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21622 Plummer StreetChatsworth, CA 91311(CHAD THERAPEUTICS LOGO)
    
    
    
    Toll Free: 800.423.8870THERAPEUTICS
    
    
    
    Phone: 818.882.0883Innovative Respiratory Solutions
    
    FOR IMMEDIATE RELEASE
    
    Main Fax: 818.882.1809Company Contact:
    
    
    
    Investor Contact:Earl L. Yager
    
    
    
    Neil Berkman AssociatesPresident and CEO
    
    
    

(310) 826 - 5051www.CHADtherapeutics.com
    
    
    
    info@BerkmanAssociates.com
 CHAD Therapeutics Reports
Fiscal 2006 Third Quarter and Nine Month Financial Results
 CHATSWORTH, California, CHAD Therapeutics, Inc.
(ASE:CTU)
 Evaluation of Strategic Opportunities
 2 7
 Third Quarter and Nine-Month Results
   2 2
  (more)
 CHAD, OXYMATIC, OXYMIZER ISO 13485, OXYLITE, and TOTAL O2 are Registered
Trademarks of Chad Therapeutics, Inc. ISO 13485 Certified Company




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CHAD Therapeutics Reports Fiscal 2006 Third Quarter and Nine Month Financial Results
 About CHAD Therapeutics
 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
potential loss of one of our major customers upon whom we depend for a material portion of our
business, increased competition and continuing downward pressure on prices for certain of our
products, the potential 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, the terms of any distribution agreement which may be negotiated with respect to our
TOTAL O2 system or our sleep products, 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.




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CHAD THERAPEUTICS, INC.
 Nine Months Ended
    
    
    Three Months EndedDecember 31,
    
    
    December 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    17,177,000
    
    
    $
    18,852,000
    
    
    $
    5,907,000
    
    
    $
    6,444,000Cost of sales
    
    
    11,194,000
    
    
    
    11,116,000
    
    
    
    3,806,000
    
    
    
    3,741,000Gross profit
    
    
    5,983,000
    
    
    
    7,736,000
    
    
    
    2,101,000
    
    
    
    2,703,000Selling, general and administrative
    
    
    5,101,000
    
    
    
    5,306,000
    
    
    
    1,558,000
    
    
    
    1,858,000Research and development
    
    
    1,202,000
    
    
    
    1,207,000
    
    
    
    435,000
    
    
    
    380,000Total costs and expenses
    
    
    6,303,000
    
    
    
    6,513,000
    
    
    
    1,993,000
    
    
    
    2,238,000Operating income (loss)
    
    
    (320,000
    )
    
    
    1,223,000
    
    
    
    108,000
    
    
    
    465,000Other income, net
    
    
    23,000
    
    
    
    28,000
    
    
    
    4,000
    
    
    
    14,000Earnings (loss) before income taxes
    
    
    (297,000
    )
    
    
    1,251,000
    
    
    
    112,000
    
    
    
    479,000Income tax expense (benefit)
    
    
    (84,000
    )
    
    
    29,000
    
    
    
    73,000
    
    
    
    (26,000
    )Net earnings (loss)
    
    $
    (213,000
    )
    
    $
    1,222,000
    
    
    $
    39,000
    
    
    $
    505,000Earnings (loss) per share:Basic
    
    $
    (0.02
    )
    
    $
    0.12
    
    
    $
    0.00
    
    
    $
    0.05Diluted
    
    $
    (0.02
    )
    
    $
    0.12
    
    
    $
    0.00
    
    
    $
    0.05Weighted shares outstanding:Basic
    
    
    10,142,000
    
    
    
    10,119,000
    
    
    
    10,151,000
    
    
    
    10,124,000Diluted
    
    
    10,142,000
    
    
    
    10,622,000
    
    
    
    10,569,000
    
    
    
    10,647,000




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CHAD THEREAPEUTICS, INC.
 December 31,2005
    
    
    2004AssetsCurrent assets:Cash
    
    $
    820,000
    
    
    $
    2,021,000Accounts receivable, net
    
    
    3,202,000
    
    
    
    3,628,000Income taxes refundable
    
    
    402,000
    
    
    
    Inventories, net
    
    
    7,356,000
    
    
    
    7,357,000Prepaid expenses and other assets
    
    
    184,000
    
    
    
    349,000Deferred income taxes
    
    
    501,000
    
    
    
    691,000Total current assets
    
    
    12,465,000
    
    
    
    14,046,000Property, plant and equipment, net
    
    
    1,056,000
    
    
    
    1,140,000Intangible assets, net
    
    
    877,000
    
    
    
    700,000Deferred income taxes
    
    
    376,000
    
    
    
    Other assets
    
    
    74,000
    
    
    
    87,000Total Assets
    
    $
    14,848,000
    
    
    $
    15,973,000Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    862,000
    
    
    $
    1,839,000Accrued expenses
    
    
    1,142,000
    
    
    
    1,290,000Income taxes payable
    
    
    
    
    
    
    418,000Total current liabilities
    
    
    2,004,000
    
    
    
    3,547,000Other long-term liabilities
    
    
    5,000
    
    
    
    Total liabilities
    
    
    2,009,000
    
    
    
    3,547,000Shareholders equity:Common shares, $.01 par value, authorized 40,000,000shares, 10,158,000 and 10,022,000 issued and outstanding
    
    
    13,397,000
    
    
    
    13,360,000Retained earnings (accumulated deficit)
    
    
    (558,000
    )
    
    
    (934,000
    )Net shareholders equity
    
    
    12,839,000
    
    
    
    12,426,000Total Liabilities and Shareholders Equity
    
    $
    14,848,000
    
    
    $
    15,973,000