Coast Distribution System Inc., a distributor of accessories to the RV and leisure marine industries in the U.S. and Canada, reports it lost $733,000 during the second quarter.

The loss during the three months ended June 30 compares with a net profit of $311,000 earned during the April-through-June portion of 2000.

As a result, for the first half of this year, Coast reports a loss totaling $783,000, compared with a profit of $724,000 earned during the first half of 2000.

Coast’s sales revenue declined 14% in the second quarter to $40.3 million and its sales during the first half of this year also were down 14% to $78.1 million.

Although both the RV and pleasure boat markets experienced declines during the first half of this year, Coast Chairman and CEO Tom McGuire said, “A meaningful part of our shortfall is sales and profits was the result of the difficulties that we had implementing our supply chain strategy.

“One of the results of these difficulties was a lower service level to our customers, hence less sales that were available to us,” McGuire said. “Secondly, higher costs than necessary due to inefficiencies and bottlenecks in the system resulted in a higher inventory at the end of the quarter than we needed.”

McGuire added that Coast’s service now is much improved and that “for the most part,” the company has recaptured the market share that it had lost.

McGuire also believes that Coast’s supply chain strategy will eventually yield lower costs, inventory reductions and increased market share.