Thedford's Black Draught
Thedford’s Black Draught…5 large packages of medicine…each holding a number of smaller packages. One loose smaller package and a shipping/display box still with the shipping label. Pd $85 Brunswick
Chattem Inc. began in 1879 as the Chattanooga Medicine Company. Its first product was a laxative containing senna called Thedford's Black Draught. In the 1940's, the company underwent expansion and changed its name to Chattem Drug and Chemical Company. Since that time the corporation has acquired a number of companies, producing everything from Aspirin to sun block, and now has annual profits of over $34 million. The company formerly produced supplements containing ephedrine, but ceased production of those brands in 2002.
Notes for Adam Quimby Simmons: A. Q. Simmons was the developer of "Dr. A.
Q. Simmons Vegetable Liver Medicine". It is said that he learned to make his
medicines from the Indians.
His son, Miles Alexander Simmons, moved to Mississippi and also produced the
medicine known as "Dr. M. A. Simmons Vegetable Liver Medicine". See more
under Miles Alexander Simmons.
His grandson, Miles Thedford, later patented the medicine known as Thedford's
Black Draught, and it was produced by the Chattanooga Medicine Company. See
more under Miles Thedford, son of Deborah West Simmons and John Harkey
Thedford.
Notes for Miles A. Thedford: He was shot by J. D Potts and died several days
afterward. The dispute was said to have been over remarks by Thedford against
Potts' wife.
Chattem History
The Company's first product was Thedford's Black Draught®, a senna based laxative, originally developed in 1840 by Dr. A.Q. Simmons of Snow Hill, Georgia. The product was renamed Black Draught® and first year sales were $35,488. Legend has it that in the early days of the British Navy it was customary for the sailors to be given a weekly infusion of senna along with their customary lot of rum. Since the mariner's diet consisted largely of salt pork, bully beef and hardtack, the custom was in the best interest of all onboard. As history bears out, Black Draught® was a huge success.
With Black Draught® successfully on its way, the Company acquired a second product called Dr. McElree's Wine of Cardui, a preparation or tonic for women based on the sedative and antispasmodic properties of Cnicus benedictus. While knowledge of the complex drug properties of botanical Cnicus benedictus extended back hundreds of years in Central Europe, there is no recorded history of the plant or its seeds being transported to the United States. Yet in 1833, Mrs. Francis Smith was growing it in her Fayetteville, Tennessee garden.
Reportedly, Mrs. Smith became acquainted with a Cherokee Indian who stopped temporarily in her town. Mrs. Smith observed this Indian bring dramatic relief to a young girl suffering from dysmenorrhea by using a compound from the dried leaves of this botanical plant. The husband of Mrs. Smith persuaded the Indian to give them a handful of dried leaves and a few seeds. Mrs. Smith then gave the seeds to her granddaughter, Mrs. McElree, who placed them in a trunk. Several years later out of curiosity, Mr. McElree planted the seeds to see if they would germinate. They did and the plant grew hardily. He then gave some of the leaves to several neighbors and all reported good results. During the 1870's the drug was commercially packaged and sold. In 1882, Mr. McElree sold the rights to the Chattanooga Medicine Company.
The Chattanooga Medicine Company pioneered a large number of the direct-marketing and advertising techniques at the turn-of-the-century, many of which are still in practice today. Working to overcome limitations in the fragmented transportation system of the day, the Company marshaled a legendary sales force to blanket the rural American landscape on foot, on horseback, or by buggy. It was no accident that many of the enlisted salespeople were also sign painters.
The Chattanooga Medicine Company was one of the first businesses to recognize the value of outdoor advertising. Many painted sales messages appeared across the landscape usually on stores fronts and sides of barns located near well traveled crossroads. Often the sales representative would bargain with the farmer to install a new roof on his barn in exchange for the space to paint a huge "Black Draught" or "Wine of Cardui" message on the side. Interestingly, barns painted with product advertising from the Chattanooga Medicine Company actually predated advertising from another Chattanooga landmark, Rock City¨. Their now familiar "See Rock City" hand-painted signs and barns actually began years later in 1935.
The Chattanooga Medicine Company was also a pioneer in direct marketing with the printing and distribution of literally tens of millions of Cardui wall calendars and church fans. But perhaps the most famous of all promotional pieces was The Ladies Birthday Almanac published by the company as early as 1891. The almanac contained weather information, important dates and, of course, ads for all of the Chattanooga Medicine Company products.
The almanac, along with the popularity of the Company's products, generated a massive amount of correspondence between the Company and its customers. Although many of the publications were distributed through the retail trade, millions of them were distributed through the mail. In fact, so great was the volume of mail that the Company soon found itself the largest generator of mail in the entire Chattanooga area. The shear volume of correspondence forced the United States Post Office to open a dedicated post office on the Company's premises! You can still order a copy of The Ladies Birthday Almanac with a "Cardui" Calendar today by sending just $3.50 along with your name and complete mailing address in care of:
The Ladies Birthday Almanac, P. O. Box 2008, Chattanooga, TN 37409.
A visionary, John A. Patten also saw the vast and unexplored opportunities for product sales in foreign countries as early as 1911 when he established a flourishing business in Central and South America. He was a man of unlimited energy and broad interests, he was responsible for the Company becoming a charter member of the United States Chamber of Commerce. He also served in many positions outside the Company such as president of The Tennessee River Navigation Company. Despite all that he did for the Company, his obituary noted that perhaps his greatest achievement in his short 48 years was his passionate interest in the improvement of navigation along the Tennessee River long before the creation of the Tennessee Valley Authority, which began in 1931.
Zebiom Charles Patten succeeded his brother as President of the Chattanooga Medicine Company in 1916 and championed the Company through tumultuous times, including those of the Great Depression.
In 1917, shares of the Chattanooga Medicine Company were again issued and once again it became a corporation, albeit very closely held among Patten family members. But don't let it be said that the Company doesn't play as hard as it works. The 1921 Chattanooga Medicine Company baseball team was the pennant winner in the local Saturday afternoon baseball league.
The Great Depression came hard and fast and took its toll on all American business, including the Chattanooga Medicine Company. Yet during this period the Company never failed to pay a dividend and during 1934 the nation's first employee pension and life insurance programs were created by the Company. Charity did not end at home as assistance was extended by the Company into neighboring communities through support of Community Chest funds.
In 1935 a new product, Menthacol, was introduced in the face of hardship. Menthacol was an analgesic balm in a unique greaseless base. This formulation was the brainchild of Dr. Irvine W. Grote then head of the Department of Chemistry at the University of Chattanooga. Interestingly, the product met with only lukewarm results until the name was changed to "Soltice" in 1946.
In 1939, after serving 21 years as President, Zeboim Charles Patten decided that the Company needed young management to address the rapidly changing drug industry. Lupton Patten, son of John A. Patten, took over as president of the Chattanooga Medicine Company at the age of 31 and in doing so moved the Company forward into the modern era. He established a nationally recognized research program and introduced diversification by entering into the fine chemical and prescription drug business. He also lead the charge to modernize the plant with automated equipment and packaging techniques. Like his predecessors, Lupton Patten had many interests beyond his immediate business. He served on the boards of trustees of the University of Chattanooga, Girl's Preparatory School and The Bright School.
A tennis champion in his youth, Lupton was primarily responsible for founding the Chattanooga Tennis Club which has become the nationally recognized Manker Patten Tennis Center, named for his eldest brother.
In 1941, the Chattanooga Medicine Company entered into the pharmaceutical business through the formation of Brayten Pharmaceutical Company. Brayten's products were promoted to physicians through medical journals, medical mailings and a detail crew who personally called on each physician.
When the patriotic call of our country came during World War II, the Chattanooga Medicine Company stepped forward to become one of the nation's leading producers of foods and medicines for the U.S. Army. Less than a week after the bombing of Pearl Harbor, the Company delivered a shipment of tincture of gentian to the United States Army. Enough aromatic spirit of ammonia, first aid for shock victims, was produced by the Company to literally float a battleship. Orders from the military reached such volume that soon the world supply of oil of lavender, one of the ingredients for ammonia, was exhausted. "Make it without lavender" said the Surgeon General. As train car load after train car load left Chattanooga, drug importers in New York telephoned that no more oil of myristica, another ingredient, could be found any where in the world. "Make it without myristica" came word from Washington. And so practically all of the rest of the war's requirements of aromatic spirits of ammonia were made by the Chattanooga Medicine Company in this fashion.
Machines and production lines were also converted to produce over 34 million K-Rations of 3 meals each during the course of the war. These rations were produced 24 hours a day, 7 days a week. In the process, the Chattanooga Medicine Company earned the prestigious E Award, named in honor of Eisenhower, not once but five times for its work in support of the war effort.
Perhaps one of the greatest contributions made by Lupton Patten was the modernization and expansion of the Company's research facilities. In addition, consultants from 24 universities, hospitals and private laboratories engaged in research projects for the Company. Soon Dr. John C. Krantz discovered one of the first new antacid compounds commonly known as Dihydroxy Aluminum Aminoacetate while conducting research for the Company. Shortly thereafter, Dr. Irvine W. Grote, a Company advisor, discovered a second new antacid, Dihydroxy Aluminum Sodium. These two compounds were manufactured by the fine chemicals division until recently for use in "Bufferin" and "Rolaids", respectively.
A mere 20 years after taking office, Lupton Patten died at the age of 51, and in December of 1958 he was succeeded as President by his nephew, Alexander Guerry, Jr., age 40. Alexander Guerry, Jr., who joined the Chattanooga Medicine Company in 1945, came from a learned, athletic and civic-minded family. He was valedictorian of both his high school (Baylor School) and college (University of the South) graduating classes. He was a fierce competitor on the tennis court earning tournament titles throughout his life. He was also a highly decorated Air Force pilot, serving two tours of duty during World War II. He was awarded the Distinguished Flying Cross, The Silver Star, The Legion of Merit and the Air Medal for his brave flying exploits in the Southwest Pacific. In total he flew 123 combat missions in seven different types of aircraft while attaining a commission of Lt. Colonel from the Air Force during just two years of service.
Alexander Guerry, Jr. was instrumental in setting the Company on firm financial footing while adopting a growth-oriented business mindset. It was during this period of expansion that the Company name was changed from the Chattanooga Medicine Company to Chattem Drug and Chemical Company and created two divisions, Chattem Chemicals and Chattem Consumer Products. Alexander Guerry, Jr. was able to secure financing for the purchase of products and even entire companies that offered Chattem a unique position in the marketplace. By 1957 annual sales had reached $5 million, but in an effort to garner additional financial resources with which to maintain growth, Company stock was sold to select outsiders during 1962, and in 1969 stock was offered to the general public for the first time. Today, Chattem common stock is traded over-the-counter on the NASDAQ exchange under the symbol CHTT.
In 1960 the National Toilet Company of Paris, Tennessee was acquired. At the time it was one of the country's oldest independent cosmetic specialty houses having marketed a line of cosmetics and specialty soap under the name Nadinola® since 1899. Another company, Ath-O-Med, which specialized in athletic medication, was purchased during this period. The line of 32 products included first aid ointments, germicidal powder, vitamins, analgesic balms and liquids. The Company saw a heightened interest in its expanding product line when it began the "Chattanooga Medicine Company Network" or CMC Network as it came to be known, which sponsored live shows and aired musical entertainment on the Black Draught - Soltice TV show. The television show went on to become the Porter Waggoner Show in 1961 and later featured then little known Dolly Parton touting the unique benefits of Soltice® Rub & Cough Medicine and Blis-To-Sol®, medicated liquid and powder for dry, itchy skin. Sponsorship of the show lasted until 1973 and would often include live commercials of the products being used by the host.
Internal research efforts also gave birth to "Pamabrom", a diuretic used to reduce menstrual discomfort. This drug lead to the development and introduction of Pamprin® in 1962, the first over-the-counter menstrual relief product, and later in 1984 Premsyn® PMS was formulated and introduced to treat symptoms prior to the menstrual cycle.
In 1974, Sun-In®, a spray-in hair lightener, was acquired from Gillette Company. In 1977 an oil-absorbent line of non-color cosmetics called CornSilk® was acquired from Shulton. In 1975 Mudd® Mask, a natural clay-based facial cleanser, was acquired. During this rapid period of growth, particularly in the toiletries area, the company had seemingly outgrown the limitations of its name Chattem Drug and Chemical Company. As a result, the name was formally changed to Chattem, Inc. in September 1978. Given all that had been accomplished throughout the years, a heightened energy and excitement permeated the company as it celebrated its 100 year anniversary in 1979. However, the leadership was even more enthusiastic about what opportunities the future held for the company and rightfully so.
In 1980, Love's® Fragrances were acquired from Menley & James. In 1983, Quencher® Lip Stick and Nail Polish were acquired from A.H. Robins. In 1985, BullFrog® Sunblock, the first all-day waterproof sun protection, was acquired from Oceanside Laboratories, Inc. in southern California. In 1986 a patented line of chlorine removal products called UltraSwim® was acquired from Eljenn International. In 1989 Flexall 454®, an aloe vera topical analgesic, was acquired from Ari-Med Pharmaceuticals followed by the purchase of Norwich® Aspirin from Procter & Gamble later that year. The prestigious REX Market Maker Award was bestowed to Chattem in 1990 as Flexall 454® was voted the most innovative over-the-counter drug introduction of the year.
After 45 years of service to Chattem, 32 as President and Chairman of the Board, Alexander Guerry, Jr. died in 1990. His dedication to excellence, integrity in all business matters and strong community values were instilled into the very culture of the organization. This dedication and unrelenting pursuit of excellence is embodied in his son, Zan Guerry who stepped forward to assume the responsibilities as President and Chairman of the Board upon his father's death. Like his father, Zan Guerry possesses a passion for winning and talent for tennis, yet his victories on the court and in the board room are tempered with reflection and perspective. Interestingly, he also relies on a simple, yet timeless, philosophy to define and guide the Company's culture - Do what's right, do your best and treat others as you wish to be treated.
In an effort to further focus on the business, in 1998 Zan Guerry retained his title as Chairman of the Board and Chief Executive Officer and appointed A. Alexander Taylor, II to the position of President and Chief Operating Officer of Chattem, Inc. Prior to his appointment, Mr. Taylor was a valued member of Chattem's Board of Directors and an accomplished corporate lawyer.
In September 2005, Mr. Taylor resigned to pursue other opportunities and was replaced by Bob Bosworth. Mr. Bosworth has served on the Company's Board of Directors since 1986 and, prior to 1998, was employed by Chattem for 18 years, most recently as Executive Vice President and Chief Financial Officer.
Since 2001 through today, Chattem's sales and earnings have steadily increased. During this four year period, adjusted earnings per share have risen at a compound annual growth rate of 54% and adjusted net income has grown from $8.4 million in 2001 to $34.3 million in 2004. This period has been overwhelmingly the most dynamic one in our long history. Our stock continues to be a solid performer, with a total market capitalization of over $900 million as of August 2005.
During 1991 a corporate milestone was achieved as sales revenues exceeded $100 million for the first time in Chattem's history. A part of that success was the acquisition and performance of Icy Hot®, a dual action topical analgesic, from Richardson-Vicks. As 1994 progressed it proved to be a very busy year with Chattem acquiring not one but two brands. Benzodent®, a topical oral analgesic, was purchased from Richardson-Vicks and pHisoderm®, a line of daily skin cleansers, was purchased from Sterling Drug. In an effort to focus on the opportunities within the growing consumer products portfolio, Chattem Chemicals was profitably divested to Elcat, Inc. in 1995.
However, the 1996 acquisition of Gold Bond® from Martin Himmel, Inc., the leading brand of medicated cream and powder in America, really began to establish Chattem as an industry force. This acquisition was soon followed by another, Herpecin-L®, a unique cold sore treatment, from Campbell Laboratories, Inc.
In 1997 Sunsource International, a company which produces herbal supplements and homeopathic treatments, was acquired from a holistic-based company founded by Dr. Robert Sohn. However, 1998 proved to be a monumental year with the largest acquisition in Chattem's long & rich history, the purchase of Ban® Anti-Perspirant & Deodorant from Bristol-Myers Squibb Company. As a result, annual sales were pushed well past the $200 million mark for the first time. The Company also successfully divested CornSilk® during 1998 to focus on other key areas of the business.
In 1998, Chattem purchased Dexatrim®, Sportscreme®, Aspercreme®, Capzasin® and Arthritis Hot® from Thompson Medical Company which made Chattem the largest manufacturer of topical analgesics in the U.S. In 2000, Chattem divested two brands; Norwich® which was sold to The Monticello Companies, Inc. and Ban® which was sold to The Andrew Jergens Company. The newest addition to the Chattem brand portfolio is Selsun Blue® which was purchased in 2002 from Abbott Laboratories.
Celebrity endorsements for specific brands have over the years also proven relevant and meaningful to consumers. In addition to sponsorship of the Porter Waggoner Show, endorsements were also secured from Priscilla Presley who was featured in television and print advertisements for Quencher®. Susan Anton was once the face behind early Mudd® Mask television and print advertisements. Olympic gold medalist swimmer Janet Evans endorsed UltraSwim® in television and print advertising as she extended her record breaking swimming career. One of the most well known and beloved consumer endorsements came from Joe Namath who's famed "bad knees" helped launch Flexall® into the national spotlight. Another celebrity to promote Flexall® was Joe Montana, who served as quarterback for Flexall® in television advertisements. Talkshow host Larry King has lent his support to a number of Sunsource® brands, including Garlique®. In 2003, Shaquille "Shaq" O'Neal joined the Chattem celebrity team to promote the Icy Hot® brand.
Our international business has been concentrated in Canada, Europe, Latin America and certain other countries in which our Selsun® products are sold. In 2004, our international sales were approximately $25 million, which represented 8% of our total revenues.
Selsun International
Selsun's international presence includes existing key markets, such as Canada, Mexico, Brazil, the U.K. and Australia, as well as new markets in Central Europe and the Middle East.
Europe
Our European business is conducted through Chattem Global Consumer Products Limited ("Chattem Global"), our newly established Irish subsidiary, located in Limerick, Ireland, and prior to November 1, 2004, Chattem (U.K.) Limited ("Chattem (U.K.)"), a wholly-owned subsidiary located in Basingstoke , Hampshire, England. This unite also services distributors in various other worldwide locations. Our products sold in Europe include Selsun®, Sun-In®, Mudd® and UltraSwim®. Cornsilk® is sold by Chattem (U.K.) under a licensing arrangement with the owner of its registered trademark. Spray Blond Spray-In Hair lightener s marketed only on the European continent. Certain of our over-the-counter health care products are sold by Chattem Global to customers in parts of Central Europe and the Middle East.
Canada.
Chattem Canada, a wholly-owned subsidiary based in Mississauga, Ontario, Canada, markets and distributes certain of our conumer products through Canada. Brands marketed and sold in Canada include Selsun®, Gold Bond®, Pamprin®, Sun-In®, UltraSwim®, Aspercreme® and Flexall®. In addition, our Icy Hot® brand was launched in Canada in 2005.
United States Export
Our United States export division services various distributors primarily located in the Caribbean and Latin America. We distribute Selsun®, Gold Bond®, Dexatrim®, and certain of our topical analgesic products into these markets.
Chattem Inc. began in 1879 as the Chattanooga Medicine Company. Its first product was a laxative containing senna called Thedford's Black Draught. In the 1940's, the company underwent expansion and changed its name to Chattem Drug and Chemical Company. Since that time the corporation has acquired a number of companies, producing everything from Aspirin to sun block, and now has annual profits of over $34 million. The company formerly produced supplements containing ephedrine, but ceased production of those brands in 2002.
Notes for Adam Quimby Simmons: A. Q. Simmons was the developer of "Dr. A.
Q. Simmons Vegetable Liver Medicine". It is said that he learned to make his
medicines from the Indians.
His son, Miles Alexander Simmons, moved to Mississippi and also produced the
medicine known as "Dr. M. A. Simmons Vegetable Liver Medicine". See more
under Miles Alexander Simmons.
His grandson, Miles Thedford, later patented the medicine known as Thedford's
Black Draught, and it was produced by the Chattanooga Medicine Company. See
more under Miles Thedford, son of Deborah West Simmons and John Harkey
Thedford.
Notes for Miles A. Thedford: He was shot by J. D Potts and died several days
afterward. The dispute was said to have been over remarks by Thedford against
Potts' wife.
Chattem History
The Company's first product was Thedford's Black Draught®, a senna based laxative, originally developed in 1840 by Dr. A.Q. Simmons of Snow Hill, Georgia. The product was renamed Black Draught® and first year sales were $35,488. Legend has it that in the early days of the British Navy it was customary for the sailors to be given a weekly infusion of senna along with their customary lot of rum. Since the mariner's diet consisted largely of salt pork, bully beef and hardtack, the custom was in the best interest of all onboard. As history bears out, Black Draught® was a huge success.
With Black Draught® successfully on its way, the Company acquired a second product called Dr. McElree's Wine of Cardui, a preparation or tonic for women based on the sedative and antispasmodic properties of Cnicus benedictus. While knowledge of the complex drug properties of botanical Cnicus benedictus extended back hundreds of years in Central Europe, there is no recorded history of the plant or its seeds being transported to the United States. Yet in 1833, Mrs. Francis Smith was growing it in her Fayetteville, Tennessee garden.
Reportedly, Mrs. Smith became acquainted with a Cherokee Indian who stopped temporarily in her town. Mrs. Smith observed this Indian bring dramatic relief to a young girl suffering from dysmenorrhea by using a compound from the dried leaves of this botanical plant. The husband of Mrs. Smith persuaded the Indian to give them a handful of dried leaves and a few seeds. Mrs. Smith then gave the seeds to her granddaughter, Mrs. McElree, who placed them in a trunk. Several years later out of curiosity, Mr. McElree planted the seeds to see if they would germinate. They did and the plant grew hardily. He then gave some of the leaves to several neighbors and all reported good results. During the 1870's the drug was commercially packaged and sold. In 1882, Mr. McElree sold the rights to the Chattanooga Medicine Company.
The Chattanooga Medicine Company pioneered a large number of the direct-marketing and advertising techniques at the turn-of-the-century, many of which are still in practice today. Working to overcome limitations in the fragmented transportation system of the day, the Company marshaled a legendary sales force to blanket the rural American landscape on foot, on horseback, or by buggy. It was no accident that many of the enlisted salespeople were also sign painters.
The Chattanooga Medicine Company was one of the first businesses to recognize the value of outdoor advertising. Many painted sales messages appeared across the landscape usually on stores fronts and sides of barns located near well traveled crossroads. Often the sales representative would bargain with the farmer to install a new roof on his barn in exchange for the space to paint a huge "Black Draught" or "Wine of Cardui" message on the side. Interestingly, barns painted with product advertising from the Chattanooga Medicine Company actually predated advertising from another Chattanooga landmark, Rock City¨. Their now familiar "See Rock City" hand-painted signs and barns actually began years later in 1935.
The Chattanooga Medicine Company was also a pioneer in direct marketing with the printing and distribution of literally tens of millions of Cardui wall calendars and church fans. But perhaps the most famous of all promotional pieces was The Ladies Birthday Almanac published by the company as early as 1891. The almanac contained weather information, important dates and, of course, ads for all of the Chattanooga Medicine Company products.
The almanac, along with the popularity of the Company's products, generated a massive amount of correspondence between the Company and its customers. Although many of the publications were distributed through the retail trade, millions of them were distributed through the mail. In fact, so great was the volume of mail that the Company soon found itself the largest generator of mail in the entire Chattanooga area. The shear volume of correspondence forced the United States Post Office to open a dedicated post office on the Company's premises! You can still order a copy of The Ladies Birthday Almanac with a "Cardui" Calendar today by sending just $3.50 along with your name and complete mailing address in care of:
The Ladies Birthday Almanac, P. O. Box 2008, Chattanooga, TN 37409.
A visionary, John A. Patten also saw the vast and unexplored opportunities for product sales in foreign countries as early as 1911 when he established a flourishing business in Central and South America. He was a man of unlimited energy and broad interests, he was responsible for the Company becoming a charter member of the United States Chamber of Commerce. He also served in many positions outside the Company such as president of The Tennessee River Navigation Company. Despite all that he did for the Company, his obituary noted that perhaps his greatest achievement in his short 48 years was his passionate interest in the improvement of navigation along the Tennessee River long before the creation of the Tennessee Valley Authority, which began in 1931.
Zebiom Charles Patten succeeded his brother as President of the Chattanooga Medicine Company in 1916 and championed the Company through tumultuous times, including those of the Great Depression.
In 1917, shares of the Chattanooga Medicine Company were again issued and once again it became a corporation, albeit very closely held among Patten family members. But don't let it be said that the Company doesn't play as hard as it works. The 1921 Chattanooga Medicine Company baseball team was the pennant winner in the local Saturday afternoon baseball league.
The Great Depression came hard and fast and took its toll on all American business, including the Chattanooga Medicine Company. Yet during this period the Company never failed to pay a dividend and during 1934 the nation's first employee pension and life insurance programs were created by the Company. Charity did not end at home as assistance was extended by the Company into neighboring communities through support of Community Chest funds.
In 1935 a new product, Menthacol, was introduced in the face of hardship. Menthacol was an analgesic balm in a unique greaseless base. This formulation was the brainchild of Dr. Irvine W. Grote then head of the Department of Chemistry at the University of Chattanooga. Interestingly, the product met with only lukewarm results until the name was changed to "Soltice" in 1946.
In 1939, after serving 21 years as President, Zeboim Charles Patten decided that the Company needed young management to address the rapidly changing drug industry. Lupton Patten, son of John A. Patten, took over as president of the Chattanooga Medicine Company at the age of 31 and in doing so moved the Company forward into the modern era. He established a nationally recognized research program and introduced diversification by entering into the fine chemical and prescription drug business. He also lead the charge to modernize the plant with automated equipment and packaging techniques. Like his predecessors, Lupton Patten had many interests beyond his immediate business. He served on the boards of trustees of the University of Chattanooga, Girl's Preparatory School and The Bright School.
A tennis champion in his youth, Lupton was primarily responsible for founding the Chattanooga Tennis Club which has become the nationally recognized Manker Patten Tennis Center, named for his eldest brother.
In 1941, the Chattanooga Medicine Company entered into the pharmaceutical business through the formation of Brayten Pharmaceutical Company. Brayten's products were promoted to physicians through medical journals, medical mailings and a detail crew who personally called on each physician.
When the patriotic call of our country came during World War II, the Chattanooga Medicine Company stepped forward to become one of the nation's leading producers of foods and medicines for the U.S. Army. Less than a week after the bombing of Pearl Harbor, the Company delivered a shipment of tincture of gentian to the United States Army. Enough aromatic spirit of ammonia, first aid for shock victims, was produced by the Company to literally float a battleship. Orders from the military reached such volume that soon the world supply of oil of lavender, one of the ingredients for ammonia, was exhausted. "Make it without lavender" said the Surgeon General. As train car load after train car load left Chattanooga, drug importers in New York telephoned that no more oil of myristica, another ingredient, could be found any where in the world. "Make it without myristica" came word from Washington. And so practically all of the rest of the war's requirements of aromatic spirits of ammonia were made by the Chattanooga Medicine Company in this fashion.
Machines and production lines were also converted to produce over 34 million K-Rations of 3 meals each during the course of the war. These rations were produced 24 hours a day, 7 days a week. In the process, the Chattanooga Medicine Company earned the prestigious E Award, named in honor of Eisenhower, not once but five times for its work in support of the war effort.
Perhaps one of the greatest contributions made by Lupton Patten was the modernization and expansion of the Company's research facilities. In addition, consultants from 24 universities, hospitals and private laboratories engaged in research projects for the Company. Soon Dr. John C. Krantz discovered one of the first new antacid compounds commonly known as Dihydroxy Aluminum Aminoacetate while conducting research for the Company. Shortly thereafter, Dr. Irvine W. Grote, a Company advisor, discovered a second new antacid, Dihydroxy Aluminum Sodium. These two compounds were manufactured by the fine chemicals division until recently for use in "Bufferin" and "Rolaids", respectively.
A mere 20 years after taking office, Lupton Patten died at the age of 51, and in December of 1958 he was succeeded as President by his nephew, Alexander Guerry, Jr., age 40. Alexander Guerry, Jr., who joined the Chattanooga Medicine Company in 1945, came from a learned, athletic and civic-minded family. He was valedictorian of both his high school (Baylor School) and college (University of the South) graduating classes. He was a fierce competitor on the tennis court earning tournament titles throughout his life. He was also a highly decorated Air Force pilot, serving two tours of duty during World War II. He was awarded the Distinguished Flying Cross, The Silver Star, The Legion of Merit and the Air Medal for his brave flying exploits in the Southwest Pacific. In total he flew 123 combat missions in seven different types of aircraft while attaining a commission of Lt. Colonel from the Air Force during just two years of service.
Alexander Guerry, Jr. was instrumental in setting the Company on firm financial footing while adopting a growth-oriented business mindset. It was during this period of expansion that the Company name was changed from the Chattanooga Medicine Company to Chattem Drug and Chemical Company and created two divisions, Chattem Chemicals and Chattem Consumer Products. Alexander Guerry, Jr. was able to secure financing for the purchase of products and even entire companies that offered Chattem a unique position in the marketplace. By 1957 annual sales had reached $5 million, but in an effort to garner additional financial resources with which to maintain growth, Company stock was sold to select outsiders during 1962, and in 1969 stock was offered to the general public for the first time. Today, Chattem common stock is traded over-the-counter on the NASDAQ exchange under the symbol CHTT.
In 1960 the National Toilet Company of Paris, Tennessee was acquired. At the time it was one of the country's oldest independent cosmetic specialty houses having marketed a line of cosmetics and specialty soap under the name Nadinola® since 1899. Another company, Ath-O-Med, which specialized in athletic medication, was purchased during this period. The line of 32 products included first aid ointments, germicidal powder, vitamins, analgesic balms and liquids. The Company saw a heightened interest in its expanding product line when it began the "Chattanooga Medicine Company Network" or CMC Network as it came to be known, which sponsored live shows and aired musical entertainment on the Black Draught - Soltice TV show. The television show went on to become the Porter Waggoner Show in 1961 and later featured then little known Dolly Parton touting the unique benefits of Soltice® Rub & Cough Medicine and Blis-To-Sol®, medicated liquid and powder for dry, itchy skin. Sponsorship of the show lasted until 1973 and would often include live commercials of the products being used by the host.
Internal research efforts also gave birth to "Pamabrom", a diuretic used to reduce menstrual discomfort. This drug lead to the development and introduction of Pamprin® in 1962, the first over-the-counter menstrual relief product, and later in 1984 Premsyn® PMS was formulated and introduced to treat symptoms prior to the menstrual cycle.
In 1974, Sun-In®, a spray-in hair lightener, was acquired from Gillette Company. In 1977 an oil-absorbent line of non-color cosmetics called CornSilk® was acquired from Shulton. In 1975 Mudd® Mask, a natural clay-based facial cleanser, was acquired. During this rapid period of growth, particularly in the toiletries area, the company had seemingly outgrown the limitations of its name Chattem Drug and Chemical Company. As a result, the name was formally changed to Chattem, Inc. in September 1978. Given all that had been accomplished throughout the years, a heightened energy and excitement permeated the company as it celebrated its 100 year anniversary in 1979. However, the leadership was even more enthusiastic about what opportunities the future held for the company and rightfully so.
In 1980, Love's® Fragrances were acquired from Menley & James. In 1983, Quencher® Lip Stick and Nail Polish were acquired from A.H. Robins. In 1985, BullFrog® Sunblock, the first all-day waterproof sun protection, was acquired from Oceanside Laboratories, Inc. in southern California. In 1986 a patented line of chlorine removal products called UltraSwim® was acquired from Eljenn International. In 1989 Flexall 454®, an aloe vera topical analgesic, was acquired from Ari-Med Pharmaceuticals followed by the purchase of Norwich® Aspirin from Procter & Gamble later that year. The prestigious REX Market Maker Award was bestowed to Chattem in 1990 as Flexall 454® was voted the most innovative over-the-counter drug introduction of the year.
After 45 years of service to Chattem, 32 as President and Chairman of the Board, Alexander Guerry, Jr. died in 1990. His dedication to excellence, integrity in all business matters and strong community values were instilled into the very culture of the organization. This dedication and unrelenting pursuit of excellence is embodied in his son, Zan Guerry who stepped forward to assume the responsibilities as President and Chairman of the Board upon his father's death. Like his father, Zan Guerry possesses a passion for winning and talent for tennis, yet his victories on the court and in the board room are tempered with reflection and perspective. Interestingly, he also relies on a simple, yet timeless, philosophy to define and guide the Company's culture - Do what's right, do your best and treat others as you wish to be treated.
In an effort to further focus on the business, in 1998 Zan Guerry retained his title as Chairman of the Board and Chief Executive Officer and appointed A. Alexander Taylor, II to the position of President and Chief Operating Officer of Chattem, Inc. Prior to his appointment, Mr. Taylor was a valued member of Chattem's Board of Directors and an accomplished corporate lawyer.
In September 2005, Mr. Taylor resigned to pursue other opportunities and was replaced by Bob Bosworth. Mr. Bosworth has served on the Company's Board of Directors since 1986 and, prior to 1998, was employed by Chattem for 18 years, most recently as Executive Vice President and Chief Financial Officer.
Since 2001 through today, Chattem's sales and earnings have steadily increased. During this four year period, adjusted earnings per share have risen at a compound annual growth rate of 54% and adjusted net income has grown from $8.4 million in 2001 to $34.3 million in 2004. This period has been overwhelmingly the most dynamic one in our long history. Our stock continues to be a solid performer, with a total market capitalization of over $900 million as of August 2005.
During 1991 a corporate milestone was achieved as sales revenues exceeded $100 million for the first time in Chattem's history. A part of that success was the acquisition and performance of Icy Hot®, a dual action topical analgesic, from Richardson-Vicks. As 1994 progressed it proved to be a very busy year with Chattem acquiring not one but two brands. Benzodent®, a topical oral analgesic, was purchased from Richardson-Vicks and pHisoderm®, a line of daily skin cleansers, was purchased from Sterling Drug. In an effort to focus on the opportunities within the growing consumer products portfolio, Chattem Chemicals was profitably divested to Elcat, Inc. in 1995.
However, the 1996 acquisition of Gold Bond® from Martin Himmel, Inc., the leading brand of medicated cream and powder in America, really began to establish Chattem as an industry force. This acquisition was soon followed by another, Herpecin-L®, a unique cold sore treatment, from Campbell Laboratories, Inc.
In 1997 Sunsource International, a company which produces herbal supplements and homeopathic treatments, was acquired from a holistic-based company founded by Dr. Robert Sohn. However, 1998 proved to be a monumental year with the largest acquisition in Chattem's long & rich history, the purchase of Ban® Anti-Perspirant & Deodorant from Bristol-Myers Squibb Company. As a result, annual sales were pushed well past the $200 million mark for the first time. The Company also successfully divested CornSilk® during 1998 to focus on other key areas of the business.
In 1998, Chattem purchased Dexatrim®, Sportscreme®, Aspercreme®, Capzasin® and Arthritis Hot® from Thompson Medical Company which made Chattem the largest manufacturer of topical analgesics in the U.S. In 2000, Chattem divested two brands; Norwich® which was sold to The Monticello Companies, Inc. and Ban® which was sold to The Andrew Jergens Company. The newest addition to the Chattem brand portfolio is Selsun Blue® which was purchased in 2002 from Abbott Laboratories.
Celebrity endorsements for specific brands have over the years also proven relevant and meaningful to consumers. In addition to sponsorship of the Porter Waggoner Show, endorsements were also secured from Priscilla Presley who was featured in television and print advertisements for Quencher®. Susan Anton was once the face behind early Mudd® Mask television and print advertisements. Olympic gold medalist swimmer Janet Evans endorsed UltraSwim® in television and print advertising as she extended her record breaking swimming career. One of the most well known and beloved consumer endorsements came from Joe Namath who's famed "bad knees" helped launch Flexall® into the national spotlight. Another celebrity to promote Flexall® was Joe Montana, who served as quarterback for Flexall® in television advertisements. Talkshow host Larry King has lent his support to a number of Sunsource® brands, including Garlique®. In 2003, Shaquille "Shaq" O'Neal joined the Chattem celebrity team to promote the Icy Hot® brand.
Our international business has been concentrated in Canada, Europe, Latin America and certain other countries in which our Selsun® products are sold. In 2004, our international sales were approximately $25 million, which represented 8% of our total revenues.
Selsun International
Selsun's international presence includes existing key markets, such as Canada, Mexico, Brazil, the U.K. and Australia, as well as new markets in Central Europe and the Middle East.
Europe
Our European business is conducted through Chattem Global Consumer Products Limited ("Chattem Global"), our newly established Irish subsidiary, located in Limerick, Ireland, and prior to November 1, 2004, Chattem (U.K.) Limited ("Chattem (U.K.)"), a wholly-owned subsidiary located in Basingstoke , Hampshire, England. This unite also services distributors in various other worldwide locations. Our products sold in Europe include Selsun®, Sun-In®, Mudd® and UltraSwim®. Cornsilk® is sold by Chattem (U.K.) under a licensing arrangement with the owner of its registered trademark. Spray Blond Spray-In Hair lightener s marketed only on the European continent. Certain of our over-the-counter health care products are sold by Chattem Global to customers in parts of Central Europe and the Middle East.
Canada.
Chattem Canada, a wholly-owned subsidiary based in Mississauga, Ontario, Canada, markets and distributes certain of our conumer products through Canada. Brands marketed and sold in Canada include Selsun®, Gold Bond®, Pamprin®, Sun-In®, UltraSwim®, Aspercreme® and Flexall®. In addition, our Icy Hot® brand was launched in Canada in 2005.
United States Export
Our United States export division services various distributors primarily located in the Caribbean and Latin America. We distribute Selsun®, Gold Bond®, Dexatrim®, and certain of our topical analgesic products into these markets.