The Coast Distribution System, one of North America's largest aftermarket suppliers of replacement parts, accessories and supplies for the recreational vehicle, boating and outdoor recreation industries, today reported a net loss for fiscal 2011, as well as for the fourth quarter.
Coast reported a net loss of $900,000, or 20 cents a diluted share, in 2011, compared with net earnings of $200,000, or 3 cents a diluted share, in 2010. Net sales decreased by $400,000, or 0.4 percent, to $108.2 million in 2011 from $108.6 million in 2010, and a shift in sales mix, together with price reductions on selected products in response to increased competition, resulted in a $1.6 million decrease in gross profits for the full year.
“The decrease in net sales was driven principally by an industrywide reduction in total purchases and usage of RVs and boats in 2011, resulting from continuing economic uncertainties and relatively high unemployment, which led consumers to limit discretionary spending,” the company said in a statement.
“Also contributing to the decline in net sales were unusually severe weather conditions in the northeastern United States and Canada in the first half of 2011,” Coast added.
Coast reported a net loss of $1.4 million, or 32 cents a diluted share, on net sales of $18.7 million in the fourth quarter of 2011, an improvement from a net loss of $1.7 million, or 38 cents a diluted share, on net sales of $17.6 million in the same quarter of 2010.
The reduction in net loss was primarily the result of increased net sales in the quarter, which ended Dec. 31, along with slight reductions in operating expenses, which were partially offset by a lower gross margin, which decreased to 11.4 percent in the 2011 fourth quarter from 11.9 percent in the same quarter of 2010.
“Even as we continued to face pockets of softness within our core markets, we were pleased with the growth in our revenues and improvements in our bottom line during our seasonally weakest quarter,” Coast CEO Jim Musbach said in a statement.
“As we look ahead into 2012, we see reasons for caution as well as encouraging signs of growth in our markets and the broader economy. The recent volatility of gas prices remains a concern among consumers that may affect the sales and use of RVs and boats, which could, in turn, affect our revenues and earnings,” he added. “However, we see reasons for cautious optimism in the broader economy, as recent trends in employment are starting to translate into improved consumer sentiment and an uptick in spending.”