<SUBMISSION>
<ACCESSION-NUMBER>0001017062-03-001232
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20030331
<FILING-DATE>20030514
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>COAST DISTRIBUTION SYSTEM INC
<CIK>0000728303
<ASSIGNED-SIC>5013
<IRS-NUMBER>942490990
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-09511
<FILM-NUMBER>03700224
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1982 ZANKER RD
<CITY>SAN JOSE
<STATE>CA
<ZIP>95112
<PHONE>4084368611
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1982 ZANKER RD
<CITY>SAN JOSE
<STATE>CA
<ZIP>95112
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>COAST RV INC
<DATE-CHANGED>19880619
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML><HEAD>
<TITLE>FORM 10-Q</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <hr size="3" width="100%" noshade color=black> <p align="center"><font size="5" face="Times New Roman"><b><font size="3">UNITED STATES<br> SECURITIES AND EXCHANGE COMMISSION</font><br> </b></font> <font
size="3"><b><font size="2">WASHINGTON, D.C. 20549</font></b></font></p> <p align="center"> <font size="5" face="Times New Roman"><b><font size="3">FORM 10-Q</font></b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="100%" colspan="5" valign="bottom"> <p> <font size="2" face="Times New Roman"><b>(Mark One)</b></font></p> </td> </tr>
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Wingdings">x</font></p> </td>
<td width="1%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="93%" colspan="3" valign="bottom"> <p> <font size="2" face="Times New Roman"><b>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"><font size="2"></font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="1%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="93%" colspan="3" valign="bottom"> <p> <font size="2" face="Times New Roman"><b>For the quarterly period ended March 31, 2003</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"><font size="2"></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman"><b>OR</b></font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="1%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="93%" colspan="3" valign="bottom"> <p align="center"><font size="2"></font></p> </td> </tr>
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Wingdings">o</font></p> </td>
<td width="1%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="93%" colspan="3" valign="bottom"> <p> <font size="2" face="Times New Roman"><b>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"><font size="2"></font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="1%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="93%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman"><b>For the transition period from _________________ to ___________________</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"><font size="2"></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman"><b>Commission File Number 1-9511</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="6" face="Times New Roman"><b><font size="4">THE COAST DISTRIBUTION SYSTEM, INC</font>.</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(Exact name of Registrant as specified in its charter)</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="49%" colspan="3" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman"><b>DELAWARE</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="49%" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman"><b>94-2490990</b></font></p> </td> </tr>
<tr>
<td width="49%" colspan="3" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="49%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="49%" colspan="3" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(State or other jurisdiction of incorporation or organization)</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="49%" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(I.R.S. Employer Identification Number)</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="49%" colspan="3" valign="bottom"> <p align="center"><font size="2" face="Times New Roman"><b>350 Woodview Avenue, Morgan Hill, California</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center"><font size="2"></font></p> </td>
<td width="49%" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman"><b>95037</b></font></p> </td> </tr>
<tr>
<td width="49%" colspan="3" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="49%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="49%" colspan="3" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(Address of principal executive offices)</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="49%" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(Zip Code)</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman"><b>(408) 782-6686</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(Registrant&#146;s telephone number, including area code)</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman"><b>Not Applicable</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(Former name, former address and former fiscal year, if changed, since last year)</b></font></p> </td> </tr>
<tr>
<td width=41 style='border:none'></td>
<td width=9></td>
<td width=307></td>
<td width=7></td>
<td width=357></td> </tr> </table> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="13%">
<tr>
<td width="7%" valign="top"> <p> <font size="2" face="Times New Roman">Yes&nbsp;&nbsp;</font> <font size="2" face="Wingdings">x</font></p> </td>
<td width="6%" valign="top"> <p> <font size="2" face="Times New Roman">No&nbsp;&nbsp;</font> <font size="2" face="Wingdings">o</font></p> </td> </tr> </table> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). </font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="13%">
<tr>
<td width="7%" valign="top"> <p> <font size="2" face="Times New Roman">Yes&nbsp;&nbsp;</font> <font size="2" face="Wingdings">o</font></p> </td>
<td width="6%" valign="top"> <p> <font size="2" face="Times New Roman">No&nbsp;&nbsp;</font> <font size="2" face="Wingdings">x</font></p> </td> </tr> </table> <p align="center"> <font size="2" face="Times New Roman"><b>APPLICABLE ONLY TO CORPORATE
ISSUERS:</b></font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate the number of shares outstanding of each of the issuer&#146;s classes of common stock, as of the latest
practicable date.</font></p> <p align="center"> <font size="2" face="Times New Roman">4,414,598 shares of Common Stock as of May 8, 2003.</font></p> <hr size="3" width="100%" noshade color=black>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"> <font size="2" face="Times New Roman"><b>PART I &#151; FINANCIAL INFORMATION</b></font></p>
<table align="center" border=0 cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="10%" valign="top"> <p><font size="2" face="Times New Roman"><b>ITEM 1.</b></font></p> </td>
<td width="98%" valign="top"> <p> <font size="2" face="Times New Roman"><b>FINANCIAL STATEMENTS</b></font></p> </td> </tr> </table> <p align="center"> <font size="2" face="Times New Roman"><b>THE COAST DISTRIBUTION SYSTEM, INC. AND
SUBSIDIARIES</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS<br> (Dollars in thousands, except per share data)</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>March 31,<br> 2003</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>December 31,<br> 2002</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(unaudited)</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="8%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em" align="center"><font size="2" face="Times New Roman"><b>ASSETS</b></font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">CURRENT ASSETS</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Cash</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,087</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,996</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Accounts receivable &#150; net of allowances of $1,743 and $1,172 as of March 31, 2003 and December 31, 2002,
respectively</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">31,090</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">12,118</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Inventories</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">39,123</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">36,198</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Other current assets</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">3,077</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">3,134</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">Total current assets</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">74,377</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">53,446</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">PROPERTY, PLANT, AND EQUIPMENT, NET</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">2,427</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">2,454</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">OTHER ASSETS</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,358</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,256</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">78,162</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">57,156</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em" align="center"><font size="2" face="Times New Roman"><b>LIABILITIES</b></font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">CURRENT LIABILITIES</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Current maturities of long-term obligations</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">65</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">62</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Accounts payable</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">16,823</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">10,909</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Accrued liabilities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">2,534</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">2,613</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">Total current liabilities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">19,422</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">13,584</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">LONG-TERM OBLIGATIONS</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Secured note payable to bank</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">37,296</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">23,004</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Other long-term liabilities</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">295</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">279</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right><font size="2" face="Times New Roman">37,591</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">23,283</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">STOCKHOLDERS&#146; EQUITY</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Preferred stock, $.001 par value: 2,000,000 shares authorized: none issued or outstanding:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Common stock, $.001 par value: 10,000,000 shares authorized; 4,414,598 and 4,390,864 shares issued and outstanding at March 31, 2003
and December 31, 2002, respectively</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">16,862</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">16,837</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Accumulated other comprehensive loss</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(555</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(806</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Retained earnings</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">4,842</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">4,258</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">21,149</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">20,289</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">78,162</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">57,156</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align="center"> <font size="2" face="Times New Roman">The accompanying notes are an integral part of these statements.</font></p> <p
align="center"><font size="2" face="Times New Roman">2</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"> <font size="2" face="Times New Roman"><b>THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF OPERATIONS<br> (Dollars in thousands, except per share data)</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>Three Months Ended March 31, <br> (Unaudited)</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2003</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Net sales</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">40,631</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">38,197</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Cost of sales, including distribution costs</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">33,173</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">31,073</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">Gross profit</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">7,458</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">7,124</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Selling, general and administrative expenses</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">5,712</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">5,346</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"><font size="2" face="Times New Roman">Operating income</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,746</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,778</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Other income (expense)</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Interest</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(352</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(331</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Other</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(1</font></p> </td>
<td width="2%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">1</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(353</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(330</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Earnings before income taxes and cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,393</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,448</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Income tax provision</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">544</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">729</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Earnings before cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">849</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">719</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(6,325</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">Net earnings (loss)</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">849</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(5,606</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Basic earnings (loss) per share:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Before cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">0.19</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">0.16</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(1.45</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Basic earnings (loss) per share</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">0.19</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(1.28</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Diluted earnings (loss) per share:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Before cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">0.19</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">0.16</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(1.45</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Diluted earnings (loss) per share</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">0.19</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(1.28</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">The accompanying notes are an integral part of these statements.</font></p> <p
align="center"> <font size="2" face="Times New Roman">3</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"> <font size="2" face="Times New Roman"><b>THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF CASH FLOWS<br> (Dollars in thousands)</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>Three months ended March 31,<br> (Unaudited)</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2003</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Cash flows from operating activities:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Net earnings (loss)</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">849</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(5,606</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Adjustments to reconcile net earnings (loss) to net cash used in operating activities:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">Depreciation and amortization</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">213</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">204</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">Cumulative effect of accounting change</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">6,325</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:5em; text-indent:-1em"><font size="2" face="Times New Roman">Changes in assets and liabilities:</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:7em; text-indent:-1em"> <font size="2" face="Times New Roman">Accounts receivable</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(18,972</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(17,899</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:7em; text-indent:-1em"> <font size="2" face="Times New Roman">Inventories</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(2,925</font></p> </td>
<td width="2%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">750</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:7em; text-indent:-1em"> <font size="2" face="Times New Roman">Prepaids and other current assets</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">57</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(505</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:7em; text-indent:-1em"><font size="2" face="Times New Roman">Accounts payable</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">5,914</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">5,730</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:7em; text-indent:-1em"> <font size="2" face="Times New Roman">Accrued liabilities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(344</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(71</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:9em; text-indent:-1em"> <font size="2" face="Times New Roman">Total adjustments</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(16,057</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(5,466</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:11em; text-indent:-1em"><font size="2" face="Times New Roman">Net cash used in operating activities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(15,208</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(11,072</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Cash flows from investing activities:</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Capital expenditures</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(179</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(451</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">(Increase) decrease in other assets</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(109</font></p> </td>
<td width="2%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">832</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:9em; text-indent:-1em"> <font size="2" face="Times New Roman">Net cash provided by (used in) investing activities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(288</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">381</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Cash flows from financing activities:</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Net borrowings under line-of-credit agreement</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">14,292</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">10,887</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Net borrowings of other long-term debt</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">19</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">67</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Issuance of common stock pursuant to employee stock option and purchase plans</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">25</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">14</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:9em; text-indent:-1em"><font size="2" face="Times New Roman">Net cash provided by financing activities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">14,336</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">10,968</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Effect of exchange rate changes on cash</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">251</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(8</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:9em; text-indent:-1em"><font size="2" face="Times New Roman">NET INCREASE (DECREASE) IN CASH</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(909</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">269</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Cash beginning of period</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">1,996</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">1,001</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Cash end of period</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,087</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,270</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Non-cash financing activities:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="76%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">During the three months ended March 31, 2003, the Company&#146;s Board of Directors declared a cash dividend in the amount of $0.06
per share.&#160; That dividend, totaling $265,000, was paid on April 29, 2003.</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align="center"> <font size="2" face="Times New Roman">The accompanying notes are an integral part of these statements.</font></p> <p
align="center"><font size="2" face="Times New Roman">4</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"> <font size="2" face="Times New Roman"><b>THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>NOTES TO CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Times New Roman">1.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman">The accompanying condensed consolidated interim financial statements have been prepared in accordance with accounting principles and SEC rules applicable to interim financial
information.&#160; Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.&#160; In the opinion of management,
these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair presentation of the Company&#146;s financial position as of March&nbsp;31, 2003
and the results of its operations and cash flows for the three months ended March&nbsp;31, 2003 and 2002.&#160; The accounting policies followed by the Company are set forth in Note&nbsp;A to the Company&#146;s financial statements in its Annual
Report on Form&nbsp;10-K for its fiscal year ended December&nbsp;31, 2002.</font></p> </td> </tr>
<tr>
<td width="5%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="94%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Times New Roman">2.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman">The Company&#146;s business is seasonal and its results of operations for the three months ended March&nbsp;31, 2003 and 2002 are not necessarily indicative of the results to be
expected for any other interim period during or for the full year ending December&nbsp;31, 2003 or for any other fiscal period.&#160; See &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations &#150;
Seasonality and Inflation&#148; in Item&nbsp;2 of Part&nbsp;I of this Report.</font></p> </td> </tr>
<tr>
<td width="5%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="94%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign="top"> <p><font size="2" face="Times New Roman">3.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman">Basic earnings per share for each period are computed using the weighted average number of common shares outstanding during such period.&#160; Diluted earnings per share are
computed using the weighted average number of common and potentially dilutive securities outstanding during the period.&#160; Potentially dilutive securities consist of the incremental common shares issuable upon the exercise of stock options (using
the treasury stock method).&#160; Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive.&#160; For the three months ended March&nbsp;31, 2003, a total of 486,500 common shares issuable on exercise of
stock options were excluded from the computation of diluted earnings per share because their exercise prices were greater than the average market price of the Company&#146;s common stock during these periods.&#160; For the three months ended
March&nbsp;31, 2002, a total of 659,000 common shares issuable on exercise of stock options were excluded from the computation of diluted earnings (loss) per share as their inclusion would have been anti-dilutive due to the net loss for the
period.</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="80%">
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="24%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Three Months Ended<br> March 31,</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="24%" colspan="5" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"><font size="1" face="Times New Roman"><b>2003</b></font></p> </td>
<td width="5%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="5%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="24%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(In thousands)</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="70%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Numerator:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="5%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Net earnings (loss)</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">849</font></p> </td>
<td width="5%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(5,606</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="5%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Denominator:</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="5%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Weighted average shares outstanding</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">4,399</font></p> </td>
<td width="5%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">4,375</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Dilutive effect of stock options</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">105</font></p> </td>
<td width="5%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="5%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Denominator for diluted net earnings (loss) per share</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">4,504</font></p> </td>
<td width="5%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">4,375</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="70%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="5%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="top"> <p><font size="2" face="Times New Roman">4.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman">The Company leases its corporate offices, warehouse facilities and data processing equipment.&#160; Those leases are classified as operating leases as they do not meet the
capitalization criteria of SFAS No.&nbsp;13.&#160; The office and warehouse leases expire over the next ten years and the equipment leases expire in 2003.&#160; The minimum future rental commitments under noncancellable operating leases having an
initial or remaining term in excess of one year as of December&nbsp;31, 2002 are as follows:</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="80%">
<tr>
<td width="65%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="1" face="Times New Roman"><b>Year Ending December 31,</b></font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Equipment</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Facilities</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Total</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="65%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="65%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="31%" colspan="8" valign="bottom"> <p align="center"><font size="1" face="Times New Roman"><b>(In thousands)</b></font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">2003</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">200</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">3,106</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">3,306</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">2004</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">2,271</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">2,271</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"><font size="2" face="Times New Roman">2005</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,757</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,757</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">2006</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">1,766</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">1,766</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:5em; text-indent:-1em"> <font size="2" face="Times New Roman">2007</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">999</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">999</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Thereafter</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">3,370</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">3,370</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">200</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">13,269</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">13,469</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="65%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">5</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"> <font size="2" face="Times New Roman"><b>THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>NOTES TO CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Times New Roman">5.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman">The Company has one operating segment, the distribution of replacement parts, accessories and supplies for recreational vehicles and boats.&#160; Set forth below are the net
sales, by region:</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="80%">
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="23%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Three Months Ended <br> March 31,</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="23%" colspan="5" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"><font size="1" face="Times New Roman"><b>2003</b></font></p> </td>
<td width="4%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="10%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="4%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="10%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="23%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(In thousands)</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="71%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">USA</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">32,375</font></p> </td>
<td width="4%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">31,098</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Canada</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">8,256</font></p> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">7,078</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="71%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Other</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="4%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">21</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="71%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">40,631</font></p> </td>
<td width="4%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">38,197</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="71%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Times New Roman">6.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman"><u>Intangible Assets</u>.&#160; Goodwill and other intangible assets primarily represent the excess of the purchase price paid over the fair value of the net assets acquired in
connection with business acquisitions.&#160; The Company adopted SFAS 142 &#147;Goodwill and Intangible Assets&#148; as of January 1, 2002.&#160; In accordance with SFAS 142, we ceased amortizing goodwill as of that date and we performed a required
transitional goodwill impairment test.&#160; This analysis resulted in a non-cash goodwill impairment charge in the amount of $6,325,000, which was reported in the statement of operations for the three months ended March 31, 2002 as a cumulative
effect of an accounting change.&#160; There was no tax benefit associated with this charge.&#160; Additionally, the Company has identified an intangible asset that is continuing to be amortized over its contractual life of seven years.</font></p>
</td> </tr>
<tr>
<td width="5%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="94%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Times New Roman">7.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman"><u>Comprehensive Earnings (Loss)</u>.</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="80%">
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="23%" colspan="5" valign="bottom"> <p align="center"><font size="1" face="Times New Roman"><b>Three Months Ended<br> March 31,</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="23%" colspan="5" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="8%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2003</b></font></p> </td>
<td width="4%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="8%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="4%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="9%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="23%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>(In thousands)</b></font></p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="73%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Net earnings (loss)</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="7%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">849</font></p> </td>
<td width="4%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(5,606</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Change in accumulated foreign currency translation adjustment:</font></p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">251</font></p> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="8%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(8</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="7%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="73%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Comprehensive earnings (loss)</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="7%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">1,100</font></p> </td>
<td width="4%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="8%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(5,614</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="73%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="7%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="8%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="top"> <p> <font size="2" face="Times New Roman">8.</font></p> </td>
<td width="94%" valign="top"> <p> <font size="2" face="Times New Roman"><u>Recently Issued Accounting Standards</u>.&#160; In December 2002, the FASB issued SFAS No. 148, &#147;Accounting for Stock-Based Compensation &#150; Transition and
Disclosure&#148; which amends SFAS No. 123, &#147;Accounting for Stock-Based Compensation,&#148; and provides alternative methods of transition to the fair value method of accounting for stock-based employee compensation.&#160; SFAS No. 148 also
amends the disclosure requirements of SFAS No. 123 and Accounting Principles Board (&#147;APB&#148;) Opinion No. 28, &#147;Interim Financial Reporting,&#148; to require disclosure of the effects of an entity&#146;s accounting policy with respect to
stock-based compensation on reported net earnings and earnings per share in both annual and interim financial statements.&#160; The disclosure provisions of SFAS No. 148 are applicable to all companies with stock-based employee compensation,
regardless of whether the compensation is accounted for using the fair value method of SFAS No. 123 or the intrinsic value method of APB Opinion No. 25.&#160; As allowed by SFAS No. 123, the Company utilizes the accounting method prescribed by APB
Opinion No. 25 and has adopted the disclosure requirements of SFAS No. 148.</font></p> </td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">6</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"> <font size="2" face="Times New Roman"><b>THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES</b></font></p> <p align="center"> <font size="2" face="Times New Roman"><b>NOTES TO CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size="2" face="Times New Roman">The following table illustrates the effect on net earnings (loss) and net earnings (loss) per common share in the three months ended March 31, 2003 and 2002, respectively, if
the Company had applied fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.</font></p> </td> </tr> </table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="80%">
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="28%" colspan="5" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Three Months Ended<br> March 31,</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="28%" colspan="5" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="10%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2003</b></font></p> </td>
<td width="7%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="10%" colspan="2" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>2002</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="10%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="7%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="10%" colspan="2" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="28%" colspan="5" valign="bottom"> <p align="center"><font size="1" face="Times New Roman"><b>(In thousands, except per share data)</b></font></p> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="67%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Net earnings (loss)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">849</font></p> </td>
<td width="7%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(5,606</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Deduct:&#160; Total stock-based employee compensation expense determined under fair value based method, net of related tax
effects</font></p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="9%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(20</font></p> </td>
<td width="7%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="9%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(25</font></p> </td>
<td width="2%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="9%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="9%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"><font size="2" face="Times New Roman">Pro forma net earnings (loss)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">829</font></p> </td>
<td width="7%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(5,631</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="9%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="9%" valign="bottom"> <hr size="3" width="100%" noshade color=black> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em"> <font size="2" face="Times New Roman">Net earnings (loss) per common share:</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:1em; text-indent:-1em">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="7%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Basic&#150;as reported</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">0.19</font></p> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(1.28</font></p> </td>
<td width="2%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Basic&#150;pro forma</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">0.19</font></p> </td>
<td width="7%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(1.29</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom"> <p style="margin-left:3em; text-indent:-1em"> <font size="2" face="Times New Roman">Diluted&#150;as reported</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">0.19</font></p> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom"> <p align=right> <font size="2" face="Times New Roman">(1.28</font></p> </td>
<td width="2%" valign="bottom"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="67%" valign="bottom" bgcolor="#cceeff"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">Diluted&#150;pro forma</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">0.18</font></p> </td>
<td width="7%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">$</font></p> </td>
<td width="9%" valign="bottom" bgcolor="#cceeff"> <p align=right> <font size="2" face="Times New Roman">(1.29</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p> <font size="2" face="Times New Roman">)</font></p> </td> </tr> </table> <p align="center"> <font size="2" face="Times New Roman">7</font></p>

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<tr>
<td width="8%" valign="top"> <p> <font size="2" face="Times New Roman"><b>ITEM&nbsp;2.</b></font></p> </td>
<td width="92%" valign="top"> <p> <font size="2" face="Times New Roman"><b>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</b></font></p> </td> </tr> </table> <p> <font size="2"
face="Times New Roman"><b>ACCOUNTING POLICIES AND ESTIMATES</b></font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>General</i></font></p> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with accounting principles generally accepted in the United States of America (&#147;US GAAP&#148;), we record assets at the lower of cost or fair
value.&#160; In determining the fair value of such assets as accounts receivable, inventories, deferred income taxes and goodwill, we must make judgments, estimates and assumptions regarding future events and circumstances that could affect the
value of those assets.&#160; These include assumptions about such matters as future economic conditions that will affect our ability to collect our accounts receivable or sell our inventories in future periods.&#160; Those estimates and assumptions
are based on current information available to us at the time they are made.&#160; If there are material changes in events or circumstances from those anticipated at the time we made our estimates and assumptions, US GAAP will require us to adjust
the earlier estimates that are affected by those changes.&#160; Any downward adjustments to the amounts at which we record our assets, due to those changes, are commonly referred to as &#147;write-downs&#148; of the assets involved.</font></p>
<p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, decisions of when adjustments of this nature should be made also sometimes require an assessment or prediction of the effects on
financial performance, or the duration, of new events or changes in circumstances.&#160; It is not uncommon for it to take some time, after the occurrence of an event or the onset of changes in economic circumstances, for their effects to become
recognizable or determinable.</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is our practice to establish reserves or allowances against which we are able to charge any downward
adjustments or &#147;write-downs&#148; in the fair value of those of our assets which are subject to periodic fluctuations in value.&#160; Examples include reserves or allowances established for uncollectible accounts receivable (sometimes referred
to as &#147;bad debt reserves&#148;) and reserves for inventory obsolescence.&#160; Such reserves or allowances are established, and such write-downs are effectuated, by charges to income or increases in expense in our statement of operations in the
periods when those reserves or allowances are established or those write-downs are recorded.&#160; With respect to other assets, we write down their fair market value directly, by a charge against income, upon determining that, due to changes in
events or circumstances, the amounts at which they are carried on our books exceed their current fair market value.&#160; As a result, our judgments, estimates and assumptions about future events and circumstances can and will affect not only the
amounts at which we record these assets on our balance sheet, but also our results of operations.</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under US GAAP, most businesses also
must make estimates or judgments regarding the amounts at which and the periods during which sales are recorded.&#160; Those estimates and judgments will depend on such factors as the steps or actions that a business must take to complete a sale of
products to or the provision of services for a customer and the circumstances under which a customer would be entitled to return the products or reject or adjust the payment for services.&#160; Additionally, in the case of a company that grants its
customers contractual rights to return products sold to them, US GAAP requires that a reserve or allowance be established for product returns by means of a reduction in the amount at which sales are recorded, primarily based on the nature,
extensiveness and duration of those rights and its historical return experience.</font></p> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In making our estimates and assumptions we follow US
GAAP and accounting practices applicable to our business that we believe, after consultation with our independent public accountants, will enable us to make fair and consistent estimates of the fair value of those assets and establish adequate
reserves or allowances.&#160; Additionally, as part of the audit of our annual financial statements, our independent public accountants examine, on a test basis, the evidence on which we rely, and assess the accounting principles that we use and the
significant estimates that we make, in determining the amounts at which we propose to record our assets and establish our reserves in our financial statements.</font></p> <p align="center"> <font size="2" face="Times New Roman">8</font></p>

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  <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is a summary of the accounting policies that we believe are material to an understanding of our
financial condition and results of operations that are discussed below.</font></p> <p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition and the Allowance for Product
Returns</i>.&#160; We recognize revenue from the sale of a product upon its shipment to the customer.&#160; We provide our customers with a limited right of return.&#160; We establish an allowance for potential returns which reduces the amounts of
our reported sales, based on historical experience with returns of like products and economic conditions and trends, which can affect the level at which customers submit product returns.</font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable and the Allowance for Doubtful Accounts.</i>&#160; In the normal course of business we extend 30 day payment terms to our customers and, due to
the seasonality of our business, during late fall and winter we grant extended payment terms to those of our customers that have good credit records.&#160; We regularly review our customers&#146; accounts and estimate the amount of and establish an
allowance for uncollectible amounts or &#147;receivables.&#148;&#160; The amount of the allowance is based on several factors, including the age of unpaid amounts, a review of significant past due accounts and current economic conditions and trends,
which affect the ability of customers to keep their accounts current.&#160; Estimates of uncollectible amounts are revised periodically, and changes are recorded in the period they become known.&#160; For example, if the financial condition of the
Company&#146;s customers or economic conditions were to deteriorate, adversely affecting their ability to make payments, increases in the allowance may be required.&#160; Additionally, charges against the allowance may necessitate that additions be
made from time to time to replenish the reserve.&#160; Since the allowance is created by recording a charge against income, an increase in or additions to the allowance will cause a decline in our operating results in the period when the increase or
additions are made.</font></p> <p><font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reserve for Excess and Obsolete Inventory</i>.&#160; Inventories are valued at the lower of cost (first-in,
first-out) or market and are reduced by charging an allowance established for excess and slowing moving or obsolete inventories.&#160; The amount of the allowance is determined on the basis of historical experience with different product lines,
estimates concerning future economic conditions and estimates of future sales.&#160; If there is an economic downturn or a decline in sales, causing inventories of some product lines to accumulate, it may become necessary to increase the
allowance.&#160; Other factors that can require increases in the allowance or inventory write downs are reductions in pricing or introduction of new or competitive products by manufacturers; however, due to the relative maturity of the markets in
which the Company operates, usually these are not significant factors.&#160; Increases in this allowance also will cause a decline in operating results as such increases are effectuated by charges against income.</font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for Deferred Income Taxes</i>.&#160; We record tax loss and tax credit carryforwards as a &#147;deferred tax asset&#148; on our balance sheet to the
extent they are available to offset or reduce our future income tax liability.&#160; At March&nbsp;31, 2003, the amount of that asset totaled approximately $3 million, net of a valuation allowance of $70,000.&#160; Under applicable federal and state
income tax laws and regulations, deferred tax assets relating to tax loss and tax credit carryforwards will expire if not used within specified time periods.&#160; Accordingly, the ability to use such assets will depend on the taxable income we are
able to generate during those time periods.&#160; As a result, we establish a valuation allowance, which we apply as a reduction of the gross amount of the deferred tax asset, to take account of the possibility that we will not generate sufficient
taxable income in the future to fully utilize this asset.&#160; In determining the amount of that allowance, we consider current operating and economic trends as they may affect the amounts and timing of future taxable income that we currently
believe we can generate.&#160; Currently, available evidence leads us to believe that it is more likely than not that we will be able to utilize the deferred tax asset that is recorded in our financial statements.&#160; However, if due to future
events or circumstances, such as an economic downturn that would adversely affect our operating results, we subsequently come to a different conclusion regarding our future taxable income and, hence, our ability to fully utilize this asset, we would
increase the valuation allowance and thereby reduce the amount at which we record the deferred tax asset.&#160; That reduction would be effectuated by an increase in the provision (or a reduction in the credit) for income taxes in our statement of
operations, which would have the effect of causing a decline in our operating results.</font></p> <p align="center"><font size="2" face="Times New Roman">9</font></p>

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  <p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Lived Assets</i>.&#160; Long-lived assets and intangible assets are reviewed for impairment at least
annually or sooner if and when events or circumstances indicate that the carrying value of any such asset may be not be fully recoverable.&#160; In accordance with US GAAP, we compare the estimated undiscounted future cash flows expected to be
generated by the asset to the carrying value of the asset.&#160; If the carrying value exceeds those undiscounted cash flows, we consider the asset to be impaired.&#160; We then measure the impairment loss as the excess of the carrying value over
the fair value of the asset and then reduce its carrying value on the balance sheet to its fair value by recording a charge against income in the amount of that excess.</font></p> <p> <font size="2" face="Times New Roman"><b>RESULTS OF
OPERATIONS</b></font></p> <p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Factors Generally Affecting Sales of RV and Boating Products</i>.&#160; We believe that we are one of the largest
wholesale distributors of replacement parts, accessories and supplies for recreational vehicles (&#147;RVs&#148;), and one of the largest distributors of replacement parts, accessories and supplies for boats, in North America.&#160; Our sales are
made to retail parts and supplies stores, service and repair establishments and new and used RV and boat dealers (&#147;After-Market Customers&#148;).&#160; Our sales are affected primarily by (i)&nbsp;usage of RVs and boats by the consumers to whom
After-Market Customers sell our products, because such usage affects the consumers&#146; needs for and purchases of replacement parts, repair services and supplies, and (ii)&nbsp;sales of new RVs and boats, because consumers often
&#147;accessorize&#148; their RVs and boats at the time of purchase.</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.&#160; As a result, recessionary conditions and increases in interest rates can lead to declines in the purchase and, to
a lesser extent, in the usage, of RVs and boats.&#160; Weather conditions also affect the usage of RVs and boats.&#160; Additionally, shortages in the supply of gasoline and, depending on other economic conditions, increases in the prices of
gasoline, also can lead to declines in the usage and purchases of RVs and boats.&#160; On the other hand we have found, at least since September 11, 2001, that usage and purchases of RVs and boats also can be affected by geopolitical
conditions.&#160; The events of September 11, 2001 appear to have resulted in a decrease in international travel and in plane travel and a related increase in the usage of RVs.&#160; As a result, our sales and operating results can be, and in the
past have been, affected by recessionary economic conditions, increases in interest rates, increases in the prices of gasoline, and unusually adverse weather conditions and geopolitical events, as well.</font></p> <p><font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Sales</i>.&#160; Net sales increased by $2,434,000 or 6.4% in the quarter ended March&nbsp;31, 2003, as compared to the corresponding period in 2002.&#160; We
believe that this increase was due to a number of factors, including (i)&nbsp;relatively stable demand for RV products despite a weakened economy, which we believe is at least partially attributable to low market rates of interest,
(ii)&nbsp;security concerns about foreign travel and travel by air, which we believe is causing an increase in the usage and in purchases of RVs, and (iii)&nbsp;the implementation of our inventory management and deployment program, which has enabled
us to improve our service levels to our customers and, we believe, increase our share of RV After-Market sales.</font></p> <p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
Margin</i>.&#160; Our gross margin decreased to 18.4% of net sales in the three months ended March&nbsp;31, 2003 from 18.7% in the first quarter of 2002.&#160; This decrease was due to (i)&nbsp;a change in the mix of products sold during the quarter
as compared to the same quarter of 2002, (ii)&nbsp;an increase in customer promotional allowances during the quarter, and (iii) competitive pricing pressures experienced during the quarter in our markets.</font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, General and Administrative Expenses</i>.&#160; Our selling, general and administrative (&#147;SG&amp;A&#148;) expenses increased in the quarter ended
March&nbsp;31, 2003 by $366,000, or 6.9%, as compared to the corresponding period of 2002.&#160; This increase was due primarily to an increase in labor costs, both selling and administrative, as well as an increase in marketing costs.&#160; In the
fiscal year ended December&nbsp;31, 2001, we reduced salaries and wages as a cost cutting measure in response to declining sales.&#160; During the latter part of fiscal 2002, we increased salaries and wages of employees, other than executive
officers of the Company, in response to improved sales and improved operating results.&#160; Those increases were reflected in first quarter 2003 operating results.</font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating Income</i>.&#160; The combined effects of the reduction in gross margin and the increase in SG&amp;A expenses more than offset the effect of the increase
in sales during the first quarter.&#160; As a result, operating income declined by $32,000 in the quarter ended March 31, 2003, as compared to the same quarter of 2002.</font></p> <p align="center"><font size="2" face="Times New Roman">10</font></p>

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  <p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest Expense</i>.&#160; Interest expense increased by $21,000, or 6.3% in the three months ended
March&nbsp;31, 2003, from the three months ended March&nbsp;31, 2002.&#160; This increase was the result of an increase in average long-term borrowings outstanding during the quarter that were used primarily to fund an increase in inventory levels
designed to meet increased customer demand and maintain improved customer service levels.</font></p> <p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes</i>.&#160; Our effective tax
rate declined to 39.0% in the first quarter of 2003 from 50.4% in the same period in 2002.&#160; This reduction was due to (i)&nbsp;an increase in earnings from our Canadian subsidiary, the income of which is taxed at a lower effective rate,
(ii)&nbsp;an adjustment in our tax valuation allowances made during 2002 to reflect the Company&#146;s increased profitability and the realization of its tax carryforward benefits, (iii)&nbsp;a reduction in our authorized common and preferred shares
which reduced our state franchise taxes, (iv)&nbsp;a reduction in non deductible fixed costs and capital taxes as a percentage of our anticipated earnings for the year due to their fixed nature and our anticipated increased profitability.</font></p>
<p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings (loss)</i>.&#160; During the quarter ended March&nbsp;31, 2003 we generated net earnings of $849,000, or $0.19 per diluted share,
as compared to earnings, before the cumulative effect of an accounting change, of 719,000, or $0.16 per share, in the same quarter of 2002.&#160; The earnings improvement in the quarter ended March&nbsp;31, 2003 was due to the reduction in our
effective tax rate described above, which more than offset the $32,000 decline in operating income in the quarter ended March&nbsp;31, 2003.</font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cumulative Effect of Accounting Change</i>.&#160; As previously reported, we adopted SFAS 142, &#147;Goodwill and Intangible Assets,&#148; effective as of
January&nbsp;1, 2002.&#160; In accordance with SFAS 142, we conducted a transitional goodwill impairment analysis as of January&nbsp;1, 2002, and on the basis of that analysis, we recognized a non-cash goodwill impairment charge of $6,325,000, or
$1.45 per share as of that date, which was reported as cumulative effect of an accounting change in the quarter ended March&nbsp;31, 2002.&#160; That goodwill impairment charge did not affect the Company&#146;s tangible net worth or cash flow.&#160;
However, due to that charge, we recorded a net loss of $5,606,000, or $1.28 per diluted share, in the first quarter of 2002.</font></p> <p><font size="2" face="Times New Roman"><b>Liquidity and Capital Resources</b></font></p> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We finance our working capital requirements for our operations primarily with borrowings under a long-term revolving bank credit facility and internally generated
funds.&#160; Under the terms of that revolving credit facility, which expires in May 2005, we may borrow up to the lesser of (i)&nbsp;$40,000,000 with seasonal reductions down to $30,000,000 to $35,000,000 between August&nbsp;1 and February&nbsp;28
of each year, or (ii)&nbsp;an amount equal to 80% of eligible accounts receivable and between 50% to 55% of eligible inventory.&#160; Interest on the revolving credit facility is payable at the bank&#146;s prime rate plus 0.75% or, at the
Company&#146;s option but subject to certain limitations, at the bank&#146;s LIBOR rate, plus 2.5 percent.</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At May&nbsp;5, 2003,
outstanding bank borrowings totaled $38,600,000.&#160; Our bank borrowings are secured by substantially all of our assets, and rank senior in priority to other indebtedness of the Company.</font></p> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generally use cash for, rather than generate cash from, operations in the first half of the year, because we build inventories, and accounts receivables increase,
as our customers begin increasing their product purchases for the spring and summer selling seasons.&#160; See &#147;Seasonality and Inflation&#148; below.</font></p> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although our sales increased 6.4% during the quarter ended March&nbsp;31, 2003 as compared to the same period of 2002, our accounts receivable balance increased by
only $431,000 or 1.4% at March&nbsp;31, 2003 as compared to our accounts receivable balance at March&nbsp;31, 2002, primarily as a result of an acceleration in our accounts receivable collections.&#160; We increased our inventories by $2,925,000 in
the quarter ended March&nbsp;31, 2003 as compared to a reduction in inventory levels of&#160; $750,000 in the same quarter of 2002, primarily to improve our ability to service the needs of our customers for products.&#160; As a result of the
increases in accounts receivable and inventories, our net bank borrowings increased by $14,292,000 during the quarter ended March&nbsp;31, 2003 as compared to $10,887,000 in the first quarter of 2002.</font></p> <p><font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures, primarily for computer enhancements and warehouse equipment, were $179,000 in the three months ended March&nbsp;31, 2003 and $451,000 in the
corresponding three months of 2002.</font></p> <p align="center"> <font size="2" face="Times New Roman">11</font></p>

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  <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the significant improvement in operating results in the fiscal year ended December&nbsp;31, 2002 (before the
non-cash goodwill impairment charge), as compared to the Company&#146;s operating results in the prior two fiscal years, the Company&#146;s Board of Directors declared a cash dividend of $0.06 per share during the quarter ended March&nbsp;31,
2003.&#160; That cash dividend, which totaled $265,000, was paid on April&nbsp;21, 2003 to all stockholders of&#160; record as of April&nbsp;7, 2003.</font></p> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We lease the majority of our facilities and certain of our equipment under non-cancelable operating leases.&#160; Our future lease commitments are described in
Note&nbsp;4 of Notes to the Company&#146;s Interim Condensed Consolidated Financial Statements included elsewhere in this report.</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that borrowings under our revolving bank credit facility and internally generated funds will be sufficient to fund our cash requirements for at least the next twelve months and we do not currently anticipate any material changes in the cash
requirements of our business or in the sources of funds for our operations.</font></p> <p> <font size="2" face="Times New Roman"><b>Seasonality and Inflation</b></font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seasonality</i>.&#160; Sales of recreational vehicle and boating parts, supplies and accessories are seasonal.&#160; We have significantly higher sales during the
six-month period from April through September than we do during the remainder of the year.&#160; Because a substantial portion of our expenses are fixed, operating income declines and the Company sometimes incurs losses and must rely more heavily on
borrowings to fund operating requirements in the months when sales are lower.</font></p> <p><font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflation</i>.&#160; Generally, we have been able to
pass inflationary price increases on to our customers.&#160; However, inflation also may cause or may be accompanied by increases in gasoline prices and interest rates.&#160; Such increases, or even the prospect of increases 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 products we sell.</font></p> <p> <font size="2" face="Times New Roman"><b>Forward Looking
Information</b></font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements contained in this Report that are not historical facts or that discuss our expectations or beliefs regarding
our future operations or future financial performance, or financial or other trends in our business, constitute &#147;forward-looking statements&#148; within the meaning of Section&nbsp;27A of the Securities Act of 1933, as amended, and
Section&nbsp;21E of the Securities Exchange Act of 1934, as amended.&#160; Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.&#160; Often, they include the words
&#147;believe,&#148; &#147;expect,&#148; &#147;anticipate,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;estimate,&#148; &#147;project,&#148; or words of similar meaning, or future or conditional verbs such as &#147;will,&#148;
&#147;would,&#148; &#147;should,&#148; &#147;could,&#148; or &#147;may.&#148;&#160; Readers of this Report are cautioned not to place undue reliance on such forward-looking statements, or to rely on historical operating results, to predict future
financial performance, because actual results in the future may differ materially, depending on the effect of a number of risks and uncertainties.&#160; Those risks and uncertainties include, but are not limited to:</font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increases in Price Competition</i>.&#160; Price competition within the Company&#146;s distribution channels may increase, which would result in reductions in our
profit margins.</font></p> <p> <font size="2" face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Difficult Economic Conditions</i>.&#160; Economic conditions in the United States may not improve significantly or
interest rates may increase, either of which could cause consumers to reduce discretionary spending which, in turn, could result in reduced sales of our products.</font></p> <p><font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effects of Shortages, or Increases in the Price, of Gasoline or Unusually Severe Weather Conditions</i>.&#160; Shortages in the supply or increases in the price of
gasoline or unusually severe weather conditions in the United States or Canada could reduce the usage of RV&#146;s and pleasure boats and, hence, purchases of the products we sell.</font></p> <p> <font size="2"
face="Times New Roman"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Possible Changes in Supply Relationships</i>.&#160; Changes could occur in the structure or nature of the relationships among manufacturers, distributors and
retailers within our industry, which could create supply problems or result in increased operating costs or increased competition that would affect our operating results.</font></p> <p align="center"> <font size="2"
face="Times New Roman">12</font></p>

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  <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information concerning these and other factors and risks, see the foregoing discussion in this section of this
Report titled, &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operation&#148; and our Annual Report on Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2002.</font></p> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.</font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="8%" valign="top"> <p> <font size="2" face="Times New Roman"><b>ITEM 3.</b></font></p> </td>
<td width="92%" valign="top"> <p> <font size="2" face="Times New Roman"><b>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></font></p> </td> </tr> </table> <p> <font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our 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 our financial position, results of operations and cash flows.&#160; The fair value of borrowings under our revolving credit facility approximate the carrying value of such obligations.&#160; As of March&nbsp;31, 2003, we had
approximately $37.3 million of borrowings outstanding under our revolving credit facility.</font></p> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To a lesser degree, we are exposed to market
risk from foreign currency fluctuations associated with our Canadian operations and our Canadian currency denominated debt.&#160; We do not use financial instruments for trading or other speculative purposes and are not party to any derivative
financial instruments.</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sometimes enter into forward exchange agreements to reduce the effect of foreign currency fluctuations on a
portion of our inventory purchases in Canada for our Canadian operations.&#160; The gains and losses on these contracts are reflected in earnings in the period during which the transactions being hedged are recognized.&#160; We believe that these
agreements do not subject us to significant market risk from exchange rate movements because the agreements offset gains and losses on the balances and transactions being hedged.&#160; As of March&nbsp;31, 2003, there were no such agreements
outstanding.</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approximately 22% of our bank debt is denominated in Canadian currency, which also exposes us to market risk associated
with exchange rate movements.&#160; Historically, we have not used derivative financial instruments to manage our exposure to foreign currency rate fluctuations since the market risk associated with our foreign currency denominated debt has not been
considered significant.</font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="8%" valign="top"> <p> <font size="2" face="Times New Roman"><b>ITEM 4.</b></font></p> </td>
<td width="92%" valign="top"> <p> <font size="2" face="Times New Roman"><b>CONTROLS AND PROCEDURES</b></font></p> </td> </tr> </table> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within the
past 90 days we carried out an evaluation, under the supervision of the Company&#146;s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company&#146;s disclosure controls and procedures.&#160; Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer have each concluded that those controls and procedures were effective in making known to them, on a timely basis, the material information needed for the preparation of this Report
on Form 10-Q.&#160; There were no significant changes in the Company&#146;s internal controls or in other factors that could significantly affect those internal controls since the date of their evaluation nor did we find any significant deficiencies
and material weaknesses that would have required corrective actions to be taken with respect to those controls.</font></p> <p align="center"><font size="2" face="Times New Roman">13</font></p>

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  <p align="center"> <font size="2" face="Times New Roman"><b>PART II&#151;OTHER INFORMATION</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="8%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman"><b>ITEM 6.</b></font></p> </td>
<td width="91%" colspan="6" valign="top"> <p> <font size="2" face="Times New Roman"><b>EXHIBITS AND REPORTS ON FORM 8-K AND EXHIBITS</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="8" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">(a)</font></p> </td>
<td width="1%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="89%" colspan="4" valign="top"> <p> <font size="2" face="Times New Roman"><u>Exhibits</u>.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="8" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="4" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign="top"> <p> <font size="2" face="Times New Roman">Exhibit 99.1</font></p> </td>
<td width="76%" valign="top"> <p> <font size="2" face="Times New Roman">Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="4" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="76%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="4" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign="top"> <p> <font size="2" face="Times New Roman">Exhibit 99.2</font></p> </td>
<td width="76%" valign="top"> <p> <font size="2" face="Times New Roman">Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> </td> </tr>
<tr>
<td width="100%" colspan="8" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">(b)</font></p> </td>
<td width="1%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="89%" colspan="4" valign="top"> <p><font size="2" face="Times New Roman"><u>Reports on Form 8-K</u>.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="8" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="8%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="3" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="87%" colspan="3" valign="top"> <p><font size="2" face="Times New Roman">None.</font></p> </td> </tr>
<tr>
<td width=44 style='border:none'></td>
<td width=20></td>
<td width=4></td>
<td width=9></td>
<td width=11></td>
<td width=1></td>
<td width=80></td>
<td width=552></td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">14</font></p>

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  <p align="center"><font size="2" face="Times New Roman"><b>SIGNATURES</b></font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.</font></p>
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<tr>
<td width="56%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="43%" colspan="2" valign="bottom"> <p> <font size="2" face="Times New Roman">T<small>HE</small> C<small>OAST</small> D<small>ISTRIBUTION</small> S<small>YSTEM</small>, I<small>NC</small>.</font></p> </td> </tr>
<tr>
<td width="56%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="43%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="56%" valign="bottom"> <p> <font size="2" face="Times New Roman">Dated:&#160; May 9, 2003</font></p> </td>
<td width="3%" valign="bottom"> <p> <font size="2" face="Times New Roman">By:</font></p> </td>
<td width="39%" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman">/s/&nbsp;&nbsp;S<small>ANDRA</small> A. K<small>NELL</small></font></p> </td> </tr>
<tr>
<td width="56%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="39%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="56%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="39%" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Sandra A. Knell<br> Executive Vice President and<br> Chief Financial Officer</b></font></p> </td> </tr> </table> <p align="center"> <font size="2"
face="Times New Roman">S-1</font></p>

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  <p align="center"><font size="2" face="Times New Roman"><b>CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER<br> UNDER<br> SECTION 302 OF THE SARBANES-OXLEY ACT</b></font></p> <p> <font size="2" face="Times New Roman">I,
Thomas R. McGuire, Chief Executive Officer of The Coast Distribution System, Inc. certify that:</font></p>
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<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">1.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">I have reviewed this quarterly report on Form 10-Q of The Coast Distribution System, Inc.;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">2.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">3.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">4.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">The registrant&#146;s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rules 13a-14
and 15d-14 of the Exchange Act) for the registrant and we have:</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="3" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">a)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this quarterly report is being prepared;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">b)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the
&#147;Evaluation Date&#148;); and</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">c)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">5.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">The registrant&#146;s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant&#146;s auditors and the audit committee
of registrant&#146;s board of directors (or persons performing the equivalent function):</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="3" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">a)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant&#146;s ability to record, process, summarize and report
financial data and have identified for the registrant&#146;s auditors any material weaknesses in internal controls; and</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">b)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal controls; and</font></p> </td>
</tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">6.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">The registrant&#146;s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.</font></p> </td> </tr>
</table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="54%" valign="bottom"> <p> <font size="2" face="Times New Roman">Date:&#160; May 9, 2003</font></p> </td>
<td width="36%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="9%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="36%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="9%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="36%" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman">/s/&nbsp;&nbsp;T<small>HOMAS</small> R. M<small>C</small>G<small>UIRE</small></font></p> </td>
<td width="9%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="36%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="9%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="36%" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Thomas R. McGuire<br> Chief Executive Officer</b></font></p> </td>
<td width="9%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align="center"> <font size="2" face="Times New Roman">S-2</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"> <font size="2" face="Times New Roman"><b>CERTIFICATIONS OF CHIEF FINANCIAL OFFICER<br> UNDER<br> SECTION 302 OF THE SARBANES-OXLEY ACT</b></font></p> <p><font size="2" face="Times New Roman">I,
Sandra A. Knell, Chief Financial Officer of The Coast Distribution System, Inc., certify that: </font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">1.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">I have reviewed this quarterly report on Form 10-Q of The Coast Distribution System, Inc.;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">2.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">3.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">4.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">The registrant&#146;s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rules 13a-14
and 15d-14 of the Exchange Act) for the registrant and we have:</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="3" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">a)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this quarterly report is being prepared;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">b)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the
&#147;Evaluation Date&#148;); and</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">c)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">5.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">The registrant&#146;s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant&#146;s auditors and the audit committee
of registrant&#146;s board of directors (or persons performing the equivalent function):</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" colspan="3" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">a)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant&#146;s ability to record, process, summarize and report
financial data and have identified for the registrant&#146;s auditors any material weaknesses in internal controls; and</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">b)</font></p> </td>
<td width="86%" valign="top"> <p> <font size="2" face="Times New Roman">any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal controls; and</font></p> </td>
</tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="top"> <p> <font size="2" face="Times New Roman">6.</font></p> </td>
<td width="91%" colspan="2" valign="top"> <p> <font size="2" face="Times New Roman">The registrant&#146;s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.</font></p> </td> </tr>
</table> <BR>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="60%" valign="bottom"> <p><font size="2" face="Times New Roman">Date:&#160; May 9, 2003</font></p> </td>
<td width="32%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="60%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="60%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign="bottom"> <p align="center"><font size="2" face="Times New Roman">/s/&#160; S<small>ANDRA</small> A. K<small>NELL</small></font></p> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="60%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="60%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="32%" valign="bottom"> <p align="center"><font size="1" face="Times New Roman"><b>Sandra A. Knell<br> Chief Financial Officer</b></font></p> </td>
<td width="7%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">S-3</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p align="center"><font size="2" face="Times New Roman"><b>INDEX TO EXHIBITS</b></font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="9%" valign="top"> <p><font size="1" face="Times New Roman"><b>Exhibit&nbsp;No</b></font></p> </td>
<td width="4%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="86%" valign="top"> <p align="center"><font size="1" face="Times New Roman"><b>Description of Exhibit</b></font></p> </td> </tr>
<tr>
<td width="9%" valign="top"> <hr size="1" width="100%" noshade color=black> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="9%" valign="top"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">99.1</font></p> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> </td> </tr>
<tr>
<td width="9%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="9%" valign="top"> <p style="margin-left:3em; text-indent:-1em"><font size="2" face="Times New Roman">99.2</font></p> </td>
<td width="4%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="86%" valign="top"> <p><font size="2" face="Times New Roman">Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> </td> </tr> </table> <p align="center"><font size="2"
face="Times New Roman">E-1</font></p>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>dex991.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER
<TEXT>
<HTML><HEAD>
<TITLE>Certification of Chief Executive Officer</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p align=right><font size="2" face="Times New Roman"><b>Exhibit 99.1</b></font></p> <p> <font size="2" face="Times New Roman">THE COAST DISTRIBUTION SYSTEM, INC.</font></p> <p> <font size="2"
face="Times New Roman">Quarterly Report on Form 10-Q<br> for the Quarter ended March&nbsp;31, 2003</font></p> <p align="center"> <font size="2" face="Times New Roman"><b>CERTIFICATION</b></font></p> <p align="center"> <font size="2"
face="Times New Roman">Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, who is the Chief Executive Officer of
The Coast Distribution System, Inc. (the &#147;Company&#148;), hereby certifies that (i)&nbsp;the Quarterly Report on Form&nbsp;10-Q for the quarter ended March&nbsp;31, 2003, as filed by the Company with the Securities and Exchange Commission (the
&#147;Quarterly Report&#148;), to which this Certification is an Exhibit, fully complies with the applicable requirements of Section&nbsp;13(a) and 15(d) of the Exchange Act; and (ii)&nbsp;the information contained in this Quarterly Report fairly
presents, in all material respects, the financial condition and results of operations of the Company.</font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="61%" valign="bottom"> <p> <font size="2" face="Times New Roman">Dated:&#160; May 9, 2003</font></p> </td>
<td width="38%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="61%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="38%" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman">/s/&nbsp;&nbsp;T<small>HOMAS</small> R. M<small>C</small>G<small>UIRE</small></font></p> </td> </tr>
<tr>
<td width="61%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="38%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="61%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="38%" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Thomas R. McGuire<br> Chairman and Chief Executive Officer</b></font></p> </td> </tr> </table> <p><font
size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A signed original of this written statement required by Section 906 has been provided to The Coast Distribution System, Inc. and will be retained by The Coast Distribution System,
Inc. and furnished to the Securities and Exchange Commission or its staff upon request.&nbsp;</font></p>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>4
<FILENAME>dex992.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER
<TEXT>
<HTML><HEAD>
<TITLE>Certification of Chief Financial Officer</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p align=right><font size="2" face="Times New Roman"><b>Exhibit 99.2</b></font></p> <p> <font size="2" face="Times New Roman">THE COAST DISTRIBUTION SYSTEM, INC.</font></p> <p> <font size="2"
face="Times New Roman">Quarterly Report on Form 10-Q<br> for the Quarter ended March&nbsp;31, 2003</font></p> <p align="center"> <font size="2" face="Times New Roman"><b>CERTIFICATION</b></font></p> <p align="center"> <font size="2"
face="Times New Roman">Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></p> <p> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, who is the Chief Financial Officer of
The Coast Distribution System, Inc. (the &#147;Company&#148;), hereby certifies that (i)&nbsp;the Quarterly Report on Form 10-Q for the quarter ended March&nbsp;31, 2003, as filed by the Company with the Securities and Exchange Commission (the
&#147;Quarterly Report&#148;), to which this Certification is an Exhibit, fully complies with the applicable requirements of Section 13(a) and 15(d) of the Exchange Act; and (ii)&nbsp;the information contained in this Quarterly Report fairly
presents, in all material respects, the financial condition and results of operations of the Company.</font></p>
<table align="center" border="0" style="border-collapse:collapse" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="61%" valign="bottom"> <p> <font size="2" face="Times New Roman">Dated:&#160; May 9, 2003</font></p> </td>
<td width="38%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="61%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="38%" valign="bottom"> <p align="center"> <font size="2" face="Times New Roman">/s/&nbsp;&nbsp;S<small>ANDRA</small> A. K<small>NELL</small></font></p> </td> </tr>
<tr>
<td width="61%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="38%" valign="bottom"> <hr size="1" width="100%" noshade color=black> </td> </tr>
<tr>
<td width="61%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="38%" valign="bottom"> <p align="center"> <font size="1" face="Times New Roman"><b>Sandra A. Knell<br> Executive Vice President and Chief Financial Officer</b></font></p> </td> </tr> </table> <p>&nbsp;<font
size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A signed original of this written statement required by Section 906 has been provided to The Coast Distribution System, Inc. and will be retained by The Coast Distribution System, Inc.
and furnished to the Securities and Exchange Commission or its staff upon request.</font></p>
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