Interactive Intelligence

(ININ)

surged Friday after the Indianapolis-based software company said it expected a boost in third-quarter revenue. The company said it expects total revenue to be between $21 million and $22 million, up from $15.2 million a year ago, while net income is expected to be between $6.3 million and $6.7 million, or 34 cents and 36 cents a share, including a $5 million tax credit. Wall Street was looking for earnings of 3 cents a share on revenue of $18.9 million.

The company said its original 2006 guidance had anticipated between 15% and 20% revenue growth over 2005; it is now forecasting revenue growth for the first nine months of 2006 closer to 30% year-over-year. The company said results were boosted by strong demand in its contract center automation software and enterprise IP communications system business.

Shares were trading up $2.78, or 23.68%, or $14.52.

Horizon Health

( HORC) lost ground after the Lewisville, Texas-based health care services firm said Friday that it is exploring a potential company sale. Horizon hired UBS Securities as a financial adviser to explore alternatives, which include a full or partial sale of the company, or a merger. Horizon's shares were battered in July after the company missed Wall Street's third-quarter earnings estimates and slashed its full-year forecast, citing pricing pressures on its behavioral health-management contract business. Shares were down 70 cents, or 4.2%, to $16.04.

Chattem

( CHTT) soared after the Chattanooga, Tenn.-based health care products company agreed to acquire the U.S. rights to five leading consumer and over-the-counter brands from

Johnson & Johnson

(JNJ) - Get Report

and

Pfizer

(PFE) - Get Report

for $410 million in cash.

Chattem said it will acquire Act mouthwash, Unisom sleep aid, Cortizone anti-itch cream, Kaopectate antidiarrhea medicine and Balmex diaper rash lotion. Johnson & Johnson is selling the brands to satisfy regulatory conditions tied to the $16.6 billion acquisition of Pfizer Consumer Healthcare, which it agreed to acquire in June. That deal is expected to close by year-end.

The company said the acquisition will be accretive in fiscal 2007. To fund the transaction, Bank of America has provided a commitment letter for a $425 million term loan facility. Shares were gaining $7, or 20.3%, to $41.43.

Build-A-Bear Workshop

(BBW) - Get Report

gained after the St Louis-based specialty retailer of plush animals was upgraded by Susquehanna Financial to positive from neutral. The company said it was opening a new distribution center in Groveport, Ohio, that will serve as the primary distribution center for Build-A-Bear's North American store operations. The distribution center will employ about 100 workers. The company's capital expenditures associated with the new distribution center totaled about $24 million. Shares were trading up 81 cents, or 3.6%, to $23.42.

ScanSource

(SCSC) - Get Report

gained after the Greenville, S.C.-based company, which markets automatic identification and data capture, and point-of-sale products, said it expected first-quarter sales to be in a range of $487 million to $495 million, compared with $390.4 million a year ago. Analysts polled by Thomson First Call were looking for sales of $474.7 million. The company is scheduled to release its full results on Oct. 26. Shares were climbing $1.90, or 6.3%, to $31.88.