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.”
The 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.
The 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.
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 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.”