MORGAN HILL, Calif. – Marine, RV and outdoor aftermarket parts and accessories supplier Coast Distribution System, Inc. (Amex: CRV) saw its 2007 earnings decline due to economic conditions, it reported in a statement earlier this week.
Coast reported a net loss of $1.5 million, or $0.34 per diluted share, on net sales of $26.7 million for the fourth quarter of 2007. For the same period of 2006, Coast reported a net loss of $1.9 million, or $0.42 per diluted share, on net sales of $26.5 million.
The company reported that the fourth quarter net loss was not unexpected. There is a traditional seasonal slowdown in the fourth quarter every year, as customers typically wait until the first quarter to place orders for the upcoming buying season and it has not been uncommon for Coast to sustain a loss in the fourth quarter in prior years as well, it stated.
“Industry associations for the RV and boating industries reported double-digit declines in industry-wide shipments of recreational vehicles and boats in the 2007 fourth quarter. By contrast, Coast's sales increased slightly year-over-year during the quarter,” said the company.
For the year ended Dec. 31, Coast reported net earnings of $215,000, or $0.05 per diluted share, on net sales of $164.3 million, compared with net earnings of $3.0 million, or $0.64 per diluted share, on net sales of $179.1 million in 2006.
"Fiscal 2007 was a difficult year due to challenging industry conditions, as higher gasoline prices, a slowing economy and a decline in consumer confidence led consumers to curtail discretionary expenditures and, therefore, to reduce their purchases and usage of RVs and boats, causing a decline in the demand for and in purchases of the products we sell. However, during 2007, we made important investments that we believe will put us in a better position for the future," said Coast Chairman and CEO Thomas R. McGuire.
"We made investments in leadership with the promotion of Stephan Lussier and the hiring of Bryan Fletcher. We made investments in new facilities and product development, such as our new Elkhart product-testing center. We expect that these investments will help us continue to add new products and improve our margins. We are especially focused on our outdoor power generation and towing product lines and our imported and branded products," he added.
"Industry analysts are predicting a 4.8 percent decline in recreational vehicle shipments and similar reductions in recreational boat volume in 2008. As a result, we are expecting another difficult year in 2008. Our focus remains on improving margins and increasing our market share primarily through increased sales of foreign sourced and proprietary products," stated McGuire.
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