<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

    (Mark One)
    [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
             EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 1999

                                       OR

    [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                 For the transition period from _______ to _____
                          Commission file number 1-9511

                       THE COAST DISTRIBUTION SYSTEM, INC.
             (Exact name of Registrant as specified in its charter)

                  Delaware                               94-2490990
      (State or other jurisdiction of       (I.R.S. Employer Identification No.)
       incorporation or organization)

350 Woodview Avenue, Morgan Hill, California               95037
  (Address of principal executive offices)               (Zip Code)

                                 (408) 782-6686
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

  Common Stock,  par value
       $.001 per share                         American Stock Exchange
-------------------------------      -------------------------------------------
       (TITLE OF CLASS)              (NAME OF EACH EXCHANGE ON WHICH REGISTERED)


Securities registered pursuant to Section 12(g) of the Act:   None

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports); and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         As of March 9, 2000, the aggregate market value of the Common Stock
held by non-affiliates was approximately $7,321,000.

         As of March 9, 2000, a total of 4,302,846 shares of Registrant's Common
Stock were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Part III of the Form 10-K is incorporated by reference from Registrant's
Definitive Proxy Statement for its Annual Meeting which is expected to be filed
on or before May 1, 2000.

<PAGE>   2

FORWARD LOOKING STATEMENTS

         This Annual Report on Form 10-K ("Report") contains forward-looking
information which reflects management's current views of the Company's future
financial performance. The forward-looking information is subject to certain
risks and uncertainties, including, but not limited to, the effects on future
performance of changing product supply relationships in the recreational vehicle
industry and the uncertainties created by those changes; increased price
competition within the industry; possible changes in economic conditions,
prevailing interest rates or gasoline prices, or the occurrence of unusually
severe winter weather conditions, all of which can affect both the purchase and
usage of recreational vehicles and boats and which, in turn, affects purchases
by consumers of the products that the Company sells; and the Company's reliance
on borrowings to fund a substantial portion of its working capital requirements
and capital expenditures. For information concerning such factors and risks, see
"Business - Products; Arrangements with Manufacturers; Competition; and Certain
Factors That Could Affect Future Performance" in Part I, Item 1 of this Report;
and "Management's Discussion and Analysis of Financial Condition and Results of
Operation" in Part II of this Report. Due to such uncertainties and risks,
readers are cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date of this Report.

                                     PART I

ITEM 1.  BUSINESS

GENERAL

         The Coast Distribution System, Inc. (the "Company") was incorporated in
California in November 1977, and reincorporated in Delaware in April 1998. We
believe that we are the largest wholesale supplier of replacement parts,
supplies and accessories for recreational vehicles ("RVs"), and one of the
largest wholesale suppliers of replacement parts, supplies and accessories for
boats, in North America. We supply more than 25,000 products and serve more than
15,000 customers throughout the United States and Canada, from 14 regional
distribution centers in the United States that are located in California, Texas,
Oregon, Arizona, Colorado, Utah, Indiana, Pennsylvania, New York, Georgia,
Florida, Wisconsin and Alaska and 4 regional distribution centers in Canada
located, respectively, in Montreal, Toronto, Calgary and Vancouver. Reference is
made to Note H to the Consolidated Financial Statements of the Company,
contained elsewhere in this Report, for certain information regarding the
respective operating results of the Company's operations in the United States
and Canada. The Company's customers are comprised primarily of RV and boat
dealers and RV and boating parts supply stores and service centers
("After-Market Customers"), who resell the products they purchase from the
Company, at retail, to consumers that own or use RVs and boats.

         In order to improve its competitive position and increase its
profitability, the Company has introduced into the marketplace a growing number
of products that have been designed specifically for the Company by independent
product design firms and are manufactured for the Company, generally on an
exclusive basis, by a number of different independent manufacturers
("proprietary products"). These proprietary products are marketed by the Company
under its own brand-names in competition with brand name products from
traditional suppliers. The Company is able to obtain the proprietary products at
prices that generally are below those it would have to pay for functionally
equivalent brand name products. See "Business--Products--Proprietary Products."

         Although initially designed for sale to After-Market Customers, a
number of the Company's more recently designed proprietary products also are
suitable for installation as original equipment on RVs and boats at the time of
their manufacture. In addition, a number of the proprietary products have
applications in markets other than the RV and boating markets, such as the
automobile or outdoor furniture markets. As a result, in 1997 the Company
established the DTS Manufacturing Division within the Company (the "DTS
Division") to implement programs to market and sell those proprietary products
to RV and boat manufacturers and to retail dealers and mass merchandisers in
other markets. Utilizing distinctive brand names and packaging, these
proprietary products are marketed separately, as products that are distinct,
from the proprietary products that are sold by the Company to RV and boating
After-Market Customers. The DTS Division also will be identifying opportunities
to design and arrange for the manufacture of new proprietary products that can
be installed as original equipment on RVs and boats or that have applications in
other markets. To date, the operating results of the DTS Division have not been
material. The


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<PAGE>   3
 Company's RV and boating After-Market products business will continue to market
proprietary products designed for RV and boating After-Market Customers under
the name "Coast Distribution."

         To provide its customers with a high level of service, the Company
utilizes a computer-based order entry and warehousing system which enables
customers to transmit orders either telephonically or electronically to the
Company, and enables the Company to prepare and invoice most orders within 24
hours of receipt. The Company also has established a national customer service
center to enable customers to obtain product information and place orders by
telephone using Company toll-free telephone numbers. The Company believes that
the breadth of its product lines, the proprietary products it is able to offer
to its customers, the computer integration of its operations and the customer
support programs it offers, distinguish it from other distributors of RV and
boating parts, supplies and accessories. See "Business - Marketing and Sales."

THE PARTS, SUPPLIES AND ACCESSORIES AFTER-MARKETS

         Many manufacturers of replacement parts, supplies and accessories rely
on independent distributors, such as the Company, to market and distribute their
products or to augment their own product distribution operations. Distributors
relieve manufacturers of a portion of the costs associated with distribution of
their products while providing geographically dispersed selling, order
processing and delivery capabilities. At the same time, distributors offer
retailers access to a broad line of products and the convenience of rapid
delivery of orders.

         The market for RV parts, supplies and accessories distributed by the
Company includes both RV dealers and RV supply stores and service centers. The
products that we sell include optional equipment and accessories, such as
awnings, trailer hitches, air conditioning units, water heaters and other
accessories, and replacement and repair parts and maintenance supplies. The
market for boating parts, supplies and accessories is comprised primarily of
independent boat dealers that sell boats and boating parts, supplies and
accessories at retail. Independent boat dealers purchase primarily replacement
parts, boating supplies and smaller accessories from the Company. See "Business
- Products."

PRODUCTS

         General. The Company carries a full line of more than 15,000
recreational vehicle parts, supplies and accessories which it purchases from
more than 500 manufacturers. Recreational vehicle products distributed by the
Company include awnings, antennae, vents, electrical items, towing equipment and
hitches, appliances such as air conditioners, refrigerators, ranges and
generators, LP gas equipment, portable toilets and plumbing parts, hardware and
tools, specialized recreational vehicle housewares, chemicals and supplies, and
various accessories, such as ladders, jacks, fans, load stabilizers, mirrors and
compressors. The Company also distributes various replacement parts and supplies
for manufactured housing, including tie-downs, skirting, windows and doors.

         The Company stocks boating and marine parts, supplies and accessories
at 13 of its 14 warehouse and distribution centers in the United States and at
all 4 of its distribution centers in Canada. Boating and marine products
distributed by the Company include boat covers, stainless steel hardware, depth
sounders, anchors, life jackets and other marine safety equipment and fishing
equipment.

         Proprietary Products. In order to improve its competitive position and
increase its profitability, the Company has introduced into the marketplace a
growing number of proprietary products, which are manufactured specifically for
the Company, generally on an exclusive basis, by a number of different
manufacturers. The proprietary products, which are designed for the Company by
independent professional product design firms or by the independent
manufacturers retained to manufacture the products for the Company, include
trailer hitches, plastic wastewater tanks, portable toilets and toilet
chemicals, vent lids and stabilizing jacks. These proprietary products


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are marketed by the Company under its own brand-names in competition with brand
name products from traditional suppliers, which usually sell their products to a
number of distributors and into other markets. However, such products currently
lack name brand recognition, which may have a limiting effect on unit sales of
and on the prices that the Company is able to charge for such products. This
lack of brand name recognition also means that the costs to the Company of
marketing the proprietary products generally is greater than for brand-name
products, which somewhat offsets the margin advantage of the proprietary
products.

         The DTS Division. Although the Company's proprietary products were
initially designed for sale to After-Market Customers, a number of those
products also are suitable for installation as original equipment on RVs and
boats at the time of their manufacture or have applications in markets other
than the RV and boating markets, such as the automobile and outdoor furniture
markets. As a result, in 1997 the Company established the DTS Manufacturing
Division within the Company (the "DTS Division"), to implement programs to
market and sell those proprietary products to RV and boat manufacturers and to
retail dealers and mass merchandisers in other markets. Utilizing distinctive
brand names and packaging, these proprietary products are marketed separately,
as products that are distinct from the proprietary products that are sold by the
Company's "Coast Distribution" Division to RV and boating After-Market
Customers. The DTS Division also will be identifying opportunities to design and
arrange for the manufacture of new proprietary products that can be installed as
original equipment on RVs and boats or that have applications in other markets.
To date, the operating results of the DTS Division have not been material.

MARKETING AND SALES

         The Company's customers include (i) RV dealers, which primarily
purchase optional equipment and accessories for new recreational vehicles and
replacement and repair parts for their service departments, (ii) independent
recreational vehicle supply stores and service centers that purchase parts,
supplies and accessories for resale to owners of RVs and for their service
centers, and (iii) independent boat dealers that purchase small accessories for
new boats and replacement parts and boating supplies for resale to boat owners
and operators. The Company is not dependent on any single customer for any
material portion of its business. No single customer accounted for as much as 5%
of the Company's sales in 1997, 1998 or 1999.

         Customer Service Center and Computerized Order Entry and Warehousing
System. The Company has designed and implemented a computer-based order entry
and warehousing system which enables its customers to transmit orders
electronically to the Company's central computers and also enables the Company
to prepare and invoice most customer orders within 24 hours of receipt.

         The Company also operates a national customer service center, through
which the Company's customers can obtain product information and place orders by
telephone using the Company's toll-free telephone numbers. With the exception of
holidays, the customer service center is operational for a total of 13 hours per
day, Monday through Friday, and 8 hours on Saturdays and is staffed by sales
personnel who are trained to promote the sale of the Company's products and to
handle customer service issues. Currently, the number of customer calls handled
by the national customer service center, which can be accessed by virtually all
of the Company's customers in the United States and Canada, ranges from 2,000 to
6,000 per day and the customer service center has enabled the Company not only
to improve customer service, but also to reduce selling expenses.

         Orders transmitted from customers either electronically or by telephone
to the national customer service center are input into the Company's IBM AS 400
computer and then are relayed to the regional distribution center selected by
the customer, where the products are selected, packed and shipped. At the time
the order is received, the customer is informed, either by electronic
confirmation, or by the sales person handling the customer's call at the
customer service center, that the order has been accepted and whether any items
are not currently in stock. In addition, the Company offers to participating
customers a "split shipment program" by which a customer's order for a product
that is not available from the Company's distribution center closest to the
customer, will be shipped to that customer from another of the Company's
distribution centers that has been pre-selected by that customer as a "back-up"
distribution center, when that product is available at that back-up distribution
center.


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<PAGE>   5

DISTRIBUTION

         The Company's regional distribution and warehouse centers in North
America carry an inventory of up to approximately 15,000 recreational vehicle
parts, supplies and accessories. In addition, at 13 of the Company's
distribution centers in the United States and at all 4 of its distribution
centers in Canada, the Company carries, in varying quantities, up to
approximately 10,000 boating and marine parts, supplies and accessories. Each
regional distribution center is operated as a separate profit center.

         The Company relies primarily on independent freight companies to ship
its products.

ARRANGEMENTS WITH MANUFACTURERS

         General. The products which the Company distributes are purchased by it
from more than 500 different manufacturers. As is typical in the industry, in
most instances the Company acquires its products on a purchase order basis and
has no guaranteed price or delivery agreements with manufacturers, including the
manufacturers that supply proprietary products to the Company. As a result,
short-term inventory shortages can occur. The Company sometimes chooses to carry
only a single manufacturer's products for certain of the brand-name product
lines that it sells, although comparable products usually are available from
multiple sources. In addition, each of the proprietary products is obtained by
the Company from a single source manufacturer, although in most instances the
Company owns the tooling required for their manufacture. Dependence on a single
manufacturer for any product or line of related products, however, presents some
risks, including the inability to readily obtain alternative product supply
sources in the event a single source supplier encounters quality or other
production problems, which could adversely affect the Company's sales.

         No manufacturer or supplier of products to the Company accounted for
more than 5% of the Company's product purchases in 1999, other than Airxcel,
Inc. ("Airxcel"). Airxcel supplies the Company with its requirements for RV air
conditioners sold under the Coleman(R) brand name, under a multi-year product
supply agreement. The products supplied by RVP accounted for approximately 13%
of the Company's net sales in 1999.

         Manufacturers generally warrant the products distributed by the Company
and allow the Company to return defective products, including those that have
been returned to the Company by its customers. The Company does not
independently warrant the products that it distributes.

         Recent Changes in Relationships Affecting the After-Market. During the
past four years some manufacturers of RV products have chosen to integrate their
operations vertically to include distribution. As a result those manufacturers,
which formerly had been a source of products for the Company and other
distributors have become competitors. One of those manufacturers, Dometic
Corporation ("Dometic"), which had supplied the Company with its requirements
for air conditioners, awnings and refrigerators that had accounted for more than
20% of the Company's annual sales, began distributing their products directly to
retail dealers and, therefore, became a competitor of the Company (as well as a
competitor of other distributors) in 1996. In addition, some boating product
distributors have vertically integrated their operations by opening an
increasing number of retail establishments. The Company, itself, has become a
designer and supplier of products that are manufactured for it by contract
manufacturers and, therefore, has become a competitor of RV and boating product
manufacturers, which led certain manufacturers to terminate their supply
relationships with the Company. Finally, manufacturers of recreational vehicles
and boats are incorporating an increasing number of accessories, that had
formerly been sold primarily as After-Market products, into the vehicles or
boats as original equipment at the time of their manufacture, which has had an
adverse impact on sales of products by distributors, including the Company.
These developments have led to realignments of relationships and increased
competition among manufacturers, distributors and retail dealers within the
After-Market. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."


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<PAGE>   6

COMPETITION

         The Company faces significant competition. In addition to Dometic,
there are a number of national and regional distributors of recreational vehicle
and boating parts, supplies and accessories that compete with the Company. There
also are certain mass merchandisers, catalog houses and national and regional
retail chains specializing in the sale of recreational vehicle or boating parts,
supplies and accessories, that purchase such products directly from
manufacturers. Such mass merchandisers and national and regional chains compete
directly with the RV and boating supply stores and service centers that purchase
products from the Company. Such competition affects both the volume of Company's
sales, and the prices it is able to charge for the products it sells, to such RV
and boating supply stores. Additionally, there is no assurance that other
changes in supply relationships or new alliances within the recreational or
boating products industry will not occur that would further increase
competition. See "Products" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

         The Company, like most of its competitors, competes on the basis of the
quality, speed and reliability of its service, the breadth of its product lines
and price. The Company believes that it is highly competitive in each of those
areas.

CERTAIN FACTORS THAT COULD AFFECT FUTURE PERFORMANCE

         Changes in Industry Supply Relationships Have Increased Competition and
Caused Problems for Us in the Past; They May Do So Again in the Future.

         Since 1996, significant changes have occurred in the product supply
relationships within the RV accessories market. These changes led to increased
competition and, in 1996, created supply problems for us, which adversely
affected our sales and margins in 1996 and 1997. In the future, additional
changes in relationships among participants in the RV and boating After-Market
may increase competition, create uncertainties or produce supply problems for
us. These changes may affect others in the industry as well. See
"Business-Products; Arrangements with Manufacturers; and Competition" in Part I
of this Report and "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in Part II of this
Report.

         Our Business is Seasonal and is Subject to Various Economic and
         Climatic Influences.

         Our sales are affected directly by the purchase and usage levels of RVs
and boats. The purchase and, in particular, the usage of RVs and boats, are
affected by weather conditions. As a result, our sales and operating results
ordinarily decline in the winter months and we sometimes incur losses in these
periods of the year. Purchases and usage of RVs and boats also are affected by
consumers' level of discretionary income and their confidence about economic
conditions and changes in interest rates and in the availability and cost of
gasoline. As a result, our sales and operating results can be, and in the past
have been, adversely affected by the following:

         o        Economic recessions, which affect the willingness of consumers
                  to purchase and use their RVs and boats;

         o        Increases in interest rates which affect the availability and
                  affordability of financing for RVs and boats;

         o        Increases in the costs and supply shortages of gasoline which
                  affect the costs of using RVs and boats; and

         o        Unusually severe or extended winter weather conditions, which
                  can reduce the usage of RV and boats for periods extending
                  beyond the ordinary winter months or to regions that
                  ordinarily encounter milder winter weather conditions.


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         We Finance Growth through Borrowings; We have Significant Debt Service
         Requirements.

         We have financed our growth primarily with bank borrowings and
institutional debt financing. We rely heavily on bank borrowings to fund our
working capital requirements and capital expenditures. Although our 1999
operations generated approximately $777,000 of positive cash flow, and we expect
to fund our 2000 working capital requirements and capital expenditures with
internally generated funds and borrowings under our revolving bank credit line,
our outstanding borrowings could harm us in the future. We may find it more
difficult to obtain additional financing to fund expansion or take advantage of
other business opportunities; and (ii) we use a substantial portion of our cash
flow from operations to pay the principal and interest on our debt. Therefore,
our existing debt makes us more vulnerable to general economic downturns and
competitive pressures. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

    EMPLOYEES

         At December 31, 1999, the Company had approximately 375 full-time
employees, which includes employees in Canada. During the peak summer months,
the Company also employs part-time workers at its regional distribution centers.
None of the Company's employees is represented by a labor union. The Company
believes that its relations with employees are good.

ITEM 2.  PROPERTIES

         The Company operates 14 regional distribution centers in 13 states in
the United States and 4 regional distribution centers, each located in a
different Province, in Canada. Except for one facility owned by the Company, all
of these facilities are leased under triple net leases which require the Company
to pay, in addition to rent, real property taxes, insurance and maintenance
costs. The following table sets forth certain information regarding these
facilities.

<TABLE>
<CAPTION>
                                        SQUARE
            GEOGRAPHIC LOCATION         FOOTAGE      LEASE EXPIRATION DATE
            -------------------         -------      ---------------------
<S>                                     <C>          <C>
    Visalia, California..............    70,000      February 28, 2007
    Fort Worth, Texas................    90,670      April 30, 2004
    San Antonio, Texas...............    27,300      April 30, 2001
    Denver, Colorado.................    50,000      September 30, 2004
    Elkhart, Indiana.................   109,000      December 31, 2005
    Lancaster, Pennsylvania..........    64,900      February 29, 2004
    Atlanta, Georgia.................    66,800      August 31, 2004
    Tampa, Florida...................    53,100      September 30, 2003
    Phoenix, Arizona.................    36,500      March 31, 2002
    Salt Lake City, Utah.............    37,800      March 31, 2003
    Portland, Oregon.................    72,000      Owned
    Albany, New York.................    52,500      April 30, 2004
    Eau Claire, Wisconsin............    36,000      July 31, 2001
    Anchorage, Alaska................     2,000      December 31, 2002
    Montreal, Quebec.................    40,715      January 1, 2010
    Toronto, Ontario.................    34,020      December 1, 2001
    Calgary, Alberta.................    30,750      December 1, 2003
    Vancouver, British Columbia......    22,839      June 1, 2004
</TABLE>

         In March 1999, the Company relocated its executive offices from San
Jose to Morgan Hill, California, a suburb of San Jose, where it now leases
26,000 square feet of office space. The Company's address is 350 Woodview
Avenue, Morgan Hill, California 95037 and its telephone at that location is
(408) 782-6686.

         The Company also leases 1,500 square feet of office space in Seattle,
Washington where the Company maintains a sales office.


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ITEM 3.  LEGAL PROCEEDINGS

         The Company from time to time is named as a defendant, sometimes along
with product manufacturers and others, in product liability and personal injury
litigation. The Company believes that this type of litigation is incident to its
operations, and since it has insurance or indemnities from manufacturers
covering any potential liability, it believes that such litigation will not
materially affect the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

EXECUTIVE OFFICERS OF REGISTRANT

<TABLE>
<CAPTION>
                   NAME                 AGE                              POSITION
                   ----                 ---                              --------
<S>                                     <C>    <C>
      Thomas R. McGuire...........      56     Chairman of the Board and Chief Executive Officer

      Sandra A. Knell.............      42     Executive Vice President - Finance and Chief Financial
                                               Officer and Secretary

      Jeffrey R. Wannamaker.......      39     Executive Vice President - Operations and President of the
                                               Coast Distribution Division of the Company

      David A. Berger.............      46     Executive Vice President - Marine Sales and Marketing

      Stephen Bartolotta..........      38     Executive Vice President -- Strategic Planning

      Dennis A. Castagnola........      52     Senior Vice President - Proprietary Products and President
                                               of the DTS Division of the Company
</TABLE>

         Set forth below is certain information regarding the Company's
executive officers.

         THOMAS R. MCGUIRE. Mr. McGuire is a founder of the Company and has been
Chairman of the Board and Chief Executive Officer of the Company since the
Company's inception. From 1981 until August 1985 he also served as the Company's
Chief Financial Officer and Secretary.

         SANDRA A. KNELL. Mrs. Knell has been the Company's Executive Vice
President - Finance, Chief Financial Officer and Secretary since August 1985.
From 1984 until she joined the Company, Mrs. Knell was an Audit Manager, and for
the prior four years was a senior and staff accountant, with Grant Thornton LLP
(formerly Alexander Grant & Co.). Mrs. Knell is a Certified Public Accountant.

         JEFFREY R. WANNAMAKER. Mr. Wannamaker, who joined the Company in 1984,
has been Executive Vice President - Operations since 1995. From 1991 and until
his promotion to Executive Vice President, Mr. Wannamaker held the position of
Senior Vice President - Branch Operations of the Company. Prior to that time he
held various other management positions with the Company. In 1997, Mr.
Wannamaker was appointed as President of the Company's Coast Distribution
Division which markets and supplies products to RV and boating After-Market
Customers.

         DAVID A. BERGER. Mr. Berger served as Executive Vice President -
Marketing from May 1988 until September 1993. Due to the growth of the Company's
marine products sales, in September 1993 the Company's marketing department was
restructured into two separate departments, one for marine products and the
other for RV products, and Mr. Berger was placed in charge of marketing for the
Company's marine products division. From August 1986 to May 1988, Mr. Berger was
Senior Vice President Purchasing of the Company. For the prior 14 years he held
various management positions with C/P Products Corp., a distributor of
recreational vehicle parts and accessories acquired by the Company in 1985.


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<PAGE>   9


         STEPHEN BARTOLOTTA. Mr. Bartolotta joined the Company in January 2000
as Executive Vice President - Strategic Planning. From September 1995 to
December 1999, he was a Senior Manager with the Strategic Services Division of
Arthur Andersen Consulting, Inc., in New York. From February 1993 to September
1995, Mr. Bartolotta was a senior staff member with Arthur Andersen's business
advisory practice. From October 1987 to February 1993, he held various positions
with the Company, including Vice President and general manager of the Company's
Connecticut distribution center.

         DENNIS A. CASTAGNOLA. Mr. Castagnola was appointed to his current
position of Senior Vice President-Proprietary Products in May 1994, in which he
directs the Company's proprietary products program. From September 1993 until
May 1994, he served as Senior Vice President - RV Sales and Marketing. For the
prior 19 years, he held various positions with the Company, including Vice
President/Division Manager of the Company's Portland, Oregon Distribution
Center. In 1997, Mr. Castagnola was appointed as President of the Company's new
DTS Division which markets and supplies proprietary products to RV and boating
manufactures and to customers in markets other than the RV and boating
After-Market.


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<PAGE>   10

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
         MATTERS

         The Company's shares of common stock are listed and trade on the
American Stock Exchange under the trading symbol "CRV."

         The following table sets forth for the calendar quarters indicated the
range of the high and low sales prices per share of the Company's common stock
on the American Stock Exchange.

<TABLE>
<CAPTION>
                                                        HIGH          LOW
                                                        ----          ---
<S>                                                    <C>           <C>
         1999:

            First Quarter............                  $3.38         $2.25
            Second Quarter...........                   3.25          2.13
            Third Quarter............                   2.94          2.38
            Fourth Quarter...........                   2.56          1.88

         1998:

            First Quarter............                  $3.25         $2.00
            Second Quarter...........                   5.00          2.75
            Third Quarter............                   4.31          2.50
            Fourth Quarter...........                   3.00          2.00
</TABLE>

         On March 9, 2000, the closing price per share of the Company's common
stock on the American Stock Exchange was $2.06 and there were approximately
1,215 holders of record of the Company's common stock.

DIVIDENDS AND SHARE REPURCHASES

         The Company has a policy of retaining earnings to support the growth of
its business and, therefore, does not anticipate that any cash dividends will be
paid in the foreseeable future. In addition, payment of cash dividends by the
Company is restricted by its loan agreements. See Note E to the Company's
Consolidated Financial Statements.

         In early 1999 the Company adopted an open market and private stock
repurchase program. We made purchases of $2,975,000 of shares under that
program, that were funded with borrowings under a term loan from the same lender
with which we have our revolving credit facility. We do not currently expect to
make any purchases of shares in 2000 unless we have the opportunity to do so at
favorable prices. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."


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<PAGE>   11

ITEM 6.  SELECTED FINANCIAL DATA

         The selected operating data set forth below for the fiscal years ended
December 31, 1999, 1998 and 1997, and the selected balance sheet data at
December 31, 1999 and 1998, are derived from the Company's audited financial
statements included elsewhere in this report and should be read in conjunction
with those financial statements. The selected financial data for the fiscal
years ended December 31, 1996 and 1995 and at December 31, 1997, 1996, and 1995
are derived from audited financial statements which are not included in this
report.

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                       -------------------------------------------------------------
                                         1999         1998         1997         1996         1995
                                       ---------    ---------    ---------    ---------    ---------
                                                   (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                                    <C>          <C>          <C>          <C>          <C>
Operating Data:
Net Sales ..........................   $ 154,800    $ 148,680    $ 135,952    $ 139,286    $ 169,559
Cost of sales (including
distribution costs) ................     128,804      124,452      117,272      118,361      138,806
                                       ---------    ---------    ---------    ---------    ---------
          Gross margin .............      25,996       24,228       18,680       20,925       30,753

Selling, general and
administrative expenses ............      23,140       20,301       20,147       21,525       22,260
                                       ---------    ---------    ---------    ---------    ---------
     Operating margin ..............       2,856        3,927       (1,467)        (600)       8,493

Equity in net earnings (loss) of
affiliated companies ...............          76         (170)         673        1,529        1,204
Other income (expense) .............      (2,386)      (2,704)      (5,775)      (1,246)      (4,271)
                                       ---------    ---------    ---------    ---------    ---------
Earnings (loss) before income
taxes ..............................         546        1,053       (6,569)        (317)       5,426
Income taxes (benefit) .............         536          927       (1,303)        (194)       2,082
                                       ---------    ---------    ---------    ---------    ---------
Net earnings (loss) ................   $      10    $     126    $  (5,266)   $    (123)   $   3,344
                                       =========    =========    =========    =========    =========

Net earnings (loss) per
share-diluted(1) ...................   $     .00    $     .02    $   (1.01)   $    (.03)   $     .64
                                       =========    =========    =========    =========    =========
Weighted average number of shares...
                                           4,641        5,282        5,239        5,198        5,206
                                       =========    =========    =========    =========    =========

<CAPTION>
                                          1999         1998         1997         1996         1995
                                       ---------    ---------    ---------    ---------    ---------
                                                       (dollars in thousands)
<S>                                     <C>          <C>          <C>          <C>         <C>
Balance Sheet Data:
Working capital ....................   $  45,653    $  42,937    $  48,999    $  45,639    $  50,004
Total assets .......................      69,687       66,813       72,663       88,442       92,136
Long-term obligations(2)............      28,105       23,175       29,726       33,771       38,376
Shareholders' equity ...............      31,243       33,831       33,996       39,450       39,392
</TABLE>


----------

(1)      See Note J to the Company's Consolidated Financial Statements.

(2)      Exclusive of current portion. For additional information regarding
         long-term obligations, see Note D to the Company's Consolidated
         Financial Statements.


                                       11
<PAGE>   12

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

GENERAL

     Factors Generally Affecting Sales of RV and Boating Products
     ------------------------------------------------------------

         We believe that the Company is the largest wholesale distributor of
replacement parts, accessories and supplies for recreational vehicles ("RVs"),
and one of the largest distributors of replacement parts, accessories and
supplies for boats, in North America. Sales are made by the Company to retail
parts and supplies stores, service and repair establishments and new and used RV
and boat dealers ("After-Market Customers"). The Company's sales are affected
primarily by (i) usage of RVs and boats and (ii) sales of new RVs and boats,
because consumers often "accessorize" their RVs and boats at the time of
purchase.

         The usage and the purchase, by consumers, of RVs and boats depend, in
large measure, upon the extent of discretionary income available to consumers
and their confidence about economic conditions. Weather conditions also affect
the usage of RVs and boats. Additionally, shortages in the supply and increases
in the prices of gasoline also can lead to declines in the usage and purchases
of RVs and boats. As a result, the Company's sales and operating results can be,
and in the past have been, adversely affected by recessionary economic
conditions, increases in interest rates, which affect the availability and
affordability of financing for purchases of RVs and boats, shortages in the
supply and increases in the prices of gasoline, and unusually adverse weather
conditions.

RESULTS OF OPERATIONS

         Net Sales. Net sales in 1999 increased by approximately $6,120,000 or
4.1% as compared to 1998, due primarily to an increase, during the first half of
1999, in consumer demand for the products that we sell, which we believe
resulted primarily from increases in sales and usage of recreational vehicles
and boats. Operating results in 1999 also included a full year of sales from
Marine Distributors, a marine products distribution business that we acquired
late in May 1998, the sales of which were therefore not included in our
operating results for the first five months of 1998.

         Net sales in 1998 increased by approximately $12,728,000 or 9.4% as
compared to 1997, due to strengthening demand, new marketing programs
implemented by the Company, and the acquisition of Marine Distributors in May
1998.

         Gross Margin. The Company's gross margin increased to 16.8% of net
sales in 1999 from 16.3% in 1998 and 13.7% in 1997. These increases were due
primarily to (i) selected price increases on the products that we sell, and (ii)
the impact of fixed costs on a higher sales base.

         Selling, General and Administrative Expenses. As a percentage of net
sales, selling, general and administrative expenses increased to 15.0% for 1999
from 13.7% in 1998. This increase was primarily the result of costs associated
with the installation of the Company's new computer system, which became
operational in the fourth quarter of 1999 and increased selling expenses due to
the addition of marine sales personnel. Also contributing to the increase in
selling, general and administrative expenses in 1999 were costs incurred in the
relocation of our corporate headquarters from San Jose, California to Morgan
Hill, California that took place in the first quarter of 1999.

         As a percentage of net sales, selling, general and administrative
expenses declined to 13.7% in 1998 from 14.8% in 1997. This decrease was due
primarily to increased sales in 1998 and a reduction of the Company's telephone
expenses.


                                       12
<PAGE>   13

         Operating Income. The increase in selling, general and administrative
expenses in 1999 more than offset the increases in sales and gross margin
achieved during the year, and therefore, operating income declined to $2,856,000
in 1999 as compared to $3,927,000 in 1998.

         The Company increased its operating income in 1998 to $3,927,000 as
compared to a loss from operations of $1,467,000 in 1997 due to increased sales
and gross margin.

         Nearly all of our corporate overhead costs are incurred in the United
States. A portion of those costs are allocated to our foreign operations to
the extent that they directly benefit from the expenses incurred.

         Equity in Net Earnings of Affiliated Companies. For several years, the
Company maintained minority ownership interests in several companies in related
industries ("affiliated companies"). The Company's ownership interests in these
affiliated companies had been accounted for under the equity method of
accounting, under which the Company included in its operating results, as
"equity in net earnings (loss) of affiliates," its pro rata share of the net
income of or any loss incurred by these companies. H. Burden Limited ("Burden"),
a distributor of caravan and boating products in Western Europe, in which the
Company had owned a 35% ownership interest, and HWH, Inc. ("HWH"), a
manufacturer of hydraulic leveling devices and other products for recreational
vehicles, in which the Company held a 34% ownership interest, accounted for
substantially all of the Company's equity in the net earnings of affiliates. In
the second half of 1997 the Company sold its ownership interest in Burden for a
cash price of $4,198,000; and, in early 1998, it sold its ownership interest in
HWH for a cash price of $5,338,000, in order to provide funds to support the
growth of the Company's core business of distributing after-market products in
North America. As a result, equity in the net earnings of affiliates was not
material in 1999, 1998 or 1997 and is not expected to be material to the
Company's operating results in the future.

         Interest Expense. During 1999 interest expense decreased by $291,000 or
11%, as compared to 1998. This decrease was largely the result of a reduction in
the rate of interest that the Company pays on its revolving line of credit.
During 1998 interest expense decreased by $674,000 or 20% as compared to 1997.
This decrease was the result of reductions in average long-term borrowings
outstanding as compared to 1997. Those reductions were funded with proceeds from
the sales of the Company's investments in Burden and HWH and, to a lesser
extent, internally generated funds.

         The Company will continue to rely on borrowings to fund a substantial
portion of its working capital requirements and future growth and, as a result,
it anticipates that interest will continue to be a significant expense for the
Company.

         Income Taxes (Benefit). The Company's effective income tax rate was 98%
in 1999, 88% in 1998 and 20% in 1997. The substantial increase in the tax rate
in 1999 and 1998, as compared to 1997, was due primarily to (i) an increase in
non-tax deductible expenses as a percentage of pre-tax results; and (ii) an
increase in income generated by the Company's Canadian subsidiary, because such
income is taxed at higher rates in Canada than the income tax rates applicable
in the United States.


LIQUIDITY AND CAPITAL RESOURCES

         We finance our working capital requirements for our operations
primarily with borrowings under a long-term revolving bank credit facility and
internally generated funds. Under that credit facility, which expires in May
2001, we may borrow up to the lesser of (i) $35,000,000 with a seasonal increase
to $40,000,000 between March 1 and June 20 of each year, or (ii) an amount equal
to 80% of eligible accounts receivable and 50% of eligible inventory (the
"borrowing base"). Borrowings under this credit facility bear interest at a per
annum rate of interest equal to the bank's prime rate plus 0.5% or, at the
Company's option but subject to certain limitations, at the bank's available
LIBOR rate, plus 2.25%.

         The Company also has obtained a $5,000,000 term loan from the bank from
which we obtained our revolving credit facility. The proceeds were used to fund
repurchases of our shares in 1999 and for other corporate purposes. The term
loan is repayable in monthly installments commencing in July 2000, based on a
three year amortization. However, if the revolving credit facility is not
extended beyond its maturity date of May 31, 2001, the remaining balance of the
term loan will become due at that time. Term loan borrowings bear interest at
the bank's prime rate plus 100 basis points or at the Bank's LIBOR rate plus 275
basis points.

         At March 21, 2000, outstanding borrowings under the revolving credit
facility and the term loan totaled $37,900,000. Borrowings under the credit
facility and term loan are secured by substantially all of the Company's assets
and rank senior in priority to other indebtedness of the Company.


                                       13
<PAGE>   14

         The Company believes that available credit under its revolving credit
facility, together with internally generated funds, will be sufficient to enable
the Company to meet its working capital requirements and other cash requirements
over the next twelve months. The Company does not presently anticipate any
material increases in its cash requirements or material changes in its sources
of funds in the foreseeable future.

         The Company generally uses cash for, rather than generating cash from,
operations in the first half of the year, because the Company builds
inventories, and accounts receivables increase, as its customers begin
increasing their product purchases for the spring and summer selling seasons.
See "Seasonality and Inflation" below.

         The Company generated cash from operating activities of $777,000,
$5,194,000 and $1,544,000 in 1999, 1998 and 1997 respectively. In 1999 the cash
was generated primarily from non-cash expenses and an increase in accounts
payable. In 1998, the cash was generated primarily from non-cash expenses and
the receipt of income tax refunds arising from the taxable loss in 1997. In
December 1999, the Company increased its inventory to prepare for its annual
dealer sales show, which was held in January 2000. In prior years the show has
been held in February. As a result, the increase in inventories in anticipation
of the dealer show in past years occurred in January, rather than the preceding
December. The Company was able to decrease its inventory by $1,267,000 in 1998
and $5,612,000 in 1997.

         Net cash used in investing activities was $272,000 in 1999, as compared
to net cash provided by investing activities of $3,294,000 in 1998 and
$3,615,000 in 1997. During the first quarter of 1998, the Company received
proceeds of $5,338,000 from the sale of its investment in HWH. In the second
half of 1997, the Company received proceeds of $4,198,000 from the sale of its
investment in Burden. In May 1998, the Company used cash of $1,142,000 to
acquire the inventory of Marine Distributors, Inc., a distributor of marine
products.

         Capital expenditures were $1,465,000 in 1999, $258,000 in 1998 and
$428,000 in 1997. The increase in capital expenditures in 1999 was related to
the acquisition and installation of the Company's new computer system and, to a
lesser extent, expenditures associated with the establishment of its new
headquarters and national order office in Morgan Hill, California.

         Borrowings under the Company's credit facility increased by $5,095,000
in 1999, as compared to decreases of $5,376,000 in 1998 and $2,835,000 in 1997.
In June 1999, the Company retired its outstanding senior subordinated notes with
a final principal payment of $2,334,000. Similar payments were made in each of
1998 and 1997. Those payments were funded principally with borrowings under our
long term revolving bank credit facility.

         In early 1999 we adopted an open market and private stock repurchase
program. During 1999, we purchased 1,012,304 shares of our common stock for an
aggregate of $2,975,000 under this program. We funded those purchases with
proceeds of the term loan we obtained from our bank lender. The stock
repurchases accounted for the decrease in stockholders equity at December 31,
1991. We do not currently expect to make any purchases of shares during 2000,
unless we have opportunities to acquire additional shares at favorable prices.

         The Company leases the majority of its facilities and certain of its
equipment under non-cancelable operating leases. In 1999, rent expense under all
operating leases totaled approximately $3,380,000. The Company's future lease
commitments are described in Note E to the Company's Consolidated Financial
Statements contained elsewhere in this Report.

SEASONALITY AND INFLATION

         Seasonality. Sales of recreational vehicle and boating parts, supplies
and accessories are seasonal. We have significantly higher sales during the
six-month period from April through September than we do during the remainder of
the year. Because a substantial portion of the Company's expenses are fixed,
operating income declines and the Company sometimes incurs losses and must rely
more heavily on borrowings to fund operating requirements in months when sales
are lower.


                                       14
<PAGE>   15

         The following table presents unaudited quarterly financial information
for each of the fiscal years ended December 31, 1999 and 1998. This information
has been prepared by us on a basis consistent with our audited financial
statements included elsewhere in this Report. The information includes all
necessary adjustments, consisting only of normal recurring adjustments, that
management considers necessary for a fair presentation of the unaudited
quarterly operating results when read in conjunction with the consolidated
financial statements and notes thereto included elsewhere in this Report. These
quarterly operating results are not necessarily indicative of results that may
be expected in future periods.

<TABLE>
<CAPTION>
                                                                 Quarter Ended
                                      March 31, 1999     June 30, 1999    September 30, 1999     December 31, 1999
                                      --------------     -------------    ------------------     -----------------
<S>                                   <C>                <C>              <C>                    <C>
Revenues                                 $41,129            $49,624            $ 41,407             $ 22,640
Gross profit                               7,130              9,381               6,172                3,313
Net earnings (loss)                          340              1,155                (163)              (1,322)
Net earnings (loss) per share            $   .07            $   .25            $   (.04)            $   (.31)

<CAPTION>
                                                                 Quarter Ended
                                      March 31, 1998     June 30, 1998    September 30, 1998     December 31, 1998
                                      --------------     -------------    ------------------     -----------------
<S>                                   <C>                <C>              <C>                    <C>
Revenues                                 $38,364            $46,188            $41,555            $ 22,573
Gross Profit                               6,490              7,984              6,276               3,478
Net earnings (loss)                          608              1,052                 69              (1,603)
Net earnings (loss) per share            $   .12            $   .20            $   .01            $   (.30)
</TABLE>


         Inflation. Generally, the Company has been able to pass inflationary
price increases on to its customers. However, inflation also may cause or may be
accompanied by increases in gasoline prices and interest rates. Such increases,
or even the prospect of increase in the price or shortages in the supply of
gasoline, can adversely affect the purchase and usage of RVs and boats, which
can result in a decline in the demand for the Company's products.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's exposure to market risk with respect to financial
instruments is primarily related to changes in interest rates with respect to
borrowing activities, which may adversely affect its financial position, results
of operations and cash flows. To a lesser degree, the Company is exposed to
market risk from foreign currency fluctuations associated with the Company's
Canadian operations and its Canadian currency denominated debt. The Company does
not use financial instruments for trading or other speculative purposes and is
not party to any derivative financial instruments.

         In seeking to minimize the risks from interest rate fluctuations, the
Company manages exposures through its regular operating and financing
activities. The fair value of borrowings under the Company's revolving credit
facility approximate the carrying value of such obligations.

         The Company sometimes enters into forward exchange agreements to reduce
the effect of foreign currency fluctuations on a portion of its inventory
purchases for its Canadian operations. The gains and losses on these contracts
are reflected in earnings in the period during which the transactions being
hedged are recognized. The Company believes that these agreements do not subject
the Company to significant market risk from exchange rate movements because the
agreements offset gains and losses on the balances and transactions being
hedged. As of December 31, 1999, there were no such agreements outstanding.

         Approximately 15% of our debt is denominated in Canadian currency,
which also exposes us to market risk associated with exchange rate movements.
Historically, the Company has not used derivative financial instruments to
manage its exposure to foreign currency rate fluctuations since the market risk
associated with our foreign currency denominated debt has not been considered
significant.


                                       15
<PAGE>   16

                                   ----------

         This Report contains forward-looking information which reflects
Management's current views of future financial performance. The forward-looking
information is subject to certain risks and uncertainties, including, but not
limited to, the effect on future performance of changing product supply
relationships in the industry and the uncertainties created by those changes;
the potential for increased price competition; and possible changes in economic
conditions, prevailing interest rates or gasoline prices, or the occurrence of
unusually severe weather conditions, that can affect both the purchase and usage
of RVs and boats and which, in turn, affects purchases by consumers of the
products that the Company sells. For information concerning such factors and
risks, see the foregoing discussion in this section of this Report titled,
"Management's Discussion and Analysis of Financial Condition and Results of
Operation." Due to such uncertainties and risks, readers are cautioned not to
place undue reliance on such forward-looking statements, which speak only as of
the date of this Report.



ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

              THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<S>                                                                                      <C>
     Consolidated Financial Statements:
              Report of Independent Certified Public Accountants...........................17

              Consolidated Balance Sheets, December 31, 1999 and 1998......................18

              Consolidated Statements of Operations for the Years Ended
              December 31, 1999, 1998 and 1997.............................................19

              Consolidated Statements of Cash Flows
              for the Years Ended December 31, 1999, 1998 and 1997.........................20

              Consolidated Statement of Shareholders' Equity for the
              Years Ended December 31, 1999, 1998 and 1997.................................21

              Notes to Consolidated Financial Statements...................................22

     Financial Statement Schedules:
              Schedule II - Valuation and Qualifying Accounts
              for the Years Ended December 31, 1999, 1998 and 1997.........................31
</TABLE>

         (Other Financial Statement Schedules are omitted as the information is
         not required, is not material or is otherwise furnished.)




                                       16
<PAGE>   17

                        REPORT OF INDEPENDENT ACCOUNTANTS



Board of Directors and Shareholders
The Coast Distribution System, Inc.

We have audited the accompanying consolidated balance sheets of The Coast
Distribution System, Inc. and Subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The Coast
Distribution System, Inc. and Subsidiaries as of December 31, 1999 and 1998, and
the consolidated results of their operations and their consolidated cash flows
for each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.

We have also audited Schedule II of The Coast Distribution System, Inc. and
Subsidiaries for each of the three years in the period ended December 31, 1999.
In our opinion this schedule presents fairly, in all material respects, the
information required to be set forth therein.

/s/ Grant Thornton LLP


San Jose, California
March 15, 2000


                                       17

<PAGE>   18


              THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                (Dollars in Thousands Except Per Share Amounts)

ASSETS

<TABLE>
<CAPTION>
                                                                    As of
                                                                 December 31,
                                                            --------------------
                                                              1999        1998
                                                            --------    --------
<S>                                                         <C>         <C>
Current Assets
  Cash ..................................................   $    641    $    435
  Accounts receivable (less allowance for doubtful
  receivables of $890 in 1999 and 1998) .................     12,981      12,412
  Inventories ...........................................     38,655      37,246
  Prepaid expenses ......................................      1,067         390
  Deferred income taxes .................................      1,743       1,823
  Income tax refunds receivable .........................        652          45
                                                            --------    --------
        Total current assets ............................     55,739      52,351

Property, Plant and Equipment ...........................      4,364       3,904
Other Assets
  Costs in excess of net assets of acquired businesses ..      7,584       8,086
  Other .................................................      2,000       2,472
                                                            --------    --------
                                                            $ 69,687    $ 66,813
                                                            ========    ========

LIABILITIES

Current Liabilities
  Accounts payable ......................................   $  7,748    $  4,647
  Accrued liabilities ...................................      2,050       2,071
  Current maturities of long-term obligations ...........        288       2,696
                                                            --------    --------
       Total current liabilities ........................     10,086       9,414

Long-Term Obligations ...................................     28,105      23,175
Deferred Income Taxes ...................................        102         156
Commitments .............................................         --          --

Redeemable Preferred Stock of Subsidiary ................        151         237

SHAREHOLDERS' EQUITY

    Preferred stock, $.001 par value; authorized:
    5,000,000 shares; none issued and outstanding: ......         --          --

    Common stock, $.001 par value; authorized:
    20,000,000 shares; 4,302,846 and 5,279,854 issued
    as of December 31, 1999 and 1998, respectively ......     16,751      19,640
    Accumulated other comprehensive income (loss) .......       (367)       (665)
    Retained earnings ...................................     14,859      14,856
                                                            --------    --------
                                                              31,243      33,831
                                                            --------    --------
                                                            $ 69,687    $ 66,813
                                                            --------    --------
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       18
<PAGE>   19

              THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                                         -----------------------------------
                                                            1999         1998         1997
                                                         ---------    ---------    ---------
                                                   (Dollars in thousands, except per share amounts)
<S>                                                      <C>          <C>          <C>
Net sales ............................................   $ 154,800    $ 148,680    $ 135,952

Cost of products sold (including distribution costs) .     128,804      124,452      117,272
                                                         ---------    ---------    ---------
    Gross margin .....................................      25,996       24,228       18,680
Selling, general and administrative expenses .........      23,140       20,301       20,147
                                                         ---------    ---------    ---------
    Operating margin .................................       2,856        3,927       (1,467)

Equity in net earnings (loss) of affiliated
    companies ........................................          76         (170)         673
Other income (expense)
    Interest expense .................................      (2,371)      (2,662)      (3,336)
    Loss from sale of investments in affiliates ......          --           --       (2,193)
    Other ............................................         (15)         (42)        (246)
                                                         ---------    ---------    ---------

Earnings (loss) before income taxes ..................         546        1,053       (6,569)
    Income tax provision (benefit) ...................         536          927       (1,303)
                                                         ---------    ---------    ---------
    Net earnings (loss) ..............................   $      10    $     126    $  (5,266)
                                                         ---------    ---------    ---------

Earnings (loss) per share:
    Basic ............................................   $     .00    $     .02    $   (1.01)
                                                         ---------    ---------    ---------
    Diluted ..........................................   $     .00    $     .02    $   (1.01)
                                                         ---------    ---------    ---------
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       19
<PAGE>   20

              THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                               Year Ended December 31,
                                                                                            -----------------------------
                                                                                              1999       1998       1997
                                                                                            -------    -------    -------
<S>                                                                                         <C>        <C>        <C>
Cash flows from operating activities:
     Net earnings (loss) ................................................................   $    10    $   126    $(5,266)
     Adjustments to reconcile net earnings (loss) to net cash provided by
     operating activities:
     Depreciation .......................................................................       928        972      1,015
     Amortization .......................................................................       634        604        608
     (Loss) gain from sale of equipment .................................................         5         51         (9)
     Equity in net earnings (loss) of affiliated companies, net of dividends ............       (76)       170       (148)
     Loss from sale of investments in affiliates ........................................        --         --      2,193
     Deferred income taxes ..............................................................       (37)      (344)       227
     Change in assets and liabilities net of effects from business acquisitions:
         Accounts receivable ............................................................      (569)    (1,144)     2,299
         Inventory.......................................................................    (2,124)     1,267      5,612
         Prepaids and tax refunds receivable.............................................    (1,245)     1,944       (924)
         Accounts payable ...............................................................     3,281      1,226     (3,901)
         Accrued liabilities ............................................................       (30)       322       (162)
                                                                                            -------    -------    -------
         Total Changes ..................................................................      (687)     3,615      2,924
                                                                                            -------    -------    -------
         Net cash provided by operating activities ......................................       777      5,194      1,544

Cash flows from investing activities:
   Proceeds from sale of equipment ......................................................       174         11         45
   Decrease (increase) in other assets ..................................................     1,019       (705)      (200)
   Acquisitions of businesses, net of cash acquired .....................................        --     (1,142)        --
   Proceeds from sale of investments in affiliates ......................................        --      5,388      4,198
   Capital expenditures .................................................................    (1,465)      (258)      (428)
                                                                                            -------    -------    -------
         Net cash provided by (used in) investing activities ............................      (272)     3,294      3,615

Cash flows from financing activities:
   Net borrowings (repayments) under notes payable and line-of credit agreements ........     5,095     (5,376)    (2,835)
   Proceeds from issuance of long-term debt .............................................       136         50        259
   Repayment of long-term debt...........................................................    (2,715)    (2,779)    (2,372)
   Issuance of common stock under employee stock purchase and stock option plans ........        86         81        119
   Redemption of redeemable preferred stock of subsidiary ...............................       (96)       (96)      (103)
   Dividends on preferred stock of subsidiary ...........................................        (7)       (12)       (13)
   Retirement of common stock............................................................    (2,975)        --         --
                                                                                            -------    -------    -------
          Net cash used in financing activities .........................................      (476)    (8,132)    (4,945)
Effect of exchange rate changes on cash .................................................       177       (229)      (120)
                                                                                            -------    -------    -------
Net Increase (Decrease) in Cash .........................................................       206        127         94
Cash beginning of year ..................................................................       435        308        214
                                                                                            -------    -------    -------
Cash end of year ........................................................................   $   641    $   435    $   308
                                                                                            =======    =======    =======

Supplemental disclosures of cash flow information:
   Cash paid during the year for:
       Interest .........................................................................   $ 2,341    $ 2,671    $ 3,312
       Income taxes .....................................................................     1,313       (920)      (608)
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       20
<PAGE>   21

              THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                             ACCUMULATED
                                                                                                OTHER
                                                                              RETAINED      COMPREHENSIVE
THREE YEARS ENDED DECEMBER 31, 1999                     COMMON STOCK          EARNINGS      INCOME (LOSS)       TOTAL
                                                   ----------------------     --------      -------------      -------
<S>                                                <C>            <C>         <C>           <C>                <C>
Balance at January 1, 1997 ..................       5,210,723     $19,440      $20,021          $ (11)         $39,450

Net loss for the year .......................              --          --       (5,266)            --           (5,266)
Foreign currency translation adjustments ....              --          --          --            (227)            (227)
Reclassification adjustment:
Gain on sale of investment in foreign entity               --          --          --             (67)             (67)
                                                                                                               -------
Comprehensive loss ..........................                                                                   (5,560)
                                                                                                               -------
Issuance of common stock under employee stock
     purchase plan ..........................          36,156         119          --              --              119
Dividends on preferred stock of subsidiary ..              --          --         (13)             --              (13)
                                                   ----------     -------     -------           -----          -------
Balance at December 31, 1997 ................       5,246,879      19,559      14,742            (305)          33,996

Net earnings for the year ...................              --          --         126              --              126
Foreign currency translation adjustments ....              --          --          --            (360)            (360)
                                                                                                               -------
Comprehensive loss ..........................                                                                     (234)
                                                                                                               -------
Issuance of common stock under employee stock
     purchase plan ..........................          32,975          81          --              --               81
Dividends on preferred stock of subsidiary ..              --          --         (12)             --              (12)
                                                   ----------     -------     -------           -----          -------
Balance at December 31, 1998 ................       5,279,854      19,640      14,856            (665)          33,831

Net earnings for the year ...................              --          --          10              --               10
Foreign currency translation adjustments ....              --          --          --             298              298
                                                                                                               -------
Comprehensive income ........................                                                                      308
                                                                                                               -------

Retirement of common stock ..................      (1,012,304)     (2,975)         --              --           (2,975)
Issuance of common stock under employee stock
     purchase plan ..........................          35,296          86          --              --               86
Dividends on preferred stock of subsidiary ..              --          --          (7)             --               (7)
                                                   ----------     -------     -------           -----          -------

Balance at December 31, 1999 ................       4,302,846     $16,751     $14,859           $(367)         $31,243
                                                   ==========     =======     =======           =====          =======
</TABLE>


   The accompanying notes are an integral part of these financial statements


                                       21
<PAGE>   22

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A summary of the significant accounting policies applied in the
preparation of the accompanying consolidated financial statements follows:

1. Principles of Consolidation. The Company consolidates the accounts of its
wholly-owned subsidiary, The Coast Distribution System (Canada) Inc. ("Coast
Canada"). Investments in unconsolidated affiliates are accounted for by the
equity method. All material intercompany transactions have been eliminated.

2. Inventories. Inventories are stated at the lower of cost (determined on a
first-in, first-out basis) or net realizable value. The Company regularly
assesses the appropriateness of the inventory valuations with particular
attention to obsolete, slow-moving and non-saleable inventory. Inventories
consist primarily of recreational replacement parts, supplies and accessories
held for resale.

3. Property, Plant and Equipment. Property, plant and equipment are stated at
cost less accumulated depreciation and amortization. Depreciation and
amortization are provided for in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service lives, principally
on a straight-line basis. The estimated lives used in determining depreciation
and amortization are:

                  Buildings and improvements         12-40 years
                  Warehouse and office equipment     5-7 years
                  Automobiles                        3-5 years

Leasehold improvements are amortized over the lives of the respective leases or
the service lives of the improvements, whichever is shorter. Currently the
amortization periods range from 5 to 15 years.

4. Revenue Recognition. Revenue from sales of product is recognized upon
shipment.

5. Segment Reporting. The Company has one operating segment which is the
distribution of recreational replacement parts, supplies and accessories. The
Company distributes its product from 18 distribution centers located throughout
the United States and Canada. No single customer accounted for 10% or more of
the Company's revenues in 1999, 1998, or 1997.

6. Intangible Assets. The costs in excess of net assets of acquired businesses
are being amortized on a straight-line basis using periods ranging from four to
thirty years. At December 31, 1999 and 1998, the accumulated amortization
applicable to intangible assets was approximately $6,364,000 and $5,700,000
respectively. We review the valuation and amortization of intangibles on an
ongoing basis and we evaluate the recoverability of intangibles based on the
undiscounted cash flows generated by our acquired businesses to determine
whether impairments have occurred. If we determine that an impairment has
occurred, it is our policy to reduce the recorded value of the intangible asset
to its fair market value.

7. Foreign Currency Translation. Exchange adjustments resulting from foreign
currency transactions are generally recognized in net earnings, whereas
adjustments resulting from the translation of financial statements are reflected
as a separate component of shareholders' equity. Net foreign currency
transaction gains or losses are not material in any of the years presented. The
functional currency of the Company's Canadian subsidiary is the Canadian dollar.


                                       22
<PAGE>   23

8. Forward Exchange Contracts. On a selective basis, the Company enters into
forward exchange contracts to reduce the effect of foreign currency fluctuations
on a portion of the inventory purchases of its subsidiary. The gains or losses
on these contracts are included in earnings in the period when the related
transactions being hedged are recognized. The contracts do not subject the
Company to significant market risk from exchange rate movements because the
contracts offset gains and losses on the balances and transactions being hedged.
At December 31, 1999, there were no forward exchange contracts outstanding.

9. Income Taxes. The Company provides a deferred tax expense or benefit equal to
the net change in the deferred tax liability or asset during the year. Deferred
income taxes represent tax loss and credit carryforwards and future net tax
effects resulting from temporary differences between the financial statement and
tax basis of assets and liabilities, using enacted tax rates. A valuation
allowance is provided against deferred tax assets when realization of the asset
is not expected to occur.

10. Use of Estimates. In preparing financial statements in conformity with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements, as well as revenues and expenses during the
reporting period. Actual results could differ from those estimates.

11. Comprehensive Income. As of January 1, 1998, the Company adopted Statement
of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income." SFAS 130 establishes new rules for reporting and display of
comprehensive income (loss) and its components. SFAS 130 requires the Company's
foreign currency translation adjustments, which prior to adoption were reported
separately in stockholder's equity, to be included in other comprehensive income
(loss). Prior year financial statements have been reclassified to conform to the
requirements of SFAS 130. The adoption of SFAS 130 had no effect on the
Company's net earnings or stockholders' equity.

12. Earnings per Share. Basic earnings per share are computed using the weighted
average number of common shares outstanding during the period. Diluted earnings
per share are computed using the weighted average number of common and common
equivalent shares outstanding during the period. Common equivalent shares
consist of the incremental common shares issuable upon conversion of convertible
securities (using the if-converted method) and shares issuable on exercise of
stock options (using the treasury stock method). Common equivalent shares are
excluded from the computation if their effect is anti-dilutive.

13. Derivative and Hedging Activities. The Company does not have any instruments
that fall within the scope of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities".

NOTE B:  PROPERTY, PLANT AND EQUIPMENT

         Property and equipment consist of the following at December 31:

<TABLE>
<CAPTION>
                                                             1999         1998
                                                            -------      -------
                                                           (dollars in thousands)
<S>                                                         <C>          <C>
        Buildings ....................................      $ 2,486      $ 2,771
        Warehouse equipment ..........................        3,716        3,340
        Office equipment .............................        4,061        3,518
        Leasehold improvements .......................          909          695
        Automobiles ..................................           55           49
                                                            -------      -------
                                                             11,227       10,373

        Less accumulated depreciation and amortization        7,500        7,106
                                                            -------      -------
                                                              3,727        3,267

                                                            -------      -------
        Land .........................................          637          637
                                                            -------      -------
                                                            $ 4,364      $ 3,904
                                                            =======      =======
</TABLE>


                                       23
<PAGE>   24

NOTE C:  SALE OF INVESTMENTS IN AFFILIATED COMPANIES

         Prior to September 1997, the Company owned 35% of the outstanding
shares of H. Burden Limited ("Burden"). The cumulative purchase price paid for
the shares was $4,025,000. In September 1997, the Company sold its investment
for $4,528,000. The carrying value of the investment was $5,003,000, and the
sale resulted in a loss which is shown net of related selling expenses.

         Prior to February 1998, the Company owned 34% of HWH Corporation. In
February 1998, HWH repurchased all of the HWH shares owned by the Company for
$5,388,000. The carrying value of the investment was $7,057,000 and, as of
December 31, 1997, the investment was written down to its net realizable value,
resulting in a loss.

NOTE D:  LONG-TERM OBLIGATIONS

<TABLE>
<CAPTION>
Long-term obligations consist of the following at:
December 31:                                                                     1999         1998
                                                                                -------      -------
                                                                               (dollars in thousands)
<S>                                                                             <C>          <C>
Secured notes payable to bank due May 31, 2001                                  $26,340      $21,245

11.2% senior subordinated secured notes-due June 1, 1999                             --        2,334

8.75% note collateralized by a deed of trust on land and building, due
in monthly installments of $13, final payment due in November 2012                1,297        1,349

10% note collateralized by a deed of trust on land and building, due in
monthly installments of $11, final payment due in September 2004                    510          590

Other                                                                               246          353
                                                                                -------      -------
                                                                                 28,393       25,871

Current portion                                                                     288        2,696
                                                                                -------      -------
                                                                                $28,105      $23,175
                                                                                =======      =======
</TABLE>

         Subsequent to 2000, annual maturities of long-term obligations (in
thousands) are $26,534 in 2001, $206 in 2002, $225 in 2003, $182 in 2004 and
$958 due thereafter.

  Secured Notes Payable to Bank

         The secured notes payable to bank evidence borrowings under a revolving
credit facility that is used to fund working capital requirements and a
(non-revolving) term line of credit to fund cash expenditures other than working
capital requirements. Under the revolving credit line, the Company may borrow up
to the lesser of (i) $40,000,000 with a seasonal reduction to $35,000,000
between June 20 and March 1 of each year, or (ii) an amount equal 80% of the
value of its eligible accounts receivable and 50% of the value of its eligible
inventory (the "Borrowing Base"). Interest is payable at the bank's prime rate
plus 50 basis points or, at the Company's option but subject to certain
limitations, borrowings will bear interest at the bank's LIBOR rate, plus 225
basis points. The Company may borrow up to $5,000,000 under the term line of
credit. At December 31, 1999, such borrowings totaled $1,600,000. Borrowings
under that line of credit are payable, commencing July 2000, in equal monthly
installments, based on a 36-month amortization period, with a final payment due,
at May 31, 2001. Such borrowings bear interest at the bank's prime rate plus 100
basis points or at the bank's LIBOR rate plus 275 basis points. Borrowings under
both the revolving credit facility and the term line of credit are
collateralized by substantially all of the assets of the Company.


                                       24
<PAGE>   25
         The agreement governing the notes payable to bank contains certain
restrictive covenants. Included are covenants regarding profitability, minimum
liquidity ratios, restrictions on investments, and limitations on indebtedness,
payment of dividends, and mergers and consolidations. The Company is in
compliance with all the covenants.

NOTE E:  COMMITMENTS

Operating Leases

         The Company leases its corporate offices, certain warehouse facilities,
and data processing equipment. These leases are classified as operating leases
as they do not meet the capitalization criteria of Statement of Financial
Accounting Standards No. 13, "Accounting for Leases." The office and warehouse
leases expire over the next ten years and the equipment leases expire over the
next five years. Minimum future rental commitments under non-cancelable
operating leases having an initial or remaining term in excess of one year as of
December 31, 1999 are as follows:

<TABLE>
<CAPTION>
         Year Ending December 31,                 Equipment            Facilities             Total
         ------------------------                 ---------            ----------             -----
                                                                (dollars in thousands)
<S>                                                <C>                 <C>                <C>
                  2000                             $  332              $ 2,766            $ 3,098
                  2001                                325                2,673              2,998
                  2002                                317                2,414              2,731
                  2003                                300                2,341              2,641
                  2004                                 50                1,581              1,631
                  Thereafter                           --                4,418              4,418
                                                   ------              -------            -------
                                                   $1,324              $16,193            $17,517
                                                   ------              -------            -------
</TABLE>

         Rent expense charged to operations amounted to (in thousands)$3,380 in
1999, $2,889 in 1998 and $2,758 in 1997.

NOTE F:  STOCK OPTIONS AND STOCK PURCHASE PLANS

Stock Option Plans

         The Company has in effect a 1987 Nonqualified Stock Option Plan, a 1993
Stock Option and Incentive Plan and a 1999 Stock Incentive Plan ("the plans"),
which authorize the issuance of options to purchase, 1,000,000 shares of the
Company's common stock to key management employees of the Company and members of
the Company's Board of Directors. The plans are accounted for under the
provisions of APB No. 25 and generally provide that option prices will not be
less than fair market value per share on the date the option is granted, or 110%
of fair market value in the case of an option granted to any employee who, at
the time of the grant, owns or is deemed to own more than 10% of the total
combined voting power of all classes of stock of the Company. Accordingly, no
compensation cost has been recognized for the plans. Had compensation cost for
the plans been determined based on fair value at the grant dates, consistent
with the method prescribed in Statement of SFAS No. 123, Accounting for
Stock-Based Compensation, the Company's net earnings (loss) and earnings (loss)
per share would have been reduced to the pro forma amounts indicated below.


                                       25
<PAGE>   26

<TABLE>
<CAPTION>
                                                              1999      1998     1997
                                                             ------    -----   --------
                                                               (dollars in thousands
                                                              except per share amounts)
<S>                                                          <C>       <C>     <C>
Net earnings (loss) attributable to common shareholders
     As reported                                             $    3    $ 114   $ (5,279)
     Pro forma                                                  (73)      53     (5,351)

Per share - Basic
     As reported                                             $  .00    $ .02   $  (1.01)
     Pro forma                                                 (.02)     .01      (1.02)

Per share - Diluted
     As reported                                             $  .00    $ .02   $  (1.01)
     Pro forma                                                 (.02)     .01      (1.02)
</TABLE>

          The fair value of each option grant is estimated on the weighted
average on the date of grant using the Black-Scholes options-pricing model with
the following assumptions used: no expected dividends; expected volatility of
71% for 1999, 70% for 1998 and 50% for 1997; risk -free interest rates of 5.2%,
6.0%, and 6.2%; an expected forfeiture rate of 37% for 1999 and 46% for 1998 and
1997; and expected lives of 4 years. A summary of the status of the Company's
stock option plans is presented below:

<TABLE>
<CAPTION>
                                              1999                      1998                        1997
                                     ----------------------    ----------------------    --------------------------
                                                   Weighted                  Weighted
                                                    Average                  Average
                                                   Exercise                  Exercise               Weighted Average
                                     Shares          Price     Shares          Price     Shares      Exercise Price
                                     -------       --------    -------       --------    -------    ----------------
<S>                                  <C>           <C>         <C>           <C>         <C>        <C>
Outstanding at beginning of year     479,500       $   4.69    335,700       $   5.67    183,200       $   7.03
Granted                               97,000           2.26    183,000           3.18    163,500           4.09
Exercised                                 --             --         --             --         --             --
Forfeited                            (28,000)          5.33    (39,200)          5.93    (11,000)          5.08
                                     -------                   -------                   -------
Outstanding at end of year           548,500           4.23    479,500           4.69    335,700           5.67

Weighted average fair value of
options granted during the year                    $   1.29                  $   1.79                  $   1.87
</TABLE>

The following information applies to options outstanding at December 31, 1999:

<TABLE>
<CAPTION>
                                                          Weighted Average
                    Options       Weighted Average      Remaining Contractual       Options        Weighted Average
     Range        Outstanding      Exercise price           Life (Years)         Exerciseable       Exercise Price
     -----        -----------     ----------------      ---------------------    ------------      ----------------
<S>               <C>             <C>                   <C>                      <C>               <C>
$2.25-$4.13         423,000            $3.30                     8                 189,800              $3.51
$5.63-$7.88         125,500             7.36                     5                 115,200               7.38
                    -------                                                        -------
                    548,500            $4.23                                       305,000              $4.97
</TABLE>

Employee Stock Purchase Plans

           Until October 1997 the Company had in place an Employee Stock
Purchase Plan under which it had issued an aggregate of 285,000 shares of common
stock to eligible participants, who are permanent employees who meet certain
employment criteria and do not own 5% or more of the Company's outstanding
shares ("Eligible Employees"). Upon expiration of that Plan in 1997, the Company
adopted and implemented the 1997 Employee Stock Purchase Plan to replace the
1987 Plan. The 1997 Plan provides for the issuance of up to 400,000 of the
Company's shares to Eligible Employees. As was the case under the 1987 Plan,
Eligible Employees may elect to have a specified sum deducted from their payroll
to fund purchases of shares under the Plan over 12 month offering periods. At
the end of


                                       26
<PAGE>   27
each offering period, shares are purchased for the participants, with the
amounts deducted from their payroll, at a price per share equal to 85% of the
lower of the fair market value at the beginning or the end of the offering
period. The weighted average per share fair values of the awards were $0.58,
$0.80 and $.81 for the years ended December 31, 1999, 1998 and 1997,
respectively. At December 31, 1999, 331,729 shares under the 1997 plan remain
available for issuance in future offering periods.

NOTE G:  EMPLOYEE BENEFIT PLAN

         The Company has a 401(k) profit sharing plan in which all full-time
employees are eligible to participate on the first quarter following the
completion of six months of employment. The plan allows participants to make
pretax contributions and apply for and secure loans from their account. The plan
provides for the Company to make discretionary contributions to be determined
annually. The Company contributed $86,441 in 1999, $65,825 in 1998, and $54,364
in 1997.

NOTE H:  FOREIGN OPERATIONS

         A summary of the Company's operations by geographic area is presented
below:

<TABLE>
<CAPTION>
                                             1999          1998
                                            -------      --------
                                            (dollars in thousands)
<S>                                         <C>          <C>
           Sales to external customers
                United States               $130,063     $123,861
                Canada                        24,737       24,819
                Other                             --           --
           Operating margin
                United States                  1,588        2,142
                Canada                         1,252        1,785
                Other                             16           --
           Identifiable assets
                United States                 60,322       58,402
                Canada                         8,658        8,411
                Other                            707           --
</TABLE>

NOTE I:  INCOME TAXES

         Pretax income (loss) for the years ending December 31 was taxed under
the following jurisdictions:

<TABLE>
<CAPTION>
                             1999          1998          1997
                            -------       -------       -------
                                   (dollars in thousands)
<S>                         <C>           <C>           <C>
      Domestic              $  (308)      $  (276)      $(6,842)
      Foreign                   854         1,329           273
                            -------       -------       -------
                            $   546       $ 1,053       $(6,569)
                            =======       =======       =======
</TABLE>


                                       27
<PAGE>   28

         The provisions (benefit) for income taxes is summarized as follows for
the year ended December 31:

<TABLE>
<CAPTION>
                                 1999          1998          1997
                                -------       -------       -------
                                       (dollars in thousands)
<S>                             <C>           <C>           <C>
      Current:
               Federal          $    77       $   577       $(1,619)
               State                 78            98           (19)
               Foreign              418           596           108
                                -------       -------       -------
                                    573         1,271        (1,530)
                                -------       -------       -------

      Deferred:
               Federal              (10)         (402)          412
               State                 (1)           66          (152)
               Foreign              (26)           (8)          (33)
                                -------       -------       -------
                                    (37)         (344)          227
                                =======       =======       =======

      Income tax provision      $   536       $   927       $(1,303)
                                =======       =======       =======
</TABLE>

         The total operating loss carryforwards available for state income tax
purposes at December 31, 1999 aggregate $2,750,000. The earliest carryforwards
begin to expire in 2000.

         Deferred tax assets (liabilities) are comprised of the following at
December 31:

<TABLE>
<CAPTION>
                                        1999          1998          1997
                                       -------       -------       -------
                                             (dollars in thousands)
<S>                                    <C>           <C>           <C>
Deferred tax assets
   Inventory capitalization            $   786       $   892       $   936
   Bad debt provision                      306           314           382
   Inventory reserve                       502           457           427
   Property, plant and equipment            54            21            --
   Loss carryforwards                      176           196           261
   Other                                    71            43            34
                                       -------       -------       -------
   Gross deferred tax assets             1,895         1,923         2,040
   Less valuation allowance                (88)         (100)          (60)
                                       -------       -------       -------
                                         1,807         1,823         1,980
                                       -------       -------       -------
Deferred tax liabilities
   Investment in affiliates                 --            --          (474)
   Property, plant and equipment          (102)         (156)         (182)
                                       -------       -------       -------
   Gross deferred tax liabilities         (102)         (156)         (656)
                                       -------       -------       -------
   Net deferred tax assets             $ 1,705       $ 1,667       $ 1,324
                                       =======       =======       =======
</TABLE>


                                       28
<PAGE>   29

         A reconciliation between actual tax expense (benefit) for the year and
expected tax expense (benefit) is as follows:

<TABLE>
<CAPTION>
                                                          1999         1998         1997
                                                          -----       ------      -------
                                                              (dollars in thousands)
<S>                                                       <C>         <C>         <C>
Earnings (loss) before income taxes                       $ 546       $1,053      $(6,569)
                                                          -----       ------      -------
Expected income tax expense at 34%                          186          358       (2,233)
Higher rates on earnings of foreign operations               84          121          (34)
Goodwill amortization                                       242          254          231
Dividend exclusion on earnings of affiliate                  --           --         (143)
Temporary differences related to sold affiliates not
previously recognized                                        --           --          913
State Taxes
   (net of federal benefit)                                  38           78         (129)
Change in valuation allowance                               (12)          40          (12)
Exclusion of earnings of foreign affiliates                 (16)          31           65
Other                                                        14           45           39
                                                          -----       ------      -------

Income tax provisions                                     $ 536       $  927      $(1,303)
                                                          =====       ======      =======
</TABLE>

         Deferred income taxes have not been provided on the undistributed
earnings of foreign affiliates as they have been and will continue to be
reinvested. Where it is contemplated that earnings will not be reinvested, the
Company believes U.S. foreign tax credits would largely eliminate any U.S. tax.

NOTE J:  EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                               For the Year Ended December 31,
                                                             -----------------------------------
                                                              1999          1998          1997
                                                             -------       -------       -------
                                                                        (in thousands)
<S>                                                          <C>           <C>           <C>
     Numerator:

     Net earnings (loss)                                     $    10       $   126       $(5,266)
     Preferred dividends                                          (7)          (12)          (13)
                                                             -------       -------       -------

     Numerator for basic earnings (loss) per share           $     3       $   114       $(5,279)
                                                             =======       =======       =======

     Numerator for diluted earnings (loss) per share         $     3       $   114       $(5,279)
                                                             =======       =======       =======

     Denominator:

     Weighted average shares outstanding                       4,633         5,275         5,239

     Dilutive effect of stock options                              8             7            --
                                                             -------       -------       -------

     Denominator for diluted earnings (loss) per share         4,641         5,282         5,239
                                                             =======       =======       =======
</TABLE>

         A total of 452,500 options in 1999, 288,500 options in 1998 and 335,700
options in 1997 were excluded from the computation of diluted earnings per share
because either (1) the options' exercise price was greater than the average
market price of the common shares, or (2) the inclusion of the options in 1997
would have been antidilutive because the Company experienced a net loss in that
year.


                                       29
<PAGE>   30

NOTE K:  ACCRUED LIABILITIES

<TABLE>
<CAPTION>
         Accrued liabilities consist of the following at
         December 31:                                          1999        1998
                                                              ------      ------
                                                            (dollars in thousands)
<S>                                                           <C>         <C>
         Payroll and related benefits                         $  484      $  753
         Rent                                                    162          62
         Income and other taxes                                  608         828
         Other                                                   796         428
                                                              ------      ------
                                                              $2,050      $2,071
                                                              ======      ======
</TABLE>


NOTE L:  FINANCIAL INSTRUMENTS

         Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of trade receivables. The
amounts reported for cash, accounts receivable, short-term borrowings, accounts
payable and accrued liabilities approximate the fair value due to the their
short maturities. As of December 31, 1999, the estimated fair value of long-term
debt, based on the current rates offered to the Company for debt of the same
remaining maturities, exceeds the carrying value by approximately $35,000.

NOTE M:  SIGNIFICANT CONCENTRATIONS

         The Company's ability to satisfy demand for its products may be limited
by the availability of those products from the Company's suppliers. In 1995 the
Company entered into a multi-year supply agreement with Airxcel, Inc. (formerly
Recreational Vehicle Products, Inc.), which manufactures air conditioners under
the Coleman(R) brand name. Airxcel is the Company's principal supplier of these
products, the sales of which accounted for approximately 13% of the Company's
net sales in 1999 and 17% in 1998 and 1997.


                                       30

<PAGE>   31

SCHEDULE II

              THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS
                        December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
                                                        BALANCE AT                                         BALANCE AT
                                                       BEGINNING OF                                          END OF
                    DESCRIPTION                           PERIOD         ADDITIONS       DEDUCTIONS(1)       PERIOD
                    -----------                        ------------      ---------       -------------     ----------
<S>                                                    <C>               <C>             <C>               <C>
         Allowance for doubtful accounts:

           Year Ended December 31, 1997                $1,086,000        $307,000          $313,000        $1,080,000
           Year Ended December 31, 1998                $1,080,000        $209,000          $399,000        $  890,000
           Year Ended December 31, 1999                $  890,000        $259,000          $259,000        $  890,000
</TABLE>

----------
(1) Write-off of doubtful accounts against the allowance and recoveries.

<TABLE>
<CAPTION>
                                                        BALANCE AT                                         BALANCE AT
                                                       BEGINNING OF                                          END OF
                    DESCRIPTION                           PERIOD         ADDITIONS        DEDUCTIONS(1)      PERIOD
                    -----------                        ------------      ---------        -------------    ----------
<S>                                                    <C>               <C>              <C>              <C>
 Allowance for obsolete or slow-moving inventory:

           Year Ended December 31, 1997                 $1,370,000       $432,000          $325,000        $1,477,000
           Year Ended December 31, 1998                 $1,477,000       $334,000          $247,000        $1,564,000
           Year Ended December 31, 1999                 $1,564,000       $508,000          $423,000        $1,649,000
</TABLE>

----------
(1) Write-off of slow-moving or obsolete inventory or sale of inventory at
    reduced margin.


                                       31
<PAGE>   32

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         None.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Except for information concerning the Company's executive officers
which is included in Part I of this Report, the information required by Item 10
is incorporated by reference from the Company's definitive proxy statement
expected to be filed with the Commission on or before May 1, 2000 for the
Company's annual shareholders' meeting.

ITEM 11.  EXECUTIVE COMPENSATION

         The information required by Item 11 is incorporated herein by reference
from the Company's definitive proxy statement expected to be filed with the
Commission on or before May 1, 2000 for the Company's annual shareholders'
meeting.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by Item 12 is incorporated herein by reference
from the Company's definitive proxy statement expected to be filed with the
Commission on or before May 1, 2000 for the Company's annual shareholders'
meeting.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by Item 13 is incorporated herein by reference
from the Company's definitive proxy statement expected to be filed with the
Commission on or before May 1, 2000 for the Company's annual shareholders'
meeting.


                                       33
<PAGE>   33

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

         (a)      The following documents are filed as part of this Report:

                  (1)      Financial Statements. The Consolidated Financial
                           Statements of The Coast Distribution System, Inc. and
                           Financial Statement Schedules: See Index to Financial
                           Statements on Page 17 of this Report.

                  (2)      Exhibits. See Index to Exhibits, elsewhere in this
                           Report, for a list and description of (i) exhibits
                           previously filed by the Company with the Commission
                           and (ii) the exhibits being filed with this Report.

                  Compensation Plans and Arrangements. Set forth below is a list
         of Compensation Plans and Arrangements that have been filed as exhibits
         with the Commission, together with the respective exhibit numbers
         thereof:

                         1983 Employee Stock Option Plan, as amended

                         -- See Exhibit 10.17

                         Nonqualified Stock Option Plan - 1987

                         -- See Exhibit 10.22

                         1987 Employee Stock Purchase Plan, as amended

                         -- See Exhibit 10.32

                         1993 Stock Option and Incentive Plan, as amended

                         -- See Exhibit 10.31

                         1997 Employee Stock Purchase Plan

                         -- See Exhibit 10. 35

                         1999 Employee Stock Option Plan

                         -- See Exhibit 10.36

         (b)      Current Reports on Form 8-K.

                  The Company did not file any reports on Form 8-K during the
         quarter ended December 31, 1999.


                                       34
<PAGE>   34

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:   March 29, 2000                THE COAST DISTRIBUTION SYSTEM, INC.



                                       By:      /s/ THOMAS R. MCGUIRE
                                            ------------------------------------
                                                    Thomas R. McGuire,
                                            Chairman and Chief Executive Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report on Form 10-K has been signed below by the following persons in the
capacities and on the dates indicated.

         Each person whose signature to this Report appears below hereby
appoints Thomas R. McGuire, Jeffrey R. Wannamaker and Sandra A. Knell, or any of
them, individually, to act severally as attorneys-in-fact and agents, with power
of substitution and resubstitution, for each of them, to sign on his behalf,
individually and in the capacities stated below, and to file any and all
amendments to this Annual Report, which amendment or amendments may make changes
and additions as such attorneys-in-fact may deem necessary or appropriate.

<TABLE>
<CAPTION>
               SIGNATURE                                                  TITLE                                   DATE
               ---------                                                  -----                                   ----
<S>                                              <C>                                                         <C>

           /s/ THOMAS R. MCGUIRE                 Chairman of the Board of Directors, Chief Executive         March 29, 2000
---------------------------------------------    Officer and Director
               Thomas R. McGuire


            /s/ SANDRA A. KNELL                  Executive Vice President (Principal Financial and           March 29, 2000
--------------------------------------------     Principal Accounting Officer)
                Sandra A. Knell


           /s/ ROBERT S. THROOP                  Director                                                    March 29, 2000
--------------------------------------------
               Robert S. Throop


                                                 Director                                                    March   , 2000
--------------------------------------------
                 John W. Casey


            /s/ BEN A. FRYDMAN                   Director                                                    March 29, 2000
--------------------------------------------
                Ben A. Frydman

</TABLE>


                                       S-1
<PAGE>   35

                                INDEX TO EXHIBITS

EXHIBIT
NUMBER
------
  3.1*    Articles of Incorporation of the Company, as currently in effect.

  3.2*    Bylaws of the Company, as currently in effect.

 10.1*    Bank of America NT&SA Loan Agreement (Receivables and Inventory).

 10.2*    Bank of America NT&SA Master Note.

 10.3**   Bank of America NT&SA Security Agreement (Receivables and Inventory).

 10.4**   Bank of America NT&SA Security Agreement (Equipment and Farm
          Products).

 10.5**   Continuing Guarantee of Indebtedness of Coast R.V., Inc. by Coast
          Fabrication, Inc.

 10.6**   Continuing Guarantee of Indebtedness of Coast R.V., Inc. by Thomas R.
          McGuire.

 10.7**   1983 Employee Incentive Stock Option Plan.

 10.8**   Industrial Lease Agreement dated May 30, 1978.

 10.10**  Standard Lease Agreement dated July 19, 1983.

 10.11    Agreement of Purchase and Sale dated September 13, 1984, among the
          Company, Trailer Equipment Distributors, Inc. ("Tedco") and its
          Principal Shareholder. (Incorporated by reference to the same numbered
          exhibit in the Company's Current Report on Form 8-K dated September
          26, 1984.)

 10.12    Lease Agreement dated September 26, 1984, by and between the Company
          and Tedco. (Incorporated by reference to the same numbered exhibit in
          the Company's Current Report on Form 8-K dated September 26, 1984.)

 10.13    Option Agreement, with form of Real Estate Purchase Agreement
          attached, relating to the warehouse and office facility being leased
          by the Company from Tedco. (Incorporated by reference to the same
          numbered exhibit in the Company's Current Report on Form 8-K dated
          September 26, 1984.)

 10.14    Bank Loan Agreement dated July 19, 1984, between the Company and Bank
          of America NT&SA. (Incorporated by reference to the same numbered
          exhibit in the Company's Annual Report on Form 10-K for the fiscal
          year ended December 31, 1984.)

 10.15    Agreement of Purchase and sale dated May 3, 1985, between the Company
          and Rogers Distributing Corporation. (Incorporated by reference to the
          same numbered exhibit in the Company's Quarterly Report on Form 10-Q
          for the quarter ended March 31, 1985.)

 10.16    Stock Purchase Agreement dated April 29, 1985, among the Company and
          certain purchasers named therein. (Incorporated by reference to the
          same numbered exhibit in the Company's Quarterly Report on Form 10-Q
          for the quarter ended March 31, 1985.)

 10.17*   Amended and Restated 1983 Employee Stock Option Plan.

 10.18    Agreement of Purchase and Sale dated June 25, 1985, between Coast
          R.V., Inc. and Coachmen Industries, Inc. (Incorporated by reference to
          the same numbered exhibit in the Company's Current Report on Form 8-K
          dated June 28, 1985.)

 10.19    Loan and Security Agreement dated June 28, 1985, between Coast R.V.,
          Inc. and Mellon Financial Services Corporation. (Incorporated by
          reference to the same numbered exhibit in the Company's Current Report
          on Form 8-K dated June 28, 1985.)

 10.20    Note Purchase Agreement dated June 27, 1985 relating to the Company's
          11.5% Convertible Subordinated Notes due 1993. (Incorporated by
          reference to the same numbered exhibit in the Company's Current Report
          on Form 8-K dated June 28, 1985.)

 10.21    Amendment No. 2 dated February 29, 1988 to Loan and Security Agreement
          between Coast R.V., Inc. and Mellon Financial Services Corporation.
          (Incorporated by reference to the same numbered exhibit in the
          Company's Annual Report on Form 10-K dated March 28, 1988.)

 10.22    Nonqualified Stock Option Plan - 1987. (Incorporated by reference to
          Exhibit 4.1 in the Company's Registration Statement on Form S-8 (File
          No. 33-15322) filed with the Commission on June 25, 1987.)
<PAGE>   36



 10.23    1987 Employee Stock Purchase Plan. (Incorporated by reference to
          Exhibit 4.1 in the Company's Registration Statement on Form S-8 (File
          No. 33-18696) filed with the Commission on December 1, 1987.)

 10.24    Agreement of Purchase and Sale of Assets dated as of March 24, 1988
          entered into between the Company and SunWest Wholesale Distributors.
          (Incorporated by reference to the same numbered exhibit to the
          Company's Current Report on Form 8-K dated April 1, 1988.)

 10.25    Note Agreement dated as of March 15, 1988 between the Company and
          Massachusetts Mutual Life Insurance Company and MassMutual Corporate
          Investors. (Incorporated by reference to the same numbered exhibit to
          the Company's Current Report on Form 10-K dated April 1, 1988.)

 10.26    Stock Purchase Agreement dated as of May 22, 1989 relating to the
          acquisition of shares of HWH Corporation. (Incorporated by reference
          to the same numbered exhibit to the Company's Current Report on Form
          8-K dated May 24, 1989.)

 10.27    Letter Agreement between Company and Furman Selz relating to HWH
          Shares. (Incorporated by reference to the same numbered exhibit to the
          Company's Current Report on Form 8-K dated May 24, 1989.)

 10.28    Note Agreement dated as of June 1, 1989 relating to sale and issuance
          of $14,000,000 of 10-year Subordinated Notes and $1,000,000 of 6-year
          Convertible Subordinated Notes. (Incorporated by reference to the same
          numbered exhibit to the Company's Current Report on Form 8-K dated
          August 17, 1989.)

 10.29    Asset Purchase Agreement dated as of August 17, 1989 which provides
          for the acquisition of substantially all of the assets of Griffin's
          Outboard Marine, Inc. (Incorporated by reference to the same numbered
          exhibit to the Company's Current Report on Form 8-K dated August 17,
          1989.)

 10.30    Amendment dated September 22, 1989 to Griffin's Outboard Marine Asset
          Purchase Agreement. (Incorporated by reference to the same numbered
          exhibit to the Company's Current Report on Form 8-K dated September
          22, 1989.)

 10.31    1993 Stock Option and Incentive Plan. (Incorporated by reference to
          Exhibit 4.3 to the Company's Registration Statement on Form S-8 (File
          No. 33-64582) filed with the Commission on June 17, 1993.)

 10.32    Share Option Agreement dated as of March 19, 1993, among the Company,
          H. Burden Limited ("Burden) and the shareholders of Burden, pursuant
          to which the Company has acquired common shares, and may acquire
          additional common shares, of Burden. (Incorporated by reference from
          Exhibit 2.1 to the Company's Current Report on Form 8-K dated April
          29, 1994.)

 10.33    Second Amended and Restated Loan Agreement between the Company and
          Mellon Bank, together with First Amendment thereto (Incorporated by
          reference to Exhibit 10.1 to the Company's Quarterly Report on Form
          10-Q for the Quarter ended June 30, 1995).

 10.34    Distribution Agreement dated October 11, 1995 between the Company and
          Recreation Vehicle Products, Inc. (Incorporated by reference to
          Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
          Quarter ended September 30, 1995).

 10.35    1997 Employee Stock Purchase Plan (incorporated by reference to
          Exhibit 4.1 to the Company's Registration Statement on Form S-8 (No.
          333-55933 filed with the Commission on June 3, 1998

 10.36    1999 Stock Incentive Plan

 21       Subsidiaries.

 23.1     Consent of Grant Thornton LLP, Independent Certified Public
          Accountants, re Consolidated Financial Statements of The Coast
          Distribution System, Inc.

 24       Power of Attorney - Included on Signature Page.

 27       1999 Financial Data Sheet

----------
*      Incorporated by reference to the same numbered exhibit in the Company's
       Registration Statement on Form S-1 (File No. 33-4393) filed with the
       Commission on March 28, 1986.
**     Incorporated by reference to the same numbered exhibit in the Company's
       Registration Statement No. 2-86420LA on Form S-18.