10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarterly period ended June 30, 2013

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the transition period from to

Commission file number 1-13602

The Female Health Company

(Name of registrant as specified in its charter)

Wisconsin	39-1144397
(State of Incorporation)	(I.R.S. Employer Identification No.)
515 N. State Street, Suite 2225 Chicago, IL	60654
(Address of principal executive offices)	(Zip Code)

312-595-9123

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨

Indicate by check  mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   x    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨                                                                                                   Accelerated filer  x

Non-accelerated filer  ¨                                                                                                   Smaller reporting company  ¨

(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as determined by Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 31, 2013, the registrant had 28,684,889 shares of $0.01 par value common stock outstanding.

THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

INDEX	PAGE
PART I.       FINANCIAL INFORMATION
Cautionary Statement Regarding Forward Looking Statements	3
Item 1.  Financial Statements	4
Unaudited Condensed Consolidated Balance Sheets -
June 30, 2013 and September 30, 2012	4
Unaudited Condensed Consolidated Statements of Income -
Three Months Ended June 30, 2013 and June 30, 2012	5
Nine Months Ended June 30, 2013 and June 30, 2012	6
Unaudited Condensed Consolidated Statements of Cash Flows -
Nine Months Ended June 30, 2013 and June 30, 2012	7
Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.  Controls and Procedures	31
PART II.        OTHER INFORMATION
Item 1A.  Risk Factors	32
Item 6.  Exhibits	33

2

CAUTIONARY STATEMENT REGARDING

FORWARD LOOKING STATEMENTS

Certain statements included in this quarterly report on Form 10-Q which are not statements of historical fact are intended to be, and are hereby identified as, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of forward-looking words or phrases such as "anticipate," "believe," "could," "intend," "may," "opportunity," "plan," "predict," "potential," "estimate," "will," "would" or the negative of these terms or other words of similar meaning.  The Company cautions readers that forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. Such factors include, among others, the following: the Company's inability to secure adequate capital to fund working capital requirements and advertising and promotional expenditures; factors related to increased competition from existing and new competitors including new product introduction, price reduction and increased spending on marketing; limitations on the Company's opportunities to enter into and/or renew agreements with international partners, the failure of the Company or its partners to successfully market, sell and deliver its product in international markets, and risks inherent in doing business on an international level, such as laws governing medical devices that differ from those in the U.S., unexpected changes in the regulatory requirements, political risks, export restrictions, tariffs and other trade barriers and fluctuations in currency exchange rates; the disruption of production at the Company's manufacturing facilities due to raw material shortages, labor shortages and/or physical damage to the Company's facilities; the Company's inability to manage its growth and to adapt its administrative, operational and financial control systems to the needs of the expanded entity and the failure of management to anticipate, respond to and manage changing business conditions; the loss of the services of executive officers and other key employees and the Company's continued ability to attract and retain highly-skilled and qualified personnel; the costs and other effects of litigation, governmental investigations, legal and administrative cases and proceedings, settlements and investigations; payment of dividends is in the discretion of the Board of Directors and the Company may not have sufficient cash flows to continue to pay dividends; and developments or assertions by or against the Company relating to intellectual property rights. Such uncertainties and other risks that may affect the Company's performance are discussed further in Part I, Item 1A, "Risk Factors," in the Company's Form 10-K for the year ended September 30, 2012.  The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this report or to update them to reflect events or circumstances occurring after the date of this report.

3

Item 1.  Financial Statements

THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS	June 30, 2013			September 30, 2012
Current Assets:
Cash	$	11,878,170		$	5,290,780
Restricted cash		52,267			4,682
Accounts receivable, net		926,098			7,268,917
Income tax receivable		-			27,369
Inventory, net		2,816,369			1,458,199
Prepaid expenses and other current assets		558,140			624,268
Deferred income taxes		2,152,000			2,152,000
TOTAL CURRENT ASSETS		18,383,044			16,826,215
Other Assets		126,800			122,336
PLANT AND EQUIPMENT
Equipment, furniture and fixtures		4,780,432			4,292,702
Construction in progress		27,796			268,765
Less accumulated depreciation and amortization		(2,588,219	)		(2,211,591	)
Plant and equipment, net		2,220,009			2,349,876
Deferred Income Taxes		11,148,000			11,148,000
TOTAL ASSETS	$	31,877,853		$	30,446,427
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,377,668		$	1,775,327
Accrued expenses and other current liabilities		1,370,066			1,095,732
Accrued compensation		2,053,912			2,964,812
Accrued dividend		16,495			24,570
TOTAL CURRENT LIABILITIES		4,818,141			5,860,441
Deferred rent		72,838			90,902
Deferred grant income		64,027			82,650
Deferred income taxes		189,723			194,244
TOTAL LIABILITIES		5,144,729			6,228,237
Commitments and Contingencies
STOCKHOLDERS’ EQUITY:
Convertible preferred stock, Class A, Series 1		-			-
Convertible preferred stock, Class A, Series 3		-			-
Convertible preferred stock, Class B		-			-
Common stock		306,968			305,500
Additional paid-in-capital		67,346,170			66,760,907
Accumulated other comprehensive loss		(581,519	)		(581,519	)
Accumulated deficit		(33,294,260	)		(35,594,455	)
Treasury stock, at cost		(7,044,235	)		(6,672,243	)
TOTAL STOCKHOLDERS’ EQUITY		26,733,124			24,218,190
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	31,877,853		$	30,446,427

See notes to unaudited condensed consolidated financial statements.

4

THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended  June 30,
	2013			2012
Product sales	$	7,280,498		$	8,656,390
Royalty income		-			-
Net revenues		7,280,498			8,656,390
Cost of sales		3,537,418			3,362,654
Gross profit		3,743,080			5,293,736
Operating expenses		2,653,184			2,485,690
Operating income		1,089,896			2,808,046
Non-operating (expense) income:
Interest, net and other (expense) income		(767	)		301
Foreign currency transaction (loss) gain		(33,280	)		15,235
Total non-operating (expense) income		(34,047	)		15,536
Income before income taxes		1,055,849			2,823,582
Income tax expense		328,938			273,839
Net income	$	726,911		$	2,549,743
Basic earnings per common share outstanding	$	0.03		$	0.09
Basic weighted average common shares outstanding		28,381,923			27,554,290
Diluted earnings per common share outstanding	$	0.03		$	0.09
Diluted weighted average common shares outstanding		28,750,679			29,101,092
Cash dividends declared per common share		-			-

See notes to unaudited condensed consolidated financial statements.

5

THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Nine Months Ended  June 30,
	2013			2012
Product sales	$	26,667,591		$	25,100,475
Royalty income		-			21,721
Net revenues		26,667,591			25,122,196
Cost of sales		11,438,196			10,251,347
Gross profit		15,229,395			14,870,849
Operating expenses		7,181,778			7,116,292
Operating income		8,047,617			7,754,557
Non-operating income (expense):
Interest, net and other income		275,966			913
Foreign currency transaction loss		(100,173	)		(69,294	)
Total non-operating income (expense)		175,793			(68,381	)
Income before income taxes		8,223,410			7,686,176
Income tax expense		470,984			572,060
Net income	$	7,752,426		$	7,114,116
Basic earnings per common share outstanding	$	0.27		$	0.26
Basic weighted average common shares outstanding		28,368,212			27,530,445
Diluted earnings per common share outstanding	$	0.27		$	0.25
Diluted weighted average common shares outstanding		28,726,565			29,017,821
Cash dividends declared per common share	$	0.19		$	0.16

See notes to unaudited condensed consolidated financial statements.

6

THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended June 30,
	2013			2012
OPERATING ACTIVITIES
Net income	$	7,752,426		$	7,114,116
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		418,352			341,755
Amortization of deferred income from grant		(18,623	)		(18,623	)
Interest added to certificate of deposit		-			(252	)
Share-based compensation		573,538			656,147
Deferred income taxes		(4,521	)		(613	)
Loss on disposal of fixed assets		940			12,628
Changes in operating assets and liabilities		4,034,586			927,405
Net cash provided by operating activities		12,756,698			9,032,563
INVESTING ACTIVITIES
(Increase) decrease in restricted cash		(47,585	)		3
Proceeds from certificate of deposit		-			64,127
Capital expenditures		(289,425	)		(505,724	)
Net cash used in investing activities		(337,010	)		(441,594	)
FINANCING ACTIVITIES
Purchases of common stock for treasury shares		(371,992	)		(59,001	)
Dividends paid on common stock		(5,460,306	)		(4,481,694	)
Payments on capital lease obligations		-			(13,037	)
Net cash used in financing activities		(5,832,298	)		(4,553,732	)
Net increase in cash		6,587,390			4,037,237
Cash at beginning of period		5,290,780			4,249,324
CASH AT END OF PERIOD	$	11,878,170		$	8,286,561
Supplemental Disclosure of Cash Flow Information:
Cash payments for income taxes	$	207,391		$	574,547
Schedule of noncash financing and investing activities:
Reduction of accrued expense upon issuance of shares	$	189,644		$	179,723
Dividends payable		8,170			14,420
Fixed asset additions in accounts payable		-			158,938

See notes to unaudited condensed consolidated financial statements.

7

THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 and nine months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2013. 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, 2012.

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 16,000 sq. ft. manufacturing facility located in Selangor D.E., Malaysia.

FC2 is currently sold or available in either or both commercial (private sector) and public health sector markets in 143 countries. The product is marketed directly to consumers in 16 countries by various country-specific commercial partners.

The Company also derives revenue from licensing its intellectual property under an agreement with its exclusive distributor in India, Hindustan Lifecare Limited (“HLL”).  HLL is authorized to manufacture FC2 at HLL's facility in Kochi, India, for sale in India, and the Company receives a royalty based on the number of units sold by HLL in India.  Such revenue appears as royalty income on the Unaudited Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2013 and 2012, and is recognized in the period in which the sale is made by HLL.

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 58 days. Over the past five years, the Company’s bad debt expense has been less than 0.05% of product sales.  The balance in the allowance for doubtful accounts was $68,694 at June 30, 2013 and $41,625 at September 30, 2012.

8

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. 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, delivery of goods or at a period of time after product has been distributed.

Foreign Currency and Change in Functional Currency

The Company recognized a foreign currency transaction loss of $33,280 and $100,173 for the three and nine months ended June 30, 2013, respectively, compared to a gain of $15,235 and loss of $69,294 for the three and nine months ended June 30, 2012, respectively. 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 September 30, 2012 consolidated financial statements have been reclassified to conform to the June 30, 2013 presentation.

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 warrants and unvested shares granted to employees and directors.

	Three Months Ended June 30,				Nine Months Ended June 30,
	2013		2012		2013		2012
Denominator:
Weighted average common shares outstanding – basic		28,381,923		27,554,290		28,368,212		27,530,445
Net effect of dilutive securities
Options		169,080		1,191,381		158,677		1,134,225
Warrants		-		62,171		-		59,901
Unvested restricted shares		199,676		293,250		199,676		293,250
Total net effect of dilutive securities		368,756		1,546,802		358,353		1,487,376
Weighted average common shares outstanding – diluted		28,750,679		29,101,092		28,726,565		29,017,821
Income per common share – basic	$	0.03	$	0.09	$	0.27	$	0.26
Income per common share – diluted	$	0.03	$	0.09	$	0.27	$	0.25

9

All the outstanding warrants, stock options, and unvested restricted shares were included in the computation of diluted net income per share for the three and nine months ended June 30, 2013 and 2012.

NOTE 3 - Inventory

Inventory consists of the following components at June 30, 2013 and September 30, 2012:

	June 30, 2013			September 30, 2012
Raw material	$	1,068,925		$	523,201
Work in process		85,730			57,102
Finished goods		1,695,141			927,706
Inventory, gross		2,849,796			1,508,009
Less: inventory reserves		(33,427	)		(49,810	)
Inventory, net	$	2,816,369		$	1,458,199

NOTE 4 – Line of Credit

On August 1, 2013, 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, 2014. 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 a rate of the base rate (4.0% at June 30, 2013) plus 0.5%. The note is collateralized by substantially all of the assets of the Company. No amounts were outstanding under the Loan Agreement at either June 30, 2013 or September 30, 2012.

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 June 30, 2013, 842,108 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 and nine months ended June 30, 2013 or 2012.

10

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. Stock compensation expense related to options for the three and nine months ended June 30, 2013, was $0, and was approximately $15,000 and $60,000 for the three and nine months ended June 30, 2012, respectively.

During the nine months ended June 30, 2013, 36,250 stock options were exercised using the cashless exercise option available under the plan which entitled the holders to 28,172 shares of common stock.  The intrinsic value of the options exercised was $272,000.  During the nine months ended June 30, 2012, 193,750 stock options were exercised using the cashless exercise option available under the plan which entitled the holders to 116,915 shares of common stock.  The intrinsic value of the options exercised was $510,000.

The following table summarizes the stock options outstanding and exercisable at June 30, 2013:

	Options Outstanding and Exercisable At 6/30/2013	Wghted. Avg. Remaining Life (years)	Wghted. Avg. Exercise Price	Aggregate Intrinsic Value
Total	240,000	4.33	$ 2.64	$ 1,732,000

The aggregate intrinsic value in the table above is before income taxes, based on the closing price of the Company’s common stock of $9.86 per share as of the last business day of the period ended June 30, 2013.  As of June 30, 2013, the Company had no unrecognized compensation expense relating to outstanding stock options as all outstanding stock options were fully vested.  The deferred tax asset and realized benefit from stock options exercised and other share-based payments for the three and nine months ended June 30, 2013 and 2012, was not recognized, based on the Company’s election of the “with and without” approach.

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 contain vesting provisions or provide for future issuance contingent on continued employment for periods that range from one to three years.

The Company granted a total of 64,676 shares of restricted stock or shares issuable pursuant to promises to issue shares of common stock during the nine months ended June 30, 2013. The fair value of the awards granted was approximately $471,000. All such shares of restricted stock vest and all such shares must be issued pursuant to promises to issue common stock in  September 2013 through May 2016, 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 and nine months ended June 30, 2013.

11

The Company granted a total of 54,750 shares of restricted stock or shares issuable pursuant to promises to issue shares of common stock during the nine months ended June 30, 2012. The fair value of the awards granted was approximately $227,000. All such shares of restricted stock vest and all such shares must be issued pursuant to promises to issue common stock by September 2014, provided the grantee has not voluntarily terminated service or been terminated for cause prior to the vesting or issuance date.  There were 2,500 shares of restricted stock that were forfeited during the three and nine months ended June 30, 2012.

The Company recognized share-based compensation expense for restricted stock or promises to issue shares of common stock of approximately $180,000 and $573,000 for the three and nine months ended June 30, 2013, respectively, $176,000 of which was included in accrued expenses at the nine months then ended since the related shares had not yet been issued at June 30, 2013.  Share-based compensation expense for restricted stock or promises to issue shares of common stock for the three and nine months ended June 30, 2012 was approximately $189,000 and $596,000, respectively, of which $178,000 was included in accrued expenses at June 30, 2012.  This compensation expense was included in operating expenses on the Unaudited Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2013 and 2012. As of June 30, 2013, there was approximately $423,000, representing approximately 65,000 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 one year.

Common Stock Purchase Warrants

The Company did not issue any common stock purchase warrants during the three and nine months ended June 30, 2013 or 2012.  During the nine months ended June 30, 2013, a warrant holder exercised 52,000 warrants using the cashless exercise option available within the warrant agreements which entitled the warrant holder to 43,465 shares of common stock.  There were no warrants exercised during the nine months ended June 30, 2012.  As of June 30, 2013, there are no outstanding warrants.

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 million shares of its common stock could be purchased during the subsequent 12 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 million shares through the period ending December 31, 2013.  From the program’s onset through June 30, 2013, the total number of shares repurchased by the Company is 2,011,954.  The total number of shares that may yet be purchased under the program is 988,046. 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. During the three months ended June 30, 2013, there were no private repurchase transactions and no open market repurchase transactions. For the nine months ended June 30, 2013, 53,125 shares were repurchased.  Of those private repurchase transactions were 43,125 shares for $304,694 and open market repurchase transactions were 10,000 shares for $67,298. During the three months ended June 30, 2012, 10,000 shares were repurchased.  Of those there were no private repurchases transactions and open market repurchase transactions were 10,000 shares for $54,311.  During the nine months ended June 30, 2012, 11,000 shares were repurchased.  Of those private repurchase transactions were 1,000 shares for $4,690 and open market repurchase transactions were 10,000 shares for $54,311.

12

Issuer Purchases of Equity Securities	Details of Treasury Stock Purchases to Date through June 30, 2013
Period:	Total Number of Shares Purchased		Average Price Paid Per Share		Cost of Treasury Stock
January 1, 2007  –  September 30, 2012		1,958,829	$	3.41	$	6,672,243
October 1, 2012 – October 31, 2012		-		-		-
November 1, 2012 – November 30, 2012		-		-		-
December 1, 2012 – December 31, 2012		25,000		7.12		178,000
Quarterly Subtotal		25,000		7.12		178,000
January 1, 2013 – January 31, 2013		-		-		-
February 1, 2013 – February 28, 2013		-		-		-
March 1, 2013 – March 31, 2013		28,125		6.90		193,992
Quarterly Subtotal		28,125		6.90		193,992
April 1, 2013 – April 30, 2013		-		-		-
May 1, 2013 – May 28, 2013		-		-		-
June 1, 2013 – June 30, 2013		-		-		-
Quarterly Subtotal		-		-		-
Nine Months Subtotal		53,125		7.00		371,992
Total		2,011,954	$	3.50	$	7,044,235

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 The Nine Months Ended						Long-Lived Assets As of
	June 30,						June 30,		September 30,
	2013			2012			2013		2012
South Africa	$	5,421	(2)	$	3,792	(1)	$	-	$	-
Brazil		4,480	(1)		6,720	(1)		-		-
Nigeria		2,878	(1)		*			-		-
United States		1,987			1,792			161		175
Congo		1,706			*			-		-
United Kingdom		*			*			187		220
India		*			*			50		67
Malaysia		*			*			1,949		2,010
Other		10,196			12,818			-		-
	$	26,668		$	25,122		$	2,347	$	2,472

* Less than 5 percent of total net revenues.

(1) Comprised of a single customer considered to be a major customer (exceeds 10 percent of net revenues).

(2) Comprised of two customers considered to be major customers (exceeds 10 percent of net revenues).

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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.

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 the subsequent six years for each tax jurisdiction.

As of June 30, 2013, the Company had U.S. federal and state net operating loss carryforwards of approximately $24,641,000 and $12,363,000, 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 $64,260,000 as of June 30, 2013, which can be carried forward indefinitely to be used to offset future U.K. taxable income. With the increasing 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.  However, because some of the U.S. federal tax losses have a net loss carryforward limitation of twenty years, it is possible that some of the Company’s early losses carried forward in the U.S. will not be fully utilized.  The U.K. net operating losses do not expire. The Company’s Malaysia subsidiary had no net operating loss carryforwards as of June 30, 2013.

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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 and nine months ended June 30, 2013 and 2012, is as follows:

	Three Months Ended June 30,						Nine Months Ended June 30,
	2013			2012			2013			2012
Income tax expense at statutory rates	$	359,000		$	960,000		$	2,796,000		$	2,613,000
State income tax, net of federal benefits		67,000			177,000			516,000			482,000
Effect of AMT expense		10,000			39,000			26,000			84,000
Non-deductible expenses		1,000			2,000			8,000			5,000
Effect of lower income tax rates on foreign income		(45,631	)		(188,971	)		(812,772	)		(639,657	)
Utilization of NOL carryforwards		(549,542	)		(784,219	)		(1,803,834	)		(2,138,683	)
Increase (decrease) in valuation allowance		487,111			69,029			(258,410	)		166,400
Income tax expense	$	328,938		$	273,839		$	470,984		$	572,060

Note 10 – Dividends

Beginning February 16, 2010, through June 30, 2013, the Company has paid 14 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 1 was paid at a quarterly rate per share of $0.07 on May 8, 2013.  The Company paid cash dividends of approximately $5.5 million and $4.5 million during the nine months ended June 30, 2013 and 2012, respectively.

On July 15, 2013, the Company’s Board of Directors declared a quarterly cash dividend of $0.07 per share.  The Company will pay, from its cash on hand, approximately $2.0 million pursuant to the dividend on August 7, 2013 to stockholders of record as of July 31, 2013.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The Female Health Company manufactures, markets and sells the FC2 Female Condom.  FC2 is the only currently available female-initiated product approved by the U.S. Food and Drug Administration (FDA) and cleared by the World Health Organization (WHO) for purchase by U.N. agencies that provides dual protection against unintended pregnancy and sexually transmitted infections ("STIs"), including HIV/AIDS. The Company’s first generation product was the FC1 Female Condom, a Class III medical device approved by FDA in 1993.  The Company’s second generation product, FC2, has been available globally since 2007, and in the U.S. since 2009 after it was approved by the FDA as a Class III medical device. To date, FHC has manufactured and sold approximately 392 million FC1 and FC2 Female Condoms.

Products

Currently, there are only two FDA approved and marketed products that prevent the transmission of HIV/AIDS through sexual intercourse: the male condom and FC2. FC2 is currently the only FDA approved and marketed product controlled by women that prevents STIs, including HIV/AIDS. Used consistently and correctly, it provides women dual protection against STIs (including HIV/AIDS) and unintended pregnancy.  FC2 does not compete with the male condom; it provides an alternative to either unprotected sex or male condom usage.

An economic analysis of the cost effectiveness of an FC2 HIV/AIDS prevention program conducted by Dr. David Holtgrave, the chairman of the Department of Health Behavior and Society at the Johns Hopkins Bloomberg School of Public Health was featured in the March 26, 2012  issue of AIDS and Behavior.  The study showed that the Washington, D.C. FC2 prevention program, a public-private partnership to provide and promote FC2, prevented enough HIV infections in the first year alone to save over $8 million in avoided future medical care costs (over and above the cost of approximately $445,000 for the program).  This means that for every dollar spent on the program, there was a cost savings of nearly $20.  In the article Dr. Holtgrave concluded, “These results clearly indicate that delivery of, and education about, Female Condoms is an effective HIV prevention intervention and an outstanding public health investment.”  The district began its program in 2010 to fight a disease that is at epidemic levels.  At least 3 percent of Washington residents have HIV or AIDS, a prevalence rate that is the highest of any U.S. city.

Numerous clinical and behavioral studies have been conducted regarding use of the female condom. Studies show that in many cultures, the female condom is found acceptable by women and their partners. Importantly, studies also show that when the female condom is made available as an option along with male condoms there is a significant increase in protected sex acts with a concurrent decrease in STIs. The increase in protected sex acts varies by country and averages between 10 percent and 35 percent.

FC2, the Company’s second generation Female Condom, has basically the same physical design, specifications, safety and efficacy profile as FC1.  Manufactured from a nitrile polymer formulation that is exclusive to the Company, FC2 can be produced more economically than the first generation product, FC1, which was made from a more costly raw material (polyurethane).   FC2 consists of a soft, loose fitting sheath and two rings: an external ring of rolled nitrile and a loose internal ring, made of flexible polyurethane. FC2’s soft sheath lines the vagina, preventing skin-to-skin contact during intercourse.  Its external ring remains outside the vagina, partially covering the external genitalia. The internal ring is used for insertion and helps keep the device in place during use.

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FC2’s primary raw material (a nitrile polymer) offers a number of benefits over natural rubber latex, the raw material most commonly used in male condoms.  FC2’s nitrile polymer is stronger than latex, reducing the probability that the Female Condom sheath will tear during use. Unlike latex, FC2’s nitrile polymer quickly transfers heat.  FC2 warms to body temperature immediately upon insertion which may enhance the user’s sensation and pleasure. Unlike the male condom, FC2 may be inserted in advance of arousal, eliminating disruption during sexual intimacy. FC2 is also an alternative to latex sensitive users (7 percent to 20 percent of the population) who are unable to use male condoms without irritation. To the Company's knowledge, there is no reported allergy to the nitrile polymer.  FC2 is pre-lubricated, disposable and recommended for use during a single sex act.  FC2 is not reusable.

FC2 received FDA approval as a Class III medical device on March 10, 2009, and has been available in the United States since August 2009.  In addition to FDA approval, FC2 has been approved by other regulatory agencies, including in the European Union, India and Brazil.  Based on a rigorous scientific review, WHO agreed that FC2 performs in the same manner as FC1 and cleared FC2 for purchase by U.N. agencies in 2006.

Raw Materials

The principal raw material used to produce FC2 is a nitrile polymer. While general nitrile formulations are available from a number of suppliers, the Company has chosen to work closely with the technical market leader in synthetic polymers to develop a grade ideally suited to the bio-compatibility and functional needs of a female condom.  The supplier has agreed that the Company is the sole and exclusive owner of the unique polymer formulation that was developed for FC2.

Global Market Potential

Because FC2 offers a woman dual protection against both unintended pregnancy and STIs, including HIV/AIDS, its market encompasses both family planning and disease prevention.

DISEASE PREVENTION

The first clinical evidence of AIDS was noted more than thirty years ago.  Since then, HIV/AIDS has become the most devastating pandemic facing humankind in recorded history. In November 2009, WHO released statistics indicating that on a world-wide basis, HIV/AIDS is now the leading cause of death in women 15 to 44 years of age.  According to the WHO, in 2010 worldwide more than half of all the adults living with HIV were women and almost 50 percent of all new adult cases of HIV/AIDS were women. In the United States the Centers for Disease Control and Prevention (CDC) and FDA both list heterosexual sex as the most common method of HIV transmission in women.

For sexually active couples, male condoms and FC2 are the only barrier methods approved by FDA for preventing sexual transmission of HIV/AIDS.  In recent years, scientists have sought to develop alternative means of preventing HIV/AIDS.   Based on the complexities of such research, a viable broadly usable prevention alternative is unlikely to be available in the foreseeable future.  To date, it is clear that condoms, male and female, continue to play a key role in the prevention of STIs, including HIV/AIDS.  The Company’s FC2 Female Condom, when used consistently and correctly, gives a woman control over her sexual health by providing dual protection against STIs (including HIV/AIDS) and unintended pregnancy.

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In the United States, the CDC continues to report that the HIV/AIDS epidemic is taking an increasing toll on women and girls. Women of color, particularly black women, have been especially hard hit.  Women of color comprise both the majority of new HIV and AIDS cases among women, and the majority of women living with the disease. 

In 2009, the CDC listed the rate of new HIV infection for black women as approximately 15 times the rate for white women in the United States. In 2009, in the United States, it estimated that one in 32 black women would be diagnosed with HIV in her lifetime, compared to the one in 526 incidence rate amongst white women. 

The CDC estimates there are 19 million new sexually transmitted infections in the United States each year. It is also estimated that over 24,000 women each year in the U.S. lose the ability to conceive or carry a pregnancy to term due to undiagnosed or untreated STIs. In March 2008, the CDC announced that a study indicated that 26 percent of female adolescents in the United States have at least one of the most common STIs.  Led by the CDC’s Sara Forhan, the study is the first to examine the combined national prevalence of common STIs among adolescent women in the United States. In addition to overall STI prevalence, the study found that by race, African American teenage girls had the highest prevalence, with an overall prevalence of 48 percent compared to 20 percent among both whites and Mexican Americans.  Overall, approximately half of all the teens in the study reported ever having sex. Among these girls, the STI prevalence was 40 percent.

On November 29, 2012, in conjunction with World AIDS Day, U.S. Secretary of State Hillary Clinton, as part of the President’s Emergency Plan For AIDS Relief (“PEPFAR”), issued a blueprint for an AIDS Free Generation.  In the blueprint it states that female condoms are unique in providing a female controlled HIV prevention option and that PEPFAR will work with partner governments and other donors to promote female condoms wherever effective programs can build a sustained demand.

CONTRACEPTION

The feminization of HIV/AIDS has increased the relevance of FC2 for the prevention of unintended pregnancies as well as disease prevention.  Unintended pregnancy may result in maternal and infant death, babies with HIV/AIDS, AIDS orphans and increased health care costs.

On July 11, 2012, World Population Day, the U.K. Government and the Bill and Melinda Gates Foundation held a Summit on Family Planning in London, England (the “London Summit”).  It was attended by public health officials, government officials, and private sector companies that supply contraceptives and related products.  The primary goal of the London Summit was to increase access to contraceptives to an additional 120 million poor women in 69 developing countries by 2020.  Achievement of this goal will reduce maternal and infant mortality, HIV/AIDS babies, AIDS orphans and health care costs.

At the close of the London Summit it was announced that commitments of $4.6 billion had been made to fund the 2012-2020 program.  This included commitments by the U.K. Government, other specific countries, the Bill & Melinda Gates Foundation, other foundations, Bloomberg Philanthropies, and other private sector donors.

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FHC was one of only fourteen companies invited to attend the London Summit.  O.B. Parrish, the Company’s Chairman and Chief Executive Officer, participated on a panel “Partnering for Progress: The Role of Public/Private Partnerships”.

FHC announced a Public/Private Partnership program to support the goal to provide contraceptives to an additional 120 million women by 2020.  FHC’s program includes the following:

·   Aggregate annual FC2 purchases from all major public sector buyers each year to establish volume-based unit pricing for the succeeding year.

·   Award major public sector purchasers with FC2 Female Condoms equal to 5 percent of their total annual units purchased, at no cost to such purchasers.

·   Invest up to $14 million over the next six years in reproductive health and HIV/AIDS prevention education and training in collaboration with global agencies.

The Company believes achievement of the London Summit’s goals will increase the market for contraceptives over the long-term.  It also believes it will increase the market for the female condom, as it is the only female-initiated product that provides dual protection against unintended pregnancy and STIs including HIV/AIDS.

The Condom Market

The global male condom market (public and private sector) is estimated to be $3 billion annually. The global public health sector market for male condoms is estimated to be greater than 10 billion units annually.  The private sector market for male condoms is estimated at 3 billion units annually.  The United Nations Joint Programme on HIV/AIDS (“UNAIDS”) estimates that the annual public health sector demand for condoms, both male and female, will reach 19 billion units by 2015.

The FC2 Female Condom and the Male Condom

Currently, there are only two FDA approved and marketed products that prevent the transmission of HIV/AIDS through sexual intercourse: the male condom and FC2.  FC2 is currently the only FDA approved and marketed product controlled by women that prevents STIs including HIV/AIDS. Used consistently and correctly, it provides women dual protection against STIs (including HIV/AIDS) and unintended pregnancy.  FC2 does not compete with the male condom; it provides an alternative to either unprotected sex or to male condom usage.

Strategy

The Company’s strategy is to fully develop global markets for the FC2 Female Condom for both contraception and STI prevention. Since the introduction of its first generation product, FC1, the Company has developed contacts and relationships with global public health sector organizations such as WHO, the United Nations Population Fund (UNFPA), the United States Agency for International Development (USAID), UNAIDS, country-specific health ministries and non-governmental organizations (NGOs), and commercial partners in various countries. The Company has representatives in various locations around the world to provide technical support and assist with its customers’ prevention and family planning programs. As announced during the July 2012 London Summit on Family Planning, the Company has pledged to significantly increase its global educational and training investment over the next six years.

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The Company’s first generation product, FC1, was produced from a costly raw material (polyurethane), in a labor intensive manufacturing process in a suburb of London, England.  To expand women’s access to the female condom, increase sales volume, reduce costs, and significantly increase gross margin, the Company developed its second generation product, FC2.  The second generation product is made from a less costly raw material, nitrile polymer. FC2’s production process is more efficient and less labor intensive than that of FC1, making it less costly to produce.  Its price is now approximately 30 percent less than that of FC1.  FC2 is currently being produced at the Company’s facility in Selangor D.E., Malaysia and in Kochi, India, in conjunction with FHC’s exclusive distributor in India, HLL. The Company made its first substantial sales of FC2 in fiscal 2007.  Since October 2009, all of the Company’s unit sales have been FC2.  Production in London was discontinued with the final shipment of FC1 in October 2009. As a result of the successful development of FC2, the Company was able to both reduce the price to the public health sector and increase its gross margin.

Since the product’s primary market is currently the public health sector, the Company incurs minimal sales and marketing expense.  Thus, as the demand for the FC2 Female Condom continues to grow in the public health sector, the Company’s operating expenses are likely to grow at a much lower rate than that of volume.

Commercial Markets - Direct to Consumers

The Company has distribution agreements and other arrangements with commercial partners which market directly to consumers in 16 countries, including the United States, Brazil, Spain, France, and the United Kingdom. These agreements are generally exclusive for a single country. Under these agreements, the Company sells FC2 to the distributor partners, who market and distribute the product to consumers in the established territory.

Relationships and Agreements with Public Health Sector Organizations

The Company’s customers are primarily large global agencies, non-government organizations, ministries of health and other government agencies which purchase and distribute FC2 for use in HIV/AIDS prevention and family planning programs.  The Company offers uniform, volume-based pricing to such agencies, rather than entering into long-term supply agreements. In the United States, FC2 is sold to city and state public health clinics as well as not-for-profit organizations such as Planned Parenthood.  FC2 is being distributed as part of New York City’s Female Condom Education and Distribution Project being conducted by the Bureau of HIV/AIDS Prevention and Control.  As of June 30, 2013, FC2 was available in 1,351 locations in New York City, as compared to 947 at June 30, 2012; including both community based organizations and the N.Y.C. Department of Health and Mental Hygiene units.

The Company, in collaboration with the National Female Condom Coalition, is encouraging FC2 usage through city-specific programs as well as other coordinated efforts.  To make “train the trainer” education broadly available, the Company introduced its FC2 On-line Training Program in March 2012. The National Female Condom Coalition support of the female condom was evidenced by its initiation of the first-ever Global Female Condom Day on September 12, 2012.

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Manufacturing Facilities

The Company leases 16,000 sq. ft. of production space in Selangor D.E., Malaysia for the production of FC2.  In fiscal 2012, expansion of the facility’s manufacturing capacity by 20 percent to approximately 100 million units annually was begun. The expansion was completed in October 2012, when the new lines went into production.  The cost was approximately $700,000, which was funded internally.

The Company’s India-based FC2 end-stage production capacity for supply to the Indian market is located at a facility owned by its exclusive distributor, HLL in the Cochin Special Export Zone. In December 2007, production began at that facility which has a capacity of 7.5 million units per year.

FHC’s total FC2 production capacity is approximately 100 million units annually.  The Company is currently reviewing options to expand its manufacturing capacity.

Government Regulation

Female condoms as a group were classified by the FDA as Class III medical devices in 1989.  Class III medical devices are deemed by the FDA to carry potential risks with use which must be tested prior to FDA approval, referred to as Premarket Approval (PMA), for sale in the U.S.  As FC2 is a Class III medical device, prior to selling FC2 in the U.S., the Company was required to submit a PMA application containing technical information on the use of FC2 such as pre-clinical and clinical safety and efficacy studies which were gathered together in a required format and content.  The FC2 PMA was approved by the FDA as a Class III medical device in March 2009.

FC2 received the CE Mark which allows it to be marketed throughout the European Union.  FC2 has also been approved by regulatory authorities in Brazil, India and other jurisdictions.

The Company believes that FC2’s PMA and FDA classification as a Class III medical device creates a significant barrier to entry in the U.S. market. The Company estimates that it would take a minimum of four to six years to implement, execute and receive FDA approval of a PMA to market another type of female condom.

In the U.S., FC2 is regulated by the FDA. Pursuant to section 515(a)(3) of the Safe Medical Amendments Act of 1990 (the "SMA Act"), the FDA may temporarily suspend approval and initiate withdrawal of the PMA if the FDA finds that FC2 is unsafe or ineffective, or on the basis of new information with respect to the device, which, when evaluated together with information available at the time of approval, indicates a lack of reasonable assurance that the device is safe or effective under the conditions of use prescribed, recommended or suggested in the labeling. Failure to comply with the conditions of FDA approval invalidates the approval order. Commercial distribution of a device that is not in compliance with these conditions is a violation of the SMA Act.  As an FDA approved medical device, the facilities in which FC2 is produced and tested are subject to periodic FDA inspection to ensure compliance with current Good Manufacturing Processes.  The Company’s most recent FDA inspection was completed in September 2010.

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The FDA’s approval order for FC2 includes conditions that relate to product labeling, including information on the package itself and instructions for use called a “package insert” which accompanies each product.  The Company believes it is in compliance with the FDA approval order.

The Company’s facility may also be subject to inspection by UNFPA, USAID, and country specific ministries of health.

The Company believes there are no material issues or material costs associated with the Company’s compliance with environmental laws related to the manufacture and distribution of FC2.

Competition

The Company's FC2 Female Condom participates in the same market as male condoms; however, it is not seen as directly competing with male condoms. Rather, studies show that providing FC2 is additive in terms of prevention and choice. Male condoms cost less and have brand names that are more widely recognized than FC2. In addition, male condoms are generally manufactured and marketed by companies with significantly greater financial resources than the Company.

Other parties have developed and marketed female condoms.  None of these female condoms marketed or under development by other parties have secured FDA approval. The Cupid female condom became the second female condom design to successfully complete the WHO prequalification process in July 2012 and be cleared for purchase by U.N. agencies. It is possible that other female condoms may receive FDA approval or complete the WHO prequalification process or may otherwise compete with the Company's FC2 Female Condom.

Patents and Trademarks

FC2 patents have been issued by the United States, Europe, Canada, Australia, South Africa, The People’s Republic of China,  Japan, Mexico and the African Regional Intellectual Property Organization (ARIPO), which includes Botswana, Gambia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Sierra Leone, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.  Further, the European patent for FC2 has been validated in the following countries: Austria, Belgium, Bulgaria, Switzerland, Republic of Cyprus, Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, United Kingdom, Greece, Hungary, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Romania, Sweden, Slovenia, Slovakia, and Turkey.  Patent applications for FC2 are pending in a number of other countries around the world through the Patent Cooperation Treaty. The patents cover the key aspects of FC2, including its overall design and manufacturing process.  There can be no assurance that pending patent applications provide the Company with protection against copycat products entering markets during the pendency of the applications.

The Company has the registered trademark “FC2 Female Condom” in the United States. The Company has also secured, or applied for, 14 trademarks in 40 countries or jurisdictions to protect the various names and symbols used in marketing the product around the world. These include "femidom" and "femy," “Reality” and others. In addition, the experience that has been gained through years of manufacturing the FC Female Condoms (FC1 and FC2) has allowed the Company to develop trade secrets and know-how, including certain proprietary production technologies that further protects its competitive position.

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Overview

The Female Health Company manufactures, markets and sells the FC2 Female Condom. FC2 is the only currently available female-initiated product approved by the FDA that provides dual protection against unintended pregnancy and STIs, including HIV/AIDS.

In 2005, the Company initiated approval of a second generation Female Condom, FC2, which had been developed to:

1.   Expand access to female-initiated prevention by offering a more affordable product

2.   Increase HIV/AIDS prevention and family planning options

3.   Lower health care costs

4.   Increase gross margins

In August 2006, after a stringent technical review, the WHO cleared FC2 for purchase by U.N. agencies.  The first substantial sales of FC2 occurred in fiscal 2007.  FC2 received FDA approval as a Class III medical device on March 10, 2009 and became available in the United States in August 2009. In addition to FDA approval, FC2 has been approved by other regulatory agencies, including in the European Union, India, and Brazil.

In October 2009, the Company completed the transition from its first generation product, FC1, to its second generation product, FC2, and production of FC1 ceased.  Although FC1 production has ceased, the Company retains ownership of certain worldwide rights to FC1, as well as various patents, regulatory approvals and other intellectual property related to FC1. 

From its introduction in March 2007 through June 30, 2013, approximately 217 million FC2 Female Condoms have been distributed in 143 countries. Since the last shipments of FC1 were produced and sold in October 2009, all units sold have been FC2.  To date, the Company has sold approximately 392 million FC1 and FC2 Female Condoms.

FC2 provides women dual protection against STIs (including HIV/AIDS) and unintended pregnancy.  Because FC2’s primary usage is that of disease prevention, the public health sector is the Company’s main market. Within the public health sector, various organizations supply critical products such as FC2, at no cost or low cost, to those who need but cannot afford to buy such products for themselves.

FC2 is currently available in 143 countries. A significant number of countries with the highest demand potential are in the developing world.  The incidence of HIV/AIDS, other STIs and unwanted pregnancy in these countries represents a remarkable potential for significant sales of a product that benefits some of the world’s most underprivileged people.  However, conditions in these countries can be volatile and result in unpredictable delays in program development, tender applications and processing orders.

The Company has a relatively small customer base, with a limited number of customers who generally purchase in large quantities. Over the past few years, major customers have included large global agencies, such as UNFPA and USAID, through its facilitator, John Snow, Inc.  Other customers include ministries of health or other governmental agencies, which either purchase directly or via in-country distributors, and non-governmental organizations.

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Purchasing patterns vary significantly from one customer to another, and may reflect factors other than simple demand.  For example, some governmental agencies purchase through a formal procurement process in which a tender (request for bid) is issued for either a specific or a maximum unit quantity.  Tenders also define the other elements required for a qualified bid submission (such as product specifications, regulatory approvals, clearance by WHO, unit pricing and delivery timetable).  Bidders have a limited period of time in which to submit bids.  Bids are subjected to an evaluation process which is intended to conclude with a tender award to the successful bidder.  The entire tender process, from publication to award, may take many months to complete. Administrative issues, politics, bureaucracy, process errors, changes in leadership, funding priorities and/or other pressures may delay or derail the process and affect the purchasing patterns of public sector customers.  As a result, the Company may experience significant quarter-to-quarter sales variations due to the timing and shipment of large orders.

In the past few years, the Company’s business model, which includes high gross margins, modest capital expenditures and low expense requirements compared to production volumes, has permitted the Company to sustain profitable operations without debt and maintain dividend payments during periods of delayed orders. Continuation of these accomplishments in the future periods will be contingent on a number of factors, including the degree and period of sales volatility and on the strength of global demand for the Company’s product.

During fiscal 2011, the Company's unit shipments, revenues and net income were adversely affected by bureaucratic delays and other timing issues involving the receipt and shipment of large orders from Brazil and the Republic of South Africa (RSA). Significant orders for both countries were received in the first quarter of fiscal 2012. The 20 million unit order received for shipment to Brazil was the largest order in the Company’s history. Receipt of these orders positively impacted fiscal 2012 results.

During the seven year period from fiscal 2005 through fiscal 2012, the average annual compound growth rate of unit sales of Female Condoms (FC1 and FC2) has been 23.7 percent.

Details of the quarterly unit sales for the last five fiscal years are listed below:

	2013		2012		2011		2010		2009
October 1 – December 31		17,114,630		15,166,217		6,067,421		9,527,700		7,955,204
January 1 – March 31		16,675,035		13,945,320		8,905,099		12,960,496		10,298,728
April 1 – June 30		12,583,460		15,198,960		5,922,334		2,606,802		10,345,898
July 1 - September 30		-		17,339,500		11,977,716		13,824,264		11,592,770
Total		46,373,125		61,649,997		32,872,570		38,919,262		40,192,600

Revenues.  Most of the Company's revenues are derived from sales of FC2 Female Condoms, and are recognized upon shipment of the product to its customers. Since fiscal 2008, revenue is also being derived from licensing the Company’s intellectual property to its exclusive distributor in India, HLL.  HLL is authorized to manufacture FC2 at HLL's facility in Kochi, India for sale in India.  HLL is the Company's exclusive distributor in India and the Company receives a royalty based on the number of units sold by HLL in India.  Such revenue appears as royalty income on the Unaudited Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2013 and 2012, and is recognized in the period in which the sale is made by HLL.

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The Company's strategy is to further develop a global market and distribution network for its product by maintaining relationships with public health sector groups and completing partnership arrangements with companies with the necessary marketing and financial resources and local market expertise.  

The Company’s most significant customers are either global public health sector agencies or those who facilitate their purchases and/or distribution of FC2 for use in HIV/AIDS prevention and/or family planning. The Company offers uniform, volume-based pricing to such agencies, rather than entering into long-term supply agreements. The Company's three largest customers currently are UNFPA, John Snow, Inc., facilitator of USAID I DELIVER project, and Sekunjalo Investments Corporation (PTY) Ltd., the Company’s distributor in the RSA.  In the United States, FC2 is sold to city and state public health clinics as well and to not-for-profit organizations such as Planned Parenthood.

Because the Company manufactures FC2 in a leased facility located in Malaysia, a portion of the Company's operating costs are denominated in foreign currencies. While a material portion of the Company's future sales are likely to be in foreign markets, all sales are denominated in the United States dollar. Effective October 1, 2009, the Company’s U.K. and Malaysia subsidiaries adopted the U.S. dollar as their functional currency, further reducing the Company’s foreign currency risk.

Expenses.  The Company manufactures FC2 at its facility located in Selangor D.E., Malaysia.  The Company's cost of sales consists primarily of direct material costs, direct labor costs and indirect production and distribution costs.  Direct material costs include raw materials used to make FC2, principally a nitrile polymer.  Indirect production costs include logistics, quality control and maintenance expenses, as well as costs for helium, nitrogen, electricity and other utilities. All of the key components for the manufacture of FC2 are essentially available from multiple sources.

The Company's operating expenses include costs for promotion, education and training relating to FC2.  During the London Summit, the Company announced a program to support the London Summit's goal to provide contraceptives to an additional 120 million women by 2020.  This program includes a plan for the Company to invest up to $14 million over the next six years in reproductive health and HIV/AIDS prevention education and training in collaboration with global agencies.  Such investment in education and training may increase the Company's operating expenses in future periods, although the Company has not set a specific timetable for any such increased spending on education and training. The Company expects to invest approximately $2.3 million on education and training during fiscal 2013.  The Company believes that increased spending on education and training will expand the market for FC2.  In connection with the London Summit, the Company implemented a volume purchasing incentive program to award major public sector purchasers with FC2 Female Condoms equal to 5 percent of their total annual units purchased, at no cost to such purchasers. The initial entitlement to 5 percent no-cost product was based on FC2 units purchased during the initial six-month period from the start of the program on July 1, 2012 through December 31, 2012.  Future entitlements to 5 percent no-cost product will be determined on a calendar year basis beginning with the year ending December 31, 2013. The Company will reserve for the cost of the 5 percent no-cost product as a cost of sales, which may affect the Company's gross margin.  The Company believes that such no-cost product awards will assist in educating and training, making new users aware of FC2 and providing an incentive for increased unit sale volumes from major purchasers.

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RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2013 COMPARED TO THREE MONTHS ENDED JUNE 30, 2012

The Company had net revenues of $7,280,498 and net income of $726,911, or $0.03 per diluted share, for the three months ended June 30, 2013 compared to net revenues of $8,656,390 and net income of $2,549,743, or $ 0.09 per diluted share, for the three months ended June 30, 2012.

Net revenues decreased $1,375,892, or 16%, on a 17% decrease in unit sales for the three months ended June 30, 2013, compared with the same period last year.  The FC2 average sales price per unit increased 2% compared with the same period last year.

Cost of sales increased $174,764, or 5%, to $3,537,418 on a 17% decrease in unit sales in the three months ended June 30, 2013 from $3,362,654 for the same period last year.  An 11.6% decrease in material costs due to lower unit sales was offset by increased costs as a result of an investment for storage materials due to increased inventory, additional quality control testing to conform to the requirements of a major customer and the Company's volume purchasing incentive program which was not in effect in the prior year quarter.

Gross profit decreased $1,550,656, or 29%, to $3,743,080 for the three months ended June 30, 2013 from $5,293,736 for the three months ended June 30, 2012.  Gross profit for the three months ended June 30, 2013 is 51% of net revenues versus 61% for the same period last year.

Significant quarter to quarter variations result from time to time due to the timing and shipment of large orders and production scheduling rather than from any fundamental changes in the business.

Operating expenses increased $167,494, or 7%, to $2,653,184 for the three months ended June 30, 2013 from $2,485,690 for the three months ended June 30, 2012.  The increase is primarily due to an increase in the stock price which is used in computing the incentive compensation expense.

Operating income for the three months ended June 30, 2013, was $1,089,896 versus operating income of $2,808,046 in the same period last year, a decrease of $1,718,150, or 61%.  The decrease is primarily due to lower unit sales, the reduction of gross margins and an increase in the stock price which is a basis in computing the incentive compensation expense.

Interest, net and other expense for the three months ended June 30, 2013 was $767, a decrease of $1,068 from the same period in fiscal year 2012, when interest, net and other income was $301.    The impact of foreign currency transactions for the third quarter of fiscal 2013 was a loss of $33,280 compared to a gain of $15,235 for the same period last year.

The Company's net income decreased $1,822,832, or 71%, to $726,911 in the three months ended June 30, 2013 from net income of $2,549,743 in the same period of the prior year, as a result of the factors discussed above. Net income was 10% and 29% of net revenues for the three months ended June 30, 2013 and 2012, respectively.

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NINE MONTHS ENDED JUNE 30, 2013 COMPARED TO NINE MONTHS ENDED JUNE 30, 2012

The Company had net revenues of $26,667,591 and net income of $7,752,426, or $0.27 per diluted share, for the nine months ended June 30, 2013 compared to net revenues of $25,122,196 and net income of $7,114,116, or $ 0.25 per diluted share, for the nine months ended June 30, 2012.

Net revenues increased $1,545,395, or 6%, on a 5% increase in unit sales for the nine months ended June 30, 2013, compared with the same period last year.  The FC2 average sales price per unit increased 1% compared with the same period last year due to customer mix.

Cost of sales increased $1,186,849, or 12%, to $11,438,196 on a 5% increase in unit sales in the nine months ended June 30, 2013 from $10,251,347 for the same period last year.  This increase is primarily attributable to the cost of the Company’s volume purchasing incentive program and certain costs due to increased inventory.

Gross profit increased $358,546, or 2%, to $15,229,395 for the nine months ended June 30, 2013 from $14,870,849 for the nine months ended June 30, 2012.  Gross profit for the nine months ended June 30, 2013 was 57% of net revenues versus 59% for the same period last year primarily due to the cost of the Company’s volume purchasing incentive program.

Significant quarter to quarter variations result from time to time due to the timing and shipment of large orders and production scheduling rather than from any fundamental changes in the business.

Operating expenses increased $65,486, or 1%, to $7,181,778 for the nine months ended June 30, 2013 from $7,116,292 for the nine months ended June 30, 2012.  

Operating income for the nine months ended June 30, 2013, was $8,047,617 versus operating income of $7,754,557 in the same period last year, an increase of $293,060, or 4%.  

Interest, net and other income for the nine months ended June 30, 2013 was $275,966, an increase of $275,053 from the same period in fiscal year 2012, when interest, net and other income was $913.  The increase is primarily due to the distribution upon demutualization of an insurance carrier.  The impact of foreign currency transactions for the nine months ended June 30, 2013 was a loss of $100,173 compared to a loss of $69,294 for the same period last year.  Beginning October 1, 2009, both the Company’s U.K. and Malaysia subsidiaries adopted the U.S. dollar as their functional currency and began to report their financial results in U.S. dollars.  The subsidiaries' adoption of the U.S. dollar as their functional currency reduces the Company’s exposure to foreign currency risk.  Assets located outside the United States totaled approximately $15.0 million and $12.4 million at June 30, 2013 and 2012, respectively.

The Company's net income increased $638,310, or 9%, to $7,752,426 in the nine months ended June 30, 2013 from net income of $7,114,116 in the same period of the prior year, as a result of the factors discussed above. Net income was 29% and 28% of net revenues for the nine months ended June 30, 2013 and 2012, respectively.

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Reliance on a Single Product

The Company expects to derive the vast majority, if not all, of its future revenues from FC2, its sole current product. While management believes the global potential for FC2 is significant, the ultimate level of consumer demand around the world is not yet known.

Distribution Network

The Company's strategy is to develop a global distribution network for FC2 by entering into partnership arrangements with financially secure companies with appropriate marketing expertise. This strategy has resulted in distribution in 143 countries, including numerous in-country distributions in the public health sector, particularly in Africa, Latin America and India. The Company has also entered into several partnership agreements for the commercialization of the FC2 Female Condoms in consumer sector markets around the world. However, the Company is dependent on country governments, global donors, as well as U.S. municipal and state public health departments to continue AIDS/HIV/STI prevention and family planning programs that include FC2 as a component of such programs. The Company’s commercial market penetration is dependent on its ability to identify appropriate business partners who will effectively market and distribute FC2 within its contractual territory. Failure by the Company's partners to successfully market and distribute the FC2 Female Condom or failure of donors and/or country governments to establish and sustain HIV/AIDS prevention programs which include distribution of female condoms, the Company’s inability to secure additional agreements with global AIDS prevention and family planning organizations, or the Company’s inability to secure agreements in new markets, either in the public or private sectors, could adversely affect the Company’s financial condition and results of operations.

Inventory and Supply

All of the key components for the manufacture of the FC2 Female Condom are essentially available from either multiple sources or multiple locations within a source.

Global Market and Foreign Currency Risks

The Company manufactures FC2 in a leased facility located in Malaysia. Although a material portion of the Company's future sales are likely to be in foreign markets, FC2 sales are denominated in U.S. dollars only.  Manufacturing costs are subject to normal currency risks associated with changes in the exchange rate of the Malaysian ringgit relative to the United States dollar.

Government Regulation

The FC2 Female Condoms are subject to regulation by the FDA pursuant to the Federal Food, Drug and Cosmetic Act (the "FDC Act"), and by other state and foreign regulatory agencies. Under the FDC Act, medical devices must receive FDA clearance before they can be sold. FDA regulations also require the Company to adhere to certain current "Good Manufacturing Practices," which include testing, quality control and documentation procedures. The Company's compliance with applicable regulatory requirements is monitored through periodic inspections by the FDA.  The failure to comply with applicable regulations may result in fines, delays or suspensions of clearances, seizures or recalls of products, operating restrictions, withdrawal of FDA approval and criminal prosecutions. The Company's operating results and financial condition could be materially adversely affected in the event of a withdrawal of approval from the FDA.

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Liquidity and Sources of Capital

The Company's operations generated positive cash flow of $12.8 million in the nine months ended June 30, 2013, which included a positive impact of changes in operating assets and liabilities of $4.0 million, compared with $9.0 million in the nine months ended June 30, 2012, which included a positive impact of changes in operating assets and liabilities of $0.9 million.

The increase in the changes in operating assets and liabilities for the nine months ended June 30, 2013 as compared to the nine months ended June 30, 2012 is primarily due to a reduction in accounts receivable, partially offset by an increase in inventories.

Accounts receivable decreased from $7.3 million at September 30, 2012 to $0.9 million at June 30, 2013.  The Company’s credit terms vary from 30 to 90 days, depending on the class of trade and customary terms within a territory, so the accounts receivable balance is also impacted 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 been approximately 58 days.  Over the past five years, the Company’s bad debt expense has been less than 0.05% of product sales.

Inventory increased from $1.5 million at September 30, 2012 to $2.8 million at June 30, 2013.  This increase is primarily due to the Company building inventory to improve lead times and provide no-cost product pursuant to the Company’s volume purchasing incentive program.

Beginning February 16, 2010, through June 30, 2013, the Company has paid 14 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 1 was paid at a quarterly rate per share of $0.07 on May 8, 2013.  The Company paid cash dividends of approximately $5.5 million and $4.5 million during the nine months ended June 30, 2013 and 2012, respectively.

On July 15, 2013, the Company’s Board of Directors declared a quarterly cash dividend of $0.07 per share.  The Company will pay, from its cash on hand, approximately $2.0 million pursuant to the dividend on August 7, 2013 to stockholders of record as of July 31, 2013.

Any future quarterly dividends and the record date for such dividends will be approved each quarter by the Company’s Board of Directors and announced by the Company.  Payment of future dividends is at the discretion of the Board of Directors and the Company may not have sufficient cash flows to continue to pay dividends.

At June 30, 2013, the Company had working capital of $13.6 million and stockholders’ equity of $26.7 million compared to working capital of $10.4 million and stockholders’ equity of $20.0 million as of June 30, 2012.

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The Company believes its current cash position is adequate to fund operations of the Company in the next 12 months, although no assurances can be made that such cash will be adequate. If the Company needs additional cash, it may sell equity securities to raise additional capital and may borrow funds under its Heartland Bank credit facility.

On August 1, 2013, the Company entered into the Loan Agreement with Heartland Bank to extend the term of the Company’s revolving line of credit to August 1, 2014. 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% to 80% of eligible accounts receivable plus 50% 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 a rate of the base rate (4.0% at June 30, 2013) plus 0.5%. The note is collateralized by substantially all of the assets of the Company. No amounts were outstanding under the revolving note at either June 30, 2013 or September 30, 2012.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The Company's exposure to market risk is limited to fluctuations in raw material commodity prices, particularly the nitrile polymer used to manufacture FC2, and foreign currency exchange rate risk associated with the Company's foreign operations.  The Company does not utilize financial instruments for trading purposes or to hedge risk and holds no derivative financial instruments which would expose it to significant market risk.  Effective October 1, 2009, the Company's U.K. and Malaysia subsidiaries adopted the U.S. dollar as their functional currency.  The consistent use of the U.S. dollar as the functional currency across the Company reduces its foreign currency risk and stabilizes its operating results.  The Company currently has no significant exposure to interest rate risk.  The Company has a line of credit with Heartland Bank, consisting of a revolving note for up to $2 million with borrowings limited to a percentage of eligible accounts receivable and eligible inventory.  Outstanding borrowings under the line of credit will incur interest at a rate equal to a base rate plus 0.5%.  The Company has not had any outstanding borrowings in the last five years.  There is, therefore, currently no significant exposure to market risk for changes in interest rates.  To the extent that the Company incurs future borrowings under its lines of credit, it would be subject to interest rate risk related to such borrowings.

Item 4.  Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. It should be noted that in designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has designed its disclosure controls and procedures to reach a level of reasonable assurance of achieving desired control objectives and, based on the evaluation described above, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective at reaching that level of reasonable assurance.

There was no change in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the Company's most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1A.  Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, "Risk Factors," of the Company's Form 10-K for the year ended September 30, 2012.  Please refer to that section for disclosures regarding the risks and uncertainties relating to the Company's business.

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Item 6.  Exhibits

Exhibit Number	Description
3.1	Amended and Restated Articles of Incorporation.  (1)
3.2	Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company increasing the number of authorized shares of common stock to 27,000,000 shares.  (2)
3.3	Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company increasing the number of authorized shares of common stock to 35,500,000 shares.  (3)
3.4	Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company increasing the number of authorized shares of common stock to 38,500,000 shares.  (4)
3.5	Amended and Restated By-Laws.  (5)
4.1	Amended and Restated Articles of Incorporation (same as Exhibit 3.1).
4.2	Articles II, VII and XI of the Amended and Restated By-Laws (included in Exhibit 3.5).
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).  (6)
101	The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (Extensible Business Reporting Language):  (1) the Unaudited Condensed Consolidated Balance Sheets, (2) the Unaudited Condensed Consolidated Statements of Income, (3) the Unaudited Condensed Consolidated Statements of Cash Flows and (4) the Notes to the Unaudited Condensed Consolidated Financial Statements.

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_____________________________

(1)	Incorporated herein by reference to the Company's Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on October 19, 1999.
(2)	Incorporated by reference to the Company's Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on September 21, 2000.
(3)	Incorporated by reference to the Company's Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on September 6, 2002.
(4)	Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2003.
(5)	Incorporated by reference to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2013.
(6)	This certification is not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THE FEMALE HEALTH COMPANY

DATE: August 1, 2013

/s/ O.B. Parrish

O.B. Parrish, Chairman and

Chief Executive Officer

DATE: August 1, 2013

/s/ Michele Greco

Michele Greco, Vice President and

Chief Financial Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, O. B. Parrish, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of The Female Health Company;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.           The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 1, 2013

/s/ O. B. Parrish

O. B. Parrish

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michele Greco, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of The Female Health Company;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.           The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 1, 2013

/s/ Michele Greco

Michele Greco

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of The Female Health Company (the "Company") certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2013 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  August 1, 2013                                                                        /s/ O. B. Parrish

O. B. Parrish

Chief Executive Officer

Dated:  August 1, 2013                                                                        /s/ Michele Greco

Michele Greco

Chief Financial Officer

This certification is made solely for purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

XML

Note 5 - Share-Based Payments (Tables)

9 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Options Outstanding and Exercisable At 6/30/2013	Wghted. Avg. Remaining Life (years)	Wghted. Avg. Exercise Price	Aggregate Intrinsic Value
Total	240,000	4.33	$ 2.64	$ 1,732,000

XML

Unaudited Condensed Consolidated Statements Of Cash Flows (USD $)	9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
OPERATING ACTIVITIES
Net income	$ 7,752,426	$ 7,114,116
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	418,352	341,755
Amortization of deferred income from grant	(18,623)	(18,623)
Interest added to certificate of deposit		(252)
Share-based compensation	573,538	656,147
Deferred income taxes	(4,521)	(613)
Loss on disposal of fixed assets	940	12,628
Changes in operating assets and liabilities	4,034,586	927,405
Net cash provided by operating activities	12,756,698	9,032,563
INVESTING ACTIVITIES
(Increase) decrease in restricted cash	(47,585)	3
Proceeds from certificate of deposit		64,127
Capital expenditures	(289,425)	(505,724)
Net cash used in investing activities	(337,010)	(441,594)
FINANCING ACTIVITIES
Purchases of common stock for treasury shares	(371,992)	(59,001)
Dividends paid on common stock	(5,460,306)	(4,481,694)
Payments on capital lease obligations		(13,037)
Net cash used in financing activities	(5,832,298)	(4,553,732)
Net increase in cash	6,587,390	4,037,237
Cash at beginning of period	5,290,780	4,249,324
CASH AT END OF PERIOD	11,878,170	8,286,561
Supplemental Disclosure of Cash Flow Information:
Cash payments for income taxes	207,391	574,547
Schedule of noncash financing and investing activities:
Reduction of accrued expense upon issuance of shares	189,644	179,723
Dividends payable	8,170	14,420
Fixed asset additions in accounts payable		$ 158,938

XML

Note 6 - Stock Repurchase Program

9 Months Ended

Jun. 30, 2013

Treasury Stock [Text Block]

Treasury Stock [Text Block]

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 million shares of its common stock could be purchased during the subsequent 12 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 million shares through the period ending December 31, 2013.  From the program’s onset through June 30, 2013, the total number of shares repurchased by the Company is 2,011,954.  The total number of shares that may yet be purchased under the program is 988,046. 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. During the three months ended June 30, 2013, there were no private repurchase transactions and no open market repurchase transactions. For the nine months ended June 30, 2013, 53,125 shares were repurchased.  Of those private repurchase transactions were 43,125 shares for $304,694 and open market repurchase transactions were 10,000 shares for $67,298. During the three months ended June 30, 2012, 10,000 shares were repurchased.  Of those there were no private repurchases transactions and open market repurchase transactions were 10,000 shares for $54,311.  During the nine months ended June 30, 2012, 11,000 shares were repurchased.  Of those private repurchase transactions were 1,000 shares for $4,690 and open market repurchase transactions were 10,000 shares for $54,311.

Issuer Purchases of Equity Securities	Details of Treasury Stock Purchases to Date through June 30, 2013
Period:	Total Number of Shares Purchased		Average Price Paid Per Share		Cost of Treasury Stock
January 1, 2007  –  September 30, 2012		1,958,829	$	3.41	$	6,672,243
October 1, 2012 – October 31, 2012		-		-		-
November 1, 2012 – November 30, 2012		-		-		-
December 1, 2012 – December 31, 2012		25,000		7.12		178,000
Quarterly Subtotal		25,000		7.12		178,000
January 1, 2013 – January 31, 2013		-		-		-
February 1, 2013 – February 28, 2013		-		-		-
March 1, 2013 – March 31, 2013		28,125		6.90		193,992
Quarterly Subtotal		28,125		6.90		193,992
April 1, 2013 – April 30, 2013		-		-		-
May 1, 2013 – May 28, 2013		-		-		-
June 1, 2013 – June 30, 2013		-		-		-
Quarterly Subtotal		-		-		-
Nine Months Subtotal		53,125		7.00		371,992
Total		2,011,954	$	3.50	$	7,044,235

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Note 4 - Line of Credit (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2013	Aug. 01, 2012
Note 4 - Line of Credit (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)		$ 2
Debt Instrument, Interest Rate at Period End	4.00%
Debt Instrument, Basis Spread on Variable Rate	0.50%

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Note 6 - Stock Repurchase Program (Tables)

9 Months Ended

Jun. 30, 2013

Treasury Stock [Text Block]

Class of Treasury Stock [Table Text Block]

Issuer Purchases of Equity Securities	Details of Treasury Stock Purchases to Date through June 30, 2013
Period:	Total Number of Shares Purchased		Average Price Paid Per Share		Cost of Treasury Stock
January 1, 2007  –  September 30, 2012		1,958,829	$	3.41	$	6,672,243
October 1, 2012 – October 31, 2012		-		-		-
November 1, 2012 – November 30, 2012		-		-		-
December 1, 2012 – December 31, 2012		25,000		7.12		178,000
Quarterly Subtotal		25,000		7.12		178,000
January 1, 2013 – January 31, 2013		-		-		-
February 1, 2013 – February 28, 2013		-		-		-
March 1, 2013 – March 31, 2013		28,125		6.90		193,992
Quarterly Subtotal		28,125		6.90		193,992
April 1, 2013 – April 30, 2013		-		-		-
May 1, 2013 – May 28, 2013		-		-		-
June 1, 2013 – June 30, 2013		-		-		-
Quarterly Subtotal		-		-		-
Nine Months Subtotal		53,125		7.00		371,992
Total		2,011,954	$	3.50	$	7,044,235

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Note 6 - Stock Repurchase Program (Details) (USD $)	3 Months Ended	9 Months Ended		77 Months Ended
	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Dec. 31, 2013	Jan. 17, 2007
Note 6 - Stock Repurchase Program (Details) [Line Items]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased		988,046		988,046	3,000,000	1,000,000
Stock Repurchased During Period, Shares	10,000	53,125	11,000	2,011,954
Private Repurchases [Member]
Note 6 - Stock Repurchase Program (Details) [Line Items]
Stock Repurchased During Period, Shares		43,125	1,000
Stock Repurchased During Period, Value (in Dollars)		$ 304,694	$ 4,690
Open Market Repurchase [Member]
Note 6 - Stock Repurchase Program (Details) [Line Items]
Stock Repurchased During Period, Shares	10,000	10,000	10,000
Stock Repurchased During Period, Value (in Dollars)	$ 54,311	$ 67,298	$ 54,311
Annually [Member]
Note 6 - Stock Repurchase Program (Details) [Line Items]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased		450,000		450,000
Annually per Individual [Member]
Note 6 - Stock Repurchase Program (Details) [Line Items]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased		50,000		50,000

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Note 5 - Share-Based Payments (Details) - Stock Options Outstanding and Exercisable (USD $)	9 Months Ended
	Jun. 30, 2013
Stock Options Outstanding and Exercisable [Abstract]
Total	240,000
Total	4 years 120 days
Total (in Dollars per share)	$ 2.64
Total (in Dollars)	$ 1,732,000

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Note 10 - Dividends (Details) (USD $)	0 Months Ended		9 Months Ended			24 Months Ended	40 Months Ended
	Jul. 15, 2013	May 08, 2013	Jun. 30, 2013	Feb. 06, 2013	Jun. 30, 2012	Feb. 09, 2012	Jun. 30, 2013
Note 10 - Dividends (Details) [Line Items]
Number of Dividends Paid		1		4		9	14
Dividends Payable, Amount Per Share		$ 0.07		$ 0.06		$ 0.05
Common Stock, Dividends, Per Share, Cash Paid			$ 5,500,000		$ 4,500,000
Common Stock, Dividends, Per Share, Declared	$ 0.07		$ 0.19		$ 0.16
Dividends Payable (in Dollars)			$ 8,170		$ 14,420		$ 8,170
Subsequent Event [Member]
Note 10 - Dividends (Details) [Line Items]
Dividends Payable (in Dollars)			$ 2,000,000				$ 2,000,000

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Note 8 - Contingent Liabilities (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Commitments and Contingencies Disclosure [Text Block]
Loss Contingency, Range of Possible Loss, Maximum	$ 5

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Note 5 - Share-Based Payments (Details) (USD $)	3 Months Ended	9 Months Ended			9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Mar. 31, 2008	Jun. 30, 2013 1997 Stock Option Plan [Member]	Jun. 30, 2013 2008 Stock Incentive Plan [Member]	Jun. 30, 2013 Options [Member]	Jun. 30, 2012 Options Held [Member]	Jun. 30, 2012 Options Held [Member]	Jun. 30, 2013 Restricted Stock [Member] Accrued Expenses [Member]	Jun. 30, 2012 Restricted Stock [Member] Accrued Expenses [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2012 Restricted Stock [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2012 Restricted Stock [Member]	Jun. 30, 2013 Minimum [Member] Certain Employees [Member]	Jun. 30, 2013 Minimum [Member]	Jun. 30, 2013 Maximum [Member] Certain Employees [Member]	Jun. 30, 2013 Maximum [Member]
Note 5 - Share-Based Payments (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		842,108
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures		150,000
Share Based Compensation Arrangement By Share Based Payment Award Expiration Period					10 years	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					3 years	3 years											1 year		3 years
Share-based Compensation (in Dollars)		$ 573,538	$ 656,147				$ 0	$ 15,000	$ 60,000	$ 176,000	$ 178,000	$ 180,000	$ 189,000	$ 573,000	$ 596,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		36,250	193,750
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures		28,172	116,915
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value (in Dollars)		272,000	510,000
Share Price (in Dollars per share)		$ 9.86
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period																1 year		3 years
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		64,676	54,750
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Intrinsic Value, Amount Per Share (in Dollars per share)		$ 471,000	$ 227,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	2,500
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars)												$ 423,000		$ 423,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number												65,000		65,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		1 year
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		52,000
Conversion of Stock, Shares Converted		43,465

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Note 2 - Earnings per Share

9 Months Ended

Jun. 30, 2013

Earnings Per Share [Text Block]

Earnings Per Share [Text Block]

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 warrants and unvested shares granted to employees and directors.

	Three Months Ended June 30,				Nine Months Ended June 30,
	2013		2012		2013		2012
Denominator:
Weighted average common shares outstanding – basic		28,381,923		27,554,290		28,368,212		27,530,445
Net effect of dilutive securities
Options		169,080		1,191,381		158,677		1,134,225
Warrants		-		62,171		-		59,901
Unvested restricted shares		199,676		293,250		199,676		293,250
Total net effect of dilutive securities		368,756		1,546,802		358,353		1,487,376
Weighted average common shares outstanding – diluted		28,750,679		29,101,092		28,726,565		29,017,821
Income per common share – basic	$	0.03	$	0.09	$	0.27	$	0.26
Income per common share – diluted	$	0.03	$	0.09	$	0.27	$	0.25

All the outstanding warrants, stock options, and unvested restricted shares were included in the computation of diluted net income per share for the three and nine months ended June 30, 2013 and 2012.

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Note 4 - Line of Credit

9 Months Ended

Jun. 30, 2013

Debt Disclosure [Text Block]

Debt Disclosure [Text Block]

NOTE 4 – Line of Credit

On August 1, 2013, 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, 2014. 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 a rate of the base rate (4.0% at June 30, 2013) plus 0.5%. The note is collateralized by substantially all of the assets of the Company. No amounts were outstanding under the Loan Agreement at either June 30, 2013 or September 30, 2012.

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Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations

9 Months Ended

Jun. 30, 2013

Segment Reporting Disclosure [Text Block]

Segment Reporting Disclosure [Text Block]

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 The Nine Months Ended						Long-Lived Assets As of
	June 30,						June 30,		September 30,
	2013			2012			2013		2012
South Africa	$	5,421	(2)	$	3,792	(1)	$	-	$	-
Brazil		4,480	(1)		6,720	(1)		-		-
Nigeria		2,878	(1)		*			-		-
United States		1,987			1,792			161		175
Congo		1,706			*			-		-
United Kingdom		*			*			187		220
India		*			*			50		67
Malaysia		*			*			1,949		2,010
Other		10,196			12,818			-		-
	$	26,668		$	25,122		$	2,347	$	2,472

* Less than 5 percent of total net revenues.

(1) Comprised of a single customer considered to be a major customer (exceeds 10 percent of net revenues).

(2) Comprised of two customers considered to be major customers (exceeds 10 percent of net revenues).

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Note 5 - Share-Based Payments

9 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

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 June 30, 2013, 842,108 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 and nine months ended June 30, 2013 or 2012.

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. Stock compensation expense related to options for the three and nine months ended June 30, 2013, was $0, and was approximately $15,000 and $60,000 for the three and nine months ended June 30, 2012, respectively.

During the nine months ended June 30, 2013, 36,250 stock options were exercised using the cashless exercise option available under the plan which entitled the holders to 28,172 shares of common stock.  The intrinsic value of the options exercised was $272,000.  During the nine months ended June 30, 2012, 193,750 stock options were exercised using the cashless exercise option available under the plan which entitled the holders to 116,915 shares of common stock.  The intrinsic value of the options exercised was $510,000.

The following table summarizes the stock options outstanding and exercisable at June 30, 2013:

	Options Outstanding and Exercisable At 6/30/2013	Wghted. Avg. Remaining Life (years)	Wghted. Avg. Exercise Price	Aggregate Intrinsic Value
Total	240,000	4.33	$ 2.64	$ 1,732,000

The aggregate intrinsic value in the table above is before income taxes, based on the closing price of the Company’s common stock of $9.86 per share as of the last business day of the period ended June 30, 2013.  As of June 30, 2013, the Company had no unrecognized compensation expense relating to outstanding stock options as all outstanding stock options were fully vested.  The deferred tax asset and realized benefit from stock options exercised and other share-based payments for the three and nine months ended June 30, 2013 and 2012, was not recognized, based on the Company’s election of the “with and without” approach.

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 contain vesting provisions or provide for future issuance contingent on continued employment for periods that range from one to three years.

The Company granted a total of 64,676 shares of restricted stock or shares issuable pursuant to promises to issue shares of common stock during the nine months ended June 30, 2013. The fair value of the awards granted was approximately $471,000. All such shares of restricted stock vest and all such shares must be issued pursuant to promises to issue common stock in  September 2013 through May 2016, 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 and nine months ended June 30, 2013.

The Company granted a total of 54,750 shares of restricted stock or shares issuable pursuant to promises to issue shares of common stock during the nine months ended June 30, 2012. The fair value of the awards granted was approximately $227,000. All such shares of restricted stock vest and all such shares must be issued pursuant to promises to issue common stock by September 2014, provided the grantee has not voluntarily terminated service or been terminated for cause prior to the vesting or issuance date.  There were 2,500 shares of restricted stock that were forfeited during the three and nine months ended June 30, 2012.

The Company recognized share-based compensation expense for restricted stock or promises to issue shares of common stock of approximately $180,000 and $573,000 for the three and nine months ended June 30, 2013, respectively, $176,000 of which was included in accrued expenses at the nine months then ended since the related shares had not yet been issued at June 30, 2013.  Share-based compensation expense for restricted stock or promises to issue shares of common stock for the three and nine months ended June 30, 2012 was approximately $189,000 and $596,000, respectively, of which $178,000 was included in accrued expenses at June 30, 2012.  This compensation expense was included in operating expenses on the Unaudited Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2013 and 2012. As of June 30, 2013, there was approximately $423,000, representing approximately 65,000 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 one year.

Common Stock Purchase Warrants

The Company did not issue any common stock purchase warrants during the three and nine months ended June 30, 2013 or 2012.  During the nine months ended June 30, 2013, a warrant holder exercised 52,000 warrants using the cashless exercise option available within the warrant agreements which entitled the warrant holder to 43,465 shares of common stock.  There were no warrants exercised during the nine months ended June 30, 2012.  As of June 30, 2013, there are no outstanding warrants.

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Note 6 - Stock Repurchase Program (Details) - Stock Repurchase Program (USD $)	78 Months Ended
	Jun. 30, 2013	Sep. 30, 2012
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	2,011,954
Average Price Paid Per Share (in Dollars per share)	$ 3.50
Cost of Treasury Stock (in Dollars)	$ 7,044,235	$ 6,672,243
Quarterly Subtotal 2012 [Member] | December 1, 2012 - December 31, 2012 [Member]
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	25,000
Average Price Paid Per Share (in Dollars per share)	$ 7.12
Cost of Treasury Stock (in Dollars)	178,000
Quarterly Subtotal 2013 [Member] | March 1, 2013 - March 31, 2013 [Member]
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	28,125
Average Price Paid Per Share (in Dollars per share)	$ 6.90
Cost of Treasury Stock (in Dollars)	193,992
Nine Months Subtotal 2012 - 2013 [Member] | June 1, 2013 - June 30, 2013 [Member]
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	53,125
Average Price Paid Per Share (in Dollars per share)	$ 7.00
Cost of Treasury Stock (in Dollars)	371,992
January 1, 2007 to September 30, 2012 [Member]
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	1,958,829
Average Price Paid Per Share (in Dollars per share)	$ 3.41
Cost of Treasury Stock (in Dollars)	6,672,243
December 1, 2012 - December 31, 2012 [Member]
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	25,000
Average Price Paid Per Share (in Dollars per share)	$ 7.12
Cost of Treasury Stock (in Dollars)	178,000
March 1, 2013 - March 31, 2013 [Member]
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	28,125
Average Price Paid Per Share (in Dollars per share)	$ 6.90
Cost of Treasury Stock (in Dollars)	$ 193,992

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Note 9 - Income Taxes (Details) (USD $)	9 Months Ended
	Jun. 30, 2013
Income Tax Disclosure [Text Block]
Deferred Tax Assets, Operating Loss Carryforwards, Domestic	$ 24,641,000
Deferred Tax Assets, Operating Loss Carryforwards, State and Local	12,363,000
Deferred Tax Assets, Operating Loss Carryforwards, Foreign	$ 64,260,000
Operating Loss Carryforwards, Limitations on Use	twenty

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Unaudited Condensed Consolidated Statements of Income (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Product sales	$ 7,280,498	$ 8,656,390	$ 26,667,591	$ 25,100,475
Royalty income				21,721
Net revenues	7,280,498	8,656,390	26,667,591	25,122,196
Cost of sales	3,537,418	3,362,654	11,438,196	10,251,347
Gross profit	3,743,080	5,293,736	15,229,395	14,870,849
Operating expenses	2,653,184	2,485,690	7,181,778	7,116,292
Operating income	1,089,896	2,808,046	8,047,617	7,754,557
Interest, net and other (expense) income	(767)	301	275,966	913
Foreign currency transaction (loss) gain	(33,280)	15,235	(100,173)	(69,294)
Total non-operating (expense) income	(34,047)	15,536	175,793	(68,381)
Income before income taxes	1,055,849	2,823,582	8,223,410	7,686,176
Income tax expense	328,938	273,839	470,984	572,060
Net income	$ 726,911	$ 2,549,743	$ 7,752,426	$ 7,114,116
Basic earnings per common share outstanding (in Dollars per share)	$ 0.03	$ 0.09	$ 0.27	$ 0.26
Basic weighted average common shares outstanding (in Shares)	28,381,923	27,554,290	28,368,212	27,530,445
Diluted earnings per common share outstanding (in Dollars per share)	$ 0.03	$ 0.09	$ 0.27	$ 0.25
Diluted weighted average common shares outstanding (in Shares)	28,750,679	29,101,092	28,726,565	29,017,821
Cash dividends declared per common share (in Dollars per share)			$ 0.19	$ 0.16

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Note 10 - Dividends

9 Months Ended

Jun. 30, 2013

Dividends Disclosure [Text Block]

Dividends Disclosure [Text Block]

Note 10 – Dividends

Beginning February 16, 2010, through June 30, 2013, the Company has paid 14 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 1 was paid at a quarterly rate per share of $0.07 on May 8, 2013.  The Company paid cash dividends of approximately $5.5 million and $4.5 million during the nine months ended June 30, 2013 and 2012, respectively.

On July 15, 2013, the Company’s Board of Directors declared a quarterly cash dividend of $0.07 per share.  The Company will pay, from its cash on hand, approximately $2.0 million pursuant to the dividend on August 7, 2013 to stockholders of record as of July 31, 2013.

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Note 1 - Basis of Presentation

9 Months Ended

Jun. 30, 2013

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

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 and nine months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2013. 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, 2012.

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 16,000 sq. ft. manufacturing facility located in Selangor D.E., Malaysia.

FC2 is currently sold or available in either or both commercial (private sector) and public health sector markets in 143 countries. The product is marketed directly to consumers in 16 countries by various country-specific commercial partners.

The Company also derives revenue from licensing its intellectual property under an agreement with its exclusive distributor in India, Hindustan Lifecare Limited (“HLL”).  HLL is authorized to manufacture FC2 at HLL's facility in Kochi, India, for sale in India, and the Company receives a royalty based on the number of units sold by HLL in India.  Such revenue appears as royalty income on the Unaudited Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2013 and 2012, and is recognized in the period in which the sale is made by HLL.

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 58 days. Over the past five years, the Company’s bad debt expense has been less than 0.05% of product sales.  The balance in the allowance for doubtful accounts was $68,694 at June 30, 2013 and $41,625 at September 30, 2012.

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. 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, delivery of goods or at a period of time after product has been distributed.

Foreign Currency and Change in Functional Currency

The Company recognized a foreign currency transaction loss of $33,280 and $100,173 for the three and nine months ended June 30, 2013, respectively, compared to a gain of $15,235 and loss of $69,294 for the three and nine months ended June 30, 2012, respectively. 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 September 30, 2012 consolidated financial statements have been reclassified to conform to the June 30, 2013 presentation.

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Unaudited Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2013	Sep. 30, 2012
Current Assets:
Cash	$ 11,878,170	$ 5,290,780
Restricted cash	52,267	4,682
Accounts receivable, net	926,098	7,268,917
Income tax receivable		27,369
Inventory, net	2,816,369	1,458,199
Prepaid expenses and other current assets	558,140	624,268
Deferred income taxes	2,152,000	2,152,000
TOTAL CURRENT ASSETS	18,383,044	16,826,215
Other Assets	126,800	122,336
PLANT AND EQUIPMENT
Equipment, furniture and fixtures	4,780,432	4,292,702
Construction in progress	27,796	268,765
Less accumulated depreciation and amortization	(2,588,219)	(2,211,591)
Plant and equipment, net	2,220,009	2,349,876
Deferred Income Taxes	11,148,000	11,148,000
TOTAL ASSETS	31,877,853	30,446,427
Current Liabilities:
Accounts payable	1,377,668	1,775,327
Accrued expenses and other current liabilities	1,370,066	1,095,732
Accrued compensation	2,053,912	2,964,812
Accrued dividend	16,495	24,570
TOTAL CURRENT LIABILITIES	4,818,141	5,860,441
Deferred rent	72,838	90,902
Deferred grant income	64,027	82,650
Deferred income taxes	189,723	194,244
TOTAL LIABILITIES	5,144,729	6,228,237
Commitments and Contingencies
STOCKHOLDERS’ EQUITY:
Common stock	306,968	305,500
Additional paid-in-capital	67,346,170	66,760,907
Accumulated other comprehensive loss	(581,519)	(581,519)
Accumulated deficit	(33,294,260)	(35,594,455)
Treasury stock, at cost	(7,044,235)	(6,672,243)
TOTAL STOCKHOLDERS’ EQUITY	26,733,124	24,218,190
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	31,877,853	30,446,427
Convertible preferred stock, Class A, Series 1 [Member]
STOCKHOLDERS’ EQUITY:
Convertible preferred stock, Class	0	0
Convertible preferred stock, Class A, Series 3 [Member]
STOCKHOLDERS’ EQUITY:
Convertible preferred stock, Class	0	0
Convertible preferred stock, Class B [Member]
STOCKHOLDERS’ EQUITY:
Convertible preferred stock, Class	$ 0	$ 0

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Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details)	9 Months Ended
	Jun. 30, 2013
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) [Line Items]
Number of Operating Segments	1
South Africa [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) [Line Items]
Concentration Risk, Customer	two

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Note 3 - Inventory (Details) - Components of Inventory (USD $)	Jun. 30, 2013	Sep. 30, 2012
Components of Inventory [Abstract]
Raw material	$ 1,068,925	$ 523,201
Work in process	85,730	57,102
Finished goods	1,695,141	927,706
Inventory, gross	2,849,796	1,508,009
Less: inventory reserves	(33,427)	(49,810)
Inventory, net	$ 2,816,369	$ 1,458,199

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Note 9 - Income Taxes

9 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Text Block]

Income Tax Disclosure [Text Block]

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 the subsequent six years for each tax jurisdiction.

As of June 30, 2013, the Company had U.S. federal and state net operating loss carryforwards of approximately $24,641,000 and $12,363,000, 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 $64,260,000 as of June 30, 2013, which can be carried forward indefinitely to be used to offset future U.K. taxable income. With the increasing 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.  However, because some of the U.S. federal tax losses have a net loss carryforward limitation of twenty years, it is possible that some of the Company’s early losses carried forward in the U.S. will not be fully utilized.  The U.K. net operating losses do not expire. The Company’s Malaysia subsidiary had no net operating loss carryforwards as of June 30, 2013.

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 and nine months ended June 30, 2013 and 2012, is as follows:

	Three Months Ended June 30,						Nine Months Ended June 30,
	2013			2012			2013			2012
Income tax expense at statutory rates	$	359,000		$	960,000		$	2,796,000		$	2,613,000
State income tax, net of federal benefits		67,000			177,000			516,000			482,000
Effect of AMT expense		10,000			39,000			26,000			84,000
Non-deductible expenses		1,000			2,000			8,000			5,000
Effect of lower income tax rates on foreign income		(45,631	)		(188,971	)		(812,772	)		(639,657	)
Utilization of NOL carryforwards		(549,542	)		(784,219	)		(1,803,834	)		(2,138,683	)
Increase (decrease) in valuation allowance		487,111			69,029			(258,410	)		166,400
Income tax expense	$	328,938		$	273,839		$	470,984		$	572,060

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Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Sep. 30, 2012
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers	$ 26,668		$ 25,122
Long-lived Assets	2,347				2,472
South Africa [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers	5,421	[1]	3,792	[2]
Brazil [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers	4,480	[2]	6,720	[2]
Nigeria [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers	2,878	[2]
United States [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers	1,987		1,792
Long-lived Assets	161				175
Congo [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers	1,706			[3]
United Kingdom [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers		[3]		[3]
Long-lived Assets	187				220
India [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers		[3]		[3]
Long-lived Assets	50				67
Malaysia [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers		[3]		[3]
Long-lived Assets	1,949				2,010
Other Countries [Member]
Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Details) - Operations by Geographic Area [Line Items]
Net Revenues to External Customers	$ 10,196		$ 12,818

[1] Comprised of two customers considered to be major customers (exceeds 10 percent of net revenues)

[2] Comprised of a single customer considered to be a major customer (exceeds 10 percent of net revenues)

[3] Less than 5 percent of total net revenues.

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Note 3 - Inventory (Tables)

9 Months Ended

Jun. 30, 2013

Inventory Disclosure [Text Block]

Schedule of Inventory, Current [Table Text Block]

	June 30, 2013			September 30, 2012
Raw material	$	1,068,925		$	523,201
Work in process		85,730			57,102
Finished goods		1,695,141			927,706
Inventory, gross		2,849,796			1,508,009
Less: inventory reserves		(33,427	)		(49,810	)
Inventory, net	$	2,816,369		$	1,458,199

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Note 8 - Contingent Liabilities

9 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies Disclosure [Text Block]

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.

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Note 3 - Inventory

9 Months Ended

Jun. 30, 2013

Inventory Disclosure [Text Block]

Inventory Disclosure [Text Block]

NOTE 3 - Inventory

Inventory consists of the following components at June 30, 2013 and September 30, 2012:

	June 30, 2013			September 30, 2012
Raw material	$	1,068,925		$	523,201
Work in process		85,730			57,102
Finished goods		1,695,141			927,706
Inventory, gross		2,849,796			1,508,009
Less: inventory reserves		(33,427	)		(49,810	)
Inventory, net	$	2,816,369		$	1,458,199

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Note 9 - Income Taxes (Details) - Reconciliation of Income Tax Expense (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Reconciliation of Income Tax Expense [Abstract]
Income tax expense at statutory rates	$ 359,000	$ 960,000	$ 2,796,000	$ 2,613,000
State income tax, net of federal benefits	67,000	177,000	516,000	482,000
Effect of AMT expense	10,000	39,000	26,000	84,000
Non-deductible expenses	1,000	2,000	8,000	5,000
Effect of lower income tax rates on foreign income	(45,631)	(188,971)	(812,772)	(639,657)
Utilization of NOL carryforwards	(549,542)	(784,219)	(1,803,834)	(2,138,683)
Increase (decrease) in valuation allowance	487,111	69,029	(258,410)	166,400
Income tax expense	$ 328,938	$ 273,839	$ 470,984	$ 572,060

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Note 7 - Industry Segments and Financial Information About Foreign and Domestic Operations (Tables)

9 Months Ended

Jun. 30, 2013

Segment Reporting Disclosure [Text Block]

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Net Revenues to External Customers For The Nine Months Ended						Long-Lived Assets As of
	June 30,						June 30,		September 30,
	2013			2012			2013		2012
South Africa	$	5,421	(2)	$	3,792	(1)	$	-	$	-
Brazil		4,480	(1)		6,720	(1)		-		-
Nigeria		2,878	(1)		*			-		-
United States		1,987			1,792			161		175
Congo		1,706			*			-		-
United Kingdom		*			*			187		220
India		*			*			50		67
Malaysia		*			*			1,949		2,010
Other		10,196			12,818			-		-
	$	26,668		$	25,122		$	2,347	$	2,472

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Note 2 - Earnings per Share (Tables)

9 Months Ended

Jun. 30, 2013

Earnings Per Share [Text Block]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended June 30,				Nine Months Ended June 30,
	2013		2012		2013		2012
Denominator:
Weighted average common shares outstanding – basic		28,381,923		27,554,290		28,368,212		27,530,445
Net effect of dilutive securities
Options		169,080		1,191,381		158,677		1,134,225
Warrants		-		62,171		-		59,901
Unvested restricted shares		199,676		293,250		199,676		293,250
Total net effect of dilutive securities		368,756		1,546,802		358,353		1,487,376
Weighted average common shares outstanding – diluted		28,750,679		29,101,092		28,726,565		29,017,821
Income per common share – basic	$	0.03	$	0.09	$	0.27	$	0.26
Income per common share – diluted	$	0.03	$	0.09	$	0.27	$	0.25

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Note 2 - Earnings per Share (Details) - Earnings per Share (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Note 2 - Earnings per Share (Details) - Earnings per Share [Line Items]
Weighted average common shares outstanding – basic	28,381,923	27,554,290	28,368,212	27,530,445
Net effect of dilutive securities
Share based payment arrangements	368,756	1,546,802	358,353	1,487,376
Weighted average common shares outstanding – diluted	28,750,679	29,101,092	28,726,565	29,017,821
Income per common share – basic (in Dollars per share)	$ 0.03	$ 0.09	$ 0.27	$ 0.26
Income per common share – diluted (in Dollars per share)	$ 0.03	$ 0.09	$ 0.27	$ 0.25
Options Held [Member]
Net effect of dilutive securities
Share based payment arrangements	169,080	1,191,381	158,677	1,134,225
Warrant [Member]
Net effect of dilutive securities
Share based payment arrangements		62,171		59,901
Restricted Stock [Member]
Net effect of dilutive securities
Share based payment arrangements	199,676	293,250	199,676	293,250

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Note 9 - Income Taxes (Tables)

9 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Text Block]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Three Months Ended June 30,						Nine Months Ended June 30,
	2013			2012			2013			2012
Income tax expense at statutory rates	$	359,000		$	960,000		$	2,796,000		$	2,613,000
State income tax, net of federal benefits		67,000			177,000			516,000			482,000
Effect of AMT expense		10,000			39,000			26,000			84,000
Non-deductible expenses		1,000			2,000			8,000			5,000
Effect of lower income tax rates on foreign income		(45,631	)		(188,971	)		(812,772	)		(639,657	)
Utilization of NOL carryforwards		(549,542	)		(784,219	)		(1,803,834	)		(2,138,683	)
Increase (decrease) in valuation allowance		487,111			69,029			(258,410	)		166,400
Income tax expense	$	328,938		$	273,839		$	470,984		$	572,060

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Document And Entity Information	9 Months Ended
	Jun. 30, 2013	Jul. 31, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	FEMALE HEALTH CO
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		28,684,889
Amendment Flag	false
Entity Central Index Key	0000863894
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Note 1 - Basis of Presentation (Details) (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2012
Note 1 - Basis of Presentation (Details) [Line Items]
Number of Geographical Locations	143		143
Average Days' Sales Outstanding			58 days
Bad Debt Expense to Product Revenue			0.05%
Allowance for Doubtful Accounts Receivable	$ 68,694		$ 68,694		$ 41,625
Foreign Currency Transaction Loss, before Tax	33,280	(15,235)	100,173	69,294
Foreign Currency Transaction Gain, before Tax		$ 15,235
Country Specific Commercial Partners [Member]
Note 1 - Basis of Presentation (Details) [Line Items]
Number of Geographical Locations	16		16
London, England [Member]
Note 1 - Basis of Presentation (Details) [Line Items]
Area of Real Estate Property (in Square Feet)	6,400		6,400
Selangor D.E., Malaysia [Member]
Note 1 - Basis of Presentation (Details) [Line Items]
Area of Real Estate Property (in Square Feet)	16,000		16,000
Minimum [Member]
Note 1 - Basis of Presentation (Details) [Line Items]
Standard Credit Term For Sales - Minimum	30 days		30 days
Maximum [Member]
Note 1 - Basis of Presentation (Details) [Line Items]
Standard Credit Term For Sales - Maximum	90 days		90 days