Veru (VERU) 10-Q 2 Feb 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2015	Feb. 01, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Entity Registrant Name	FEMALE HEALTH CO
Entity Central Index Key	863,894
Current Fiscal Year End Date	--09-30
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Entity Common Stock, Shares Outstanding		29,030,499

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Dec. 31, 2015	Sep. 30, 2015
Current Assets:
Cash	$ 3,671,641	$ 4,105,814
Accounts receivable, net	17,684,819	14,088,390
Income tax receivable	27,195	21,251
Inventory, net	1,562,117	1,745,180
Prepaid expenses and other current assets	316,675	609,320
Deferred income taxes	279,659	1,016,000
TOTAL CURRENT ASSETS	23,542,106	21,585,955
Other assets	137,616	136,766
PLANT AND EQUIPMENT
Equipment, furniture and fixtures	4,629,755	4,680,246
Leasehold Improvements	323,147	323,147
Less accumulated depreciation and amortization	(3,824,487)	(3,763,403)
Plant and equipment, net	1,128,415	1,239,990
Deferred income taxes	14,509,000	14,509,000
TOTAL ASSETS	39,317,137	37,471,711
Current Liabilities:
Accounts payable	1,148,387	1,077,349
Accrued expenses and other current liabilities	3,115,318	2,555,231
Accrued compensation	212,851	592,428
TOTAL CURRENT LIABILITIES	4,476,556	4,225,008
Deferred rent	12,001	15,389
Deferred income taxes	108,363	98,252
TOTAL LIABILITIES	$ 4,596,920	$ 4,338,649
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Preferred stock
Common stock	$ 312,075	$ 311,925
Additional paid-in-capital	69,301,843	69,205,201
Accumulated other comprehensive loss	(581,519)	(581,519)
Accumulated deficit	(26,505,577)	(27,995,940)
Treasury stock, at cost	(7,806,605)	(7,806,605)
TOTAL STOCKHOLDERS' EQUITY	34,720,217	33,133,062
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 39,317,137	$ 37,471,711

Condensed Consolidated Statemen

Condensed Consolidated Statements Of Income - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Condensed Consolidated Statements Of Income [Abstract]
Net revenues	$ 8,230,659	$ 6,659,206
Cost of sales	2,828,322	2,839,533
Gross profit	5,402,337	3,819,673
Operating expenses	3,009,782	2,365,824
Operating income	2,392,555	1,453,849
Non-operating (expense) income:
Interest and other (expense) income, net	(27,795)	652
Foreign currency transaction (loss) gain	(44,944)	20,846
Total non-operating (expense) income	(72,739)	21,498
Income before income taxes	2,319,816	1,475,347
Income tax expense	829,453	670,430
Net income	$ 1,490,363	$ 804,917
Net income per basic common share outstanding	$ 0.05	$ 0.03
Basic weighted average common shares outstanding	28,633,372	28,502,560
Net income per diluted common share outstanding	$ 0.05	$ 0.03
Diluted weighted average common shares outstanding	28,993,943	28,778,710

Condensed Consolidated Stateme4

Condensed Consolidated Statements Of Cash Flows - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
OPERATING ACTIVITIES
Net income	$ 1,490,363	$ 804,917
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	114,406	127,939
Share-based compensation	123,344	199,676
Deferred income taxes	746,452	569,768
Loss on disposal of fixed assets	111	3,483
Changes in current assets and liabilities	(2,905,907)	(2,925,956)
Net cash used in operating activities	(431,231)	(1,220,173)
INVESTING ACTIVITIES
Capital expenditures	(2,942)	(2,282)
Net cash used in investing activities	(2,942)	(2,282)
FINANCING ACTIVITIES
Dividends paid on common stock		(5,198)
Net cash used in financing activities		(5,198)
Net decrease in cash	(434,173)	(1,227,653)
Cash at beginning of period	4,105,814	5,796,223
CASH AT END OF PERIOD	3,671,641	4,568,570
Supplemental Disclosure of Cash Flow Information:
Cash payments for income taxes	$ 69,856	61,430
Schedule of noncash financing and investing activities:
Reduction of accrued expense upon issuance of shares		$ 239,580

Basis of Presentation

Basis of Presentation	3 Months Ended
	Dec. 31, 2015
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 gene r ally 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, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2016 . 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, 2015 . 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 Limited , 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 consolidati on. The Female Health Company ( FHC or the Company) is currently engaged in the ma r keting, manufacture and distribution of a consumer health care p roduct, the FC2 Female Condom ( FC2 ) . The F e male Health Company Limited , 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 (collectively, the U.K. subsidiary) . The Female Health Company (M) SDN.BHD leases a 45,800 sq. ft. manufacturing facility located in Selangor D.E., Malaysia (the Malaysia subsidiary) . 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 120 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. The Company has agreed to credit terms of up to 150 days with our distributor in the Republic of South Africa. For the most recent order of 15 million units under the Brazil tender, the Company has agreed to up to 360 day credit terms with our distributor in Brazil, subject to earlier payment upon receipt of payment by the distributor from the Brazilian go v ernment. For the past twelve months, the Company's average days’ sales outstanding has averaged approximately 156 days. Over the past five years, the Company’s bad debt expense has been less than 0.03 percent of product sales. The balance in the allowance for doubtful accounts was $ 48,068 at December 31, 2015 and September 30, 2015 . 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. Restric t ed cash was $ 159,252 and $ 85,697 at December 31, 2015 and September 30, 2015 , 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 loss of $ 44,944 for the three months ended December 31, 2015 compared to a gain of $ 20,846 for the three months ended December 31, 2014 . The consistent use of the U.S. dollar as functional currency across the Company reduces its foreign currency risk and stabilizes its operating r e sults. As a result of the U.S. dollar being the functional currency of the Company and all of its subsidiaries, compr e hensive income is equivalent to the reported net income. Reclassifications Certain items in the September 30, 2015 consolidated financial statements have been reclassified to conform to the December 31, 2015 presentation.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Dec. 31, 2015
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 2015 2014 Weighted average common shares outstanding - basic 28,633,372 28,502,560 Net effect of dilutive securities: Options 17,043 70,094 Unvested restricted shares 343,528 206,056 Total net effect of dilutive securities 360,571 276,150 Weighted average common shares outstanding - diluted 28,993,943 28,778,710 Income per common share – basic $ 0.05 $ 0.03 Income per common share – diluted $ 0.05 $ 0.03 Options to purchase approximately 90,000 shares of common stock at an exercise price of $3.92 per share that were outstanding during the three months ended December 31, 2015 were not included in the computation of diluted net income per share because their effect was anti-dilutive. All other outstanding stock options and unvested restricted shares were included in the computation of diluted net in come per share for the three months ended December 31, 2015 and 2014 .

Inventory

Inventory	3 Months Ended
	Dec. 31, 2015
Inventory [Abstract]
Inventory	NOTE 3 - Inventory Inventory consists of the following components at December 31, 2015 and September 30, 2015 : December 31, 2015 September 30, 2015 Raw material $ 526,164 $ 839,179 Work in process 69,098 77,483 Finished goods 996,746 868,270 Inventory, gross 1,592,008 1,784,932 Less: inventory reserves (29,891) (39,752) Inventory, net $ 1,562,117 $ 1,745,180

Line of Credit

Line of Credit	3 Months Ended
	Dec. 31, 2015
Line of Credit [Abstract]
Line of Credit	NOTE 4 – Line of Credit On August 1, 2015, the Company entered into an amendment to the Second Amended and Restated Loan Agreement (as amended, the Loan Agreement) with Midland States Bank to extend the term of the Company’s revolving line of credit to August 1, 2016 . The credit facility consisted of a single revolving note for up to $2 million with Midland States 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 d 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 d id not contain any fina n cial covenants that require d compliance with ratios or amounts. D ividends and share repurchases we re permitted as long as after giving effect to the dividend or share repurchase the Company ha d a ratio of total liabilities to total stockholders’ equity of no more than 1:1 . Borrowings on the revolving note were to bear interest at the national prime rate published by the Wall Street Journal ( 3.25 percent at September 30, 2015). The note wa s collateralized by substantially all of the assets of the Company. No amounts were outstanding under the revolving note at Se p tember 30, 2015 . On December 29, 2015, the Company and Midland States Bank terminated the Loan Agreement. There was no pe n alty related to the early termination of the Loan Agreement and no amounts were outstanding under this facility. On December 29, 2015, the Company entered into a Credit Agreement (the Credit Agreemen t ) with BMO Harris Bank, N.A. (BMO Harris Bank). The Credit Agreement provides the Company with a revolving line of credit of up to $10 million with a term that extends to December 29, 2017 . Borrowings under the Credit Agreement bear inte r est, at the Company’s option, at a base rate or at LIBOR plus 2.25% . The Company is also required to pay a co m mitment fee at the rate of 0.10% per annum on the average daily unused portion of the revolving line of credit. T he Company's obligations under the Credit Agreement are secured by a lien against substantially all of the assets of the Company and a pledge of 65% of the outstanding shares of The Female Health Company Limited. In addition to other customary representations, covenants and default provisions, the Company is required to maintain a minimum tangible net worth and to not to exceed a maximum total leverage ratio. Among the non-financial covenants, the Company is restricted in its ability to pay dividends, buy back shares of its common stock, incur additional debt and make acquisitions above certain amounts. No amounts are outstanding under the Credit Agreement at December 31, 2015 .

Share-Based Payments

Share-Based Payments	3 Months Ended
	Dec. 31, 2015
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, 2015 , 1,302,885 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 , directors and consultants . 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, 2015 or 2014 . Compensation expense is recognized only for share-based payments expected to vest. The Company estimates fo r feitures 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, 2015 or 2014 . No stock options were exercised during the three months ended December 31, 2015 or 2014 . The following table summarizes the stock options outstanding and exercisable at December 31, 2015 : Options Weighted Avg. Outstanding and Exercisable Remaining Life Weighted Avg. Aggregate at December 31, 2015 (years) Exercise Price Intrinsic Value Total 180,000 2.09 $ 2.60 $ 16,200 The aggregate intrinsic value in the table above is before income taxes, based on the closing price of the Company’s common stock of $ 1.45 per share as of the last business day of the period ended December 31, 2015 . As of Dece m ber 31, 2015 , 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 per i ods 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 43,250 shares of restricted stock or shares issuable pursuant to promises to issue shares of common stock during the three months ended December 31, 2015 . The fair value of the awards granted was approximately $ 71,000 . 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 D e cember 31, 2015 . 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 recognized share-based compensation expense for restricted stock or promises to issue shares of common stock of approximately $ 123,000 and $ 200,000 f or the three months ended December 31, 2015 and 2014 , respectively, $ 26,000 and $ 54,000 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, 2015 and 2014 , 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, 2015 and 2014 . As of December 31, 2015 , there was approximately $ 592,000 , representing approximately 285,000 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 2.24 years.

Stock Repurchase Program

Stock Repurchase Program	3 Months Ended
	Dec. 31, 2015
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 ma x imum 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, 201 6 . From the program’s onset through December 31, 2015 , the total number of shares repurchased by the Company is 2,183,704 . The total number of shares that may yet be purchased under the program is 816,296 . 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 autho r ized 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 repu r chases of any kind under the program for the three months ended December 31, 2015 or 2014 . Total repurchase a c tivity through December 31, 2015 is as follows: Details of Treasury Stock Purchases to Date Issuer Purchases of Equity Securities through December 31, 2015 Total Number Average Price of Shares Paid Cost of Treasury Purchased Per Share Stock Period: January 1, 2007 – September 30, 2015 2,183,704 $ 3.57 $ 7,806,605 October 1, 2015 - October 31, 2015 — $ — $ — November 1, 2015 - November 30, 2015 — $ — $ — December 1, 2015 - December 31, 2015 — $ — $ — Quarterly Subtotal — $ — — Total 2,183,704 $ 3.57 $ 7,806,605

Industry Segments And Financial

Industry Segments And Financial Information About Foreign And Domestic Operations	3 Months Ended
	Dec. 31, 2015
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 marke t ing 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, 2015 2014 2015 2015 Brazil $ 4,755 (1) $ 3,502 (1) $ — $ — Zimbabwe 826 (1) 963 (1) — — United States 815 541 114 123 South Africa * 686 (1) — — Cameroon * 488 — — United Kingdom * * 113 120 Malaysia * * 1,039 1,134 Other 1,835 479 — — Total $ 8,231 $ 6,659 $ 1,266 $ 1,377 * Less than 5 percent of total net revenues . (1) Exceeds 10 percent of total net revenues . At December 31, 2015 the Company had one customer whose accounts receivable balance was 62 percent of current assets. At September 30, 2015 the Company had one customer whose accounts receivable balance was 46 percent of current assets. No other single customer’s accounts receivable balance accounted for more than 10 percent of current assets as of December 31, 2015 or September 30, 2015. There were two customers that exceeded 10 percent of net revenues for the three months ended December 31, 2015 and 2014.

Contingent Liabilities

Contingent Liabilities	3 Months Ended
	Dec. 31, 2015
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 $10 million for FHC's consumer health care product.

Income Taxes

Income Taxes	3 Months Ended
	Dec. 31, 2015
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 nece s sary. In evaluating the Company’s ability to realize its deferred tax assets, management considers all available pos i tive and negative evidence on a country-by-country basis, including past operating results and forecast of future ta x able 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 Co m pany’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, 2015 , the Company had U.S. federal and state net operating loss carryforwards of approximat e ly $ 13,023,000 and $ 12,587,000 , respectively, for income tax purposes expiring in years 2020 to 2027 . The Co m pany’s U.K. subsidiary has U.K. net operating loss carryforwards of approximately $ 61,938,000 as of December 31, 2015 , which can be carried forward indefinitely to be used to offset future U.K. taxable income. 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, 2015 and 2014 , is as follows : Three Months Ended December 31, 2015 2014 Income tax expense at statutory rates $ 789,000 $ 502,000 State income tax, net of federal benefits 119,000 93,000 Non-deductible expenses 2,000 2,000 Effect of AMT expense 30,000 27,000 Effect of lower foreign income tax rates (107,125) 20,734 Other (3,422) 25,696 Income tax expense $ 829,453 $ 670,430

Dividends

Dividends	3 Months Ended
	Dec. 31, 2015
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 . O n 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, 2015
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 gene r ally 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, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2016 . 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, 2015 .
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 Limited , 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 consolidati on. The Female Health Company ( FHC or the Company) is currently engaged in the ma r keting, manufacture and distribution of a consumer health care p roduct, the FC2 Female Condom ( FC2 ) . The F e male Health Company Limited , 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 (collectively, the U.K. subsidiary) . The Female Health Company (M) SDN.BHD leases a 45,800 sq. ft. manufacturing facility located in Selangor D.E., Malaysia (the Malaysia subsidiary) . 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 120 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. The Company has agreed to credit terms of up to 150 days with our distributor in the Republic of South Africa. For the most recent order of 15 million units under the Brazil tender, the Company has agreed to up to 360 day credit terms with our distributor in Brazil, subject to earlier payment upon receipt of payment by the distributor from the Brazilian go v ernment. For the past twelve months, the Company's average days’ sales outstanding has averaged approximately 156 days. Over the past five years, the Company’s bad debt expense has been less than 0.03 percent of product sales. The balance in the allowance for doubtful accounts was $ 48,068 at December 31, 2015 and September 30, 2015 .
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. Restric t ed cash was $ 159,252 and $ 85,697 at December 31, 2015 and September 30, 2015 , respectively, and is included in cash on the accompanying Unaudited Condensed Consolidated Balance Sheets.
Foreign Currency and Change in Functional Currency	Foreign Currency and Change in Functional Currency The Company recognized a foreign currency transaction loss of $ 44,944 for the three months ended December 31, 2015 compared to a gain of $ 20,846 for the three months ended December 31, 2014 . The consistent use of the U.S. dollar as functional currency across the Company reduces its foreign currency risk and stabilizes its operating r e sults. As a result of the U.S. dollar being the functional currency of the Company and all of its subsidiaries, compr e hensive income is equivalent to the reported net income.
Reclassifications	Reclassifications Certain items in the September 30, 2015 consolidated financial statements have been reclassified to conform to the December 31, 2015 presentation.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Dec. 31, 2015
Earnings Per Share [Abstract]
Schedule Of Earnings Per Share, Basic And Diluted	Three Months Ended December 31, Denominator 2015 2014 Weighted average common shares outstanding - basic 28,633,372 28,502,560 Net effect of dilutive securities: Options 17,043 70,094 Unvested restricted shares 343,528 206,056 Total net effect of dilutive securities 360,571 276,150 Weighted average common shares outstanding - diluted 28,993,943 28,778,710 Income per common share – basic $ 0.05 $ 0.03 Income per common share – diluted $ 0.05 $ 0.03

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Dec. 31, 2015
Inventory [Abstract]
Components Of Inventory	December 31, 2015 September 30, 2015 Raw material $ 526,164 $ 839,179 Work in process 69,098 77,483 Finished goods 996,746 868,270 Inventory, gross 1,592,008 1,784,932 Less: inventory reserves (29,891) (39,752) Inventory, net $ 1,562,117 $ 1,745,180

Share-Based Payments (Tables)

Share-Based Payments (Tables)	3 Months Ended
	Dec. 31, 2015
Share-Based Payments [Abstract]
Summary Of Stock Options Outstanding And Exercisable	Options Weighted Avg. Outstanding and Exercisable Remaining Life Weighted Avg. Aggregate at December 31, 2015 (years) Exercise Price Intrinsic Value Total 180,000 2.09 $ 2.60 $ 16,200

Stock Repurchase Program (Table

Stock Repurchase Program (Tables)	3 Months Ended
	Dec. 31, 2015
Stock Repurchase Program [Abstract]
Schedule Of Repurchase Activity	Details of Treasury Stock Purchases to Date Issuer Purchases of Equity Securities through December 31, 2015 Total Number Average Price of Shares Paid Cost of Treasury Purchased Per Share Stock Period: January 1, 2007 – September 30, 2015 2,183,704 $ 3.57 $ 7,806,605 October 1, 2015 - October 31, 2015 — $ — $ — November 1, 2015 - November 30, 2015 — $ — $ — December 1, 2015 - December 31, 2015 — $ — $ — Quarterly Subtotal — $ — — Total 2,183,704 $ 3.57 $ 7,806,605

Industry Segments And Financi20

Industry Segments And Financial Information About Foreign And Domestic Operations (Tables)	3 Months Ended
	Dec. 31, 2015
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, 2015 2014 2015 2015 Brazil $ 4,755 (1) $ 3,502 (1) $ — $ — Zimbabwe 826 (1) 963 (1) — — United States 815 541 114 123 South Africa * 686 (1) — — Cameroon * 488 — — United Kingdom * * 113 120 Malaysia * * 1,039 1,134 Other 1,835 479 — — Total $ 8,231 $ 6,659 $ 1,266 $ 1,377 * 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, 2015
Income Taxes [Abstract]
Reconciliation Of Income Tax Expense	Three Months Ended December 31, 2015 2014 Income tax expense at statutory rates $ 789,000 $ 502,000 State income tax, net of federal benefits 119,000 93,000 Non-deductible expenses 2,000 2,000 Effect of AMT expense 30,000 27,000 Effect of lower foreign income tax rates (107,125) 20,734 Other (3,422) 25,696 Income tax expense $ 829,453 $ 670,430

Basis of Presentation (Details)

Basis of Presentation (Details) item in Millions	3 Months Ended		12 Months Ended	63 Months Ended
	Dec. 31, 2015USD ($)ft²itemcountry	Dec. 31, 2014USD ($)	Dec. 31, 2015USD ($)ft²country	Dec. 31, 2015USD ($)ft²country	Sep. 30, 2015USD ($)
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]
Number of countries in which entity operates | country	144		144	144
Average days sales outstanding			156 days
Allowance for Doubtful Accounts Receivable	$ 48,068		$ 48,068	$ 48,068	$ 48,068
Bad debt expense, percentage				0.03%
Restricted cash and cash equivalents, current	159,252		159,252	$ 159,252	$ 85,697
Foreign currency transaction gain (loss), realized	(44,944)	$ 20,846
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
South Africa [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]
Credit terms	150 days
Brazil [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]
Number of units ordered | item	15
Credit terms	360 days
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 | ft²	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 | ft²	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	120 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 | country	16		16	16

Earnings Per Share (Details)

Earnings Per Share (Details) - $ / shares	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Schedule of Earnings Per Share, Basic and Diluted [Line Items]
Weighted average common shares outstanding - basic	28,633,372	28,502,560
Net effect of dilutive securities	360,571	276,150
Weighted average common shares outstanding - diluted	28,993,943	28,778,710
Income per common share – basic	$ 0.05	$ 0.03
Income per common share – diluted	0.05	$ 0.03
Exercise price of options outstanding not included in computation of diluted shares (in Dollars per share)	$ 2.60
Options [Member]
Schedule of Earnings Per Share, Basic and Diluted [Line Items]
Net effect of dilutive securities	17,043	70,094
anti-dilutive shares	90,000
Exercise price of options outstanding not included in computation of diluted shares (in Dollars per share)	$ 3.92
Restricted Stock [Member]
Schedule of Earnings Per Share, Basic and Diluted [Line Items]
Net effect of dilutive securities	343,528	206,056

Inventory (Components Of Invent

Inventory (Components Of Inventory) (Details) - USD ($)	Dec. 31, 2015	Sep. 30, 2015
Inventory [Abstract]
Raw material	$ 526,164	$ 839,179
Work in process	69,098	77,483
Finished goods	996,746	868,270
Inventory, gross	1,592,008	1,784,932
Less: inventory reserves	(29,891)	(39,752)
Inventory, net	$ 1,562,117	$ 1,745,180

Line of Credit (Details)

Line of Credit (Details) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 29, 2015	Sep. 30, 2015	Aug. 01, 2015
Line of Credit Facility [Line Items]
Pledge, percentage	65.00%
BMO Harris Bank (The Credit Agreement) [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 10,000,000
Commitment fee, percentage	0.10%
Line of credit facility, expiration date	Dec. 29, 2017
Line of credit facility, amount outstanding	$ 0
Midland States Bank (The Loan Agreement) [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity				$ 2,000,000
Line of credit facility, interest rate at period end			3.25%
Line of credit facility, expiration date	Aug. 1, 2016
Line of credit facility, amount outstanding			$ 0
London Interbank Offered Rate (LIBOR) [Member] | BMO Harris Bank (The Credit Agreement) [Member]
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	2.25%
Inventory [Member] | Midland States Bank (The Loan Agreement) [Member]
Line of Credit Facility [Line Items]
Line of credit facility, percentage of assets borrowing	50.00%
Minimum [Member] | Accounts Receivable [Member] | Midland States Bank (The Loan Agreement) [Member]
Line of Credit Facility [Line Items]
Line of credit facility, percentage of assets borrowing	70.00%
Maximum [Member] | Accounts Receivable [Member] | Midland States Bank (The Loan Agreement) [Member]
Line of Credit Facility [Line Items]
Line of credit facility, percentage of assets borrowing	80.00%

Share-Based Payments (Narrative

Share-Based Payments (Narrative) (Details) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in period	0	0
Share-based compensation	$ 123,344	$ 199,676
Unrecognized compensation expense	$ 0
Shares, exercised	0	0
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 0	$ 0
Share price	$ 1.45
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 123,000	$ 200,000
Grants in period	43,250	43,500
Fair value of awards granted	$ 71,000	$ 144,000
Unrecognized compensation expense	$ 592,000
Shares forfeited in period	0	0
Unvested shares	285,000
Unrecognized compensation expense, period for recognition	2 years 2 months 27 days
Restricted Stock [Member] | Accrued Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 26,000	$ 54,000
Minimum [Member] | Restricted Stock [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] | Restricted Stock [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
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 period	3 years
Grants in period	150,000
2008 Stock Incentive Plan [Member] | Employee Stock Option [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage per month	2.78%
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 period	3 years
1997 Stock Option Plan [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage per month	2.78%

Share-Based Payments (Summary O

Share-Based Payments (Summary Of Stock Options Outstanding And Exercisable) (Details)	3 Months Ended
	Dec. 31, 2015USD ($)$ / sharesshares
Share-Based Payments [Abstract]
Options Outstanding and Exercisable | shares	180,000
Weighted Average Remaining Life (years)	2 years 1 month 2 days
Weighted Average Exercise Price | $ / shares	$ 2.60
Aggregate Intrinsic Value | $	$ 16,200

Stock Repurchase Program (Narra

Stock Repurchase Program (Narrative) (Details) - shares	3 Months Ended		107 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	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	2,183,704
Maximum repurchases allowed under provision through calendar year	450,000
Maximum repurchases allowed under provision annually per individual	50,000
Maximum number of shares that may yet be purchased under the program	816,296		816,296

Stock Repurchase Program (Sched

Stock Repurchase Program (Schedule Of Repurchase Activity) (Details) - USD ($)	1 Months Ended			3 Months Ended	105 Months Ended	108 Months Ended
	Dec. 31, 2015	Nov. 30, 2015	Oct. 31, 2015	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2015
Stock Repurchase Program [Abstract]
Total Number of Shares Purchased					2,183,704	2,183,704
Average Price Paid Per Share					$ 3.57	$ 3.57
Cost of treasury stock					$ 7,806,605	$ 7,806,605

Industry Segments And Financi30

Industry Segments And Financial Information About Foreign And Domestic Operations (Details)		3 Months Ended				12 Months Ended
		Dec. 31, 2015USD ($)segmentcustomer		Dec. 31, 2014USD ($)		Sep. 30, 2015USD ($)customer
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of reportable segments | segment		1
Net revenues to external customers		$ 8,230,659		$ 6,659,206
Long-Lived Asset		$ 1,266,000				$ 1,377,000
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	[1]	$ 4,755,000		3,502,000
Zimbabwe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues to external customers	[1]	826,000		963,000
U.S. [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues to external customers		815,000		541,000
Long-Lived Asset		$ 114,000				123,000
South Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues to external customers			[2]	686,000	[1]
Cameroon [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues to external customers			[2]	$ 488,000
U.K. [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues to external customers	[2]
Long-Lived Asset		$ 113,000				120,000
Malaysia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues to external customers	[2]
Long-Lived Asset		$ 1,039,000				$ 1,134,000
Other Countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues to external customers		$ 1,835,000		$ 479,000
Customer One [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of Customers | customer		1				1
Customer One [Member] | Accounts Receivable [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage		62.00%				46.00%
Single Customer [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of Customers | customer		0				0
Single Customer [Member] | Sales Exceeding Ten Percent [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage		10.00%				10.00%
Three Customers [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of Customers | customer		2
Three Customers [Member] | Sales Exceeding Ten Percent [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage		10.00%
[1]	(1) Exceeds 10 percent of total net revenues
[2]	* Less than 5 percent of total net revenues

Contingent Liabilities (Details

Contingent Liabilities (Details) $ in Millions	Dec. 31, 2015USD ($)
Contingent Liabilities [Abstract]
Loss contingency, range of possible loss, maximum	$ 10

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details)	3 Months Ended
	Dec. 31, 2015USD ($)
Federal [Member]
Income Tax Expense (Benefit) [Line Items]
Operating loss carryforwards	$ 13,023,000
Operating Loss Carryforwards, Expiration Year	2,020
State [Member]
Income Tax Expense (Benefit) [Line Items]
Operating loss carryforwards	$ 12,587,000
Operating Loss Carryforwards, Expiration Year	2,027
U.K. [Member]
Income Tax Expense (Benefit) [Line Items]
Operating loss carryforwards	$ 61,938,000

Income Taxes (Reconciliation Of

Income Taxes (Reconciliation Of Income Tax Expense) (Details) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Income Taxes [Abstract]
Income tax expense at statutory rates	$ 789,000	$ 502,000
State income tax, net of federal benefits	119,000	93,000
Non-deductible expenses	2,000	2,000
Effect of AMT expense	30,000	27,000
Effect of lower foreign income tax rates	(107,125)	20,734
Other	(3,422)	25,696
Income tax expense	$ 829,453	$ 670,430

Dividends (Details)

Dividends (Details) $ / shares in Units, $ in Millions	9 Months Ended	12 Months Ended	24 Months Ended	51 Months Ended
	Feb. 06, 2013item$ / shares	May. 07, 2014item$ / shares	Feb. 09, 2012item$ / shares	May. 07, 2014item$ / shares	Sep. 30, 2014USD ($)
Dividends [Abstract]
Number of dividends paid | item	4	5	9	18
Dividends payable, amount per share | $ / shares	$ 0.06	$ 0.07	$ 0.05	$ 0.07
Cumulative dividends paid | $					$ 29.4