<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
____________________
Date of Report (Date of earliest event reported): JULY 26, 1995
CHATTEM, INC.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TENNESSEE 0-5905 62-0156300
------------- --------------------- --------------
(STATE OF (COMMISSION FILE NO.) (IRS EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
1715 WEST 38TH STREET, CHATTANOOGA, TENNESSEE 37409
------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(615) 821-4571
----------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Page 1 of 12 Pages
<PAGE>
ITEM 5. OTHER EVENTS.
Chattem, Inc. (the "Company") in its 1994 Annual Report to Shareholders
(the "Annual Report") included in note 14 to its audited financial statements
consolidating condensed financial data of its wholly-owned subsidiary, Signal
Investment & Management Co. ("Signal"). Signal was formed by the Company in
1986 for the purpose of holding certain trademarks and investments and has no
active operations. Signal is a joint and several guarantor (the "Guarantee")
of the Company's $75,000,000 12.75% Series B Senior Subordinated Notes due
2004 (the "Notes"), which Guarantee and Notes were registered under the
Securities Act of 1933, as amended ("Securities Act"), on a Form S-2
Registration Statement which was declared effective August 5, 1994.
The Company's obligations under the Notes are absolutely and
unconditionally, and jointly and severally guaranteed, on a senior
subordinated basis by Signal and will be guaranteed by any future or existing
subsidiary of the Company that is required to guarantee the Company's senior
indebtedness or other debt PARI PASSU with or junior to the Notes. Signal's
Guarantee is subordinated to the prior payment in full of the Company's
senior indebtedness and is limited to such amount as will not result in such
Guarantee being a fraudulent conveyance under applicable law. Signal may be
released from the Guarantee and its related obligations only if all of its
capital stock is sold to another person or if Signal consolidates with,
merges into or sells all or substantially all of its assets to, another
person, in accordance with the requirements of the indenture pursuant to
which the Notes were issued.
Signal has or will file reports under the Securities Exchange Act of
1934, as amended, as a result of the registration of the Guarantee under the
Securities Act, which reports will include greater detail than that included
in note 14 of the Company's financial statements in the Annual Report.
Accordingly, in order to supplement the information previously disclosed by
the Company in its Annual Report, the Company reports the following
consolidating financial data illustrating the composition of Signal and the
Company's non-guarantor subsidiaries.
Page 2 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
At November 30, 1994: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,299 $ 476 $ 1,259 $ 0 $ 3,034
Accounts receivable, net 15,267 0 5,021 0 20,288
Royalties receivable from Parent 0 1,072 0 (1,072) 0
Inventories 5,439 0 1,780 0 7,219
Refundable and deferred income taxes 1,015 0 0 0 1,015
Prepaid expenses and other current assets 1,150 0 595 0 1,745
-----------------------------------------------------------------------------
Total current assets 24,170 1,548 8,655 (1,072) 33,301
-----------------------------------------------------------------------------
Property, plant and equipment, net 10,996 0 283 0 11,279
-----------------------------------------------------------------------------
Investment in subsidiaries 5,156 0 0 (5,156) 0
-----------------------------------------------------------------------------
Other noncurrent assets:
Patents, trademarks and other purchased
product rights, net 1,239 31,216 0 0 32,455
Deferred income taxes 2,106 (508) 0 0 1,598
Debt issuance costs, net 3,771 0 0 0 3,771
Amounts receivable from subsidiaries 34,585 0 0 (34,585) 0
Notes receivable from Parent 0 2,537 850 (3,387) 0
Other 4,012 0 0 0 4,012
-----------------------------------------------------------------------------
Total other noncurrent assets 45,713 33,245 850 (37,972) 41,836
-----------------------------------------------------------------------------
Total assets $86,035 $34,793 $9,788 ($44,200) $86,416
=============================================================================
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term debt $2,500 $0 $0 $0 $2,500
Accounts payable 4,772 0 787 0 5,559
Payable to bank 1,301 0 0 0 1,301
Accrued liabilities 9,723 0 1,109 0 10,832
-----------------------------------------------------------------------------
Total current liabilities 18,296 0 1,896 0 20,192
-----------------------------------------------------------------------------
Long-term debt, less current maturities 94,486 0 0 0 94,486
-----------------------------------------------------------------------------
Amounts payable to Parent 0 29,104 9,940 (39,044) 0
-----------------------------------------------------------------------------
Accrued postretirement health care benefits 1,289 0 0 0 1,289
-----------------------------------------------------------------------------
Shareholders' equity (deficit):
Common stock, without par value 1,519 2 120 (122) 1,519
Paid-in surplus 51,797 0 0 0 51,797
Retained earnings (accumulated deficit) (81,352) 5,687 (653) (5,034) (81,352)
-----------------------------------------------------------------------------
(28,036) 5,689 (533) (5,156) (28,036)
Foreign currency translation adjustment 0 0 (1,515) 0 (1,515)
-----------------------------------------------------------------------------
Total shareholders' equity (deficit) (28,036) 5,689 (2,048) (5,156) (29,551)
-----------------------------------------------------------------------------
Total liabilities and shareholders'
equity (deficit) $86,035 $34,793 $9,788 ($44,200) ($86,416)
=============================================================================
</TABLE>
Page 3 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
At November 30, 1994: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 213 $ 1,805 $ 2,444 $ 0 $ 4,462
Accounts receivable, net 11,715 0 7,244 0 18,959
Royalties receivable from Parent 0 664 0 (664) 0
Inventories 8,600 0 2,511 0 11,111
Refundable and deferred income taxes 1,746 0 0 0 1,746
Prepaid expenses and other current assets 1,208 0 651 0 1,859
-----------------------------------------------------------------------------
Total current assets 23,482 2,469 12,850 (664) 38,137
-----------------------------------------------------------------------------
Property, plant and equipment, net 9,831 0 252 0 10,083
-----------------------------------------------------------------------------
Investment in subsidiaries 4,572 0 0 (4,572) 0
-----------------------------------------------------------------------------
Other noncurrent assets:
Patents, trademarks and other purchased
product rights, net 687 11,883 1,058 0 13,628
Deferred income taxes 2,787 (334) 0 0 2,453
Debt issuance costs, net 1,852 0 0 0 1,852
Amounts receivable from subsidiaries 20,451 0 0 (20,451) 0
Other 4,041 0 0 0 4,041
-----------------------------------------------------------------------------
Total other noncurrent assets 29,818 11,549 1,058 (20,451) 21,974
-----------------------------------------------------------------------------
Total assets $67,703 $14,018 14,160 ($25,687) $70,194
=============================================================================
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term debt $ 5,000 $ 0 $ 0 $ 0 $ 5,000
Accounts payable 4,593 0 692 0 5,285
Payable to bank 1,058 0 0 0 1,058
Accrued liabilities 4,496 0 3,668 0 8,164
-----------------------------------------------------------------------------
Total current liabilities 15,147 0 4,360 0 19,507
-----------------------------------------------------------------------------
Long-term debt, less current maturities 83,000 0 0 0 83,000
-----------------------------------------------------------------------------
Amounts payable to Parent 0 8,430 12,685 (21,115) 0
-----------------------------------------------------------------------------
Accrued postretirement health care benefits 1,160 0 0 0 1,160
-----------------------------------------------------------------------------
Shareholders' equity (deficit):
Common stock, without par value 1,519 2 120 (122) 1,519
Paid-in surplus 50,283 0 0 0 50,283
Retained earnings (accumulated deficit) (83,406) 5,586 (1,136) (4,450) (83,406)
-----------------------------------------------------------------------------
(31,604) 5,588 (1,016) (4,572) (31,604)
Foreign currency translation adjustment 0 0 (1,869) 0 (1,869)
-----------------------------------------------------------------------------
Total shareholders' equity (deficit) (31,604) 5,588 (2,885) (4,572) (3,473)
-----------------------------------------------------------------------------
Total liabilities and shareholders'
equity (deficit) $67,703 $14,018 $14,160 ($25,687) $70,194
=============================================================================
</TABLE>
Page 4 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
YEAR ENDED NOVEMBER 30, 1994: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET REVENUES $96,229 $3,950 $12,077 ($4,300) $107,956
-----------------------------------------------------------------------------
COSTS OF EXPENSES:
Costs of sales 33,811 0 3,364 0 37,175
Advertising and promotion 30,859 939 5,498 (3,950) 33,346
Selling, general and administrative 18,808 0 2,786 (350) 21,244
Nonrecurring and unusual charges 559 0 0 0 559
-----------------------------------------------------------------------------
Total costs and expenses 84,037 939 11,648 (4,300) 92,324
-----------------------------------------------------------------------------
INCOME FROM OPERATIONS 12,192 3,011 429 0 15,632
-----------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest expense (10,260) 0 0 148 (10,112)
Investment income (loss) 116 164 54 (148) 186
Equity in earnings of subsidiaries 2,584 0 0 (2,584) 0
Other income (expense), net (74) 0 0 0 (74)
-----------------------------------------------------------------------------
Total other income (expense) (7,634) 164 54 (2,584) (10,000)
-----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY LOSS 4,558 3,175 483 (2,584) 5,632
PROVISION FOR INCOME TAXES 948 1,074 0 0 2,022
-----------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY
LOSS 3,610 2,101 483 (2,584) 3,610
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT, NET (1,556) 0 0 0 (1,566)
-----------------------------------------------------------------------------
NET INCOME $ 2,054 $2,101 $ 483 ($2,584) $ 2,054
=============================================================================
</TABLE>
Page 5 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
YEAR ENDED NOVEMBER 30, 1993: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET REVENUES $92,136 $3,501 $13,619 ($3,851) $105,405
-----------------------------------------------------------------------------
COSTS OF EXPENSES:
Costs of sales 33,140 0 3,326 0 36,466
Advertising and promotion 33,986 624 5,164 (3,501) 36,273
Selling, general and administrative 17,171 7 4,450 (350) 21,278
Nonrecurring and unusual charges 2,679 0 2,848 0 5,527
-----------------------------------------------------------------------------
Total costs and expenses 86,976 631 15,788 (3,851) 99,544
-----------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS 5,160 2,870 (2,169) 0 5,861
-----------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest expense (4,229) 0 0 0 (4,229)
Investment income (loss) (484) (96) 58 0 (522)
Equity in earnings (losses) of subsidiaries (203) 0 0 203 0
Other income (expense), net 912 0 0 0 912
-----------------------------------------------------------------------------
Total other income (expense) (4,004) (96) 58 203 (3,839)
-----------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES,
EXTRAORDINARY LOSS AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGES 1,156 2,774 (2,111) 203 2,022
PROVISION FOR INCOME TAXES (123) 866 0 0 743
-----------------------------------------------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY
LOSS AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGES 1,279 1,908 (2,111) 203 1,279
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT, NET (480) 0 0 0 (480)
CUMULATIVE EFFECT OF
ACCOUNTING CHANGES, NET 569 0 0 0 569
-----------------------------------------------------------------------------
NET INCOME (LOSS) $ 1,368 $1,908 ($2,111) $203 $ 1,368
=============================================================================
</TABLE>
Page 6 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
YEAR ENDED NOVEMBER 30, 1992: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET REVENUES $93,775 $1,880 $14,726 ($2,230) $108,151
-----------------------------------------------------------------------------
COSTS OF EXPENSES:
Costs of sales 33,251 0 3,687 0 36,938
Advertising and promotion 30,712 197 5,560 (1,880) 34,589
Selling, general and administrative 18,226 11 5,006 (350) 22,893
-----------------------------------------------------------------------------
Total costs and expenses 82,189 208 14,253 (2,230) 94,420
-----------------------------------------------------------------------------
INCOME FROM OPERATIONS 11,586 1,672 473 0 13,731
-----------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest expense (2,505) 0 0 0 (2,505)
Investment income (loss) (80) 726 95 0 741
Equity in earnings of subsidiaries 2,386 0 0 (2,386) 0
Other income (expense), net 265 0 0 0 265
-----------------------------------------------------------------------------
Total other income (expense) 66 726 95 (2,386) (1,499)
-----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 11,652 2,398 568 (2,386) 12,232
PROVISION FOR INCOME TAXES 3,580 580 0 0 4,160
-----------------------------------------------------------------------------
NET INCOME $ 8,072 $1,818 $ 568 ($2,386) $ 8,072
=============================================================================
</TABLE>
Page 7 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
YEAR ENDED NOVEMBER 30, 1994: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 2,054 $ 2,101 $ 483 ($2,584) $ 2,054
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,968 939 129 0 4,036
Deferred income tax provision 129 174 0 0 303
Repriced stock option expense 559 0 0 0 559
Loss (gain) on sales of assets 518 0 0 0 518
Extraordinary loss on extinguishment of
debt, net 1,556 0 0 0 1,556
Equity in earnings of subsidiaries (2,584) 0 0 2,584 0
Other, net 983 0 0 0 983
Changes in operating assets and liabilities:
Accounts receivable (3,552) (408) 1,848 408 (1,704)
Refundable and deferred income taxes 828 0 0 0 828
Inventories 3,161 0 571 0 3,832
Prepaid expenses and other current assets 38 0 95 0 133
Accounts payable and accrued liabilities 4,170 0 (1,106) 0 3,064
Payable to bank 243 0 0 0 243
-----------------------------------------------------------------------------
Net cash provided by operating
activities 11,071 2,806 2,120 408 16,405
-----------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (2,691) 0 (73) 0 (2,764)
Proceeds from notes and sales of assets 275 0 274 0 549
Purchases of patents, trademarks and
other products rights 0 (20,272) 0 0 (20,272)
Distributions from subsidiaries 2,000 0 0 (2,000) 0
Advances (to)/from subsidiaries, net (17,521) 0 0 17,521 0
Proceeds from/(addition of) note
receivable to/(from) affiliate 3,387 (2,537) (850) 0 0
Increase in other assets (1,266) 0 0 0 (1,266)
-----------------------------------------------------------------------------
Net cash used in investing activities (15,816) (22,809) (649) 15,521 (23,753)
-----------------------------------------------------------------------------
FINANCING ACTIVITIES:
Repayment of long-term debt (112,831) 0 0 0 (112,831)
Proceeds from long-term debt 48,706 0 0 0 48,706
Advances (to)/from parent, net 0 20,674 (2,745) (17,929) 0
Proceeds from issuance of senior
subordinated notes 73,012 0 0 0 73,012
Proceeds from issuance of stock warrants 955 0 0 0 955
Debt issuance costs (4,011) 0 0 0 (4,011)
Distributions to parent 0 (2,000) 0 2,000 0
-----------------------------------------------------------------------------
Net cash provided by (used in)
financing activities 5,831 18,674 (2,745) (15,929) 5,831
-----------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 0 0 89 0 89
-----------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
Increase (decrease) for the year 1,086 (1,329) (1,185) 0 (1,428)
At beginning of year 213 1,805 2,444 0 4,462
-----------------------------------------------------------------------------
At end of year $1,299 $ 476 $ 1,259 $ 0 $ 3,034
=============================================================================
</TABLE>
Page 8 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
YEAR ENDED NOVEMBER 30, 1993: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 1,368 $ 1,908 ($2,111) $ 203 $ 1,368
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 2,418 624 345 0 3,387
Cumulative effect of accounting changes,
net (589) 0 0 0 (589)
Deferred income tax provision 360 33 0 0 393
Repriced stock option expense 956 0 0 0 956
Loss (gain) on sales of assets (757) 0 0 0 (757)
Extraordinary loss on extinguishment of
debt, net 480 0 0 0 480
Equity in losses of subsidiaries 203 0 0 (203) 0
Other, net (354) 0 11 0 (343)
Changes in operating assets and liabilities:
Accounts receivable 1,948 (85) (266) 85 1,682
Refundable and deferred income taxes (941) 0 0 0 (941)
Inventories 659 0 (164) 0 495
Prepaid expenses and other current assets 293 66 (42) 0 317
Accounts payable and accrued liabilities (412) 0 2,264 0 1,852
Payable to bank 230 0 0 0 230
-----------------------------------------------------------------------------
Net cash provided by operating
activities 5,882 2,546 37 85 8,550
-----------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,242) 0 (55) 0 (2,297)
Net decrease in long-term investments 380 4,682 0 0 5,062
Proceeds from (purchases of) short-term
investments 0 23,212 0 0 23,212
Proceeds from notes and sales of assets 619 0 0 0 619
Purchases of patents, trademarks and
other product rights 0 (1,750) 0 0 (1,750)
Distributions from subsidiaries 1,600 0 0 (1,600) 0
Advances (to)/from subsidiaries, net 26,108 0 0 (26,108) 0
Increase in other assets (790) 0 0 0 (790)
-----------------------------------------------------------------------------
Net cash provided by (used in)
investing activities 25,675 26,144 (55) (27,708) 24,056
-----------------------------------------------------------------------------
FINANCING ACTIVITIES:
Repayment of long-term debt (42,900) 0 0 0 (42,900)
Proceeds from long-term debt 104,116 0 0 0 104,116
Advances (to)/from parent, net 0 (27,053) 1,030 26,023 0
Proceeds from issuance of common stock 12,405 0 0 0 12,405
Common stock dividends paid (109,570) 0 0 0 (109,570)
Exercise of stock options 1,156 0 0 0 1,156
Tax benefit from exercise of stock
options 1,253 0 0 0 1,253
Debt issuance costs (2,630) 0 0 0 (2,630)
Distributions to parent 0 0 (1,600) 1,600 0
Other, net (712) 0 0 0 (712)
-----------------------------------------------------------------------------
Net cash used in financing
activities (36,882) (27,053) (570) 27,623 (36,882)
-----------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 0 0 30 0 30
-----------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
Increase (decrease) for the year (5,325) 1,637 (558) 0 (4,246)
At beginning of year 5,538 168 3,002 0 8,708
-----------------------------------------------------------------------------
At end of year $ 213 $ 1,805 $ 2,444 $ 0 $ 4,462
=============================================================================
</TABLE>
Page 9 of 12 Pages
<PAGE>
<TABLE>
<CAPTION>
Parent Non-
and its Guarantor Guarantor
Divisions Subsidiary Subsidiaries Eliminations Consolidated
YEAR ENDED NOVEMBER 30, 1992: (1) (2) (3) (4) Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 8,072 $ 1,818 $ 568 ($ 2,386) $ 8,072
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,650 197 210 0 3,057
Deferred income tax provision 164 0 0 0 164
Loss (gain) on sales of assets (40) 0 0 0 (40)
Equity in earnings of subsidiaries (2,386) 0 0 2,386 0
Other, net (242) 0 (11) 0 (253)
Changes in operating assets and liabilities:
Accounts receivable 534 (579) (1,867) 579 (1,333)
Refundable and deferred income taxes (62) 0 0 0 (62)
Inventories (2,726) 0 (651) 0 (3,377)
Prepaid expenses and other current assets (314) (66) (57) 0 (437)
Accounts payable and accrued liabilities (2,232) 0 424 0 (1,808)
Payable to bank 659 0 0 0 659
-----------------------------------------------------------------------------
Net cash provided by (used in)
operating activities 4,077 1,370 (1,384) 579 4,642
-----------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (3,067) 0 (48) 0 (3,115)
Net decrease in long-term investments 2,982 0 0 0 2,982
Proceeds from (purchases of) short-term
investments (3,041) (20,171) 0 0 (23,212)
Proceeds from notes and sales of assets 419 0 0 0 419
Purchases of patents, trademarks and
other product rights (159) 0 0 0 (159)
Advances (to)/from subsidiaries, net (20,279) 0 0 20,279 0
Increase in other assets (1,836) 0 0 0 (1,836)
-----------------------------------------------------------------------------
Net cash used in investing
activities (24,981) (20,171) (48) 20,279 (24,921)
-----------------------------------------------------------------------------
FINANCING ACTIVITIES:
Repayment of long-term debt (32,279) 0 0 0 (32,279)
Proceeds from long-term debt 26,535 0 0 0 26,535
Advances (to)/from parent, net 0 18,968 1,890 (20,858) 0
Proceeds from issuance of common stock 28,104 0 0 0 28,104
Common stock dividends paid (1,447) 0 0 0 (1,447)
Exercise of stock options 2,421 0 0 0 2,421
Tax benefit from exercise of stock
options 3,026 0 0 0 3,026
-----------------------------------------------------------------------------
Net cash provided by financing
activities 26,360 18,968 1,890 (20,858) 26,360
-----------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 0 0 200 0 200
-----------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
Increase for the year 5,456 167 658 0 6,281
At beginning of year 82 1 2,344 0 2,427
-----------------------------------------------------------------------------
At end of year $ 5,538 $ 168 $ 3,002 $ 0 $ 8,708
=============================================================================
</TABLE>
Page 10 of 12 Pages
<PAGE>
(1) Investments in the subsidiaries are accounted for by the parent under the
equity method of accounting.
(2) Signal Investment and Management Co. was founded by Chattem, Inc. for the
sole purpose of holding certain of Chattem's trademarks and investments.
Signal has no active operations.
(3) The financial information of the nonguarantor subsidiaries includes
Chattem's two wholly-owned foreign subsidiaries, Chattem (Canada) Inc.
and Chattem (U.K.) Limited and Chattem's wholly-owned captive insurance
subsidiary, HBA Insurance Ltd.
(4) The principal elimination entries eliminate investments in subsidiaries
and intercompany accounts and transactions.
Page 11 of 12 Pages
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
July 26, 1995 CHATTEM, INC.
By: /s/ Robert E. Bosworth
-------------------------
Robert E. Bosworth,
Executive Vice President
and Chief Financial Officer
Page 12 of 12 Pages
