CNS First-Quarter Revenues Increase 85 Percent; Breathe Right Sales Growth is Key Factor

Apr 19, 2001, 01:00 ET from CNS, Inc.

    MINNEAPOLIS, April 19 /PRNewswire/ -- CNS, Inc. (Nasdaq:   CNXS), a consumer
 health care products company, today reported financial results for the first
 quarter ended March 31, 2001.
     First-quarter net sales were $27,112,000, an 85 percent gain from
 $14,634,000 in the 2000 first quarter.  The company reported a net loss of
 $3,577,000, or $.25 per diluted share, compared to a net loss of $5,687,000,
 or $.39 per diluted share, for the comparable period in 2000.  Operating
 expenses for the quarter increased to $22,345,000, up from $15,973,000 for the
 2000 first quarter.  First-quarter spending to support the domestic Breathe
 Right(R) brand was approximately equivalent to the same period a year ago.
 The overall increase was due primarily to planned seasonal spending on
 advertising for Breathe Right nasal strips in key international markets and
 support for FiberChoice(R) chewable fiber tablets.
     "We're very pleased with our strong revenue growth and bottom line
 improvement during the quarter and attribute our performance to better-than-
 expected sales of Breathe Right nasal strips with contributions from
 FiberChoice tablets," said Marti Morfitt, president and chief operating
 officer.  "We are optimistic about the balance of 2001.  The sales momentum in
 the Breathe Right brand continues, both domestically and internationally, and
 FiberChoice tablet sales are building due to strong trial and repeat consumer
 purchases and increased retail distribution.  During the next two quarters, we
 will prepare for international distribution of Breathe Right strips for colds
 with mentholated vapors, which made a strong debut in the U.S. market.  We
 also will test new advertising for Breathe Right strips as an allergy relief
 product within the cold/allergy/sinus/nasal market."
 
     2001 Outlook
     CNS currently expects net sales in the range of  $15 to $17 million for
 the 2001 second quarter and $85 to $95 million for all of 2001.  The company
 expects a loss of $.05 per share to breakeven for the second quarter and a
 profitable second half of 2001, which should result in a breakeven year.  The
 company does not plan to introduce any new products in 2001.
     "We are focused on leveraging the successful turnaround in our Breathe
 Right business and returning the company to sustainable profitability, on an
 annual basis," said Dan Cohen, chairman and chief executive officer.
 
     About CNS, Inc.
     CNS, based in Minneapolis, is a growth company that designs, manufactures
 and markets consumer health care products, including Breathe Right(R) nasal
 strips and FiberChoice(R) chewable fiber tablets.  The company focuses on
 products that address important consumer needs within the aging-well/self-care
 market, including better breathing and digestive health.  Its common stock is
 listed on the Nasdaq National Market under the ticker symbol "CNXS."  More
 information about CNS and its products is available on the Internet at
 http://www.cns.com .
     Some of the information contained in this news release is forward-looking
 and subject to certain business risks as described in the company's filings
 with the Securities and Exchange Commission, including those referred to in
 its Annual Report on Form 10-K for the year ended December 31, 2000.  This
 news release contains forward-looking statements, which involve risks and
 uncertainties.
 
 
                                   CNS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except per share amounts) (unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                        2001          2000
     Domestic net sales                               $22,284        $14,338
     International net sales                            4,828            296
       Total net sales                                 27,112         14,634
     Cost of goods sold                                 8,706          4,846
       Gross profit                                    18,406          9,788
     Operating expenses:
       Marketing and selling                           20,201         14,312
       General and administrative                       1,517          1,173
       Product development                                627            488
         Total operating expenses                      22,345         15,973
         Operating loss                                (3,939)        (6,185)
     Interest income                                      362            498
       Loss before income taxes                        (3,577)        (5,687)
     Income tax benefit                                     0              0
       Net loss                                       $(3,577)       $(5,687)
     Diluted net loss per share                         $(.25)         $(.39)
     Weighted average number of common and assumed
      conversion shares outstanding                    14,123         14,400
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                           (in thousands) (unaudited)
 
                                                      March 31,    December 31,
                                                        2001          2000
     Current assets:
       Cash and marketable securities                 $19,720        $31,323
       Accounts receivable, net                        13,764         12,582
       Inventories                                      6,519          4,752
       Other current assets                             2,896          3,257
         Total current assets                          42,899         51,914
     Long-term assets                                   4,562          4,430
         Total assets                                 $47,461        $56,344
     Current liabilities                               13,864         19,407
     Shareholders' equity                              33,597         36,937
         Total liabilities and shareholders' equity   $47,461        $56,344
 
 

SOURCE CNS, Inc.
    MINNEAPOLIS, April 19 /PRNewswire/ -- CNS, Inc. (Nasdaq:   CNXS), a consumer
 health care products company, today reported financial results for the first
 quarter ended March 31, 2001.
     First-quarter net sales were $27,112,000, an 85 percent gain from
 $14,634,000 in the 2000 first quarter.  The company reported a net loss of
 $3,577,000, or $.25 per diluted share, compared to a net loss of $5,687,000,
 or $.39 per diluted share, for the comparable period in 2000.  Operating
 expenses for the quarter increased to $22,345,000, up from $15,973,000 for the
 2000 first quarter.  First-quarter spending to support the domestic Breathe
 Right(R) brand was approximately equivalent to the same period a year ago.
 The overall increase was due primarily to planned seasonal spending on
 advertising for Breathe Right nasal strips in key international markets and
 support for FiberChoice(R) chewable fiber tablets.
     "We're very pleased with our strong revenue growth and bottom line
 improvement during the quarter and attribute our performance to better-than-
 expected sales of Breathe Right nasal strips with contributions from
 FiberChoice tablets," said Marti Morfitt, president and chief operating
 officer.  "We are optimistic about the balance of 2001.  The sales momentum in
 the Breathe Right brand continues, both domestically and internationally, and
 FiberChoice tablet sales are building due to strong trial and repeat consumer
 purchases and increased retail distribution.  During the next two quarters, we
 will prepare for international distribution of Breathe Right strips for colds
 with mentholated vapors, which made a strong debut in the U.S. market.  We
 also will test new advertising for Breathe Right strips as an allergy relief
 product within the cold/allergy/sinus/nasal market."
 
     2001 Outlook
     CNS currently expects net sales in the range of  $15 to $17 million for
 the 2001 second quarter and $85 to $95 million for all of 2001.  The company
 expects a loss of $.05 per share to breakeven for the second quarter and a
 profitable second half of 2001, which should result in a breakeven year.  The
 company does not plan to introduce any new products in 2001.
     "We are focused on leveraging the successful turnaround in our Breathe
 Right business and returning the company to sustainable profitability, on an
 annual basis," said Dan Cohen, chairman and chief executive officer.
 
     About CNS, Inc.
     CNS, based in Minneapolis, is a growth company that designs, manufactures
 and markets consumer health care products, including Breathe Right(R) nasal
 strips and FiberChoice(R) chewable fiber tablets.  The company focuses on
 products that address important consumer needs within the aging-well/self-care
 market, including better breathing and digestive health.  Its common stock is
 listed on the Nasdaq National Market under the ticker symbol "CNXS."  More
 information about CNS and its products is available on the Internet at
 http://www.cns.com .
     Some of the information contained in this news release is forward-looking
 and subject to certain business risks as described in the company's filings
 with the Securities and Exchange Commission, including those referred to in
 its Annual Report on Form 10-K for the year ended December 31, 2000.  This
 news release contains forward-looking statements, which involve risks and
 uncertainties.
 
 
                                   CNS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except per share amounts) (unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                        2001          2000
     Domestic net sales                               $22,284        $14,338
     International net sales                            4,828            296
       Total net sales                                 27,112         14,634
     Cost of goods sold                                 8,706          4,846
       Gross profit                                    18,406          9,788
     Operating expenses:
       Marketing and selling                           20,201         14,312
       General and administrative                       1,517          1,173
       Product development                                627            488
         Total operating expenses                      22,345         15,973
         Operating loss                                (3,939)        (6,185)
     Interest income                                      362            498
       Loss before income taxes                        (3,577)        (5,687)
     Income tax benefit                                     0              0
       Net loss                                       $(3,577)       $(5,687)
     Diluted net loss per share                         $(.25)         $(.39)
     Weighted average number of common and assumed
      conversion shares outstanding                    14,123         14,400
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                           (in thousands) (unaudited)
 
                                                      March 31,    December 31,
                                                        2001          2000
     Current assets:
       Cash and marketable securities                 $19,720        $31,323
       Accounts receivable, net                        13,764         12,582
       Inventories                                      6,519          4,752
       Other current assets                             2,896          3,257
         Total current assets                          42,899         51,914
     Long-term assets                                   4,562          4,430
         Total assets                                 $47,461        $56,344
     Current liabilities                               13,864         19,407
     Shareholders' equity                              33,597         36,937
         Total liabilities and shareholders' equity   $47,461        $56,344
 
 SOURCE  CNS, Inc.