Chattem's 3rd Quarter Earnings Expected to Exceed Previous Guidance.CHATTANOOGA, Tenn. -- Chattem, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CHTT) --3rd Quarter adjusted earnings per share expected to increase 20% to $0.55 per share(a), exceeding current analysts' consensus estimates --3rd Quarter revenues expected to increase 3% to $68 million (a) Before charges discussed below. Chattem, Inc. (NASDAQ: CHTT), a leading marketer and manufacturer of branded consumer products, today reported that it expects to achieve total revenues for the 3 months ended August 31, 2005 of approximately $68 million, a 3% increase over the same period a year ago. For the nine months ended August 31, 2005, total revenues are expected to increase 9% to approximately $215 million from $197 million for the same period a year ago. "We are extremely pleased with our growth in adjusted earnings per share of 20% for the quarter versus the third quarter of last year," stated Zan Guerry, Chattem's Chairman and Chief Executive Officer. "This puts us in an excellent position to achieve annual adjusted earnings per share of $2.08-$2.10 a 22-24% increase over fiscal year 2004. This would mark our fifth consecutive year of superior earnings growth." Adjusted earnings per share for the quarter exclude Dexatrim litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement items and executive severance costs, which are expected to total approximately $0.09. For fiscal year 2005, the Company expects total revenues to reach $278-280 million and earnings per share to be in the range of $2.08-$2.10 (excluding Dexatrim litigation settlement items, debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. charges and executive severance costs). The Company also announced that it expects total revenue growth in fiscal 2006 to be approximately 20% due primarily to new products, such as the previously announced Icy Hot(R) Pro-Therapy(TM) and Selsun Salon(TM). Earnings per share (excluding expensing related to stock options) should increase 10-15% in fiscal 2006. During the third quarter of fiscal 2005, Chattem resolved substantially all of the remaining claims submitted in the Dexatrim PPA PPA 1. Palpation, Percussion & Ausculation 2. Pittsburgh pneumonia agent 3. Postpartum amenorrhea 4. Price per accession 5. Pure pulmonary atresia settlement and now estimates that the total cost of the Dexatrim settlement will be approximately $56 million. As previously reported, a total of $70.1 million has been funded into a settlement trust by the Company's insurers and the product manufacturer and is available to pay claims in the settlement. The Company currently expects that after all claims and expenses of the settlement trust have been paid, it could recover up to approximately $8.5 million from the settlement trust and, subject to confirmation of the DELACO bankruptcy plan, $8.75 million from a trust established under DELACO's bankruptcy plan in accordance with the Company's settlement agreement with DELACO. If realized, these potential recoveries are estimated to occur in the fourth quarter of fiscal 2005 or the first quarter of fiscal 2006. The Company currently does not expect to record any additional charges relative to the settlement of the PPA litigation, except for legal expenses that will be recorded in the period incurred. The Company has utilized the stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. authority granted by its Board of Directors to repurchase 572,267 shares at a total cost of $22.7 million, or average cost of $39.60 per share, thus far in 2005. At current stock price levels, the Company plans to continue to repurchase its shares aggressively. The Company has $23 million of availability remaining under its current stock buyback authority. As previously announced, the Company will issue its third quarter fiscal 2005 earnings release on Monday, September 19, 2005, after the market closes and host a conference call at 9:00 am ET on Tuesday, September 20, 2005. The conference call will be available via webcast and accessible on the Company website at www.chattem.com. In addition, the Icy Hot Pro-Therapy and Selsun Salon video presentations will be available on the Company's website beginning Friday, September 16, 2005. Chattem, Inc. is a leading marketer and manufacturer of a broad portfolio of branded OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). healthcare products, toiletries toi·let·ry n. pl. toi·let·ries An article, such as toothpaste or a hairbrush, used in personal grooming or dressing. toiletries npl → artículos mpl de aseo (= and dietary supplements. The Company's products target niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. segments and are among the market leaders in their respective categories across food, drug and mass merchandisers. The Company's portfolio of products includes well-recognized brands such as Icy Hot(R), Gold Bond(R), Selsun blue Selsun Blue is a shampoo, developed by Ross Laboratories, a subsidiary of Abbott Laboratories and later bought by Chattem, that functions as an over-the-counter treatment for dandruff. (R), pHisoderm(R), Garlique(R), Pamprin(R) and BullFrog bullfrog, common name of the largest North American frog, Rana catesbeiana. Native to the E United States, this species has been successfully introduced in the West and in other parts of the world. The body length is 4 to 8 in. (R). Chattem conducts a portion of its global business through subsidiaries in the United Kingdom, Ireland and Canada. Statements in this press release which are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including, without limitation, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc results for fiscal 2005 and fiscal 2006 and potential recoveries from the Dexatrim settlement trust or DELACO bankruptcy. These forward-looking statements involve risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from those expressed or projected, including, those described in our filings with the Securities and Exchange Commission. |
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