  suffered
through the implementation of a comprehensive new software system,  which in the
operations  areas lead to difficulties in efficiently  operating the purchasing,
planning  and  manufacturing  processes  of  the  business.  Merit  also  made a
purposeful   effort  to  increase  its  safety  stock  levels  of  inventory  in
preparation for higher,  anticipated  sales orders ahead of Y2K. The combination
of these  increased  production  demands created a build-up of capacity in labor
and overhead.  As the end of 1999  approached,  however,  the Company  needed to
reduce production levels to match cash-flow expectations. The reduced production
volumes  created higher overhead cost per unit,  lower gross margins,  and lower
bottom-line results. Another important factor negatively effecting gross margins
was the large  (13.2%)  drop in the Euro in relation to the dollar  during 2000.
This reduced  revenues and gross profit of the European  operation by $1,076,975
and reduced over all gross margins by 1.2%. In December  1999, the Company began
the difficult  process of down-sizing  the labor and overhead  capacities in the
operation  of its Utah  facilities.  The Company has made  significant  progress
toward  eliminating  the large excess  negative  production  variances that were
caused by the  slow-down in production  volumes.  This was  accomplished  by the
reduction of  approximately  240 people from its high point in December of 1999,
or an  average  reduction  of 100  people  in 2000  compared  to 1999.  This was
accomplished  primarily by attrition.  There have been many cost  reductions and
efficiency gains which will lead to improved  margins in 2001.  Margins improved
in 1999 compared to 1998,  principally  through  increased  production  volumes,
automation and efficiencies in manufacturing, and tighter price controls on some
of the Company's lower margin products. Part of the increased production volumes
resulted in a significant increase in inventories in 1999.

     Selling,  general and  administrative  expenses  increased  $2,893,425,  or
14.2%,  in 2000 over 1999 and  $2,878,926,  or 16.4%,  in 1999 over 1998.  These
additional expenditures were related principally to increased costs of expanding
the direct sales force and their  management  both in U.S.  and Europe.  Another
important factor has been the costs of implementing and supporting the Company's
new Oracle  system and the  development  of new business  opportunities  such as
acquisitions,  product distribution agreements,  national accounts and the O.E.M
segment of the business.  These  increases in costs have grown slower than sales
causing selling,  general and  administrative  expenses as a percent of sales to
decrease to 25.5% in 2000, compared to 26.2% in 1999 after increasing from 25.6%
in 1998.

     Research and development expenditures for 2000 were $3,864,171, an increase
of 7%,  compared to  $3,618,041  in 1999.  Most of this  increase was due to the
addition of the R&D  capabilities  in Angleton,  Texas with the Company's  newly
acquired catheter technologies.  R&D expenses increased in 1999 by 12%, compared
to $3,244,477 in 1998. Research and development costs as a percent of sales were
4.2%, 4.6% and 4.7% for 2000, 1999 and 1998, respectively.

      Significantly lower gross margins have more than offset the gains in sales
as well as the efficiencies in SG&A and R&D Expenses,  the net of which resulted
in income from operations of $3,128,555 down 48% from 1999. The higher sales and
gross margins, together with modest increases in operating expenses,  positively
affected income from operations in 1999 which increased to $6,016,792, up 16.4%,
compared to $5,171,005 in 1998. The income tax benefit for 2000 was $52,712,  an
effective  rate of -6.8%.  This unusual tax rate was due  principally to R&D tax
credits  which the  Company  was able to realize  in the fourth  quarter of 2000
including  amended  returns  for the 1997,  1998 and 1999 tax years.  Management
expects the R&D tax credit to continue to  favorably  affect the  Company's  tax
rate for at least the next two  years.  The income  tax  provision  for 1999 was
$1,687,379,  an effective rate of 30.6%,  compared to  $1,454,762,  or 39.3 % in
1998.  The  effective  tax rate  improved  significantly  in 1999 as the Ireland
facility became profitable and the 10% tax rate became a benefit.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2000 the Company's  working capital was  $32,447,007,  a
decrease of over 4%, representing a current ratio of 4.4 to 1. This decrease was
due primarily to the reduction of $2.3 million in inventory and the repayment of
long-term  debt. In October 2000, the Company also negotiated an increase in its
line of credit,  to $35 million.  The Company had $23 million  outstanding under
its  line  of  credit  at  December  31,  2000.  Merit  has  financed  leasehold
improvements  and  equipment  acquisitions  through  secured  notes  payable and
capital lease arrangements with an outstanding balance of $2,103,503 at December
31, 2000. For the year ended  December 31, 2000 the Company  generated cash from
operations in the amount of $7,127,597 the most in the history of the Company.

                                       13







      Historically,  the Company has incurred significant expenses in connection
with product envelopment and introduction of new products. This was particularly
true in 1999 with  regard  to an  increase  in  inventory,  plant and  equipment
associated  with the Company's  acquisition and new product  introductions.  The
Company's  principal source of funding for these and other expenses has been the
cash generated from operations, secured loans on equipment, bank lines of credit
and sales of equity.  The Company believes that its present sources of liquidity
and capital are adequate for its current operation.

Item 7A.   Quantitative and Qualitative Disclosure About Market Rider
           ----------------------------------------------------------

     The Company  principally hedges the following  currencies:  Belgian Francs,
German marks,  Dutch Gilders,  and Irish Pounds. The Company enters into forward
foreign  exchange  contracts  to  protect  the  Company  from the risk  that the
eventual  net  dollar  cash  flows  resulting  from  transactions  with  foreign
customers  and  suppliers  may be  adversely  affected  by changes  in  currency
exchange rates. Such contracts are not significant.

As of December 31, 2000, the Company had $23.0 million (1999- $ 25.9 million) of
variable rate debt, all  denominated  in U.S.  dollars.  Interest  expense would
change by approximately $230,000 for every 1% change in interest rates.

                                       14


Item 8.   Financial Statements and Supplementary Data.
MERIT MEDICAL SYSTEMS, INC.
AND SUBSIDIARIES

Consolidated  Financial Statements as of December 31, 2000 and 1999 and for Each
of the  Three  Years in the  Period  Ended  December  31,  2000 and  Independent
Auditors' Report

INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
of Merit Medical Systems, Inc.:

We have audited the  accompanying  consolidated  balance sheets of Merit Medical
Systems, Inc. and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial  position of Merit Medical Systems,  Inc. and
subsidiaries  as of  December  31,  2000  and  1999,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States of America.


By: /s/ DELOITTE & TOUCHE LLP
-----------------------------
        DELOITTE & TOUCHE LLP

Salt Lake City, Utah
February 23, 2001

                                      15


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------



ASSETS                                                                  2000               1999
                                                                    ----------         ----------
CURRENT ASSETS:
                                                                                 
  Cash and cash equivalents                                         $  412,384         $  668,711
  Trade receivables - net of allowance for uncollectible
    accounts:  2000 - $440,275; 1999 - $305,475                     13,235,858         12,550,132
  Employee and related party receivables                               440,654            502,803
  Irish Development Agency grant receivable                            177,477             93,059
  Inventories                                                       25,273,428         27,521,087
  Prepaid expenses and other assets                                    663,101            564,213
  Deferred income tax assets                                         1,183,944          1,052,745
  Income tax refund receivable                                         588,640            210,112
                                                                    ----------         ----------
          Total current assets                                      41,975,486         43,162,862
                                                                    ----------         ----------
PROPERTY AND EQUIPMENT:
  Land                                                               1,260,985          1,365,985
  Building                                                           1,500,000          1,500,000
  Automobiles                                                          131,036            133,316
  Manufacturing equipment                                           19,696,550         17,617,798
  Furniture and fixtures                                             9,576,084          8,883,297
  Leasehold improvements                                             5,420,194          5,114,964
  Construction-in-progress                                           2,120,671          1,669,725
                                                                    ----------         ----------
          Total                                                     39,705,520         36,285,085
  Less accumulated depreciation and amortization                   (17,860,490)       (14,277,666)
                                                                    ----------         ----------
          Property and equipment - net                              21,845,030         22,007,419
                                                                    ----------         ----------
OTHER ASSETS:
  Patents and trademarks - net of accumulated amortization:
    2000 - $1,382,672; 1999 - $1,179,246                             2,522,384          2,319,581
  Cost in excess of the fair value of assets acquired - net
    of accumulated amortization:  2000 - $417,398; 1999 - $138,022   5,062,458          4,819,288
  Deposits                                                              41,273             51,319
                                                                    ----------         ----------
          Total other assets                                         7,626,115          7,190,188
                                                                    ----------          ---------
TOTAL ASSETS                                                       $71,446,631        $72,360,469
                                                                   ===========         ==========

                                   (Continued)


                 See Notes To Consolidated Financial Statements.

                                       16


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------




LIABILITIES AND STOCKHOLDERS' EQUITY                                   2000               1999
                                                                    ----------         ----------

CURRENT LIABILITIES:
                                                                                
  Current portion of long-term debt                                $ 1,091,725        $ 1,001,917
  Trade payables                                                     4,835,517          4,749,432
  Accrued expenses                                                   3,471,039          3,092,280
  Advances from employees                                               96,778            116,094
  Income taxes payable                                                  33,420            269,441
                                                                   -----------        -----------
          Total current liabilities                                  9,528,479          9,229,164

DEFERRED INCOME TAX LIABILITIES                                      2,177,833          1,722,094

LONG-TERM DEBT                                                      24,011,778         27,817,308

DEFERRED CREDITS                                                       955,839            901,767
                                                                   -----------        -----------
          Total liabilities                                         36,673,929         39,670,333
                                                                   -----------        -----------
COMMITMENTS AND CONTINGENCIES (Notes 6, 7 and 11)

STOCKHOLDERS' EQUITY:
  Preferred stock - 5,000,000 shares authorized as of
   December 31, 2000 and 1999, no shares issued
  Common stock - no par value; 20,000,000 shares
    authorized; 7,788,208 and 7,591,236 shares issued
    at December 31, 2000 and 1999, respectively                     19,779,765         18,428,572
  Retained earnings                                                 15,617,075         14,790,518
  Accumulated other comprehensive loss                                (624,138)          (528,954)
                                                                   -----------        -----------
           Total stockholders' equity                               34,772,702         32,690,136
                                                                   -----------        -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $71,446,631        $72,360,469
                                                                   ===========        ===========


                                  (Concluded)

                See Notes To Consolidated Financial Statements.

                                       17


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------



                                                       2000               1999           1998
                                                    -----------        -----------    -----------

                                                                             
NET SALES                                           $91,447,512        $77,959,576    $68,377,357

COST OF SALES                                        60,823,459         47,917,815     42,433,873
                                                    -----------        -----------    -----------
GROSS PROFIT                                         30,624,053         30,041,761     25,943,484
                                                    -----------        -----------    -----------
OPERATING EXPENSES:
  Selling, general, and administrative               23,300,352         20,406,927     17,528,002
  Research and development                            3,864,171          3,618,041      3,244,477
  Severance costs                                      330,975                --             --
                                                    -----------        -----------    -----------
          Total operating expenses                   27,495,498         24,024,968     20,772,479
                                                    -----------        -----------    -----------
INCOME FROM OPERATIONS                                3,128,555          6,016,793      5,171,005
                                                    -----------        -----------    -----------
OTHER INCOME (EXPENSE):
  Interest income                                        39,091             50,391         33,662
  Interest expense                                   (2,319,500)        (1,293,023)      (826,778)
  Miscellaneous expense                                 (74,301)           (12,732)       (87,543)
                                                    -----------        -----------    -----------
          Other expense - net                        (2,354,710)        (1,255,364)      (880,659)
                                                    -----------        -----------    -----------
INCOME  BEFORE INCOME TAXES                             773,845          4,761,429      4,290,346

INCOME TAX BENEFIT (EXPENSE)                             52,712         (1,454,762)    (1,687,379)

MINORITY INTEREST IN INCOME OF
  SUBSIDIARY                                               --              (81,077)      (151,808)
                                                    -----------        -----------    -----------
NET INCOME                                          $   826,557        $ 3,225,590    $ 2,451,159
                                                    ===========        ===========    ===========
EARNINGS  PER COMMON SHARE -
  Basic and diluted                                 $       .11        $       .43    $       .33
                                                    ===========        ===========    ===========
AVERAGE COMMON SHARES:
  Basic                                               7,729,294          7,541,562      7,420,224
                                                    ===========        ===========    ===========
  Diluted                                             7,860,905          7,565,673      7,488,225
                                                    ===========        ===========    ===========




                See Notes To Consolidated Financial Statements.

                                       18



MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------



                                                                                                         Accumulated
                                                                                                           Other
                                                                                 Common Stock              Compre-
                                                                           --------------------------      hensive       Retained
                                                              Total           Shares       Amount           Loss         Earnings
                                                           ------------    -----------   ------------   -----------   ------------
                                                                                                     
BALANCE, JANUARY 1, 1998                                   $ 25,802,149      7,395,091   $ 17,178,971   $   (490,591)  $  9,113,769
                                                           ============    ===========   ============   ============   ============

Comprehensive income:
  Net income                                                  2,451,159                                                   2,451,159
  Other comprehensive income -
    Foreign currency translation adjustment (net of tax)        218,937                                      218,937
                                                           ------------
Comprehensive income                                          2,670,096
Tax benefit attributable to appreciation of common
  stock options exercised                                        33,398                        33,398
Issuance of common stock for cash                                81,850         13,819         81,850
Issuance of common stock under Employee
  Stock Purchase Plans                                          267,549         52,425        267,549
Options and warrants exercised                                  370,914         64,840        370,914
Shares surrendered in exchange for the
  recording of payroll tax liabilities                           (4,588)          (569)        (4,588)
Shares surrendered in exchange for the
  exercise of stock options                                    (135,000)       (16,692)      (135,000)
                                                           ------------    -----------   ------------

BALANCE, DECEMBER 31, 1998                                   29,086,368      7,508,914     17,793,094       (271,654)    11,564,928

Comprehensive income:
  Net income                                                  3,225,590                                                   3,225,590
  Other comprehensive loss -
    Foreign currency translation adjustment (net of tax)       (257,300)                                    (257,300)
                                                           ------------
Comprehensive income                                          2,968,290
Tax benefit attributable to appreciation of common
  stock options exercised                                       245,200                       245,200
Issuance of common stock for cash                                62,600         10,990         62,600
Issuance of common stock under Employee
  Stock Purchase Plans                                          312,027         66,330        312,027
Options and warrants exercised                                  114,746         22,080        114,746
Shares surrendered in exchange for the
  recording of payroll tax liabilities                           (1,583)          (264)        (1,583)
Shares surrendered in exchange for the
  exercise of stock options                                     (97,512)       (16,814)       (97,512)
                                                           ------------    -----------   ------------
BALANCE, DECEMBER 31, 1999                                   32,690,136      7,591,236     18,428,572       (528,954)    14,790,518
                                                           ============    ===========   ============   ============   ============



                                  (Continued)
                                      19




                                                                                                         Accumulated
                                                                                                           Other
                                                                                 Common Stock              Compre-
                                                                           --------------------------      hensive       Retained
                                                              Total           Shares       Amount           Loss         Earnings
                                                           ------------    -----------   ------------   -----------   ------------
                                                                                                        
Comprehensive income:
  Net income                                                    826,557
  Other comprehensive loss -                                                                                                826,557
    Foreign currency translation adjustment (net of tax)        (95,184)                                     (95,184)
                                                           ------------
Comprehensive income                                            731,373
Tax benefit attributable to appreciation of common
  stock options exercised                                       172,818                       172,818
Issuance of common stock under Employee
  Stock Purchase Plans                                          350,248         64,172        350,248
Options and warrants exercised                                  933,605        146,660        933,605
Shares surrendered in exchange for the
  recording of payroll tax liabilities                           (9,109)        (1,071)        (9,109)
Shares surrendered in exchange for the
  extinguishment of related party receivable                    (45,004)        (6,546)       (45,004)
Shares surrendered in exchange for the exercise of
  stock options                                                 (51,365)        (6,243)       (51,365)
                                                           ------------    -----------   ------------   ------------   ------------

BALANCE, DECEMBER 31, 2000                                 $ 34,772,702      7,788,208   $ 19,779,765   $   (624,138)  $ 15,617,075
                                                           ============    ===========   ============   ============   ============


                                  (Concluded)

                See Notes To Consolidated Financial Statements.

                                      20


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------



                                                                      2000               1999           1998
                                                                   -----------        -----------    -----------

                                                                                            
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                       $   826,557        $ 3,225,590    $ 2,451,159
                                                                   -----------        -----------    -----------
  Adjustments to reconcile net income to net cash provided
  by operating
    activities:
    Depreciation and amortization                                    4,486,291          3,757,539      2,923,484
    Losses on sales and abandonment of
      property and equipment                                            49,833              8,339         46,897
    Amortization of deferred credits                                  (166,609)          (215,894)      (114,607)
    Deferred income taxes                                              389,635            450,734        435,489
    Tax benefit attributable to appreciation of
      common stock options exercised                                   172,818            245,200         33,398
    Minority interest in income of subsidiary                             --               81,077        151,808
    Changes in operating assets and liabilities, net of
      effects from acquisitions:
      Trade receivables                                               (685,726)        (2,113,647)      (837,042)
      Employee and related party receivables                            17,145            (29,809)      (184,182)
      Irish Development Agency grant receivable                        (84,418)           105,386        549,443
      Income tax refund receivable                                    (378,528)          (210,112)
      Inventories                                                    2,274,934         (7,150,393)    (3,250,303)
      Prepaid expenses and other assets                                  6,112             71,911        (97,865)
      Deposits                                                          10,046             22,899        (27,606)
      Trade payables                                                    86,085          1,176,099        134,984
      Accrued expenses                                                 378,759            771,936       (358,201)
      Advances from employees                                          (19,316)            42,004         (7,155)
      Income taxes payable                                            (236,021)            74,719       (174,973)
                                                                   -----------        -----------    -----------
          Total adjustments                                          6,301,040         (2,912,012)      (776,431)
                                                                   -----------        -----------    -----------
          Net cash provided by operating activities                  7,127,597            313,578      1,674,728
                                                                   -----------        -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures for:
    Property and equipment                                          (4,690,107)        (4,750,608)    (4,138,219)
    Intangible assets                                                 (406,229)          (269,388)      (522,671)
    Acquisitions                                                      (607,129)       (11,322,916)
  Proceeds from the sale of property and equipment                   1,347,613                           584,688
                                                                   -----------        -----------    -----------
           Net cash used in investing activities                    (4,355,852)       (16,342,912)    (4,076,202)
                                                                   -----------        -----------    -----------


                                  (Continued)

                See Notes To Consolidated Financial Statements.

                                       21


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998



                                                                      2000               1999           1998
                                                                   -----------        -----------    -----------

                                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from (payments on) line of
    credit facility                                                $(2,907,596)       $(7,567,655)   $ 3,009,880
  Proceeds from:
    Issuance of common stock                                         1,223,379            390,278        580,725
    Long-term debt                                                                     25,907,596        677,802
    Deferred credits                                                   132,513             93,800
  Principal payments on:
    Long-term debt                                                  (1,316,089)        (2,403,143)    (2,172,753)
    Deferred credits                                                                                     (37,899)
                                                                   -----------        -----------    -----------
          Net cash provided by (used in)
               financing activities                                 (2,867,793)        16,420,876      2,057,755
                                                                   -----------        -----------    -----------
EFFECT OF EXCHANGE RATES ON CASH                                      (160,279)          (574,741)       218,937
                                                                   -----------        -----------    -----------
NET DECREASE IN CASH AND
  CASH EQUIVALENTS                                                    (256,327)          (183,199)      (124,782)

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR                                                 668,711            851,910        976,692
                                                                   -----------        -----------    -----------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR                                                   $   412,384        $   668,711    $   851,910
                                                                   ===========        ===========    ==========
SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION - Cash paid during
    the year for:
       Interest (including capitalized interest of
        approximately $128,000, $143,000, and $93,000
        during 2000, 1999, and 1998, respectively)                 $ 2,309,634        $ 1,288,301    $   995,417
                                                                   ===========        ===========    ===========
    Income taxes                                                   $   172,202          $ 684,109    $ 1,393,465
                                                                   ===========        ===========    ===========



                See Notes To Consolidated Financial Statements.

                                       22


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

o    During  2000,  1999,  and 1998,  the Company  entered  into  capital  lease
     obligations  and notes payable for  approximately  $508,000,  $50,000,  and
     $868,000, respectively, for manufacturing equipment.

o    In connection with the sale in 1998 of the Company's manufacturing facility
     in Castlerea,  Ireland, the buyer assumed debt of the Company in the amount
     of approximately $259,000.

o    During 2000, 1999, and 1998, options to purchase 1,071, 264, and 569 shares
     of the  Company's  common  stock  were  surrendered  in  exchange  for  the
     Company's   recording  of  payroll  tax   liabilities   in  the  amount  of
     approximately $9,100, $1,600, and $4,600.

o    During 2000, 1999, and 1998,  6,243,  16,814,  and 16,692 shares of Company
     common stock with a value of approximately $51,000,  $98,000, and $135,000,
     respectively,  were  surrendered  in  exchange  for the  exercise  of stock
     options.

o    uring 1999, the Company  acquired  substantially  all of the assets of the
     "Angelton   Division"  of  Mallinckrodt  Inc.   (Angelton)  in  a  purchase
     transaction  for $7,867,699 in cash. In conjunction  with the  acquisition,
     liabilities were assumed as follows:




                                                                             
        Fair value of assets acquired (including goodwill of $ 1,949,383)       $  8,132,194
        Cash Paid                                                                  7,867,699
                                                                                ------------
        Liabilities assumed                                                     $    264,495
                                                                                ============



o    Additionally,  during 1999, the Company  acquired the minority  interest in
     its  subsidiary,  Sentir,  Inc.  (Sentir)  in a  purchase  transaction  for
     $3,455,217  in cash.  The minority  interest  carried by the Company at the
     date of  acquisition  was $629,577.  In conjunction  with the  acquisition,
     liabilities were assumed as follows:



                                                                             
        Fair value of assets acquired (including goodwill of $ 2,825,640)       $  3,574,016
        Cash Paid                                                                  3,455,217
                                                                                ------------
        Liabilities assumed                                                     $    118,799
                                                                                ============

                See Notes To Consolidated Financial Statements.  (Concluded)

                                       23


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization - Merit Medical  Systems,  Inc.  (Merit) and its  wholly-owned
     subsidiaries,  Merit Holdings, Inc. (MHI), and Sentir collectively own 100%
     of Merit Medical Systems LP (MMSLP).  Combined with its other  wholly-owned
     subsidiary, Merit Medical International, Inc. (MMI), Merit, MHI, and Sentir
     collectively  own 100% of Merit  Services,  Inc. (MSI)  (collectively,  the
     Company).  The  Company  develops,  manufactures,  and  markets  disposable
     medical  products  primarily  for use in the  diagnosis  and  treatment  of
     cardiovascular  disease  which  is  considered  to be one  segment  line of
     business.  The Company  manufactures  its products in plants located in the
     United  States and in Ireland.  The Company has export sales to dealers and
     has direct sales forces in the United  States,  Canada,  and Western Europe
     (see Note 9).

     The consolidated  financial statements of the Company have been prepared in
     accordance  with  accounting  principles  generally  accepted in the United
     States of America.  The following is a summary of the more  significant  of
     such policies.

     Use of Estimates in Preparing  Financial  Statements - The  preparation  of
     financial  statements in conformity  with accounting  principles  generally
     accepted  in the  United  States of  America  requires  management  to make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     expenses  during the  reporting  period.  Actual  results could differ from
     those estimates.

     Principles of Consolidation - The consolidated financial statements include
     those of Merit, MMI, MHI, MSI, MMSLP and Sentir. All material  intercompany
     balances and transactions have been eliminated in consolidation.

     Revenue  Recognition - The Company recognizes  revenues when the product is
     shipped  which meets the  criteria  required by Staff  Accounting  Bulletin
     (SAB) No. 101,  Revenue  Recognition  in  Financial  Statements,  which was
     issued by the  Securities  and Exchange  Commission in December  1999.  The
     adoption  of SAB No.  101,  which  provides  guidance  on the  recognition,
     presentation and disclosure of revenue in financial statements, during 2000
     was not significant to the Company's financial statements.

     Inventories  - Inventories  are stated at the lower of cost  (computed on a
     first-in, first-out basis) or market.

     Income  Taxes - The Company  utilizes an asset and  liability  approach for
     financial accounting and reporting for income taxes.  Deferred income taxes
     are  provided  for  temporary  differences  in  the  bases  of  assets  and
     liabilities as reported for financial statement and income tax purposes.

     Long-Lived  Assets - The Company  evaluates the carrying value of long-term
     assets  based on  current  and  anticipated  undiscounted  cash  flows  and
     recognizes  impairment  when such cash flows will be less than the carrying
     values. There were no impairments as of December 31, 2000 or 1999.

                                       24

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

     Property and Equipment - Property and equipment are recorded at cost.
     Depreciation and amortization are computed using the straight-line method
     over estimated useful lives as follows:

         Building                                             20 years
         Automobiles                                           4 years
         Manufacturing equipment                         5 to 12 years
         Furniture and fixtures                          3 to 10 years
         Leasehold improvements                          4 to 25 years

     Intangible  Assets - Costs  associated with obtaining  patents,  issued and
     pending,  and trademarks  have been  capitalized and are amortized over the
     patent or trademark  period or charged to expense if not approved.  Cost in
     excess of fair value of assets  acquired  has been  allocated  to goodwill,
     which is amortized over twelve to twenty years. Amortization of intangibles
     is done on a straight-line basis.

     Research and Development - Research and  development  costs are expensed as
     incurred.

     Earnings per Common Share - Net income per common share is computed by both
     the basic method,  which uses the weighted  average number of the Company's
     common  shares  outstanding,  and the diluted  method,  which  includes the
     dilutive common shares from stock options and warrants, as calculated using
     the treasury stock method. The amounts of such options and warrants are not
     significant and, accordingly,  the Company's basic and diluted earnings per
     share are the same.

     Financial  Instruments - The Company's financial  instruments,  when valued
     using market  interest  rates,  would not be materially  different from the
     amounts presented in the consolidated financial statements.

     Stock-Based  Compensation - The Company accounts for its stock compensation
     arrangements  under the provisions of Accounting  Principles  Board Opinion
     No. 25,  Accounting for Stock Issued to Employees,  (APB 25) and intends to
     continue to do so. The Company has adopted the  disclosure-only  provisions
     of Statement of Financial  Accounting  Standards (SFAS) No. 123, Accounting
     for Stock-Based Compensation.

     Statements  of Cash Flows - For purposes of the  statements  of cash flows,
     the Company  considers  interest bearing deposits with an original maturity
     date of three months or less to be cash equivalents.

     Concentration  of Credit  Risk -  Financial  instruments  that  potentially
     subject the Company to  concentrations  of credit risk consist primarily of
     temporary cash and cash  equivalents and accounts  receivable.  The Company
     provides credit,  in the normal course of business,  primarily to hospitals
     and independent third-party packers and distributors.  The Company performs
     ongoing credit  evaluations  of its customers and maintains  allowances for
     potential credit losses.

     Foreign Currency  Translation  Adjustment - The financial statements of the
     Company's   foreign   subsidiaries  are  generally   measured  using  local
     currencies  as  the  functional   currency.   Assets  and  liabilities  are
     translated  into U.S.  dollars at year-end rates of exchange and results of
     operations are  translated at average rates for the year.  Gains and losses
     resulting  from  these  translations  are  included  in  accumulated  other
     comprehensive loss as a separate component of stockholders' equity.

     Comprehensive Loss - Accumulated other comprehensive loss consists entirely
     of foreign currency translation adjustments.

                                      25

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

     Recently Issued Financial  Accounting  Standards - SFAS 133, Accounting for
     Derivative  Instruments and Hedging Activities,  as amended,  requires that
     all derivative instruments be recognized as either assets or liabilities at
     fair market value. The Company adopted this statement  beginning January 1,
     2001.  The effect on the  Company's  financial  statements of adopting this
     statement was not significant.

2.   SEVERANCE COSTS

     During  the  year  ended   December  31,  2000,   the  Company   terminated
     approximately 30 employees and  correspondingly  accrued a termination cost
     of approximately $331,000. This amount is included in operating expenses as
     severance costs. As of December 31, 2000, all but approximately  $67,000 of
     the above amount had been paid to the terminated employees.

3.   ACQUISITIONS

     On July 27, 1999,  the Company  acquired  the 28% minority  interest in its
     subsidiary,  Sentir,  for a  purchase  price of  $3,574,016  consisting  of
     $3,455,217  in cash and the  assumption  of  liabilities  in the  amount of
     $118,799.  Of the $3,574,016  purchase price,  $226,463 was paid to related
     parties.  The  acquisition has been accounted for using the purchase method
     of accounting;  as such, 100 percent of Sentir's results of operations have
     been included in the accompanying  consolidated  financial  statements from
     the date of  acquisition.  Previous to the  acquisition  date, the minority
     interest's  share  of  operations  was  excluded  from  net  income  in the
     consolidated  statements  of  operations.  The  cost  of  this  acquisition
     exceeded the estimated fair value of the acquired net assets by $2,825,640.
     Such excess has been  allocated  to goodwill  and is being  amortized  on a
     straight-line basis over 20 years.

     On August 20, 1999, the Company  acquired  substantially  all of the assets
     and assumed certain  liabilities of the Angelton  Division of Mallinckrodt,
     Inc. (Angelton) for a purchase price of $8,132,194 consisting of $7,867,699
     in cash and the  assumption  of  liabilities  in the  amount  of  $264,495.
     Angelton is a manufacturer and marketer of medical catheters,  introducers,
     guide wires, and needles.  The acquisition has been accounted for using the
     purchase method of accounting;  as such,  Angelton's  results of operations
     have been included in the accompanying  consolidated  financial  statements
     from the date of  acquisition.  The cost of this  acquisition  exceeded the
     estimated fair value of the acquired net assets by $1,949,383.  Such excess
     has been  allocated to goodwill and is being  amortized on a  straight-line
     basis over 20 years.

     The  unaudited pro forma results of operations of the Company for the years
     ended December 31, 1999 and 1998 (assuming the  acquisition of Angelton had
     occurred as of January 1, 1998) are as follows:

                                                   1999                1998
                                              -------------       -------------
     Net sales                                $  87,606,126       $  79,368,263
     Net income                                   3,944,207           3,816,143
     Net income per share (basic and diluted)          0.52                0.51

     On May 18, 2000, the Company  acquired  certain assets of  Electro-Catheter
     Corporation  (Elecath)  for a purchase  price of $607,129 in cash.  Elecath
     develops,  manufactures and sells a broad range of cardiovascular catheters
     for use  primarily in the Electro  physiology,  Cath Lab and Critical  Care
     departments  of  hospitals.  The  cost of  this  acquisition  exceeded  the
     estimated  fair value of the acquired  assets by $533,793.  Such excess has
     been allocated to goodwill and is being amortized on a straight-line  basis
     over 12 years.

                                       26

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

4.   INVENTORIES

     Inventories consist of the following at December 31, 2000 and 1999:

                                                    2000               1999
                                               -------------      --------------
     Finished goods                            $  15,255,622      $  16,816,578
     Work in-progress                              3,678,807          3,270,163
     Raw materials                                 8,325,314          8,554,635
     Less reserve for obsolete inventory          (1,986,315)        (1,120,289)
                                               -------------      --------------
     Total                                     $  25,273,428      $  27,521,087

5.   INCOME TAXES

     Deferred  income tax assets and  liabilities  at December 31, 2000 and 1999
     consist of the following temporary differences and carryforward items:



                                                       Current                              Long-Term
                                           --------------------------------     -------------------------------
                                                 2000            1999                 2000            1999
                                           ---------------- ---------------     ----------------  -------------
                                                                                      
Deferred income tax assets:
  Allowance for uncollectible
    accounts receivable                    $         17,788 $      123,026
  Accrued compensation expense                      198,338         200,799     $          9,612
  Tax credits                                                                            282,630  $     126,563
  Inventory capitalization for
    tax purposes                                    137,513         338,753
  Inventory obsolescence reserve                    576,319         241,150
  Net operating losses of subsidiaries               95,704          90,254              231,989        298,323
  Other                                             192,113          65,078              407,810        367,025
                                           ---------------- ---------------     ----------------  -------------
Total deferred income tax assets                  1,217,775       1,059,060              932,041        791,911

Deferred income tax liabilities:
  Tax credits                                                        (6,315)
  Differences between tax basis
    and financial reporting basis
    of property and equipment                                                         (3,098,747)    (2,514,005)
  Other                                             (33,831)                            (11,127)
                                           ---------------- ---------------     ----------------  -------------
Net                                        $      1,183,944 $     1,052,745     $     (2,177,833) $  (1,722,094)
                                           ================ ===============     ================  =============


                                      27

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

     Income tax expense for the years ended  December 31, 2000,  1999,  and 1998
     differs from amounts  computed by applying  the  statutory  Federal rate to
     pretax income as follows (foreign taxes are not considered significant):



                                                                 2000                 1999              1998
                                                            ---------------     ----------------  -------------
                                                                                         
Computed Federal income tax expense at
  statutory rate of 35%                                     $       270,846     $      1,666,500  $   1,501,621
State income taxes                                                   25,153              124,352        186,948
Creation of tax credits                                            (444,551)            (140,369)      (133,529)
Tax benefit of foreign sales corporation                            (53,139)            (109,579)       (96,808)
(Gains) losses of subsidiaries recorded
  at foreign rates                                                  (13,746)            (115,803)       183,622
Other - including the effect of graduated rates                     162,725               29,661         45,525
                                                            ---------------     ----------------  -------------
Total income tax (benefit) expense                          $       (52,712)    $      1,454,762  $   1,687,379
                                                            ===============     ================  =============
Consisting of:
  Current                                                         $(442,347)    $      1,004,028  $   1,251,890
  Deferred                                                          389,635              450,734        435,489
                                                            ---------------     ----------------  -------------
Total                                                       $      (52,712)     $      1,454,762  $   1,687,379


6.   REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

     Revolving  Credit Facility - In August 1999, the Company entered into a $28
     million  long-term  revolving  credit  facility (the Facility) with a bank,
     which enables the Company to borrow funds at variable  interest  rates.  In
     March 2000,  the Company  amended the Facility by increasing  the amount of
     borrowings  available to $35 million. The Facility is fully due and payable
     on June 30,  2006.  The  weighted  average  interest  rates  applied to the
     outstanding  balances at  December  31, 2000 and 1999 were 8.20% and 7.55%,
     respectively.  Under the terms of the  Facility,  among other  things,  the
     Company is required to  maintain a ratio of total  liabilities  to tangible
     net worth not to exceed 2.0 to 1.0,  maintain a ratio of current  assets to
     current  liabilities  of at  least  1.5 to 1.0,  maintain  minimum  working
     capital  of  $25,000,000,  and  is  restricted  from  paying  dividends  to
     shareholders. For the years ended December 31, 2000 and 1999, management of
     the Company believes the Company was in compliance with all debt covenants.
     As  of  December  31,  2000  and  1999,  the  Company  owed   approximately
     $23,000,000 and $26,000,000 under the Facility,  respectively. The Facility
     is  collateralized  by  trade   receivables,   inventories,   property  and
     equipment, and intangible assets.

                                       28

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

     Long-term Debt - Long-term debt consists of the following at December 31,
     2000 and 1999:



                                                                                      2000              1999
                                                                                ----------------  -------------
                                                                                            
     Notes payable to financial institutions; payable in monthly installments
        through 2004, including interest at rates ranging
        from 6.26% to 8.89%; collateralized by equipment                        $      1,963,368  $   2,634,977

     Capital lease obligations (see Note 7)                                              140,135        276,652

     Revolving credit facility (see above)                                            23,000,000     25,907,596
                                                                                ----------------  -------------
     Total                                                                            25,103,503     28,819,225
     Less current portion                                                              1,091,725      1,001,917
                                                                                ----------------  -------------
     Long-term portion                                                           $    24,011,778  $  27,817,308
                                                                                ================  =============


     Scheduled maturities of long-term debt at December 31, 2000 are as follows:

        Year ending December 31:
      2001                                                         $   1,091,725
      2002                                                               508,664
      2003                                                               361,231
      2004                                                                61,227
      2005                                                                65,764
      Thereafter                                                      23,014,892
                                                                   -------------
     Total                                                         $  25,103,503

7.   COMMITMENTS AND CONTINGENCIES

     Leases - The Company  has  noncancelable  operating  lease  agreements  for
     off-site office and production facilities and equipment. The leases for the
     off-site  office  and  production  facilities  are for five  years and have
     renewal  options  of  one  to  five  years.  The  Company  subleased  these
     facilities during 1997 for approximately  $97,000.  Total rental expense on
     these operating  leases and on the Company's new  manufacturing  and office
     building (see below) for the years ended December 31, 2000,  1999, and 1998
     approximated $2,539,000, $3,094,000, and $3,293,000, respectively.

     In June 1993,  the Company  entered into a 25 year lease  agreement  with a
     developer for a new manufacturing and office building. Under the agreement,
     the Company was granted an option to purchase  the  building at fair market
     value after 10 years and, if not exercised,  after 25 years.  In connection
     with this lease  agreement,  the Company in 1993 sold to the  developer  10
     acres of land on which the building was  constructed.  The $166,136 gain on
     the sale of the land has been  recorded  as a deferred  credit and is being
     amortized as a reduction of rent expense over ten years. In connection with
     the lease  agreement,  the  Company  issued to the  developer  warrants  to
     purchase  155,461  shares of the Company's  common stock at $4.95 per share
     subject to carrying cost increases of 3% per year ($5.74 as of December 31,
     2000). The warrants expire in 2005.

     On  December  22,  2000,  the  Company  sold  certain of its  manufacturing
     equipment  with a net  carrying  value  of  approximately  $1,210,000  to a
     financial  institution.  The Company then entered into a six-year operating
     lease  agreement for the same equipment.  The  approximate  $70,000 gain on
     sale has been  recorded as a deferred  credit and is being  amortized  as a
     reduction of rental expense over six years.

                                      29

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

     The  Company  leases  certain  manufacturing  and  office  equipment  under
     long-term  capital  lease  agreements,  some of  which  require  the  lease
     payments  over a period  shorter  than the lease term.  Capital  leases are
     collateralized  by equipment  with a recorded cost  approximating  $848,500
     with accumulated  amortization of approximately $210,000 and $157,000 as of
     December 31, 2000 and 1999, respectively.

     The future minimum lease  payments,  together with the present value of the
     net minimum capital lease payments as of December 31, 2000, are as follows:



                                                                                    Operating        Capital
                                                                                     Leases           Leases

                                                                                            
Year ending December 31:
   2001                                                                         $      2,497,179  $     146,213
   2002                                                                                2,227,406
   2003                                                                                2,060,857
   2004                                                                                2,045,507
   2005                                                                                1,985,963
   Thereafter                                                                         22,188,192
                                                                                ----------------  -------------
Total minimum lease payments                                                    $     33,005,104        146,213
Less amount representing interest and executory costs                           ================         (6,078)
Present value of net minimum lease payments (see Note 6)                                          -------------
                                                                                                        140,135
                                                                                                  =============



     Irish Government Development Agency Grants - Through December 31, 2000, the
     Company has entered into several grant agreements with the Irish Government
     Development Agency of which approximately  $177,000 and $93,000 remained in
     receivables  at  December  31,  2000  and  1999,  respectively.  The  grant
     agreements  reimburse the Company for a portion of the cost of property and
     equipment purchased in Ireland,  specific research and development projects
     in Ireland,  and costs of hiring and training employees located in Ireland.
     The Company has  recorded the grants  related to research  and  development
     projects  and costs of hiring and  training  employees  as a  reduction  of
     operating  expenses in 2000, 1999, and 1998 in the amounts of approximately
     $67,000,  $154,000,  and  $164,000,  respectively.  Grants  related  to the
     acquisition of property and equipment  purchased in Ireland are recorded as
     deferred  credits and are amortized to income over lives  corresponding  to
     the  depreciable  lives of such  property.  During  2000,  1999,  and 1998,
     approximately  $149,000,  $142,000,  and  $98,000,   respectively,  of  the
     deferred credit was amortized as a reduction of operating expenses.

     Preferred  Share Purchase  Rights - In August 1997, the Company  declared a
     dividend  of one  preferred  share  purchase  right  (a  "Right")  for each
     outstanding  share of Common Stock which  entitles the holder of a Right to
     purchase  one  one-hundredth  of a share of  Series A Junior  Participating
     Preferred  Stock at an exercise price of $40 in the event a person or group
     acquires,  or  announces  an  intention  to  acquire,  15% or  more  of the
     Company's common stock. Until such an event, the Rights are not exercisable
     and are  transferable  with the common stock and may be redeemed at a price
     of $.0001 per Right.

     Litigation - In the ordinary course of business, the Company is involved in
     litigation and claims which management  believes will not have a materially
     adverse effect on the Company's operations.

                                      30

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

8.   EMPLOYEE STOCK PURCHASE PLAN AND STOCK OPTIONS AND WARRANTS

     The Company  offers to its employees an Employee  Stock Purchase Plan which
     allows  the  employee  on a  quarterly  basis  to  purchase  shares  of the
     Company's  common  stock at the  lesser of 85% of the  market  value on the
     offering  commencement date or offering  termination date. The total number
     of shares  available to employees to purchase under this plan is 500,000 of
     which 236,921 have been purchased as of December 31, 2000.

     The Company has a long-term  incentive plan which provides for the issuance
     of  incentive  stock  options,  nonstatutory  stock  options,  and  certain
     corresponding  stock  appreciation  rights. The maximum number of shares of
     common stock for which options may be granted is 2,400,000.  Options may be
     granted to directors,  officers, outside consultants,  and key employees of
     the Company and may be granted upon such terms and such  conditions  as the
     Compensation Committee in its sole discretion shall determine. In no event,
     however, shall the exercise price be less than the fair market value on the
     date of grant.

     Changes in stock options and warrants for the years ended December 31,
     2000, 1999, and 1998 are as follows:



                                                         Options                           Warrants
                                              ---------------------------------  -------------------------------
                                                                  Weighted                       Weighted
                                                                 Average or                     Average or
                                                                  Range of                       Range of
                                                                  Exercise                       Exercise
                                                  Shares           Price             Shares       Price
2000:
                                                                                      
  Granted                                             485,600      $4.50
  Exercised                                           146,660       6.37
  Forfeited/expired                                   124,440       6.94
  Outstanding at December 31                        1,727,940       6.14              155,461     $5.74
  Exercisable                                         820,200       6.97              155,461      5.74

Weighted average fair value of
  options granted during year                                      $2.00

Weighted average fair value of
  shares issued under Employee
  Stock Purchase Plan                                              $0.96


                                       31

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------




                                                         Options                           Warrants
                                              ---------------------------------  -------------------------------
                                                                  Weighted                       Weighted
                                                                 Average or                     Average or
                                                                  Range of                       Range of
                                                                  Exercise                       Exercise
                                                  Shares           Price             Shares       Price
1999:
                                                                                      
  Granted                                             448,900      $5.84
  Exercised                                            22,080       4.96
  Forfeited/expired                                    61,150       5.70
  Outstanding at December 31                        1,513,440       7.02              155,461     $5.57
  Exercisable                                         740,480       7.20              155,461      5.57

Weighted average fair value of
  options granted during year                                      $2.98

Weighted average fair value of
  shares issued under Employee
  Stock Purchase Plan                                              $0.83

                                                            Options                      Warrants
                                              ---------------------------------  -------------------------------
                                                                  Weighted                       Weighted
                                                                 Average or                     Average or
                                                                  Range of                       Range of
                                                                  Exercise                       Exercise
                                                  Shares           Price             Shares       Price
1998:
  Granted                                             203,500      $6.41
  Exercised                                            64,840       5.80
  Forfeited/expired                                    47,990       6.41
  Outstanding at December 31                        1,147,770       6.76              155,461     $5.41
  Exercisable                                         486,230       7.45              155,461      5.41

Weighted average fair value of
  options granted during year                                      $3.14

Weighted average fair value of
  shares issued under Employee
  Stock Purchase Plan                                              $0.90


                                       32

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

     The following table summarizes information about stock options and warrants
     outstanding at December 31, 2000:



                                                                                    Options and Warrants
                   Options and Warrants Outstanding                                     Exercisable
------------------------------------------------------------------------        ----------------------------
                                            Weighted
                                             Average
                                            Remaining     Weighted                               Weighted
     Range of                              Contractual    Average                                Average
     Exercise               Number            Life        Exercise                  Number       Exercise
      Prices              Outstanding       (in years)     Price                 Exercisable      Price

Options:
                                                                                   
    $4.50-$7.25             1,276,540          3.24         $ 5.47                  457,200       $ 6.01
    7.50-10.625               451,400          1.30           8.05                  363,000         8.17

Warrants:
        $  5.74               155,461          4.00           5.74                  155,461         5.74



     The Company  accounts for stock options granted using APB 25.  Accordingly,
     no compensation  cost has been recognized for its fixed stock option plans.
     Had compensation cost for the Company's stock-based compensation plans been
     determined  based on the fair  value at the grant  dates for  awards  under
     those plans  consistent with SFAS No. 123, the Company's net income and net
     income per common and common equivalent share would have changed to the pro
     forma amounts indicated below:



                                                                     2000             1999          1998
Net income:
                                                                                        
  As reported                                                      $ 826,557       $ 3,225,590   $ 2,451,159
  Pro forma                                                          140,145         2,480,928     1,840,182

Net income per common (both basic and diluted) share:
  As reported                                                          $0.11       $      0.43   $      0.33
  Pro forma                                                             0.02              0.33          0.25



     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes  option-pricing model with the following weighted-average
     assumptions used for grants in 2000, 1999, and 1998:  dividend yield of 0%;
     expected  volatility of 61.04%,  56.0%, and 55.2% for 2000, 1999, and 1998,
     respectively;  risk-free  interest  rates ranging from 4.58% to 7.36%;  and
     expected lives ranging from 2.33 to 4.5 years.

9.   SEGMENT REPORTING AND FOREIGN OPERATIONS

     During the years ended  December 31, 2000,  1999, and 1998, the Company had
     foreign sales of approximately $22,968,000, $18,336,000, and $15,198,000 or
     approximately 25%, 24%, and 22%, respectively, of total sales, primarily in
     Japan, Germany, France, and the United Kingdom.

     The  Company  operates  primarily  in one  segment  in which  it  develops,
     manufactures,  and markets disposable medical products, principally for use
     in the diagnosis and treatment of cardiovascular  disease. Major operations
     outside the United States include a leased  manufacturing  and distribution
     facility in Ireland and sales  subsidiaries  in Europe.  The following is a
     summary of the Company's  foreign  operations by geographic area for fiscal
     years 2000, 1999, and 1998:

                                       33

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------





                                                        Transfers
                                         Sales to        Between                          Net
                                        Unaffiliated    Geographic                       Income       Identifiable
                                          Customers       Areas           Revenue        (Loss)          Assets
Fiscal year ended December 31, 2000:
  United States, Canada, and
                                                                                       
  international distributors            $ 80,380,485   $  1,060,749    $ 81,441,234    $ 2,301,524    $ 61,897,460
  Europe direct and European
    distributors                          11,067,027      4,906,800      15,973,827     (1,608,513)      9,549,171
  Eliminations                                           (5,967,549)     (5,967,549)       133,546
                                        ------------   ------------    ------------    -----------    ------------
Consolidated                            $ 91,447,512           None    $ 91,447,512    $   826,557    $ 71,446,631
                                        ============   ============    ============    ===========    ============

Fiscal year ended December 31, 1999:
  United States, Canada, and
    international distributors          $ 69,595,418   $  1,288,485    $ 70,883,903    $ 3,761,605    $ 62,666,167
  Europe direct and European
    distributors                           8,364,158      4,281,400      12,645,558       (319,784)      9,694,302
  Eliminations                                           (5,569,885)     (5,569,885)      (216,231)
                                        ------------   ------------    ------------    -----------    ------------
Consolidated                            $ 77,959,576           None    $ 77,959,576    $ 3,225,590    $ 72,360,469
                                        ============   ============    ============    ===========    ============

Fiscal year ended December 31, 1998:
  United States, Canada, and
    international distributors          $ 60,407,019   $  1,386,073    $ 61,793,092    $ 3,373,280    $ 41,547,669
  Europe direct and European
    distributors                           7,970,338      2,546,099      10,516,437       (593,677)      9,117,117
  Eliminations                                           (3,932,172)     (3,932,172)      (328,444)
                                        ------------   ------------    ------------    -----------    ------------
Consolidated                            $ 68,377,357           None    $ 68,377,357    $ 2,451,159    $ 50,664,786
                                        ============   ============    ============    ===========    ============


     Transfers  between  geographic areas are accounted for at amounts which are
     generally  above  cost and  consistent  with the rules and  regulations  of
     governing  tax   authorities.   Such   transfers  are   eliminated  in  the
     consolidated financial statements.  Net income by geographic areas reflects
     foreign earnings reported by the foreign entities.  Identifiable assets are
     those  assets that can be directly  associated  with a  particular  foreign
     entity and thus do not include assets used for general corporate purposes.

10.  RELATED PARTY TRANSACTIONS

     Receivables  from  employees  and related  parties at December 31, 2000 and
     1999 totaled approximately $441,000 and $503,000, respectively,  (including
     approximately  $208,000 and  $267,000,  respectively,  from officers of the
     Company).  During 2000,  approximately  45,000 shares of Company stock were
     surrendered  in  exchange  for  the   extinguishment  of  a  related  party
     receivable.

11.  ROYALTY AGREEMENT

     On April 8, 1992, the Company  settled  litigation  involving,  among other
     things, allegations that certain of the Company's inflation device products
     infringed patents issued to another medical product  manufacturing  company
     (the Licensor).

                                       34

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

     Pursuant to the settlement,  the Company  entered into a license  agreement
     with  the  Licensor,   whereby  the  Licensor  granted  to  the  Company  a
     nonexclusive  right and license to manufacture  and sell products which are
     subject to the patents  issued to the Licensor.  For the rights and license
     granted under the agreement,  the Company paid the Licensor a nonrefundable
     prepaid  royalty  in the  amount of  $600,000.  The  royalty  was paid upon
     execution of the agreement and represented a prepaid  royalty  covering the
     first seven years of the agreement,  which concluded  during the year ended
     December 31, 1999. In addition to the prepaid  royalty,  the Company agreed
     to pay the Licensor a continuing royalty beginning January 1, 1992 of 5.75%
     of sales (which will not exceed $450,000 for any calendar year) made in the
     United States, of products covered by the license  agreement.  Royalties of
     $450,000 were paid or accrued in each of the years ended December 31, 2000,
     1999, and 1998.

     The Licensor has released the Company from all damages,  claims,  or rights
     of  action  which  the  Licensor  may  have  had  related  to  the  alleged
     infringement  of the patents  issued to the Licensor.  The Company has also
     agreed to not proceed against the Licensor for the alleged misappropriation
     by the Licensor of the Company's confidential and proprietary information.

12.  EMPLOYEE BENEFIT PLAN

     The Company has a contributory  401(k) savings and profit sharing plan (the
     Plan) covering all full-time employees who are at least 21 years of age and
     have a minimum of six months of service to the  Company.  The  Company  may
     contribute at its discretion matching contributions based on the employees'
     compensation.  Contributions  made by the Company to the Plan for the years
     ended  December 31, 2000,  1999, and 1998 totaled  approximately  $258,000,
     $88,000, and $18,000, respectively.

     The Plan purchased  unissued shares of the Company's common stock at market
     value during each of the three years ended December 31, 2000 as follows:

                                                                   Market
                                                     Shares         Value
Years ended December 31:
  2000                                                 None          None
  1999                                               10,990       $62,600
  1998                                               13,819        81,850

                                       35

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
--------------------------------------------------------------------------------

13.      QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

     Quarterly data (unaudited) for the years ended December 31, 2000, 1999, and
     1998 is as follows:



                                                                         Quarter Ended
                                         -----------------------------------------------------------------------
2000                                             March 31         June 30        September 30       December 31

                                                                                       
Net sales                                     $ 22,080,435     $ 23,552,859      $ 23,330,203      $ 22,484,015
Gross profit                                     7,634,050        7,616,239         7,958,848         7,414,916
Income from operations                             289,575          647,698         1,224,604           966,678
Income tax expense (benefit)                       (68,347)          19,254           169,026          (172,645)
Net income (loss)                                 (159,482)          44,927           394,397           546,715
Basic and diluted net income
  (loss) per share                                   (0.02)            0.01              0.05              0.07

1999

Net sales                                     $ 17,701,723     $ 18,979,739      $ 19,920,419        21,357,695
Gross profit                                     6,692,102        7,349,765         7,763,440         8,236,454
Income from operations                           1,070,736        1,477,316         1,705,782         1,762,959
Income tax expense                                 255,731          446,516           463,321           289,194
Net income                                         565,123          752,684           928,768           979,015
Basic and diluted net income
  per share                                           0.08             0.10              0.12              0.13

1998

Net sales                                     $ 16,466,015     $ 17,974,170      $ 16,703,033        17,234,139
Gross profit                                     6,163,161        6,812,741         6,432,783         6,534,799
Income from operations                           1,108,003        1,382,228         1,543,092         1,137,682
Income tax expense                                 459,115          548,306           542,743           137,215
Net income                                         427,655          586,558           722,836           714,110
Basic and diluted net income
  per share                                           0.06             0.08              0.10              0.09





                                                                ******


                                       36




Item 9.   Changes and Disagreements with Accountants on Accounting and Financial
          Disclosure.
          ----------------------------------------------------------------------

          None.

                                    PART III

Items 10, 11, 12 and 13.

          These items are incorporated by reference to the Company's  definitive
Proxy Statement relating to the Annual Meeting of Shareholders scheduled for May
23, 2001. The definitive  Proxy  Statement will be filed with the Commission not
later than 120 days after  December 31, 2000,  pursuant to Regulation 14A of the
Securities Exchange Act of 1934, as amended.

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
          ---------------------------------------------------------------

          (a)     Documents filed as part of this report:

                (1)Financial Statements.  The following financial statements are
          incorporated by reference as provided in  --------------------  Item 8
          of this report:

        --       Independent Auditors' Report

        --        Consolidated Balance Sheets as of December 31, 2000 and 1999

        --        Consolidated  Statements  of  Operations  for the Years Ended
                 December 31, 2000, 1999 and 1998

        --        Consolidated Statements of Stockholders' Equity for the Years
                 Ended December 31, 2000, 1999 and 1998


        --        Consolidated  Statements  of Cash  Flows for the Years  Ended
                   December 31, 2000, 1999 and 1998

        --        Notes to Consolidated Financial Statements

                (2)  Financial Statement Schedule
                     ----------------------------

        --        Schedule II - Valuation and qualifying account

                           all other  schedules  have been omitted  because they
                           are not required, not applicable,  or the information
                           is otherwise set forth in the financial statements or
                           notes thereto.

          (b)     Reports on Form 8-K:

                  None.

          (c)     Exhibits:

                  The following  exhibits required by Item 601 of Regulation S-K
          are filed herewith or have been filed  previously  with the Commission
          as indicated below:
                                       37




                                             Description                                         Exhibit No.
                 ------------------------------------------------------------------    ------------------------------
                                                                                 
         3.1     Articles of Incorporation of the Company, as amended and restated*    [Form 10-Q filed August 14,
                                                                                       1996, Exhibit No. 1]
         3.2     Bylaws of the Company*                                                [Form S-18 filed October 19,
                                                                                       1989, Exhibit No. 2]
         4       Specimen Certificate of the Company's Common Stock, no par            [Form S-18 filed October 19,
                 value*                                                                1989, Exhibit No. 10]
        10.1     Merit Medical Systems, Inc. Long Term Incentive Plan (as amended      [Form 10-Q filed August 14,
                 and restated) dated March 25, 1996*                                   1996, Exhibit No. 2]
        10.2     Merit Medical Systems, Inc. 401(k) Profit Sharing Plan (as amended    [Form S-1 filed February 14,
                 effective January 1, 1991*                                            1992, Exhibit No. 8]
        10.3     License Agreement, dated April 8, 1992 between the Company and        [Form S-1 filed February 14,
                 Utah Medical Products, Inc.*                                          1992, Exhibit No. 5]
        10.4     Lease Agreement dated as of June 8, 1993 for office and               [Form 10-K for year ended
                 manufacturing facility*                                               December 31, 1994, Exhibit
                                                                                       No. 10.5]
        10.5     Loan Agreement with Zions First National Bank dated October 10,       [Form 10-K for year ended
                 1995*                                                                 December 31, 1995, Exhibit
                                                                                       No. 10.5
        10.6     Amendment to Loan Agreement with Zions First National Bank            [Form 10-K for year ended
                 dated October 10, 1997                                                December 31, 1997, Exhibit
                                                                                       No. 10.5]
                                                                                       [Form 10-K for year ended
        10.7     Amendment to Loan Agreement with Zions First National Bank            December 31, 1998, Exhibit
                 dated August 11, 1999                                                 No.10.7]
                                                                                       [Form 10-K for year ended
                                                                                       December 31, 1999, Exhibit
        10.8     Amendment to Loan Agreement with Zions First National Bank            No.10.8]
                 dated
        10.9     Agreement of sale by and between Merit Medical Systems, Inc. and      [Form 8-K dated August 20,
                 Mallinckrodt Inc. dated August 20, 1999                               1999, Exhibit No. 10.1]
       10.10     Amendment to Loan Agreement with Zions First National Bank            Filed herewith
                 3/11/2000
       10.11     Merit Medical Systems, Inc. Highly Compansated Deferred               Filed herewith
                 Compenstaion Plan.
       13.1      Annual Report to  Shareholders  for the year ended December 31,
                 2000.  Certain  portions of this  exhibit are  incorporated  by
                 reference  into  this  Report  on  Form  10-K;   except  as  so
                 incorporated by reference, the Annual Report to Shareholders is
                 not deemed filed as part of this Report on Form 10-K.
        23.1     Consent of Independent Auditors                                       Filed herewith

-------------------------------
* These exhibits are incorporated herein by reference.

     (d)  Financial  Statement  Schedules:  There  are  no  financial  statement
schedules required to be filed with this report.
                                       38




                                   SIGNATURES
                                   ----------

          Pursuant to the  requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 29, 2001.

                           MERIT MEDICAL SYSTEMS, INC.

                                       By:   FRED P. LAMPROPOULOS, PRESIDENT
                                          ----------------------------------
                                             Fred P. Lampropoulos, President
                                             and Chief Executive Officer

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities indicated on March 29,2001.

          Signature                       Capacity in Which Signed
          ---------                       ------------------------

/s/: FRED P. LAMPROPOULOS      President, Chief Executive Officer and Director
---------------------------
     Fred P. Lampropoulos

/s/:KENT W. STANGER            Chief Financial Officer, Secretary, Treasurer and
----------------------------   Director (Principal financial and accounting
    Kent W. Stanger            officer)



/s/:RICHARD W. EDELMAN         Director
---------------------------
    Richard W. Edelman

/s/:REX C. BEAN
---------------------------
    Rex C. Bean                Director



/s/:JAMES J. ELLIS
---------------------------
    James J. Ellis             Director



/s/:MICHAEL E. STILLABOWER
---------------------------
    Michael E. Stillabower     Director
                                       39