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The Health Company

female. The Health Company. INVESTOR PRESENTATION Q2 2014 6/12/14. The Female Health Company manufactures and markets the FC2 Female C ondom . FC2 is the only product currently available : Approved by the FDA and cleared by the WHO Under a women’s control Which provides dual

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The Health Company

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  1. female TheHealth Company INVESTOR PRESENTATION Q2 2014 6/12/14

  2. The Female Health Company manufactures and markets the FC2 Female Condom. • FC2 is the only product currently available: • Approved by the FDA and cleared by the WHO • Under a women’s control • Which provides dual • protection against: • Unintended pregnancy • Sexually transmitted infections • (STIs), including HIV/AIDS

  3. At a Glance NASDAQ FHCO Market cap ~$165 million Core product FC2 Female Condom Gross margin ~55% Operating margin ~22% Total current assets $15 million no L/T debt at 3/31/14 Cash dividend $0.07 per share quarterly Current yield ~4.90%

  4. Shareholder Return • Closing stock price on March 31, 2014 - $7.76 vs. March 28, 2013 - $7.24, an increase of 7% • Total return (appreciation plus dividends) for FY2013 was 42% • The average annual total return for the eight year 2005-2013 period (since becoming profitable) was 67% Stock Prices

  5. The “Worlds” of FHC Consumer Global Public Sector HIV/AIDS Global Market $4-6 Billion Family Planning Global Condom Public Health $ 400 – 500 Million

  6. HIV/AIDS Market Overview • No. 1 cause of death globally for women age 15-44 • 80% of female cases contracted via heterosexual transmission • Male and female condoms are the only prevention products available • No near-term alternative prevention products on the horizon • In Sub-Saharan Africa, women • represent >58% of adults • with HIV/AIDS infections(1 ) • Worldwide, women living with • HIV/AIDS is 50% of the global total(1 ) (1) Source: World Health Organization

  7. FC2 Female Condom vs. Male Condom FC2 is simply an alternative to the male condom * Every $1 spent on Female Condoms represents $20 in healthcare savings per the Johns Hopkins Study published in AIDS and Behavior, 2012.

  8. FHC Brand • Quality, Reliability, Safety • Partnership in solving significant global issues • HIV/AIDS, other STIs • Poverty – Family planning • Female empowerment and rights • Environment – Population control • Delivers to all stakeholders

  9. Why FC2 Demand Will Continue To Grow • Continued Global Focus on HIV • Feminization of AIDS – leading cause of death women age 15-44 • 35 million persons living with AIDS, 2.3 million newly infected in 2012 • New Global Focus on Family Planning • Addresses poverty, climate change, human rights • Gates/DFID Summit – New Funding • Female Controlled Protection • Basic rights, education, opportunity

  10. FHC Stake Holders Society, Countries, Regulatory Bodies Customers – Procurers Government/UN Agencies Investors Partners - NGO’s, Social Marketing, Advocacy Groups Distributors Customers – Users Employees Suppliers

  11. Geographic ExpansionFC2 Now Distributed Into 144 Countries • Female Health owns certain worldwide rights to FC2 • Patents and Trademarks Yellow shading shows distribution

  12. FHC Key Goals/Strategy • Continue Market Growth • Expand existing programs • Geographic expansion • Capacity / Cost Optimization • Current capacity at 100 million units • Acquired additional space for further expansion • Explore Product/Business Opportunities • Leverage unique channel and capabilities 12

  13. State-of-the-Art Manufacturing 100 million unit capacity, with ability to add up to an additional 100 million units.

  14. US Programs Highlights • FC2 Prevention Programs in Key US Cities – concentrated where HIV/AIDS most prevalent. • College Campus Program launched – raise awareness of and access to FC2 on campus. • Online Ordering Presence

  15. Global Program Highlights • Multilingual (English, Portuguese, Spanish and French) website that provides downloadable training and education is visited 1,500 times per month. • YouTube multilingual FC2 animation and instruction site has received 9 million views during the last year. • 133 training and education sessions in 7 countries with an estimated 19,749 people participating in these sessions. • More than 30 countries asked for and received information and advice on training and education.

  16. Low Risk, Unique Business Model • Modest inventory level, production primarily against orders • Low foreign currency exchange risk, FHCO & Subs Report in $USD • Minimal credit risk, less than 1% bad debt in past five years • Low sales and marketing expense, provide training and education • Strong free cash flow • $2 M unused credit facility • NOL carryforward: • UK: ~$63 M – No expiration date • US: ~$19 M – Expiring in years 2018 to 2027 • State: ~$17 M – Expiring in years 2018 to 2027

  17. FY 2013 – 2012 Results

  18. Unit Sales 100% sales of lower price, higher margin, next generation FC2 CAGR 18.7 % 54.8 19.6 FC1 & FC2 FC1 FC2

  19. Net Revenues 100% sales of lower price, higher margin, next generation FC2 $31.5 $14.8 FC1 FC1 & FC2 FC2

  20. Gross Margin 100% sales of lower price, higher margin, next generation FC2 37.0 FC2 FC1 & FC2 FC1

  21. Dividends 18 Consecutive quarterly dividends paid totaling $29.4 million. - Initially $0.05/share; increased 20% to $0.06/share Q2 FY2012; increased 17% to $0.07/share Q2 FY2013 *Not Taxable

  22. Talented Management Team • OB Parrish - Chairman • A FHCO founder • Previous Experience • Pfizer – Executive V.P. of International Division • G.D. Searle – President of Global Pharmaceuticals • Karen King – CEO and President • Effective January 20, 2014 • Previous Experience • Royal DSM – President Biologics and BioSolutions • The Female Health Company – Executive Vice President • Baxter International • Michele Greco – CFO and Vice President • Effective January 1, 2013 • Previous Experience • Ernst & Young LLP Audit Partner • Susan Ostrowski – Vice President -Sales/Marketing/Support • Previous Experience • DuPont, BASF, DSM, and Cambrex • Mike Pope – Vice President of Global Operations • Previous Experience • Chartex, Franklin Medical, Warner Surgical Products

  23. Competition FC2 Cupid PATH – Women’s Condom

  24. Competition

  25. FC2 Barriers To Entry • Patents principally on design and rings: • 42 patents in 56 countries • FC2 proprietary material formulation • Worldwide product specific training and education • Country registration process • FDA approval/WHO clearance 25

  26. FHC Summary • Stable, profitable company • Partner in resolving critical societal needs • Unique cost-effective business model • Small percentage of total potential market reached to date = opportunity for growth • Experienced leadership 26

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