Hello and welcome to The Female Health Company First Quarter of 2013 Operating Results Conference Call. All participants will be in a listen-only mode. (Operator Instructions) After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. The statements made on this conference call, which are not historical facts are forward-looking statements based upon the company’s current plan and strategies and reflect the company’s current assessment of the risk and uncertainties related to its business, including such things as product demand and market acceptance; the economic and business environment, and the impact of government pressures, currency risks, capacity, efficiency, and supply constraints and other risks detailed in the company’s press releases, shareholder communications, Securities and Exchange Commission filings. For additional information, the company urges you to consider reviewing its 10-Q and 10-K SEC filings. I would now like to turn the conference to O.B. Parrish, Chairman and CEO. Please go ahead.

Thank you, Emily. Good morning and welcome to The Female Health Company’s first quarter 2013 conference call. Michele Greco, our Vice President and Chief Financial Officer is here with me in Chicago; Mike Pope, our Vice President, UK and Malaysian Operations is participating from our London office. This morning I will address the financial results, recent events and long-term demand factors that will impact future results and then the outlook. After that, we’ll take questions. As usual, when I refer to years, I am referring to the company’s fiscal year which ends September 30 unless I state otherwise. Turning to the first quarter, unit sales increased 13% to 17.1 million versus the first quarter of 2012. This is a first quarter record and the second best quarter ever compared to 17.3 million units in the fourth quarter of 2012. Revenue increased 15% to $9.9 million, another first quarter’s record. Cost of goods increased 9% on a 15% revenue growth. This reflected the impact of increased volume in the company’s cost reduction program. Gross profit increased 19% to $6 million or 60.2% of sales compared to $5 million or 58.1% of sales in the prior year quarter. Our operating expenses increased 5.9% to $2.4 million compared to the first quarter of 2012. Operating earnings increased 29% to $3.6 million compared with $2.8 million in the prior year quarter. And net income increased 33% to $3.5 million, another first quarter record or $0.12 per diluted common share compared to $2.7 million or $0.09 per diluted common share for the first quarter of 2012. I should point out that the gross margin figure of $6 million and the operating earnings figure of $3.6 million for the first quarter both set new quarterly records. Shareholders’ equity totaled $24 million at the end of the…

(Operator Instructions) And our first question will come from Andrew Love of Love Savings Holding. Please go ahead.

Good morning O.B.

Good morning Andy. How are you?

Yes, fine. Congratulations on another excellent quarter.

Thank you.

I was curious if you could give us the figures during the quarter for CapEx and stock repurchases?

For the second half? Our CapEx, it was nominal Andy in the quarter certainly less than $100,000. And on stock repurchases, there is one stock repurchase for $178,000.

Okay, thanks.

And our next question comes from Marc Robins of Catalyst Research. Please go ahead.

Hey, thank you, O.B. Good quarter.

Well, thank you Marc.

Congratulations to you and your team. Hey, help me understand something or remember something in the fourth quarter of last year, there was a $5 million tax, I guess, rebate you might say versus the $25,000 and $71,000, could you help me better understand why there was this kind of anomaly?

In terms of the cash benefit we took?

Yeah, the tax benefit?

And you are comparing it to what period, the prior period?

Well, in the first quarter, I believe the benefit was like or the tax was $25,000 and in the first quarter a year ago it was $71,000.

Well, I see which one that you are referring to that. Well, there is an anomaly there in terms of the split between U.S. and international profits and the fact that a year ago, Illinois has suspended its NOLs for a period of four years. And so we have paid tax in Illinois Lilly a year ago. And this year we didn’t have any tax to pay at Illinois, because if you look at just Illinois alone, there was a loss on it, so we didn’t have to pay tax at that time.

And so that was a catch up item then?

It fits the difference between the 71 and the 25.

Okay, but in the fourth quarter, there was it looks like a $5 million benefit?

Well, in the fourth quarter each year we consider taking a tax benefit based on the results at the time and the outlook for the company. And each year, we have been taking a tax benefit and we took one in the fourth quarter which is about $4.5 million.

I got you, okay. So, it was the normal plus the catch up, okay, very good. Thank you. And again excellent quarter.

Thanks.

Our next question comes from Peter McMullen of IPC Inc. Please go ahead.

Hi O.B. How are you?

Good Peter.

Couple of things. First of all, give us a little color on the sales in terms of now maybe new markets or the countries and the second thing is the inventories are up nicely 25% is that some sort of a reflection on future demand, maybe just comment on those two things?

Sure. In terms of the distribution, we actually are in 138 countries now versus 121 a year ago. But I think more importantly and that is we are seeing an increase in certain countries and we are focused on countries in two different ways. One way, there is really populous countries I think it’s for a large scale program. We’ll begin to see increases in those countries are becoming substantial, but also in a different way that we have seen increases in a number of small countries that we ship to. For example country like Uruguay where we ship small orders and then something last year we shipped 300,000 to Uruguay, shipping to Ecuador. We are seeing the quantities that were small are growing in those countries. And if you put them altogether they are meaningful. So, we are getting increased use and that in fact is probably more important at this point than the increased countries.

And the inventories?

In reference to inventory, the reason you’ll see the increase in the inventory is to fill orders in-house.

Now you say that again please?

The reason for the increase of inventories is which you applied is to fill orders that we have.

Thank you.

Our next question comes from George Whiteside of SWS Financial. Please go ahead.

Good morning, O. B. And I would like to add my congratulations to a wonderful first quarter. And in that regard your profit margin really looked excellent at 60% and what is your feeling about your ability to maintain that in light of I am sure you are making investments in enhancing your distribution channels and training, etcetera?

Well, I think we are working assiduously on reducing our cost (indiscernible), which is one of the factors. Another factor is increased volume that influences that. As the volume goes up, if we get we did 61.6 million units last year, it’s something gets up to 200 million to 300 million units, we may have in terms of absolute dollars and more profitable company at a slightly lower margin, but our objective is to keep that margin as high as we can.

Excellent, my second item is you commented on the completion of the Malaysia expansion and with your growth prospects, do you have additional capacity in that facility to make further expansions as the demand increases?

Mike you want to make the comment on what our next steps would be?

Yes, of course. The answer to your question, yes we do have some more space of the, it’s starting to get a little tight. We are looking at additional units in the locality to expand into. There is quite a lot of available space within Malaysia relatively competitively priced, so it won’t be an issue.

Well, that’s certainly encouraging and it sounds still you’ve done some forward planning so that when the need raises you will have capability of locating space etcetera.

Thank you very much.

That’s not a problem, you have to deliver it.

Our next question is a follow-up from Marc Robins of Catalyst Research. Please go ahead.

Thank you. O. B., help me understand a little something about your business, have you really detected any kind of seasonality to the quarterly revenue numbers?

I don’t think there was any seasonality in that sense to them…

We have the ebb and flow of orders that…

If you look at it from the standpoint of success and seasonal…

No, no.

And we are going to have that impact, you might have some changes in buying patterns for maybe one country and then the program goes for a while. And then you don’t have any additional buying in these three or four quarters late. So, this is when we talk about the volatility in it. So, you don’t get a linear picture. Overall, you have the nice rising demand that the picture may not be linear in that sense.

And secondly, you had another competitor I want to say India or China, has the landscape, competitive landscape changed any?

Well, we haven’t missed the company is in our 10-K and 10-Q indicated that one other company is secured and we are going to show clearance, but they have substantial work to do to be able to produce and deliver any large quantities of the product. Other than that, I don’t think there is anybody else that’s close to getting clearance from FDA or from WHO.

Okay, very good, thank you, and again great quarter.

Having no further questions, this concludes our question-and-answer session. I’d like to turn the conference back over to Mr. Parrish for any closing remarks.

I just like to thank everybody for attending and for your support. And we look forward to the next conference call. Thanks.