CHATTEM CONSUMER PRODUCTS DRIVE FIRST QUARTER CORPORATE SALES TO 8% GAIN
This article was originally published in The Tan Sheet
Executive Summary
CHATTEM CONSUMER PRODUCTS DRIVE FIRST QUARTER CORPORATE SALES TO 8% GAIN to $ 21.2 mil., the Chattanooga, Tenn.-based OTC/H&BA company reported. For the three month period ended Feb. 28, Chattem's earnings before an extraordinary charge increased 245% to $ 1.41 mil., up from $ 408,000 in the first quarter of 1992. Net income after the extraordinary charge, which was taken to account for the retirement of debt, grew 127% to $ 927,000, the company said. "From a divisional perspective, Chattem Consumer Products experienced a significant increase in sales and operating income, led by solid performances by [pain relieving gel] Flex-all 454, [the water-durable sunblock] Bullfrog, and [oil absorbing cosmetic line] Corn Silk," Chattem stated. The company cited "a shift in product mix, improved gross margins, cost controls and operating leverage" to explain why the company's earnings are rising faster than sales. Chattem plans to begin running print ads for its Bullfrog Sport Lotion SPF 18 in speciality magazines in May. "Sweatproof" and "non-greasy," the sport lotion provides "all day waterproof protection with one application" and screens both UVA and UVB rays, according to the company. An umbrella print and billboard ad campaign for the Bullfrog brand, which also features a PABA-free SPF 18 Extra Moisturizing Gel, will also begin in May. Chattem expects to further support the line with product sampling. Chattem said that its cash and investments exceeded debt by nearly $ 8 mil. at the end of the quarter. The company reported that it plans to retire its $ 25 mil. in currently outstanding debt "utilizing cash and investments." Anticipating the payment, the extraordinary non-cash charge was estimated at $ 480,000, or $ .09 per share. Included in first quarter results, Chattem noted, is a gain of approximately $ .10 a share, or about $ 550,000, from the company's sale of "two minor consumer products" -- Black Draught laxative and Nullo internal deodorant tablet. The company's chemicals subsidiary showed "essentially flat" sales compared with "a very strong first quarter of 1992," Chattem reported. In addition, the company said its international consumer product operations "remained soft, reflecting the weak economies in the key markets served by the division." Chart omitted.