February 28,
2008
SENT
VIA
EDGAR
Mr.
John
Cash
Accounting
Branch Chief
United
States Securities and Exchange Commission
Division
of Corporation Finance
Washington,
D.C. 20549
Re:
The
Female Health Company Form 10-KSB
for the year ended September 30, 2007
File
No. 1-13602
Dear
Mr.
Cash:
The
following are the responses of The Female Health Company (the "Company") to
the
comments in the letter of the staff of the Securities and Exchange Commission
dated February 20, 2008 relating to the Company's Form 10-KSB for the year
ended September 30, 2007. For reference purposes, the text of
the staff's comment letter has been reproduced below with responses below for
each numbered paragraph.
Form
10-KSB for the Year
Ended September 30, 2007
Item
6. MD&A – Liquidity
and Sources of Capital, page 20
Comment
1:
We
have reviewed your response to our prior comment three. The enhanced
disclosure you have included in your Form 10-Q for the period ended December
31,
2007 is not sufficiently detailed enough to enable a reader to understand the
nature of an changes in your accounts receivable balance. Please
revise future filings to include more specific and comprehensive
disclosures.
Response
to Comment No.
1:
The
Company will expand the disclosure of its accounts receivable balance in
MD&A in future filings. Below is a proposed form of such
disclosure.
The
Company's quarter-end accounts receivable balance is impacted by various factors
besides rising sales levels. A primary factor is the Company's
pattern of production and sales, which causes accounts receivable to spike
near
quarter end. The Company's U.K subsidiary produces product early in
the quarter to be sold by its U.S. parent, thus ensuring that most sales to
third parties occur in the second half of the quarter. The timing of
large orders can have a significant impact on the quarter-end
balance. The Company's standard credit terms vary from 30 to 90days,
depending on the class of trade and customary terms within a territory, so
accounts receivable is affected by the mix of purchasers within the
quarter. As is typical in the Company's business, the Company may
offer extended credit terms as a sales promotion. For the past twelve
months, the Company's average days sales outstanding has been approximately
60
days.
Note
1. Nature of Business
and Significant Accounting Policies, page F-7
Deferred
Grant Income, page
F-9
Comment
No. 2:
We
have reviewed your response to our prior comment four. Please revise
future filings to disclose the full impact that the government grants have
had
on your financial statements in a given period, including proceeds that are
credited to income for expenses and proceeds that are released to income in
connection with depreciation expense.
Response
to Comment No.
2:
In
future
filings, the Company will disclose the full impact of government grants on
the
Company's financial statements in all applicable periods, including the amount
of grant proceeds credited to income and the amount of grant proceeds released
to income in connection with depreciation of the relevant assets.
Please
contact me at (312) 595-9742 if you have any questions on any of the responses
to your comments.
Best
regards,
The
Female Health Company
/s/
Donna
Felch
Donna
Felch
Vice
President and Chief Financial Officer