Chattem, Inc. Announces Moody's Outlook Improvement; Increase in T. Rowe Price Stake.

Business Editors

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Feb. 14, 2002

Chattem, Inc. (NASDAQ: CHTT), a leading marketer and manufacturer of branded consumer products, announced today that Moody's Investor's Service has changed the outlook from negative to stable for the Company. Moody's cited Chattem's "improved situation with regard to its core Dexatrim(R) brand as well as its materially reduced leverage and enhanced cash position." Moody's further indicated that the outlook improvement was "supported by the Company's stable portfolio of products and its active stance towards managing its brands, reducing its leverage, and efficiently utilizing its assets."

Separately, Chattem announced that T. Rowe Price Associates Inc., a financial services firm with over $140.4 billion of assets under management, has increased its ownership stake in the Company's common stock by approximately 285,000 shares, raising its position from 6.1% to 9.5% of Chattem's outstanding shares.

Chattem, Inc. is a leading marketer and manufacturer of branded consumer products including health, beauty, and skin care products. The Company's products target niche market segments and are among the market leaders in their respective categories across food, drug and mass merchandisers. OTC health care products include: the Gold Bond(R) line of medicated powders, creams and lotions; topical analgesics, including Icy Hot(R), Flexall(R), Sportscreme(R), Aspercreme(R), Arthritis Hot(R), Capzasin-P(R) and Capzasin-HP(R); menstrual internal analgesics Pamprin(R) and Premsym(R); and Herpecin-L(R) lip balm. Skin and beauty care brands include: Mudd(R) facial masques, pHisoderm(R) acne and facial washes, Sun-In(R) hair lightener, Ultra Swim(R) shampoo and conditioner, and Bull Frog(R) sunscreen products. Nutritional supplements include: the Sunsource(R) brand including Garlique, Rejuvex, Propalmex, New Phase and Omnigest-EZ. Chattem also markets Dexatrim Natural(R) and Ephedrine-free Dexatrim Natural(R) for appetite suppression. Chattem conducts a portion of its global business through subsidiaries in the United Kingdom and Canada.