The Coast Distribution System, Inc. Reports Fourth Quarter and Fiscal Year 2002 Operating Results
Coast Reports Significant Improvements in Fiscal 2002 Operating Results
Board of Directors Declares Cash Dividend of $0.06 Per Share
MORGAN HILL, Calif., March 12 -- The Coast Distribution System, Inc. (AMEX:CRV) today announced financial results for its fourth quarter and year ended December 31, 2002.
Fourth Quarter Operating Results
Net sales increased by 11% to $23.2 million in the fourth quarter of 2002 as compared to $20.9 million for the same quarter of 2001. The Company incurred a net loss of $717,000, or $0.16 per diluted share, in the fourth quarter of 2002 as compared to a net loss of $1,258,000, or $.0.29 per diluted share in the fourth quarter of 2001. That improvement was primarily attributable to the sale by Coast, in the fourth quarter of 2002, of its rights to manufacture a line of ventilation products to an R. V. products manufacturer.
Fiscal 2002 Operating Results
Net sales increased by 8% in fiscal 2002 to $145.8 million from $135.0 million in 2001. Coast generated income from operations of $2,641,000 for fiscal 2002 as compared to a loss from operations of $2,826,000 for fiscal 2001, an improvement of more than $5.4 million. And, Coast is reporting income, before the cumulative effect of accounting change for goodwill impairment, of $1,063,000, or $0.24 per diluted share, as compared to a loss of $2,495,000, or $0.57 per diluted share, in fiscal 2001, an improvement of more than $3.5 million.
As previously reported, the Company adopted SFAS 142, "Goodwill and Intangible Assets" effective as of January 1, 2002 and anticipated that it would be recognizing a non-cash goodwill impairment charge, as a cumulative effect of an accounting change, in fiscal 2002. The Company completed its transitional goodwill impairment analysis for 2002 and has determined the amount of that goodwill impairment charge to be $6,325,000, or $1.44 per share. As a result of that charge, which is being reported as the cumulative effect of an accounting change, the Company is reporting a net loss of $5,262,000, or $1.20 per diluted share, as compared to a net loss of $2,495,000, or $0.57 per diluted share, in 2001. This goodwill impairment charge, does not affect the Company's tangible net worth or cash flow.
Thomas R. McGuire, Chairman and Chief Executive Officer, said, "Our fourth quarter and, particularly, our year end results reflect continued financial and operational improvements. We have been able to reduce costs, improve our processes and increase the focus on our customers. The results were significant improvements in both operating income and net income (before the goodwill impairment charge) in fiscal 2002 as compared to 2001. We are excited about our prospects in 2003 and are committed to being the supplier of choice in the markets we serve."
Declaration of Cash Dividend
As a result of Coast's fiscal 2002 operating results and optimism about fiscal 2003, the Company's Board of Directors has declared a cash dividend of $0.06 per share of common stock that will be payable on April 21, 2003 to stockholders of record as of April 7, 2003.
About The Coast Distribution System
The Coast Distribution System, Inc. is a leading supplier of parts, accessories and supplies for recreational vehicles (RVs) and pleasure boats in the U.S. and Canada. Coast supplies its products to its 15,000 customers through 17 distribution centers located throughout the U.S. and Canada.
Forward Looking Statements
This News Release contains statements regarding expectations about our future financial performance that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are estimates of, or statements about our expectations or beliefs regarding, our future financial performance and operating trends that are based on current information and that are subject to a number of risks and uncertainties that could cause our actual operating results in the future to differ significantly from those expected at the current time. Those risks and uncertainties may include, among others: Loss of confidence among consumers regarding economic conditions, which could adversely affect their willingness to purchase and use their RVs and boats and which, in turn, would affect their purchases of the products we sell; increases in interest rates which affect the availability and affordability of financing for RVs and boats; increases in the costs and supply shortages of gasoline which affect the costs of using and the ability to use RVs and boats; and unusually severe or extended winter weather conditions, which can reduce the usage of RVs and boats for periods extending beyond the ordinary winter months or to regions that ordinarily encounter milder winter weather conditions; possible increases in price competition within our markets that could affect our margins and, therefore, our operating results; and possible changes in supply relationships in our markets, which could lead to increased competition or to reductions in the number of products we are able to offer our customers. Certain of these risks and uncertainties, in addition to other risks, are more fully described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this News Release, which speak only as of today date, or to make predictions based solely on historical financial performance. We also disclaim any obligation to update forward-looking statements contained in this document, whether as a result of new information, future events or otherwise.
THE COAST DISTRIBUTION SYSTEM, INC.
Condensed Consolidated Statements of Operations for the
Fourth Quarter and Year Ended December 31, 2002 & 2001
Fourth Quarter Ended December 31, 2002 2001
(In thousands, except per share data)
Net sales $23,220 $20,944
Loss from operations $(1,693) $(1,747)
Loss before income taxes $(1,325) $(2,043)
Net loss $ (717) $(1,258)
Per Share Data:
Diluted loss per share $ (0.16) $ (0.29)
Average number of shares outstanding 4,390,864 4,366,880
Year Ended December 31, 2002 2001
(In thousands, except per share data)
Net sales $145,816 $134,958
Income (loss) from operations $ 2,641 $ (2,826)
Income (loss) before taxes $ 1,878 $ (3,693)
Income (loss) before cumulative effect
of accounting change $ 1,063 $ (2,495)
Cumulative effect of accounting change $ (6,325) $ --
Net loss $ (5,262) $ (2,495)
Per Share Data:
Income (loss) per share
before cumulative effect
of accounting change $ 0.24 $ (0.57)
Cumulative effect of accounting change $ (1.44) $ --
Net loss $ (1.20) $ (0.57)
Average number of shares outstanding 4,386,987 4,360,211
Balance Sheet
At December 31,
2002 2001
(In Thousands)
ASSETS
Cash $ 1,996 $ 1,001
Accounts receivable 12,118 12,760
Inventories 36,198 32,356
Other current assets 3,134 1,980
Total Current Assets 53,446 48,097
Property, Plant & Equipment 2,455 2,137
Other Assets 1,255 10,002
Total Assets $ 57,156 $ 60,236
LIABILITIES
Accounts payable $ 10,909 $ 10,603
Other current liabilities 2,675 2,267
Total Current Liabilities 13,584 12,870
Long term debt 23,283 21,991
Shareholders Equity 20,289 25,375
Total Liabilities and Equity $ 57,156 $ 60,236