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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The Coast Distribution System Inc., a key aftermarket supplier to the recreational vehicle and outdoor recreation industries, reported a 59% increase in net income for its third quarter, ended Sept. 30, on lower sales.
“We are pleased with our solid balance sheet performance during the third quarter, as well as the positive impact of our strategy to increase sales of our propriety products,” said Jim Musbach, CEO for the Morgan Hill, Calif.-based company. “As a result of these efforts, we saw improved gross margin in this year’s third quarter, despite a decrease in net sales. Our slightly lower net sales reflected the effect of poor weather conditions this summer, which dampened RV usage and resulted in a decrease in our sales of air conditioners as compared to the third quarter of last year.
Net income for the third quarter totaled $487,000, or 10 cents per diluted share, compared to 307,000, or 7 cents per diluted share the year prior. The company reported that operating income increased 86% to $1 million while gross profits increased by $411,000 to $6.1 million.
Sales for the year’s third quarter fell by 4% to $33.1 million from $34.5 million in the third quarter of 2012. SG&A expenses decreased by $69,000, or 1.3%, to $5.1 million in the quarter compared to the previous year.
For the first nine months, Coast reported net earnings of $645,000, or 14 cents per diluted share, compared to a net loss of $534,000, or 12 cents per diluted share, for the first nine months of 2012. The increase was due to a $1.3 million rise in net sales to $94.1 million from $92.8 million, coupled with a $2.7 million, or 18.6%, increase in gross profits to $17.4 million.
Coast said the increase in gross profits resulted primarily from a change in the mix of products sold, which included a higher percentage of proprietary products on which it realized higher gross margin, as well as the implementation of selected price increases in the first quarter of 2013. As a result of these factors, Coast reported operating income of $1.9 million in the first nine months of 2013, compared to an operating loss of $198,000 for the first nine months of 2012.
On the balance sheet, inventory decreased $2.6 million to $28.1 million at Sept. 30 compared to $30.7 million a year ago. Long-term debt decreased to $8.8 million from $11.7 million.
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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.”
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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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Aftermarket supplier Coast Distribution System Inc. announced the expansion of its Canadian products line to include Dometic replacement parts.
According to a press release, Coast dealer partners throughout Canada will have greater access to Dometic OEM parts for these systems, which are used extensively in today’s RVs. In addition, consumers will benefit from quicker repairs and less time waiting for Dometic parts because Coast Canada has stocking warehouses located near their local dealerships.
“Our dealer partners will enjoy giving a positive answer when asked how long it will take to complete a repair or to get Dometic parts for their RV,” says Sly Lussier, senior vice president and general manager of Coast Canada. “We believe this extension of our RV replacement parts program will better serve the dealers and retail customers in the Canadian market by offering greater availability and accessibility to Dometic branded parts.”
Coast is a leading supplier to RV, marine, towing and outdoor power equipment retailers across North America. For additional information visit http://www.coastdistribution.com/.
The Coast Distribution System Inc. reported it has been informed by Thomas R. McGuire, the company’s chairman, that he has established a plan, pursuant to Securities Exchange Commission Rule 10b5-1, to sell up to a total of 62,500 of the more than 495,000 shares of Coast common stock that he owns.
According to a news release, it is expected that those 62,500 shares will be sold in brokerage transactions over a period of approximately five quarters.
McGuire is the Morgan Hill, Calif.-based company’s largest stockholder, owning 10.8% of its outstanding shares. This does not include an additional 40,000 shares that he has a right to purchase on exercise of stock options.
Rule 10b5-1 under the Securities Exchange Act of 1934 allows officers and directors to adopt written plans for trading securities in a non-discretionary, pre-scheduled manner in order to avoid concerns about initiating stock transactions when the officer or director may be aware of non-public information. Such plans also allow officers and directors to diversify their holdings and minimize the potential market effect of stock sales by spreading them out over time.
McGuire stated, “I have decided to implement this plan primarily to diversify my investment portfolio. I remain confident about Coast’s future prospects, and I have no plans at this time to sell any additional Coast shares and will continue to own more than 400,000 shares even after completing the sale of the 62,500 shares under this Rule 10b5-1 plan.”
Aftermarket supplier Coast Distribution System Inc. reported mixed results for its third quarter, ended Sept. 30, showing a drop in earnings on a 9.2% increase in sales.
Morgan Hill, Calif.-based Coast reported net income of $307,000, or 7 cents per diluted share, for the third quarter of 2012, compared to net income of $612,000, or 13 cents per diluted share, in the same quarter of 2011. For the nine months ended, Coast recorded a net loss of $534,000, or 12 cents per diluted share, compared with net income of $553,000, or 12 cents per diluted share, for the first nine months of 2011. The decline in net income in this year’s third quarter and the loss for the first nine months of 2012 were primarily attributable to declines in gross profits, along with increases in selling, general and administrative expenses in both periods.
Net sales for the third quarter increased by to $34.5 million compared to $31.6 million a year ago. In the nine months, net sales increased by 3.7% to $92.8 million from $89.5 million in the same nine-month period of 2011. Those increases were primarily the result of increased sales in new distribution channels of the company’s Powerhouse generators and other RV products to large mass merchandisers, which is a new distribution channel for Coast.
“We continued to face challenging conditions in our markets throughout the year to date, but we have reason for optimism surrounding the future of our business,” said Coast CEO Jim Musbach. “Sales of our proprietary products into new distribution channels positively impacted our net sales during the quarter, and we will continue to foster this early success as we build these channels and explore new opportunities. We are also continuing to work on balancing pricing and product costs to improve our overall margins, including fostering the growth of our proprietary products.
“In looking at the broader recreational industry, recent consumer confidence surveys suggest improvement among consumers in the United States, which we should provide more favorable conditions as consumers become more comfortable with discretionary spending associated with the purchase and usage of RVs and boats.”
Third-quarter gross margin declined to 16.5% from 18.1% in the same quarter of 2011, due primarily to an 11.3% increase in costs of sales which more than offset the beneficial effect on gross margin of the increase in net sales during this year’s third quarter. In the nine months, gross profits fell by $1.2 million to $14.7 million resulting in a decline in gross margin to 15.8% from 17.8% in the same nine months of 2011. These declines in gross margin were the result of price reductions on selected products that Coast implemented in response to aggressive price competition in the market, as well as a weakening of the Canadian dollar, as compared to the U.S. dollar. In addition, the company incurred additional costs primarily attributable to quality control testing of new models of proprietary products introduced into the market place in this year’s third quarter and an increase in the warranty reserve for proprietary products as a result of increases in sales of those products.
On the balance sheet, accounts receivable increased $72,000, to $9 million at Sept. 30 from $8.9 million last year. Inventories were $30.7 million, an increase of $2.5 million compare with a year ago. The increase in inventory levels from the prior year was a result of Coast’s efforts to increase sales and its market share of the company’s proprietary products.
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Husky Towing Products, a division of Morgan Hill, Calif.-based COAST Distribution System Inc., hosted its first editorial conference Wednesday (June 13), bringing together magazine editors and writers from around the country to the company’s expansive R & D Center in Elkhart, Ind., for an intensive one-day workshop with Husky executives and engineers.
“We are considering continuing this conference on an annual basis,” said Steve Holt, director of brand and corporate marketing for Coast. “Whether we do the same thing next year isn’t certain, but we definitely want to expand on this relationship with the editorial community.”
The “Towing Tech ’12” program provided an overview of Husky towing products — including its weight-distribution and fifth-wheel hitches, brake controls and assemblies and RV power jacks — followed by a tour of the R&D facility. Also on the agenda were hands-on demonstrations of Husky’s Center Line weight-distribution and sway control system and an installation of the company’s new Husky 10 fifth-wheel hitch base assembly.
Scheduled for release in July, the Husky 10 slider assembly replaces traditional rollers with innovate composite-design nylon pads to provide the hitch base 10 inches of travel, allowing use of short-bed pickups when towing fifth-wheel trailers. Designed to be used with Husky 16K and 26K fifth-wheel hitches, the Husky 10 also incorporates a patent-pending “no bind” latching mechanism that eliminates tension on the handle, allowing the flip lever to release and automatically lock in the next position.
Attendees also toured the Technical Center, including an overview of the company’s salt/fog testing equipment, and witnessed failure-testing of a Husky 26K fifth-wheel hitch.
Following the day-long event, Husky arranged for a dinner at the RV/MH Hall of Fame, followed by a private tour of the displays by Hall historian Al Hesselbart.
Aftermarket supplier Coast Distribution System Inc. reported a net loss on lower sales for its first quarter ended March 31.
Net sales for the quarter fell 1.8% to $24.2 million compared to net sales of $24.7 million in the first quarter of 2011. According to the company, the decrease was primarily the result of continuing consumer uncertainties about the strength of the overall economy, persistently high unemployment rates and the adverse effect of recent increases in gasoline prices on consumer discretionary spending.
The Morgan Hill, Calif.-based company reported a net loss of $1.3 million, or $0.30 per diluted share, for the first quarter of 2012, compared to a net loss of $1.0 million, or $0.23 per diluted share, in the same quarter of 2011.
Gross profits declined by $489,000, to $3.4 million, resulting in a decrease in gross margin to 14.1% in the 2012 first quarter from 15.8% in the same quarter of 2011. That decrease was the result of selected price reductions that Coast implemented in response to aggressive price competition in the market, as well as an increase in shipping costs related to fuel prices.
“The first quarter was challenging in terms of both revenues and margins as we faced an increasingly competitive market environment,” said Coast CEO Jim Musbach. “Our sales were impacted by soft consumer demand as well as increased promotional pricing on a variety of products, and the more competitive pricing translated into compressed gross margins. These factors are also affecting the broader RV industry as manufacturers and dealers have faced increased discounting in the market, although recent projections from RVIA suggest growth in RV unit shipments may improve over the course of 2012.
Until we see a pick up in sales and usage of RVs that will drive increased demand for our products, we will continue to balance defending our market share with continued tight management of operating expenses.”
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Morgan Hill, Calif.-based Coast Distribution System Inc., one of North America’s largest aftermarket suppliers of replacement parts, accessories and supplies for the recreational vehicle, boating and outdoor recreation industries, reported a slight dip in income and sales for its third quarter, ended Sept. 30.
Coast reported net income of $0.6 million, or $0.13 per diluted share for the third quarter of 2011, compared to $0.7 million, or $0.14 per diluted share in the same quarter of 2010. Sales for the quarter fell 2% to $31.6 million compared to sales of $32.2 million the previous year. The decrease in sales during the quarter was the result of the continued weakness in the economy and in consumer spending.
Gross profits declined by $200,000, resulting in a decrease in gross margin to 18.1% in the 2011 third quarter from 18.2% in the same quarter of 2010. Coast said the decrease in gross margin was the result of slightly higher shipping costs. Selling, general and administrative expenses decreased by $31,000, or 0.7%, to $4,703,000, compared to $4,734,000 in the same quarter in 2010. This slight improvement was primarily the result of several cost reductions, including a reduction in rent expense for the company’s headquarters, which was renegotiated in the first quarter of 2011.
On the balance sheet, accounts receivable totaled $8.9 million, which was flat compared with the balance at the end of the third quarter of 2010. Inventories at Sept. 30 were $28.2 million, an increase of $1.0 million compared with $27.2 million last year. The increase in inventory levels from the prior year was due primarily to an increase in inventory of the company’s proprietary branded products. Long-term debt increased to $10.9 million, from $9.4 million a year ago, reflecting increased investments in working capital.
“We are pleased with our performance in the third quarter despite the continued softness in our industry, which resulted in a small decrease in the top line,” said Coast’s CEO Jim Musbach. “Even with these broader market challenges, we made progress in increasing the penetration of our branded products, and we began making inroads into a number of large retailers in the United States and Canada, which is a new area for us. We continue to take steps to increase sales, particularly through new supply relationships that should allow us to source from lower cost, high quality overseas suppliers. Overall, despite the adverse conditions, Coast performed well in the quarter, as our earnings held up in the face of industry weakness and our book value per diluted share increased to $6.77, which is more than double our current market value.”
For the nine-month period, Coast reported net earnings of $553,000, or $0.12 per diluted share, on net sales of $89.5 million, compared with net earnings of $1,865,000, or $0.41 per diluted share, on net sales of $91.0 million in the same nine-month period of 2010. The decrease in net income was attributable to the decrease in net sales as a result of weaker economic conditions, combined with severe weather conditions affecting the northeastern United States and Canada in the first half of 2011, which led to decreased usage of RVs and boats by consumers in those areas.
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