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): July 10, 2007
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 July 10, 2007, Chattem, Inc. (the "Company") issued a press
release announcing financial results for the fiscal second quarter and six
months ended May 31, 2007 (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 net income and
earnings per share, excluding certain identified items, for the Company's second
fiscal quarter and six month periods ended May 31, 2006 and 2007. The adjusted
net income and earnings per share disclosures are non-GAAP financial measures
(the "Operating Measures"). The Operating Measures exclude (i) for the second
fiscal quarter and first six months of fiscal 2007, employee stock option
expenses under SFAS 123R and a loss on early extinguishment of debt; (ii) for
the second fiscal quarter of 2006, employee stock option expenses under SFAS
123R and legal expenses relating to the Dexatrim litigation; and (iii) for the
first six months of fiscal 2006, employee stock option expenses under SFAS 123R,
a loss on early extinguishment of debt and a recovery relating to the Dexatrim
litigation.
A reconciliation of each of the Operating Measures to the most
comparable GAAP measurement for the fiscal second quarter and six month periods
ended May 31, 2006 and 2007 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.
The Company believes that the Operating Measures improve and clarify an
investor's understanding of the Company's financial and operational performance.
Management of the Company uses this non-GAAP measure to analyze the Company's
performance compared to forecasted and prior period results and for other
internal purposes.
The Press Release also contains disclosure regarding the
Company's earnings before interest, taxes, depreciation and amortization
("EBITDA") adjusted to exclude litigation settlement items for the second fiscal
quarter and six month period ended May 31, 2006, which are non-GAAP financial
measures. A reconciliation of EBITDA excluding litigation settlement items to
net income, the most directly comparable GAAP financial measure, is contained in
the Company's unaudited consolidated statements of income attached to the Press
Release.
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 litigation settlement items provides investors with a useful
measure of the Company's ongoing operating performance. Further, EBITDA adjusted
to exclude litigation settlement items 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 non-GAAP financial measures used by the Company do not
have standardized meanings prescribed by GAAP and may not be comparable to
similar measures for other companies.
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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(d) Exhibits:
99.1 Press Release dated July 10, 2007
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.
July 10, 2007 CHATTEM, INC.
By: /s/ Theodore K. Whitfield, Jr.
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Theodore K. Whitfield, Jr.
Vice President, General Counsel and
Secretary
EXHIBIT INDEX
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Exhibit No. Exhibit Description
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99.1 Press Release dated July 10, 2007