FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

[x]            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2001

OR

[ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM: _______ TO _________

COMMISSION FILE NO.: 0-19974

ICU MEDICAL, INC.
(Exact name of Registrant as provided in charter)
------------------------------------------------

Delaware                                       33-0022692
--------                                       ----------
(State or Other Jurisdiction of                        (I.R.S. Employer
Incorporation or Organization)                        Identification No.)

951 Calle Amanecer, San Clemente, California                92673
--------------------------------------------                -----
(Address of Principal Executive Offices)                 (Zip Code)

(949) 366-2183
--------------
(Registrant's Telephone No. Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports 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 XXX                          No____
---

Indicate the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest practicable date:

Class                            Outstanding at April 18, 2001
-----                            -----------------------------
Common                                     8,444,801

ICU MEDICAL, INC.

INDEX

PART I - FINANCIAL INFORMATION                                    PAGE NUMBER
------------------------------                                    -----------

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------

Consolidated Balance Sheets, March 31, 2001 and 
December 31, 2000
3

Consolidated Statements of Income for the three months
ended March 31, 2001 and 2000                                          4

Consolidated Statements of Cash Flows for the three
months ended March 31, 2001 and 2000                                   5

Notes to Consolidated Financial Statements                             6

ITEM 2.
-------

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

ITEM 3.
-------

Quantitative and Qualitative Disclosures About Market Risk      Not Applicable

PART II - OTHER INFORMATION                                           15
---------------------------

SIGNATURES                                                            16

2

ICU MEDICAL, INC.
Consolidated Balance Sheets
March 31, 2001 and December 31, 2000
(all dollar amounts in thousands except share data)

ASSETS

3/31/01    12/31/00
---------   ---------
CURRENT ASSETS:                                          (unaudited)
Cash and cash equivalents                               $  1,706    $  1,945
Liquid investments                                        54,241      48,841
---------   ---------
Cash and liquid investments                      55,947      50,786
Accounts receivable, net of allowance for
doubtful accounts of $549 and $505 as of
March 31, 2001 and December 31, 2000,
respectively                                             11,148      12,425
Inventories                                                1,606       1,435
Prepaid expenses and other                                   499         402
Deferred income taxes - current portion                    2,150       2,150
---------   ---------
Total current assets                             71,350      67,198
---------   ---------

PROPERTY AND EQUIPMENT, at cost:
Land, building and building improvements                   13,505      13,505
Machinery and equipment                                    15,560      15,601
Furniture and fixtures                                      2,712       2,763
Molds                                                       6,848       6,804
Construction in process                                     2,669       1,458
---------   ---------
41,294      40,131
Less--Accumulated depreciation                            (17,221)    (16,210)
---------   ---------
24,073      23,921
---------   ---------
DEFERRED INCOME TAXES                                           889         889
OTHER ASSETS                                                    913         852
---------   ---------
$ 97,225    $ 92,860
=========   =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable                                          $  1,569    $  1,687
ccrued liabilities                                          7,840       7,793
---------   ---------
Total current liabilities                         9,409       9,480
---------   ---------

STOCKHOLDERS' EQUITY:
Convertible preferred stock, $1.00 par
value  Authorized -- 500,000 shares,
issued and outstanding -- none                                 -           -
Common stock, $0.10 par value-
Authorized -- 20,000,000 shares,
issued -- 8,867,162 shares                                   887         887
Additional paid-in capital                                  42,313      41,702
Treasury stock -- 422,361 and 472,933 shares at
March 31, 2001 and December 31, 2000, respectively         (4,527)     (4,819)
Retained earnings                                          49,143      45,610
---------   ---------
Total stockholders' equity                       87,816      83,380
---------   ---------
$ 97,225    $ 92,860
=========   =========

The accompanying notes are an integral part of these consolidated financial
statements.

3

ICU MEDICAL, INC.
Consolidated Statements of Income
For the Three Months Ended
March 31, 2001 and March 31, 2000 (all dollar
amounts in thousands except per share data)
(unaudited)

For the Three Months Ended
---------------------------

3/31/01         3/31/00
-----------     -----------
NET SALES                                            $   15,006      $   14,249
COST OF GOODS SOLD                                        6,457           6,019

-----------     -----------
Gross profit                                           8,549           8,230
-----------     -----------
OPERATING EXPENSES:
Selling, general and administrative                     3,381           3,870
Research and development                                  293             241
-----------     -----------
Total operating expenses                               3,674           4,111
-----------     -----------
Income from operations                                 4,875           4,119

INVESTMENT INCOME                                           678             493
-----------     -----------
Income before income taxes                             5,553           4,612

PROVISION FOR INCOME TAXES                                2,020           1,740
-----------     -----------
NET INCOME                                           $    3,533      $    2,872
===========     ===========
NET INCOME PER SHARE
Basic                                             $     0.42      $     0.35
Diluted                                           $     0.38      $     0.33
===========     ===========
WEIGHTED AVERAGE NUMBER OF SHARES
Basic                                              8,407,075       8,200,286
Diluted                                            9,402,455       8,658,759
===========     ===========

The accompanying notes are an integral part of these consolidated financial
statements.

4

ICU MEDICAL, INC.
Consolidated Statements of Cash Flows
For the Three Months Ended
March 31, 2001 and March 31, 2000
(all dollar amounts in thousands)
(unaudited)

For the Three Months Ended
--------------------------

3/31/01     3/31/00
--------   --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income                                                  $ 3,533    $ 2,872
Adjustments to reconcile net income to net cash
provided by operating activities --
Depreciation and amortization                                1,089      1,238
Net change in current assets and current 
liabilities, and other                                        935       (295)

--------   --------
Net cash provided by operating activities                    5,557      3,815
--------   --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                         (1,299)    (1,802)
Net change in liquid investments                            (5,400)    (3,500)

--------   --------
Net cash (used in) investing activities                     (6,699)    (5,302)
--------   --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock
options and related income tax benefits, and other            903      2,103
Purchase of treasury stock                                       -       (119)

--------   --------
Net cash provided by financing activities                      903      1,984
--------   --------

NET INCREASE IN CASH AND CASH EQUIVALENTS                      (239)       497

CASH AND CASH EQUIVALENTS, beginning of the period            1,945      1,901
--------   --------

CASH AND CASH EQUIVALENTS, end of the period                $ 1,706    $ 2,398
========   ========

The accompanying notes are an integral part of these consolidated financial
statements.

5

ICU MEDICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(All dollar amounts in thousands)
(unaudited)

NOTE 1: The accompanying unaudited interim consolidated financial statements
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission and reflect all adjustments which are, in the opinion of
Management, necessary to a fair statement of the consolidated results for the
interim periods presented, which adjustments consist of only normal recurring
adjustments. Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's 2000 Annual Report to Stockholders.

NOTE 2: Net inventories consisted of the following:

3/31/01               12/31/00
--------------         --------------
Raw material                   $ 1,268                $ 1,050
Work in process                    209                    140
Finished goods                     129                    245
--------------         --------------
Total                          $ 1,606                $ 1,435
==============         ==============

NOTE 3: Basic net income per share is computed by dividing net income by the
weighted average number of common shares outstanding. Diluted net income per
share is computed by dividing net income by the weighted average number of
common shares outstanding plus dilutive securities. The Company's dilutive
securities are outstanding common stock options (excluding stock options with an
exercise price in excess of market value), less the number of shares that could
have been purchased with the proceeds from the exercise of the options, using
the treasury stock method, and were 995,380 and 458,473 for the three months
ended March 31, 2001 and 2000, respectively.

NOTE 4: The effective tax rate differs from that computed at the federal
statutory rate of 34% principally because of the effect of state income taxes
partially offset by the effect of tax-exempt investment income.

NOTE 5: The Company is involved in litigation with Medex, Inc. over patent
matters. See Part II, Item 1, "Legal Proceedings."

6

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

General
-------

The following table sets forth the net sales by product as a percentage
of total net sales for the periods indicated:

================================================================================
PRODUCT LINE                        1998     1999      2000     Q1-00     Q1-01
--------------------------------------------------------------------------------
CLAVE(R)                             69%      68%       71%       72%       73%
--------------------------------------------------------------------------------
CLC2000(TM)                          --        1%        4%        3%        3%
--------------------------------------------------------------------------------
Protected Needle Products             8%       6%        3%        4%        2%
--------------------------------------------------------------------------------
Lopez Valve(R)and other               5%       4%        3%        4%        3%
--------------------------------------------------------------------------------
RF100-RF150 ("Rhino")                 5%       6%        5%        5%        4%
--------------------------------------------------------------------------------
Custom I.V. Systems                   8%      11%       12%        9%       13%
--------------------------------------------------------------------------------
B.Braun SafeLine Revenue Sharing      5%       4%        2%        3%        2%
--------------------------------------------------------------------------------
Total                               100%     100%      100%      100%      100%
================================================================================

The Company sells its products to independent distributors and through
supply and distribution agreements with Abbott Laboratories ("Abbott"), B.Braun
Medical Inc. ("B.Braun"), (the "Abbott Agreements" and the "B.Braun Agreements,"
respectively) and Bard. Most independent distributors handle the full line of
the Company's products. Abbott and B.Braun both purchase CLAVE Products,
principally bulk, non-sterile connectors. Abbott also purchases the Rhino, a
low-priced connector specifically designed for Abbott, and since July 1999, the
CLC2000, and under an agreement signed February 27, 2001, custom I.V. sets.
B.Braun also purchases the McGaw Protected Needle and pays the Company revenue
sharing payments on its sales of its SafeLine products. Bard purchases the Lopez
Valve under a five-year agreement signed in June 1999. The Company also
distributes the CLC2000 through several other medical product manufacturers for
inclusion in catheter kits and trays.

The Abbott Agreements extend to December 2009. The B.Braun Agreement
for CLAVE extends to December 2002. All have extension provisions beyond those
dates.

Management believes that as the healthcare provider market continues to
consolidate, the Company's success in marketing and distributing CLAVE products
will depend, in part, on the Company's ability, either independently or through
strategic supply and distribution arrangements, to secure long-term CLAVE
contracts with major buying organizations. Further, the Company's marketing and
distribution strategy may result in a significant share of the Company's
revenues being concentrated among a small number of distributors and
manufacturers. The loss of a strategic supply and distribution agreement with a
customer or the loss of a large contract by such a customer could have a
material adverse effect on operating results.

7

Management believes the success of the CLAVE has, and will continue to
motivate others to develop one piece needleless connectors which may incorporate
many of the same functional and physical characteristics as the CLAVE. The
Company is aware of a number of such products. In response to competitive
pressure, the Company has been reducing prices to protect and expand its market.
The price reductions to date have been more than offset by increased volume.
Management expects that the average price of its CLAVE products will continue to
decline. There is no assurance that the Company's current or future products
will be able to successfully compete with products developed by others.

The federal Needlestick Safety and Prevention Act enacted in November
2000 modified standards promulgated by the Occupational Safety and Health
Administration to require employers to use needleless systems where appropriate
to reduce risk of injury to employees from needlesticks. The Company believes
the effect of this law will be to accelerate sales of the Company's needleless
systems, although it is unable to estimate the amount or timing of such sales.

The Company has commenced two initiatives that, if successful, will
reduce its dependence on its current proprietary products. It is seeking to
substantially expand its custom I.V. systems business with products sold to
medical product manufacturers and independent distributors. On February 27,
2001, the Company signed an agreement with Abbott under which the Company will
manufacture all new custom I.V. sets for sale by Abbott, and the two companies
will jointly promote the products under the name SetSource. The Company expects
a significant increase in sales of custom I.V. systems once production under
this agreement commences. The Company has also launched SetFinder, a separate
subsidiary, which will contract with and distribute commodity-type standard I.V.
sets directly to healthcare providers and to group purchasing organizations and
independent dealer networks. There is no assurance that either one of these
initiatives will succeed, or that the expected increases in sales under the
February 2001 contract with Abbott will occur.

The Company has been taking steps aimed to improve manufacturing
efficiency principally by reducing labor costs, reducing time needed to produce
an order, and minimizing investment in inventory. The original focus was on
production of custom I.V. systems, which is relatively labor intensive; it has
now been expanded to include all of the Company's automated and manual
manufacturing operations. Substantially all manual assembly is now performed at
the facility that the Company opened in December 1998 in Ensenada, Baja
California, Mexico. In 1999, the Company made significant investment in
automated molding and assembly equipment. Both of these steps have reduced unit
production costs. Ongoing steps are aimed at increasing systems capabilities,
improving manufacturing efficiency and enhancing distribution, as well as
automation of the production of new products, such as the CLC2000 and the 1o2
Valve, and other products for which volume is growing. Because significant
innovation is required to achieve these goals, there is no assurance that these
steps will achieve the desired results.

8

Net sales for each distribution channel, based on the new grouping,
were as follows:

================================================================================
Channel                             1998     1999      2000     Q1-00     Q1-01
--------------------------------------------------------------------------------
Medical product manufacturers        64%      71%       74%       75%       68%
--------------------------------------------------------------------------------
Independent domestic distributors    33%      25%       21%       22%       20%
--------------------------------------------------------------------------------
International                         3%       4%        5%        3%       11%
--------------------------------------------------------------------------------
SetFinder                            --       --        --        --         1%
--------------------------------------------------------------------------------
Total                               100%     100%      100%      100%      100%
================================================================================

QUARTER ENDED MARCH 31, 2001 COMPARED TO THE SAME QUARTER LAST YEAR
-------------------------------------------------------------------

Net sales increased $757,000, or approximately 5%, to $15,006,000 in
the first quarter of 2001 compared to $14,249,000 during the same period last
year. The increase was primarily attributable to increased sales of CLAVE
products, including custom CLAVE I.V. systems.

Net sales in the first quarter of 2001 fell below Management's
expectations and were adversely affected by negative fluctuations in sales
patterns, especially to the Company's medical product manufacturer customers.
Management expects that the latter quarters of 2001 and the year in total will
reflect the Company's customary annual growth in net sales and earnings.

Net sales to Abbott in the first quarter of 2001 were $8,032,000, as
compared with net sales of $6,071,000 in the first quarter of 2000. Net sales of
CLAVE products to Abbott, excluding custom CLAVE I.V. systems, in the first
quarter of 2001 increased approximately 44%, principally on an increase in unit
volume, to $6,795,000. Changes in sales volume of the other product lines sold
to Abbott were not significant. Management expects a substantial increase in
CLAVE unit and dollar sales volume with Abbott in 2001, although there is no
assurance as to the amount or timing of such an increase.

Net sales to B.Braun, including revenue sharing, amounted to $2,078,000
in the first quarter of 2001, as compared with $4,625,000 in the first quarter
of 2000. The decrease was principally because of a 58% decrease in net sales of
CLAVE products, mostly because of a decrease in unit volumes. Management
believes that the year-to-year quarterly comparisons of CLAVE sales are
distorted by fluctuations in sales of CLAVE patterns to B.Braun. Net sales of
CLAVE to B.Braun were disproportionately high in the first quarter of 2000,
again disproportionately high in the fourth quarter of 2000, followed by
disproportionately low sales in the first quarter of 2001. Other net sales to
B.Braun, which consist of the McGaw Protected Needle (a protected needle
product) and SafeLine revenue sharing decreased, and Management expects those
sales to continue to decrease in the future as the market for safe connectors
continues to shift to needleless, swabable technology. Management expects that
the SafeLine agreement, which expires in June 2001, will be extended, and that
SafeLine revenue sharing payments will continue, but there is no certainty as to
this matter or the amount of future payments, if any.

9

Net sales to independent domestic distributors decreased approximately
6% from $3,137,000 in 2000 to $2,962,000 in 2001. This is because of a decrease
in sales of CLAVE Products and all other products, partially offset by a 76%
increase in custom I.V. systems. Management expects a continued decrease in the
net sales of standard CLAVE Products to the independent domestic distributors,
but expects that the decrease will be at least partially offset by sales of
custom I.V. systems and new products such as the CLC2000 and the 1o2 Valve.
There is no assurance that the Company will achieve increased net sales to
independent domestic distributors in the future. Further, the ability of the
independent distributors to sustain or increase their sales may be impacted by
competition from existing and new competitive products or acquisition of market
share by Abbott and B.Braun. Management expects to encounter continued pricing
pressure from individual end users, and expects continued declines in net prices
to the independent distributors.

Total sales to foreign distributors were $1,676,000 in the first
quarter of 2001, as compared with $382,000 in the first quarter of 2000. (Those
amounts do not include distribution in Canada.) The increase is attributable
almost entirely to a large stocking purchase by a distributor in South Africa.
The Company now has distribution arrangements in all the principal countries in
Western Europe and the Pacific Rim, and in South Africa. Management expects that
its sales to European and other foreign customers will continue to increase in
the future, but at a lower rate than in the first quarter of 2001, and further,
there is no assurance that those expectations will be realized.

In the fourth quarter of 1999, the Company launched SetFinder, doing
business as setfinder.com. Net sales of SetFinder to date have not been
significant. The Company believes that, in time, a major portion of the sales of
disposable medical products will be initiated on the internet, although the
transition to the internet has been slow so far. The Company has spent a
significant effort on the launch and development of SetFinder, although it has
temporarily curtailed internet related marketing activities until market
opportunities expand. There is no assurance that SetFinder will achieve
significant sales and the amount of future operating profits or losses of
SetFinder is dependent upon the future development of the SetFinder business,
the outcome of which is not known at this time.

Total net sales of CLAVE products (excluding custom CLAVE I.V. systems)
increased to $10,877,000 in the first quarter of 2001 from $10,242,000 in the
first quarter of 2000, or 6%. The increase in unit shipments was approximately
24%, over half of which was accounted for by shipments to international
distributors, and the balance mostly by shipments to medical product
manufacturers. Average net selling prices decreased approximately 14% because a
greater proportion of sales were the lower priced bulk non-sterile CLAVEs and in
response to market pressure.

In November 1997, the Company commenced marketing the CLC2000, a
one-piece, swabable connector, engineered to prevent the back-flow of blood into
the catheter. Net sales until late 1999 were not significant, but in late 1999
sales to Abbott and the independent domestic distributors started to accelerate.
Abbott currently accounts for over half the net sales of the CLC2000. Management
expects continued increases in CLC2000 sales, but there is no assurance as to
the amount or timing of future CLC2000 sales. Automated assembly equipment is
expected to be completed later in 2001.

10

Net sales of Click Lock and Piggy Lock decreased approximately 35% in
the first quarter of 2001 compared to the same period last year. The decline is
because of the safe-connector market's continued shift to swabable, needleless
technology. Management expects the trend to continue.

Net sales of Lopez Valve decreased 53% in the first quarter compared to
the same period last year. Most of the decrease was because of failure of a
supplier to deliver a component, which caused a delay in shipments until the
second quarter of 2001. Management expects that net sales of the Lopez Valve
will increase for the remainder of 2001 on sales to independent domestic
distributors. Bard's sales of Lopez Valves have been less than they originally
anticipated, and the amount of future purchases by Bard is uncertain.

Net sales of custom I.V. systems were $1,977,000 in the first quarter
of 2001, up 53% from the $1,295,000 recorded in the first quarter of 2000. Unit
sales increased approximately 90%, with most of that increase with the domestic
distributors.

The 1o2 Valve is the first one-way or two-way drug delivery system. It
was initially introduced in November 1998, and after initial delays in
production, the Company actively commenced sales in April 2000. Sales to date
have not been significant, but have been increasing. Automated assembly
equipment and large-cavity molds are expected to be completed in the second half
of 2001.

Historically, the Company has experienced lower usage of its products
in the summer months due to lower censuses in healthcare facilities. That would
generally cause the Company's sales in the second and third quarters of the year
to be lower than sales in the first and fourth quarters. Since 1995, there have
been significant departures from that pattern because significant increases in
volumes with B.Braun and Abbott have often offset the expected seasonal sales
decline. Further, those medical product manufacturers order bulk non-sterile
product many months before sale to the healthcare providers to allow for normal
manufacturing lead-times. Thus, Management believes that the large percentage of
sales to I.V. product manufacturers could lead to non-seasonal quarterly
fluctuations in net sales because their ordering patterns may not directly
reflect their current sales volumes.

GROSS MARGIN was 57% during the first quarter of 2001 compared to 58%
during the same period last year. Increases in production volume which resulted
in greater absorption of overhead and a decrease in unit manufacturing costs
offset most of the continued decrease in average selling prices. Management
expects that gross margins for custom I.V. systems, SetFinder products and
certain other manually assembled products will be lower than those historically
recorded by the Company because their production is relatively labor intensive.
The Company expects that its unit production costs will continue to decrease in
2001, but that the gross margin percentage will be equal to or slightly lower
than that achieved in the first quarter of 2001 as average unit sales prices
continue to decrease, and manually assembled products become a greater
percentage of the Company's sales.

Electrical energy costs at the Company's manufacturing facilities in
the first quarter of 2001 were almost four times what they were in the first
quarter of 2000, and were approximately 2% of net sales. Most of the increase
was because of rate increases. Management expects a continuation of increased
costs through 2001. The Company's principal electrical provider, San Diego Gas &
Electric Company, is not subject to certain of the regulatory constraints
impacting the other two major providers in California, and there has been no

11

interruption in service. However, there is currently significant uncertainty as
to the future cost and availability of electrical energy in California,
especially over the spring and summer months of 2001. Any further significant
increase in electrical costs or a significant interruption in service could have
an adverse effect on the Company.

SELLING, GENERAL AND ADMINISTRATIVE expenses ("SG&A"), excluding
research and development expenses, decreased $489,000 to $3,381,000, and
decreased as a percentage of net sales to 23% during the first quarter of 2001
compared to 27% during the same period last year. Administrative costs decreased
principally because of a decrease in legal fees, and sales and marketing
decreased principally because of reduced expenses related to SetFinder.
Management expects that SG&A will be a higher percentage of net sales for the
balance of 2001, and that for the entire year 2001 it will approximate the same
percentage of sales as it did in 2000.

RESEARCH AND DEVELOPMENT EXPENSES ("R&D") increased in the first
quarter of 2001 as compared with the first quarter of 2000. This is principally
because of increased work on clinical evaluations of the new CLC2000 and
continued work on software development for the custom I.V. systems business, in
addition to work on new products. Management expects R&D expense to continue to
increase later in 2001 but to be approximately the same percentage of annual
sales as it was in the first quarter of 2000; however, there is no assurance
that such costs will not differ materially from current estimates or that the
R&D will be completed as expected.

INCOME FROM OPERATIONS increased $756,000 or 18% and was 32% of net
sales in the first quarter of 2001, as compared with 29% in the first quarter of
2000. Gross profit increased $319,000 while operating expenses decreased
$437,000.

NET INCOME increased 23% to $3,533,000 in the first quarter of 2001 as
compared with $2,872,000 in the comparable period last year, principally because
of the increase in income from operations. Net income per share - diluted
increased $0.05 or 15%, in the first quarter of 2001 over the first quarter of
2000. The percentage increase in net income per share is less than the
percentage increase in net income principally because of an increase in the
dilutive effect of stock options resulting from the increase in the market price
of the Company's stock.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

During the three months ended March 31, 2001, the Company's cash and
cash equivalents and investment securities position increased $5,161,000 to
$55,947,000. Cash provided by operating activities and the exercise of stock
options was partially offset by the cost of additions to property and equipment.

Management expects that sales of the Company's products will continue
to grow in 2001. If sales continue to increase, accounts receivable and
inventories are expected to increase as well. As a result of these and other
factors, the Company's working capital requirements may increase in the
foreseeable future.

Management currently expects that capital expenditures for property and
equipment will be approximately $4 million to $6 million in 2001, principally
for production tooling for capacity expansion and new products.

12

The Company has not purchased treasury stock since October 1999, except
for a small amount in March 2000. It may purchase additional shares in the
future. However, future acquisitions, if any, will depend on market conditions
and other factors.

The Company believes that its existing working capital, supplemented by
income from operations, will be sufficient to fund capital expenditures and
increased working capital requirements for the foreseeable future.

FORWARD LOOKING STATEMENTS
--------------------------

Various portions of this Report, including this Management's Discussion
and Analysis, describe trends in the Company's business and finances that
Management perceives and state some of its expectations and beliefs about the
Company's future. These statements about the future are "forward looking
statements," and the Company identifies them by using words such as "believes,"
"expects," "estimates," "plans," "will," "continue," "could," and by similar
expressions and statements about aims, goals and plans. The forward looking
statements are based on the best information currently available to Management
and assumptions that Management believes are reasonable, but Management does not
intend the statements to be representations as to future results. They include,
among other things, statements about:

o        future operating results and various elements of operating results,
including sales and unit volumes of products, future increases in sales
of custom I.V. systems, SafeLine revenue share, production costs, gross
margins, SG&A, and RD
o        factors affecting operating results, such as shipments to specific
customers, product mix, selling prices, the market shift to needleless
products, impact of safety legislation on buying patterns, achievement
of business expansion goals, development of innovative systems
capabilities, sales of new products, sales initiated on the internet,
manufacturing efficiencies, labor costs, unit production costs,
electrical energy costs and availability, production automation, and
expansion of markets;
o        new or extended contracts with manufacturers and buying organizations,
ability to replace distributors, and dependence on a small number of
customers;
o        outcome of litigation;
o        competitive and market factors, including continuing development of
competing products by other manufacturers, consolidation of the
healthcare provider market and downward pressure on selling prices; and
o        working capital requirements, changes in accounts receivable and
inventories, capital expenditures and common stock repurchases.

The kinds of statements described above and similar forward looking
statements about the Company's future performance are subject to a number of
risks and uncertainties which one should consider in evaluating the statements.
First, one should consider the factors and risks described in the statements
themselves. Those factors are uncertain, and if one or more of them turn out
differently than Management currently expects, the Company's operating results
may differ materially from Management's current expectations.

13

Second, one should read the forward looking statements in conjunction
with the Risk Factors in the Company's Current Report on Form 8-K to the
Securities and Exchange Commission dated November 5, 1999 which is incorporated
by reference.

Third, the Company's actual future operating results are subject to
other important factors that the Company cannot predict or control, including
among others the following:

o        general economic and business conditions;
o        the effect of price and safety considerations on the healthcare
industry;
o        competitive factors, such as product innovation, new technologies,
marketing and distribution strength and price erosion;
o        unanticipated market shifts and trends;
o        the impact of legislation affecting government reimbursement of
healthcare costs;
o        changes by the Company's major customers and independent distributors
in their strategies that might affect their efforts to market the
Company's products or products incorporating the Company's products;
o        unanticipated production problems; and
o        the availability of patent protection and the cost of enforcing and of
defending patent claims.

The Company disclaims any obligation to update the statements or to
announce publicly the result of any revision to any of the statements contained
herein to reflect future events or developments.

14

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
-------------------------

In an action filed July 19, 1999, entitled MEDEX, INC. V. ICU MEDICAL,
INC. pending in the United States District Court for the Southern District of
Ohio, Eastern Division, and served on the Company on November 4, 1999, Medex
alleges that ICU Medical infringes one of its patents by the manufacture and
sale of the CLAVE connector, and Medex seeks monetary damages and injunctive
relief. The Company believes the suit against the Company is without merit and
the Company has been vigorously defending itself in the action. On July 29,
1999, the Company brought an action entitled ICU MEDICAL, INC. V. MEDEX, INC. in
the United States District Court for the Central District of California against
Medex, Inc. for infringing several patents of the Company by the manufacture and
sale of certain blood access devices. The Company seeks monetary damages and
injunctive relief. The Company intends to vigorously pursue this matter.

The Company is from time to time involved in various other legal
proceedings, either as a defendant or plaintiff, most of which are routine
litigation in the normal course of business. The Company believes that the
resolution of the legal proceedings in which it is involved will not have a
material adverse effect on the Company's financial position or results of
operations.

ITEM 2. CHANGES IN SECURITIES
-----------------------------
Inapplicable

ITEM 3. DEFAULT UPON SENIOR SECURITIES
--------------------------------------
Inapplicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------
Inapplicable

ITEM 5. OTHER INFORMATION
-------------------------
None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------------
(a)  Exhibits:

None

(b)  Reports on Form 8-K:

The Registrant filed the following Report on Form 8-K during the quarter for
which this Report is filed:

Item 5 - March 7, 2001

15

Signatures

Pursuant to the requirements 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.

ICU Medical, Inc.
(Registrant)

/s/ Francis J. O'Brien                                   Date:  April 25, 2001
----------------------
Francis J. O'Brien
Chief Financial Officer
(Principal Financial Officer and)
Chief Accounting Officer)

16