CNS Inc. (CNXS) Makers of the Breath Right Message Board

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Biotech / Medical : CNS Inc. (CNXS) Makers of the Breath Right

CNXS 0.000001000

-90.0%

Jun 3 1:05 PM EST

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To: MrBluff who wrote (323)	12/21/1997 9:42:00 PM
From: Donald carlson	Read Replies (1) of 432

This forth quarter seems to be a pivotal quarter. Either the company should make some significant marketing progress or change strategy. CNS is will spend about $30M on sales and marketing this year. So far it looks like they are producing about 10% sell through growth year over year ,even less revenue gain and about 2% "new trials". Unless the new add campaign produces some spectacular year end results it doesn't look like management is doing much for shareholder value. The $30M S&M expenditure looks to be producing about $6M of revenue and maybe $1M of earnings growth. That's not much return on a $30M investment. I am a long long on the stock but am becoming skeptical on the domestic growth. It seems like CNS management has some options to improve shareholder value. A few are: - At $6 per share price CNS can more than double the return on the $60M of cash through stock buyback. If interest rates fall or earnings increase this return increases proportionally. - If $30M of S&M doesn't significantly increase sales perhaps CNS should look at cutting advertising dollars in half and let that saving drop to the bottom line (about 50 cents per share). - Alternately they could sell the company. It's probably worth $15-20/share. Perhaps J&J or 3M could make it grow. Any thoughts? Regards DGC

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