Atrion Reports Fourth Quarter and Year-end Results.

ARAB, Ala.--(BUSINESS WIRE)--Feb. 12, 1998--Atrion Corporation (Nasdaq/NM - ATRI) today announced results for the fourth quarter and year ended December 31, 1997.

"The past year was a remarkable period for Atrion as the Company virtually transformed its operations to focus on its medical products business," commented Jerry A. Howard, President and Chief Executive Officer. "Highlights of the year included the disposition of our natural gas operations and our later agreement to acquire the cardiovascular and specialized intravenous fluid delivery product lines of Quest Medical, Inc. With the completion of that purchase late last month, we believe we have not only strengthened the Company's medical products business and provided new opportunities to realize synergies in its operations, but also positioned Atrion to become a leading provider of certain cardiovascular products to a worldwide market."

Howard noted that chief among the cardiovascular products acquired from Quest Medical in January 1998 is a Myocardial Protection System(R) which applies state-of-the-art technology, reliability, and safety for cardioplegia delivery during open-heart surgery. The cardiovascular product line also includes other specialized proprietary devices used during cardiopulmonary surgery. The intravenous fluid delivery product line includes more than 50 distinct models used for more complex procedures employed in anesthesia administration, intravenous feeding, intensive care, and cancer therapy.

"As we look ahead to the coming year, we are enthusiastic about the growth prospects for our array of medical products," Howard continued. "In particular, we believe there will be ample opportunities to integrate selling and manufacturing activities across our product lines and to introduce new products that extend our offering of cardiovascular, opthalmic, and fluid delivery products. With the previously announced elimination of cash dividends, we expect to have additional funds to enhance the growth of our business."

Atrion's revenues for the fourth quarter increased 7% to $6,901,000 compared with $6,429,000 in the same period last year. Revenues for the year increased 37% to $30,276,000 versus $22,121,000 in 1996, with most of that increase reflecting the addition of the operations of Atrion's Halkey-Roberts unit for the entire 1997 period. The acquisition of Halkey-Roberts, which was completed on May 21, 1996, had no effect on comparisons for the fourth quarter reporting periods.

Atrion recorded after-tax charges totaling $3.7 million in the fourth quarter of 1997, of which $3.0 million was for the revaluation of intangible assets and $0.7 million was for a product replacement program. After these non-recurring charges, Atrion reported a loss from continuing operations of $3,458,000 or $1.07 per basic share compared with income from continuing operations in the year-earlier period totaling $105,000 or $0.03 per basic share. For the year ended December 31, 1997, the loss from continuing operations was $2,045,000 or $0.63 per basic share versus income from continuing operations in 1996 totaling $853,000 or $0.27 per basic share. Excluding the non-recurring charges, the Company had income from continuing operations of $279,000 or $0.09 per basic share for the 1997 fourth quarter, representing a 166% increase compared with income from continuing operations in the 1996 fourth quarter. For the year ended December 31, 1997, Atrion had income from continuing operations before non-recurring charges of $1,692,000 or $0.52 per basic share, a 98% increase over income from continuing operations in 1996.

In May 1997, Atrion completed the sale of its natural gas pipeline and marketing subsidiaries. Accordingly, the revenues and expenses of those operations have been aggregated and reported as discontinued operations for all periods presented. Net loss for the fourth quarter of 1997, including discontinued operations, a gain on the sale of a portion of those operations and the fourth quarter charges, totaled $3,166,000 or $0.98 per basic share versus net income of $1,171,000 or $0.36 per basic share in the same 1996 period. Net income for 1997, including discontinued operations, the gain on the sale of those operations and the fourth quarter charges, totaled $17,170,000 or $5.33 per basic share compared with $6,476,000 or $2.03 per basic share for 1996.

As of December 31, 1997, Atrion reported total assets of $60,942,000, including $32,172,000 in cash and cash equivalents. Subsequent to year-end, the Company completed the acquisition of the Quest Medical product lines utilizing $23.7 million of the cash and cash equivalents on hand at December 31, 1997. Stockholders' equity totaled $49,986,000 at December 31, 1997, representing a book value of $15.42 per share.

Atrion Corporation designs, develops, manufactures, sells and distributes medical products and components to markets worldwide.

The statements in this press release that are forward looking are based upon current expectations and actual results may differ materially. Therefore, the inclusion of such forward-looking information should not be regarded as a representation by Atrion that the objectives or plans of Atrion will be achieved. Such statements include, but are not limited to, Atrion's expectations regarding the introduction of new products and synergies that may be achieved with the acquisition of the Quest Medical product lines having been completed. Words such as "believe" and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements contained herein involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the effect of changing economic and business conditions, the successful integration of acquired product lines with the Company's existing businesses, and changes in growth of the medical products industry. -0-

                          ATRION CORPORATION
             UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
                (In thousands, except per share data)

                        Three Months Ended       YearEnded
                           December 31,         December 31,
                          1997      1996       1997      1996
Revenues                 $ 6,901   $ 6,429   $ 30,276    $22,121
Cost of goods sold        (5,777)1  (4,068)   (20,755)1  (13,033)
   Gross profit            1,124     2,361      9,521      9,088
Operating expenses        (7,111)2  (2,239)   (13,908)2   (7,864)
   Operating (loss)
     income               (5,987)3     122     (4,387)3    1,224
Interest income
 (expense),   net            423       (49)       818       (159)
Other income, net             22        56        241        262
   (Loss) income from
     continuing
     operations before
     income taxes         (5,542)3     129     (3,328)3    1,327
Income tax benefit
  (provision)              2,084       (24)     1,283       (474)
(Loss) income from
  continuing operations   (3,458)4     105     (2,045)4      853
Discontinued operations:
Income (loss) from
  discontinued
  operations                   2     1,066      1,923      5,623
   Gain on disposal of
     discontinued
     operations              290         0     17,292          0
      Net (loss) income  $(3,166)4 $ 1,171    $17,170(4) $ 6,476

(Loss) earnings per
  basic share:
   Continuing operations $ (1.07)  $  0.03   $  (0.63)   $  0.27
   Discontinued
     operations              .00      0.33       0.60       1.76
   Gain on disposal of
     discontinued
     operations             0.09       .00       5.36        .00
      Net (loss) income
        per share        $ (0.98)4 $  0.36      $5.33(4) $  2.03

Weighted average basic
  shares outstanding       3,242     3,204      3,224      3,189

(Loss) earnings per
  diluted share:
   Continuing operations $ (1.07)  $  0.03   $  (0.63)   $  0.26
   Discontinued
     operations              .00      0.32       0.60       1.73
   Gain on disposal of
     discontinued
     operations             0.09       .00       5.36        .00
      Net (loss) income
        per share        $ (0.98)4 $  0.35      $5.33(4) $  1.99

Weighted average diluted
  shares outstanding       3,242     3,298      3,224      3,253


1    Includes product replacement charges of approximately $807.
2    Includes asset impairment charge of approximately $4,797 and
     product replacement charges of $293.
3    Includes total non-recurring charges of approximately $5,897.
4    Includes $3,737 or $1.16 per share in non-recurring after-tax
     charges.

                          ATRION CORPORATION
                UNAUDITED CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                             Dec. 31,  Dec. 31,
                                               1997      1996
ASSETS
Current assets:
  Cash and cash equivalents                  $ 32,172    $   144
  Accounts receivable                           2,897      3,658
  Inventories                                   3,960      3,712
  Other current assets                            337        486
   Total current assets                        39,366      8,000
Property, plant and equipment, net             13,142     12,680
Other assets                                    8,434     12,059
Net assets of discontinued operations               0     12,694
                                             $ 60,942    $45,433

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued liabilities   $  5,322    $ 2,944
  Current maturities of long-term debt            453        703
   Total current liabilities                    5,775      3,647
Long-term debt                                    203      6,313
Other non-current liabilities                   4,978      1,055
Stockholders' equity                           49,986     34,418
                                             $ 60,942    $45,433

CONTACT: Atrion Corp., Arab

Jeffery Strickland, 205/586-1580

http://www.atrioncorp.com