Interviews
Icy Hot Heat Therapy products recalled
18 Feb '08
4 min read
Sales of Icy Hot Heat Therapy in fiscal 2007 represented 2.3% of the Company's total revenues of $423 million and less than 1% of its total EBITDA. For fiscal 2008, Icy Hot Heat Therapy was forecasted to represent less than 2% of total revenues and less than 1% of EBITDA.
In the first quarter of fiscal 2008, the Company expects to record a charge for the Icy Hot Heat Therapy recall related costs and expenses of approximately $6 million to $9 million, or $0.20 to $0.30 per share. The charge encompasses the return of products from the Company's distributors, retail customers and end-user consumers, impairment of the affected in-house inventory and other recall-related costs.
As previously disclosed on the fourth quarter and fiscal year 2007 earnings conference call, Chattem's portfolio of brands is performing well at retail and has continued its 2007 momentum with increases in A.C. Nielsen plus mass merchandiser point-of-sale data of 7% for the four-week period ending January 26, 2008 as compared to the same prior year period, excluding Icy Hot Heat Therapy and Icy Hot Pro-Therapy.
Specifically, this retail sales data was highlighted by strong results from Chattem's key brands, led by ACT, up 37%, and Cortizone-10, up 19%, driven by strong media support, Gold Bond continuing its strong performance, up 25%, and Unisom, up 5%, all compared to the prior year four-week period. During this same period, Selsun Blue A. C. Nielsen plus mass merchandiser point-of-sale data showed a decrease of 11% in advance of media support for Selsun Blue Naturals that started airing the last week of January.
Chattem believes that this retail sales momentum and strong year-to-date factory shipments to customers, combined with the strength of its broad portfolio of products, will enable it to achieve its previously forecasted earnings per share for fiscal 2008 of $4.00 to $4.20 and trend toward the upper end of this range, excluding the impact of the Icy Hot Heat Therapy recall charge, stock option expense under FAS 123R and any loss on debt extinguishment.
In striving to achieve these results, we will maintain strong advertising and promotional support for its brands and remain focused on the growth and profitability of the brands in fiscal 2008.
Chattem Inc is a leading marketer and manufacturer of a broad portfolio of branded OTC healthcare products, toiletries and dietary supplements.
In the first quarter of fiscal 2008, the Company expects to record a charge for the Icy Hot Heat Therapy recall related costs and expenses of approximately $6 million to $9 million, or $0.20 to $0.30 per share. The charge encompasses the return of products from the Company's distributors, retail customers and end-user consumers, impairment of the affected in-house inventory and other recall-related costs.
As previously disclosed on the fourth quarter and fiscal year 2007 earnings conference call, Chattem's portfolio of brands is performing well at retail and has continued its 2007 momentum with increases in A.C. Nielsen plus mass merchandiser point-of-sale data of 7% for the four-week period ending January 26, 2008 as compared to the same prior year period, excluding Icy Hot Heat Therapy and Icy Hot Pro-Therapy.
Specifically, this retail sales data was highlighted by strong results from Chattem's key brands, led by ACT, up 37%, and Cortizone-10, up 19%, driven by strong media support, Gold Bond continuing its strong performance, up 25%, and Unisom, up 5%, all compared to the prior year four-week period. During this same period, Selsun Blue A. C. Nielsen plus mass merchandiser point-of-sale data showed a decrease of 11% in advance of media support for Selsun Blue Naturals that started airing the last week of January.
Chattem believes that this retail sales momentum and strong year-to-date factory shipments to customers, combined with the strength of its broad portfolio of products, will enable it to achieve its previously forecasted earnings per share for fiscal 2008 of $4.00 to $4.20 and trend toward the upper end of this range, excluding the impact of the Icy Hot Heat Therapy recall charge, stock option expense under FAS 123R and any loss on debt extinguishment.
In striving to achieve these results, we will maintain strong advertising and promotional support for its brands and remain focused on the growth and profitability of the brands in fiscal 2008.
Chattem Inc is a leading marketer and manufacturer of a broad portfolio of branded OTC healthcare products, toiletries and dietary supplements.
Chattem Inc
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