Those new clear nasal strips that are designed to peel off easily -- a major benefit for people with sensitive skin -- made news again today. Breathe Right producer CNS
Overall, CNS's third-quarter sales increased 9%, and net income, excluding a $1.1 million import duty refund, was 2.5 times higher. Helping results, too, was a 28% increase in sales of FiberChoice chewable fiber tablets (although they represent only 10.5% of total sales).
The company plans to continue to offer oversized net income increases. Next quarter, CNS says, it expects earnings to go from last year's $0.02 per share to $0.09 to $0.14. For fiscal 2005, its earnings should rise 25% to 34% -- that's 19 times forward low-end earnings guidance.
CNS, a Motley Fool Hidden Gems newsletter recommendation, is not your typical company. The debt-free king of the nasal strip market has built up a $58.2 million ($3.94-a-share) cash hoard. Although the company pays a nickel quarterly dividend (a 1.6% yield), investors would be wise to realize there is ample cash for share repurchases or acquisitions without sullying the balance sheet with debt.
There is one dark cloud on Breathe Right's horizon: The U.S. Patent Office is reviewing two CNS nasal strip patents. Before running for the hills, remember that deep-pocketed Schering-Plough
Breathe Right dominates its market. From Vapor Strips that incorporate Procter & Gamble's
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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.