Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Dec. 31, 2014 | Feb. 02, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Entity Registrant Name | FEMALE HEALTH CO | |
Entity Central Index Key | 863894 | |
Current Fiscal Year End Date | -21 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Common Stock, Shares Outstanding | 28,814,215 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Current Assets: | ||
Cash | $4,568,570 | $5,796,223 |
Accounts receivable, net | 5,835,850 | 2,943,850 |
Inventory, net | 3,464,673 | 2,983,447 |
Prepaid expenses and other current assets | 452,795 | 638,243 |
Deferred income taxes | 129,000 | 711,000 |
TOTAL CURRENT ASSETS | 14,450,888 | 13,072,763 |
Other assets | 156,958 | 166,084 |
PLANT AND EQUIPMENT | ||
Equipment, furniture and fixtures | 4,870,250 | 4,913,271 |
Less accumulated depreciation and amortization | -3,397,083 | -3,310,964 |
Plant and equipment, net | 1,473,167 | 1,602,307 |
Deferred income taxes | 16,832,000 | 16,832,000 |
TOTAL ASSETS | 32,913,013 | 31,673,154 |
Current liabilities: | ||
Accounts payable | 1,152,867 | 1,124,859 |
Accrued expenses and other current liabilities | 1,956,283 | 1,816,508 |
Accrued compensation | 338,075 | 436,843 |
TOTAL CURRENT LIABILITIES | 3,447,225 | 3,378,210 |
Long-term liabilities: | ||
Deferred rent | 31,899 | 39,105 |
Deferred income taxes | 178,281 | 190,513 |
TOTAL LIABILITIES | 3,657,405 | 3,607,828 |
Commitments and Contingencies | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | ||
Common stock | 310,009 | 309,587 |
Additional paid-in-capital | 68,869,832 | 68,484,889 |
Accumulated other comprehensive loss | -581,519 | -581,519 |
Accumulated deficit | -31,537,059 | -32,341,976 |
Treasury stock, at cost | -7,805,655 | -7,805,655 |
TOTAL STOCKHOLDERS' EQUITY | 29,255,608 | 28,065,326 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $32,913,013 | $31,673,154 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements Of Income (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Consolidated Statements Of Income [Abstract] | ||
Net revenues | $6,659,206 | $6,690,195 |
Cost of sales | 2,839,533 | 3,011,701 |
Gross profit | 3,819,673 | 3,678,494 |
Operating expenses: | ||
Operating expenses | 2,365,824 | 2,094,858 |
Operating income | 1,453,849 | 1,583,636 |
Non-operating income (expense): | ||
Interest and other income (expense), net | 652 | -1,732 |
Foreign currency transaction gain (loss) | 20,846 | -18,426 |
Total non-operating income (expense) | 21,498 | -20,158 |
Income before income taxes | 1,475,347 | 1,563,478 |
Income tax expense | 670,430 | 98,875 |
Net income | $804,917 | $1,464,603 |
Net income per basic common share outstanding (in Dollars per share) | $0.03 | $0.05 |
Basic weighted average common shares outstanding (in Shares) | 28,502,560 | 28,479,597 |
Net income per diluted common share outstanding (in Dollars per share) | $0.03 | $0.05 |
Diluted weighted average common shares outstanding (in Shares) | 28,778,710 | 28,798,400 |
Cash dividends declared per common share (in Dollars per share) | $0.14 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements Of Cash Flows (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
OPERATING ACTIVITIES | ||
Net income | $804,917 | $1,464,603 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 127,939 | 143,749 |
Share-based compensation | 199,676 | 203,753 |
Deferred income taxes | 569,768 | -2,726 |
Loss on disposal of fixed assets | 3,483 | 430 |
Changes in current assets and liabilities | -2,925,956 | -628,150 |
Net cash (used in) provided by operating activities | -1,220,173 | 1,181,659 |
INVESTING ACTIVITIES | ||
Capital expenditures | -2,282 | -81,902 |
Net cash used in investing activities | -2,282 | -81,902 |
FINANCING ACTIVITIES | ||
Dividends paid on common stock | -5,198 | -2,031,000 |
Net cash used in financing activities | -5,198 | -2,031,000 |
Net decrease in cash | -1,227,653 | -931,243 |
Cash at beginning of period | 5,796,223 | 8,922,430 |
CASH AT END OF PERIOD | 4,568,570 | 7,991,187 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash payments for income taxes | 61,430 | 441,142 |
Schedule of noncash financing and investing activities: | ||
Reduction of accrued expense upon issuance of shares | 239,580 | 297,806 |
Dividends payable | $2,023,175 |
Basis_Of_Presentation
Basis Of Presentation | 3 Months Ended |
Dec. 31, 2014 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | NOTE 1 - Basis of Presentation |
The accompanying condensed consolidated financial statements are unaudited but in the opinion of management contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position and the results of operations and cash flow for the periods presented in conformity with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. | |
Operating results for the three months ended December 31, 2014, are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2015. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended September 30, 2014. | |
Principles of Consolidation and Nature of Operations | |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, The Female Health Company-UK, and its wholly owned subsidiaries, The Female Health Company-UK, plc and The Female Health Company (M) SDN.BHD. All significant intercompany transactions and accounts have been eliminated in consolidation. The Female Health Company ("FHC" or the "Company") is currently engaged in the marketing, manufacture and distribution of a consumer health care product, the FC2 Female Condom ("FC2"). The Female Health Company-UK, is the holding company of The Female Health Company-UK, plc, which is located in a 6,400 sq. ft. leased office facility located in London, England. The Female Health Company (M) SDN.BHD leases a 45,800 sq. ft. manufacturing facility located in Selangor D.E., Malaysia. | |
Since the Company began distributing FC2 in 2007, it has been shipped to either or both commercial (private sector) and public health sector markets in 144 countries. It is marketed to consumers through distributors, public health programs and retailers in 16 countries. | |
The Company's standard credit terms vary from 30 to 90 days, depending on the class of trade and customary terms within a territory, so accounts receivable is affected by the mix of purchasers within the quarter. As is typical in the Company's business, extended credit terms may occasionally be offered as a sales promotion. For the past twelve months, the Company's average days’ sales outstanding has averaged approximately 62 days. Over the past five years, the Company’s bad debt expense has been less than 0.04 percent of product sales. The balance in the allowance for doubtful accounts was $48,068 at December 31, 2014 and September 30, 2014. | |
Restricted cash | |
Restricted cash relates to security provided to one of the Company’s U.K. banks for performance bonds issued in favor of customers. The Company has a facility of $250,000 for such performance bonds. Such security has been extended infrequently and only on occasions where it has been a contract term expressly stipulated as an absolute requirement by the funds’ provider. The expiration of the bond is defined by the completion of the event such as, but not limited to, a period of time after the product has been distributed or expiration of the product shelf life. Restricted cash was $87,760 and $55,806 at December 31, 2014 and September 30, 2014, respectively, and is included in cash on the accompanying Unaudited Condensed Consolidated Balance Sheets. | |
Foreign Currency and Change in Functional Currency | |
The Company recognized a foreign currency transaction gain of $20,846 for the three months ended December 31, 2014 compared to a loss of $18,426 for the three months ended December 31, 2013. The consistent use of the U.S. dollar as functional currency across the Company reduces its foreign currency risk and stabilizes its operating results. As a result of the U.S. dollar being the functional currency of the Company and all of its subsidiaries, comprehensive income is equivalent to the reported net income. | |
Reclassifications | |
Certain items in the December 31, 2013 and the September 30, 2014 consolidated financial statements have been reclassified to conform to the December 31, 2014 presentation. | |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||
Dec. 31, 2014 | ||||||
Earnings Per Share [Abstract] | ||||||
Earnings Per Share | NOTE 2 – Earnings per Share | |||||
Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income by the weighted average number of common shares outstanding during the period after giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of stock options and unvested shares granted to employees and directors. | ||||||
Three Months Ended | ||||||
December 31, | ||||||
Denominator | 2014 | 2013 | ||||
Weighted average common shares outstanding - basic | 28,502,560 | 28,479,597 | ||||
Net effect of dilutive securities: | ||||||
Options | 70,094 | 169,967 | ||||
Unvested restricted shares | 206,056 | 148,836 | ||||
Total net effect of dilutive securities | 276,150 | 318,803 | ||||
Weighted average common shares outstanding - diluted | 28,778,710 | 28,798,400 | ||||
Income per common share – basic | $ | 0.03 | $ | 0.05 | ||
Income per common share – diluted | $ | 0.03 | $ | 0.05 | ||
All the outstanding stock options and unvested restricted shares were included in the computation of diluted net income per share for the three months ended December 31, 2014 and 2013. | ||||||
Inventory
Inventory | 3 Months Ended | |||||
Dec. 31, 2014 | ||||||
Inventory [Abstract] | ||||||
Inventory | NOTE 3 - Inventory | |||||
Inventory consists of the following components at December 31, 2014 and September 30, 2014: | ||||||
31-Dec-14 | 30-Sep-14 | |||||
Raw material | $ | 978,404 | $ | 1,091,703 | ||
Work in process | 99,895 | 15,962 | ||||
Finished goods | 2,437,378 | 1,936,655 | ||||
Inventory, gross | 3,515,677 | 3,044,320 | ||||
Less: inventory reserves | -51,004 | -60,873 | ||||
Inventory, net | $ | 3,464,673 | $ | 2,983,447 | ||
Line_Of_Credit
Line Of Credit | 3 Months Ended |
Dec. 31, 2014 | |
Line Of Credit [Abstract] | |
Line Of Credit | NOTE 4 – Line of Credit |
On August 1, 2014, the Company entered into an amendment to the Second Amended and Restated Loan Agreement (as amended, the “Loan Agreement”) with Heartland Bank to extend the term of the Company’s revolving line of credit to August 1, 2015. The credit facility consists of a single revolving note for up to $2 million with Heartland Bank, with borrowings limited to a borrowing base determined based on 70 percent to 80 percent of eligible accounts receivable plus 50 percent of eligible inventory. Significant restrictive covenants in the Loan Agreement include prohibitions on any merger, consolidation or sale of all or a substantial portion of the Company’s assets and limits on the payment of dividends or the repurchase of shares. The Loan Agreement does not contain any financial covenants that require compliance with ratios or amounts. Dividends and share repurchases are permitted as long as after giving effect to the dividend or share repurchase the Company has a ratio of total liabilities to total stockholders’ equity of no more than 1:1. Borrowings on the revolving note bear interest at the national prime rate published by the Wall Street Journal (3.25 percent at December 31, 2014). The note is collateralized by substantially all of the assets of the Company. No amounts were outstanding under the Loan Agreement at either December 31, 2014 or September 30, 2014. | |
ShareBased_Payments
Share-Based Payments | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Share-Based Payments [Abstract] | |||||||||
Share-Based Payments | NOTE 5 – Share-Based Payments | ||||||||
In March 2008, the Company’s shareholders approved the 2008 Stock Incentive Plan which is utilized to provide equity opportunities and performance–based incentives to attract, retain and motivate those persons who make (or are expected to make) important contributions to the Company. A total of 2 million shares are available for issuance under this plan. As of December 31, 2014, 1,096,268 shares had been granted under the plan, of which 150,000 shares were in the form of stock options and the remainder were in the form of restricted stock or other share grants. | |||||||||
Stock Options | |||||||||
Under the Company’s previous share based long-term incentive compensation plan, the 1997 Stock Option Plan, the Company granted non-qualified stock options to employees. There are no shares available for grant under this plan which expired on December 31, 2006. Options issued under this plan expire 10 years after the date of grant and generally vested 1/36 per month, with full vesting after three years. Under the Company’s 2008 Stock Incentive Plan, options issued expire 10 years after the date of grant and vest 1/36 per month, with full vesting after three years. The Company did not grant any options during the three months ended December 31, 2014 or 2013. | |||||||||
Compensation expense is recognized only for share-based payments expected to vest. The Company estimates forfeitures at the date of grant based on historical experience and future expectations. No stock compensation expense related to options was recognized for the three months ended December 31, 2014 or 2013. | |||||||||
No stock options were exercised during the three months ended December 31, 2014 or 2013. | |||||||||
The following table summarizes the stock options outstanding and exercisable at December 31, 2014: | |||||||||
Options | Wghted. Avg. | ||||||||
Outstanding and Exercisable | Remaining Life | Wghted. Avg. | Aggregate | ||||||
at December 31, 2014 | (years) | Exercise Price | Intrinsic Value | ||||||
Total | 180,000 | 3.09 | $ | 2.6 | $ | 238,500 | |||
The aggregate intrinsic value in the table above is before income taxes, based on the closing price of the Company’s common stock of $3.92 per share as of the last business day of the period ended December 31, 2014. As of December 31, 2014, the Company had no unrecognized compensation expense relating to outstanding stock options as all outstanding stock options were fully vested. | |||||||||
Restricted Stock | |||||||||
The Company issues restricted stock to employees, directors and consultants. Such issuances may have vesting periods that range from one to three years. In addition, the Company has issued stock awards to certain employees that provide for future issuance contingent on continued employment for periods that range from one to three years. | |||||||||
The Company granted a total of 43,500 shares of restricted stock or shares issuable pursuant to promises to issue shares of common stock during the three months ended December 31, 2014. The fair value of the awards granted was approximately $144,000. All such shares of restricted stock vest and all such shares must be issued at the end of the applicable period, provided the grantee has not voluntarily terminated service or been terminated for cause prior to the vesting or issuance date. There were no shares of restricted stock forfeited during the three months ended December 31, 2014. | |||||||||
The Company granted a total of 118,910 shares of restricted stock or shares issuable pursuant to promises to issue shares of common stock during the three months ended December 31, 2013. The fair value of the awards granted was approximately $1,054,000. All such shares of restricted stock vest and all such shares must be issued at the end of the applicable period, provided the grantee has not voluntarily terminated service or been terminated for cause prior to the vesting or issuance date. There were no shares of restricted stock forfeited during the three months ended December 31, 2013. | |||||||||
The Company recognized share-based compensation expense for restricted stock or promises to issue shares of common stock of approximately $200,000 and $204,000 for the three months ended December 31, 2014 and 2013, respectively, $54,000 and $62,000 of which was included in accrued expenses at the three months then ended since the related shares had not yet been issued at December 31, 2014 and 2013, respectively. This compensation expense was included in operating expenses on the accompanying Unaudited Condensed Consolidated Statements of Income for the three months ended December 31, 2014 and 2013. As of December 31, 2014, there was approximately $980,000, representing approximately 150,000 unvested shares, of total unrecognized compensation cost related to non-vested restricted stock compensation arrangements granted under the Company’s equity compensation plans. This unrecognized cost will be recognized over the weighted average period of the next 1.45 years. | |||||||||
Stock_Repurchase_Program
Stock Repurchase Program | 3 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Stock Repurchase Program [Abstract] | ||||||||
Stock Repurchase Program | NOTE 6 - Stock Repurchase Program | |||||||
The Company’s Stock Repurchase Program was announced on January 17, 2007. At initiation, the program’s terms specified that up to 1,000,000 shares of its common stock could be purchased during the subsequent twelve months. Subsequently, the Board has amended the program a number of times to both extend its term and increase the maximum number of shares which could be repurchased. Currently, the program allows for a maximum repurchase of up to 3,000,000 shares through the period ending December 31, 2015. From the program’s onset through December 31, 2014, the total number of shares repurchased by the Company is 2,183,454. The total number of shares that may yet be purchased under the program is 816,546. The Stock Repurchase Program authorizes purchases in privately negotiated transactions as well as in the open market. In October 2008, the Company's Board of Directors authorized repurchases in private transactions under the Stock Repurchase Program of shares issued under the Company's equity compensation plans to directors, employees and other service providers at the market price on the effective date of the repurchase request. Total repurchases under this provision currently are limited to an aggregate of 450,000 shares per calendar year and to a maximum of 50,000 shares annually per individual. There were no repurchases of any kind under the program for the three months ended December 31, 2014 or 2013. | ||||||||
Total repurchase activity through December 31, 2014 is as follows: | ||||||||
Details of Treasury Stock Purchases to Date | ||||||||
Issuer Purchases of Equity Securities | through December 31, 2014 | |||||||
Total Number | Average Price | |||||||
of Shares | Paid | Cost of Treasury | ||||||
Purchased | Per Share | Stock | ||||||
Period: | ||||||||
January 1, 2007 – September 30, 2014 | 2,183,454 | $ | 3.57 | $ | 7,805,655 | |||
October 1, 2014 - October 31, 2014 | — | — | — | |||||
November 1, 2014 - November 30, 2014 | — | — | — | |||||
December 1, 2014 - December 31, 2014 | — | — | — | |||||
Quarterly Subtotal | — | — | — | |||||
Total | 2,183,454 | $ | 3.57 | $ | 7,805,655 | |||
Industry_Segments_And_Financia
Industry Segments And Financial Information About Foreign And Domestic Operations | 3 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Industry Segments And Financial Information About Foreign And Domestic Operations [Abstract] | ||||||||||||||
Industry Segments And Financial Information About Foreign And Domestic Operations | NOTE 7 - Industry Segments and Financial Information About Foreign and Domestic Operations | |||||||||||||
The Company currently operates in one industry segment which includes the development, manufacture and marketing of consumer health care products. | ||||||||||||||
The Company operates in foreign and domestic regions. Information about the Company's operations by geographic area is as follows (in thousands): | ||||||||||||||
Net Revenues to External Customers for | Long-Lived Asset As Of | |||||||||||||
the Three Months Ended December 31, | December 31, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2014 | |||||||||||
Brazil | $ | 3,502 | -1 | $ | * | $ | — | $ | — | |||||
Zimbabwe | 963 | -1 | * | — | — | |||||||||
South Africa | 686 | -1 | 1,656 | -1 | — | — | ||||||||
United States | 541 | 710 | -1 | 77 | 88 | |||||||||
Cameroon | 488 | * | — | — | ||||||||||
Angola | * | 2,476 | -1 | — | — | |||||||||
Congo | * | 650 | — | — | ||||||||||
Malaysia | — | — | 1,412 | 1,528 | ||||||||||
United Kingdom | — | — | 141 | 152 | ||||||||||
Other | 479 | 1,198 | — | — | ||||||||||
Total | $ | 6,659 | $ | 6,690 | $ | 1,630 | $ | 1,768 | ||||||
* Less than 5 percent of total net revenues. | ||||||||||||||
(1) Exceeds 10 percent of total net revenues. | ||||||||||||||
Contingent_Liabilities
Contingent Liabilities | 3 Months Ended |
Dec. 31, 2014 | |
Contingent Liabilities [Abstract] | |
Contingent Liabilities | NOTE 8 – Contingent Liabilities |
The testing, manufacturing and marketing of consumer products by the Company entail an inherent risk that product liability claims will be asserted against the Company. The Company maintains product liability insurance coverage for claims arising from the use of its products. The coverage amount is currently $5 million for FHC's consumer health care product. | |
Income_Taxes
Income Taxes | 3 Months Ended | |||||
Dec. 31, 2014 | ||||||
Income Taxes [Abstract] | ||||||
Income Taxes | NOTE 9 – Income Taxes | |||||
The Company accounts for income taxes using the liability method, which requires the recognition of deferred tax assets or liabilities for the tax-effected temporary differences between the financial reporting and tax bases of its assets and liabilities, and for net operating loss and tax credit carryforwards. | ||||||
The Company completes a detailed analysis of its deferred income tax valuation allowances on an annual basis or more frequently if information comes to our attention that would indicate that a revision to our estimates is necessary. In evaluating the Company’s ability to realize its deferred tax assets, management considers all available positive and negative evidence on a country-by-country basis, including past operating results and forecast of future taxable income. In determining future taxable income, management makes assumptions to forecast U.S. federal and state, U.K. and Malaysia operating income, the reversal of temporary differences, and the implementation of any feasible and prudent tax planning strategies. These assumptions require significant judgment regarding the forecasts of the future taxable income in each tax jurisdiction, and are consistent with the forecasts used to manage the Company’s business. It should be noted that the Company realized significant losses through 2005 on a consolidated basis. Since fiscal year 2006, the Company has consistently generated taxable income on a consolidated basis, providing a reasonable future period in which the Company can reasonably expect to generate taxable income. In management’s analysis to determine the amount of the deferred tax asset to recognize, management projected future taxable income for each tax jurisdiction. | ||||||
As of December 31, 2014, the Company had U.S. federal and state net operating loss carryforwards of approximately $17,269,000 and $17,020,000, respectively, for income tax purposes expiring in years 2018 to 2027. The Company’s U.K. subsidiary, The Female Health Company-UK, plc has U.K. net operating loss carryforwards of approximately $62,870,000 as of December 31, 2014, which can be carried forward indefinitely to be used to offset future U.K. taxable income. The Company’s Malaysia subsidiary had no net operating loss carryforwards as of December 31, 2014. With the demand for and profitability of FC2, the Company expects utilization of its net operating losses in both the U.K. and the U.S. will continue. The Company’s net operating loss carryforwards will be utilized to reduce cash payments for income taxes based on the statutory rate in effect at the time of such utilization. | ||||||
A reconciliation of income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes for the three months ended December 31, 2014 and 2013, is as follows: | ||||||
Three Months Ended | ||||||
December 31, | ||||||
2014 | 2013 | |||||
Income tax expense at statutory rates | $ | 502,000 | $ | 532,000 | ||
State income tax, net of federal benefits | 93,000 | 98,000 | ||||
Non-deductible expenses | 2,000 | 2,000 | ||||
Effect of AMT expense | 27,000 | — | ||||
Effect of lower foreign income tax rates | 20,734 | -114,211 | ||||
Effect of share-based compensation | — | -214,000 | ||||
Other | 25,696 | -204,914 | ||||
Income tax expense | $ | 670,430 | $ | 98,875 | ||
Dividends
Dividends | 3 Months Ended |
Dec. 31, 2014 | |
Dividends [Abstract] | |
Dividends | Note 10 – Dividends |
Beginning February 16, 2010, through May 7, 2014, the Company paid 18 quarterly cash dividends. The first 9 were paid at a quarterly rate per share of $0.05 through February 9, 2012, 4 were paid at a quarterly rate per share of $0.06 from May 9, 2012 through February 6, 2013, and 5 were paid at a quarterly rate per share of $0.07 from May 8, 2013 through May 7, 2014. Cumulative dividends paid totaled $29.4 million through September 30, 2014. The Company paid cash dividends of approximately $2.0 million during the three months ended December 31, 2013. On July 14, 2014, the Company announced that its Board of Directors has elected to suspend the payment of quarterly cash dividends in order to devote operating cash flows towards strategic growth initiatives. | |
Basis_Of_Presentation_Policy
Basis Of Presentation (Policy) | 3 Months Ended |
Dec. 31, 2014 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | Basis of Presentation |
The accompanying condensed consolidated financial statements are unaudited but in the opinion of management contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position and the results of operations and cash flow for the periods presented in conformity with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. | |
Operating results for the three months ended December 31, 2014, are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2015. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended September 30, 2014. | |
Principles Of Consolidation And Nature Of Operations | Principles of Consolidation and Nature of Operations |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, The Female Health Company-UK, and its wholly owned subsidiaries, The Female Health Company-UK, plc and The Female Health Company (M) SDN.BHD. All significant intercompany transactions and accounts have been eliminated in consolidation. The Female Health Company ("FHC" or the "Company") is currently engaged in the marketing, manufacture and distribution of a consumer health care product, the FC2 Female Condom ("FC2"). The Female Health Company-UK, is the holding company of The Female Health Company-UK, plc, which is located in a 6,400 sq. ft. leased office facility located in London, England. The Female Health Company (M) SDN.BHD leases a 45,800 sq. ft. manufacturing facility located in Selangor D.E., Malaysia. | |
Since the Company began distributing FC2 in 2007, it has been shipped to either or both commercial (private sector) and public health sector markets in 144 countries. It is marketed to consumers through distributors, public health programs and retailers in 16 countries. | |
The Company's standard credit terms vary from 30 to 90 days, depending on the class of trade and customary terms within a territory, so accounts receivable is affected by the mix of purchasers within the quarter. As is typical in the Company's business, extended credit terms may occasionally be offered as a sales promotion. For the past twelve months, the Company's average days’ sales outstanding has averaged approximately 62 days. Over the past five years, the Company’s bad debt expense has been less than 0.04 percent of product sales. The balance in the allowance for doubtful accounts was $48,068 at December 31, 2014 and September 30, 2014. | |
Restricted Cash | Restricted cash |
Restricted cash relates to security provided to one of the Company’s U.K. banks for performance bonds issued in favor of customers. The Company has a facility of $250,000 for such performance bonds. Such security has been extended infrequently and only on occasions where it has been a contract term expressly stipulated as an absolute requirement by the funds’ provider. The expiration of the bond is defined by the completion of the event such as, but not limited to, a period of time after the product has been distributed or expiration of the product shelf life. Restricted cash was $87,760 and $55,806 at December 31, 2014 and September 30, 2014, respectively, and is included in cash on the accompanying Unaudited Condensed Consolidated Balance Sheets. | |
Foreign Currency Translation And Operations | |
Foreign Currency and Change in Functional Currency | |
The Company recognized a foreign currency transaction gain of $20,846 for the three months ended December 31, 2014 compared to a loss of $18,426 for the three months ended December 31, 2013. The consistent use of the U.S. dollar as functional currency across the Company reduces its foreign currency risk and stabilizes its operating results. As a result of the U.S. dollar being the functional currency of the Company and all of its subsidiaries, comprehensive income is equivalent to the reported net income. | |
Reclassifications | Reclassifications |
Certain items in the December 31, 2013 and the September 30, 2014 consolidated financial statements have been reclassified to conform to the December 31, 2014 presentation. | |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||
Dec. 31, 2014 | ||||||
Earnings Per Share [Abstract] | ||||||
Schedule Of Earnings Per Share, Basic And Diluted | ||||||
Three Months Ended | ||||||
December 31, | ||||||
Denominator | 2014 | 2013 | ||||
Weighted average common shares outstanding - basic | 28,502,560 | 28,479,597 | ||||
Net effect of dilutive securities: | ||||||
Options | 70,094 | 169,967 | ||||
Unvested restricted shares | 206,056 | 148,836 | ||||
Total net effect of dilutive securities | 276,150 | 318,803 | ||||
Weighted average common shares outstanding - diluted | 28,778,710 | 28,798,400 | ||||
Income per common share – basic | $ | 0.03 | $ | 0.05 | ||
Income per common share – diluted | $ | 0.03 | $ | 0.05 | ||
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||
Dec. 31, 2014 | ||||||
Inventory [Abstract] | ||||||
Components Of Inventory | ||||||
31-Dec-14 | 30-Sep-14 | |||||
Raw material | $ | 978,404 | $ | 1,091,703 | ||
Work in process | 99,895 | 15,962 | ||||
Finished goods | 2,437,378 | 1,936,655 | ||||
Inventory, gross | 3,515,677 | 3,044,320 | ||||
Less: inventory reserves | -51,004 | -60,873 | ||||
Inventory, net | $ | 3,464,673 | $ | 2,983,447 | ||
ShareBased_Payments_Tables
Share-Based Payments (Tables) | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Share-Based Payments [Abstract] | |||||||||
Summary Of Stock Options Outstanding And Exercisable | |||||||||
Options | Wghted. Avg. | ||||||||
Outstanding and Exercisable | Remaining Life | Wghted. Avg. | Aggregate | ||||||
at December 31, 2014 | (years) | Exercise Price | Intrinsic Value | ||||||
Total | 180,000 | 3.09 | $ | 2.6 | $ | 238,500 | |||
Stock_Repurchase_Program_Table
Stock Repurchase Program (Tables) | 3 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Stock Repurchase Program [Abstract] | ||||||||
Schedule Of Treasury Stock Purchases | ||||||||
Details of Treasury Stock Purchases to Date | ||||||||
Issuer Purchases of Equity Securities | through December 31, 2014 | |||||||
Total Number | Average Price | |||||||
of Shares | Paid | Cost of Treasury | ||||||
Purchased | Per Share | Stock | ||||||
Period: | ||||||||
January 1, 2007 – September 30, 2014 | 2,183,454 | $ | 3.57 | $ | 7,805,655 | |||
October 1, 2014 - October 31, 2014 | — | — | — | |||||
November 1, 2014 - November 30, 2014 | — | — | — | |||||
December 1, 2014 - December 31, 2014 | — | — | — | |||||
Quarterly Subtotal | — | — | — | |||||
Total | 2,183,454 | $ | 3.57 | $ | 7,805,655 | |||
Industry_Segments_And_Financia1
Industry Segments And Financial Information About Foreign And Domestic Operations (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Industry Segments And Financial Information About Foreign And Domestic Operations [Abstract] | ||||||||||||||
Schedule Of Operations By Geographic Area | ||||||||||||||
Net Revenues to External Customers for | Long-Lived Asset As Of | |||||||||||||
the Three Months Ended December 31, | December 31, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2014 | |||||||||||
Brazil | $ | 3,502 | -1 | $ | * | $ | — | $ | — | |||||
Zimbabwe | 963 | -1 | * | — | — | |||||||||
South Africa | 686 | -1 | 1,656 | -1 | — | — | ||||||||
United States | 541 | 710 | -1 | 77 | 88 | |||||||||
Cameroon | 488 | * | — | — | ||||||||||
Angola | * | 2,476 | -1 | — | — | |||||||||
Congo | * | 650 | — | — | ||||||||||
Malaysia | — | — | 1,412 | 1,528 | ||||||||||
United Kingdom | — | — | 141 | 152 | ||||||||||
Other | 479 | 1,198 | — | — | ||||||||||
Total | $ | 6,659 | $ | 6,690 | $ | 1,630 | $ | 1,768 | ||||||
* Less than 5 percent of total net revenues. | ||||||||||||||
(1) Exceeds 10 percent of total net revenues. | ||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | |||||
Dec. 31, 2014 | ||||||
Income Taxes [Abstract] | ||||||
Reconciliation Of Income Tax Expense | ||||||
Three Months Ended | ||||||
December 31, | ||||||
2014 | 2013 | |||||
Income tax expense at statutory rates | $ | 502,000 | $ | 532,000 | ||
State income tax, net of federal benefits | 93,000 | 98,000 | ||||
Non-deductible expenses | 2,000 | 2,000 | ||||
Effect of AMT expense | 27,000 | — | ||||
Effect of lower foreign income tax rates | 20,734 | -114,211 | ||||
Effect of share-based compensation | — | -214,000 | ||||
Other | 25,696 | -204,914 | ||||
Income tax expense | $ | 670,430 | $ | 98,875 | ||
Basis_Of_Presentation_Details
Basis Of Presentation (Details) (USD $) | 3 Months Ended | 12 Months Ended | 60 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | |
country | country | country | |||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||||
Number of countries in which entity operates | 144 | 144 | 144 | ||
Average days sales outstanding | 62 days | ||||
Bad debt expense, percentage | 0.04% | ||||
Allowance for doubtful accounts | $48,068 | $48,068 | $48,068 | $48,068 | |
Restricted cash and cash equivalents, current | 87,760 | 87,760 | 87,760 | 55,806 | |
Foreign currency transaction gain (loss), realized | 20,846 | -18,426 | |||
Performance Bond [Member] | |||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||||
Restricted cash and cash equivalents, current | $250,000 | $250,000 | $250,000 | ||
Office Space [Member] | London, England [Member] | |||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||||
Area of real estate property (in square feet) | 6,400 | 6,400 | 6,400 | ||
Manufacturing Space [Member] | Selangor D.E., Malaysia [Member] | |||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||||
Area of real estate property (in square feet) | 45,800 | 45,800 | 45,800 | ||
Minimum [Member] | |||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||||
Credit terms | 30 days | ||||
Maximum [Member] | |||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||||
Credit terms | 90 days | ||||
Country Specific Commercial Partners [Member] | |||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||||
Number of countries in which entity marketed directly to consumers | 16 | 16 | 16 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||
Weighted average common shares outstanding - basic | 28,502,560 | 28,479,597 |
Net effect of dilutive securities | 276,150 | 318,803 |
Weighted average common shares outstanding - diluted | 28,778,710 | 28,798,400 |
Income per common share b basic (in Dollars per share) | $0.03 | $0.05 |
Income per common share b diluted (in Dollars per share) | $0.03 | $0.05 |
Options [Member] | ||
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||
Net effect of dilutive securities | 70,094 | 169,967 |
Restricted Stock [Member] | ||
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||
Net effect of dilutive securities | 206,056 | 148,836 |
Inventory_Components_Of_Invent
Inventory (Components Of Inventory) (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Inventory [Abstract] | ||
Raw material | $978,404 | $1,091,703 |
Work in process | 99,895 | 15,962 |
Finished goods | 2,437,378 | 1,936,655 |
Inventory, gross | 3,515,677 | 3,044,320 |
Less: inventory reserves | -51,004 | -60,873 |
Inventory, net | $3,464,673 | $2,983,447 |
Line_Of_Credit_Details
Line Of Credit (Details) (USD $) | 3 Months Ended | ||
Dec. 31, 2014 | Sep. 30, 2014 | Aug. 01, 2014 | |
Line of Credit Facility [Line Items] | |||
Ratio of liabilities to equity | 100.00% | ||
Line of credit facility, interest rate at period end | 3.25% | ||
Line of credit facility, amount outstanding (in Dollars) | $0 | $0 | |
New Structure [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity (in Dollars) | $2,000,000 | ||
Borrowing Capacity Percentage of Eligible Inventory [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, percentage of assets borrowing | 50.00% | ||
Minimum [Member] | Borrowing Capacity Percentage of Eligible Accounts Receivable [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, percentage of assets borrowing | 70.00% | ||
Maximum [Member] | Borrowing Capacity Percentage of Eligible Accounts Receivable [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, percentage of assets borrowing | 80.00% |
ShareBased_Payments_Narrative_
Share-Based Payments (Narrative) (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in period | 0 | 0 |
Share-based compensation (in Dollars) | $199,676 | $203,753 |
Options, exercises in period | 0 | 0 |
Share price (in Dollars per share) | $3.92 | |
Unrecognized compensation expense (in Dollars) | 0 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation (in Dollars) | 0 | 0 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation (in Dollars) | 200,000 | 204,000 |
Grants in period | 43,500 | 118,910 |
Fair value of awards granted (in Dollars) | 144,000 | 1,054,000 |
Unrecognized compensation expense (in Dollars) | 980,000 | |
Shares forfeited in period | 0 | 0 |
Unvested shares | 150,000 | |
Unrecognized compensation expense, period for recognition | 1 year 5 months 12 days | |
Restricted Stock [Member] | Accrued Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation (in Dollars) | $54,000 | $62,000 |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Award requisite service period | 1 year | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Award requisite service period | 3 years | |
2008 Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 2,000,000 | |
Grants in period | 1,096,268 | |
2008 Stock Incentive Plan [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award expiration period | 10 years | |
Award vesting rights, percentage per month | 2.78% | |
Award vesting period | 3 years | |
Grants in period | 150,000 | |
1997 Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 0 | |
Award expiration period | 10 years | |
Award vesting rights, percentage per month | 2.78% | |
Award vesting period | 3 years |
ShareBased_Payments_Summary_Of
Share-Based Payments (Summary Of Stock Options Outstanding And Exercisable) (Details) (USD $) | 3 Months Ended |
Dec. 31, 2014 | |
Share-Based Payments [Abstract] | |
Options Outstanding and Exercisable | 180,000 |
Weighted Average Remaining Life (in years) | 3 years 1 month 2 days |
Weighted Average Exercise Price (in Dollars per share) | $2.60 |
Aggregate Intrinsic Value (in Dollars) | $238,500 |
Stock_Repurchase_Program_Narra
Stock Repurchase Program (Narrative) (Details) | 3 Months Ended | 95 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Jan. 17, 2007 | |
Stock Repurchase Program [Abstract] | ||||
Number of shares authorized to be repurchased | 3,000,000 | 3,000,000 | 1,000,000 | |
Stock repurchased during period, shares | 0 | 0 | 2,183,454 | |
Remaining number of shares authorized to be repurchased | 816,546 | 816,546 | ||
Maximum repurchases allowed under provision per calendar year | 450,000 | 450,000 | ||
Maximum repurchases allowed under provision annually per individual | 50,000 | 50,000 |
Stock_Repurchase_Program_Sched
Stock Repurchase Program (Schedule Of Treasury Stock Purchase) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 93 Months Ended | 96 Months Ended | ||
Dec. 31, 2014 | Nov. 30, 2014 | Oct. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | |
Stock Repurchase Program [Abstract] | ||||||
Total Number of Shares Purchased | 2,183,454 | 2,183,454 | ||||
Average Price Paid Per Share (in Dollars per share) | $3.57 | $3.57 | ||||
Treasury Stock, Value, Acquired, Cost Method | $7,805,655 | $7,805,655 |
Industry_Segments_And_Financia2
Industry Segments And Financial Information About Foreign And Domestic Operations (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
segment | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of reportable segments | 1 | ||
Net Revenues to External Customers | $6,659 | $6,690 | |
Long-Lived Asset | 1,630 | 1,768 | |
Sales Less Than Five Percent [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 5.00% | ||
Sales Exceeding Ten Percent [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Brazil [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | 3,502 | ||
Zimbabwe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | 963 | ||
South Africa [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | 686 | 1,656 | |
U.S. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | 541 | 710 | |
Long-Lived Asset | 77 | 88 | |
Cameroon [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | 488 | ||
Angola [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | 2,476 | ||
Congo [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | 650 | ||
Malaysia [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | |||
Long-Lived Asset | 1,412 | 1,528 | |
U.K. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | |||
Long-Lived Asset | 141 | 152 | |
Other Countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenues to External Customers | $479 | $1,198 |
Contingent_Liabilities_Details
Contingent Liabilities (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Contingent Liabilities [Abstract] | |
Loss contingency, range of possible loss, maximum | $5 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 3 Months Ended |
Dec. 31, 2014 | |
Federal [Member] | |
Income Tax Expense (Benefit) [Line Items] | |
Operating loss carryforwards | $17,269,000 |
Operating loss carryforwards, expiration year | 2018 |
State [Member] | |
Income Tax Expense (Benefit) [Line Items] | |
Operating loss carryforwards | 17,020,000 |
Operating loss carryforwards, expiration year | 2027 |
The Female Health Company - UK [Member] | |
Income Tax Expense (Benefit) [Line Items] | |
Operating loss carryforwards | 62,870,000 |
The Female Health Company - Malaysia [Member] | |
Income Tax Expense (Benefit) [Line Items] | |
Operating loss carryforwards | $0 |
Income_Taxes_Reconciliation_Of
Income Taxes (Reconciliation Of Income Tax Expense) (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | ||
Income tax expense at statutory rates | $502,000 | $532,000 |
State income tax, net of federal benefits | 93,000 | 98,000 |
Non-deductible expenses | 2,000 | 2,000 |
Effect of AMT expense | 27,000 | |
Effect of lower foreign income tax rates | 20,734 | -114,211 |
Effect of share-based compensation | -214,000 | |
Other | 25,696 | -204,914 |
Income tax expense | $670,430 | $98,875 |
Dividends_Details
Dividends (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | 51 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 06, 2013 | 7-May-14 | Feb. 09, 2012 | 7-May-14 |
item | item | item | item | ||
Dividends [Abstract] | |||||
Number of dividends paid | 4 | 5 | 9 | 18 | |
Dividends payable, amount per share (in Dollars per share) | $0.06 | $0.07 | $0.05 | $0.07 | |
Payments of dividends | $2 |