CTU Chad Therapeutics,

CHAD Therapeutics, Inc. (AMEX:CTU) today announced operating results for the third quarter and first nine months of fiscal 2008. "As previously announced, CHAD has decided to exit the oxygen business in order to focus exclusively on the proprietary medical devices we are developing for the diagnosis and treatment of sleep disorders such as obstructive sleep apnea. In this connection, we are scheduled to close the sale of the assets related to CHAD's oxygen conserving business to Inovo, Inc. on February 15, 2008 for approximately $5.25 million in cash. In addition, we hope soon to sell our trans-filling assets," said President and CEO Earl Yager. Third Quarter Results For the three months ended December 31, 2007, net sales decreased to $2,929,000 compared to $4,307,000 for the third quarter of fiscal 2007. The net loss for the third quarter of fiscal 2008 was $868,000, or $0.09 per basic and diluted share. This compares to a net loss for the third quarter of fiscal 2007 of $435,000, or $0.04 per basic and diluted share. Nine Month Results For the nine months ended December 31, 2007, net sales decreased to $10,108,000 compared to $14,766,000 for the first nine months of fiscal 2007. The net loss for this year's first nine months was $3,511,000, or $0.34 per basic and diluted share. This compares to a net loss for the first nine months of fiscal 2007 of $858,000, or $0.08 per basic and diluted share. About CHAD Therapeutics CHAD Therapeutics, Inc. develops, manufactures and markets 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 Statements under the Private Securities Litigation Reform Act of 1995. The foregoing statements regarding prospects for future earnings and revenues, future sales trends and the introduction of products under development are forward-looking statements 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 Company's products, 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 Company's products 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 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. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) � � � � � � Three Months Ended � Nine Months Ended � � � December 31, � December 31, � � � � 2007 � � � 2006 � � � 2007 � � � 2006 � � � � � � � � � Net sales $ 2,929,000 � $ 4,307,000 � $ 10,108,000 � $ 14,766,000 Cost of sales � 1,770,000 � � � 3,248,000 � � � 7,555,000 � � � 10,276,000 � � � � � � � � � � � � � Gross profit � 1,159,000 � � � 1,059,000 � � � 2,553,000 � � � 4,490,000 � � � � � � � � � Costs and expenses: � � � � � � � � Selling, general and administrative 1,537,000 � 1,421,000 � 4,494,000 � 4,805,000 � Research and development � 359,000 � � � 396,000 � � � 1,212,000 � � � 1,053,000 � � � � � � � � � � � � � Total costs and expenses � 1,896,000 � � � 1,817,000 � � � 5,706,000 � � � 5,858,000 � � � � � � � � � � � Operating (loss) (737,000 ) � (758,000 ) � (3,153,000 ) � (1,368,000 ) � � � � � � � � Other income (expense), net � (131,000 ) � � 18,000 � � � (354,000 ) � � 57,000 � � � � � � � � � Loss before income taxes (868,000 ) � (740,000 ) � (3,507,000 ) � (1,311,000 ) � � � � � � � � Income tax expense (benefit) � -- � � � (305,000 ) � � 4,000 � � � (453,000 ) � � � � � � � � � � � � Net loss $ (868,000 ) � $ (435,000 ) � $ (3,511,000 ) � $ (858,000 ) � � � � � � � � � � Loss per share: � � � � � � � � � Basic $ (0.09 ) � $ (0.04 ) � $ (0.34 ) � $ (0.08 ) � � Diluted $ (0.09 ) � $ (0.04 ) � $ (0.34 ) � $ (0.08 ) � � � � � � � � � � Weighted shares outstanding: � � � � � � � � � Basic 10,180,000 � 10,169,000 � 10,180,000 � 10,169,000 � � Diluted 10,180,000 � 10,169,000 � 10,180,000 � 10,169,000 CHAD THERAPEUTICS, INC. CONDENSED BALANCE SHEETS (Unaudited) � � � � � � December 31, � � � � 2007 � � � 2006 � Assets � � � � � � � � � Current assets: � � � � Cash $ 261,000 � $ 1,070,000 � Accounts receivable, net 1,470,000 � 2,239,000 � Income taxes refundable 2,000 � 300,000 � Inventories, net 6,140,000 � 6,768,000 � Prepaid expenses and other assets 319,000 � 292,000 � Deferred income taxes � -- � � � 640,000 � � � � � � � � � Total current assets � 8,192,000 � � � 11,309,000 � � � � � � � Property, plant and equipment, net 611,000 � 751,000 Intangible assets, net 1,071,000 � 1,094,000 Deferred income taxes -- � 796,000 Other assets � 262,000 � � � 46,000 � � � � � � � � � Total Assets $ 10,136,000 � � $ 13,996,000 � � � � � � � � � � � � � Liabilities and Shareholders' Equity � � � � � � � � � Current liabilities: � � � � Accounts payable $ 1,507,000 � $ 1,132,000 � Accrued expenses 1,090,000 � 1,260,000 � Revolving line of credit 1,168,000 � -- � Current portion of long-term debt � 292,000 � � � -- � � � � � � � � � Total current liabilities 4,057,000 � 2,392,000 � � � � � � Long-term debt � 390,000 � � � -- � � � � � � � � � Total liabilities 4,447,000 � 2,392,000 � � � � Shareholders' equity: � � � � Common shares, .01 par value, authorized; 40,000,000 shares, 10,180,000 and 10,168,000 issued and outstanding 13,632,000 � 13,480,000 � Accumulated deficit � (7,943,000 ) � � (1,876,000 ) � � � � � � � � Net shareholders' equity � 5,689,000 � � � 11,604,000 � � � � � � � � � Total Liabilities and Shareholders' Equity $ 10,136,000 � � $ 13,996,000 �