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MORGAN HILL, Calif. – Despite a more than 40 percent drop in net sales, the Coast Distribution System, Inc. (Amex: CRV) reported only a slight increase in net loss during the first quarter ended March 31.
Coast, an aftermarket supplier of replacement parts, accessories and supplies for the recreational vehicle (RV), boat and outdoor recreation industries, reported a net loss of $888,000, or $0.20 per diluted share, on net sales of $23.2 million for the first quarter of 2009. For the same period of 2008, Coast reported a net loss of $850,000, or $0.19 per diluted share, on net sales of $39.5 million, according to the company.
Net sales in the 2009 first quarter declined 41.2 percent 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, the company explained. The Recreational Vehicle Industry Association (RVIA) reported RV industry shipments were off 63.2 percent year-over-year in the first three months of 2009.
“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 Chief Executive Officer 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 percent.”
The company reduced selling, general and administrative (SG&A) expenses by 32.5 percent year-over-year in the 2009 first quarter. Coast also reduced its long-term debt by 49.8 percent year-over-year, leaving the company with $20.2 million in long-term obligations at March 31.
“We continue to expect a challenging year in terms of customer demand,” said Musbach. “The RVIA is forecasting a 45 percent year-over-year decline in total shipments for the RV industry in 2009, which would be on top of the 32.9 percent 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 percent of survey respondents intend to use their RVs more this spring and summer than last year, and 45 percent are considering another RV purchase. Three-quarters of those responding said they planned to take more mini-vacations using their RV, despite the economy.”
In conclusion, Musbach said he believes the company’s “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.”
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