The Female Health Company Reports Fiscal Year 2011 Results/ CC @ 11 EST
--Fourth Quarter Operating Income Exceeds Operating Income During First Nine
Months of Fiscal Year by 134% --Highlights: --Fourth Quarter -- Gross margin
improves to 59.5% vs. 49.2% in first nine months of fiscal year -- Operating
income of $2.3 million vs. $1.0 million in first nine months of fiscal year
FY2011 -- Operating income of $3.3 million -- Company generates $7.0 million in
cash from operations -- Net income, including tax benefit, of $5.4 million --
Company pays 8th consecutive quarterly dividend of $0.05 per share on November 9,
2011
CHICAGO, Dec. 2, 2011 /PRNewswire via COMTEX/ -- The Female Health Company
(nasdaq-cm:FHCO), which manufactures and markets the FC2 Female Condom, today
reported its financial results for the quarter and fiscal year ended September
30, 2011.
For the three months ended September 30, 2011, unit sales decreased 13% to 12
million units, versus 13.8 million units - the highest quarterly unit sales in
the Company's history -- during the fourth quarter of FY2010. Net revenues
decreased 9% to $7.1 million, compared with $7.8 million in the three months
ended September 30, 2010, as a result of lower unit shipments.
The Company previously announced that results for FY2011 would be negatively
impacted by delays in the receipt of large orders from Brazil and the Republic of
South Africa (RSA). In November 2011 the Company received an order from the
Republic of South Africa Department of Health for 5 million units of FC2 for
delivery as soon as possible. Shipments against the order will begin before
calendar year end. With respect to the Brazil tender for up to 20 million units,
the Company has been advised by UNFPA that an order will be placed through UNFPA.
The Company anticipates that the RSA order, any additional orders that may be
received from RSA, and the order expected from UNFPA with respect to the
Brazilian tender will positively impact FY 2012 results.
Global demand continued to increase during the fourth quarter, as reflected by
strong revenue improvement and higher gross margins when compared with the first
three quarters of FY2011. Fourth quarter revenues did not include any shipments
of product to either Brazil or RSA departments of health. Gross profit decreased
8% to $4.2 million, or 59.5% of net revenues, in the most recent quarter,
compared with $4.6 million, or 59.0% of net revenues, in the fourth quarter of
FY2010 and 49.2% of net revenues during the first nine months of FY2011.
Operating income decreased to $2.3 million in the three months ended September
30, 2011, compared with $3.1 million in the prior-year quarter.
The Company reported net income attributable to common shareholders of $4.5
million, or $0.16 per diluted share, in the fourth quarter of FY2011, down 18%
from the fourth quarter of FY2010, when net income attributable to common
shareholders totaled $5.5 million, or $0.19 per diluted share. In the fourth
quarter of FY2011, the Company recorded a small favorable currency gain of $0.01
million and a tax benefit of $2.5 million, compared with an unfavorable currency
loss of $0.1 million and a tax benefit of $2.8 million in the corresponding
period of the previous fiscal year.
The Company expects significant quarter-to-quarter variations in its operating
results, due to the timing, receipt and requested shipping schedules of large
orders. As reported throughout FY2011, the Company's financial results were
negatively impacted by on-going delays involving certain large tenders.
For the year ended September 30, 2011, net revenues decreased 16% to $18.6
million, compared with $22.2 million in FY2010, reflecting lower unit shipments,
which decreased 16% to 32.9 million units, compared with 38.9 million units in
FY2010. Gross profit decreased 24% to $9.9 million (53.1% of net revenues),
compared with $12.9 million (58.2% of net revenues) in FY2010. Operating income
decreased 24% to $3.3 million in FY2011, compared with $4.3 million in FY2010,
which included a $1.9 million restructuring charge.
In FY2011, net income attributable to common stockholders decreased 20% to $5.4
million, or $0.19 per diluted share, compared with net income attributable to
common stockholders of $6.7 million, or $0.24 per diluted share, in FY2010. In
FY2011, the Company recognized a tax benefit for past losses that added $2.5
million to net income attributable to common stockholders, whereas a $2.8 million
tax benefit was recognized in FY2010. Stockholders' equity at September 30, 2011
totaled $16.8 million, versus $16.1 million at the end of FY2010.
"We are very pleased to report that Fiscal 2011 represented another year of solid
profitability for our Company," noted O.B. Parrish, Chief Executive Officer of
The Female Health Company. We generated sufficient cash flow to continue our
quarterly dividend program during fiscal 2011. After the payment of approximately
$5.5 million in cash dividends, our year-end balance sheet reflected a cash
position of over $4.2 million, compared with $2.9 million at the end of fiscal
2010. Our Company remains debt-free and has $2 million available in an unused
credit line."
"As noted in previous press releases, timing issues regarding the receipt and
shipment of large orders can significantly impact our Company's operating
results, positively or negatively. The impact during Fiscal 2011 was significant,
illustrating the difficulty of providing specific revenue and operating earnings
guidance. In the future, we intend to provide general comments each quarter
regarding the Company's outlook, based upon information available to management
at the time.
We believe the demand for FC2 will continue to increase as governments, public
health agencies, donor groups, and women's rights organizations seek more
effective protection for women in the global battle against HIV/AIDS, and this
should be reflected in long-term revenue and earnings growth for the Company.
Regarding the outlook for Fiscal 2012, we believe the Company will post record
unit sales for the first quarter and that revenue and operating earnings for the
year will improve improve significantly from Fiscal 2011 levels," concluded
Parrish.
Investor Conference Call
As previously announced, the Female Health Company will host an investor
conference call at 11:00 a.m. Eastern time, December 2, 2011. Shareholders and
other interested parties may participate in the conference call by dialing
877-317-6789 (international participants dial 412-317-6789) and asking to be
connected to "The Female Health Company" conference call, a few minutes before
11:00 a.m. Eastern Time on December 2, 2011. A replay of the call will be
available one hour after the call through 9:00 a.m. EST on Friday, December 16,
2011 by dialing 877-344-7529 (international callers dial 412-317-0088) and
entering the conference ID 10006829.
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 in about 120
other countries globally. The Company owns certain worldwide rights to the FC2
Female Condom?, including patents that have been issued in 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 the timing of receipt by the Company of orders from Brazil and the RSA,
underlying demand for FC2, the outlook for FY 2012 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 fiscal year ended September 30, 2010.
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 femalehealth.com and 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.
(Financial Highlights Follow)
The Female Health Company
Unaudited Condensed Consolidated Balance Sheets
September 30,September 30,
20112010
Cash$4,249,324$2,918,776
Certificate of deposit63,875-
Restricted cash4,5264,578
Accounts receivable, net2,305,4734,460,517
Income tax receivable-28,179
Inventory2,026,5282,194,330
Prepaid expenses and other current assets297,267284,948
Deferred income taxes800,0001,900,000
Total current assets9,746,99311,791,328
Other non-current assets116,360178,713
Net property, plant & equipment1,979,4382,398,060
Deferred income taxes7,600,0004,000,000
Total assets$19,442,791$18,368,101
Accounts payable$1,076,994$586,596
Accrued expenses and other current liabilities 846,591906,994
Accrued compensation369,825444,843
Total current liabilities2,293,4101,938,433
Obligations under capital leases-12,999
Deferred rent101,133-
Deferred grant income107,481132,312
Deferred income taxes188,177152,227
Total liabilities2,690,2012,235,971
Total stockholders' equity16,752,59016,132,130
Total liabilities and stockholders' equity$19,442,791$18,368,101
The Female Health Company
Unaudited Condensed Consolidated Income Statements
Three Months Ended September 30,
20112010
Net revenues$7,109,050$7,799,923
Cost of sales2,881,6973,197,435
Gross profit4,227,3534,602,489
Advertising and promotion87,32022,991
Selling, general and administrative1,830,4641,514,486
Restructuring costs-3,478
Total operating expenses1,917,7841,540,955
Operating income2,309,5693,061,534
Interest, net and other income8141,264
Foreign currency transaction gain (loss)12,993(91,937)
Income before income taxes2,323,3762,970,861
Income tax benefit(2,191,342)(2,544,878)
Net income4,514,7185,515,739
Net income attributable to common stockholders$4,514,718$5,515,739
Net income per basic common share outstanding$ 0.17$ 0.20
Basic weighted average common shares outstanding27,301,42227,211,526
Net income per diluted common share outstanding$ 0.16$ 0.19
Diluted weighted average common shares outstanding 28,891,11828,861,955
The Female Health Company
Unaudited Condensed Consolidated Income Statements
Twelve Months Ended September 30,
20112010
Net revenues$18,565,102$22,221,955
Cost of sales8,699,9129,297,136
Gross profit9,865,19012,924,819
Advertising and promotion332,764220,181
Selling, general and administrative6,226,1556,425,175
Research and development10,929381
Restructuring costs-1,929,922
Total operating expenses6,569,8488,575,659
Operating income3,295,3424,349,160
Interest, net and other income (loss)(2,109)29,168
Foreign currency transaction loss(61,258)(154,196)
Income before income taxes3,231,9754,224,132
Income tax benefit(2,167,076)(2,512,946)
Net income5,399,0516,737,078
Net income attributable to common stockholders$5,399,051$6,737,078
Net income perbasic common share outstanding$ 0.20$ 0.25
Basic weighted average common shares outstanding27,287,34226,981,275
Net income per diluted common share outstanding$ 0.19$ 0.24
Diluted weighted average common shares outstanding 28,971,01128,545,391 |
