Chad Therapeutics to Cut Work Force, Report Loss

Chad Therapeutics Inc., a Chatsworth-based maker of respiratory care devices, said last week that it is cutting 12% of its work force and will report a fiscal third-quarter loss because of higher costs and weaker sales.

The company, which now employs 93 people, said the 11 workers to be cut could be reinstated if sales improve. The company lost $286,000, or 3 cents a share, on sales of $3.23 million in the year-earlier quarter.

Chad said the quarterly loss for the three months that ended Dec. 31 will reflect the weak sales and job-cut costs.

Sales have been hurt by competition and Medicare reimbursement cuts, the company said, in addition to the costs of having to find some new parts suppliers for its Total 02 oxygen delivery system.

“With sales anticipated to be down some 5% to 10% from the previous year’s quarter, these changes will more closely align our staffing and overall operating expenses with current revenue expectations,” chief executive Thomas E. Jones said in a statement.

Chad said its cost-cutting moves, which also include salary reductions for its executives, are expected to save about $900,000 a year.

Chad’s stock price fell 1/16 to 1 1/2 on the news.