Coast Distribution System Inc. reported its second quarter sales declined 5% and its earnings were down 73%.

The Morgan Hill, Calif.-based distributor earned $311,000 on sales of $46.9 million during the three months ended June 30.

“RV sales at both the OEM and aftermarket levels declined considerably during the latter half of the second quarter,” said Thomas McGuire, chairman and CEO. “As has historically occurred during times of declining sales, price competition has increased, which contributed to reductions in our gross margins during the quarter.”

In response, Coast Distribution plans to “reduce operating costs and assets” and to “seek new avenues for additional sales growth,” McGuire said.

One recent move made by Coast Distribution was to sell its Refresh line of recreational sanitation equipment to Thetford Corp., McGuire added.

Coast Distribution will continue to sell the Refresh and Thetford product lines, he said.

During the first half of this year, Coast Distribution reported a marginal increase in sales revenue to $90.81 million, compared with $90.75 million during the first half of 1999.

However, Coast Distribution’s earnings during the first half of this year were down 52% to $724,000.