Female condom maker sees record sales
Shares of Chicago-based Female Health Company Inc. shot up nearly 8 percent Wednesday on the company's announcement it had swung to a net profit of $854,600, or 3 cents per diluted share, in the first quarter ended Dec. 31, from a loss of $186,300, or 1 cent per diluted share, for the year-earlier period.
The female condom manufacturer attributed its strong showing in the quarter to record sales: its revenue totaled $5.7 million, a 37 percent increase from $4.2 million in the year-earlier period.
Nonprofit agencies throughout the world distribute FHC's products, which are the only U.S. Food and Drug Administration-approved devices controlled by women that protect against the transmission of the HIV/AIDS virus.
No analysts cover the company, but a report by London-based Company Watch Ltd. published in September 2007 said FHC's financial health was far better than the average for the overall healthcare industry.
In the fiscal year ended Sept. 30, FHC saw revenues of $7.2 million, compared with $5.5 million in the year-earlier period.
Net income was $1.7 million, or 6 cents per diluted share, compared with $282,000, or 1 cent per diluted share, in the year-earlier period.
"We believe fiscal 2008 will be another record year in terms of revenues and earnings," CEO O.B. Parrish said in a statement.
Still, Parrish warned the production and shipping of large orders will result in quarter-to-quarter revenue variations.
At least 33 million people have HIV, and an estimated 2.5 million new cases are reported each year, according to the United Nations. By 2030, 117 million will have contracted or died of the disease. Domestically, AIDS, the condition caused by HIV, is the leading cause of death for African-American women between 25 and 34, according to the Centers for Disease Control. In 1992, women accounted for an estimated 14 percent of people with AIDS nationally; at the end of 2005, the proportion grew to 23 percent, data from the CDC shows.
To address this phenomenon, organizations including the World Health Organization, the United Nations Population Fund, the U.S. Agency for International Development and foreign government health ministries buy FHC's female condoms for about 89 cents each and distribute them in 116 countries. The product is also marketed commercially in 15 countries, including in the United Kingdom and the U.S.
FHC's first quarter report comes a week after the FDA accepted for review a new, cheaper version of the company's female condom. In August 2006, the World Health Organization approved it for use.
Shares of FHC began trading on the American Stock Exchange in July 2007. The stock closed at $2.63 Wednesday, up 19 cents or 7.8 percent. The company has 2.7 million shares outstanding.