Chatsworth, Calif. Chad Therapeutics reported an 8 percent drop in net sales for its third quarter ended December 31, 1998, to $3 million, down from $3.2 million for the same period the previous year. Officials attribute the loss to weak oxygen conserver sales, staff reduction costs and a change in parts suppliers, officials said last week.

Net loss was $894,000, or a loss of 9 cents a share, compared with net loss of $286,000, or a loss of 3 cents a share, in 1997. Officials attribute the results to reimbursement factors as well as start-up manufacturing costs and related supplier quality issues for the Total O2 system.

Chad implemented cost-cutting moves including trimming its work force by 12 percent and reducing executive salaries. The number of employees will drop from 93 to 82, said Earl Yager, executive vice president and chief financial officer. Chad also aims to boost sales in 1999 by employing 50 sales reps throughout the country by April, Yager said.