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My wife has used the product for years. I have suggested using an alternative that is less expensive...because it is not cheap on a per use measure.

I use the product with bouts of head colds, once used it during the day on the golf course...played well, drives were terrifically long that day, though I suspect the fact that I was under the weather and therefore not swinging with all my strength may have more to do with the distance.

My concern is whether this is a one hit wonder for the company. If so, cash could be burned attempting to bring out new products that do not meet the grade. I also have some concern about growth potential. The US market is presumably saturated since most people are well aware of the product. Maybe oversees growth is the key. Maybe as suggested in the newletter this company would be a good buyout opportunity since it does dominate its market and should show steady though slow growth.

It is on my watch list. Any other thoughts out there?
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Hi, Havenotime,

I agree that Breathe Right Strips is an awesome product.

I am a long time holder of Johnson & Johnson, and I think CNS would be a nice buyout addition. To my knowledge, J&J does not market nasal strips, and the company is very adept at searching out and buying companies whose products will enhance the value of its own product base. Also, since J&J is already a worldwide company, it would be easier to introduce the product to overseas markets.

Regards,
Digger 29
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No. of Recommendations: 2
Hi Havenotime,

Growth potential and product introduction are the primary concerns.

Cash will probably never be a problem. The good thing about their primary product is that it is a repeat seller. You use it, you throw it away, you buy more. This means they will always be able to produce a regular cash flow stream from that product.

In the past, the company has had problems growing earnings. Many times earings were affected by high advertisement costs to push the nasal strip which produced higher sales and earnings in future years. Lately the advertisement has sorta taken care of themselves as many professional ball players now visibly use the strip on television during games which has really help sell the product to the younger generation. They have successfully introduced a few new products.

Their fiber product is a true break away from their nasal products, but will face a lot of competition. But the product is unique because its chewable and may be more desirable to consumers. They are going to introduce the New Breathe Right® Vapor Shot! Personal Vaporizer in the fall of this year. This may give us an idea how well their new products will be accepted by consumers.

Past products seem to be doing well

This was take from their website

The improved financial results were driven by domestic sales of Breathe Right Snore Relief™ throat spray and nasal strips, international new product introductions and growing sales of FiberChoice® chewable fiber tablets. Operating expenses for the quarter increased 13 percent compared to the prior year, as a result of investment in new product testing for future growth and expansion of successful advertising for FiberChoice tablets.



I am trying to learn more about their product release and the growth from the products. I will report back here when I have new information.


tom

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No. of Recommendations: 4
First off, it's nice to see some activity on this board.

I have been a shareholder of CNXS since it was under $7 earlier this year, and have followed it since Whitney Tilson wrote an article expressing his dislike for the management a few years ago. I thought I could respond to some of the recent posts on this board.

To start off, I would recommend reading the Whitney Tilson article here:

http://www.fool.com/news/foth/2001/foth011113.htm

It raises very valid points about management squandering money. (Following the link to the Value Investors Club site is also very worthwhile).

And is also mentioned by Tom Jacobs in this recent article:

http://www.fool.com/news/commentary/2003/commentary030617tj.htm

Where he estimates the Intrinsic Value of the stock to be between $9.50 and $15.


My comments on the recent posts:

My concern is whether this is a one hit wonder for the company. If so, cash could be burned attempting to bring out new products that do not meet the grade. I also have some concern about growth potential. The US market is presumably saturated since most people are well aware of the product.

This company is sort of a one hit wonder, and it was definitely off squandering money on the Fiber Choice introduction. However, recently, they have smartly decided to focus on introducing products that leverage their key brand name (Breathe Right), and have decided to introduce only 1 new product a year. The recent conference calls reinforce this information. The Fiber Choice product still strikes me as terrible, but they have stated that they will only continue to push the product if it can be profitable.

Also, I would disagree with the US market being saturated. I still think that most Americans think of the strips as being for athletes. It is really a snoring product, and there are most likely millions of snorers that could still benefit from this product.

To my knowledge, J&J does not market nasal strips, and the company is very adept at searching out and buying companies whose products will enhance the value of its own product base. Also, since J&J is already a worldwide company, it would be easier to introduce the product to overseas markets.

J&J does not market these strips (re-read the Whitney Tilson article for more), and I agree that they would seem like a decent takeover target. However, two years ago the management was pretty intent on remaining independent, and I have never heard them backtrack in this regard. It could be a good question for the next conference call.

Additionally, CNS does have some decent overseas sales, and they are continuing to grow. I don't doubt that J&J could force a whole lot more product onto shelves, but CNS is doing a pretty good job.

Lately the advertisement has sorta taken care of themselves as many professional ball players now visibly use the strip on television during games which has really help sell the product to the younger generation.

While I am fine with this happening, in the end, this really isn't a key driver of sales. The snoring market is really where CNS makes its money.


My Take: CNS was a great value below $7. It has good but not great management (they seem to understand what shareholders want from the company now, and are definitely improving). This company is not likely to jump extensively from here barring a buyout. I sold out half of my position just above $10, and would consider selling the rest above $14. I don't see a buyout happening here, because of the feelings I have about the management. I wouldn't buy much at these levels, but I am happy with my purchase so far.

-DejSpin
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I bought CNXS at $8.75 earlier this year. I look at Breathe-Right strips as not only addressing the snoring problem, but the nasal congestion area. If you consider the amount spent on OTC nasal congestion relief products, then the Breathe-Right market has plenty of room to grow.
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No. of Recommendations: 1
I appreciate all the feed back from my initial post (Digger29, tom and dejspin)...this board seems to be one that is able to stay focussed on the issue at hand while providing excellent insight.

I did purchase CNS last month (near the high) and will be looking to see what happens over the next year or two wrt new market releases. In the mean time their cash flow is good and it pays a bit of a dividend.

I will also attempt to read this board more than once per month.

tim
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