Coast Distribution System Reports Increased Sales for 2005
Despite difficult market conditions, year-over-year sales increase 2.6%
MORGAN HILL, Calif., March 6 -- The Coast Distribution System (AMEX:CRV) today reported its sales increased 6.7 percent in the fourth quarter of 2005 compared with the same period of last year, driven by the introduction of a new portable and standby power generation product line sourced from Asia.
Coast, one of North America's largest suppliers of aftermarket replacement parts, accessories and supplies for the recreational vehicle and marine industries, reported a net loss of $1.05 million, or $0.24 per diluted share, on net sales of $29.3 million for the fourth quarter of 2005, compared with a net loss of $999,000 or $0.22 per diluted share, on net sales of $27.5 million for the same period of last year.
The company said its loss was expected due to the traditional seasonal slowdown in the fourth quarter, as its customers typically wait until the first quarter to place their orders for the upcoming buying season. The company also reported it incurred higher taxes in the most recent quarter compared to last year's fourth quarter due to taxes on the repatriation of cash from an Asian-based subsidiary back to the United States. The company's pre-tax loss in the 2005 fourth quarter was 10 percent lower than in the same quarter of 2004.
Despite higher freight and warehouse costs associated with Coast's move of its distribution center during the quarter, gross margin as a percentage of net sales improved to 14.6 percent in the fourth quarter of 2005, compared with 14.4 percent in the same quarter of last year. The improvement of gross margin for the quarter was due to increased margin contributions from the newly introduced KIPOR generator product.
For the year ended Dec. 31, 2005, Coast reported net earnings of $3.8 million, or $0.79 per diluted share, on net sales of $176.3 million, compared with net earnings of $4.4 million, or $0.91 per diluted share, on net sales of $171.8 million for 2004.
"We were pleased with our performance this year, as we increased sales under difficult market conditions," Coast Chairman and CEO Thomas R. McGuire said. "Our new larger distribution warehouse is allowing us to increase the number of proprietary-branded products we can source overseas, as shown by the strong sales of our new generator product line.
"Looking at our earnings for the year, the costs associated with the move, along with increased fuel and freight prices, cut into our profit margins. We are optimistic our sales will continue to grow in 2006 as market conditions improve due to increased consumer confidence and stabilized fuel prices. We also expect the introduction of new, higher-margin products will boost our profits."
About The Coast Distribution System
The Coast Distribution System, Inc. (http://www.coastdistribution.com/ ) 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 throughout the U.S. and Canada. Coast is publicly traded on the American Stock Exchange under the ticker symbol CRV.
THE COAST DISTRIBUTION SYSTEM, INC.
Condensed Consolidated Statements of Operations for the
Fourth Quarter and Year Ended December 31, 2005 & 2004
(In thousands, except per share data)
Quarter Ended December 31, Year Ended December 31,
2005 2004 2005 2004
Net sales $29,307 $27,476 $176,340 $171,833
Cost of sales(1) 25,021 23,519 143,732 138,792
Gross profit 4,286 3,957 32,608 33,041
Selling, general
and administrative
expenses 5,509 5,277 24,932 24,502
Operating income (1,223) (1,320) 7,676 8,539
Other income (expense)
Interest (257) (245) (1,308) (1,117)
Other 84 15 121 17
(173) (230) (1,187) (1,100)
Earnings (loss)
before taxes (1,396) (1,550) 6,489 7,439
Income tax credit 350 551 (2,732) (3,033)
Net earnings (loss) $(1,046) $(999) $3,757 $4,406
Basic earnings (loss)
per share $(0.24) $(0.22) $0.82 $0.96
Diluted earnings
(loss) per share $(0.24) $(0.22) $0.79 $0.91
(1) Includes distribution costs, such as freight and warehouse costs.
Condensed Consolidated Balance Sheet
At December 31,
2005 2004
(In Thousands)
ASSETS
Cash $1,744 $880
Accounts receivable 17,025 15,335
Inventories 37,545 44,151
Other current assets 3,736 4,002
Total Current Assets 60,050 64,368
Property, Plant & Equipment 2,634 2,068
Other Assets 849 800
Total Assets $63,533 $67,236
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable $9,573 $11,444
Other current liabilities 3,589 3,712
Total Current Liabilities 13,162 15,156
Long term debt 19,950 23,634
Stockholders Equity 30,421 28,446
Total Liabilities and Stockholders' Equity $63,533 $67,236