Posted December 5, 2008

CHATTANOOGA, Tennessee -- Chattem, Inc., a leading marketer and manufacturer of branded consumer products headquartered in Chattanooga, TN, today announced plans for an expansion that could represent an investment of as much as $31 million and the creation and/or retention of approximately 120 full-time positions.

“The growth of our business has continued with the acquisition of five brands from Johnson & Johnson in January 2007 and the strong performance of our other business lines, which enables us to continue to expand our presence in Chattanooga,” said Zan Guerry, Chairman and Chief Executive Officer of Chattem.  “The increased investment in our Chattanooga locations will result in the creation of more full-time positions and a capital investment of up to $31 million over the next several years,” Guerry also highlighted.

Chattem’s investment in manufacturing will result in the creation of 33 full-time positions and spending of $7 million over the next three years.  In addition, Chattem is considering options for the construction of a consolidated warehouse to improve the efficiency of its distribution operations and additional manufacturing capacity.  The distribution only option would be an approximate 250,000-square-foot distribution facility and would result in the retention of 36 full-time employees in Chattanooga. Chattem’s other option would be to construct a distribution facility and manufacturing location that is expected to cost a combined $24 million and create 50 new full-time manufacturing positions in addition to the retention of the 36 current distribution employees.  A decision about the facilities is expected by the end of 2009.

Chattem is a testimony to the strength of Chattanooga business in manufacturing and in the healthcare industry,” said Chattanooga Mayor Ron Littlefield.  “We are extremely pleased by the vitality of this company whose brands, such as Gold Bond®, Icy Hot® and BullFrog®, are used by consumers around the world.”

“I am always happy when a manufacturer of long-standing and distinction, such as Chattem, announces that it will contribute even more to the local economy by creating new jobs and retaining existing jobs,” said Hamilton County Mayor Claude Ramsey. “The projects Chattem envisions will also offer enormous opportunities for the local construction industry.”

Trevor Hamilton, vice president of economic development at the Chattanooga Area Chamber of Commerce, said Chattem’s growth speaks to the diversity of local industry. “One reason we are weathering challenging economic times is the mix of our economic base,” he said. “We will never be a one-industry town. Our diversity provides us with a strong foundation for our commercial activities.”

Founded in 1879, Chattem is a leading marketer and manufacturer of a broad portfolio of branded over-the-counter healthcare products, toiletries and dietary supplements.  Originally named the Chattanooga Medicine Company, Chattem offers brands sold around the world, including ACT®, Cortizone-10® and Selsun Blue®.  For more information, please visit the Company’s website: www.chattem.com.