The Coast Distribution System Inc. today (Aug. 16) reported revenue growth for the second quarter and six months ended June 30.
Morgan Hill, Calif.-based Coast, one of North America’s largest aftermarket suppliers of replacement parts, accessories and supplies for the recreational vehicle, boating and outdoor recreation industries, reported net income of $1,184,000 for the second quarter, compared to $1,162,000, for the second quarter of 2009, according to a news release. A small increase in gross profit led to a $200,000 increase in pretax income, which was offset by a higher effective tax rate.
Net sales increased by 4.6%, to $34.6 million in the second quarter of 2010, compared to $33.1 million in the same quarter of 2009. Sales increased in both the company’s United States and Canadian operations. The improvement in sales was attributable to a slight firming of demand for the company’s products, coupled with historically low inventory levels maintained by Coast’s aftermarket customers.
On the balance sheet, accounts receivable increased modestly to $14.4 million from $14.2 million at June 30, 2009, as a result of increased sales compared to the prior year. Inventories at June 30 were $29.8 million, an increase of $5.1 million compared with $24.7 million a year earlier, which was attributable to the company’s plan to optimize inventory levels to improve customer service in season. Given the increased levels of inventory, the company’s revolving credit facility increased to $13.3 million at June 30, 2010, from $11.4 million at June 30, 2009.
“Our financial results for the second quarter reflected slight improvements in our market share, as well as our ongoing efforts to control costs and operate efficiently,” said Coast CEO Jim Musbach. “Although our progress was tempered by continued uncertainty in our markets over the last few months, we continue to focus on our objective of providing more of our branded products to our customers. Year to date, approximately 33% of Coast’s sales were derived from the products that we have designed, developed and sourced during the last decade.”
For the six-month period ended June 30, 2010, Coast reported net earnings of $1.2 million on net sales of $58.7 million, compared with net earnings of $0.3 million on net sales of $56.3 million in the same six-month period of 2009.