Top

Coast Reports Lower 1Q Profits on Flat Sales

May 16, 2011 by · Leave a Comment 

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, today reported financial results for the first quarter ended March 31.

Despite a 2.5% increase in sales, Coast incurred a net loss of $1.0 million, or $0.23 per diluted share, on net sales of $24.7 million in the first quarter of 2011, compared to net sales of $24.1 million in the same quarter of 2010. The increase in net sales during the quarter was a result of an increase in sales of air conditioners that are installed in RVs. This increase in air conditioner sales was attributable to the withdrawal of a supplier of aftermarket air conditioners that had previously supplied air conditioners to competing distributors.

The first quarter 2011 loss was primarily attributable to a decrease in gross profits and, to a lesser extent, an increase in selling, general and administrative (“SG&A”) expenses. Gross profits declined by $1.0 million, resulting in a decrease in gross margin to 15.8% in the 2011 first quarter from 20.4% in the same quarter of 2010. That decrease was primarily due to a change in the mix of products sold to include a greater proportion of air conditioners, which tend to generate lower gross margins, and to selected price reductions on certain products, which were implemented in response to an increase in price competition in the market. In addition, shipping costs increased as a result of increased fuel prices. The increase in SG&A expenses was due largely to the restoration, in July 2010, of one-half of the companywide reductions in salaries that were implemented in 2009.

“The first quarter marked a significant turn in the industries we serve, most notably the RV industry. Poor weather in the first quarter, combined with higher gas prices and continued uncertainty surrounding the economy, have created a potent combination of factors to dampen the sales and use of RVs,” said Coast’s CEO Jim Musbach. “The current state of the RV industry is rather weak, particularly in terms of retail sales of motorized RVs. In the United States, motorized RV retail registrations fell 15.2% in February, while sales in Canada fared even worse, with motorized retail registrations down 42.4% in February.

“The dramatic decrease in RV retail sales translates to lower RV usage, resulting in softer demand for Coast’s products. While it appears consumer demand may remain soft over the near term, we are taking added steps to increase sales, while managing our overall cost structure. As the current softness in our markets runs its course, we anticipate continued pressure on our sales and margins over the near term.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Coast Reports Modest 5.2% Profit Rise in 2010

March 31, 2011 by · Leave a Comment 

Coast reports modest sales rise.

Coast reports 2010 results

The Coast Distribution System Inc. today (March 31) reported financial results for the full year and fourth quarter ended Dec. 31, 2010, highlighted by a modest improvement in net earnings on a 5.2% increase in net sales for the year.

Following is the company’s news release.

Year Ended December 31, 2010 vs. 2009

Net income increased to $152,000, or 3 cents per share, in 2010 from $99,000, or 2 cents per share, in 2009. This increase was primarily attributable to a rise in net sales of $5.4 million, or 5.2%, to $108.6 million in 2010, from $103.2 million in 2009; a nearly $200,000 increase in gross profits; and a reduction in selling, general and administrative (SG&A) expenses of $200,000, or 1.2%, to $18.3 million in 2010. The reduction in SG&A expenses followed a reduction of $8 million, or 30.1%, in 2009.

The increase in net sales was primarily due to the replenishment of inventories by Coast’s customers in the first half of 2010 in preparation for the summer selling season and an increase in sales of air conditioners in the second half of the year, as a result of a change in supplier relationships within the RV market.

The increase in gross profits was attributable to the increase in sales. Gross margin declined to 18.1% in 2010 from 18.8% in 2009, due primarily to a change in the sales mix, increased freight-in costs and selected price reductions in response to increased price competition. The reduction in SG&A expenses in 2010 was attributable to continued cost savings measures begun in 2008 and 2009, which was offset in part by a partial reversal, effective July 1, 2010, in the companywide 10% pay reduction implemented in 2009.

Interest expense decreased primarily as a result of a reduction in the average amount of outstanding bank borrowings and lower interest rates in 2010 as compared to 2009.

Higher net sales and the reductions in SG&A and interest expense combined to increase pre-tax earnings by $400,000, or 179%, in 2010 from $200,000 in 2009. This increase was partially offset by a $300,000 increase in the provision for income taxes, to $400,000 in 2010, from $100,000 in 2009, which accounted for the more modest increase in net earnings in 2010.

Fourth Quarter 2010 vs. 2009

Despite a 2% increase in sales, Coast incurred a net loss of $1.7 million, or 38 cents per share, on net sales of $17.6 million in the fourth quarter of 2010, compared to a net loss of $1.1 million, or 24 cents per share, on net sales of $17.3 million in the same quarter of 2009. The higher loss was the result of a lower gross margin combined with an increase in operating expenses and a higher tax rate.

Gross margin decreased to 11.9% in the 2010 fourth quarter from 13.7% in the same quarter of 2009, primarily as a result of increases in sales of lower-margin air conditioners, higher freight-in costs and selected price reductions. SG&A expenses increased by $300,000, or 7.2%, in the 2010 fourth quarter, due primarily to increased stock-based compensation expense and the reversal of the companywide  pay reduction.

“As expected, our financial results for the fourth quarter reflected the ongoing recessionary forces impacting our industry, including high levels of unemployment, reduced availability of consumer credit and lower consumer confidence,” said Coast CEO Jim Musbach. “While these conditions persisted through the quarter, we were able to generate modest sales growth, though at the expense of gross margins as a result of increased sales of lower-margin products and our deliberate decision to take targeted price reductions to remain competitive in our markets.

“As we work through the continuing economic conditions that have been adversely affecting consumers’ purchases and use of RVs and boats, we continue to maintain tight control over our expenses. As I mentioned last quarter, we continue to look for areas of potential savings, including financing and rent costs. This effort has resulted in the recent reduction in our corporate space, which we expect will offer significant reductions in rent expense in the future.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Coast’s Tim McGuire Sells Substantial Shares

November 19, 2010 by · Leave a Comment 

Thomas R. McGuire,  executive chairman of Coast Distribution System Inc., has established a plan, pursuant to Securities Exchange Commission Rule 10b5-1, to sell up to a total of 100,000 of the more than 520,000 shares of company common stock that he owns, the company announced Thursday (Nov. 18).

It is expected that those 100,000 shares will be sold in brokerage transactions over a period of eight calendar quarters, according to a news release.

McGuire is the company’s largest stockholder, owning 11.2%, of its outstanding shares (which does not include an additional 51,250 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 market effect of stock sales by spreading them out over time.

McGuire stated, “I have decided to implement this plan at this time primarily to diversify my investment portfolio. I remain confident about Coast’s future prospects, and I have no plans to sell any additional Coast shares and will continue to own at least 420,000 shares even after completing the sale of the 100,000 shares under this Rule 10b5-1 plan.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Coast Distribution Reports Q2 Revenue Gain

August 16, 2010 by · 1 Comment 

Coast logoThe 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.

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Coast Announces Extension of Credit Facility

November 30, 2009 by · Leave a Comment 

The Coast Distribution System Inc. today (Nov. 30) reported that it has reached an agreement with Bank of America that extends the maturity date of the company’s existing senior secured bank revolving credit facility from May 10, 2010, to July 10, 2011.

The amendment also revises certain terms and covenants of the credit facility to reflect current economic and market conditions, according to a press release.

The Morgan Hill, Calif.-based company is an aftermarket supplier of replacement parts, accessories and supplies for the RV, boat and outdoor recreation industries.

“We are very pleased to have successfully extended this important borrowing facility, which provides us with the financial support and flexibility needed to take advantage of the opportunities that lie ahead for Coast,” said Coast CEO Jim Musbach. “We appreciate the confidence Bank of America has demonstrated in our business by continuing to work as an integral part of our capital structure. We have a leaner, stronger company, and this agreement provides the necessary financial resources to ensure our company can continue to capture market share and position ourselves for the eventual economic recovery.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Leaner Coast Distribution Reports Profit in Q3

November 16, 2009 by · Leave a Comment 

Coast logoThe Coast Distribution System Inc. today (Nov. 16) reported financial results for the third quarter ended Sept. 30, highlighted by net earnings despite lower sales, driven by improved margins and a leaner operating structure.

Coast, one of North America’s largest aftermarket suppliers of replacement parts, accessories and supplies for the RV, boat and outdoor recreation industries, reported net earnings of $900,000 on net sales of $29.6 million for the quarter, compared to a net loss of $300,000 on net sales of $34.7 million a year ago, the Morgan Hill, Calif.-based company stated in a news release.

Gross margin as a percentage of sales increased to 20.7% in the quarter, compared to 17.9% in the same quarter of 2008. The increase was a result of reduced freight costs, discounts and volume rebates, work force reductions in its warehouses and the introduction of additional higher-margin Coast branded products.

In the quarter, Coast reduced selling, general and administrative (SG&A) expenses by $2.1 million, or 30.9% as compared to the 2008 third quarter. The company attributed the decrease in SG&A to an aggressive cost-control program, which has included reducing staffing levels and companywide reductions in salaries. Coast reduced its borrowings under its bank line of credit by $11.2 million, or 55.2% year-over-year and reduced inventory year-over-year by $10.2 million, or 28.8% to $25.3 million.

For the nine-month period ended Sept. 30, Coast reported net earnings of $1.2 million on net sales of $85.9 million, compared with net earnings of $400,000, on net sales of $115.4 million in the same period of 2008.

“Given the difficult industry conditions, we are pleased with our results in the quarter,” said Jim Musbach, Coast CEO. “Driving our profits were improved margins, which for a large part were the result of several important yet painful steps we have taken in the past 18 months to create a leaner, stronger company. Looking ahead, our focus is on new product introductions to capture market share and increase volume beginning in 2010. We are also encouraged as we are seeing our customers restocking inventory in anticipation of an upturn in our industry. We will continue to reduce costs wherever practicable to improve our operations and effectively position ourselves for the eventual industry recovery, while expanding our customer base for Coast-branded and partnered distribution products.”

Net sales in the 2009 third quarter declined 14.7% year-over-year, which management attributed to lower retail traffic at RV and marine dealerships, Coast’s primary customers, reflecting the continuing effects of the recession and credit crisis. Industry associations for both the RV and boating industries reported double-digit declines in industry shipments for the first nine months of the year. 

As in past years, the company expects a loss in the fourth quarter due to the traditional, seasonal slowdown in the quarter, as customers typically wait until the first quarter to begin placing orders for the upcoming season, which commences in the spring.

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Coast Distribution Reports Profit, Sees Business Uptick

August 14, 2009 by · Leave a Comment 

coast-logoThe Coast Distribution System Inc., one of North America’s largest aftermarket suppliers of replacement parts, accessories and supplies for the recreational vehicle, boat and outdoor recreation industries, today (Aug. 14) reported its operating results for the second quarter and six months ended June 30.

Morgan Hill, Calif.-based Coast generated net earnings of $1.2 million on net sales of $33.1 million for the second quarter of 2009. For the same period of 2008, Coast reported net earnings of $1.6 million on net sales of $41.2 million.

“Despite some of the most difficult conditions in the recreational vehicle industry since the oil crisis and economic downturns of the 1970s, Coast was profitable in the second quarter and six month period,” said Jim Musbach, Coast CEO. “We achieved this performance because of the proactive and aggressive steps we have taken to control costs since the beginning of the industry downturn. These painful but necessary steps included reducing staffing levels across multiple departments, as well as cutting salaries across the board.”

In the 2009 second quarter, Coast reduced selling, general and administrative expenses by $1.7 million, or 27.8% as compared to the 2008 second quarter. Coast also reduced its borrowings under its bank line of credit by $19.0 million, or 62.6% year-over-year and reduced inventory year-over-year by $16.9 million, or 40.6%. Because Coast’s current line of credit will be expiring in May 2010, borrowings under that credit line are classified as a current liability in the company’s 2009 second quarter financial statements.

Net sales in the 2009 second quarter declined 19.6% year-over-year, a result management attributed to lower retail traffic at RV and marine dealerships. 

Musbach continued, “Though our primary markets remain very challenging, we have seen a slight uptick in recent demand, which may indicate our customers are restocking inventory in anticipation of the bottom of the industry slump. We do see this development as a positive sign, though we remain conservative and cautious in our approach.”

“We will continue to reduce costs wherever possible, and are actively working with our product suppliers and our bank lender to ensure we have the proper resources into the future,” said Musbach. “Since the beginning of the economic recession, everyone at Coast has worked very hard to tackle challenges aggressively by taking steps to improve our operations and effectively position ourselves for the future. We continue to seek additional market share through greater penetration of our Coast-branded and partnered distribution products. Because of these efficiency improvements and increased demand for our products, we believe Coast is well positioned to take advantage when the economy eventually rebounds.”

For the six-month period ended June 30, Coast reported net earnings of $274,000 on net sales of $56.3 million, compared with net earnings of $711,000 on net sales of $80.7 million in the same six-month period of 2008.

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Coast Distribution Reports Quarter Results

May 15, 2009 by · Leave a Comment 

The Coast Distribution System Inc. reported its operating results for the first quarter ended March 31.

The Morgan Hill, Calif.-based aftermarket suppliers of replacement parts, accessories and supplies for the RV, boat and outdoor recreation industries, reported a net loss of $888,000 on net sales of $23.2 million for the quarter. For the same period of 2008, Coast reported a net loss of $850,000 on net sales of $39.5 million.

Net sales in the 2009 first quarter declined 41.2% year-over-year, a result management attributed to lower retail sales at RV and marine dealerships. Industry associations for both the RV and boating industries reported double-digit declines in industry shipments for the first quarter. 

“Since the beginning of the downturn in the RV industry in 2008, we have taken proactive steps to control costs across the company,” said Coast CEO Jim Musbach. “In addition to reducing our staffing levels to meet demand and replacing our annual trade show with an online program, we have reduced salaries across the board, including those of executives, by a minimum of  10%.”

The company reduced selling, general and administrative expenses by 32.5% year-over-year in the 2009 first quarter. Coast also reduced its long-term debt by 49.8% year-over-year, leaving the company with$20.2 million in long-term obligations as of March 31.

“We continue to expect a challenging year in terms of customer demand,” said Musbach. “The Recreation Vehicle Industry Association (RVIA) is forecasting a 45% year-over-year decline in total shipments for the RV industry in 2009, which would be on top of the 32.9% year-over-year decline in 2008. Despite the drop in industry unit shipments, we have seen some optimism recently in terms of dealer traffic, and we are hopeful the industry is reaching the bottom in retail demand. Further, a survey conducted by the RVIA in March 2009 indicated that 55% of survey respondents intend to use their RVs more this spring and summer than last year, and 45% are considering another RV purchase. Three-quarters of those responding said they planned to take more mini-vacations using their RV, despite the economy.”

Musbach concluded, “We continue to believe our streamlined operations, improved product development capabilities, stronger balance sheet and expanded market share of Coast developed and imported products will place us in a stronger position when the RV and marine industries make their eventual recovery.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Coast Distribution Reports Loss for 2008

March 31, 2009 by · Leave a Comment 

Coast Distribution System 
Inc. today (March 31) reported its operating results for the 
fourth quarter and year ended Dec. 31, 2008.

The Morgan Hill, Calif.-based supplier of aftermarket
 replacement parts, accessories and supplies for the RV, marine and outdoor recreation industries reported a net loss of
 $2.3 million on sales of $16.9 million 
for the fourth quarter 2008, compared with a loss of $1.5 million on sales of $26.7 million a year earlier.

Net sales in the 2008 fourth quarter declined
 37% year-over-year, as industry associations for both the RV
and boating industries reported double-digit declines in shipments for
 the year.

For the year ended Dec. 31, 2008, Coast reported a loss of $1.8
 million on sales of $132.2 million,
 compared with earnings of $215,000 on  sales of $164.3 million for 2007.

“As expected, 2008 was extremely difficult based on the drop in sales 
traffic to RV dealerships, our primary customer, due to the economic
 recession, unstable fuel prices and lack of available financing for
 potential purchasers,” said Coast’s CEO Jim Musbach.

“We continue to control costs and optimize costs in line with sales
 wherever possible,” he continued.  ”We have reduced our staffing levels by 30%
 and replaced our costly annual trade show with a more efficient and
 effective online sales program.  We also restructured our sales
 department to focus more on inside sales to existing accounts, and have
 worked with our vendors and landlords to secure discounts.

“Looking ahead, we are expecting a challenging 2009,” said Musbach.
 “The RVIA is forecasting another year of decline for the RV industry.
 That said, we believe people are still using the RVs they own and
 enjoying the RV lifestyle more than ever, and will continue to demand
 our aftermarket products even in a recession.  We are closely monitoring
 our inventory levels, inventory turnover and days sales outstanding.  We 
believe we have the cash, financing and level of demand to weather this
 storm, even as we proactively streamline our operations, and evaluate
 strategic options to maximize shareholder value in 2009.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

« Previous Page

Bottom