The Female Health Company Reports Record Revenues and Earnings for Second Quarter of FY2007

Second quarter highlights:






CHICAGO, May 15  /PRNewswire-FirstCall/ -- The Female Health Company (OTC:FHCO) (BULLETIN BOARD: FHCO) , which manufactures and markets the FC Female Condom(R), today reported record net revenues and net income during the second quarter of FY2007.

For the three months ended March 31, 2007, net revenues increased 44% to approximately $5.3 million, compared with approximately $3.7 million in the three months ended March 31, 2006.  Net income attributable to common shareholders increased more than eight-fold to $317,348, or $0.01 per diluted share, in the second quarter of FY2007, versus $36,418, or $0.00 per share, in the prior-year period.  Unit sales also established a new quarterly record.

Gross profit rose 49% to $2,034,097, compared with $1,367,979 in the second quarter of FY2006.  Operating income increased 382% to $321,331 in the three months ended March 31, 2007, compared with $66,654 in the corresponding period of the previous fiscal year.

The Company expects significant quarter-to-quarter variations in its operating results, due to the timing of large order receipts, production scheduling, and shipping of products.

"We are very pleased to report record revenues and earnings for our second quarter of Fiscal 2007," noted O.B. Parrish, Chief Executive Officer of The Female Health Company.  "The 44% increase in second quarter revenues reflects continued growth in orders for the FC1 female condom, along with significant and growing demand for our FC2 second-generation female condom.  We have recently committed to doubling the production capacity of our FC2 manufacturing facility in Malaysia by the end of calendar 2007.  This will bring our annualized production capacity in Malaysia to approximately 30 million units.  With our partner in India, Hindustan Latex Limited, we expect to start-up the first FC2 production line in that nation of over 1 billion people by mid-year calendar 2007."

For the six months ended March 31, 2007, revenues increased 34% to approximately $9.5 million, compared with approximately $7.1 million in the first half of FY2006.  Year-to-date net income attributable to common shareholders of $90,424, or $0.00 per diluted share, was slightly below the net income attributable to common shareholders of $96,370 or $0.00 per diluted share that was recorded in the corresponding period of the previous fiscal year.

Gross profit increased 19% to $3.3 million in the first half of FY2007, compared with $2.8 million in the six months ended March 31, 2006.  Operating income declined to $102,925, versus $156,663 in the first half of FY2006.

As previously announced, the Female Health Company will host an investor conference call at 11:00 a.m. Eastern time, May 15, 2007. Shareholders and other interested parties may participate in the conference call by dialing 888-694-4728 (international/local participants dial 973-582-2745) and referencing the conference code 8763804, a few minutes before 11:00 a.m. EDT on May 15, 2007. A replay call will be available through May 22, 2007 by dialing 877-519-4471 (international callers dial 973-341-3080) and referencing the conference code is 8763804.

About The Female Health Company, Inc.  --

The Female Health Company, based in Chicago, Illinois, manufactures and markets the FC Female Condom(R), which is primarily distributed by public health organizations and donor groups in over 90 developing countries around the world. World-wide, the Female Condom is available in various programs in 108 countries. The Company owns certain worldwide rights to the FC Female Condom(R), including patents that have been issued in the United States, United Kingdom, Japan, France, Italy, Germany, Spain, the European Patent Convention, the People's Republic of China, Canada, South Korea and Australia. FC Female Condom(R) is the only available FDA-approved product controlled by a woman that offers dual protection against sexually transmitted diseases, including HIV/AIDS, and unintended pregnancy.

"Safe Harbor" statement under the Private Securities Litigation Reform Action of 1995: The statements in this release which are not historical fact are forward-looking statements based upon the Company's current plans and strategies, and reflect the Company's current assessment of the risks and uncertainties related to its business, including such things as product demand and market acceptance; the economic and business environment and the impact of government pressures; currency risks; capacity; efficiency and supply constraints; and other risks detailed in the Company's press releases, shareholder communications and Securities and Exchange Commission filings. Actual events affecting the Company and the impact of such events on the Company's operations may vary from those currently anticipated.

For more information about the Female Health Company visit the Company's web site at http://www.femalehealth.com/ and http://www.femalecondom.org/.

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                        The Female Health Company
              Unaudited Condensed Consolidated Balance Sheet

                                                    March 31,     March 31,
                                                      2007           2006
  Cash                                            $1,672,441    $1,736,555
  Restricted cash                                     83,450       195,942
  Accounts receivable, net                         4,114,611     2,416,004
  Inventory                                        1,481,067       962,349
  Prepaid and other current assets                   570,769       261,927
  Total current assets                             7,922,338     5,572,777

  Other non-current assets                           191,928       186,745
  Net property, plant & equipment                  1,102,639       322,841
  Total assets                                    $9,216,905    $6,082,363

  Accounts payable                                $1,082,789      $564,355
  Accrued expenses                                 1,465,248       644,815
  Preferred dividends payable                          9,606         5,587
  Total current liabilities                        2,557,643     1,214,757

  Deferred gain on sale of facilities              1,093,298     1,065,058
  Total liabilities                                3,650,941     2,279,815

  Total stockholders' equity                       5,565,964     3,802,548
  Total liabilities and equity                    $9,216,905    $6,082,363



                        The Female Health Company
            Unaudited Condensed Consolidated Income Statements

                                                         Three Months Ended
                                                              March 31,
                                                         2007         2006

  Net revenues                                       $5,323,593   $3,692,871

  Gross profit                                        2,034,097    1,367,979

  Advertising and promotion                              33,926       58,677
  Selling, general and administrative                 1,619,803    1,220,605
  Research and development                               59,037       22,043

  Total operating expenses                            1,712,766    1,301,325

  Operating income                                      321,331       66,654

  Interest, net and other income                         35,777        9,524

  Net income                                            357,108       76,178

  Preferred dividends                                    39,760       39,760

  Net income attributable to common stockholders       $317,348      $36,418

  Net income per basic common share outstanding           $0.01        $0.00

  Basic weighted average common shares outstanding   23,973,955   23,745,268

  Net income per diluted common share outstanding         $0.01        $0.00

  Diluted weighted average common shares outstanding 27,702,950   26,882,256




                        The Female Health Company
            Unaudited Condensed Consolidated Income Statements

                                                      Six Months Ended
                                                           March 31,
                                                     2007          2006

  Net revenues                                    $9,522,473    $7,100,933

  Gross profit                                     3,312,495     2,795,150

  Advertising and promotion                           92,964       108,782
  Selling, general and administrative              2,992,865     2,476,216
  Research and development                           123,741        53,489

  Total operating expenses                         3,209,570     2,638,487

  Operating income                                   102,925       156,663

  Interest, net and other income                      49,330        14,846
  Foreign currency transactions (gain) loss           18,572         5,264

  Net income                                         170,827       176,773

  Preferred dividends                                 80,403        80,403

  Net income attributable to common stockholders     $90,424       $96,370

  Net  income per basic common share outstanding       $0.00         $0.00

  Basic weighted average common shares
   outstanding                                    23,962,877    23,624,686

  Net income per diluted common share outstanding      $0.00         $0.00

  Diluted weighted average common shares
   outstanding                                    26,513,336    26,668,403


DATASOURCE: The Female Health Company



CONTACT:  William R. Gargiulo, Jr., [phone], or Donna Felch,

[phone], both of The Female Health Company



Web site:  http://www.femalehealth.com/

http://www.femalecondom.org/ 

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