The Female Health Company Reports Record Fourth Quarter and FY2012
Operating Results
CHICAGO, Dec. 4, 2012 /PRNewswire/ --The Female Health
Company (NASDAQ-CM: FHCO), which manufactures and markets the
FC2 Female Condom, today reported its financial results for
the fourth quarter and fiscal year ended September 30, 2012. The Company will host an
investor conference call today at 11:00 a.m.
Eastern Time to discuss these operating results (see details
below).
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"We are pleased with the outstanding results achieved by our
Company in the fourth quarter and fiscal year ended September 30, 2012," noted O.B. Parrish, Chairman and Chief Executive
Officer of The Female Health Company. "Fiscal 2012 operating
results reflect increasing demand for the FC2 Female Condom.
We believe the rising global demand for FC2 reflects a
growing awareness of the dual protection that female condoms
provide against unintended pregnancy as well as sexually
transmitted infections, including HIV/AIDS. FC2 makes
an important contribution to saving lives and reducing healthcare
costs, particularly in light of the fact that HIV/AIDS remains the
leading cause of death worldwide among women 15 to 44 years of
age."
For the three months ended September 30,
2012, unit sales increased 45% when compared with the fourth
quarter of FY2011. Net revenues increased 39% to a record
$9.9 million, compared with
$7.1 million in the three months
ended September 30, 2011.
Gross profit increased 36% to $5.8
million, or 58.0% of net revenues, in the most recent
quarter, compared with $4.2 million,
or 59.5% of net revenues, in the fourth quarter of FY2011.
Operating expenses for the quarter ended September 30, 2012 increased 34% to $2.6 million, versus operating expenses of
$1.9 million in the fourth quarter of
FY2011. The increase was primarily due to an accrual for
fiscal year incentive payments based on the achievement of unit
sales and operating income performance goals, along with increased
spending on education and training.
Operating income increased 38% to a record $3.2 million in the three months ended
September 30, 2012, compared with
$2.3 million in the prior-year
quarter. The increase was primarily due to higher
revenues.
The Company reported net income of $8.2
million, or $0.29 per diluted
share, in the fourth quarter of FY2012, an 81% increase over net
income of $4.5 million, or
$0.16 per diluted share, in the
fourth quarter of FY2011. The Company recorded a currency loss of
$0.08 million and a currency gain of
$0.01 million during the quarters
ended September 30, 2012 and 2011,
respectively. The Company recorded a net tax benefit of
$5.1 million in the fourth quarter
versus a net tax benefit of $2.2
million in the prior-year quarter.
For the fiscal year ended September 30,
2012, unit sales increased 88% when compared with unit
shipments in FY2011. The Company shipped approximately 61.6
million FC2 Female Condoms to customers in FY2012, versus
approximately 32.9 million FC2 Female Condoms in the
previous fiscal year. Net revenues increased 89% to a record
$35.0 million in FY2012, compared
with $18.6 million in FY2011.
In the fiscal year ended September 30,
2012, gross profit increased 109% to $20.6 million, or 58.9% of net revenues, compared
with $9.9 million, or 53.1% of net
revenues, in the fiscal year ended September
30, 2011.
Operating expenses for the fiscal year ended September 30, 2012 increased 47% to $9.7 million, compared with operating expenses of
$6.6 million in the fiscal year ended
September 30, 2011. The
increase in operating expenses relates primarily to fiscal year
incentive payments based on the achievement of unit sales and
operating income performance goals, along with increased spending
on education and training.
Operating income increased 232% to a record $10.9 million in the fiscal year ended
September 30, 2012, compared with
$3.3 million in FY2011. The increase
was due to higher revenue and gross profit margins in FY2012.
The Company reported record net income of $15.3 million, or $0.53 per diluted share, in the fiscal year ended
September 30, 2012, for an increase
of 183% when compared with net income of $5.4 million, or $0.19 per diluted share, in the fiscal year ended
September 30, 2011. The Company
recorded currency losses of $0.15
million and $0.06 million in
the fiscal years ended September 30,
2012 and 2011, respectively. The Company recorded a
net tax benefit for FY2012 of $4.5
million, versus $2.2 million
in FY2011. The Company has tax loss carryforwards of
$24.6 million Federal, $12.4 million state and $64.3 million in the U.K., to offset future
earnings.
During the fiscal year ended September
30, 2012, the Company generated positive cash flow from
operations of approximately $10.4
million, paid two quarterly cash dividends of $0.05 per share each and two quarterly cash
dividends of $0.06 per share each,
self-funded plant capacity expansion, and maintained a debt-free
balance sheet. The amount of cash on the Company's balance
sheet increased 25% during FY2012, to $5.3
million as of September 30,
2012, versus $4.2 million as
of September 30, 2011. The
Company's annualized cash dividends of $0.24 at the current dividend rate provides
shareholders with a current yield of 3.3% based upon the closing
price of FHCO shares on December 3,
2012.
"As noted in previous press releases, timing issues regarding
the receipt and shipment of large orders can significantly impact
the Company's operating results, positively or negatively,
illustrating the difficulty of providing specific revenue and
operating income guidance," added Parrish. "Management intends to
provide general comments each quarter regarding the Company's
outlook, based on information available at the time. The
female condom is the only product where use is initiated by women
that provides dual protection against HIV/AIDs and unintended
pregnancy. As a result we believe that following a record
year in FY2012, the Company will experience continued revenue and
operating income growth in fiscal 2013."
Investor Conference Call
As previously announced, the Female Health Company will
host an investor conference call at 11:00
a.m. Eastern Time, today, December 4,
2012, to discuss its fourth quarter operating results and
other topics of interest. Shareholders and other interested
parties may participate in the conference call by dialing
1-877-374-8416 (local or international participants dial
412-317-6716) and asking to be connected to "The Female Health
Company" conference call, a few minutes before 11:00 a.m. EST.
A replay of the conference call will be available one hour
after the call through 9:00 a.m. EST
on Tuesday, December 18, 2012 by
dialing 877-344-7529 (local or international callers dial
412-317-0088) and entering the conference ID 10021755.
About The Female Health Company
The Female Health Company, based in Chicago, Illinois, manufactures and markets
the FC2 Female Condom® (FC2), which is available in the U.S.
and approximately 138 other countries globally. The Company owns
certain worldwide rights to the FC2 Female Condom®,
including patents that have been issued by the U.S., the European
Union, Canada, Australia, South
Africa, Japan, The People's Republic of China, Spain, Mexico, Greece, Turkey and the African Regional Intellectual
Property Organization (ARIPO), which includes Botswana, The Gambia, Ghana, Kenya,
Lesotho, Malawi, Mozambique, Namibia, Sierra
Leone, Somalia,
Sudan, Swaziland, Uganda, United Republic of Tanzania, Zambia and Zimbabwe. FC2 patent
applications are pending in various countries. The FC2
Female Condom® is the only available FDA-approved product
controlled by a woman that offers dual protection against sexually
transmitted diseases, including HIV/AIDS, and unintended pregnancy.
The World Health Organization (WHO) has cleared FC2 for
purchase by U.N. agencies.
"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 statements
regarding underlying demand for FC2, the outlook for FY 2013 and
the continuation of cash dividends in future periods. 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 year ended September 30,
2012. Actual events affecting the Company and the impact of
such events on the Company's operations may vary from those
currently anticipated.
For more information about the Female Health Company visit the
Company's website at www.femalehealth.com and www.femalecondom.org.
To be added to the Company's e-mail alert list, please send an
e-mail to FHCInvestor@femalehealthcompany.com.
(Financial Highlights Follow)
The
Female Health Company
Unaudited Condensed Consolidated Balance
Sheets
|
|
September
30,
|
|
2012
|
|
2011
|
Cash
|
$
5,290,780
|
|
$
4,249,324
|
Certificate of deposit
|
-
|
|
63,875
|
Restricted
cash
|
4,682
|
|
4,526
|
Accounts
receivable, net
|
7,268,917
|
|
2,305,473
|
Income tax
receivable
|
27,369
|
|
-
|
Inventories
|
1,458,199
|
|
2,026,528
|
Prepaid
expenses and other current assets
|
624,268
|
|
297,267
|
Deferred
income taxes
|
2,152,000
|
|
800,000
|
Total
current assets
|
16,826,215
|
|
9,746,993
|
|
|
|
|
Other
non-current assets
|
122,336
|
|
116,360
|
Plant and
equipment, net
|
2,349,876
|
|
1,979,438
|
Deferred
income taxes
|
11,148,000
|
|
7,600,000
|
Total
assets
|
$
30,446,427
|
|
$
19,442,791
|
|
|
|
|
Accounts
payable
|
$
1,775,327
|
|
$
1,076,994
|
Accrued
expenses and other current liabilities
|
1,120,302
|
|
846,591
|
Accrued
compensation
|
2,964,812
|
|
369,825
|
Total
current liabilities
|
5,860,441
|
|
2,293,410
|
|
|
|
|
Deferred
rent
|
90,902
|
|
101,133
|
Deferred
grant income
|
82,650
|
|
107,481
|
Deferred
income taxes
|
194,244
|
|
188,177
|
Total
liabilities
|
6,228,237
|
|
2,690,201
|
|
|
|
|
Total
stockholders' equity
|
24,218,190
|
|
16,752,590
|
Total
liabilities and stockholders' equity
|
$
30,446,427
|
|
$
19,442,791
|
|
|
|
|
|
The
Female Health Company
Unaudited Condensed Consolidated Income
Statements
|
|
Three
Months Ended
September
30,
|
|
2012
|
|
2011
|
|
|
|
|
Net
revenues
|
$
9,911,701
|
|
$
7,109,050
|
|
|
|
|
Cost of
sales
|
4,161,537
|
|
2,881,697
|
|
|
|
|
Gross
profit
|
5,750,164
|
|
4,227,353
|
|
|
|
|
Operating
expenses
|
2,564,791
|
|
1,917,784
|
|
|
|
|
Operating
income
|
3,185,373
|
|
2,309,569
|
|
|
|
|
Interest
and other (expense) income
|
(551)
|
|
814
|
Foreign
currency transaction (loss) gain
|
(78,975)
|
|
12,993
|
|
|
|
|
Income
before income taxes
|
3,105,847
|
|
2,323,376
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
(5,079,358)
|
|
(2,191,342)
|
Net
income
|
$
8,185,205
|
|
$
4,514,718
|
|
|
|
|
Net income
per basic common share outstanding
|
$
0.29
|
|
$
0.17
|
|
|
|
|
Basic
weighted average common shares outstanding
|
28,180,001
|
|
27,301,422
|
|
|
|
|
Net income
per diluted common share outstanding
|
$
0.29
|
|
$
0.16
|
|
|
|
|
Diluted
weighted average common shares outstanding
|
28,678,081
|
|
28,891,118
|
|
|
|
|
|
|
|
|
|
The
Female Health Company
Unaudited Condensed Consolidated Income
Statements
|
|
Year
Ended
|
|
September
30,
|
|
2012
|
|
2011
|
|
|
|
|
Net
revenues
|
$
35,033,897
|
|
$
18,565,102
|
|
|
|
|
Cost of
sales
|
14,412,884
|
|
8,699,912
|
|
|
|
|
Gross
profit
|
20,621,013
|
|
9,865,190
|
|
|
|
|
Operating
expenses
|
9,681,083
|
|
6,569,848
|
|
|
|
|
Operating
income
|
10,939,930
|
|
3,295,342
|
|
|
|
|
Interest
and other income (expense)
|
362
|
|
(2,109)
|
Foreign
currency transaction loss
|
(148,269)
|
|
(61,258)
|
|
|
|
|
Income
before income taxes
|
10,792,023
|
|
3,231,975
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
(4,507,298)
|
|
(2,167,076)
|
Net
income
|
$
15,299,321
|
|
$
5,399,051
|
|
|
|
|
Net income
per basic common share outstanding
|
$
0.55
|
|
$
0.20
|
|
|
|
|
Basic
weighted average common shares outstanding
|
27,693,721
|
|
27,287,342
|
|
|
|
|
Net income
per diluted common share outstanding
|
$
0.53
|
|
$
0.19
|
|
|
|
|
Diluted
weighted average common shares outstanding
|
28,933,144
|
|
28,971,011
|
|
|
|
|
|
|
|
|
|
SOURCE The Female Health Company