: William R. Gargiulo, Jr. 231.526.1244 Donna Felch 312.595.9123 The Female Health Company Reports Record Profit for Fiscal Year 2009 Excluding Restructuring Costs for Each, Operating Incom

Female Health Company Reports Record Profit for

Restructuring Costs for Each, Operating Income Exceeds Previous Earnings

Completes FC1 to FC2 Transition

Payment of Dividend in Calendar 2010

CHICAGO, November 30, 2009 -

The Female Health Company (NASDAQ-CM: FHCO - News), which

manufactures and markets the FC2 Female Condom, today

reported record net revenues and operating income for the year ended September

three months ended September 30, 2009, net revenues increased slightly to $7.9

million, compared with $7.8 million in the three months ended September 30,

2008, reflecting the impact of the transition from FC1 (and limited FC1

production capacity) to the lower-priced, second-generation FC2 female

profit increased 9% to $3.8 million, compared with $3.5 million in the fourth

quarter of FY2008. Operating income declined to $0.5 million, after recording

the $1.5 million restructuring charge associated with the transition from FC1 to

FC2, in the three months ended September 30, 2009, compared with $1.2 million in

the prior-year quarter. Exclusive of the restructuring charge, operating income

increased 66% to approximately $2.0 million.

fourth quarter of FY2009, the Company recorded a favorable currency gain of $92

thousand and a tax benefit of $1.6 million, compared with a favorable currency

gain of $893 thousand and a tax benefit of $219 thousand in the same period last

Company reported net income attributable to common shareholders of $2.3 million,

or $0.08 per diluted share, in the fourth quarter of FY2009, which was identical

to the same period last year, in spite of the $1.5 million fourth quarter FY2009

restructuring charge.

Company expects significant quarter-to-quarter variations in its operating

results, due to the timing of large order receipts, production scheduling, and

shipping of products.

year ended September 30, 2009, net revenues increased 7% to $27.5 million,

compared with $25.6 million in FY2008, reflecting a shift in customer purchases

towards the lower-priced FC2. Gross profit increased 26% to $13.5

million, compared with $10.7 million in FY2008. Operating income, including the

$1.5 million restructuring charge

associated with the transition from FC1 to FC2, increased 48% to $4.7 million,

compared with operating income of $3.2 million in FY2008. Exclusive of the

restructuring charge, operating income rose 95% to $6.2 million, compared with

the Company's previous guidance that anticipated an increase in operating income

of 60%-85%. In FY2009, the Company sold 40.2 million FC female

condoms, for an increase of 16% when compared with 34.7 million units sold in

FY2008. FHC's unit growth was limited by FC1 production capacity in

FY2009. All future orders and unit shipments will be the

second-generation product, FC2.

income attributable to common stockholders for FY2009 increased 34% to $6.5

million, or $0.24 per diluted share, compared with net income attributable to

common stockholders of $4.8 million or $0.18 per diluted share, in

FY2008. In FY2009, the Company was able to recognize a tax benefit

for past losses which added $1.6 million to net income attributable to common

stockholders, as compared with a $0.8 million tax benefit recognized in

very pleased to report strong revenue and earnings growth for the year ended

September 30, 2009," noted O.B. Parrish, Chief Executive Officer of The Female

Health Company. "We are particularly encouraged by the successful completion of

the transition from FC1 to the lower-priced but higher-margin

FC2. Our strong FY2009 operating performance reflects continued

growth in global demand for the female condom, including excellent acceptance of

our second-generation product. Most importantly, the growth in the

use of the female condom reflects increased protection against

Company generated $5.8 million in cash from operations during FY2009, and its

year-end cash position was approximately $2.9 million, compared with $2.1

million at the end of FY2008. Cash expenditures in 2009 included

approximately $1.7 million for capital expenditures and $3.8 million for common

stock repurchases. The Company has no outstanding debt and $1.5

million in unused credit lines. Based on the Company's strong cash

flow and completion of the FC1 to FC2 transition, the Board of Directors is

considering initiating dividend payments in calendar 2010.

equity at September 30, 2009 totaled $13 million, versus $9.7 million at the end

Restructuring Charge FC1 to

the year FHC announced (i) a 150% expansion of its Malaysian FC2 production

capacity, (ii) that it expected a 100% transition to FC2 during calendar 2009,

and (iii) that there would be certain one-time charges as a result of the

transition. There are two categories of charges.

Redundancy / General

2009, the Company announced to its UK employees that the Company was evaluating

the future of its UK facility upon the decision of two of its largest customers

to switch their purchases from the first-generation product, FC1, which was

manufactured in the UK facility, to the second-generation product, FC2, which is

manufactured in Malaysia. As required by British labor law, the

Company went through an evaluation process, working in tandem with employee

representatives, in which various manufacturing alternatives were

considered. As the Company was unable to identify a satisfactory

alternative, the facility's manufacturing operations ceased in October

2009. The Company incurred a one-time charge of $1.5 million for

restructuring costs, including redundancy payments to employees and associated

restructuring fees. The redundancy payments made to employees in late November

2009 were self-funded by the Company. This charge for restructuring

costs was accrued in the fourth quarter of FY2009.

Company leased its FC1 manufacturing facility in the U.K. In connection with the

evaluation of its U.K. FC1 manufacturing facility, the Company entered into new

lease and related agreements (collectively, the "New Lease") with the new owner

of the U.K. facility. The New Lease replaces the Company's previous

lease for its U.K. facility, which had an expiration date of December 10, 2016

and rent of 296,725 ($488,100) per year. The New Lease expires on

the earlier of (1) November 1, 2010 or (2) at least three months after the

Landlord provides a notice of termination, but in any event not before May 2,

2010. The rent remains 296,725 ($488,100) per year, and the Company

was required to deposit the amount of the annual rent upon execution of the New

Lease. In connection with the New Lease, the Company also made a

lease surrender payment of 600,000 ($986,940) to the Landlord on November 2,