12.05.05
Chattem, Inc. announced that on November 30, 2005 the Company sold its pHisoderm line of skin care products to The Mentholatum Company, Inc. for $8.5 million plus inventories of approximately $1.1 million. Sales of the pHisoderm line represented approximately 4% and 5% of net sales in fiscal 2005 and 2004, respectively.
"The sale of pHisoderm to a strategic buyer enables us to redirect our core competencies into the continued growth of our leading brands," said Zan Guerry, the Chattem chairman and chief executive officer. "This transaction was a good opportunity to divest a brand that was no longer consistent with our strategy of having leading products in small to medium sized HBA categories and allows us to focus management and financial resources on our key brands. Additionally, the cash generated through the sale of pHisoderm further strengthens our balance sheet and creates additional financial flexibility."
Due to the transaction, the company expects to recognize a non-cash loss on the sale of approximately $8.0 - 8.5 million before tax in the fourth quarter of fiscal 2005. For fiscal 2006, it anticipates that the divestiture will have a negligible impact on earnings per share in comparison with previous guidance.