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.”