THE COAST DISTRIBUTION SYSTEM, INC.
350 Woodview Avenue
Morgan Hill, California 95037
(408) 782-6686
January 27, 2011
VIA EDGAR
Division of Corporation Finance
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Attention: David R. Humphrey, Branch Chief,
Re: | The Coast Distribution System, Inc. (File No. 1-9511) |
Form 10-K for Year Ended December 31, 2009, Filed March 31, 2010 |
Company Response to SEC Staff Supplemental Comment Letter dated January 25, 2011 |
Ladies and Gentlemen:
Set forth in the attachment to this letter is the response of The Coast Distribution System, Inc. to the comment in the letter dated January 25, 2011 (the “Supplemental Comment Letter”), of the Staff of the Securities and Exchange Commission (the “Staff”) relating to the Company’s 2009 Annual Report on Form 10-K filed with the Commission on March 31, 2010.
If you have any questions or would like to discuss these responses with us, please do not hesitate to call me at (408) 782-6686, Ext. 2167.
Sincerely, |
/s/ SANDRA A. KNELL |
Sandra A. Knell, Executive Vice President & Chief Financial Officer |
cc: | Margery Reich, Senior Staff Accountant |
Beverly A. Singleton, Staff Accountant
RESPONSE OF THE COAST DISTRIBUTION SYSTEM, INC. (FILE NO. 1-9511) TO THE COMMENT, IN THE LETTER DATED JANUARY 25, 2011 FROM THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION,
RELATING TO THE FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
Form 10-K (Fiscal Year Ended December 31, 2009)
Consolidated Statements of Operations, Page 31
1. WEHAVEREVIEWEDYOURRESPONSETOOURPRIORCOMMENTS 1AND 2. WITHRESPECTTOYOUR AVERAGE ANNUALINCOMEUSEDINTHEINCOMETESTFORINCOMEFROMCONTINUINGOPERATIONS,WENOTETHEAMOUNTOF $3,025,000WASBASEDONANAVERAGEOF 4YEARS,WHEREASTHEAVERAGEINCOMESHOULDHAVEBEENCOMPUTEDUSINGANAVERAGEOF 5YEARS,NOTWITHSTANDINGTHATAZEROAMOUNTHADBEENASSIGNEDTOTHELOSSYEAR. ASRECOMPUTED,THE AVERAGE ANNUAL INCOMEWOULDHAVEBEEN $2,420,000. SINCESUCHRECOMPUTEDAMOUNTISSTILLMORETHAN 10TIMESTHEFISCALYEARENDED DECEMBER 31, 2009PRE-TAXINCOMEFROMCONTINUINGOPERATIONS,THEOUTCOMEOFTHETESTHASNOTCHANGED. FORFUTUREREFERENCE,PLEASENOTETHATTHEINCOMEAVERAGINGTESTREQUIRESTHEUSEOF 5YEARSASTHEDENOMINATOR. INADDITION,ASYOURINVESTMENTIN ACCESSORIOSREPRESENTSASIGNIFICANTPORTIONOF “OTHER ASSETS”PLEASEGIVECONSIDERATIONTODISCLOSINGTHENATUREOFTHISINVESTMENTANDITSACCOUNTING,ALONGWITHANYMATERIALCHANGESFROMONEYEARTOTHENEXT,INYOURNOTESTOTHEFINANCIALSTATEMENTS.
Company Response:
As requested by the Staff, we will give consideration to disclosing, in the notes to our financial statements included in our future Form 10-K filings, the nature of the Company’s investment in Accessorios, along with a discussion of the manner in which we account for that investment, and any year-over-year material changes that may have occurred therein.
Acknowledgements
We also acknowledge that:
• | We are responsible for the adequacy and accuracy of the disclosure in our filings; |
• | Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
• | We may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |