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Biotech / Medical : GUMM - Eliminate the Common Cold -- Ignore unavailable to you. Want to Upgrade?

To: Mike M who wrote (3051)	11/6/2000 12:43:16 AM
From: StockDung	Respond to of 5582

You can't even walk and chew GUMM at the same time.

To: Mike M who wrote (3051)	11/6/2000 8:57:48 AM
From: StockDung	Read Replies (2) \| Respond to of 5582

Moody's revises Chattem <CHTT.O> outlook to negative Aprroximately $407 million of Debt Affected (Press release provided by Moody's Investors Service) NEW YORK, Oct 30 - Moody's Investor's Service changed the outlook to negative from stable for Chattem Inc. The ratings affected by the outlook change are the following: $275 million 8 7/8% senior subordinated notes, due 2008 B2; $32 million 12 3/4% senior subordinated notes, due 2004 B2; $100 million senior secured credit facilities Ba2; Senior Implied Rating Ba3 The change in outlook is in response to the announcement that an advisory committee of the FDA has determined phenylpropanolamine (PPA), the active ingredient in the company's Dexatrim brand, is not safe for use as an appetite suppressant. The advisory committee concerns relate to PPA as a possible contributing factor to strokes and its findings will now go to the FDA for review. Moody's future analysis of Chattem will need to consider management's strategy regarding this product, together with the implications of possible product returns from retailers and asset-write downs. It is unclear at this time whether the company could be the subject of potential lawsuits, for which it carrys product liability insurance. Dexatrim with PPA sales are expected to be $20 million for the fiscal year ended November 30, 2000 and Dexatrim Natural, which does not contain PPA, is expected to have sales of $10 million. Dexatrim with PPA was also forecasted to contribute $8 million of the total projected EBITDA of $47-50 million for the fiscal year ended 2001. Utilizing pro-forma net debt of $207 million (net of $100 million cash on hand from the sale of Ban), Moody's estimates that Debt-to-EBITA, excluding Dexatrim with PPA, for the fiscal year ended November 2001 will be approximately 5.4 times (5.1 Debt-to-EBITDA). This leverage ratio contrasts to 4.5 times (4.3 times EBITDA, when sales and earnings from Dexatrim with PPA are included. Moody's also estimates that EBITA net interest coverage will decline to 1.7 times (1.8 EBITDA) versus EBITA net interest coverage of 2.0 times (2.2 times EBITDA),when including sales of Dexatrim with PPA for the same period. These calculations exclude the potential impact of any non-recurring charges. Chattem plans to cooperate with the FDA regarding the PPA study, and there is the potential that the company will have to reformulate or discontinue the Dexatrim with PPA product. However, the timing of any future actions by the FDA is currently undetermined. Headquartered in Chattanooga, Tennessee, Chattem, Inc. manufactures and markets niche branded consumer products. 13:52 10-30-00