William R. Gargiulo, Jr. 231.526.1244 Donna Felch 312.595.9123 The Female Health Company Reports 60% Increase in Third Quarter Earnings Company Increases Full-Year Earnings Guidance; Preta

Female Health Company Reports 60% Increase in Third Quarter

Increases Full-Year Earnings Guidance; Pretax Income Expected to Rise 200%-250%

August 12, 2008- The Female Health Company (AMEX: FHC - News)

manufactures and markets the FC and

FC2 Female Condoms , today

reported its operating results for the third quarter and first nine months

FY2008. The Company will host an investor conference call today,

August 12, 2008, at 11:00 a.m. Eastern Time to discuss its operating results

other topics of interest (see details below).

three months ended June 30, 2008, the Company's net revenues increased 22%, or

$1.1 million, to approximately $5.7 million, compared with approximately $4.6

million in the three months ended June 30, 2007. The Company's net

income attributable to common stockholders increased 60% to $509,067, or $0.02

per diluted share, during the third quarter of FY2008, compared with $317,274,

or $0.01 per diluted share, in the corresponding period of the previous fiscal

profit increased 20% to $2.2 million in the most recent quarter, compared with

$1.8 million in the third quarter of FY2007. Operating income

increased 7% to $396,376 in the three months ended June 30, 2008,

compared with operating income of $370,577 in the quarter ended June 30,

2007. During the third quarter of FY 2008, FHC recorded an expense

accrual for incentive compensation based on the probability of achievement

2008 plan compared to the third quarter of FY 2007 when there was a reversal

an expense accrual due to a change in accounting estimate. A

year-to-year comparison of operating expense shows a 23.5% increase, 71% of

which is attributable to the accrual mentioned

Company expects significant quarter to quarter variations due to the timing

the receipt of large orders, production scheduling, and shipping of

income attributable to common stockholders for the three months ended June

2008 includes an income tax benefit of $167,000. This income tax

benefit is the result of the ongoing evaluation of our ability to realize our

deferred tax assets based on all available information including our past

operating results and our forecast of future taxable income. The

Company did not recognize such a benefit for the three months ended June 30,

Company has Federal and state net operating loss carryforwards of approximately

$66 million, expiring in years 2008 to 2027. The Company's United

Kingdom (U.K.) subsidiary, The Female Health Company-UK plc., has U.K. net

operating loss carryforwards of approximately $88 million. The U.K.

net operating loss carryforwards can be carried forward indefinitely and

utilized to offset future U.K. taxable income.

nine months ended June 30, 2008, the Company's net revenues increased 26% to

approximately $17.8 million, compared with approximately $14.1 million in the

nine months ended June 30, 2007. For the nine months ended June 30,

2008, net income attributable to common stockholders increased 510% to

$2,488,971, or $0.09 per diluted share, compared with $407,698, or $0.02 per

diluted share, in the corresponding period of the previous fiscal

profit increased 41% to $7.2 million in the first nine months of FY2008,

compared with $5.1 million in the first nine months of

FY2007. Operating income increased to $1,953,155 in the nine months

ended June 30, 2008, compared with operating income of $500,991 in the same

income attributable to common stockholders for the nine months ended June 30,

2008 included an income tax benefit of $544,000. The Company did not

recognize such a benefit for the nine months ended June 30, 2007.

the first nine months of FY2008, the Company generated $2.6 million in cash

operations and used approximately $1.1 million of cash to repurchase 439,600

shares of FHC common stock in the open market in accordance with an

authorization by the Board of Directors to repurchase up to 2 million shares

common stock. Since the Board approved the buyback program, the

Company has repurchased a total of 613,000 shares in the open

market. As of June 30, 2008, the Company had over $1.8 million of

cash, no debt outstanding and $1.5 million in unused credit lines.

very pleased to report record revenues and earnings during the first nine months

of our 2008 fiscal year," noted O.B. Parrish, Chief Executive Officer of The

Female Health Company. "Growing global acceptance of the female

condom as the only available FDA approved barrier contraceptive method

controlled by women that provides protection against HIV/AIDS is the basis

our growth. The FC Female

Condom is now available in over 100 countries, and we believe it will

play an increasingly important role in the global battle against HIV/AIDS in

2008, we provided guidance that unit sales for FY2008 were expected to increase

by 20% to 25% over the 25.9 million units sold in FY2007 and that pre-tax income

for FY 2008 was expected to increase by 150% to 200% over the $868,913 recorded

for FY2007" said Parrish. "Now, we confirm the unit sales guidance

for FY2008, and are raising our pretax income guidance to be that pretax income

is expected to increase by 200% to 250% over the FY2007 pre-tax income of

are optimistic regarding the outlook for The Female Health

Company. Our team members are now working with organizations in

nearly all regions of the world, from Brazil to Cambodia, from the United

Kingdom to India, from New York to South Africa. Given the gravity of

the HIV/AIDS pandemic, our results are an indicator of the even greater

contribution the female condom will make to world health in coming years,"

previously announced, the Female Health Company will host an investor conference

call at 11:00 a.m. Eastern time, August 12, 2008. Shareholders and other

interested parties may participate in the conference call by dialing

800-860-2442 (international/local participants dial 412-858-4600) and asking

be connected to "The Female Health Company" conference call, a few minutes

before 11:00 a.m. EDT on August 12, 2008. A replay of the call will

be available through August 26, 2008 by dialing 877-344-7529 (international

callers dial 412-317-0088) and referencing the conference code ID

The Female Health Company

Female Health Company (FHC), headquartered in Chicago, IL, is the maker of

FC Female Condom (FC1

and FC2), a revolutionary

offering women dual protection against both sexually transmitted diseases,

including HIV/AIDS, and unintended pregnancy. FHC was created as a worldwide

company in February 1996 with the purchase of Chartex Resources Ltd., the holder

of exclusive worldwide rights to FC1. The Company holds

exclusive product and technology patents for FC1 in the United States,

Australia, Brazil, Canada, France, Germany, Italy, Spain, the United Kingdom,

the People's Republic of China, South Korea and Japan. Patents are