Operating Income Rises 172% to Record $2.3 Million CHICAGO, May 8
/PRNewswire-FirstCall/ -- Second quarter highlights: -- 172%
Operating Profit Increase to $2.3 Million -- Gross Profit Margin
widens to 53% of net revenues vs. 42% in prior year quarter -- 46%
Gross Profit Increase -- E.P.S. of $0.07 vs. $0.04 in prior-year
quarter Year-to-date highlights: -- Gross Margin widens to 50% of
net revenue vs. 42% in first half of fiscal year 2008 -- Operating
income up 73% -- Operating margin widens to 21% of revenues vs. 13%
in first half of FY2008 -- E.P.S. rise 85% to $0.13 vs. $0.07 in
first half of FY 2008 The Female Health Company (NYSE Amex: FHC),
which manufactures and markets the FC and FC2 Female Condom(R),
today reported its operating results for the second quarter and
first half of FY2009. The Company will host an investor conference
call at 11:00 a.m. Eastern Time today, May 8, 2009, to discuss its
operating results and other topics of interest (see details below).
For the three months ended March 31, 2009, the Company's net
revenues increased 14% to $7.3 million, compared with $6.4 million
in the three months ended March 31, 2008. For the quarter ended
March 31, 2009, unit sales increased 21% over the same period in FY
2008. The Company's net income attributable to common stockholders
increased 67% to $1,951,786, or $0.07 per diluted share, during the
second quarter of FY2009, compared with $1,165,936, or $0.04 per
diluted share, in the corresponding period of the previous fiscal
year. Gross profit increased 46% to $3.9 million (53% of net
revenues) in the most recent quarter, compared with $2.7 million
(42% of net revenues) in the second quarter of FY2008. Operating
income increased 172% to $2.3 million (31% of net revenues) in the
three months ended March 31, 2009, compared with operating income
of $0.8 million (13% of net revenues) in the quarter ended March
31, 2008. "We are very pleased to report quarterly operating
earnings exceeding $2 million for the first time in the Company's
history," stated O.B. Parrish, Chief Executive Officer of The
Female Health Company. "The favorable financial results for the
three and six months ended March 31, 2009 reflect the increasing
impact of FC2 upon our operating results, as evidenced by the
widening of the second quarter gross margin to 53% of net revenues
from 42% in the prior-year quarter. FC2 accounted for 46% of unit
sales for the six months ended March 31, 2009 vs. 39% for the same
period in FY 2008. It is also important to note that the increase
in unit shipments was greater than the 14% increase in second
quarter revenues, due to the higher percentage of FC2 in our sales
mix. FC2 sells at a lower price, but contributes a higher gross
margin than the FC1 female condom." The Company expects significant
quarter to quarter variations due to the receipt of large orders,
production scheduling, and shipping of products. For the six months
ended March 31, 2009, the Company's net revenues increased 4% to
$12.7 million, compared with $12.1 million in the six months ended
March 31, 2008. Unit sales were up 16% for the first half of FY
2009 vs. the same period last year. For the six months ended March
31, 2009, net income attributable to common stockholders increased
to $3.6 million, or $0.13 per diluted share, compared with $2.0
million, or $0.07 per diluted share, in the corresponding period of
the previous fiscal year. Gross profit increased 26% to $6.3
million (50% of net revenues) in the first six months of FY2009,
compared with $5.0 million (42% of net revenues) in the first half
of FY2008. Operating income increased 73% to $2.7 million (21% of
net revenues) in the six months ended March 31, 2009, compared with
operating income of $1.6 million (13% of net revenues) in the same
period last year. The Company recorded a foreign currency
transaction loss of $194,286 in the second quarter of FY2009,
versus a foreign currency transaction loss of $5,053 in the quarter
ended March 31, 2008. For the six months ended March 31, 2009, the
Company recorded a foreign currency transaction gain of $999,820,
compared with a foreign currency transaction gain of $110,304 in
the corresponding period of the previous fiscal year. The Company
evaluates its ability to realize deferred tax assets on a regular
basis. The net income attributable to common stockholders for the
three and six months ended March 31, 2008, included a benefit for
income taxes of $377,000, related to such evaluation. The Company
has Federal and state net operating loss carryforwards of
approximately $42 million and $22 million respectively, expiring in
years 2009 to 2028. The Company's UK subsidiary, The Female Health
Company-UK plc. has UK net operating losses of approximately $65
million. The UK tax loss carryforwards can be carried forward
indefinitely to offset future U.K. taxable income. "With the recent
FDA approval of FC2, some of FHC's major customers that require
such approval will transition to the second generation product,
which should further improve the Company's financial results,"
added Parrish. "Growing global acceptance of the Female Condom, the
only available barrier method initiated by women that allows them
to protect themselves against HIV/AIDS and unintended pregnancy, is
the basis for our growth. The Female Condom is now available in
over 100 countries, and we believe it will play an increasingly
important role in the global battle against HIV/AIDS in the future.
The FC2 Female Condom is currently being distributed in 77
countries." "We are reaffirming our annual guidance for FY 2009
that unit sales should increase 20% to 25% and that operating
earnings should rise 50% to 75% from last year's $3,183,725 record
level," concluded Parrish. During the first half of FY 2009, the
Company generated $3.2 million in cash from operations. The Company
has no outstanding debt and $1.5 million in unused credit lines.
Investor Conference Call As previously announced, the Female Health
Company will host an investor conference call at 11:00 a.m. Eastern
time, May 8, 2009. Shareholders and other interested parties may
participate in the conference call by dialing 800-860-2442
(international/local participants dial 412-858-4600) and asking to
be connected to "The Female Health Company" conference call, a few
minutes before 11:00 a.m. EDT on May 8, 2009. A replay of the call
will be available through May 26, 2009 by dialing 877-344-7529
(international callers dial 412-317-0088) and referencing the
conference code ID 430401. About The Female Health Company The
Female Health Company, based in Chicago, Illinois, manufactures and
markets the FC Female Condom(R) (FC1) and the FC2 Female Condom
(FC2), which are primarily distributed by public health
organizations and donor groups in over 90 developing countries
around the world. Globally, the Female Condoms are available in
various programs in 116 countries. The Company owns certain
worldwide rights to the FC Female Condom(R), including patents that
have been issued in the United States, United Kingdom, Japan,
France, Italy, Germany, Spain, the European Patent Convention, the
People's Republic of China, Canada, South Korea and Australia. FC2
patents have been granted in Australia and South Africa and are
pending in various other countries. FC1 and FC2 Female Condom(R)
are the only available FDA-approved products controlled by a woman
that offer dual protection against sexually transmitted diseases,
including HIV/AIDS, and unintended pregnancy. For more information
about the Female Health Company visit the Company's website at
http://www.femalehealth.com/ and http://www.femalecondom.org/. If
you would like to be added to the Company's e-mail alert list,
please send an e-mail to . "Safe Harbor" statement under the
Private Securities Litigation Reform Act of 1995. - The statements
in this release which are not historical fact are "forward-looking
statements" as that term is defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements in this
release include the Company's financial guidance for fiscal 2009 as
well as the expected transition of customers to FC2 and its effect
on the Company's financial results. These statements are based upon
the Company's current plans and strategies, and reflect the
Company's current assessment of the risks and uncertainties related
to its business, and are made as of the date of this release. The
Company assumes no obligation to update any forward-looking
statements contained in this release as a result of new information
or future events, developments or circumstances. Such
forward-looking statements are inherently subject to known and
unknown risks and uncertainties. The Company's actual results and
future developments could differ materially from the results or
developments expressed in, or implied by, these forward-looking
statements. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking
statements include, but are not limited to, the following: product
demand and market acceptance; competition in the Company's markets
and the risk of new competitors and new competitive product
introductions; the Company's reliance on its international partners
in the consumer sector and on the level of spending on the female
condom by country governments; global donors and other public
health organizations in the global public sector; the economic and
business environment and the impact of government pressures; risks
involved in doing business on an international level, including
currency risks, regulatory requirements, political risks, export
restrictions and other trade barriers; the Company's production
capacity, efficiency and supply constraints; and other risks
detailed in the Company's press releases, shareholder
communications and Securities and Exchange Commission filings,
including the Company's Form 10-K for the fiscal year ended
September 30, 2008. Actual events affecting the Company and the
impact of such events on the Company's operations may vary from
those currently anticipated. The Female Health Company Unaudited
Condensed Consolidated Balance Sheets March 31, March 31, 2009 2008
Cash $1,546,277 $2,464,036 Restricted cash 202,696 236,280 Accounts
receivable, net 6,062,108 5,495,489 Inventory 1,576,040 1,967,212
Prepaid and other current assets 333,369 304,061 Deferred income
taxes 1,600,000 1,202,000 Total current assets 11,320,490
11,669,078 Other non-current assets 56,664 247,609 Net property,
plant & equipment 1,744,063 1,542,121 Total assets $13,121,217
$13,458,808 Accounts payable $937,422 $627,503 Accrued expenses
1,756,485 2,105,842 Preferred dividends payable 22,780 51,025 Total
current liabilities 2,716,687 2,784,370 Obligations under capital
leases 23,102 58,396 Deferred gain on sale of facilities 627,538
989,663 Deferred grant income 151,369 242,407 Total liabilities
3,518,696 4,074,836 Total stockholders' equity 9,602,521 9,383,972
Total liabilities and stockholders' equity $13,121,217 $13,458,808
The Female Health Company Unaudited Condensed Consolidated Income
Statements Three Months Ended March 31, 2009 2008 Net revenues
$7,319,509 $6,401,277 Cost of products sold 3,426,574 3,728,630
Gross profit 3,892,935 2,672,647 Advertising and promotion 30,377
68,858 Selling, general and administrative 1,587,723 1,690,409
Research and development 24,354 86,247 Total operating expenses
1,642,454 1,845,514 Operating income 2,250,481 827,133 Interest,
net and other income 590 (7,057) Foreign currency transaction loss
194,286 5,053 Income before income taxes 2,055,605 829,137 Income
tax expense (benefit) 81,039 (377,000) Net income 1,974,566
1,206,137 Preferred dividends 22,780 40,201 Net income attributable
to common stockholders $1,951,786 $1,165,936 Basic earnings per
common share outstanding $0.08 $0.04 Basic weighted average common
shares outstanding 25,489,097 26,087,245 Diluted earnings per
common share outstanding $0.07 $0.04 Diluted weighted average
common shares outstanding 27,747,588 28,403,263 The Female Health
Company Unaudited Condensed Consolidated Income Statements Six
Months Ended March 31, 2009 2008 Net revenues $12,664,347
$12,136,028 Cost of goods sold 6,330,218 7,097,265 Gross profit
6,334,129 5,038,763 Advertising and promotion 101,171 110,376
Selling, general and administrative 3,448,767 3,184,232 Research
and development 94,774 187,376 Total operating expenses 3,644,712
3,481,984 Operating income 2,689,417 1,556,779 Interest, net and
other income (8,299) (16,666) Foreign currency transactions gain
(999,820) (110,304) Income before income taxes 3,697,536 1,683,749
Income tax expense (benefit) 89,579 (377,000) Net income 3,607,957
2,060,749 Preferred dividends 47,355 80,845 Net income attributable
to common stockholders $3,560,602 $1,979,904 Basic earnings per
common share outstanding $0.14 $0.08 Basic weighted average common
shares outstanding 25,656,480 26,104,540 Diluted earnings per
common share outstanding $0.13 $0.07 Diluted weighted average
common shares outstanding 27,852,443 28,501,611 DATASOURCE: Female
Health Company CONTACT: William R. Gargiulo, Jr., +1-231-526-1244,
or Donna Felch, +1-312-595-9123, both for Female Health Company Web
Site: http://www.femalehealth.com/
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