CHAD Therapeutics Reports Continuing Strong Sales Increase.Business Editors CHATSWORTH, Calif.--(BUSINESS WIRE)--Feb. 4, 2002 CHAD Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , Inc. (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. :CTU CTU Colorado Technical University CTU Czech Technical University in Prague CTU Counter Terrorist Unit CTU Clinical Trials Unit CTU Catholic Theological Union CTU Chicago Teachers Union CTU Computer Training Unit CTU Control Unit ), producer and distributor of oxygen conserving con·serve v. con·served, con·serv·ing, con·serves v.tr. 1. a. To protect from loss or harm; preserve: devices and oxygen systems used by pulmonary pulmonary /pul·mo·nary/ (pool´mo-nar?e) 1. pertaining to the lungs. 2. pertaining to the pulmonary artery. pul·mo·nar·y adj. Of, relating to, or affecting the lungs. patients who need supplementary oxygen, today announced operating results for the third quarter ended December 31, 2001. Sales for the quarter were $4,669,000, an increase of $1,912,000 or 69% over the same quarter last year. For the nine months ended December 31, sales increased to $14,622,000, an increase of $5,766,000 or up 65% from the same period last year. The Company's net earnings for the third quarter were $81,000 ($0.01 per share) compared to a loss of $856,000 ($0.09 per share) for the same quarter last year. For the nine months ended December 31, net earnings were $161,000 ($0.02 per share) compared to a loss of $2,261,000 ($0.23 per share) for the previous year. At December 31, 2001, the Company had fully utilized its net operating loss carrybacks Net operating loss carrybacks The application of losses to offset earnings in previous years. and has approximately $3,856,000 and $2,928,000 in Federal and California net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. , respectively, available to offset future taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . Thomas E. Jones, Chief Executive Officer, stated, "This represents the third consecutive quarter of strongly increasing sales for CHAD. Our performance was again led by an 86% increase in domestic sales, generated primarily from sales of the OXYMATIC(R) 400 series conservers, which were introduced during the past fiscal year. The increase in conserver con·serve v. con·served, con·serv·ing, con·serves v.tr. 1. a. To protect from loss or harm; preserve: sales has partially offset a slow down in the sale of TOTAL O2(R) systems, which was caused by the acquisition of a major customer of this product by a national chain during this quarter. While this chain is a significant customer of the Company's OXYMATIC conservers, they are not a user of the TOTAL O2 system and have discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the purchase of this product by our former customer. While conserver sales are improving, we continue to work on the development of additional products that are designed to further improve our competitive position and provide the home oxygen industry with the widest selection of conservers on the market." Jones further stated, "With the strong increase in conserver sales offset somewhat by the decline in TOTAL O2 system sales System sales is a business term used in the franchising industry. Franchisors provide supplies, marketing and administration services to franchisees in return for a part of the franchisees' revenues. Some franchisors also operate some outlets directly. in the past quarter, if sales trends continue we currently believe that CHAD will generate net earnings of at least $300,000 to $400,000 ($.03 to $.04 per share) for the fiscal year ending March 31, 2002. Furthermore, although it is too early to project results for the fiscal year ending March 31, 2003, if these sales trends continue, we believe these earnings could increase significantly next year without any contribution from products under development." Jones also noted that CHAD had recently received clearance from the Food and Drug Administration to market a new post valve for cylinders that are used with the TOTAL O2 system. This new cylinder cylinder, in mathematics, surface generated by a line moving parallel to a given fixed line and continually intersecting a given fixed curve called the directrix; each line of the family of lines forming the cylinder is called a ruling, or generator. valve will enable patients to use OXYMATIC 400 series conservers with the TOTAL O2 system. He indicated CHAD currently plans to begin initial shipments of cylinders with the new post valve in April 2002. The foregoing statements regarding prospects for future earnings, future sales trends for the OXYMATIC 400 series conservers and the introduction of products under development are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve certain risks and uncertainties. A number of important factors could cause actual results to differ materially from those contemplated by such forward-looking statements. These include the loss of one or more major customers, increased competition, the introduction of new products with perceived competitive advantages over the OXYMATIC 400 series conservers, changes or proposed changes in health care reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. which affect home care providers and the ability to anticipate and respond to technological and economic changes in the home oxygen market. Moreover, the success of the OXYMATIC 400 series conservers and products under development will depend on the health care community's perception of the products capabilities and benefits, the degree of acceptance the products achieve among homecare providers and, with respect to products under development, obtaining timely regulatory approval. Additional factors that could cause actual results to differ materially from those contemplated in this press release can be found in the Company's annual and quarterly reports filed with the Securities and Exchange Commission under the caption "Outlook: Issues and Risks."
CHAD THERAPEUTICS, INC.
Selected Financial Data
December 31, 2001
Nine Months Ended Three Months Ended
December 31, December 31,
2001 2000 2001 2000
Net Sales $14,622,000 $8,856,000 $4,669,000 $2,757,000
Interest Income,
Net 43,000 67,000 12,000 28,000
Earnings (Loss) before
Income Taxes 165,000 (2,261,000) 82,000 (856,000)
Net Earnings (Loss) 161,000 (2,261,000) 81,000 (856,000)
Basic Earnings (Loss)
Per Share .02 (.23) .01 (.09)
Diluted Earnings (Loss)
Per Share .02 (.23) .01 (.09)
Balance As of
December 31,
2001 2000
Cash $ 570,000 $ 1,355,000
Total Assets 11,596,000 11,356,000
Shareholders' Equity $ 9,372,000 $ 9,957,000
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