Coast Distribution Reports Quarter Results

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.”

Coast Distribution Reports Loss for 2008

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.”

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