SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): February 8, 2006
CHATTEM, INC.
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(Exact name of registrant as specified in its charter)
Tennessee 0-5905 62-0156300
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(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
1715 West 38th Street, Chattanooga, Tennessee 37409
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(Address of principal executive offices, including zip code)
(423) 821-4571
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(Registrant's telephone number, including area code)
Item 2.02. Results of Operations and Financial Condition
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On February 8, 2006, the Company issued a press release announcing financial
results for the fiscal fourth quarter and 2005 fiscal year ended November 30,
2005 (the "Press Release"). A copy of the Press Release is attached as Exhibit
99.1 and is incorporated by reference herein.
The Press Release contains disclosure regarding the following non-GAAP financial
measures: operating income (excluding loss on product divestitures and
litigation settlement charges), net income (excluding loss on product
divestitures and litigation settlement charges) and earnings per share
(excluding loss on product divestitures and litigation settlement charges)
(collectively, the "Operating Measures"), each for the Company's fourth fiscal
quarter ended November 30, 2005, and operating income (excluding loss on product
divestitures, litigation settlement and executive severance charges), net income
(excluding debt extinguishment charge, loss on product divestitures, litigation
settlement and executive severance charges) and earnings per share (excluding
debt extinguishment charge, loss on product divestitures, litigation settlement
and executive severance charges), each for the fiscal year ended November 30,
2005. A reconciliation of each of the Operating Measures to the most comparable
GAAP measurement for the applicable period is contained in the Company's
unaudited consolidated statements of income attached to the Press Release. The
Company considers disclosure of the Operating Measures to be meaningful
information to an investor's understanding of the Company's operating
performance and useful for comparison with prior period and forecasted net
income and earnings per share. Management of the Company uses the Operating
Measures to analyze the Company's performance compared to forecasted and prior
period results and for other internal purposes.
The Company's unaudited consolidated statements of income attached to the Press
Release also contain a reconciliation of EBITDA (excluding impairment, loss on
product divestitures, litigation settlement and severance charges) to net
income.
The Company considers EBITDA an important indicator of its operational strength
and performance, including its ability to pay interest, service debt and fund
capital expenditures. The Company believes that EBITDA adjusted to exclude
impairment, loss on product divestitures, litigation settlement and severance
charges provides investors with a useful measure of the Company's ongoing
operating performance. Further, EBITDA adjusted to exclude impairment, loss on
product divestitures, litigation settlement and severance charges is one measure
used in the calculation of certain ratios to determine the Company's compliance
with its existing credit facility. The Company's presentation of adjusted EBITDA
should not be construed as an inference that the Company's future results will
be unaffected by items similar to those excluded from the calculation of
adjusted EBITDA. EBITDA and adjusted EBITDA are not measurements of financial
performance and liquidity under GAAP and should not be considered as
alternatives to net income, income from operations or any performance measures
derived in accordance with GAAP, or as alternatives to cash flows provided by
operating, investing or financing activities as measures of liquidity.
The information in this Current Report on Form 8-K is being furnished and shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
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(c) Exhibits:
99.1 Press Release Dated February 8, 2006
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
February 8, 2006 CHATTEM, INC.
By: /s/ Robert E. Bosworth
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Robert E. Bosworth
President and Chief Operating Officer
EXHIBIT INDEX
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Exhibit No. Exhibit Description
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99.1 Press Release dated February 8, 2006