Chattem Announces Pricing of $125 Million of Senior Subordinated Notes and $75 Million of Senior Floating Rate Notes.

Business Editors/Health/Medical Writers

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Feb. 20, 2004

Chattem, Inc. (NASDAQ:CHTT), a leading marketer and manufacturer of branded consumer products, announced today that it has priced its $125 million aggregate principal amount senior subordinated fixed rate notes due 2014 at 7.0% and its $75 million aggregate principal amount of senior floating rate notes due 2010 at a spread of 3.0% over LIBOR. Based on current LIBOR rates, the current rate of interest on the floating rate notes would be 4.2%. Chattem intends to use the proceeds of the offering of the notes together with borrowings under a new bank credit facility to refinance existing debt, including its $205 million 8 7/8% due 2008.

The placement was made to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, and outside the United States pursuant to Regulation S of the Securities Act.

The sale of the notes, which remains subject to customary closing conditions, is expected to close on February 26, 2004.

This press release contains certain statements relating to the Company's expectations about the closing of the sale of the notes, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. There can be no assurances that the Company will complete the closing of the offering. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors, including market and other conditions. More detailed information about these and other factors is set forth in the Company's Annual Report on Form 10-K and in other reports which the Company from time to time files with the Securities and Exchange Commission, available publicly on the SEC's Web site, http://www.sec.gov.