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, 2001 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)                                           Identi-fication 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 [X]  No [ ]

         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 27, 2002, was approximately $198 million.
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 27, 2002 the  Registrant  had  10,807,928  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, 2002 (Part
III).






                                TABLE OF CONTENTS

                                                                                               
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

Disclosure regarding forward-looking statements. . . . . . . . . . . . . . . . . . . . . . . . .   1
-----------------------------------------------
Item 1.  Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         --------
GENERAL  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
PRODUCTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
MARKETING AND SALES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         Market Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         U.S. Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         International Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
CUSTOMERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
RESEARCH  AND  DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
MANUFACTURING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
PATENTS, PATENT APPLICATIONS, LICENSES, TRADEMARKS AND COPYRIGHTS. . . . . . . . . . . . . . . .  10
REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
         AND EXPORT  SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

Item 2.  Properties  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

Item 3.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         -----------------

Item 4.  Submission of Matters to a Vote of Security Holders. . .. . . . . . . . . . . . . . . .  13
         ---------------------------------------------------

PART II.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

Item 5.  Market for Registrant's Common Stock and Related Shareholder Matters  . . . . . . . . .  14
         ---------------------------------------------------------------------

Item 6.  Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         -----------------------

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations .  15
         -------------------------------------------------------------------------------------

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.  . . . . . . . . . . . . . .  18
         ---------------------------------------------------------

Item 8.  Financial Statements and Supplementary Data  . . . . . . . . . . . . . . . . . . . . .   18
         ----------------------------------------------

Item 9.  Changes and Disagreements with Accountants on Accounting and Financial Disclosure . . .  39
         ---------------------------------------------------------------------------------

PART III.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39

Items 10, 11, 12 and 13  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39

PART IV .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K   . . . . . . . . . . .  39
         ---------------------------------------------------------------

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43









                                     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,   product  liability  claims,   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.


                                       1


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 safety products 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 both  stand-alone  products
in  combination  with custom kits have  increased as additions have been made to
the Company's  product lines. In 2001,  approximately 53% of the Company's sales
were made directly to U.S. hospitals and approximately 24% of sales were made to
custom packagers,  distributors and O.E.M. companies who also distribute to U.S.
hospitals.  Approximately  23% of the  Company's  sales  in  2001  were  made in
international markets.

         The Company was organized in July 1987 as a Utah  corporation.  In July
1994, the Company purchased a controlling interest in Merit Sensor Systems, Inc.
(formally  Sentir),  a  California-based  manufacturer of silicon  sensors,  and
during 1999 the Company purchased the remaining  interest.  The Company also has
established  subsidiaries  in  Ireland,  Germany,  France,  the United  Kingdom,
Belgium, and 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."


                                       2


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), Smart Tip(TM) and Inject8(TM)),  inflation devices  (Intellisystem(R),
Monarch(R), Basix(R), 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),  Backstop(R)  and
ShortStop(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(TM) Contrast
Management  System(TM)),  angiography needles (Majestik(R)  Series,  Majestik(R)
Sheilded needle),  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(R)),  diagnostic angiographic pigtail catheters,  diagnostic
cardiology  and  radiology  catheters,   (SofTouch(R)  and  Performa(R))  sheath
introducers   (DialEase(TM)),   diagnostic   guide   wires   (Inqwire(R)),   and
RadStat(TM).  These products are sold  separately and in custom kits  consisting
primarily of selected combinations of products.

         The Company  has not  experienced  any  significant  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 and Angioplasty Accessories.
         ----------------------------------------------
         Inflation   devices   are   large,   specialized   syringes   used   in
interventional  catheterization  procedures to inflate balloon-tipped catheters.
Each of the  Company's  inflation  devices  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  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 internal  pressure  transducer  which
connects to a monitor outside of the sterile field.  The  IntelliSystem  monitor
measures,  times,  records,  and digitally displays  information  concerning the
pressure, duration and number of each inflation and deflation of the angioplasty
balloon.   The  Company  believes  that  electronic   sensing  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.

The patented IntelliSystem II(TM) color monitor is an advanced balloon inflation
system. It gives physicians several highly desirable options, including: a large
touch  screen,  an instant  readout of positive and negative  pressures,  and an
enlarged   graphing  display  to  show  extremely  subtle  changes  in  pressure
measurements.  In addition  the  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(R) is a disposable  inflation  device which digitally  displays data
concerning pressure and duration of inflations and deflations on a small digital
readout mounted on the barrel of the inflation  syringe.  The small monitor does
not  offer  the  same  display,   storage  or  printing   capabilities   of  the
IntelliSystem  &  IntelliSystem  II(TM) but offers the  convenience  of portable
digital operation.  In 2002 Merit will launch a 30 atmosphere version to provide
clinicians with additional options.

                                       3


The Basix(R) 25 and the new  BasixCOMPAK(TM)  are disposable  inflation syringes
which incorporate a conventional  analog pressure gauge mounted on the barrel of
the inflation  syringe.  The Basix(R) 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(R)  and  BasixCOMPAK(TM)
represent a  significant  addition to its line of  inflation  devices  that will
contribute  to  increased  sales where both  clinical  outcomes  and price are a
priority.

         Hemostasis Valves.
         ------------------
         The  MBA(TM),  Passage(R),  AccessPlus(TM),  Double  Play(TM),  and the
Inspector(R)  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(TM)
connectors.  The devices  differ in size and  function.  The MBA(TM)  features a
valve mechanism that minimizes  blood loss during  exchange of wires,  catheters
and other tools  through the valve.  The Access  Plus(TM)  and Access  9(TM) are
large-bore  configurations.  The  Double  Play(TM)  incorporates  a  double  "Y"
configuration   for   kissing-balloon   techniques.   The   Inspector(R)   is  a
single-lumen, flow-through configuration.

         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.

         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 model,  Inject8(TM).  In
response to customer demand, Merit launched latex-free control syringes in 1998.

         60ml VacLok(R).
         ---------------
         The 60ml VacLok(R) syringe is used to create negative  pressure.  There
are many  clinical  applications  for a negative  pressure  syringe,  including:
abscess drainage and biopsy,  balloon  preparation,  nephrostomy  drainage,  and
more.

         Large-Bore Stopcock(TM).
         ------------------------
         The large-bore(TM)  stopcock launched in 2001 is designed to facilitate
movement  of fluid.  The large  internal  diameter  (0.120") is ideal for moving
drainage fluid from the body. Like all Merit stopcocks,  the large-bore  version
incorporates a clear body for easy visualization and a large, easy-to-manipulate
handle.

         Percu-Stay(R) - Catheter Fixation Device.
         -----------------------------------------
         Percu-Stay(R)  is a one piece  catheter tube  securing  device and site
dressing for  percutaneous  drainage sites.  The product provides a comfortable,
low-profile  fixation  device for  catheters  and  tubes.  The device is used in
interventional radiology, special procedures,  cardiology,  urology, home health
care, and skilled nursing facilities.

         MDD600(TM).
         -----------
         The Merit Drainage  Depot(TM) was launched in 2001 and is  specifically
designed to temporarily  collect  fluids.  It  incorporates a drainage spout for
quick and easy fluid disposal.  It incorporates an internal anti-reflux valve to
help prevent fluid from backing up the line. The bag also comes packaged with an
adjustable  Velcro strap that can be used to attach the device to the  patient's
waist or leg.

         Specialty Syringes.
         -------------------
         Merit's  Medallion(R)  syringes,  a  line  of  disposable,  latex-free,
color-coded specialty syringes, are used for injection of medications,  flushing
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  minimizes medication errors by
allowing a clinician to assign a color for each  medication  to be dispensed and
to  differentiate  syringes by their  contents.  The syringes also can be custom
printed to the specifications of the user. 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.

                                       4


         High-Pressure Contrast Injection Line and Sherlock(TM) Connectors.
         ------------------------------------------------------------------
         During angiographic and diagnostic radiology procedures, contrast media
must be injected  through a catheter  into a patient's  artery or vein.  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(TM) 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(TM)  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(TM) 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. The Company has designed
its own manifold consisting of two, three, four or five valves. When compared to
manifolds sold by competitors,  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.  The Merit
Manifold is sold separately but is also a key component of the Company's  custom
kits.

         RadStat(TM) Radial Artery Compression Device.
         ---------------------------------------------
         The RadStat(TM) Radial Artery Compression Device is intended to be used
to apply direct pressure to the radial artery puncture site after diagnostic and
interventional  procedures.  In addition  to rapid  controlled  hemostasis,  the
RadStat(TM)   immobilizes  the  wrist  comfortably,   permitting  rapid  patient
ambulation.

         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 in a closed  system and  collects
waste  materials  such as blood and other  fluids  during  angioplasty  or other
procedures.  The Merit Disposal Depot(TM) is self-contained for ease of disposal
and  reduces  the  risk  of  contamination.  The  Backstop(R)  is a  unique  and
proprietary  alternative  fluid disposal  basin  designed to reduce  exposure to
blood-borne pathogens. In 2002 Merit will launch the DugOut(TM),  a large volume
(1000 ml) line extension to the  Backstop(R).  The  DugOut(TM)  also contains an
additional compartment for the storage of accessories.

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

         Contrast Management Systems.
         ----------------------------
         The Miser(TM) and the In-Line(TM)  Contrast Management System have been
designed to increase catheterization lab efficiencies by reducing contrast media
waste.  This small  system helps save  hospitals  thousands of dollars a year in
wasted contrast.

         Majestik(R) Angiographic Needles.
         ---------------------------------
         The  angiography  needle  creates the  percutaneous  (through the skin)
access site for virtually all invasive diagnostic and interventional  procedures
performed in cardiology and radiology.  The needle provides the initial point of
entry site for the  introducer  sheath,  guide  wires,  catheters  and any other
interventional devices. The Merit Majestik(R) Needle helps the physician achieve
precision  vascular access with one of the sharpest  angiography  needles on the
market.

         Majestik(R) Shielded Angiography Needles.
         -----------------------------------------
         The needlestick safety and prevention act that passed in November 2000,
requires  healthcare  employers  to document  their  exposure  control  plan and
evaluate  safety-engineered  products to protect clinicians.  In 2002 Merit will
launch a new line of shielded, 18-gauge angiography introducer needles that meet
the requirements of the law. The Majestik(R)  shielded needle will be one of the
first safety-engineered  devices designed to promote safer needles in cardiology
and radiology.

                                       5


         Fountain(R) and Mistique(TM) Infusion Catheters.
         ------------------------------------------------
         Vascular occlusion is a common anomaly and affects millions of patients
each year. Both the Fountain(R) catheter and the Mistique(TM)  catheters deliver
therapeutic  solutions  to dissolve  thrombolytic  occlusions  (blood  clots) in
peripheral  arteries,  hemodialysis grafts and deep veins. The Fountain catheter
utilizes an occluding wire to effectively  block off the end hole and direct the
infusion  therapy   uniformly   through  the   laser-drilled   side  holes.  The
Mistique(TM)  is designed to be used over standard 0.035 or 0.038 guide wires to
block off the end hole and direct the  infusion  therapy  uniformly  through the
side holes.

         InQwire(R) Diagnostic Guide Wires.
         ----------------------------------
         Guide  wires  consist of a  small-diameter  wire  tightly  wrapped in a
coated wire coil. The technology  needed to produce these wires is considerable,
and Merit utilizes its guide wire center of excellence in Ireland to manufacture
the Inquire Diagnostic Guide Wire, as well as PTCA guide wires. Guide wires vary
in length, outside diameter and tip configuration,  and are used to place either
a diagnostic or therapeutic catheter into a patient's heart artery or other area
of the body.

         Tomcat(TM) Interventional PTCA Guide Wires.
         -------------------------------------------
         Tomcat(TM)  PTCA  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.

         RingMaster(TM).
         ---------------
         The  RingMaster(TM)   guide  wire  basin,   launched  in  2001,  allows
clinicians  to  conveniently   store  guide  wires  to  maintain  sterility  and
organization. It separates wires for quick selection, uses less table space than
conventional  basins  because it's  stackable  and it helps keep wires  hydrated
throughout the procedure.

         KEEP(TM).
         ---------
         The Merit  KEEP(TM)is an accessory  organizer  that holds and organizes
guide wires, catheters and tubing.

         Performa(R) Introducer Sheaths.
         -------------------------------
         Introducer  Sheaths are used to create the access  through  which guide
wires and catheters are passed into the vasculature.  Most sheaths incorporate a
valved hub to minimize  bleeding,  and a side port for drug  delivery,  pressure
monitoring and standard flushing.

         Vessel Dilators.
         ----------------
         Dilators are used to dilate puncture  sites.  They are commonly used in
Radiology and  Cardiology  over a 0.035" or 0.038" guide wire to dilate the site
prior to placing sheaths and catheters in the femoral artery.

         Squirt(R) Fluid Dispensing System.
         ----------------------------------
         The  Squirt(R)  fluid  dispensing  system is a unique  and  proprietary
product designed specifically for therapeutic infusion for controlled,  accurate
and consistent fluid delivery.  Some Fountain catheter  configurations contain a
Squirt(R) packaged with it.

         DialEase(R) Introducer Sheath.
         ------------------------------
         The  DialEase(TM)  Sheath  is a short  introducer  ideally  suited  for
dialysis  graft  intervention.  It is  commonly  used in  conjunction  with  the
Fountain(R) and Mistique(TM)  therapeutic  infusion catheters to declot dialysis
grafts.

         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, (Teflon(R)), high-flow, pigtail
angiographic catheters ideally suited for smaller patients.

         Pericardiocentesis.
         -------------------
         On occasion,  the pericardial sack surrounding the heart becomes filled
with  blood  or  fluid.  To  remove  the  fluid  and  the  potential  for  heart
strangulation (tamponade), a catheter is placed in the pericardial sack to drain
the excess fluid. Merit offers a complete  pericardiocentesis kit which combines
a high-flow  drainage catheter with virtually all components needed to place the
device in the  pericardial  sack. The kit  combination  saves the physician both
time and money by having all components in one convenient tray.

         One-Step(TM) Centesis Catheter.
         -------------------------------
         The One  Step(TM)  Catheter  launched  in the first  quarter of 2002 is
intended  to be used for  short-term  centesis  procedures.  It  incorporates  a
luer-locked introducer needle for secure,  one-handed placement.  The tip of the
introducer   needle  is   echogenically   enhanced  for   visualization   during
ultrasound-guided  placement.  The transition between the catheter and needle is
perfectly smooth to facilitate insertion.

                                       6


         Resolve(TM) Universal Drainage Catheter with Locking Pigtail.
         -------------------------------------------------------------
         The Resolve(TM)  Universal  Drainage  Catheter with locking pigtail and
hydrophilic coating will be another key addition to Merit's offering of drainage
catheters and accessories in 2002. It is intended for  percutaneous  drainage of
body fluids where a locking pigtail is required for extended catheter placement.
With the unique,  patented pigtail release mechanism there is no need to cut the
catheter for removal and  exchange.  With a new hub design,  the  clinician  can
close  the hub and  lock  the  pigtail  with  one  hand.  There  is no  longer a
requirement  to wind a locking  suture around the hub to keep the pigtail locked
in place.

         Resolve(TM) Universal Drainage Catheter with Non-Locking Pigtail.
         -----------------------------------------------------------------
         The Resolve(TM)  Universal  Drainage Catheter with non-locking  pigtail
will also be  launched in 2002.  It is a standard  drainage  catheter  that will
round out the Merit offering of drainage products.

         Meritrans(R) Pressure Transducer and Accessories.
         -------------------------------------------------
         Diagnostic  blood  pressure   monitoring  is  a  critical  priority  in
virtually  all  diagnostic  and  interventional   procedures.  The  Meritrans(R)
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 vital  component  of many custom kit  configurations.  Pressure
Monitoring Tubing and Stopcocks are common ancillary  products to complement the
Meritrans(R).  Merit  provides  several  reusable  accessories  to  support  the
Meritrans(R).   The  Merit   Mentor(TM)   is  a   transducer   calibration   and
troubleshooting  device to insure  accuracy  and  repeatability  of  physiologic
pressure  measurements.  Reusable  transducer cables connect the Meritrans(R) to
the bedside monitor.  Organizing brackets hold multiple  transducers to beds and
IV poles.

         Pressure Infusor Bag.
         ---------------------
         In 2001 Merit signed a  distribution  agreement  for a line of Pressure
Infusor Bags. These devices are used hospital-wide to apply pressure to a sealed
bag of fluid,  such as IV solutions or blood products.  The pressure  exerted is
shown by a color-coded  pressure gauge, and the device has a valve that releases
pressure to prevent inadvertent over-pressurization.

         ShortStop(R).
         -------------
         In 2000, Merit introduced the ShortStop(R),  a small,  temporary sharps
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 help prevent inadvertent clinician injury.

         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 preassembled form. Custom kits also
provide cost savings over  purchasing  single products and reduce the hospital's
administrative  costs  associated  with  maintaining  inventory  of  individual,
sterile products.

         Universal Fluid Dispensing Syringe.
         -----------------------------------
         In 1997 the company  received  510(k)  approval  from the U.S. Food and
Drug  Administration  ("the  FDA")  for  use of its  digital  inflation  devices
(Intellisystem(R)  and  Monarch(R))  for a wide  range  of  additional  clinical
applications  such  as  discography,  esophageal  dilatation,  trigeminal  nerve
compression,  and  retinal  detachment.   Universal  fluid  dispensing  syringes
incorporate  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  pressure.  Each  syringe  also
provides  a  clear  view  of the  fluid  path  that  simplifies  debubbling  and
contributes  to accurate  measurement  of pressure.  When used in other clinical
applications  such as discography,  the  IntelliSystem(R)  accurately  dispenses
fluid while documenting and graphing pressures in the disc. The Company believes
that electronic  sensing  display of such  information is much more accurate and
precise  than the  tactile  feel of  standard  syringes  and that  which  can be
obtained  from  conventional  analog  gauges.  The  data  is  stored  and may be
displayed, retrieved, graphed and printed.

         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.

                                       7


         Diagnostic Radiology Catheters.
         -------------------------------
         Radiology  catheters  are  engineered  and designed  with  distinct tip
configurations  to access  specific  vessels and organs outside the heart (head,
kidneys,  legs,  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  adult  vessel-sizing
catheters,  which are used by radiologists to measure the internal  diameter and
length of a blood vessel under fluoroscopy.  Procedures in which these catheters
are used include  angioplasty,  embolization,  abdominal aortic  aneurysm  (AAA)
stent-grafts and vena cava filter placements.  In 2001. Pediatric  vessel-sizing
catheters were introduced to complement the line

         Guide Catheters.
         ----------------
         The  Mallinckrodt  acquisition  brought with it a line of  high-quality
guide catheters used in cardiology.  Coronary  angioplasty requires the use of a
guiding  catheter to place the balloon within the  vasculature.  The catheter is
inserted through a 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  radiopaque  dye  that  is used  to  provide  fluoroscopic
visualization during the procedure.


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.

         When  a  product  suggestion   demonstrates   sustainable   competitive
advantage, meets customer needs, fits strategically and technologically with the
Company's business, 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,  have 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
in 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:  drug-coated  stents,  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.

                                       8


         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 44
direct sales representatives  located in major metropolitan areas throughout the
U.S.  The  Company's  sales  people are trained by  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., approximately 100 independent dealer organizations
and 17 direct sales  representatives  in Germany,  France,  the United  Kingdom,
Belgium,  Netherlands,  and Ireland  presently sell the Company's  products.  In
2001,  the  Company's   international   sales  grew  by  9%  and  accounted  for
approximately 23% 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, technicians and
nurses,  all of whom  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 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 where we do not have a direct sales force,  independent  dealers
in medical products resell to hospitals and other customers.

           In 2001, approximately 53% of the Company sales were made directly to
domestic hospitals, 24% to custom packagers and packers and 23% to international
markets. Sales to the Company's single largest customer, a packer, accounted for
7.3% of total sales during the year ended December 31, 2001. Merit  manufactures
products for other medical device  companies  through its OEM program.  In 2001,
OEM sales represented 8.7% of Merit's total revenue.


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  as well as its recently  developed and
acquired technologies of guide wires and catheters 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  $4,117,839,  $3,864,171 and $3,618,041 in 2001, 2000
and  1999,   respectively.   There  was  no   customer-sponsored   research  and
development.  The Company anticipates that its research and development expenses
will range between approximately 3% and 4% of net sales for 2002.

                                       9


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(R)  and Monarch(R)  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 Merit Sensor  Systems,  Inc.,  which is engaged in  development  and
marketing of silicon sensors.  Merit Sensor Systems, Inc. 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; Santa Clara,  California;  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
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 Merit's existing, patented
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.  Merit has received 92 issued U.S. and Foreign patents and
many more pending.  Two U.S. patents were issued in 1991 covering the mechanical
aspects of the  Company's  angioplasty  inflation  devices  which  relate to the

                                       10


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(R)  inflation
device and for  displaying,  storing and retrieving  inflation data. The Company
has  obtained  other  patents  covering  each  of its  Monarch(R)  and  Basix(R)
inflation devices and additional features of the IntelliSystem(R).

         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(R)
and Monarch(R)  inflation  devices in  consideration of a 5.75% ongoing royalty,
not to exceed $450,000  annually.  Royalties paid in each of 2001, 2000 and 1999
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 trade
names 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.


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 these  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 and Murray,
Utah facilities,  for its Galway, Ireland facility, and for its Angleton,  Texas
facility. The Company has also received the ISO 9002 certification for its Merit
Sensor Systems, Inc. facility in Santa Clara, California.

                                       11


EMPLOYEES

         As of March 20, 2002, the Company employed 1,071 persons, including 818
in manufacturing,  112 in sales and marketing,  70 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 10 to the Consolidated  Financial  Statements  incorporated by
reference in this report.

Item 2.  Properties.

         The  Company is the owner of  approximately  26 acres of real  property
situated in the City of South Jordan,  Utah,  surrounding an additional  10-acre
site which includes 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 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 was constructed to
the Company's specifications and is presently 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 a  diagnostic  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(R) inflation device and the Company's
PTCA guide wire. In 1998 Merit began the  manufacture  of the  hemostasis  valve
products in Ireland.  Toward the end of 2001 the Company finished an R&D project
and began  manufacturing  a new  diagnostic  guide wire.  The  property has been
improved  and  equipped on terms  favorable  to the Company in  connection  with
economic  development  incentives and grants  provided by the Irish  Government.
This lease is for 20 years at approximately  $210,000 per year. The Company also
has a purchase option exercisable throughout 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 the production of new products. The leases are for a
term of five years with monthly lease payments of approximately $30,000.

          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.

                                       12


         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.


                                       13


                                     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, 2001,  furnished  herewith to the
Commission as Exhibit 13.1 to this Report, is incorporated herein by reference.

Item 6.  Selected Financial Data.


          (In Thousands except for EPS)
                                                           Year Ended December 31,
                                           2001        2000        1999         1998          1997
                                        ---------    ---------   ---------    ---------    ---------
                                                                            
Operating Data:
  Sales                                 $ 104,036    $  91,448   $  77,960    $  68,377    $  60,579
  Cost of  Sales                           65,938       60,824      47,918       42,434       37,766
  Gross Profit                             38,098       30,624      30,042       25,943       22,813
  Selling, General and Administrative
   Expenses                                24,040       23,300      20,407       17,528       15,727
  Research and Development Expenses         4,118        3,864       3,618        3,244        4,446
  Severance Costs                            --            331        --           --           --
  Income from operations                    9,940        3,129       6,017        5,171        2,640
  Other Expense                               938        2,355       1,256          881          864
  Gain on sale of land                       (786)        --          --           --           --
  Income Before Income Tax Expense          9,788          774       4,761        4,290        1,776
  Income Tax Benefit (Expense)             (3,052)          53      (1,454)      (1,687)        (945)
  Minority Interest in Subsidiary            --           --           (81)        (152)         (33)
  Net Income                            $   6,736    $     827   $   3,226    $   2,451    $     798
  Net Income Per Share (Diluted)        $    0.63    $    0.08   $    0.34    $    0.26    $    0.09
  Weighted Average Shares Outstanding
       (Diluted)                           10,744        9,826       9,457        9,360        9,212
Balance Sheet Data:
  Working Capital                       $  26,911    $  32,447   $  33,934    $  15,780    $  14,738
  Total Assets                             66,659       71,447      72,360       50,665       45,270
  Long-Term Debt                            5,727       24,012      27,817        3,389        3,914
Stockholders' Equity                    $  47,658    $  34,773   $  32,690    $  29,086    $  25,802



                                       14


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

OVERVIEW

         2001 was by far the most exciting and rewarding  year in the history of
Merit Medical,  particularly on the heels of the challenging  year preceding it.
The Company has not only  achieved a 14% top line growth but improved just about
every area of its financial statements, especially the bottom line, up 715% over
an albeit  "troubled"  2000.  Income  for 2001 was also up 109% over  1999,  the
previous best year ever,  and within 8% of exceeding the total net income of the
previous four years (1997 - 2000).

         2001 was a year of great accomplishments and important  milestones.  To
start with Merit  passed a major  milestone  of $100  million in  revenues.  The
Company also passed  important  milestones  in equity market  capitalization  of
first $100 million, and now $200 million.  Merit Medical surpassed the milestone
of over $100,000 of sales per employee for 2001, up 54% from just two years ago.
From January 2000 to February 2002, the Company's revenue has increased over 30%
while inventory has dropped over 31%. The preceding two  accomplishments,  along
with our  upgraded  MIS systems and our new  incentive  pay system,  have worked
together to make the Company much more productive.  The  productivity  gains are
evident in both the gross  margin and SG&A  improvements  as a percent of sales.
Maybe the best  milestone  of all is that  since  late  August  2000 (in just 19
months),  Merit Medical has paid off approximately $32 million in debt and as of
March 27, 2002 the line of credit is paid in full. All of these  accomplishments
and milestones have contributed to a record year for "the bottom line".

         So what made this happen and why do we believe it will continue? Higher
productivity  from all of our employees has come from a  Company-wide  incentive
pay program that  compensates  each  employee for  individual,  team and Company
goals,  the benefit from which it shares with the  employees.  The Company's new
Oracle system, now learned, is increasing  productivity.  Management  throughout
the Company has learned  important  lessons  from our 1999 to 2000  experiences.
Continuing  leverage of long-term  investments in: (1) product breadth,  quality
and innovation (2) direct sales force in U.S. and Europe (3) quality systems and
facilities.

         With the Company's  cash flow improving and its debt paid off, it is in
the position to take advantage of the many  opportunities now becoming available
to a company with the market  leadership and  reputation of Merit  Medical.  The
Company has recently  added products to its offerings  which  "weren't  invented
here"  because  Merit is the best  option for these  products to get the focused
exposure they needed.  Management  believes there are many more opportunities to
grow the company in addition to the continued  growth of the market in which the
Company sells,  and the continued  acceptance by the market of the Company's new
and  existing  products,   namely  in  the  form  of  newly  acquired  products,
technologies  and/or business that will enhance and leverage  further the strong
position Merit Medical has achieved.

                                       15


RESULTS OF OPERATIONS

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

                                         2001     2000   1999
                                        -----    -----   -----
Sales                                   100.0%   100.0%  100.0%
Gross margins                            36.6     33.5     38.5
Selling, general and administrative      23.1     25.5     26.2
Research and development                  4.0      4.2      4.6
Income from operations                    9.6      3.4      7.7
Income before income tax expense          9.4       .8      6.1
Net Income                                6.5       .9      4.1

         Sales  increased  by $12.6  million, or 13.8%, in 2001  compared  to an
increase of $13.5 million,  or 17.3%,  in 2000, and an increase of $9.6 million,
or 14.0%,  in 1999.  The  increase in sales for 2001 came from a 19% increase in
custom  kits,  an 18%  increase in  stand-alone  products  and a 14% increase in
inflation  devices.  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 1999  through  2001 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 2001 were
approximately $23.8 million, or 23%, compared to $21.8 million, or 24%, in 2000,
and $18.3 million,  or 24%, in 1999.  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 $10.6  million,  $8.6  million and $8.2  million in
2001, 2000 and 1999, respectively.

         Gross profit as a percent of sales was 36.6%, 33.5%, and 38.5% in 2001,
2000,  and 1999,  respectively.  The increase in the gross margin  percentage in
2001 over 2000 was due primarily to an increase in efficiency  and  productivity
gains by the operations group in the Utah facilities. A lower head count in both
direct  labor  and  overhead   areas  of   production   contributed   to  higher
productivity.  This margin percentage increase is expected to continue into 2002
as  demonstrated  by the 38.5% gross  margin  achieved in the fourth  quarter of
2001. The Company is operating in a generally  declining price market.  There is
also a general cost-increasing manufacturing environment. 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
costs per unit,  lower gross margins,  and lower  bottom-line  results.  Another
important factor  negatively  affecting 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 $1.1 million and reduced overall 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  eliminated  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.

                                       16


         Selling, general and  administrative  expenses  increased  $739,945, or
3.2%,  in 2001 over 2000 and $2.9 million,  or 14.2%,  in 2000 over 1999.  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 the  development  of  new  business
opportunities such as acquisitions,  product distribution  agreements,  national
accounts and the O.E.M  portion 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 23.1 % in 2001,  from 25.5% in 2000, and 26.2%
in 1999.

         Research and development  expenditures  for 2001 were $4.1 million,  an
increase of 6.6%,  compared to $3.9  million for 2000,  which was an increase of
6.8%,  compared to $3.6  million 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  technology.  Research and development  costs as a percent of
sales were 4.0%, 4.2% and 4.6% for 2001, 2000 and 1999, respectively.

         In  2001  higher  sales,   better  gross  margins  and  lower  selling,
administrative  and  research  costs per dollar of sales  combined  to  increase
income  from  operations  (up 218%),  income  before tax (up 1,066%  without the
benefit  of the  sale of  land),  and net  income  (up 715% to  record  levels),
compared to 2000.

         In 2000,  significantly  lower gross margins 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 $3.1  million,  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
$6.0  million,  up 16.4%.  The  income  tax  benefit  for 2000 was  $52,712,  an
effective rate of -6.8%.  This negative tax rate was due  principally to R&D tax
credits  which the  Company  was able to realize in the fourth  quarter of 2000,
including a portion of which related to prior years.  Management expects the R&D
tax credit to continue to favorably affect the Company's tax rate for 2002 year.
The income tax provision for 1999 was $1.5 million,  an effective rate of 30.6%.
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,  2001 the  Company's  working  capital  was  $26.9
million, a decrease of over 17%,  representing a current ratio of 3.5 to 1. This
decrease was due primarily to the reduction of almost $4.5 million in inventory.
The Company had $5.1  million  outstanding  under its line of credit at December
31,  2001.  As of March 27, 2002,  the line of credit  balance is $0.  Merit has
financed leasehold improvements and equipment acquisitions through secured notes
payable and  capital  lease  arrangements  with an  outstanding  balance of $1.2
million at December 31, 2001.  For the year ended  December 31, 2001 the Company
generated cash from  operations in the amount of $18.4 million,  the most in the
history of the Company, and an increase of 158% over 2000.

         The  Company  has  certain   commitments  related  to  long-term  debt,
operating leases,  and royalty payments as set forth in Notes 6, 7 and 12 of the
Notes to Consolidated Financial Statements.

         Historically,   the  Company  has  incurred   significant  expenses  in
connection with product  development 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.

Critical Accounting Policies and Estimates

         In December 2001, the SEC requested that all registrants  discuss their
most  critical  accounting  policies in their  MD&A.  The SEC  indicated  that a
"critical   accounting   policy"  is  one  which  is  both   important   to  the
representation  of the  Company's  financial  condition and results and requires
management's most difficult,  subjective or complex judgments, often as a result
of the need to make  estimates  about the effect of matters that are  inherently
uncertain.  The Company bases  estimates on past experience and on various other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which form the basis for making  judgments  about carrying  values of
assets and liabilities that are not readily apparent from other sources.  Actual
results  may  differ  from  these  estimates  under  different   assumptions  or
conditions. The following are the Company's most critical accounting policies:

                                       17


         Inventory  Obsolescence  Reserve: The Company writes down its inventory
for estimated  obsolescence for  unmarketable  products and slow moving products
that may expire prior to being sold. If market  conditions become less favorable
than those  projected by management,  additional  inventory  write-downs  may be
required.

         Allowance for Doubtful Accounts:  The Company maintains  allowances for
doubtful accounts for estimated losses resulting from the inability of customers
to make required payments. The allowance is based upon historical experience. If
the  financial  condition  of  the  Company's  customers  were  to  deteriorate,
resulting  in an  impairment  of  their  ability  to make  payments,  additional
allowances may be required.


Item 7A. Quantitative and Qualitative Disclosure About Market Risk

         The Company  principally  hedges the Euro.  The  Company  enters into a
forward foreign exchange  contract 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, 2001 the Company had $5.1 million  (2000- $ 23.0  million) of
variable rate debt, all denominated in U.S.  dollars.  Annual  interest  expense
would change by approximately $51,000 for every 1% change in interest rates.

Item 8.  Financial Satements and Supplementary Data

DEPENDENT 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, 2001 and 2000, and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 2001.  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,  2001  and  2000,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2001 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 15, 2002
  (March 27, 2002 as to the effects of the stock split described in Note 15)


                                       18



MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------


ASSETS                                                                2001            2000
                                                                  ------------    ------------
                                                                            
CURRENT ASSETS:
  Cash and cash equivalents                                       $    341,690    $    412,384
  Short-term investments                                                85,286            --
  Trade receivables - net of allowance for uncollectible
    accounts:  2001 - $408,851; 2000 - $440,275                     14,748,021      13,235,858
  Employee and related party receivables                               266,905         440,654
  Irish Development Agency grant receivable                             98,081         177,477
  Inventories                                                       20,823,616      25,273,428
  Prepaid expenses and other assets                                    514,786         663,101
  Deferred income tax assets                                           723,299       1,183,944
  Income tax refund receivable                                            --           588,640
                                                                  ------------    ------------

          Total current assets                                      37,601,684      41,975,486
                                                                  ------------    ------------

PROPERTY AND EQUIPMENT:
  Land                                                               1,252,066       1,260,985
  Building                                                           1,500,000       1,500,000
  Automobiles                                                           91,573         131,036
  Manufacturing equipment                                           23,289,880      19,696,550
  Furniture and fixtures                                             9,963,045       9,576,084
  Leasehold improvements                                             5,659,457       5,420,194
  Construction-in-progress                                           1,738,540       2,120,671
                                                                  ------------    ------------

          Total                                                     43,494,561      39,705,520
  Less accumulated depreciation and amortization                   (21,671,501)    (17,860,490)
                                                                  ------------    ------------

          Property and equipment - net                              21,823,060      21,845,030
                                                                  ------------    ------------

OTHER ASSETS:
  Patents and trademarks - net of accumulated amortization:
    2001 - $1,630,528; 2000 - $1,382,672                             2,434,632       2,522,384
  Cost in excess of the fair value of assets acquired - net of
    accumulated amortization:  2001 - $712,760; 2000 - $417,398      4,764,596       5,062,458
  Deposits                                                              34,843          41,273
                                                                  ------------    ------------

          Total other assets                                         7,234,071       7,626,115
                                                                  ------------    ------------

TOTAL ASSETS                                                      $ 66,658,815    $ 71,446,631
                                                                  ============    ============

                                                                      Continued)

                                       19


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------



LIABILITIES AND STOCKHOLDERS' EQUITY                        2001             2000
                                                         ------------    ------------
                                                                   
CURRENT LIABILITIES:
  Current portion of long-term debt                      $    598,086    $  1,091,725
  Trade payables                                            4,659,295       4,835,517
  Accrued expenses                                          4,817,595       3,471,039
  Advances from employees                                     128,624          96,778
  Income taxes payable                                        486,763          33,420
                                                         ------------    ------------

          Total current liabilities                        10,690,363       9,528,479

DEFERRED INCOME TAX LIABILITIES                             1,654,383       2,177,833

LONG-TERM DEBT                                              5,727,381      24,011,778

DEFERRED CREDITS                                              928,280         955,839
                                                         ------------    ------------

          Total liabilities                                19,000,407      36,673,929
                                                         ------------    ------------

COMMITMENTS AND CONTINGENCIES (Notes 6, 7 and 11)

STOCKHOLDERS' EQUITY:
  Preferred  stock - 5,000,000  shares  authorized  as
    of December  31, 2001 and 2000, no shares issued
  Common stock - no par value; 20,000,000 shares
    authorized; 10,701,617 and 9,735,260 shares issued
    at December 31, 2001 and 2000, respectively            25,958,295      19,779,765
  Retained earnings                                        22,353,053      15,617,075
  Accumulated other comprehensive loss                       (652,940)       (624,138)
                                                         ------------    ------------

           Total stockholders' equity                      47,658,408      34,772,702
                                                         ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $ 66,658,815    $ 71,446,631
                                                         ============    ============


See notes to consolidated financial statements.                      (Concluded)

                                       20


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
--------------------------------------------------------------------------------


                                             2001             2000             1999
                                         -------------    -------------    -------------
                                                                  
NET SALES                                $ 104,035,806    $  91,447,512    $  77,959,576
COST OF SALES                               65,938,044       60,823,459       47,917,815
                                         -------------    -------------    -------------

GROSS PROFIT                                38,097,762       30,624,053       30,041,761
                                         -------------    -------------    -------------

OPERATING EXPENSES:
  Selling, general, and administrative      24,040,297       23,300,352       20,406,927
  Research and development                   4,117,839        3,864,171        3,618,041
  Severance costs                                 --            330,975             --
                                         -------------    -------------    -------------
          Total operating expenses          28,158,136       27,495,498       24,024,968
                                         -------------    -------------    -------------

INCOME FROM OPERATIONS                       9,939,626        3,128,555        6,016,793
                                         -------------    -------------    -------------

OTHER INCOME (EXPENSE):
  Interest income                               40,530           39,091           50,391
  Interest expense                            (978,009)      (2,319,500)      (1,293,023)
  Miscellaneous income (expense)               786,248          (74,301)         (12,732)
                                         -------------    -------------    -------------
          Other expense - net                 (151,231)      (2,354,710)      (1,255,364)
                                         -------------    -------------    -------------

INCOME  BEFORE INCOME TAXES                  9,788,395          773,845        4,761,429

INCOME TAX BENEFIT (EXPENSE)                (3,052,417)          52,712       (1,454,762)

MINORITY INTEREST IN INCOME OF
  SUBSIDIARY                                      --               --            (81,077)
                                         -------------    -------------    -------------

NET INCOME                               $   6,735,978    $     826,557    $   3,225,590
                                         =============    =============    =============

EARNINGS  PER COMMON SHARE -
  Basic                                  $         .66    $         .09    $         .34
                                         =============    =============    =============
  Diluted                                $         .63    $         .08    $         .34
                                         =============    =============    =============

AVERAGE COMMON SHARES:
  Basic                                     10,142,089        9,661,618        9,426,953
                                         =============    =============    =============
  Diluted                                   10,743,668        9,826,131        9,457,091
                                         =============    =============    =============

PROFORMA EARNINGS PER COMMON
  SHARE (see Note 15):
  Earnings per common share:
    Basic                                $        0.53    $        0.07    $        0.27
                                         =============    =============    =============
    Diluted                              $        0.50    $        0.07    $        0.27
                                         =============    =============    =============

  Average common shares:
    Basic                                   12,677,611       12,077,023       11,783,691
                                         =============    =============    =============
    Diluted                                 13,429,585       12,282,664       11,821,364
                                         =============    =============    =============


See notes to consolidated financial statements.

                                       21


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
--------------------------------------------------------------------------------


                                                                                                     Accumulated
                                                                             Common Stock            Other Compre-     Retained
                                                        Total           Shares          Amount       hensive Loss      Earnings
                                                     ------------    ------------    ------------    ------------    ------------
                                                                                                      
BALANCE, JANUARY 1, 1999                             $ 29,086,368       9,386,143    $ 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          13,738          62,600            --              --
Issuance of common stock under Employee Stock
  Purchase Plans                                          312,027          82,913         312,027            --              --
Options and warrants exercised                            114,746          27,600         114,746            --              --
Shares surrendered in exchange for the payment of
  payroll tax liabilities                                  (1,583)           (330)         (1,583)           --              --
Shares surrendered in exchange for the exercise of
  stock options                                           (97,512)        (21,018)        (97,512)           --              --
                                                     ------------    ------------    ------------    ------------    ------------

BALANCE, DECEMBER 31, 1999                             32,690,136       9,489,046      18,428,572        (528,954)     14,790,518

Comprehensive income:
  Net income                                              826,557            --              --              --           826,557
  Other comprehensive loss -
    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          80,215         350,248            --              --
Options and warrants exercised                            933,605         183,325         933,605            --              --
Shares surrendered in exchange for the payment of
  payroll tax liabilities                                  (9,109)         (1,339)         (9,109)           --              --
Shares surrendered in exchange for the
  extinguishment of related party receivable              (45,004)         (8,183)        (45,004)           --              --
Shares surrendered in exchange for the exercise of
  stock options                                           (51,365)         (7,804)        (51,365)           --              --
                                                     ------------    ------------    ------------    ------------    ------------

BALANCE, DECEMBER 31, 2000                             34,772,702       9,735,260      19,779,765        (624,138)     15,617,075

Comprehensive income:
  Net income                                            6,735,978            --              --              --         6,735,978
  Other comprehensive loss -
    Foreign currency translation adjustment
    (net of tax)                                          (28,802)           --              --           (28,802)           --
Comprehensive income                                    6,707,176            --              --              --              --
Tax benefit attributable to appreciation of common
  stock options exercised                               2,514,392            --         2,514,392            --              --
Deferred compensation                                     (37,084)         (5,960)        (37,084)           --              --
Issuance of common stock under Employee Stock
  Purchase Plans                                          257,702          44,479         257,702            --              --
Options and warrants exercised                          5,019,939       1,036,279       5,019,939            --              --
Shares surrendered in exchange for the payment of
  payroll tax liabilities                                (537,375)        (34,644)       (537,375)           --              --
Shares surrendered in exchange for the
  extinguishment of related party receivable             (214,558)        (19,427)       (214,558)           --              --
Shares surrendered in exchange for the exercise of
  stock options                                          (824,486)        (54,370)       (824,486)           --              --
                                                     ------------    ------------    ------------    ------------    ------------

BALANCE, DECEMBER 31, 2001                           $ 47,658,408      10,701,617    $ 25,958,295    $   (652,940)   $ 22,353,053
                                                     ============    ============    ============    ============    ============


See notes to consolidated financial statements

                                       22


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
--------------------------------------------------------------------------------

                                                             2001            2000            1999
                                                          ------------    ------------    ------------
                                                                                 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                              $  6,735,978    $    826,557    $  3,225,590
                                                          ------------    ------------    ------------

  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                            4,767,588       4,486,291       3,757,539
    (Gain) losses on sales and abandonment of
      property and equipment                                  (784,729)         49,833           8,339
    Write-off of certain patents and trademarks                 93,291            --              --
    Amortization of deferred credits                          (203,131)       (166,609)       (215,894)
    Deferred income taxes                                      (45,152)        389,635         450,734
    Tax benefit attributable to appreciation of
      common stock options exercised                         2,514,392         172,818         245,200
    Minority interest in income of subsidiary                     --              --            81,077
    Changes in operating assets and liabilities, net of
      effects from acquisitions:
      Short-term investments                                   (85,286)           --              --
      Trade receivables                                     (1,512,163)       (685,726)     (2,113,647)
      Employee and related party receivables                   (40,809)         17,145         (29,809)
      Irish Development Agency grant receivable                 79,396         (84,418)        105,386
      Inventories                                            4,449,812       2,274,934      (7,150,393)
      Prepaid expenses and other assets                        148,315           6,112          71,911
      Income tax refund receivable                             588,640        (378,528)       (210,112)
      Deposits                                                   6,430          10,046          22,899
      Trade payables                                          (176,222)         86,085       1,176,099
      Accrued expenses                                       1,346,556         378,759         771,936
      Advances from employees                                   31,846         (19,316)         42,004
      Income taxes payable                                     453,343        (236,021)         74,719
                                                          ------------    ------------    ------------

          Total adjustments                                 11,632,117       6,301,040      (2,912,012)
                                                          ------------    ------------    ------------

          Net cash provided by operating activities         18,368,095       7,127,597         313,578
                                                          ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures for:
    Property and equipment                                  (4,091,399)     (4,690,107)     (4,750,608)
    Patents and trademarks                                    (263,427)       (406,229)       (269,388)
    Acquisitions                                                  --          (607,129)    (11,322,916)
  Proceeds from the sale of property and equipment             952,308       1,347,613            --
                                                          ------------    ------------    ------------

           Net cash used in investing activities            (3,402,518)     (4,355,852)    (16,342,912)
                                                          ------------    ------------    ------------


                                                                     (Continued)

                                       23


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
--------------------------------------------------------------------------------



                                                            2001            2000            1999
                                                         ------------    ------------    ------------
                                                                                
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net payments on revolving credit facility              $(17,884,761)   $ (2,907,596)   $ (7,567,655)
  Proceeds from:
    Issuance of common stock                                3,915,780       1,223,379         390,278
    Notes payable to financial institutions
      and capital lease                                          --              --        25,907,596
    Deferred credits                                          175,572         132,513          93,800
  Principal payments on notes payable to
    financial institutions and capital leases              (1,164,444)     (1,316,089)     (2,403,143)
  Purchase of treasury stock for deferred
    compensation                                              (37,084)           --              --
                                                         ------------    ------------    ------------

          Net cash provided by (used in)
               financing activities                       (14,994,937)     (2,867,793)     16,420,876
                                                         ------------    ------------    ------------

EFFECT OF EXCHANGE RATES ON CASH                              (41,334)       (160,279)       (574,741)
                                                         ------------    ------------    ------------

NET DECREASE IN CASH AND
  CASH EQUIVALENTS                                            (70,694)       (256,327)       (183,199)

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR                                        412,384         668,711         851,910
                                                         ------------    ------------    ------------

CASH AND CASH EQUIVALENTS
  AT END OF YEAR                                         $    341,690    $    412,384    $    668,711
                                                         ============    ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION - Cash paid during
    the year for:
      Interest (including capitalized interest of
        approximately $105,000, $128,000, and $143,000
        during 2001, 2000, and 1999, respectively)       $  1,286,872    $  2,309,634    $  1,288,301
                                                         ============    ============    ============
      Income taxes                                       $    127,553    $    172,202    $    684,109
                                                         ============    ============    ============



                                                                     (Continued)

                                       24


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
--------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
o    During  2001,  2000,  and 1999,  the Company  entered  into  capital  lease
     obligations and notes payable for  approximately  $271,000,  $508,000,  and
     $50,000, respectively, for manufacturing equipment.

o    During 2001,  2000, and 1999,  options to purchase  34,644,  1,339, and 330
     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 $537,000, $9,000, and $1,600.

o    During 2001,  2000, and 1999,  54,370,  7,804, and 21,018 shares of Company
     common stock with a value of approximately $824,000,  $51,000, and $98,000,
     respectively,  were  surrendered  in  exchange  for the  exercise  of stock
     options.

o    During 1999, the Company  acquired  substantially  all of the assets of the
     "Angleton   Division"  of  Mallinckrodt  Inc.   (Angleton)  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 goodwekk 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,  Merit Sensor Systems, Inc. (formerly 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)


                                       25


MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
--------------------------------------------------------------------------------

1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization - Merit Medical Systems, Inc. (Merit) and its wholly-owned
         subsidiaries,  Merit Holdings,  Inc.  (MHI),  and Merit Sensor Systems,
         Inc.  collectively  own  100% of  Merit  Medical  Systems  LP  (MMSLP).
         Combined  with  its  other  wholly-owned   subsidiary,   Merit  Medical
         International,  Inc. (MMI), Merit, MHI, and Merit Sensor Systems,  Inc.
         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,  and Western
         Europe (see Note 10).

         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 Merit Sensor systems,
         Inc. All material  intercompany  balances  and  transactions  have been
         eliminated in consolidation.

         Receivables - The allowance for  uncollectible  accounts  receivable is
         based  on  the  Company's   historical  bad  debt   experience  and  on
         management's evaluation of collectibility of the individual outstanding
         balances.

         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, 2001
         or 2000.

                                       26


         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.

         Accrued  Expenses  -  Accrued  expenses  consist  of the  following  at
         December 31, 2001 and 2000:

                                              December 31,
                                        -----------------------
                                           2001         2000
                                        ----------   ----------
               Accrued payroll taxes    $  377,254   $  213,322
               Accrued payroll             706,538      724,764
               Accrued bonuses             883,056       34,502
               Accrued commissions         278,675      230,857
               Accrued vacation            836,380      713,225
               Other accrued expenses    1,735,692    1,554,369
                                        ----------   ----------

               Total                    $4,817,595   $3,471,039
                                        ==========   ==========

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

         Stockholders'  Equity - On August  14,  2001,  the  Company's  Board of
         Directors approved a five-for-four  split of the Company's common stock
         effective  August 27, 2001 for  stockholders of record as of August 24,
         2001. All historical  share and per share amounts have been restated to
         reflect the stock split.

         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.

         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.

                                       27


         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.

         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.

         In June 2001, SFAS No. 141,  Business  Combinations,  and SFAS No. 142,
         Goodwill  and  Other  Intangible  Assets  were  issued.  Statement  141
         requires all business combinations  initiated after June 30, 2001 to be
         accounted for using the purchase method. Statement 142 became effective
         January 1, 2002 and eliminates the amortization of goodwill relating to
         past and  future  acquisitions.  Instead,  goodwill  is  subject  to an
         impairment assessment that must be performed upon adoption of Statement
         142 and at least annually thereafter.

         The  initial  application  of  Statements  141 and 142  will not have a
         material impact on the results of operations or financial  condition of
         the  Company.  However,  the  adoption of  Statements  141 and 142 will
         eliminate approximately $300,000 of goodwill amortization expense on an
         annual basis.

         In August of 2001,  SFAS No.  144,  Accounting  for the  Impairment  or
         Disposal of Long-lived  Assets,  was issued which addresses  accounting
         and financial  reporting  for the  impairment or disposal of long-lived
         assets.  This statement was effective for the Company beginning January
         1, 2002. The effect on the Company's  financial  statements of adopting
         this statement was not significant.

         Short-term  Investments - Trading  securities are recorded at estimated
         fair value with  unrealized  gains and losses  included in income.  The
         basis of cost used in determining realized gains and losses is specific
         identification.   The  estimated   fair  value  of  all  securities  is
         determined by quoted market prices.

         Deferred  Compensation - During 2001, the Company  established  certain
         deferred  compensation  plans (the "deferred  compensation  plans") for
         eligible  participants.  The  deferred  compensation  plans permit each
         participant  to defer a portion of their  salary  until the future.  As
         permitted by the deferred  compensation  plans, the deferred salary may
         be  invested on behalf of the  participant  in  marketable  securities,
         money market funds or the company's own stock.  However, as the Company
         is the owner of the invested  assets,  such assets are reflected in the
         consolidated balance sheet at December 31, 2001. Short-term investments
         in marketable securities are classified as trading and recorded at fair
         value with unrealized gains and losses included in income. Common stock
         of the Company held for the deferred  compensation plans is reported as
         a contra-equity  account and is recorded at original cost. The deferred
         compensation  obligation  is  classified  as  an  accrued  expense  and
         adjusted, with a corresponding charge (or credit) to compensation cost,
         to reflect changes in the fair value of the underlying assets.  Because
         the  deferred  compensation  obligation  may be settled by  delivery of
         cash,  shares of Company stock, or diversified  assets,  Company shares
         acquired are not included in basic  earnings per share but are included
         in the calculation of diluted earnings per share.

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.

3.       ACQUISITIONS

         On July 27, 1999, the Company acquired the 28% minority interest in its
         subsidiary,  Merit  Sensor  Systems,  Inc.,  for a  purchase  price  of
         $3,574,016  consisting  of  $3,455,217  in cash and the  assumption  of

                                       28


         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 Merit Sensor Systems, Inc.'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  Angleton  Division of
         Mallinckrodt,  Inc.  (Angleton)  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.   Angleton  is  a  manufacturer  of  medical
         catheters.  The  acquisition  has been accounted for using the purchase
         method of accounting;  as such,  Angleton'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
         year ended December 31, 1999 (assuming the  acquisition of Angleton had
         occurred as of January 1, 1999) are as follows:

                                                        1999

         Net Sales                                  $87,606,126
         Net Income                                   3,944,207
         Net income per share (basic and diluted)          0.52

         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.

4.       INVENTORIES

         Inventories consist of the following at December 31, 2001 and 2000:

                                                      2001            2000
                                                   ------------    ------------

             Finished goods                        $ 13,716,474    $ 15,255,622
             Work-in-process                          3,001,250       3,678,807
             Raw materials                            7,501,253       8,325,314
             Less reserve for obsolete inventory     (3,395,361)     (1,986,315)
                                                   ------------    ------------

             Total                                 $ 20,823,616    $ 25,273,428
                                                   ============    ============

                                       29


5.       INCOME TAXES

         Deferred  income tax assets and  liabilities  at December  31, 2001 and
         2000 consist of the following  temporary  differences and carry forward
         items:


                                                   Current                       Long-Term
                                             2001           2000           2001            2000
                                           ---------      ---------      ---------        -------
                                                                              
Deferred income tax assets:
  Allowance for uncollectible
    accounts receivable                  $   163,540    $    17,788           --             --
  Accrued compensation expense               263,126        198,338           --      $     9,612
  Tax credits                                   --             --      $   813,599        282,630
  Inventory capitalization for
    tax purposes                             106,937        137,513           --             --
  Inventory obsolescence reserve           1,427,188        576,319
  Net operating losses of subsidiaries       120,779         95,704        278,639        231,989
  Other                                       65,004        192,113        444,915        407,810

Total deferred income tax assets           2,146,574      1,217,775      1,537,153        932,041
                                           ---------      ---------      ---------        -------

Deferred income tax liabilities:
  Prepaid expenses                        (1,419,916)          --             --             --
  Differences between tax basis
    and financial reporting basis
    of property and equipment                   --             --       (2,880,088)    (3,098,747)
  Other                                       (3,359)       (33,831)      (311,448)       (11,127)

Net                                      $   723,299    $ 1,183,944    $(1,654,383)   $(2,177,833)





         Income tax expense for the years ended  December  31, 2001,  2000,  and
         1999 differs from amounts  computed by applying the  statutory  Federal
         rate to pretax income as follows:

                                                     2001             2000          1999
                                                                       

Computed Federal income tax expense at
  statutory rate of 35%                           $ 3,425,938    $   270,846    $ 1,666,500
State income taxes                                    159,770         25,153        124,352
Creation of tax credits                              (399,001)      (444,551)      (140,369)
Tax benefit of foreign sales corporation             (141,565)       (53,139)      (109,579)
Income of subsidiaries recorded at
  foreign tax rates                                   (63,517)       (13,746)      (115,803)
Other - including the effect of graduated rates        70,792        162,725         29,661

Total income tax (benefit) expense                $ 3,052,417    $   (52,712)   $ 1,454,762


                                       30


         The components of the provision for income taxes are as follows:

                                          2001           2000          1999
                                      -----------    -----------    -----------
        Current expense (benefit):
          Federal                     $ 2,608,391    $  (423,470)   $   735,293
          State                           370,707        (29,922)       196,642
          Foreign                         118,471         11,045         72,093
                                      -----------    -----------    -----------
                                        3,097,569       (442,347)     1,004,028
                                      -----------    -----------    -----------

        Deferred expense (benefit):
          Federal                         (57,070)       196,470        509,077
          State                          (124,908)       132,281         (8,230)
          Foreign                         136,826         60,884        (50,113)
                                      -----------    -----------    -----------
                                          (45,152)       389,635        450,734
                                      -----------    -----------    -----------

        Total                         $ 3,052,417    $   (52,712)   $ 1,454,762
                                      ===========    ===========    ===========

6.       REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

         Revolving Credit Facility - The Company maintains a 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.  Then,  during September 2001, the Company  voluntarily
         reduced  the  facility  to $8  million.  The  Facility is fully due and
         payable on June 30,  2006.  Additionally,  the  facility  is reduced by
         $375,000 on the last day of each  quarter  commencing  with the quarter
         ending  September 30, 2001. The weighted average interest rates applied
         to the  outstanding  balances at December  31, 2001 and 2000 were 3.42%
         and 8.20%,  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, 2001
         and  2000,  management  of the  Company  believes  the  Company  was in
         compliance with all debt  covenants.  As of December 31, 2001 and 2000,
         the  Company  owed  $5,115,239  and  $23,000,000  under  the  Facility,
         respectively.  The  Facility is  collateralized  by trade  receivables,
         inventories, property and equipment, and intangible assets.

         Long-term  Debt - Long-term  debt consists of the following at December
31, 2001 and 2000:


                                                                 2001          2000
                                                                     
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                                             $ 1,210,228   $ 1,963,368

Capital lease obligations (see Note 7)                              --         140,135

Revolving credit facility (see above)                          5,115,239    23,000,000
                                                             -----------   -----------

Total                                                          6,325,467    25,103,503
Less current portion                                             598,086     1,091,725
                                                             -----------   -----------

Long-term portion                                            $ 5,727,381   $24,011,778
                                                             ===========   ===========


                                       31


         Scheduled  maturities  of  long-term  debt at December  31, 2001 are as
         follows:

                    Year ending December 31:

                    2002                   $  598,086
                    2003                      457,508
                    2004                       78,266
                    2005                       66,137
                    2006                    5,125,470
                                           ----------

                   Total                   $6,325,467
                                           ==========

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.  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,  2001,
         2000, and 1999  approximated  $2,539,000,  $2,539,000,  and $3,094,000,
         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 194,326 shares
         of the  Company's  common stock at $3.96 per share  subject to carrying
         cost  increases  of 3% per year ($4.73 as of December  31,  2001).  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.

         The future minimum lease  payments for operating  leases as of December
         31, 2001, are as follows:

                                                 Operating
                                                   Leases

                Year ending December 31:
                 2002                           $ 2,490,777
                 2003                             2,226,808
                 2004                             2,167,641
                 2005                             2,101,241
                 2006                             2,096,110
                 Thereafter                      21,566,087
                                                -----------

                Total minimum lease payments    $32,648,664
                                                ===========

         Irish Government Development Agency Grants - Through December 31, 2001,
         the Company has entered into several  grant  agreements  with the Irish
         Government  Development  Agency  of  which  approximately  $98,000  and
         $177,000  remained  in  receivables  at  December  31,  2001 and  2000,
         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

                                       32


         and training  employees  as a reduction of operating  expenses in 2001,
         2000, and 1999 in the amounts of approximately  $36,000,  $67,000,  and
         $154,000,  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 2001,  2000,  and 1999,  approximately
         $175,000, $149,000, and $142,000,  respectively, of the deferred credit
         was  amortized  as  a  reduction  of  operating  expenses.  There  is a
         commitment  to repay the  government  grants if Merit  Medical  were to
         cease  production in Ireland within 10 years of the receipt of the last
         grant payment.

         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.

8.       EARNINGS PER COMMON SHARE (EPS)

         The  following  table  sets  forth  the  computation  of basic  diluted
         earnings per common share:


                                                      Net                  Per Share
                                                    Income       Shares      Amount
                                                                   
Year ended December 31, 2001:
  Basic EPS                                       $6,735,978   10,142,089   $   0.66
  Effect of dilutive stock options and warrants         --        601,579       --
                                                  ----------   ----------   --------

Diluted EPS                                       $6,735,978   10,743,668   $   0.63
                                                  ==========   ==========   ========

Year ended December 31, 2000:
  Basic EPS                                       $  826,557    9,661,618   $   0.09
  Effect of dilutive stock options and warrants         --        164,513       --
                                                  ----------   ----------   --------

Diluted EPS                                       $  826,557    9,826,131   $   0.08
                                                  ==========   ==========   ========

Year ended December 31, 1999:
  Basic EPS                                       $3,225,590    9,426,953   $   0.34
  Effect of dilutive stock options and warrants         --         30,138       --
                                                  ----------   ----------   --------

Diluted EPS                                       $3,225,590    9,457,091   $   0.34
                                                  ==========   ==========   ========


         For the years ended December 31, 2001,  2000,  and 1999,  approximately
         486,000,  928,000, and 960,000 respectively,  of stock options were not
         included in the computation of diluted  earnings per share because they
         would have been antidilutive. See Note 15.

9.       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
         625,000 of which 281,400 have been purchased as of December 31, 2001.

                                       33


         The Company  has a  long-term  incentive  plan which  provides  for the
         issuance of incentive stock options,  non-statutory stock options,  and
         certain  corresponding stock appreciation rights. The maximum number of
         shares of common stock for which  options may be granted is  3,000,000.
         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,
         2001, 2000, and 1999 are as follows:


                                                          Options                           Warrants
                                              ---------------------------------  -------------------------------
                                                                  Weighted                          Weighted
                                                                  Average                           Average
                                                                  Exercise                          Exercise
                                                     Shares        Price                 Shares      Price
                                                                                         
2001:
  Granted                                           1,131,911      $10.05
  Exercised                                         1,036,279       4.84
  Forfeited/expired                                   248,425       6.57
  Outstanding at December 31                        2,007,140       7.64                 194,326     $4.73
  Exercisable                                         644,373       4.57                 194,326      4.73

Weighted average fair value of
  options granted during year                                      $5.49

Weighted average fair value of
  shares issued under Employee
  Stock Purchase Plan                                              $1.02

                                                          Options                           Warrants
                                              ---------------------------------  -------------------------------
                                                                  Weighted                          Weighted
                                                                  Average                           Average
                                                                  Exercise                          Exercise
                                                      Shares        Price                Shares      Price
2000:
  Granted                                             607,000      $3.60
  Exercised                                           183,325       5.10
  Forfeited/expired                                   155,550       5.55
  Outstanding at December 31                        2,159,933       4.91                 194,326     $4.59
  Exercisable                                       1,025,250       5.58                 194,326      4.59

Weighted average fair value of
  options granted during year                                      $1.60

Weighted average fair value of
  shares issued under Employee
  Stock Purchase Plan                                              $0.77


                                       34




                                                          Options                           Warrants
                                              ---------------------------------  -------------------------------
                                                                  Weighted                          Weighted
                                                                  Average                           Average
                                                                  Exercise                          Exercise
                                                  Shares           Price             Shares          Price
                                                                                         
1999:
  Granted                                             561,125      $4.67
  Exercised                                            27,600       3.97
  Forfeited/expired                                    76,438       4.56
  Outstanding at December 31                        1,891,808       5.62                 194,326     $4.46
  Exercisable                                         925,600       5.76                 194,326      4.46

Weighted average fair value of
  options granted during year                                      $2.38

Weighted average fair value of
  shares issued under Employee
  Stock Purchase Plan                                              $0.66


         The  following  table  summarizes  information  about stock options and
         warrants outstanding at December 31, 2001:


                                                                                     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:
    $3.60-$6.33                1,508,355          5.03            $ 4.64          644,373       $ 4.57
   $9.02-$16.91                  498,785          9.93             16.71

Warrants:
        $4.73                    194,326          3.08              4.73          194,326         4.73


         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:

                                       35


                                      2001           2000           19999

Net income:
  As reported                  $   6,735,978   $   826,557    $   3,225,590
  Pro forma                        5,379,236       140,145        2,480,928

Net income per common share:
  Basic:
    As reported                $        0.66   $      0.09    $        0.34
    Pro forma                           0.53          0.00             0.24

  Diluted:
    As reported                         0.63          0.08             0.34
    Pro forma                           0.50         (0.01)            0.24

         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 2001, 2000, and 1999:
         dividend yield of 0%; expected volatility of 63.48%,  61.04%, and 56.0%
         for  2001,  2000,  and 1999,  respectively;  risk-free  interest  rates
         ranging from 4.58% to 6.71%;  and expected  lives  ranging from 2.33 to
         4.58 years.

10.      SEGMENT REPORTING AND FOREIGN OPERATIONS

         During the years ended  December 31, 2001,  2000, and 1999, the Company
         had  foreign  sales  of  approximately  $23,801,000,  $21,773,000,  and
         $18,336,000 or approximately 23%, 24%, and 24%, 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 2001, 2000, and 1999:

                                       36




                                                        Transfers
                                         Sales to         Between                            Net
                                       Unaffiliated     Geographic                          Income        Identifiable
                                        Customers          Areas          Revenue           (Loss)           Assets
                                       -------------   -------------    -------------    -------------    -------------
                                                                                           
Fiscal year ended December 31, 2001:
  United States, Canada, and
    international distributors         $  89,208,943   $   1,770,388    $  90,979,331    $   7,807,510    $  57,151,956
  Europe direct and European
    distributors                          14,826,863       6,101,400       20,928,263         (884,181)       9,506,859
  Eliminations                                  --        (7,871,788)      (7,871,788)        (187,351)            --
                                       -------------   -------------    -------------    -------------    -------------

Consolidated                           $ 104,035,806            None    $ 104,035,806    $   6,735,978    $  66,658,815
                                       =============   =============    =============    =============    =============

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
                                       =============   =============    =============    =============    =============


         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.

11.      RELATED PARTY TRANSACTIONS

         Receivables from employees and related parties at December 31, 2001 and
         2000  totaled  approximately   $267,000  and  $441,000,   respectively,
         (including  approximately  $15,000  and  $208,000,  respectively,  from
         officers of the Company).  During 2001,  approximately 19,427 shares of
         Company stock were surrendered in exchange for the  extinguishment of a
         related party receivable in the amount of approximately $215,000.

12.      ROYALTY AGREEMENT

         In 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). 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.  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, 2001, 2000, and 1999.

                                       37



13.      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 18 years
         of age. The Plan has no minimum  service  requirement.  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,  2001,  2000,  and  1999  totaled
         approximately $361,000, $258,000, and $88,000, respectively.

         The Plan  purchased  unissued  shares of the Company's  common stock at
         market value during each of the three years ended  December 31, 2001 as
         follows:

                                                                Market
                                                  Shares         Value
           Years ended December 31:
             2001                                  None          None
             2000                                  None          None
             1999                                13,819       $81,850

14.      QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         Quarterly data (unaudited) for the years ended December 31, 2001, 2000,
         and 1999 is as follows:


                                                                   Quarter Ended
                                         -----------------------------------------------------------------------
2001                                            March 31          June 30        September 30       December 31
                                                                                       
Net sales                                     $ 26,788,373     $ 26,264,015      $ 25,694,128      $ 25,289,290
Gross profit                                     9,219,374        9,426,157         9,725,611         9,726,620
Income from operations                           2,083,229        2,177,236         2,730,338         2,948,823
Income tax expense                                 460,737          785,935           854,528           951,217
Net income                                       1,186,425        1,858,793         1,744,996         1,945,764
Basic earnings per common share                       0.12             0.19              0.17              0.18
Diluted earnings per common share                     0.12             0.18              0.16              0.17


2000

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 earnings
  (loss) per common 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 earnings
  per common share                                    0.06             0.08              0.10              0.10


                                       38


15.      SUBSEQUENT EVENT

         On March  27,  2002,  the  Company's  Board  of  Directors  approved  a
         five-for-four  stock  split  of the  Company's  common  stock  which is
         expected to be effective  April 11, 2002 for  stockholders of record as
         of April 8, 2002.  Average  dilutive  common stock shares  outstanding,
         giving  retroactive  effect to the stock  split,  at December 31, 2001,
         2000, and 1999 are 13,429,585,  12,282,664,  and  11,821,364.  Proforma
         earnings per dilutive common stock share,  giving retroactive effect to
         the stock split, at December 31, 2001, 2000, and 1999 are $0.50, $0.07,
         and $0.27.
.................................................................................



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

         None

                                    PART III

Item 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, 2002. The definitive  Proxy Statement will be filled with the Commission not
later than 120 days after  December 31, 2001,  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

                                       39


VALUATION AND QUALIFYING ACCOUNTS



YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

                                                 Additions
                                Balance at       Charged to                      Balance at
                                 Beginning         Costs                           End of
Description                       of Year         Expenses       Deductions         Year
-----------                       -------         --------       ----------         ----
                                                                     
ALLOWANCE FOR
  UNCOLLECTIBLE

  ACCOUNTS:
  1999                          $(197,331)       $(158,722)        $50,578       $(305,475)

  2000                           (305,475)        (626,263)        491,463        (440,275)

  2001                           (440,275)         (50,892)         82,316        (408,851)




                  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:


                                       41




           Description                                                                         Exhibit No.
           -----------------------------------------------------------------          ------------------------------
                                                                                
       3.1       Articles of Incorporation of the Company, as amended and             [Form 10-Q  filed  August 14,
                 restated*                                                            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 value*    [Form S-18 filed  October 19,
                                                                                      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           [Form S-1 filed  February 14,
                 amended 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 dated     [Form  10-K  for  year  ended
                 October 10, 1997                                                     December  31,  1997,  Exhibit
                                                                                      No. 10.5]

      10.7       Amendment to Loan Agreement with Zions First National Bank dated     [Form 10-K for year ended
                 October 10, 1998                                                      December 31, 1998, Exhibit
                                                                                      No.10.7]

      10.8       Amendment to Loan Agreement with Zions First National Bank dated     [Form 10-K for year ended
                 August 11, 1999                                                       December 31, 1999, Exhibit
                                                                                      No.10.8]

      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 Zion's First National Bank          [Form 10-K for year ended
                 3/11/2000                                                            December 31, 2000, Exhibit
                                                                                      10.10]

      10.11      Merit Medical Systems, Inc. Highly Compensated Deferred              [Form 10-K for year ended
                 Compensation Plan.                                                   December 31, 2000, Exhibit
                                                                                      10.11]

      13.1       Annual Report to  Shareholders  for the year ended December 31,
                 Filed  herewith[  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.


                                       42


                                   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, 2002.

                                   MERIT MEDICAL SYSTEMS, INC.



                                   By: /s/ 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, 2002.

       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
Kent W. Stanger                   and accounting officer)



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



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



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



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

                                       43