CHAD Therapeutics Reports Improved First Quarter Revenue and Earnings.Business Editors CHATSWORTH, Calif.--(BUSINESS WIRE)--July 28, 2003 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. (AMEX AMEX See: American Stock Exchange :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 ), a producer and distributor of oxygen conserving devices and oxygen systems for 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 first quarter of fiscal 2004. For the three months ended June 30, 2003, revenue increased 13% to $5,669,000 from $5,022,000 for the first quarter of fiscal 2003. Net earnings for the first quarter of fiscal 2004 increased 26% to $224,000, or $0.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $178,000, or $0.02 per diluted share, for the first quarter of fiscal 2003. Operations Review "CHAD's best quarterly revenue performance in six years is clear evidence that our growth strategy is working," said Thomas E. Jones, Chief Executive Officer. "Revenue continued to be driven by domestic sales of oxygen conservers, which increased 21% over the same quarter last year. International revenue increased by 9% over the prior year's quarter, also primarily the result of higher conserver sales. We continue to gain market share in the domestic conserver market and have begun to expand our position internationally, which we attribute to the success of our strategy to offer the widest array of choices in conserver products. Our OXYMATIC(R) 400 Series electronic conservers and CYPRESS Cypress, city, United States Cypress (sī`prəs), city (1990 pop. 42,655), Orange co., S Calif. near Long Beach; inc. 1956. Forest Lawn–Cypress, a branch of the famous cemetery in Glendale, Calif. (TM) OXYPneumatic(R) conservers provide a cost-effective choice of solutions for home care providers to satisfy individual patient requirements." Jones continued, "We are encouraged by the strong performance of our conserver line and continue to look for opportunities to expand these product offerings. We are developing additional models to fill specific requirements in both the domestic and international markets. In addition, we are making progress with development programs related to the technologies we licensed earlier this year from AirMatrix Technologies, Inc. and ACOBA ACOBA Advisory Committee on Business Appointments (UK) , LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . These technologies will help us expand our home oxygen product lines and potentially allow us to enter the high-growth sleep disorder Sleep disorder Any condition that interferes with sleep. At least 84 have been identified, according to the American Sleep Disorders Association. Mentioned in: Insomnia, Night Terrors market. It is especially encouraging to note that first quarter earnings rose despite a $60,000 increase in research and development expenses to support these important product development efforts. "The foundation of our strategic growth plan has been the restoration of CHAD's traditional leadership position in the conserver market. We expect to make continued progress in this area throughout the current fiscal year. We also are moving forward with the second element of our strategic plan, which involves CHAD's entry into related markets with significant growth potential." Outlook for Growth Jones added, "We believe the growth we are generating in the conserver market will provide the basis for continued positive revenue comparisons in fiscal 2004, assuming no changes in the Medicare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. structure. In addition, certain selling, general and administrative expenses are expected to be reduced by approximately $500,000 during the balance of fiscal 2004. If current sales and expense trends continue, we currently expect CHAD to generate net earnings of between $1,300,000 and $1,500,000, or $0.13 to $0.15 per diluted share, for the fiscal year ending March 31, 2004." For fiscal 2003, CHAD reported a net loss of $433,000, or $0.04 per diluted share. Operating Loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. Carryforwards At June 30, 2003, 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 had approximately $111,000 and $2,405,000 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. . In September of 2002, the State of California enacted legislation that suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. the utilization of net operating loss carryforwards during tax years starting in 2002 and 2003 effective retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin to January 1, 2002. As a result, CHAD will be unable to use its California net operating loss carryforwards until the tax year beginning April 1, 2004. About CHAD Therapeutics CHAD Therapeutics, Inc. is in the business of developing, producing and marketing respiratory care devices designed to improve the efficiency of oxygen delivery systems for home health care and hospital treatment of patients suffering from pulmonary diseases. For more information, visit www.CHADtherapeutics.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statements under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 The foregoing statements regarding prospects for future earnings and revenues, future sales trends for the OXYMATIC 400 series and CYPRESS 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 and CYPRESS conservers, changes or proposed changes in health care reimbursement which affect home care providers and CHAD's ability to anticipate and respond to technological and economic changes in the home oxygen market. Moreover, the success of the OXYMATIC 400 series and CYPRESS conservers and products under development will depend on their efficacy, reliability and the health care community's perception of the products' capabilities and benefits, the degree of acceptance the products achieve among home care 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.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
June 30,
2003 2002
Net sales $ 5,669,000 $ 5,022,000
Cost of sales 3,151,000 2,882,000
Gross profit 2,518,000 2,140,000
Costs and expenses:
Selling, general and administrative 1,965,000 1,700,000
Research and development 323,000 263,000
Total costs and expenses 2,288,000 1,963,000
Operating income 230,000 177,000
Interest income 5,000 4,000
Earnings before income taxes 235,000 181,000
Income tax expense 11,000 3,000
Net earnings $ 224,000 $ 178,000
Basic earnings per share $ 0.02 $ 0.02
Diluted earnings per share $ 0.02 $ 0.02
Weighted shares outstanding:
Basic 10,076,000 10,068,000
Diluted 10,254,000 10,429,000
CHAD THERAPEUTICS, INC.
CONDENSED BALANCE SHEETS
(unaudited)
June 30, June 30,
2003 2002
Assets
Current assets:
Cash $ 1,431,000 $ 549,000
Accounts receivable, net 2,946,000 2,619,000
Income taxes refundable 4,000 995,000
Inventories, net 5,802,000 5,509,000
Prepaid expenses 455,000 323,000
Total current assets 10,638,000 9,995,000
Property, plant and equipment, net 1,158,000 1,548,000
Other assets 735,000 1,184,000
Total Assets $ 12,531,000 $ 12,727,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 801,000 $ 815,000
Accrued expenses 1,397,000 1,345,000
Income taxes payable 9,000 7,000
Total current liabilities 2,207,000 2,167,000
Shareholders' equity:
Common shares, no par value,
authorized 40,000,000 shares,
10,076,000 and 10,059,000 issued
and outstanding 13,257,000 13,106,000
Retained earnings (accumulated
deficit) (2,933,000) (2,546,000)
Net shareholders' equity 10,324,000 10,560,000
Total Liabilities and
Shareholders' Equity $ 12,531,000 $ 12,727,000
Note to Editors: CHAD, OXYMATIC, OXYMIZER, OXYLITE, and TOTAL O2 are registered trademarks of CHAD Therapeutics, Inc. The "2" in "02" is a subscript (1) In word processing and scientific notation, a digit or symbol that appears below the line; for example, H2O, the symbol for water. Contrast with superscript. (2) In programming, a method for referencing data in a table. . ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 Certified See certification. Company. |
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