The Coast Distribution System, Inc., a distributor of aftermarket replacement parts, accessories and supplies for the recreational vehicle and marine industries, reported net sales of $51.7 million in the second quarter of 2005, compared to $52.1 million in the second quarter of 2004. Earnings declined 15% to $2.2 million compared to the previous year. Executives of the Morgan Hill, Calif.-based company attributed the profit decline to strategic price reductions for some products as well as higher freight, shipping and steel costs in the first six months of the year.
“Overall, we are pleased with our results for the quarter and six months ended June 30, 2005,” said Thomas R. McGuire, company chairman and CEO. “Despite a difficult market, in which sales of new recreational vehicles have been declining, we were able to generate sales largely comparable to the sales we achieved in the three and six months ended June 30, 2004.” As a result, in terms of sales, we were able to outperform most others in the RV market, many of whom have been reporting double-digit sales declines,” McGuire added.
The company announced that during the next six months it will be relocating its Visalia, Calif.-based warehouse and distribution center to a larger facility. “Although this move will result in increased operating costs and reduced gross margins in the short term, it will not affect our service levels to customers and we believe that the move will provide us with the opportunity, in the longer term, to increase the volume of proprietary products that we can source overseas and, thereby, better serve our customers and at the same time enable us to improve our margins,” said McGuire.
Coast supplies its products to customers through 17 distribution centers located across the U.S. and Canada and is publicly traded on the American Stock Exchange under the ticker symbol CRV.
Source: Coast Distribution System, Inc.