Hello and welcome The Female Health Company, Third Quarter of Fiscal Year 2014 Operating Results Conference Call. All participants will be in 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 that are not historical facts are forward-looking statements based upon the Company’s current plans and strategies. Such forward-looking statements reflect the Company’s current assessment of the risks and uncertainties related to its business. The Company’s actually results and future developments could differ materially from the results or developments in such forward-looking statements. Factors that may cause actual results or developments to differ materially include such things as product demand and market acceptance, the timing of the receipt shipment of large orders, competition, the economic and business environment, and the impact of government pressures, currency risks, capacity, efficiency and supply constraints, the ability to execute on new business strategies and other risks detailed in the Company’s press releases, shareholder communications and Securities and Exchange Commission filings. For additional information regarding such risks, the Company urges you to review its 10-Q and 10-K SEC filings. I would now like to turn the conference over to Karen King, CEO of The Female Health Company. Please go ahead ma’am.

Thank you, Walker. Good morning everyone. This is Karen King, President and CEO of The Female Health Company and I'd like to welcome you all to The Female Health Company’s third quarter 2014 conference call. Joining me on the call today are the Company’s Chairman, OB Parrish; our CFO, Michele Greco; Susan Ostrowski, our new Vice President of Business Development; and Mike Pope, our VP of Operations. Before beginning today’s discussion I would first like to acknowledge the lost of a member of our team. Dr. Lucie Van Mens, our Director of Program Development and Support, was a passenger on the Malaysian air flight recently downed over the Ukraine. She was on her way to the International Aids conference in Melbourne. Lucie spent most of her professional career in the fight against HIV Aids and in promoting women’s health and empowerment and was highly respected in our industry. Lucie was our colleague and our friend and she will be greatly missed by all of us. Turning to our business, I will begin with comments and then I will ask Michele to review the financial results for the third quarter which ended June 30, 2014. Then I will discuss our strategic plans which we announced in the press release two weeks ago. Finally I’ll comment on key factors that may impact future results and afterward we will take your questions. Please note that when we refer to years, it's to FHCs fiscal year which ends September 30th unless otherwise stated. During the third quarter of 2014, the Company recorded significant increases in unit volumes, revenues and operating income when compared with the prior year third quarter. We are pleased to deliver the strong performance. This quarter’s increase follows several down quarters and is a continuing example of the volatility in ordering patterns experienced throughout the company history and discussed extensively in previous quarterly calls. As I pointed out last quarter, it is inherent in a market segment in which we operate. Now I’d like to ask Michele to review the financial results.

Our third quarter fiscal 2014 results; unit sales were $13.7 million, up 9% from $12.6 million units in the third quarter of 2013 and up 88% from the second quarter of 2014. Net sales for the quarter totaled $7.9 million, an increase of 9% from $7.3 million in the prior year quarter. Gross profit increased 11% to $4.2 million, which represents 53% of net sales compared with $3.7 million or 51% of net sales in the prior year quarter. Operating expenses decreased 19% to $2.1 million from $2.6 million for the prior year quarter. Operating income totaled $2 million, an increase of 86% when compared with the $1.1 million in the prior year quarter. Net income increased 60% to $1.2 million or $0.04 per diluted share from $727,000 or $0.03 per diluted share in the third quarter of 2013. Now a few points about the nine month results. Net sales for the first nine months of fiscal 2014 were $18.9 million, a decrease of 29% from $26.7 million in the first nine months of 2013. Operating expenses in that same period decreased 19% to $5.8 million compared to $7.2 million for the prior nine months. Operating income totaled $4.4 million, a decrease of 45%, compared to $8 million in the prior year nine months. The cash flow; in the first nine months of fiscal 2014 the Company generated $4.9 million in cash from operations, prior to the negative impact of $3.4 million from changes in current assets and liabilities, which result in $1.5 million in net cash provided by operating activities. This compares with the 2013 nine months results of $8.7 million in cash from operations prior to the positive impact of $4 million from the changes in current assets and liabilities, which results in $12.7 million in net cash…

Okay thanks, Michele. Now I’d like to turn to our new strategic direction, which we announced two weeks ago. Upon joining the Company at the end of January, I assessed our market opportunity, as well as our strengths and weaknesses in order to develop a plan to grow the Company and address areas for improvement. The board of directors reviewed the plan and following an in-depth discussion unanimously agreed to this strategy which included the suspension of the Company’s cash dividend. The Company has a two-part strategy moving forward. The first priority is to grow the demand for FC2 female condom in locations all around the world. There are over 10 billion male condoms distributed through the global public sector each year and while many key procurement organizations have stated a desired target ratio of 10 to 1 four male to female condoms, female condom still represent well under 1% of male condom volumes in the public sector. The company has historically relied on partners, procurement groups and its own programming and training team to help drive awareness of female condoms through education and training and thereby generate demand for FC2. While this has proven to be a very cost conscious approach we believe it has not delivered on the full potential for the product. Additionally competitive landscape has changed with products out of India and China entering the markets. While we believe these products are inferior to FC2, we cannot ignore that the competitive landscape is evolving. Accordingly we have begun to significantly ramp up sales and marketing activity to grow sales of FC2 in our core public sector channel and also explore opportunities for further development in the consumer channels. I’m very pleased to have Susan Ostrowski join our executive team to lead our sales marketing and sales…

We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Jack Wallace of Sidoti & Company; please go ahead. Jack Wallace - Sidoti & Company: I’ve got a couple for you. Just in terms of the sequential revenue growth, what areas of the world were you seeing the pickup in order activity?

Right at this moment, Jack, we've seeing continuation of where we have our strongest programs, certainly Africa. Brazil continues to be a very strong area for us, and other parts of the world as well. But where we're going to focus for -- where we have identified untapped demand is more of South America and Latin America, and then Eastern Europe as well. Jack Wallace - Sidoti & Company: Got you. And then the inventory levels, Michele you mentioned were elevated due to the increase in testing and quality control initiatives. It’s that going to be a more steady level in the 3 million plus range or might that level come back down a little bit?

Now, it may stay around that level. The inventory on hand, at quarter end was either in the queue to be tested, was out being tested or was getting ready to be shipped. Jack Wallace - Sidoti & Company: And then, going back to Brazil, was there any effect of the World Cup on sales in the quarter, or any specific orders by the country leading up to that event?

We had anticipated an order for the World Cup, and there was some discussion around it. We do know that there was quite a bit of discussion around who would be responsible for funding that. In the end we did not see a specific World Cup order. So we have to assume that existing Ministry Of Health inventory was utilized for the event. Jack Wallace - Sidoti & Company: And is there a -- just for the current political environment in Brazil and obviously things slowing down during the World Cup there, has there been any renewed activity or any timetable or any potential tender there? And also any idea on what the inventory levels are in that country?

Jack, as you know, we're never able to discuss when we're currently engaged in tender discussions. It's actually a requirement or a request quite often of the country that issues the tenders. So I would not be able to speak to any ongoing tender discussions. Jack Wallace - Sidoti & Company: Okay, then any idea on what inventory levels are in Brazil?

No, we get some general guidance from the government in terms of what they might be looking at for next purchase quantities, but we don’t have any direct visibility into inventory levels. Jack Wallace - Sidoti & Company: And then do you have any more color or details on some of the organization, and actually kind of boots on the ground so to speak with the FP2020 initiative, and if there is any demand that's been seen or increase for demand being seen related to that initiative?

Right. So as I described last time, we've learned much more about how FP2020 is going to operate. FP2020 is essentially a facilitation body to help assure that these reproductive health programs get implemented in 69 of poorest countries around the world and reach an additional 120 million with both education and programming and commodities for reproductive health choices. And we know that male and female condoms are considered a critical part of that offering. We are aware of several countries who have initiated reproductive health programs under FP2020 guidance and we are aware that female condoms are a part of that program. The procurement for those programs is going to happen through the normal channels that it does today, and so we would not be able to distinguish if the order was for FP2020 or for a typical AIDS program. Jack Wallace - Sidoti & Company: I guess another way of getting to that, would there be I just any increase in demand, kind of from specific countries where those programs are involved?

We have definitely seen orders to those countries following the startup programming in reproductive health, yes. Jack Wallace - Sidoti & Company: Okay, then lastly, Susan this one is for you. Hopefully you can go into little bit more detail on the new and improved sales and marketing strategy?

Certainly. We've taken a hard look at the way we go to market and we feel that we need additional resources to really take advantage of all the opportunities that's out there. We are in the process right now of designing our organization and we’ll share that with you when we finalize our plans.

Thank you (Operator Instructions). Our next question comes from (Michael Demain of Elevyn Capital) [ph]. Please go ahead.

Good morning first of all I am very sorry about your colleague Lucie. First of all, I applaud you all for suspending the dividend. I may be the only investor out there who feels that way but then I also applaud you guys for reemphasizing the sales channel, especially the public channels. And so from that perspective, what sort of G&A bump should we see from building up that team?

So, at this time, we’re planning for a small but again highly experienced team. Our plan right now is for Susan to hire two additional individual sales professionals. And for some of that we expect to be able to divert some of our resources that have been used in other areas and then some of it will be incremental cost. But we’re certainly trying to manage that overall.

Okay, great. And then maybe if you could talk a little bit more about business development and the acquisitions. I think from an equity holder’s perspective you hear the word acquisition, I think about how are you going to fund that? I look at the balance sheet and obviously cutting the dividend is helpful to accumulate cash. But issuing stock at this level doesn’t make sense in terms of an equity transaction. And then beyond that debt, with our volatility and revenue, it seems like that might be expensive as well. So how are you thinking about potentially financing any acquisitions?

So, I think we are aware of all the various options available to us. And some of that will depend on the type of deal that we’re doing and the timing for when that deal is ready to go. Certainly we're considering that. And again at the time we will evaluate all the options available to us and assess what’s the best one.

Okay, great. And then have you seen any pricing pressure and from your bids now that some of these competitors are actually landing these tenders?

Good question. So the one that we have the most visibility in queue was the South African tender, the last South African tender that was awarded in September of 2013. And all of the bids which do get published, the actual pricing, they were all pretty close in terms of pricing. And FC2 was not the highest nor was it the lowest. So it was about in the middle of the pack. So, so-far we have not seen any significant pricing issue. Of course that is a possibility that could change in the future.

And then one last housekeeping issue. The last few quarters there has been discussion about some big order that may or may not come through. Did that come through in this quarter?

So the only order that I'm aware that there might have been discussion around was the World Cup order and as I just mentioned, we had anticipated the World Cup order because some discussion and questions had been pushed to us and I know there was an issue on the funding and then no order came through. But any other very significant orders are usually tied to tenders and we just are not able to discuss tenders that are under negotiations.

Thank you sir (Operator Instructions). Our next question comes from Mark Robins with Canvas Research. Please go ahead.

Thank you for taking the questions. First help me better understand the competitive landscape, because as I remember from previous calls, we kind of knew that there was some product being generated or created but there was no real conversation to my memory about competitive products being actually offered into the tenders. Was this kind of a surprise for you folks in the last three months?

So, certainly not in the last three months because that tender was awarded last September, so September of 2013. I think that as I've mentioned when I was discussing the competition, we have seen some competition enter in the past like the VA w.o.w product out of India and ultimately that competition didn’t make it. So now that we have the competition that participated in the South African tender, certainly we’re watching very closely to see if those competitors can in fact deliver the product, if they can meet quality standards, if the product will be accepted. So we’re watching very closely. I think it’s still pretty early to really make any conclusions about the competition.

Okay, and then let’s talk about the program, the expansion program. I am a little fuzzy details I guess as I should be because of the limited expressions of where things are going. But so help define for me again kind of the focus of where you're going with the new endeavors.

So as I said, we really want to stick fairly close to home on that and we'll be looking at opportunities that complement our market segment -- our channels that we participate in, or the type of category of product that we're involved in. Certainly you can expect that we’ll be looking hard at the female health arena and products directed towards the female health. It also would make sense for us to be examining products related to infectious disease prevention. So those would be two areas for examples that we’ll be putting a lot of focus. But our idea here is to stay pretty close to home.

And does that mean that you might push more into the OTC channel, or would you push primarily into the channel where outside organizations are doing the purchasing, or both?

No. It could be either one. One of the things that I also mentioned about FC2 that we’re going to be exploring is obviously we're very strong in the global public sector channel. We have some presence in the consumer channel and we really want to be evaluating can we further develop our presence in that consumer channel. So as we think about the next product that we want to bring into our portfolio, I could really see that either channel would make sense for us because it can either assist us in the way that we're hoping to move or just be complementary to what we are already doing.

Our next question comes from Peter McMillan of IPC Inc. [ph]. Please go ahead.

I saw the [indiscernible] Gates Foundation were trying fund a different kind of female condom or a lower cost one. Could you just comment on that and how that compares with FHCO plans?

Yes, Peter, thank you. Good question. We are definitely aware of the Gates offering $100,000 grant to a contest winners for the design of a different female condom. They have also done the same thing with male condoms. And first of all, the one thing that that really signifies to us is the importance around condoms, the continuing importance of condoms and prevention. So condoms are a very old product but they are still essential and really do something that no other type of product can do. We are always following new designs and what people are working on. It’s something that possibly we could look at trying to work with someone if there is really a very unique approach or we're also always looking for things that we can do our self. So we're aware of that and we actually support the idea of additional innovation in the whole condom field.

(Operator Instructions) Our next question is a follow-up from Jack Wallace of Sidoti & Company. Please go ahead. Jack Wallace - Sidoti & Company : Michele, this one is for you, just in regards to taxes. Every fourth quarter it looks like you take a nice benefit there. It’s been right around $5 million in the last couple of fourth quarters. Do we expect a similar level here in the September at the quarter?

No Jack, we have been trying to highlight that in the footnotes in the quarters. That was a result of taking down a valuation allowance against our NOLs and we’ve basically completed that at the end of 2013.

Thank you. And this concludes our question-and-answer session. I would like to turn the conference back over to the management team for any final remarks.

Okay. Thank you Rocco. And thanks to everyone for participating today. I just will also add that as in the past, if you have some additional questions and would like to reach out to us, you can give either Michele or I a call and we're happy to take further questions off line. So thank you for participating. Bye-bye.

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