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Morgan Hill, Calif.-based Coast Distribution System Inc. reported a net loss on lower sales for its third quarter, ended Sept. 30, pulled down by “decreased demand” in the RV and marine sectors.
“We anticipated that the second half of 2008 would be a difficult period based on the extremely difficult market conditions facing the RV and recreational boating markets, and consumer products in general, as a result of the turmoil in both the U.S. credit markets and the economy in general and relatively high fuel prices,” said Jim Musbach, CEO of the aftermarket supplier.
Coast reported a third-quarter net loss of $290,000 compared with net income of $834,000 a year ago while sales fell to $34.7 million from $43.2 million.
For the nine months, the company posted net income of $421, 000 versus $1.7 million the previous year. Sales during the period declined to $115.4 million from $137.6 million.
Musbach said that in response to the depressed markets Coast was “taking steps to control costs and keep them in line with sales.”
“Since November 2007, we have reduced our staffing levels by 15%,” he said. “We have also replaced our annual Las Vegas trade show with a new, much more efficient online program that directly rewards customers with better pricing and other incentives for selling Coast products.”
The company has also reduced its debt “to operate in these challenging and uncertain times and places us in a good position when the RV and marine industries eventually recover.”
Looking forward, Coast is anticipating a loss in its fourth quarter, which is traditionally a slow period for both of its core markets.