Over-the-counter healthcare products and dietary supplements maker Chattem, Inc. (CHTT) reported Tuesday an increase in third-quarter profit, helped chiefly by a 3.5% growth in domestic revenues and the absence of a hefty litigation settlement that dented the year-ago results. The company also maintained its fiscal 2009 adjusted earnings outlook that surpassed consensus projection.
For the third quarter, net income surged to $23.43 million or $1.22 per share from $13.97 million or $0.73 per share in the previous year.
The results of the latest quarter included loss on early extinguishment of debt of $405 thousand. The prior-year results included a litigation settlement or $11.19 million related to claims alleging injury as a result of ingestion of Dexatrim products in 1998 through 2003. Loss on early extinguishment of debt and employee stock option expenses under SFAS 123R rose to $2.12 million from $1.70 million.
Excluding items, net income increased to $25.04 million or $1.31 a share from $22.28 million or $1.17 a share in the year-ago period.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $1.21 per share in the third quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 2.9% to $115.17 million from $111.93 million. Seven analysts were expecting revenue of $116.70 million in the third quarter.
Chattem's domestic business, which accounts for 95% of the total revenues, increased 3.5% to $108.59 million from $104.96 million. The increase in domestic revenues was attributed to higher sales of Gold Bond, ACT, Icy Hot and Cortizone-10, partially offset by lower sales of certain smaller brands and a $1.8 million or 30% increase in promotional programs.
Revenues from international division dipped 5.6% to $6.57 million from $6.97 million reflecting a change in distributors in Latin America, general sales weakness in our European markets and an adverse foreign exchange rate impact. On a constant currency basis, international revenues for the period climbed 3% year-over-year.
Advertising and promotion costs reduced to $22.87 million from $26.79 million, reflecting the utilization by retail customers of more price promotion programs. Interest expense came down to $5.13 million from $6.17 million.
For the first nine months of fiscal 2009, net income grew sharply to $67.22 million or $3.48 per share from $49.57 million or $2.56 per share last year. Adjusted earnings was $71.54 million or $3.70 a share, up from $63.78 million or $3.29 a share in the past year. Revenues increased 1.1% to $353.09 million from $349.42 million.
Looking ahead to fiscal 2009, the company continues to expect adjusted earnings per share to be in the range of $4.80 - $4.90. Analysts earnings consensus is $4.54 per share for the full year.
CHTT is currently trading at $65.96, up $2.90 or 4.60%, on the NASDAQ.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.