Coast Reports 4Q Net Loss; Revenue Up 10.6%
The Coast Distribution System Inc. reported a net loss for its fiscal fourth quarter, ended Dec. 31, on an increase in sales.
The Morgan Hill, Calif.-based aftermarket supplier incurred a net loss of $1.5 million, or 32 cents per diluted share, for the fourth quarter compared to a net loss of $1.4 million, or 32 cents per diluted share, in the same quarter of 2011. For the full year, Coast recorded a net loss of $2 million, or 44 cents per diluted share, compared with a net loss of $886,000, or 20 cents per diluted share, for 2011.
The company said the increase in net loss in this year’s fourth quarter and full year 2012 were primarily attributable to declines in gross profit, along with increases in selling, general and administrative expenses in both periods.
Net sales for the fourth quarter increased by 10.6% to $20.7 million compared to net sales of $18.7 million in the fourth quarter of 2011. For the full year, net sales increased by 4.9%, to $113.5 million, from $108.2 million in 2011.
Coast said those increases were the result of increased sales of the company’s products to large mass merchandisers, which represents a new distribution channel, as well as an increase in the purchase and usage of RVs, which translated into increased purchases of Coast’s products.
“The combination of a number of market challenges in 2012 and continued investments in our proprietary products resulted in our loss for the year,” said Coast CEO Jim Musbach. “Recent improvements in wholesale shipments of RVs have not resulted in a steady improvement in demand for RV products as consumers remain concerned about the strength and duration of the economic recovery, changes in domestic fiscal policy and recent increases in the price of gasoline.
“Despite these challenges, our strategic goal for 2013 is to achieve a return to profitability by capturing additional market share, increasing sales to specialty retailers and expanding sales of higher margin proprietary products. With the help of improved conditions in the broad economy and our markets specifically, we expect to achieve our strategic goals for the year.”
In this year’s fourth quarter, gross margin increased to 12.6% from 11.4% in the same quarter of 2011. In the full year, 2012, gross profits fell by $727,000 to $17.3 million, resulting in a decline in gross margin to 15.2% from 16.7% in 2011.
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