Chattem

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Chattem Inc.
Type	Public company
Founded	Tennessee (January 30, 1879, as the Chattanooga Medicine Company)
Headquarters	Chattanooga, Tennessee
Key people	Alexander Zeboim Guerry, Chairman & CEO Bob Bosworth, President, Chief Operations Officer, & Interim Chief Financial Officer Richard Kornhauser, Vice President of Marketing Ron Galante, Vice President of New Business Development B. Derrill Pitts, Vice President of Operations
Industry	healthcare Over-the-counter-drug manufacturing
Products	Gold Bond, Flexall, IcyHot, Bullfrog Sunblock, Sun-In, Pamprin, Dexatrim, Aspercreme, and Selsun Blue
Revenue	$100 Million (USD) 1Q 2007
Operating income	unknown
Net income	unknown
Employees	447
Website	Chattem.com

Chattem NASDAQ: CHTT is a Chattanooga, Tennessee-based producer and marketer of over-the-counter healthcare products, toiletries, dietary supplements, topical analgesics, and medicated skin care products. Originally named the Chattanooga Medicine Company, the company’s brand portfolio holds twenty-two brands including Gold Bond, Flexall, IcyHot, Bullfrog Sunblock, Sun-In, Pamprin, Dexatrim, Aspercreme, and Selsun Blue. Two thirds of Chattem’s products are produced by the company at its Chattanooga production facilities with the remaining produced by third-party producers.

The company’s brands are sold nationally through mass merchandiser, drug and food retailers. In 2005, 70% of all sales by the firm were made through its top ten customers, which include Wal-Mart, Walgreens, and Kroger. Sales to Wal-Mart constituted 36% of Chattem’s total sales in 2005. Chattem supports these sales with a forty-five-person sales force broadcast media advertising. Chattem has market penetration in the United States, Europe, Canada, Latin America, and the Caribbean.

[edit] History

Chattem was founded by Zeboim Cartter Patten as the Chattanooga Medicine Company in 1879. The company incorporated in 1909 and has remained in Chattanooga, Tennessee, to this day. The firm adopted Chattem as its name and went public in 1969. Chattem’s top and bottom lines grew significantly from 1989 through 1992. The source of this growth was the company’s strategy of purchasing under-marketed consumer brands and aggressively marketing those already in its portfolio. In 1993, Chattem experienced a 14% decline in sales as a result of the loss of Warner-Lambert’s Rolaids business. To fund a one-time special dividend in 1994, $75 million in high-yield bonds were issued.

[edit] Recent events

In October 2006, Chattem announced that it will be acquiring five brands for $410 million as a result of the merger between Johnson & Johnson and the consumer healthcare business of Pfizer. These brands are:

ACT Anti-Cavity Mouthwash
Unisom
Cortizone
Kaopectate
Balmex-Diaper Rash Ointment

Pending the government’s approval of the merger of Johnson & Johnson and Pfizer, Chattem will acquire five brands divested from the firms. Chattem has announced that it expects to take possession of the brands around January 2007. These are very mature brands and will provide $150 million in additional revenue to Chattem per year.