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No. of Recommendations: 6
2nd quarter 2003 report

http://quote.fool.com/news/symbolnews.asp?guid={639E9A9A-FDB2-458F-87DE-265C06017BCA}&currticker=cnxs&symbols=cnxs&nx=&bx=


Net sales for the fiscal 2004 second quarter grew to $20.6 million, up 19 percent versus $17.4 million in the prior-year quarter. Net income increased 20 percent to $4.2 million, or 29 cents per fully diluted share, compared to net income of $3.5 million, or 25 cents per fully diluted share, in the second quarter last year. Gross margins for the quarter improved to 69 percent, up from 66 percent in the prior-year period. Operating expenses for the 2004 second quarter rose 29 percent versus the prior-year period, as the company invested in new product development for future growth and continued its expansion of advertising for FiberChoice(R) chewable fiber tablets to gain further market share.


Earnings .29 for the quarter fully diluted compared to .25 cents in the 2nd quarter of fiscal 2002.

2Q:03 .29 ----- Ending Sept 30
1Q:03 .20 ----- Ending June 30
4Q:02 .04 ------Ending march 31,
3Q:02 .06 ------Ending Dec 31
2Q:02 .26 ------Ending Sept 30.

It is important to note that CNXS had a one time tax benefit that allowed them to report .71 per share. However, we don't want to include this in our valuations because it is a one-time charge.


Net sales for the 2003 fourth quarter grew 12 percent to $21.3 million compared to $19.1 million in the prior-year period. Net income for the quarter ended March 31, 2003, was $569,000, or 4 cents per diluted share, compared to pro forma net income for the quarter ended March 31, 2002, of $625,000, or 4 cents per diluted share, excluding a one-time tax benefit and reflecting a 38 percent tax rate. Reported net income for the quarter ended March 31, 2002, was $10.1 million, or 71 cents per diluted share


Before the Q3 was reported, the TTM or trailing 12 month earnings was .56. Immediately after, CNXS was recommended in the Hidden Gems they traded to $12 a share - the price I paid.

The PE ratio was 21.42.

However now that the 3rd quarter earnings reported, we can see that the .Trailing 12 month earnings went up a bit to .59. This was not a big improvement. Everyone that follows CNXS knows that its not this quarter that will matter but the next two. Both Q4 and Q3 were not very good quarters.

Nevertheless, my buy price PE dropped to 20.33.
At today's price the PE dropped further – 19.

Check out the guidance at the end of the Fiscal year.


http://quote.fool.com/news/symbolnews.asp?guid={5EFB4051-470F-4FD8-99DD-E06036CE2D01}&currticker=cnxs&symbols=cnxs&nx=37895.7208333333-807454440&bx=


Outlook for 2004 First-Quarter and Full-Year

CNS currently expects net sales for the fiscal first quarter ending June 30, 2003, in the range of $15 million to $17 million, compared to net sales of $14.5 million in the same period last year. Earnings for the first quarter are estimated between 11 cents and 14 cents per diluted share, versus net income of 11 cents per diluted share in the prior-year period.

In reality the quarter came in at .20 above guidance

For the 2004 fiscal year from April 1, 2003, to March 31, 2004, the company anticipates net sales will grow from 7 to 14 percent to between $85 million and $90 million. Diluted earnings per share in fiscal 2004 are estimated to be in the range of 51 cents to 56 cents, an increase of 11 to 22 percent over fiscal 2003.


Latest guidance 6 months later ---

http://quote.fool.com/news/symbolnews.asp?guid={639E9A9A-FDB2-458F-87DE-265C06017BCA}&currticker=cnxs&symbols=cnxs&nx=&bx=

Outlook for Third Quarter and Full Year of Fiscal 2004
For the third quarter of fiscal 2004, ending December 31, 2003, CNS anticipates net sales in the range of $26 million to $27 million, compared to net sales of $25.9 million in the third quarter of fiscal 2003. Earnings per fully diluted share are estimated to be between 6 cents and 7 cents, versus 6 cents per share last year.
For the fiscal year ending March 31, 2004, the company has raised its expectations for net sales and earnings per share. Net sales for the full year are now estimated to be between $88 and $92 million, an increase of 11 percent to 16 percent over fiscal 2003 sales of $79.1 million. Earnings per fully diluted share are now estimated to be between 57 cents and 60 cents, a 24 percent to 30 percent increase versus 46 cents per fully diluted share last year.


In the next 6 months as you can see guidance has went up from .51 -.56 to .57 - .60.

It will be interesting to see if they can exceed estimates in a quarter that is predicted to be a weak quarter sequentially.

They have a strong cash position that they can use to buy back shares, pay dividends or/and expand the business.

$14,019,000 in cash
14,,627,000 shares outstanding.

The above is just some notes that I wanted to add to my first set of notes. The process will help me understand the company going forward.
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