Proxy Statement Pursuant to Section 14(a) of the
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CHAD THERAPEUTICS, INC.
(Name of Registrant as Specified in Its Charter)
McDowell Investments, L.P.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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The following text regarding Mr. Monte McDowell can be found at www.montemcdowell.com.
Monte McDowell is a respiratory product entrepreneur and a significant Chad Therapeutics, Inc. shareholder. He believes in a team approach that is rooted in more than twenty years of sales, management and ownership experience in the medical and home respiratory markets.
As indicated in his biography below, McDowell is a business owner and CEO. He started out of college in the early 1980s as a record setting sales representative for Xerox, American Medical Supply, SmithKlein and Toshiba Medical Systems. He then moved into business ownership when he formed a start-up durable medical equipment (DME) company that grew rapidly when it focused on the medical and home respiratory markets. The growth of the company in eight short years culminated in the sale of Med4Home in two sales transactions in excess of $100 million, combined. His current role is President and CEO of Radix Pharmaceuticals, which is a diversified wholesale pharmaceutical distribution company.
Forty-six year old McDowell has a track record of growing companies and now he wants to apply his success as a Chad Therapeutics board member to help Chad gain market share, nurture revolutionary products and increase the value of Chad Therapeutics stock.
McDowell: First of all, due to my experience in the respiratory field, I understand the business. Second, I have a track record of success in growing a business in the industry. Third, I am a significant Chad shareholder, and thus I am very interested in the future of the company.
McDowell: The immediate goal is to try to help Chad quickly increase market share in its core business. My overall goal is to direct Chad Therapeutics from slow growth to sustainable high growth. Lowering costs will be imperative as well because health care reimbursements will continue to decrease.
McDowell: Number one on my slate is the need to establish a high quality direct marketing team. Chad needs direct sales representation in order to control its own destiny.
McDowell:
| 1. | As indicated above, Chad needs a direct sales force. |
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| 2. | Income needs to be related to performance. For example, board members should not be compensated unless the company is making money. Upper management income should be performance based. |
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| 3. | Chad needs to get its arms around costs. Reimbursements in healthcare will continue to decrease. Chad needs to bring products to market that address this issue. Chad needs to produce better products faster and be cost effective. Chad must create and show its customers, DME companies, beyond a shadow of a doubt that Chad's products will make them money, grow their business and reduce their costs. These types of products will grow market share and increase profits and company value. |
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| 4. | Chad needs to evaluate and implement production in less costly regions and countries, like their competition, or face decreased market share on their generic products based on cost alone. |
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| 5. | Chad needs to spend more on research and development and less on public relations and executive pay. Chad needs to focus on the most innovative and promising products and growing markets within its core respiratory marketplace. |
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| 6. | The traditional business model in Chad's industry is too heavy on infrastructure. The challenge is to reduce that infrastructure on a national scale. |
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| 7. | Chad needs fresh ideas. The big companies, which are similar to the IBMs of the world that dominate markets, currently have no reason to be innovative. There are no companies in Chad's industry, similar to the Dells of the world, that provide revolutionary competition. |
McDowell: The need for long term respiratory care is a growth opportunity. People are living longer, which equates to a greater need for respiratory products. Respiratory lung disease is a growth market. Due to an aging population and issues such as smoking, the environment and even sleep apnea, the worldwide demand for the respiratory products is enormous and growing. Chad can increase market share by coming out with innovative products and marketing them correctly.
McDowell: he industry has consolidated into two or three big companies. Chad Therapeutics is one of the remaining small companies, which is a good thing. Smaller companies can react quickly. Chad could be the nimble, innovative company within the industry.
McDowell: My success in turning Med4Home into a fast-growing DME company was based on my "best practices" methodology,
McDowell: Chad Therapeutics was once a proud, fast growing company led by an entrepreneur with a stock price in excess of $20, and in excess of 30% annualized revenue growth. Approximately six years ago that changed. The numbers speak for themselves. I am only asking for one board seat to attempt to restore the former entrepreneurial spirit to this once proud company. Thank you for your time and please vote with the gold proxy card.
Indirect sole owner of diversified wholesale pharmaceutical distribution company. Radix provides pharmaceutical drugs and related equipment to companies specializing in providing respiratory services to patients.
Company sales increased in excess of 100% in 2002 over 2001.
Owner and President of respiratory pharmaceutical and equipment supplies company. Home Medical was initially formed by Mr. McDowell to provide durable medical equipment ("DME") and related services to Medicare patients. Mr. McDowell grew the durable medical equipment business and in 1998 began focusing on marketing respiratory drugs. In 1999, Home Medical sold its traditional DME businesses in Kansas, Missouri and Colorado to Apria Healthcare, Inc. in exchange for approximately two times revenue. Med4Home's monthly pharmacy revenues grew from $800,000 in December 1999 to in excess of $5.5 million for September 2001. (Annualized revenue at the time of sale to Lincare was in excess of $70 million.) Med4Home also sold oxygen products manufactured by Chad Therapeutics, Inc and was a large customer of Chad until the sale to Lincare Inc. in October 2001 for approximately 1.3 times revenue.
Toshiba Medical Systems. Sales Executive, Ultra Sound Imaging. 1991-1993
SmithKline, Regional Division Manager, Humphrey Product Sales. 1983-1991
American Edwards Laboratories, a Division of American Hospital Supply Corporation, Territory Manager, Halter Products 1982-1983. Named number one sales rep in the nation.
Xerox, Sales Rep. Kansas City top sales rep. Number six out of 1800 sales reps nationally. 1980-1982
Education: Northwestern Missouri State University,
Bachelor of Science in Business Administration - 1980
Experience in Business Size (revenues): 85 million
Indirect sole owner and Manager of diversified wholesale pharmaceutical distribution company. Radix provides pharmaceutical drugs and related equipment to companies specializing in providing respiratory services to patients. Company sales increased in excess of 100% in 2002 over 2001.
Indirect sole owner and Manager of diversified wholesale pharmaceutical distribut Sole Shareholder, Director and President of respiratory pharmaceutical and equipment supplies company. Home Medical was initially formed by Mr. McDowell to provided durable medical equipment ("DME") and related services to Medicare patients. Mr. McDowell grew the durable medical equipment business and in 1998 began focusing on marketing two respiratory drugs, Albuterol and Ipratroprium, to Medicare patients. In 1999, Home Medical sold its traditional DME business in Kansas and Missouri to Apria Healthcare, Inc. in exchange for $19.5 million. Mr. McDowell then focused Med4Home on the direct marketing of Albuterol and Ipratroprium to Medicare patients. Med4Home's pharmacy revenues grew from $800,000 in December 1999 to in excess of $5.5 million for September 2001 (Annualized revenue at the time of sale to Lincare was in excess of $70 million). Med4Home also sold oxygen products manufactured by Chad Therapeutics, Inc. and was a large customer of Chad until Med4Home was sold to Lincare Inc. in October 2001 for $83.5 million.
IMPORTANT INFORMATION: In connection with our solicitation of proxies with respect to the 2003 annual meeting of Chad, McDowell Investments, L.P. has filed with the Securities and Exchange Commission (the “SEC”) and disseminated to shareholders a definitive proxy statement dated August 11, 2003. Shareholders are advised to read the proxy statement as it contains important information, including information regarding the participants in our solicitation and their interest in Chad. Shareholders may obtain a free copy of the proxy statement and other relevant documents filed with the SEC from the SEC website at www.sec.gov. Shareholders may also obtain a free copy of our proxy statement by contacting N.S. Taylor & Associates, Inc. in the manner described below.