Chattem, Inc. Announces Expectations for Sales, Net Income and EBITDA for Second Quarter

Business Wire, June 9, 2000

Business Editors

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--June 9, 2000

Chattem, Inc. (NASDAQ:CHTT), a leading marketer and manufacturer of branded consumer products, announced today that it expects net sales and earnings per share before extraordinary items for its second fiscal quarter ended May 31, 2000 to be in the $78-80 million and $.62-.65 ranges, respectively. For the corresponding period of fiscal 1999, net sales were $83.4 million and earnings per share before extraordinary items were $.69. EBITDA for the second fiscal quarter of 2000 should be in the $21-22 million range, compared to $23.6 million in the year ago period.

The Company attributed the year-over-year net sales decline to continued weakness in its SUNSOURCE dietary supplements line and competitive pressures in the antiperspirant/deodorant marketplace experienced by Chattem's BAN line of products. In particular, Lever Brothers launched DOVE antiperspirant and deodorant in the first half of 2000 with annual reported media and promotional support of approximately $50 million. The balance of the Company's business, led by the strong performance of its topical analgesic franchise (FLEXALL, ICY HOT, ASPERCREME, SPORTSCREME and CAPZASIN), remains solid. The Company noted in particular that it has been generally pleased with the launch of DEXATRIM NATURAL and distribution of BAN Naturals which began in the second quarter and will be supported by heavy advertising and promotional spending in the third quarter.

Chattem will release second quarter results on June 29, 2000.

Statements concerning the Company's business outlook, anticipated profitability, sales or expenses and sales growth, together with other statements made in this press release that are not historical facts are "forward looking statements" as that term is defined under the federal securities laws. All forward looking statements are subject to the risks and uncertainties which could cause actual results to differ materially from those projected, including those described in the Company's filings with the Securities and Exchange Commission.