It's football season, and fans are sure to see CNS's
The company's earnings report was mixed today, though. The flagship Breathe Right franchise, 86% of sales, looked winded with a 5.5% sales decline. FiberChoice, a daily fiber supplement, grew 15%. (Tight product synergies, right?)
Net income of $0.24 a share beat analyst estimates by $0.05 and the top end of the company's guidance. But the decline in Breathe Right sales left income $0.05 a share below the year-ago quarter. Investors liked the news and sent the stock up 2% in early trading.
The company left its full-year earnings guidance at up to $0.68 a share (or 17 times forward earnings). It earned $0.59 last year.
CNS might be overlooked if it wasn't for its $52 million in cash and no debt. That's $3.54 a share in cash for an $11.30 stock. That's very healthy. So is the company's share repurchase program, which has retired 20% of the outstanding shares, and its shareholder-friendly stock option program with only 1% stock dilution a year.
Not healthy is the 5.8% increase in accounts receivable. With sales declining, the focus should be on getting money into the company. But, with more than 25% of sales coming from retailer-to-the-world Wal-Mart
CNS's peak quarters -- cold and flu season -- are coming. Because the company exceeded its earnings target for the latest quarter, management has credibility when it projects much better earnings to come.
CNS follows an old business model -- be No. 1 in your product category and sell like mad. Procter & Gamble
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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.