The Female Health Company Expects to Report Modest Profit in FY2011 Third Quarter
Despite Continued Delays in Receipt and Shipping of Large Orders - Board of
Directors Declares Third Quarter Cash Dividend of $0.05 per Common Share
CHICAGO, July 15, 2011 /PRNewswire via COMTEX/ -- The Female Health Company
(nasdaq-cm:FHCO), today provided information regarding its financial expectations
for the third quarter of FY2011. The Company announced that, while it should
report a modest profit and higher unit shipments for the third quarter of FY2011
than in the prior-year quarter, unit shipments, revenues and net income will be
adversely affected by bureaucratic delays and other timing issues involving the
receipt and shipment of anticipated substantial orders from Brazil and the
Republic of South Africa. As a result, while the Company expects positive
operating earnings for FY2011, results will be significantly less than earlier
guidance. Since the May 6, 2011 announcement that the Company's Brazilian
distributor, Semina Industria e Comercio (Semina), was awarded a tender for up to
20 million female condoms, unexpected bureaucratic issues have delayed the
placement of orders under the terms of the tender. The Company is awaiting the
resolution of certain administrative issues in the Republic of South Africa that
have delayed a tender award for the purchase of up to 11 million female condoms.
The Company has routinely noted in its SEC filings and earnings releases that
there is the possibility of significant quarter-to-quarter sales variations due
to the timing and shipment of large orders. The Company will report its operating
results for the three and nine months ended June 30, 2011 on August 5, 2011. The
Company will hold a conference call at 10 AM CDT on that date to comment upon the
financial results.
"Over the past years, the face of AIDS has become feminized. Globally, HIV/AIDS
is the leading cause of death for women of reproductive age (15-44). Women now
comprise more than 50% of adult HIV/AIDS cases. These facts have raised awareness
of the need for prevention, as evidenced by the fact that FC2 is now available in
120 countries around the world. Although our financial results have been
constrained by continued bureaucratic delays related to the timing and shipment
of certain large orders, we are confident that the fundamentals of our business
remain strong and that demand for, and acceptance of, the FC2 Female Condom,
continues to increase," stated O.B. Parrish, Chairman and Chief Executive Officer
of The Female Health Company.
"We are very encouraged by recent indications of demand growth from customers
that distribute female condoms globally and believe the long-term outlook for the
Company remains positive for three reasons: the feminization of HIV/AIDS, the
complexity of developing easy-to-use alternative prevention methods, and the
emergence of drug resistant strains of sexually transmitted infections (STIs)."
The Female Health Company also announced that its Board of Directors has declared
a quarterly cash dividend of $0.05 per share. The dividend is payable August 9,
2011 to stockholders of record as of August 2, 2011. This represents the seventh
consecutive quarterly cash dividend declared by the Company since it announced
the initiation of a cash dividend program in January 2010.
"The Company's Board of Directors and management team believe that the payment of
cash dividends allows shareholders to participate directly in the Company's
long-term success," stated O.B. Parrish, Chairman and Chief Executive Officer of
The Female Health Company. "While our operating results have suffered due to
timing issues involving large orders during the current fiscal year, we have
continued to generate cash flows from operations that significantly exceed our
capital spending requirements, and our balance sheet remains free of debt. We
remain highly optimistic regarding the Company's future and the expanding role
that FC2 will play in the global battle against HIV/AIDS."
Any future quarterly dividends and the record date for any such dividend will be
approved each quarter by the Company's Board of Directors and announced by the
Company. Payment of future dividends is in the discretion of the Board of
Directors and the Company may not have sufficient cash flows to continue to pay
dividends.
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
120 other countries around the world. The Company owns certain worldwide rights
to the FC2 Female Condom?, including patents that have been issued in the U.S.,
Europe, Canada, Australia, South Africa, Japan, China, Spain, Mexico, Greece and
Turkey and 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.
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