Chattem provides update on sales performance.

* Chattem, Inc. provided an update on its recent retail sales performance as measured by AC Nielsen and point-of-sale data from key mass merchandiser accounts. The company also affirmed its fiscal 2008 and 2009 guidance.

"The momentum of our business has continued as expected behind our key brands such as Act, Gold Bond and Icy Hot," said Zan Guerry, chairman and chief executive officer of Chattem.

According to the company, for the four-week period ended Oct. 4, 2008, retail sales of Chattem products, excluding recalled Icy Hot Heat Therapy and the effectively discontinued Icy Hot Pro-Therapy brands, grew 10% compared to the same period in 2007. This represents an acceleration in the rate of growth for retail sales compared to the 13-week period ended Oct. 4, 2008, during which comparable retail sales rose almost 8%.

The year-over-year increase in retail sales was led by Act, which took over third place in the mouthwash category ahead of Scope, based on AC Nielsen data for the most recent four and 13 weeks, which grew by 33% and 28% in the four and 13- week periods, respectively, Gold Bond, up 23% and 13%, and Icy Hot, up 11% and 13%. Overall, Chattem's "Big Six" brands, which also include Cortizone and Selsun, realized growth of 15% and 12% in retail sales for the four and 13-week periods, respectively, compared to the same periods in 2007.

"In this difficult economic environment, and at a time in which concerns regarding negative consumer sentiment and spending clearly exist, we are pleased with the performance of our brands," Mr. Guerry continued. "For fiscal 2009, our exciting lineup of new products is expected to continue our revenue growth, fuel earnings momentum and result in strong cash flow."