8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported):   July 17, 2003

CNS, INC.
(Exact name of Registrant as specified in its charter)

Delaware	0-16612	41-1580270
(State or other jurisdiction of     incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

P.O. BOX 39802
Minneapolis, MN	55439
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (952) 229-1500

Items 1, 2, 3, 4, 5, 6, 8, 10, and 11 are not applicable and therefore omitted.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits

The following are filed as Exhibits to this Report:

Exhibit No. Description of Exhibit

99.1 Press release issued July 17, 2003.

ITEM 9. REGULATION FD DISCLOSURE (Item 12. Disclosure of Results of Operations and Financial Condition).

        Pursuant to Item 12 of Form 8-K, Disclosure of Results of Operations and Financial Condition, CNS, Inc. hereby furnishes a press release, issued on July 17, 2003, disclosing material non–public information regarding its results of operations for the quarter ended June 30, 2003.

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CNS, INC.


By /s/ Marti Morfitt
      ———————————————
      Marti Morfitt
      President and Chief Executive Officer

Dated: July 17, 2003

EX-99.1

EXHIBIT 99.1

NEWS RELEASE

FOR 3:00 P.M. CT RELEASE
July 17, 2003

Contact:
Marti Morfitt	Shawn Brumbaugh/Marian Briggs
Chief Executive Officer	Padilla Speer Beardsley Inc.
CNS, Inc.	(612) 455-1700
(952) 229-1500	sbrumbaugh@psbpr.com
Nasdaq Symbol: CNXS	mbriggs@psbpr.com

CNS, Inc. First-Quarter Sales Grow 21 Percent, EPS Up 82 Percent

        MINNEAPOLIS, July 17 — CNS, Inc. (Nasdaq: CNXS), the Breathe Right^® company, today reported increased sales and earnings for the first quarter ended June 30, 2003, results which surpassed analysts’ estimates.

        Net sales for the fiscal 2004 first quarter grew 21 percent to $17.5 million versus $14.5 million in the prior-year quarter. Net income rose 75 percent to $2.8 million, or 20 cents per diluted share, compared to net income of $1.6 million, or 11 cents per diluted share, in the prior-year quarter.

        “We are very pleased with the company’s performance in the first quarter,” said Marti Morfitt, president and chief executive officer, CNS, Inc. “We experienced sales growth across all of our business lines that, coupled with lower cost of goods sold, led to significantly higher gross profit.”

        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.

        “In addition, we remain optimistic about further building our Breathe Right brand through the launch of our newest product, Breathe Right Vapor Shot!™ personal vaporizer,” Morfitt said. “We started shipping this product to retailers in July, and consumers should begin to see it appear on store shelves this fall. The response by retailers has been very encouraging.”

CNS Reports Fiscal 2004 First-Quarter Results
Page 2

Business Line Results

        Domestic sales of Breathe Right branded products grew to $12.5 million in the first quarter, up 14 percent from $11.0 million in the prior-year quarter. The gain was due to increased sales of the company’s core Breathe Right nasal strips and Breathe Right Snore Relief throat spray.

        International sales of Breathe Right products rose 61 percent to $2.9 million versus $1.8 million in the year-ago period. International sales benefited from the introduction of new items in Japan and Italy, and allergy season promotion activity. For comparison purposes, the prior-year quarter included unusually low international sales, as CNS’ Japanese distributor worked through excess inventory.

        During the 2004 first quarter, after reviewing initial test market results, CNS terminated a marketing test of Breathe Right nasal strips with its distribution partner in China. The company may reassess this market at a future date. “We believe there are many international growth opportunities,” said Morfitt. “We will continue to make thorough assessments as to which markets and distribution partners provide a good return on investment in a reasonable time frame.”

        Sales of FiberChoice chewable fiber tablets contributed $2.0 million in sales during the quarter, an 18 percent gain over $1.7 million in the same quarter last year.

Outlook for Second Quarter and Full Year of Fiscal 2004

        “We expect to achieve higher sales and earnings this year versus the prior year, and we are on target to meet our fiscal 2004 estimates,” said Morfitt.

        For the second quarter of fiscal 2004, ending September 30, 2003, CNS anticipates net sales in the range of $17.5 to $19.5 million, compared to net sales of $17.4 million in the second quarter of fiscal 2003. Earnings per share are estimated to be between 25 to 27 cents, versus 25 cents per share last year.

        For the fiscal year ending March 31, 2004, the company continues to anticipate that net sales will increase from 7 to 14 percent over fiscal year 2003 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, up 11 to 22 percent over the prior fiscal year.

CNS Reports Fiscal 2004 First-Quarter Results
Page 3

Conference Call Webcast

        A conference call to review the first-quarter results is scheduled today at 4 p.m. CT (5 p.m. ET). Interested participants may listen to the conference call over the Internet by logging onto the CNS Web site at www.cns.com. If you do not have access to the Internet and want to listen to an audio replay of the conference call, dial 303-590-3000 (domestic and international), conference call ID #543999. The audio replay will be available beginning at 6 p.m. CT on Thursday, July 17, until 6 p.m. CT on Thursday, July 24. The Webcast version of the conference call will be archived for 12 months at www.cns.com.

About CNS, Inc.

CNS, based in Minneapolis, is a growing company that designs, manufactures and markets consumer health care products, including Breathe Right^® nasal strips, Breathe Right Snore Relief™ throat spray, Breathe Right Vapor Shot!™ personal vaporizer and FiberChoice^® 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 at 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 March 31, 2003. This news release contains forward-looking statements, which involve risks and uncertainties.

CNS Reports Fiscal 2004 First-Quarter Results
Page 4

CNS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts) (unaudited)

	Three Months Ended June 30,
	2003		2002
Net sales	$	17,497	$	14,523
Cost of goods sold		5,470		5,319
Gross profit		12,027		9,204
Operating expenses:
Advertising and promotion		4,465		4,115
Selling, general and administrative		3,341		2,763
Total operating expenses		7,806		6,878
Operating income		4,221		2,326
Investment income		194		229
Income before income taxes		4,415		2,555
Income tax expense		1,634		1,000
Net income	$	2,781	$	1,555
Diluted net income per share	$	.20	$	.11
Weighted average number of common and
Assumed conversion shares outstanding		14,238		14,193

CNS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts) (unaudited)

	June 30, 2003		March 31, 2003
Current assets:
Cash and marketable securities	$	41,145	$	41,615
Accounts receivable, net		9,638		11,011
Inventories		4,872		3,266
Other current assets		3,749		5,695
Total current assets		59,404		61,587
Long-term assets		3,567		3,788
Total assets	$	62,971	$	65,375
Current liabilities		10,685		16,321
Stockholders’ equity		52,286		49,054
Total liabilities and stockholders’ equity	$	62,971	$	65,375