Operating Income Rises 172% to Record $2.3 Million
CHICAGO, May 8 /PRNewswire-FirstCall/ --
Second quarter highlights:
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 FHCInvestor@femalehealthcompany.com.
"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
|SOURCE Female Health Company|
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