Hello and welcome to The Female Health Company Third Quarter Fiscal Year 2015 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 that this event is being recorded. The statements made on this conference call that are not historical in nature 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 actual 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 receipt and 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 release, 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 OB Parrish. Please go ahead.

Thank you, Ed. Good morning and welcome to The Female Health Company’s third quarter 2015 conference call. Michele Greco, Executive Vice President and CFO, is here with me in our Chicago office. This morning, I’d like to make some general comments regarding the status of the company then I’ll cover the financial results and key factors that may impact future results and the outlook. As usual, on every 30 years, I am referring to the company’s fiscal year evolution September 30, unless I know otherwise. I have three general comments regarding the company. First, during the third quarter and year-to-date the company experienced 1 million FC2 unit sales growth, this is important because it reflects increased global demand for Female products. Secondly, as you would’ve probably noticed in the release the company has experienced a new expense growth year-to-date. A portion of this represents in investment and development, a significant portion of future expenditures will be reduced under Federal line with revenue and return on investment. The third general comment, although the company continues to be profitable and debt-free, the company has experienced a significant decline in shareholder value, as a substantial shareholder I’m acutely aware of this. Because the company is a profitable debt-free company, which I believe that’s good prospects. I believe that it is currently under development, it’s my objective to focus on returns on investment and shareholder value. Turning to the financial results for the third quarter, unit sales totaled $14.4 million up 5% from the third quarter of 2014. Net revenues for the quarter totaled $7.8 million, a decrease of 1% from $7.9 million in the prior year period. Gross profit increased 11% to $4.6 million or 59.7% of net revenues compared with $4.2 million or 53% of net revenues in the prior year quarter.…

[Operator Instructions]. Our first question comes from Avi Fischer of Long Cast Advisors. Please go ahead.

Hi, good morning OB and Michele. I have two quick questions. First, is it possible that might be best to just take on one thing at a time, say, due to U.S. consumer strategy expansion now and then rethink additional acquisition sometime in the future instead of doing, you’re a small organization maybe putting that up into two separate times and two different things instead of simultaneously?

Well, I think within that context, that type of solution would be based on the opportunities available on each side. And as we evaluate those if that turns out to be the best choice that’s what we’ll do, but we’re not limiting ourselves to something looking at one opportunity.

I guess, as a follow-up to that, because the increased spending on the SG&A line is I presume in the pursuit of both of these things simultaneously? When should we expect the kind of return on that?

Well, that’s the key question and that’s what we’re looking at. On the G&A line on expenses, some of that is due to the particular, those particular projects. But there are some other expenses in there that are substantially far and one of the points I made initially is that we can typically reduce the federal line than, rather than this and the return on investment. In terms of timing, as we look and make decisions on the consumer project or on the acquisition, one of the key things would be both return on investment and timing. And that will be part of the decision and perhaps literally we focus on one more than other or drop one and not the other.

Perfect. And then just finally, you’ve been the kind of publicly traded company for a long time, you know it’s not just about unit sales and revenues but balance sheet management, cash flow management. And they tend to let it in the company about this last year after you cancelled this dividend. But is it possible that your compensation would be based less in the future or could be changed, so it’s not just on unit sales and profitability but also returns on invested capital. Is that something you’d be willing to revisit?

Let’s tell you that historically my preference has always been to tie intellectual compensations where we see the shareholder value.

I hope we get to see that in the next proxy statement. Thank you.

Thank you, Avi.

Our next question comes from Tony Sorenza [ph] of Key Equity Investors. Please go ahead.

Thank you, good morning. Given the management and leadership change, does this signal in anyway a change in strategy, the strategy sounds very similar to what it was elucidated before. But is the strategy now significantly different in your mind?

I don’t think the fundamental strategy is significant different. I think the execution will be substantially different.

Okay. Maybe a question of emphasis or just to actually execution you’d say?

Well, I think the focus on return on investment and shareholder value is a primary objective that I would have.

Okay. Now, my next question is and it’s a question I’ve spoken to a lot of other shareholders and a little bit confusion on, it’s really the acquisition strategy. As we look at the company’s balance sheet, obviously there is not a lot of cash there to actually do a transaction. And I don’t know if you want to take on that. It would seem to me and I think this is a general reaction, would it make more sense to be involved in a partnership with someone else to help distribute the product or even possibly a sale of the company to someone else who would have better distribution with say in the United States who can more effectively sell the product?

Well, that’s a good observation. I should point out that in looking at that type of activity, we haven’t eliminated any possibility that would make sense with our shareholders including all the ones which you’ve mentioned.

Okay. So those are all on the table, when you say acquisition, we could look at partnership?

We’re not necessarily saying that we’re going to do this regardless. We’re looking at any possibility direction that could improve shareholder value.

Okay, great. That’s good to know, I appreciate that. Good luck. Thank you.

Thank you.

Our next question comes from Anthony Vendetti of Maxim Group. Please go ahead.

Thank you. Yes, just a follow-up on the distribution strategy. In healthcare obviously it’s very fragmented and vitally imperative that you figure out a distribution strategy that can best monetize a product that is clearly a product that should be high demand, high need for. So, can you talk a little bit more about what your distribution strategy is and how you see it evolving over the next couple of years?

Well, there are two parts to this. If you look at distribution of the public sector where we feel the base, we currently have that substantially covered, we currently distribute in various ways to 144 countries around the world. And that also forms a framework if you had another product that fit that distribution system, you would capitalize on it. Secondly, there are other types of distribution business product that might be useful. For example, if you look at non-formal birth-control and so it relates to normally we had breast-cancer and until they were treated, they can’t use the pills they’re looking for, know more normal methods of birth-control, there is another subset of market like that that could be use of where we expand even in the public sector or private sector. As far as distribution of the consumer basis, it could very well be and we’re seeing substantial purchases online of male condoms and we’re beginning to see it on female condoms. And so you could have social media and online purchasing. We’re currently listed on Amazon with purchases. And there could be some special retail applications of it as I’d mentioned earlier. We’re going to be careful in looking at something like it and determining level of risk and potential return.

Okay. And just a quick follow-up, you mentioned under ObamaCare there is a code that could allow for reimbursement, can you elaborate on that?

Yes. The ObamaCare, if somebody gets considering from both physician that says female condom, they can get reimbursed for it. And UFA has a code in order for that that’s happening.

So, you need an actual script from a doctor in order to get reimbursed?

Right. And we’ve talked to physicians about it and there are a number of physicians that have kept requesting and they have been doing that for a number of reasons.

Okay, great. Thank you.

Our next question comes from Peter Mcmullin of IPC Global. Please go ahead.

Hi OB, how are you doing?

Peter, how are you?

Very well, thank you. Do to expect this negative cash flow to reverse and somebody pointed out it’s kind of limiting your options on acquisitions. With over your time and that would look better?

Well, most of it is good as Brazil time. And we’re good in regular payments. And we hope there would be a big chunk of that by the end of our current fiscal year, which ends in September.

Okay. And second question was referenced to FC2 product development, and given a more competitive marketplace with some pressure on prices, would you be looking at trying to do it somewhat cheaper or just what direction is product development going?

Well, there are maybe three different things Peter. One is, of course reducing cost and we’re focusing on that which has something to do with the pricing structure. The second is the types of bidding strategies NY has in reference to time and price and volume. The third is providing different varieties of the product. One of the things that’s come all-in in the public sector includes the reducing use of female condoms and male condoms, just having the variety that captures interest and the story behind is, and have a public sector and hope soon get actual use of the product among the public sector users. So we’re looking both of the types of things we’re looking at.

Okay, thank you.

[Operator Instructions].

Hello. I’m just wondering could you explain all through the foreign exchange charges, I thought we took steps to minimize those years ago, why are the foreign exchange charges so large?

To minimize what?

The foreign exchange expenses or gains.

Well, one of the, there are two parts to that. One is that we did, now that everything is dollars, so we do have one exposure in Malaysia, it was Malaysian Ringgit and the U.S. dollar. And they have been pretty much in lock-step for a long period of time for many years of up to maturation. And recently with the strengthening dollar we’ve had weakening Ringgit, the Malaysian Ringgit next to that and so we got some positive currency in that.

Do you expect further large swings in that or not?

Not really.

Okay, thank you.

And this concludes our question-and-answer session. I would like to turn the conference back over to OB Parrish for any closing remarks.

Well, I like to thank everybody for their interest in The Female Health Company, and for their attendance. I look forward to entering the call to next quarter. And thank you once again all. Bye.

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