JACKSON CENTER, Ohio-- Thor Industries, Inc. (NYSE: THO) announced preliminary sales and backlog for the quarter and three months ended October 31, 2011.

Preliminary consolidated sales in the quarter were $673,670,000, up 11% from $606,684,000 last year. RV sales were $562,649,000, up 11% from $506,563,000 last year. Bus sales were $111,021,000, up 11% from $100,121,000 last year.

Cash, cash equivalents and investments on October 31, 2011 were $208 million. Consolidated backlog on October 31, 2011 was $510 million, compared to $467 million last year. RV backlog was $300 million, versus $254 million last year. Bus backlog was $210 million versus $213 million last year.

"Thor's increased RV backlog reflects dealer enthusiasm for Thor's new RV product lines, with strong orders received in September at the Thor Open House event in Elkhart, IN," said Peter B. Orthwein, Thor Chairman, CEO & President. "The retail RV market remains about on par with last year and dealer inventories are right-sized for market demand. The bus market is showing signs of improvement with greater bid activity from municipalities," he added.

Thor is the world's largest manufacturer of recreation vehicles and a major builder of commercial buses and ambulances.

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CHARLOTTE, Mich.--Spartan Motors, Inc. (NASDAQ: SPAR) announced improved operating results for the third quarter of 2011 reflecting significant gains in its Delivery and Service Vehicles segment and the ongoing benefits of actions taken earlier in the year to realign operations.

Revenues were $120.3 million, up 21 percent from the second quarter, driven by increased sales in the Delivery and Service segment ahead of the peak holiday season, which offset softness in other markets Spartan serves. Also contributing to the improvement in third quarter revenues were sizable orders for Aftermarket Parts and Assemblies (APA). Improved product mix and initial cost savings due to Spartan's operational realignment in the previous quarter resulted in net income of $3.2 million, or $0.10 per diluted share.

Third quarter 2011 results:

• Net sales of $120.3 million (flat with Q3 2010 sales of $120.6 million)
• Gross margin of 17.0 percent of sales (up from 16.4 percent in Q3 2010)
• Operating expense of $15.2 million (up $0.8 million compared to Q3 2010)
• Net income of $3.2 million ($0.10 per diluted share)
• Cash from continuing operations of $26.4 million (for the first nine months of 2011)
• Ending consolidated backlog of $142.8 million (down 20.4 percent from Q2 2011)
• Total debt of $5.2 million
• Cash balance of $30.5 million (up $16.0 million from Q4 2010)

"Our top line performance highlighted the strength of our diversified business lines as solid growth in Utilimaster's business drove outstanding results in our Delivery and Service Vehicles segment," said John Sztykiel, President and CEO of Spartan Motors. "The performance at Utilimaster helped to offset softness in the recreational vehicle (RV), emergency response and defense markets and helped reduce our exposure to government-dependent revenue streams. Utilimaster's performance helped drive our business-to-business (B2B) and business-to-consumer (B2C) revenues to 63 percent of the total - leaving our business-to-government (B2G) revenues at just 37 percent. This is a dramatic improvement over the 2008 timeframe when 88 percent of our revenue was B2G derived and just 12% was B2B/B2C. This further demonstrates the insight of the diversified growth strategy we implemented in 2009.

"Our net income for the third quarter validates the restructuring actions we have taken over the last several months and demonstrates our ability to drive significant leverage to the bottom line. Our relationship with Isuzu grows stronger as we approach full capacity with production of the N-Series Gas cab and chassis. As we begin generating sales of the Reach(TM) commercial van that will also help us achieve a more diversified revenue mix."

Profitable Growth Opportunities and Compelling Products

• The Reach, a commercial van offering up to 35 percent better fuel economy with improved safety and operational performance, was launched into market during the third quarter. The Reach is being offered by a nationwide network of Isuzu dealers. The first orders were received near the end of the third quarter, with initial shipments expected in the fourth quarter.
• Classic Fire has been fully integrated into Spartan's emergency response vehicle lineup, creating a more diversified product line to meet the needs of the budget-sensitive market. The Classic Series of emergency response vehicles has been added to the Legend and Star Series, and will be focused on the lower-priced niche of the fire truck market.
• Spartan Chassis has been developing an ADA-compliant "low floor" chassis for use in the shuttle bus market. Expansion into this market illustrates Spartan's efforts to penetrate adjacent chassis markets that have countercyclical growth cycles to current markets served.
• Spartan Chassis was awarded orders for 23 Metro Star® emergency response cab and chassis for multiple fire departments in China. The latest orders represent another step forward in Spartan's efforts to expand sales globally and bring the total number of units sold to China to 94. These orders are expected to be delivered in the fourth quarter of 2011 and the first quarter of 2012.
• Production of the Isuzu N-Series Gas cab and chassis increased to 21 units per day, or 5,000 per year, during the quarter. The N-Series contributes significantly to Isuzu's position as America's top selling low cab forward truck, a position Isuzu has enjoyed since 1986.
• Utilimaster fulfilled significant orders of Aftermarket Parts and Assemblies for a large fleet customer in the third quarter. This helped to boost revenues and gross margins in the segment, and Utilimaster is pursuing additional profitable field service growth opportunities. These solutions enable existing customer fleets to achieve performance improvement, increased safety and the ability to retrofit new vocational packages. These achievements highlight Spartan's success in APA by capturing improved revenue opportunities and contribution margin.

Managing Costs and Strengthening the Balance Sheet

In the third quarter, Spartan completed a number of actions designed to reduce expenses in all areas of the Company's business. These actions are part of a constant discipline to improve operating leverage and match operating expenses to current market demands. In addition, Spartan made the decision to transition production for RV chassis to facilities in Wakarusa, Ind. to better meet the needs of RV manufacturer customers in Elkhart County, Ind. By moving production closer to customers, Spartan expects to reduce transportation costs and be more responsive to customer demand through improved speed and agility. As part of this transition, Spartan intends to move production of the Reach commercial van to Charlotte, Mich. to bring this operation closer to the engineering and production resources of the Isuzu team.

"Beyond the major restructuring actions we've taken over the past few years, we have remained vigilant in evaluating and refining our business model to reflect current market conditions and support our long-term strategic plan," said Joe Nowicki, Chief Financial Officer. "These efforts are not simply about cutting costs to improve profitability. They are also about improving customer focus through strategic production locations and investing in new business development. Our acquisition and integration of Utilimaster demonstrates how we are successfully investing to grow our business. Lastly, because of our relentless focus on the balance sheet, we ended the quarter with more than $30 million in cash, which marks a dramatic improvement and allows us the capital flexibility to grow."

• Consolidated net sales for the quarter were $120.3 million, down slightly from the same quarter last year, reflecting seasonal strength in the Delivery and Service market offsetting market declines in the RV, emergency response and military markets.
• Gross margin rose to 17.0 percent in the third quarter, from 16.4 percent for the same period in 2010, driven by a product mix shift toward fewer emergency response and military vehicles and higher delivery and service revenues.
• Operating expenses increased by $0.8 million from the third quarter of 2010, driven by the addition of the Classic Fire acquisition in the current year and a $0.6 million accrual for contingent earn-out payments associated with the greater-than-expected performance at Utilimaster. Partially offsetting these items were lower fixed operating expenses as a result of the annualized $4 million savings from restructuring actions taken earlier in the year.
• Excluding the Company's discontinued operations, the cash conversion cycle improved by 17 days, quarter over quarter, through better management of both accounts receivable and inventory.

Mr. Sztykiel concluded: "As we look ahead, we expect the challenges in some of our markets to continue, even as we face some seasonal decreases in demand, which were reflected in the lower backlog levels at the end of the third quarter. However, we remain focused on our blended growth strategy of penetrating diversified end markets through acquisitions, alliances or organic growth, while continually evolving our cost structure to ensure a sound balance sheet and profitability. The good news is that our third quarter results clearly reflected the benefits of our strategy."

About Spartan Motors

Spartan Motors, Inc. designs, engineers and manufactures specialty chassis, specialty vehicles, truck bodies and aftermarket parts for the recreational vehicle (RV), emergency response, government services, defense, and delivery and service markets. The Company's brand names - Spartan(TM), Crimson Fire(TM), Crimson Fire Aerials(TM), and Utilimaster® - are known for quality, value, service and first-to-market innovation. The Company employs approximately 1,900 associates at facilities in Michigan, Pennsylvania, South Dakota, Indiana, Florida and Texas. Spartan reported sales of $481 million in 2010 and is focused on becoming a global leader in the design, engineering and manufacture of specialty vehicles and chassis. Visit Spartan Motors at www.spartanmotors.com.

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Thor Industries, Inc. (NYSE:THO) announced results for the fourth quarter and year ended July 31, 2011. Sales for the quarter were $770,538,000, up 16% from $663,788,000 last year. Net income for the quarter was $36,889,000, compared with $40,600,000 last year. Basic earnings per share (E.P.S.) for the quarter were 66¢ versus 78¢ last year.

Sales for the year were $2,755,508,000, up 21% from $2,276,557,000 last year. Net income for the year was $106,273,000, compared with $110,064,000 last year. Basic E.P.S. for the year were $1.92 versus $2.08 last year.

Total RV sales for the quarter were $653,971,000, up 16% from $563,658,000 last year. Towable RV sales for the quarter were $565,534,000, up 21% from $465,749,000 last year. Motorized RV sales for the quarter were $88,437,000, down 10% from $97,909,000 last year. Total RV sales for the year were $2,340,442,000, up 27% from $1,848,549,000 last year. Towable RV sales for the year were $1,977,416,000, up 27% from $1,556,591,000 last year. Towable RV sales in both the quarter and the year include Heartland RV, since its acquisition on September 16, 2010. Motorized RV sales for the year were $363,026,000, up 24% from $291,958,000 last year. Bus segment sales for the quarter, including buses and ambulances, were $116,567,000, up 16% from $100,130,000 last year. Bus segment sales for the year were $415,066,000, compared with $428,008,000 last year.

Total RV income before tax for the quarter was $53,974,000, compared with $57,779,000 last year. Towable RV income before tax for the quarter was $50,322,000, down 4% from $52,207,000 last year. Motorized RV income before tax for the quarter was $3,652,000, compared with $5,572,000 last year. Total RV income before tax for the year was $159,138,000, up 2% from $156,232,000 last year. Towable RV income before tax for the year was $146,361,000, up 1% from $145,604,000 last year. Motorized RV income before tax for the year was $12,777,000, up 20% from $10,628,000 last year. Bus segment income before tax for the quarter was $4,268,000, compared with $6,149,000 last year and was $21,951,000 for the year, compared with $29,904,000 last year.

“Thor delivered solid results in both the fourth quarter and its fiscal year amidst challenging market conditions in both the RV and Bus businesses,” said Peter B. Orthwein, Thor Chairman. “We look to RV retail sales to pull through wholesale shipments in the year ahead, and to improving conditions in the 2012 public transportation market to fuel better bus sales ahead for Thor. Thor’s RV open house in Elkhart, Indiana last week was a success, with dealers optimistic and ordering. Dealer response to our new RV product lines is very positive. Likewise, Thor’s new low-floor cutaway bus products received favorable reviews at the recent BusCon convention in Chicago. I believe that Thor is well positioned to perform in both of our businesses this fiscal year,” Mr. Orthwein added.

Thor is the world’s largest manufacturer of recreation vehicles and a major builder of commercial buses and ambulances.

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MORGAN HILL, Calif.-- The Coast Distribution System, Inc. (NYSE Amex: CRV), one of North America's largest aftermarket suppliers of replacement parts, accessories and supplies for the recreational vehicle (RV), boating and outdoor recreation industries, reported financial results for the second quarter ended June 30, 2011.

Second Quarter 2011 vs. 2010

Coast reported net income of $1.0 million, or $0.21 per diluted share for the second quarter of 2011, compared to net income of $1.2 million, or $0.26 per diluted share in the same quarter of 2010. Net sales for the quarter fell 4.1 percent, to $33.2 million, compared to net sales of $34.6 million in the second quarter of 2010. The decrease in net sales during the quarter was the result of the slowing of the economy and weak consumer spending.

Gross profits declined by $0.4 million, resulting in a decrease in gross margin to 19.0 percent in the 2011 second quarter from 19.4 percent in the same quarter of 2010. The decrease in gross margins narrowed to 40 basis points, compared to a 460 basis-point decline in the first quarter. Selling, general and administrative expenses decreased by 2.5 percent, to $4.6 million, compared to $4.7 million in the same quarter in 2010. This improvement was primarily a result of several cost reductions, including a reduction in rent expense for the Company's headquarters, which was renegotiated in the first quarter of 2011, as well as a reduction in bad debt write-offs, when compared to the same quarter in the previous year. Operating expenses were adversely impacted by the strengthening Canadian dollar, resulting in higher expense levels when operating expenses from Coast's Canadian operations are translated to U.S. dollars and consolidated. Without the impact of foreign exchange, operating expenses would have shown further improvement.

On the balance sheet, accounts receivable totaled $15.7 million in the second quarter, an increase of $1.3 million compared with the balance at the end of the second quarter of 2010. Inventories at June 30, 2011 were $29.3 million, a decrease of $0.5 million compared with $29.8 million at June 30, 2010. The Company typically builds inventories during the first half of the year in anticipation of improved customer orders during the spring and summer months, when product sales increase due to seasonal increases in usage and purchases of RVs and boats. The reduction in inventory levels from the prior year was due primarily to lower sales levels along with active management of inventory turnover. Long-term debt was reduced to $12.7 million, from $13.3 million a year ago, reflecting the strength of Coast's balance sheet.

"The slowing economy and resulting weakness in consumer spending along with additional weakness in our industry took their toll on our results in the second quarter," said Coast's Chief Executive Officer Jim Musbach. "Concerns over unemployment and price inflation eating away at discretionary spending negatively impacted the sales and use of RVs in the first half of 2011. The RV industry as a whole has continued along a path of relatively anemic growth, particularly in terms of retail sales of RVs. In the United States, motorized RV retail registrations were up just 1.1 percent through May, while sales in Canada remained moribund, with motorized retail registrations down 19.4 percent through May. On the towable side, sales in the United States rose 6.8 percent for the first five months of 2011, but in Canada, retail sales fell 14.1 percent over the same period. These figures point to lower RV usage, resulting in softer demand for our products. As a result, we are taking added steps to increase sales in both our market and in other channels, particularly through new product supply relationships that should allow us to source from lower cost, high quality overseas suppliers. However, as we work through these issues, we expect the recent softer economic conditions will continue to affect our results."

Six Months Ended June 30, 2011 vs. 2010

For the six-month period ended June 30, 2011, Coast reported a net loss of $59,000, or ($0.01) per diluted share, on net sales of $57.9 million, compared with net earnings of $1.2 million, or $0.26 per diluted share, on net sales of $58.7 million in the same six-month period of 2010. The net loss was attributable to the loss of $1.0 million incurred in this year's first quarter which was largely offset by Coast's second quarter earnings.

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RVIA has published the 2010 Survey of Lenders’ Experiences, a publication detailing the results of the association’s annual nationwide survey of financial institutions concerning their RV lending portfolios.

This year’s report again provides an informative look at key data from both the Wholesale and Retail Indirect RV lending markets and illustrates why RV loans are an attractive product for financial institutions to include in their portfolios.

With the dollar volume for both types of loans on the rise, the information suggests that RV financing continues to be an profitable venue for banks, especially when considering the delinquency rate for RV loans continues to be among the lowest of other consumer loans tracked by the American Bank Association.

In documenting the stability and potential profitability of RV loans, the 2010 Survey of Lenders’ Experiences is a helpful tool for industry members to use in educating banks and financial institutions about the RV lending market.

RVIA has mailed complimentary copies of the publication to dealer, manufacturer and finance contacts. Copies are available for purchase in the Publications store on www.rvia.org. for $30.

The 2010 Survey of Lenders’ Experiences concentrated on the largest lenders in the Wholesale and Retail Indirect markets that together constitute approximately 80% of national lending activity.

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hor Industries, Inc. (NYSE:THO) announced preliminary sales and backlog for the quarter and twelve months ended July 31, 2011.

Sales in the quarter were $769 million, up 16% from $664 million last year. RV sales were $653 million, up 16% from $564 million last year. Bus Group sales, which include buses and ambulances, were $116 million, up 16% from $100 million last year.

Sales in the fiscal year were $2.754 billion, up 21% from $2.277 billion last year. RV sales were $2.339 billion, up 27% from $1.849 billion last year. Both RV and consolidated sales in the quarter and fiscal year include Heartland RV, acquired September 16, 2010. Bus Group sales in the fiscal year were $415 million, compared with $428 million last year.

Cash, cash equivalents and investments on July 31, 2011 were $216 million versus $253 million last year. Backlog on July 31, 2011 was $432 million, compared to $489 million last year. RV backlog was $228 million, versus $261 million last year. Bus Group backlog was $204 million versus $228 million last year.

“Thor’s revenues in the fourth quarter were lower than expectations resulting from the slowing of the economy and weak consumer spending, along with continued challenging conditions in the bus market. This led to pressure on margins in the quarter compared to the fourth quarter of fiscal 2010,” said Peter B. Orthwein, Thor Chairman, CEO & President. “The RV market is flat right now, due to lower consumer confidence levels. RV dealer inventories remain balanced with consumer demand, but dealers are currently cautious with their orders as we enter the slower fall retail season,” he added.

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FOREST CITY, Iowa--Winnebago Industries, Inc. (NYSE:WGO) reported results for the Company's third quarter and first nine months of Fiscal 2011.

Consolidated revenues for the third quarter of Fiscal 2011 ended May 28, 2011 were $135.6 million, an increase of 0.6% percent, versus $134.8 million for the third quarter of Fiscal 2010. Included within consolidated revenues were $7.2 million associated with towable products. The Company reported an operating profit of $0.5 million for the quarter, versus an operating profit of $3.4 million for the third quarter of Fiscal 2010. Net income for the third quarter of Fiscal 2011 was $1.2 million versus net income of $6.0 million for the third quarter of Fiscal 2010. On a diluted per share basis, the Company had net income of $0.04 for the third quarter of Fiscal 2011 versus net income of $0.21 for the third quarter of Fiscal 2010. The net income for the third quarter of Fiscal 2010 reflected the positive effect of $.08 per diluted share in tax benefits associated with resolution of tax audits and various tax planning initiatives.

The third quarter of Fiscal 2011 as compared to the third quarter of Fiscal 2010 was negatively impacted by last-in, first-out (LIFO) inventory expense as opposed to LIFO income in the prior year, commodity inflation, an impairment charge on an asset held for sale, as well as increased discounts, repurchase exposure and legal costs. These negative items were partially offset by a tax benefit recorded in the third quarter of Fiscal 2011, primarily due to a favorable adjustment as a result of a lower annual effective tax rate.

Consolidated revenues for the first nine months of Fiscal 2011 were $365.9 million, an increase of 12.1 percent, compared to $326.4 million for the first nine months of Fiscal 2010. Included within consolidated revenues were $9.0 million associated with towable products. The Company reported an operating profit of $9.5 million for the first nine months of Fiscal 2011, compared to an operating loss of $4.4 million for the first nine months of Fiscal 2010. The net income for the first nine months of Fiscal 2011 was $8.3 million, or $0.28 per diluted share, versus a net income of $5.4 million, or $0.18 per diluted share, for the first nine months of Fiscal 2010. A tax benefit of $.33 per diluted share was recorded in the first nine months of Fiscal 2010, which primarily related to tax benefits associated with the carryback of Fiscal 2009 net operating losses permitted by tax law changes and tax benefits associated with various tax planning initiatives and tax settlements.

"The retail market for motorhomes softened during our third Fiscal quarter, adding to our disappointment with the level of industry retail sales thus far in Calendar 2011 compared with the prior year," said Winnebago Industries' Chairman and CEO Bob Olson. "While discouraging, it is understandable in the context of new job creation slowing in America, along with reports of falling home prices, declining auto sales, weaker consumer spending, the concern over rising fuel prices and the impact these issues are currently having on the stock market. We remain concerned the current recovery appears to be slowing."

According to Winnebago Industries' President Randy Potts, "We have started to produce our 2012 motorhome lineup and we are introducing these new and exciting products to our dealers throughout our fourth quarter. In addition, the Winnebago Industries Towables subsidiary continues to make progress with new and redesigned SunnyBrook brand products to be introduced throughout the summer. We also expect to debut Winnebago brand towable products in the coming months."

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Thor Industries, Inc. (NYSE:THO) announced results for the third quarter and nine months ended April 30, 2011. Consolidated sales for the quarter were $852,059,000, up 25% from $680,192,000 last year. Net income for the quarter was $40,008,000 up 17% from $34,111,000 last year. E.P.S. for the quarter were 72¢ versus 66¢ last year.

Consolidated sales for the nine months were $1,984,970,000, up 23% from $1,612,769,000 last year. Net income for the nine months was $69,384,000 versus $69,464,000 last year. E.P.S. for the nine months were $1.26 versus $1.30 last year.

RV sales in the quarter were $742,797,000, up 33% from $559,166,000 last year. Towable RV sales in the quarter were $624,631,000, up 33% from $468,002,000 last year. Motorized RV sales in the quarter were $118,166,000, up 30% from $91,164,000 last year. RV sales in the nine months were $1,686,471,000, up 31% from $1,284,891,000 last year. Towable RV sales in the nine months were $1,411,882,000, up 29% from $1,090,842,000 last year. Motorized RV sales in the nine months were $274,589,000, up 42% from $194,049,000 last year. Consolidated sales, RV sales, and Towable RV sales in the third quarter and nine months of Thor’s 2011 fiscal year include Heartland RV, acquired September 16, 2010. Bus segment sales in the quarter were $109,262,000, compared with $121,026,000 last year. Bus segment sales in the nine months were $298,499,000 versus $327,878,000 last year.

RV income before tax in the third quarter was $60,035,000, up 23% from $48,754,000 last year. Towable RV income before tax in the quarter was $54,131,000, up 20% from $45,114,000 last year. Motorized RV income before tax in the quarter was $5,904,000, up 62% from $3,640,000 last year. RV income before tax in the nine months was $105,164,000, up 7% from $98,453,000 last year. Towable RV income before tax in the nine months was $96,039,000, up 3% from $93,397,000 last year. Motorized RV income before tax in the nine months was $9,125,000, up 80% from $5,056,000 last year. Bus segment income before tax in the quarter was $4,472,000, compared with $9,142,000 last year and was $17,683,000 in the nine months, versus $23,755,000 last year. Corporate net costs were $7,189,000 in the quarter versus $5,691,000 last year and $24,362,000 in the nine months versus $13,497,000 last year.

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SCHAUMBURG, Ill.--TCF Inventory Finance, Inc. (“TCFIF”), a subsidiary of TCF National Bank, announced today an agreement with Jayco, Inc. (“Jayco”) to become the preferred inventory finance source for Jayco’s three recreation vehicles divisions (Jayco, Starcraft RV and Entegra Coach) which includes 352 dealers in the United States and Canada.

“The launch of the Jayco floorplan finance program clearly supports TCFIF’s entry into the recreation vehicle industry,” said Ross Perrelli, President and CEO of TCFIF. “We are truly excited to enter the recreation vehicle industry and believe this relationship is an excellent fit for Jayco, their dealers and TCFIF.”

TCFIF is a premier inventory finance company offering a full range of inventory financing solutions to manufacturers and their distributors throughout the United States and Canada in the lawn and garden industry, the power sports industry, the consumer electronics and household appliances industry and now the recreation vehicle industry. TCFIF originated approximately $2.5 billion in loans to nearly 9,000 customers in 2010 and $1 billion in loans to date in 2011. TCFIF is an indirect subsidiary of TCF Financial Corporation (“TCF”) (NYSE: TCB) (www.tcfbank.com), a Wayzata, Minnesota-based bank holding company with $18.7 billion in total assets. TCF has 442 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF also conducts commercial leasing and equipment finance business in all 50 states. For more information about TCFIF, please visit www.tcfif.com.

Jayco, Inc., headquartered in Middlebury, IN, is the largest privately-held manufacturer of recreation vehicles in North America. The company builds and markets 23 lines of camping trailers, travel trailers, fifth wheel trailers, toy haulers, and motorhomes through its Jayco, Starcraft RV and Entegra Coach divisions. For more information, call (800) RV-JAYCO or visit www.jayco.com.

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MORGAN HILL, Calif. -- The Coast Distribution System, Inc. (NYSE Amex: CRV), one of North America's largest aftermarket suppliers of replacement parts, accessories and supplies for the recreational vehicle (RV), boating and outdoor recreation industries, today reported financial results for the first quarter ended March 31, 2011.

First Quarter 2011 vs. 2010

Despite a 2.5 percent increase in sales, Coast incurred a net loss of $1.0 million, or $0.23 per diluted share, on net sales of $24.7 million in the first quarter of 2011, compared to breakeven results, on net sales of $24.1 million in the same quarter of 2010. The increase in net sales during the quarter was a result of an increase in sales of air conditioners that are installed in RVs. This increase in air conditioner sales was attributable to the withdrawal of a supplier of aftermarket air conditioners that had previously supplied air conditioners to competing distributors.

The first quarter 2011 loss was primarily attributable to a decrease in gross profits and, to a lesser extent, an increase in selling, general and administrative ("SG&A") expenses. Gross profits declined by $1.0 million, resulting in a decrease in gross margin to 15.8 percent in the 2011 first quarter from 20.4 percent in the same quarter of 2010. That decrease was primarily due to a change in the mix of products sold to include a greater proportion of air conditioners, which tend to generate lower gross margins, and to selected price reductions on certain products, which were implemented in response to an increase in price competition in the market. In addition, shipping costs increased as a result of increased fuel prices. The increase in SG&A expenses was due largely to the restoration, in July 2010, of one-half of the Company-wide reductions in salaries that were implemented in 2009.

"The first quarter marked a significant turn in the industries we serve, most notably the RV industry. Poor weather in the first quarter, combined with higher gas prices and continued uncertainty surrounding the economy, have created a potent combination of factors to dampen the sales and use of RVs," said Coast's Chief Executive Officer Jim Musbach. "The current state of the RV industry is rather weak, particularly in terms of retail sales of motorized RVs. In the United States, motorized RV retail registrations fell 15.2 percent in February, while sales in Canada fared even worse, with motorized retail registrations down 42.4 percent in February. The dramatic decrease in RV retail sales translates to lower RV usage, resulting in softer demand for Coast's products. While it appears consumer demand may remain soft over the near term, we are taking added steps to increase sales, while managing our overall cost structure. As the current softness in our markets runs its course, we anticipate continued pressure on our sales and margins over the near term."

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