Coast Narrows 1Q Net Loss; Sales Slide 2.1%
Net loss during the period was $738,000, or 15 cents per diluted share, for the first quarter compared to a net loss of $939,000, or 20 cents per diluted share, a year ago. This improvement was primarily attributable to an increase in gross margin and a reduction in selling, general and administration expenses.
Net sales for the quarter declined by 2.1% to $24.9 million compared to net sales of $25.4 million in the first quarter of 2013. The company’s sales were adversely impacted by the unusually severe and extended winter weather conditions that persisted throughout the Midwest, Northeast, and Southeast regions of the United States and throughout most of Canada.
Gross profit for the first quarter of 2014 was $4.2 million, reflecting a modest increase of $13,000 from the first-quarter 2013, which resulted in an increase in gross margin to 17.0%, up from 16.5% in the same quarter of 2013. The increases in gross profit and gross margin in the first quarter primarily resulted from a reduction in freight costs, a change in the mix of products sold, and a reduction in warranty expense.
“Although our first quarter net sales figures were below our expectations, we are encouraged by the improvement overall in our financial performance, which resulted from a higher gross margin and lower operating costs,” said Coast CEO Jim Musbach. “The severe winter weather conditions that impacted many regions of the United States and Canada had a detrimental effect on our sales during the quarter.”
Musbach continued, “The 2014 RV retail shows have been favorable. Additionally, the Recreation Vehicle Industry Association (RVIA) is forecasting an approximately 6% increase in wholesale RV shipments for 2014. We expect to see positive industry momentum in the coming quarters based on recent successful retail shows, the RVIA forecast, and improving weather conditions. Going forward, we will continue our strategic focus on customers in our core RV channel, as well as on the expansion of sales of our higher-margin proprietary products.”
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