Coast Reduces 1Q Net Loss; Sales Improve 5%
The Coast Distribution System Inc., a leading supplier to the RV and outdoor aftermarket industries, reported a reduction in its net loss for the first quarter on stronger sales, ended March 31.
Morgan Hill, Calif.-based Coast said its net loss was reduced by 30% to $0.9 million, or 20 cents per diluted share, from a net loss of $1.3 million, or 30 cents per diluted share, in the first quarter of 2012. This improvement was due primarily to increases in net sales and gross margin in this year’s first quarter as compared to the same quarter of 2012.
Net sales for the quarter increased 4.7% to $25.4 million compared to $24.2 million a year ago, primarily as a result of a strengthening of economic conditions as well as an increase in consumer confidence, ultimately leading to increases in the purchases of Coast’s products. This increase was accomplished despite unusually severe weather conditions in this year’s first quarter which the company believes adversely affected sales in Canada and in the northeastern and midwestern regions of the United States.
Coast also initiated new marketing programs in the second half of 2012 which served to increase sales of the company’s proprietary products to specialty retailers and mass merchandisers. These represent relatively new channels for the company and continue to be an area of investment.
Gross profit in the first quarter of 2013 increased by $0.8 million to $4.2 million, resulting in an increase in gross margin to 16.5%, from 14.1% in the same quarter of 2012.
Selling, general and administrative expenses (SG&A) increased by $0.4 million, or 7.7%, to $5.4 million in this year’s first quarter, compared to $5 million in the same quarter of 2012. Inventories at March 31, 2013 were $34.6 million, an increase of $4.6 million compared with $30 million at March 31, 2012.
“We made considerable progress in the first quarter, as we generated improved sales and margins resulting in a 30% reduction in our loss in this year’s first quarter as compared to both the first quarter of 2012 and the immediately preceding quarter ended December 31, 2012,” said Coast’s CEO Jim Musbach. “We have seen encouraging signs in our core markets, including a strengthening RV market and improving consumer confidence that give us reason to be optimistic for the remainder of 2013.”
To view the entire report click here.