Atrion Corporation (NASDAQ: ATRI) announced today that revenues were

down 4% for the fourth quarter but up 8% for the full year 2011

compared to the quarter and year ended December 31, 2010. Revenues for

the fourth quarter of 2011 were $25.5 million compared to $26.6

million in the same period of 2010. For the quarter ended December 31,

2011, diluted earnings per share were down 1% compared to the fourth

quarter of 2010. For the full year 2011, however, Atrion's revenues

increased to $117.7 million from $108.6 million in 2010. Net income

per diluted share of $12.82 in 2011 was 24% higher than net income per

diluted share of $10.32 in 2010, as described below.

Commenting on the Company's performance for the fourth quarter of 2011

compared to the fourth quarter of 2010, David A. Battat, President &

CEO, said, "In the fourth quarter, our financial performance was

essentially flat with diluted EPS declining by $0.02 to $2.65. While

we experienced an 8% growth in fluid delivery and cardiovascular

revenues, areas representing 72% of our overall sales, this good

performance was offset by the decline in shipments of ophthalmic

products due to the rescheduling of a shipment from late December to

January so that a large, multinational customer with which we have a

continuing long-term contract, could review its inventory levels."

Mr. Battat also spoke to the full-year results of 2011 compared to

2010 stating, "We are very pleased with the results for the year as a

whole as revenues of all major product categories were up, with fluid

delivery and cardiovascular increasing 15% and 9% respectively. These

excellent results led to an increase in our diluted EPS of 24%." Mr.

Battat added, "At year-end our finished goods inventories were up $5.2

million from December 31, 2010. This was due to the postponement of

the shipment mentioned above, the need to build safety stocks to

mitigate a supplier risk, and to meet contractual obligations to

customers. We expect our overall inventory to decline as the year

progresses as the shipment and supplier issues are resolved." Mr.

Battat added, "As previously announced, last year we embarked on a

major program of equipment additions to expand capacity and to

continue to raise the quality levels of our products. To that end, we

spent $12 million in 2011 as compared to $4 million in 2010. We expect

continued high levels of capital additions in 2012, as we complete

this phase of modernization. Despite the substantial increase in

capital investments last year, our cash and short and long term

investments increased by $13.5 million to $55.2 million as of December

31, 2011."

Mr. Battat continued, "Looking forward to 2012, we anticipate that

despite the muddled economic outlook in international markets, where

we generate 42% of our sales, fluid delivery and cardiovascular

revenues will continue to show healthy increases. This month, however,

we learned from the above mentioned ophthalmic customer that it had

accumulated too large an inventory, necessitating significant

reductions in 2012 shipments to it. We expect our earnings for the

full year could decline by approximately 10% from 2011 levels. The

bulk of this decline will be felt in the first two quarters, which

will likely show declines of some 20% before tapering off. While this

would mean an interruption of our 13 year history of annual growth in

EPS, we wish to emphasize that we believe our business has never been

as solidly anchored as it is now and we expect to return to our

double-digit growth pattern in 2013."

Atrion Corporation develops and manufactures products primarily for

medical applications. The Company's website is

Statements in this press release that are forward looking are based

upon current expectations and actual results or future events may

differ materially. Such statements include, but are not limited to,

Atrion's expectations regarding the Company's inventory levels in

2012, a resolution of shipment and supplier issues, capital additions

in 2012, fluid delivery and cardiovascular revenues in 2012, earnings

for the first two quarters and the full year of 2012, an interruption

of our 13 history of double-digit annual growth in EPS in 2012 and a

return to the Company's double-digit growth pattern in 2013. Words

such as "expects," "believes," "anticipates," "intends," "should",

"plans," "will" and variations of such words and similar expressions

are intended to identify such forward-looking statements.

Forward-looking statements involve risks and uncertainties. The

following are some of the factors that could cause actual results or

future events to differ materially from those expressed in or

underlying our forward-looking statements: changing economic, market

and business conditions; acts of war or terrorism; the effects of

governmental regulation; competition and new technologies;

slower-than-anticipated introduction of new products or implementation

of marketing strategies; the Company's ability to protect its

intellectual property; changes in the prices of raw materials; changes

in product mix; and intellectual property and product liability claims

and product recalls. The foregoing list of factors is not exclusive,

and other factors are set forth in the Company's filings with the

Securities and Exchange Commission.



(In thousands, except per share data)


Twelve Months

Three Months Ended Ended

December 31, December 31,

------------------ ------------------

2011 2010 2011 2010

-------- -------- -------- --------

Revenues $ 25,519 $ 26,630 $117,704 $108,569

Cost of goods sold 12,815 13,748 57,697 57,655

-------- -------- -------- --------

Gross profit 12,704 12,882 60,007 50,914

Operating expenses 5,073 5,127 21,839 19,937

-------- -------- -------- --------

Operating income 7,631 7,755 38,168 30,977

Interest income 302 320 1,295 1,009

Other income 9 -- 12 2

-------- -------- -------- --------

Income before income taxes 7,942 8,075 39,475 31,988

Income tax provision (2,554) (2,652) (13,437) (11,036)

-------- -------- -------- --------

Net income $ 5,388 $ 5,423 $ 26,038 $ 20,952

Income per basic share $ 2.67 $ 2.69 $ 12.90 $ 10.38

Weighted average basic shares

outstanding 2,016 2,013 2,019 2,018

$ 2.65 $ 2.67 $ 12.82 $ 10.32

Income per diluted share

Weighted average diluted shares

outstanding 2,030 2,028 2,031 2,030



(In thousands)

Dec. 31, Dec. 31,

ASSETS 2011 2010

----------- -----------


Current assets:

Cash and cash equivalents $ 24,590 $ 10,670

Short-term investments 20,279 10,715

----------- -----------

Total cash and short-term investments 44,869 21,385

Accounts receivable 11,223 11,521

Inventories 24,582 17,400

Prepaid expenses and other 2,313 1,050

Deferred income taxes 755 625

----------- -----------

Total current assets 83,742 51,981

Long-term investments 10,336 20,291

Property, plant and equipment, net 56,370 50,664

Other assets 11,447 11,716

----------- -----------

$ 161,895 $ 134,652


Current liabilities 10,043 7,752

Line of credit -- --

Other non-current liabilities 13,338 10,283

Stockholders' equity 138,514 116,617

----------- -----------

$ 161,895 $ 134,652