<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1999
---------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from____________________ to ___________________
Commission File Number 1-9511
THE COAST DISTRIBUTION SYSTEM, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 94-2490990
- --------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
350 WOODVIEW AVENUE, MORGAN HILL, CALIFORNIA 95037
- -------------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
(408) 782-6686
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed, since last year)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to such
filing requirements for the past 90 days.
YES XX NO
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
4,312,746 shares of Common Stock
as of November 8, 1999
<PAGE> 2
THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, 1999 and December 31, 1998
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(UNAUDITED) (AUDITED)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 798 $ 435
Accounts receivable - net 15,444 12,412
Inventories 37,777 37,246
Other current assets 918 2,258
-------- --------
Total current assets 54,937 52,351
PROPERTY, PLANT, AND EQUIPMENT - NET 3,925 3,904
OTHER ASSETS 9,661 10,558
-------- --------
$ 68,523 $ 66,813
======== ========
LIABILITIES
CURRENT LIABILITIES
Current maturities of long-term obligations $ 324 $ 2,696
Accounts payable - trade 7,073 4,647
Other current liabilities 1,871 2,071
-------- --------
Total current liabilities 9,268 9,414
LONG-TERM OBLIGATIONS
Secured note payable to bank 24,467 21,245
Other long-term liabilities 1,962 2,086
-------- --------
26,429 23,331
REDEEMABLE PREFERRED STOCK OF SUBSIDIARY 146 237
SHAREHOLDERS' EQUITY
Preferred stock, $.001 par value;
authorized: 5,000,000 shares;
none issued and outstanding: -- --
Common stock, $.001 par value;
authorized: 20,000,000 shares;
4,403,146 and 5,279,854 issued as of
September 30, 1999 and December 31,
1998, respectively 4 5
Additional paid-in capital 16,979 19,635
Cumulative translation adjustment (486) (665)
Retained earnings 16,183 14,856
-------- --------
32,680 33,831
-------- --------
$ 68,523 $ 66,813
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE> 3
THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES
INTERIM CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 41,407 $ 41,555 $ 132,160 $ 126,107
Cost of sales, including distribution costs 35,235 35,279 109,479 105,358
--------- --------- --------- ---------
Gross profit 6,172 6,276 22,681 20,749
Selling, general and administrative expenses 6,165 5,501 17,779 15,540
--------- --------- --------- ---------
Operating income 7 775 4,902 5,209
Other income (expense)
Interest (542) (607) (1,833) (2,119)
Other 11 -- 5 --
--------- --------- --------- ---------
(531) (607) (1,828) (2,119)
--------- --------- --------- ---------
Earnings (loss) before income taxes (524) 168 3,074 3,090
Income tax provision (benefit) (361) 99 1,742 1,361
--------- --------- --------- ---------
NET EARNINGS (LOSS) $ (163) $ 69 $ 1,332 $ 1,729
========= ========= ========= =========
Earnings (loss) per common Share:
Basic $ (.04) $ .01 $ .28 $ .33
========= ========= ========= =========
Diluted $ (.04) $ .01 $ .28 $ .33
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Nine months ended September 30,
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,332 $ 1,729
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 1,119 1,105
Changes in assets and liabilities:
(Increase) in accounts receivable (3,032) (2,798)
(Increase) decrease in inventories (531) 1,265
(Increase) decrease in prepaids and other
current assets 1,340 (828)
Increase in accounts payable 2,426 4,124
Increase (decrease) in note, accrueds, and
other current liabilities (200) 116
------- -------
Total adjustments 1,122 2,984
------- -------
Net cash from operating activities 2,454 4,713
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired -- (1,142)
Proceeds from sale of investment -- 5,338
Capital expenditures (714) (137)
(Increase) decrease in other assets 471 (21)
------- -------
Net cash provided by (used in)
investing activities (243) 4,038
Cash flows from financing activities:
Net borrowings under line-of-credit agreement 3,222 (5,891)
Net repayments of other long-term debt (2,496) (2,618)
Issuance of Common Stock pursuant to Employee
Stock Option and Stock Purchase Plans 86 81
Redemption of redeemable preferred stock of
subsidiary (91) (120)
Dividends on preferred stock of subsidiary (5) (9)
Repurchases of common stock (2,743) --
------- -------
Net cash used in financing activities (2,027) (8,557)
Effect of exchange rate changes on cash 179 (283)
------- -------
NET INCREASE (DECREASE) IN CASH 363 (89)
Cash beginning of period 435 308
------- -------
Cash end of period $ 798 $ 219
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present the Company's financial position as of September 30, 1999 and the
results of its operations and cash flows for the three and nine month
periods ended September 30, 1999 and 1998. The accounting policies followed
by the Company are set forth in Note A to the Company's financial
statements in its Annual Report on Form 10-K for its fiscal year ended
December 31, 1998.
2. The Company's business is seasonal and its results of operations for the
three and nine month periods ended September 30, 1999 and 1998 are not
necessarily indicative of the results to be expected for the full year. See
"Management's Discussion & Analysis of Financial Condition and Results of
Operations" elsewhere in this Report.
3. Earnings per share. Basic earnings per share are computed using the
weighted average number of common shares outstanding during the period.
Diluted earnings per share are computed using the weighted average number
of common and common equivalent shares outstanding during the period.
Common equivalent shares consist of the incremental common shares issuable
upon the exercise of stock options (using the treasury stock method).
Common equivalent shares have been excluded from the computation of
earnings per share as if their effect is anti-dilutive.
4. The Company leases its corporate offices, warehouse facilities and data
processing equipment. Those leases are classified as operating leases as
they do not meet the capitalization criteria of FASB Statement No. 13. The
office and warehouse leases expire over the next eleven years and the
equipment leases expire over the next five years.
The minimum future rental commitments under noncancellable operating leases
having an initial or remaining term in excess of one year as of December
31, 1998 are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31, EQUIPMENT FACILITIES TOTAL
------------ --------- ---------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
1999 $57 $2,521 $2,578
2000 15 1,734 1,749
2001 8 1,632 1,640
2002 1 1,368 1,369
2003 -- 1,313 1,313
Thereafter -- 4,250 4,250
--- ------- -------
$81 $12,818 $12,899
=== ======= =======
</TABLE>
5. The Company has one operating segment, the distribution of replacement
parts, accessories and supplies for recreational vehicles and boats.
Geographic net sales for the nine months ended September 30, 1999 are as
follows:
USA $109,258,000
Canada 22,902,000
------------
$132,160,000
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
Factors Generally Affecting Sales of RV and Boating Products
We believe that the Company is the largest wholesale distributor of
replacement parts, accessories and supplies for recreational vehicles ("RVs"),
and one of the largest distributors of replacement parts, accessories and
supplies for boats, in North America. Sales are made by the Company to retail
parts and supplies stores, service and repair establishments and new and used RV
and boat dealers ("After-Market Customers"). The Company's sales are affected
primarily by (i) usage of RVs and boats and (ii) sales of new RVs and boats,
because consumers often "accessorize" their RVs and boats at the time of
purchase.
The usage and the purchase, by consumers, of RVs and boats depend, in
large measure, upon the extent of discretionary income available to consumers
and their confidence about economic conditions. Weather conditions also affect
the usage of RVs and boats. As a result, the Company's sales and operating
results can be, and in the past have been, adversely affected by recessionary
economic conditions, increases in interest rates, which affect the availability
and affordability of financing for purchases of RVs and boats, increases in
gasoline prices which adversely affect the costs of using RVs and boats, and
unusually weather conditions.
Results of Operations
Net Sales. Net Sales remained relatively unchanged in the third quarter
of 1999 at $41,407,000 as compared to $41,555,000 for the same quarter in 1998.
For the nine months ended September 30, 1999 sales increased 5% to $132,160,000
from $126,107,000 in the first nine months of 1998. This increase was a result
primarily of (i) increased consumer demand, during the first and second quarters
of the year, for the products that we sell, which we believe resulted primarily
from increases in sales and usage of recreational vehicles and boats, and (ii)
the fact that during the nine months ended September 30, 1999 we had nine full
months of product sales by Marine Distributors, a marine products distribution
business we acquired in late May 1998, whereas due to the date of that
acquisition, sales from that business were included in our operating results for
only four months of the nine month period ended September 30, 1998. Sales in the
third quarter of 1999 flattened on a comparative basis with the preceding year
due to more moderate than usual summer weather which adversely affected sales of
some of our higher-priced products such as air conditioners.
Gross Margin. The Company's gross margin decreased to 14.9% of net
sales in the three months ended September 30, 1999 from 15.1% for the same
period of 1998. This decrease was due primarily to (i) increased price
competition in the markets in which the Company operates, which the Company
believes is due to a market-wide slowdown in aftermarket sales of recreational
vehicle and boating products, and (ii) increased shipping costs charged by the
third-party freight carriers that deliver our products to customers. In the nine
months ended September 30, 1999, the Company's gross margin increased to 17.2%
of net sales from 16.5% in 1998. These increases were due primarily to (i) price
increases in early 1999 on selected products that the Company sells, and (ii)
the impact of fixed costs on a higher sales base.
Selling, General and Administrative Expenses. As a percentage of net
sales, selling, general and administrative expenses increased to 14.9% for the
third quarter of 1999 from 13.2% in the comparable quarter of 1998. In the nine
months ended September 30, 1999, these expenses increased to 13.5% of net sales
from 12.3% for the same period of 1998. These increases were primarily the
result of the installation of the Company's new computer system, which will
become operational in the fourth quarter of 1999 and increased selling expenses
due to the addition of marine sales personnel. Also contributing to the increase
in selling, general and administrative expenses in the nine months ended
September 30, 1999 were costs incurred in the relocation of our corporate
headquarters from San Jose, California to Morgan Hill, California that took
place in the first quarter of 1999.
Operating Income. Due to the combined effects of the decreases in sales
and gross margin and the increases in selling, general and administrative
expenses during the quarter ended September 30, 1999, operating income declined
to $7,000 from $775,000 in the third quarter of 1998. The increase in selling,
general and
6
<PAGE> 7
administrative expenses in the nine months ended September 30, 1999 more than
offset the increases in sales and gross margin for the same period as compared
to the nine months ended September 30, 1998, and therefore, operating income
declined to $4,902,000 for the nine months ended September 30, 1999 as compared
to $5,209,000 for the same nine month period of 1998.
Interest Expense. In the quarter ended September 30, 1999, interest
expense declined by $65,000 or 11%, as compared to the same quarter of 1998.
Interest expense for the nine months ended September 30, 1999 decreased by
$286,000 or 14%, as compared to the same period of 1998. These decreases were
largely the result of a reduction in the rate of interest the Company pays on
borrowings under its bank credit facility. The Company will continue to rely on
borrowings to fund a substantial portion of its working capital requirements and
future growth and, as a result, it anticipates that interest will continue to be
a significant expense for the Company.
Income Taxes. For the nine months ended September 30, 1999, the
Company's effective income tax rate was 56.7%. The effective tax rate is
affected by the amount of our expenses that are not deductible for income tax
purposes and income tax rates in Canada which are higher than income tax rates
in the United States.
Liquidity and Capital Resources
We finance our working capital requirements for our operations
primarily with borrowings under a long-term revolving bank credit facility and
internally generated funds. Under that credit facility, we may borrow up to the
lesser of (i) $35,000,000 with a seasonal increase to $40,000,000 between March
1 and June 20 of each year, or (ii) an amount equal to 80% of eligible accounts
receivable and 50% of eligible inventory (the "borrowing base"). We also may
borrow up to an additional $5,000,000 under the credit facility for general
corporate purposes, such as acquisitions or stock repurchases. Borrowings under
this credit facility bear interest at a per annum rate of interest equal to the
bank's prime rate or, at the Company's option but subject to certain
limitations, at the bank's available LIBOR rate, plus 1.75% (or, in the case of
borrowings other than for working capital purposes, at LIBOR plus 2.25% per
annum). At November 8, 1999 outstanding borrowings under the revolving credit
facility were $23,665,000. Borrowings under the credit facility are secured by
substantially all of the Company's assets and rank senior in priority to other
indebtedness of the Company.
The Company believes that available credit under its revolving credit
facility, together with internally generated funds, will be sufficient to enable
the Company to meet its working capital requirements and other cash requirements
over the next twelve months. The Company does not presently anticipate any
material increases in its cash requirements or material changes in its sources
of funds in the foreseeable future.
During the nine months ended September 30, 1999, increases in accounts
payable, net income and the receipt of income tax refunds enabled the Company to
generate cash from operating activities of $2,454,00. During the nine months
ended September 30, 1998, increases in accounts payable, reductions in
inventory, combined with the Company's earnings, enabled us to generate cash
from operating activities of $4,713,000.
Net cash used in investing activities was $243,000 in the nine months
ended September 30, 1999, as compared to net cash provided by investing
activities of $4,038,000 in the same period of 1998. During the first quarter of
1998, the Company received proceeds of $5,338,000 from the sale of its
investment in HWH. In addition, in May 1998, the Company used cash of $1,142,000
to acquire the inventory of Marine Distributors, Inc., a distributor of marine
products. Capital expenditures were $714,000 in 1999 and $137,000 in 1998.
In June 1999, we made the final payment, in the amount of $2,333,000,
on our outstanding senior subordinated notes. In early 1999 we began an open
market and private stock repurchase program and, as of October 31, 1999, we had
purchased $3,004,000 of shares of our common stock. We used a combination of
borrowings under the bank credit facility and internally generated funds to make
the principal payment on the senior subordinated notes and to fund the
repurchases of our shares. We intend to purchase additional shares in the future
if opportunities to do so, at favorable prices, become available.
The Company leases the majority of its facilities and certain of its
equipment under non-cancelable operating leases. The Company's future lease
commitments are described in Noted 4 of Notes to the Company's Interim Condensed
Consolidated Financial Statements included elsewhere in this report.
7
<PAGE> 8
Seasonality and Inflation
Sales of recreational vehicle and boating parts, supplies and
accessories are seasonal. We have significantly higher sales during the
six-month period from April through September than we do during the remainder of
the year. Because a substantial portion of the Company's expenses are fixed,
operating income declines and the Company sometimes incurs losses and must rely
more heavily on borrowings to fund operating requirements in months when sales
are lower.
Generally, the Company has been able to pass inflationary price
increases on to its customers. However, inflation also may cause or may be
accompanied by increases in gasoline prices and interest rates. Such increases,
or even the prospect of increase in the price or shortages in the supply of
gasoline, can adversely affect the purchase and usage of RVs and boats, which
can result in a decline in the demand for the Company's products.
Year 2000
The software for most computer systems was written using two digits
(rather than four) to define the applicable year. As a result, those computer
systems will be unable to interpret dates beginning with the year 2000 ("Y2K"),
which could cause computer errors or even system failures, leading to
disruptions in operations.
We recently acquired a new primary computer system, as part of a
capital equipment improvement program, to take advantage of improvements in
computer technology and functionality that have occurred since the last major
upgrading of our computer system. Although the primary purpose of acquiring the
new computer system was not to address the Y2K issue, we have been assured by
our computer vendors and consultants that the software employed by the new
system was written to recognize and process date sensitive information after
1999 and that, as a result, the new computer system is Y2K compliant. Most of
the costs of the new and upgraded systems, which total approximately $2,500,000
and are being financed with bank borrowings or equipment lease financing, would
have been incurred without regard to the Y2K issue. As a result, we believe that
the costs of achieving Y2K compliance will represent only a fraction of the
costs of obtaining the new system and such costs will not have a material effect
on the Company's financial condition or operating results.
We also use other electronic and communication systems that contain
software that would be unable to interpret dates after 1999. Although we believe
that the Company does not have non-IT systems that are of material importance to
our operations, we have developed a three-phase program designed to make those
other systems Y2K compliant. Phase I, which has been completed, involved the
identification of those systems. Phase II, which also has been completed,
involved the development and implementation of action plans, including the
upgrading or replacement of existing software, designed to make those systems
Y2K compliant. Phase III, to be completed during the fourth quarter of 1999,
involves the final testing of each of those systems and also the testing of the
new computer system to ensure that all of those systems are Y2K compliant.
Based on currently available information, we believe that the impact of
the Y2K issue, as it relates to our internal computer systems, will not be
material to the Company. However, notwithstanding the Company's Y2K compliance
and testing programs, it will not be possible, until the beginning of 2000, to
determine, with certainty, whether or not some processing problems or
disruptions will occur that could cause delays in the processing, shipping and
invoicing of customers orders, the processing and transmission of product
purchase orders to and the receipt of products from vendors, and the gathering
and analysis of financial data used by the Company in its operations. The impact
of any such delays on the Company's operating results and financial condition
cannot be accurately predicted, however, as this would depend on which computer
systems are affected by the time it takes and the expense that must be incurred
to correct those problems.
The Company currently expects that most of its vendors and customers
that rely heavily on computer systems in transacting business with the Company,
including public utilities that provide telephone and other utility services to
the Company, and the financial institutions with which the Company has banking
and borrowing relationships, will be Y2K compliant prior to the beginning of
2000. However, that expectation is based on verbal, rather than written,
information furnished to the Company by those vendors and customers, and the
Company has no cost-effective means of independently confirming that these third
parties will, in fact achieve Y2K compliance in
8
<PAGE> 9
sufficient time to avoid disruptions in their businesses that could affect the
Company. As a result, the Company's business operations and its results of
operations could be adversely affected, if and to the extent its major vendors
or customers fail to remedy their Y2K issues on a timely basis.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's exposure to market risk with respect to financial
instruments is primarily related to changes in interest rates with respect to
borrowing activities, which may adversely affect its financial position, results
of operations and cash flows. To a lesser degree, the Company is exposed to
market risk from foreign currency fluctuations associated with the Company's
Canadian operations and its Canadian currency denominated debt. The Company does
not use financial instruments for trading or other speculative purposes and is
not party to any derivative financial instruments.
In seeking to minimize the risks from interest rate fluctuations, the
Company manages exposures through its regular operating and financing
activities. As of September 30, 1999, the Company had outstanding $24,500,000
under its revolving credit facility. At September, 30 1999, a hypothetical 100
basis point increase in interest rates would result in a reduction of
approximately $61,000 in 1999 pretax earnings. The fair value of borrowings
under the Company's revolving credit facility approximate the carrying value of
such obligations.
The Company sometimes enters into forward exchange agreements to reduce
the effect of foreign currency fluctuations on a portion of its inventory
purchases in Canada for its Canadian operations. The gains and losses on these
contracts are reflected in earnings in the period during which the transactions
being hedged are recognized. The Company believes that these agreements do not
subject the Company to significant market risk from exchange rate movements
because the agreements offset gains and losses on the balances and transactions
being hedged. As of September 30, 1999, there were no such agreements
outstanding.
Approximately 15% of our debt is denominated in Canadian currency,
which also exposes us to market risk associated with exchange rate movements.
Historically, the Company has not used derivative financial instruments to
manage its exposure to foreign currency rate fluctuations since the market risk
associated with our foreign currency denominated debt has not been considered
significant.
--------------------------
This Report contains forward-looking information which reflects
Management's current views of future financial performance. The forward-looking
information is subject to certain risks and uncertainties, including, but not
limited to, the effect on future performance of changing product supply
relationships in the industry and the uncertainties created by those changes;
the potential for increased price competition; possible changes in economic
conditions, prevailing interest rates or gasoline prices, or the occurrence of
unusually severe weather conditions, that can affect both the purchase and usage
of RVs and boats and which, in turn, affects purchases by consumers of the
products that the Company sells; and the risks that the costs of resolving Y2K
issues could prove to be greater than currently anticipated or that the
Company's efforts to resolve those issues in a timely manner could prove to be
unsuccessful. For information concerning such factors and risks, see the
foregoing discussion in this section of this Report titled, "Management's
Discussion and Analysis of Financial Condition and Results of Operation." Due to
such uncertainties and risks, readers are cautioned not to place undue reliance
on such forward-looking statements, which speak only as of the date of this
Report.
9
<PAGE> 10
PART II
ITEM 4. SUBMISSION OF MATTERS FOR VOTE OF SECURITY HOLDERS
(a) The Company's Annual Meeting of Stockholders was held on July 27,
1999.
(b) Set forth below is the name of each director elected at the meeting
and the number of votes cast for their election and the number of votes
withheld. The election was uncontested and there were no broker non-votes in the
election.
Directors Elected at the Annual Meeting:
<TABLE>
<CAPTION>
Name of Number of Number of
Nominee/Director Votes "For" Votes "Withheld"
---------------- ----------- ----------------
<S> <C> <C>
John Casey 4,066,238 13,072
</TABLE>
The incumbent directors whose term of office continued after the
meeting were Thomas R. McGuire, Robert S. Throop and Ben A. Frydman.
(c) At the Annual Meeting, the Company's 1999 Stock Incentive Plan,
which provides for the grant of stock options purchase up to an aggregate of
300,000 shares of the Company's Common Stock to directors, officers, employees
and service providers, was approved by the following vote of the Shareholders:
For: 1,879,550 Against: 469,534 Abstain: 27,305
--- ------- --------
A total of 2,081,751 shares held of record by brokers were not voted on
approval of the 1999 Stock Incentive Plan.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K AND EXHIBITS
(a) Exhibits.
Exhibit 11.1 -- Computation of Earnings (Loss) Per Share for the
quarter and nine months, ended September 30, 1999
and 1998.
Exhibit 27 -- Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended September
30, 1999.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: November 12, 1999 THE COAST DISTRIBUTION SYSTEM, INC.
By: /s/ SANDRA A. KNELL
-------------------------------
Sandra A. Knell
Executive Vice President and
Chief Financial Officer
11
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT DESCRIPTION NUMBERED PAGE
- ------- ----------- -------------
<S> <C> <C>
Exhibit 11.1 Computation of Income (Loss) Per Share for the Quarter and the Nine
Months, ended September 30, 1999 and 1998
Exhibit 27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 11.1
THE COAST DISTRIBUTION SYSTEM, INC.
Computation of Earnings Per Share
Quarter Ended September 30,
<TABLE>
<CAPTION>
1999
----
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Net loss $(163,000)
Dividends paid on preferred
stock of subsidiary (1,000)
---------
Net loss attributable to common
shareholders $(164,000)
=========
Basic and diluted loss per share $(164,000) 4,440,464 $(0.04)
========= ========= ======
</TABLE>
<TABLE>
<CAPTION>
1998
----
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Net earnings $69,000
Dividends paid on preferred
stock of subsidiary (3,000)
-------
Net earnings available to common
shareholders $66,000
=======
Basic and diluted earnings per share $66,000 5,279,854 $0.01
======= ========= =====
</TABLE>
<PAGE> 2
EXHIBIT 11.1 (Continued}
THE COAST DISTRIBUTION SYSTEM, INC.
Computation of Earnings Per Share
Nine Months Ended September 30,
<TABLE>
<CAPTION>
1999
----
Income (Loss) Shares Per-Share
(Numerator) (Denominator) Amount
------------- ------------- ---------
<S> <C> <C> <C>
Net earnings $1,332,000
Dividends paid on preferred
stock of subsidiary (5,000)
----------
Net earnings available to common
shareholders $1,327,000
==========
Basic and diluted earnings per share $1,327,000 4,733,889 $0.28
========== ========= =====
</TABLE>
<TABLE>
<CAPTION>
1998
----
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Net earnings $1,729,000
Dividends paid on preferred
stock of subsidiary (9,000)
----------
Net earnings available to common
shareholders $1,720,000
==========
Basic and diluted earnings per share $1,720,000 5,266,567 $0.33
========== ========= =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF, AND THE STATEMENT OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 30,
1999 INCLUDED IN REGISTRANT'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER
ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
BALANCE SHEET AND STATEMENT OF OPERATIONS AND THE NOTES THERETO.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 798
<SECURITIES> 0
<RECEIVABLES> 15,444
<ALLOWANCES> 0
<INVENTORY> 37,777
<CURRENT-ASSETS> 54,937
<PP&E> 3,925
<DEPRECIATION> 0
<TOTAL-ASSETS> 68,523
<CURRENT-LIABILITIES> 9,268
<BONDS> 24,467
146
0
<COMMON> 4
<OTHER-SE> 32,676
<TOTAL-LIABILITY-AND-EQUITY> 68,523
<SALES> 132,160
<TOTAL-REVENUES> 132,160
<CGS> 109,479
<TOTAL-COSTS> 17,779
<OTHER-EXPENSES> (5)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,833
<INCOME-PRETAX> 3,074
<INCOME-TAX> 1,742
<INCOME-CONTINUING> 1,332
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,332
<EPS-BASIC> .28
<EPS-DILUTED> .28
</TABLE>
