<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, 1998

                                       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, without par value                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 [X].

         As of March 17, 1999, the aggregate market value of the Common Stock
held by non-affiliates was approximately $11,466,000.

         As of March 17, 1999, a total of 5,279,854 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 1999 Annual Meeting which is expected to be
filed on or before April 30, 1999.

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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 1977, and reincorporated in Delaware in 1998. The Company is the
largest supplier of replacement parts, supplies and accessories for recreational
vehicles ("RVs"), and one of the largest suppliers of replacement parts,
supplies and accessories for boats, in North America. The Company supplies more
than 25,000 products and serves 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 in 1997 and 1998. 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 leisure products 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 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."


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         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."

SALE OF INVESTMENTS

         In previous years, the Company had acquired minority ownership
interests in certain other companies that operated in the same or related
businesses, with a view to acquiring a controlling interest in those companies
if their operating results later warranted additional investments by the
Company. For example, in 1992 the Company acquired a minority investment in a
distributor of RV products in Canada and in 1994 acquired the remaining shares
of that company (which now operates as a wholly-owned subsidiary under the name
"Coast Canada"). The Company also had acquired a 35% ownership interest in H.
Burden Limited ("Burden"), a privately-owned distributor of caravan and boating
products in Western Europe, and a 34% minority interest in HWH Corporation, a
privately owned manufacturer of hydraulic leveling devices and jacks and other
products primarily for recreational vehicles ("HWH"). During 1997 and in early
1998, the Company took advantage of opportunities that arose to dispose of the
minority investments that it had made in Burden and HWH.

         The sale of the Company's investment in Burden took place in the latter
half of 1997 for a cash price to the Company of $4,198,000, plus a right to
receive additional cash payments of up to $330,000 upon satisfaction of certain
contingencies. The sale of the Company's investment in HWH was completed in
early 1998 for a cash price to the Company of $5,388,000. The proceeds of both
sales were used to reduce borrowings, pending use of the funds in its business.
For financial reporting purposes, the Company recorded losses, in 1997, on the
sales of its investments in Burden and HWH of $525,000 and $1,669,000,
respectively. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in Part II of this Report.

         There were a number of factors that led the Company to decide to sell
its investments in Burden and HWH. Firstly, both investments were illiquid and
there was no assurance as to when opportunities to sell those investments, at
prices comparable to those being offered to the Company, might arise in the
future. Secondly, the Company had no prospect of acquiring control of either of
these two companies and therefore had no meaningful ability to control their
future performance. Finally, the sales would provide the Company with additional
financial resources that could be used (i) to reduce bank borrowings, thereby
strengthening the financial condition of the Company and reducing interest
expense, and (ii) to support the growth and to increase the competitiveness of
its core product supply business in North America.

         The Company continues to retain ownership interests in two foreign
distributors of RV parts, supplies and accessories, located respectively in
Sydney, Australia and Mexico City, Mexico. Both of these distributors are small,
each with annual sales in 1998 of less than $2,500,000, and neither of them is
material to the Company's operations or financial condition. The Company's
investments in these two companies are accounted for under the equity method of
accounting. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in Part II of this Report.

THE PARTS, SUPPLIES AND ACCESSORIES 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
retail dealers 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 product supply stores and service
centers. Optional equipment and accessories, such as awnings, trailer hitches,
air conditioning units, water heaters and other appliances make up a large
proportion of the Company's sales to RV dealers, while RV replacement parts,
maintenance supplies and smaller accessories make up a larger proportion of 


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the Company's sales to supply stores and service centers. Although supply stores
and service centers generally purchase lower cost products than those sold to RV
dealers, supply stores and service centers generally order more frequently and
purchase a wider variety of products than do RV dealers. 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."

         Sales to RV and boat dealers generally have been more sensitive to
changes in economic conditions than have sales to supply stores and service
centers. During periods of higher interest rates or unemployment, consumers are
likely to postpone purchases of higher priced items such as RVs and boats and
higher priced accessories and convenience items such as appliances, awnings and
hitches. By contrast, continued demand among RV and boat owners for repair parts
and supplies, and increases in the total number of RVs and boats in use, have
increased the "aftermarket" for repair and maintenance items and for specialty
products and supplies. In addition, RV manufacturers have been increasing the
number of accessories that they install in their vehicles as original equipment
at the time of manufacture. As a result, in recent years sales of accessories to
RV dealers have come to represent a less significant percentage of the total
product sales of After-Market distributors, such as the Company.

         The Company's sales are also affected by weather conditions, because
the usage and purchase of RVs and boats decline in the winter months due to the
colder weather. As a result, the Company's operating income declines and it
sometimes incurs losses in the winter months, particularly in years in which
there are unusually severe winter weather conditions. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Seasonality and Inflation" in Part II of this Report.

PRODUCTS

         General. The Company carries a full line of more than 15,000 RV parts,
supplies and accessories which it purchases from more than 500 manufacturers. RV
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 RV 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 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, the Company's
proprietary products currently lack the name brand recognition that many
competitive products have, 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. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Part II of this Report.

         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 leisure products
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 


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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 new 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 RVs and replacement and
repair parts for their service departments, (ii) independent RV 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 1996, 1997 or
1998.

         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 larger customers to transmit orders
electronically to the Company's central computers and also enables the Company
to prepare, ship and invoice most customer orders within 24 hours of receipt.

         The Company also operates a national customer service center in San
Jose, California, which enables the Company's customers to obtain product
information and to 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
computers 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.

DISTRIBUTION

         The Company's regional warehouse and distribution centers in North
America carry an inventory of up to approximately 15,000 RV 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 600 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 


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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 were to encounter quality or other
production problems or were to terminate its supply arrangement with the
Company, which can, and in 1996 and 1997 did, adversely affect the Company's
sales, as certain of its manufacturers were unable to meet the Company's product
requirements (see "Recent Changes in Relationships With Manufacturers").

         No manufacturer or supplier of products to the Company accounted for
more than 5% of the Company's product purchases in 1998, other than Airxcel,
Inc. (formerly "Recreation Vehicle Products, Inc.") ("RVP"). RVP has, since
1996, supplied the Company with RV air conditioners sold under the Coleman(R)
brand name and awnings under the Faulkner(R) brand name, under a multi-year
product supply agreement. In 1998, the products supplied by RVP accounted for
approximately 17% of the Company's net sales. In the later half of 1998, with
the consent of RVP, the Company obtained a new supplier of awnings in place of
RVP. As a result, beginning in 1999 the Company will be purchasing only air
conditioners from RVP and expects that the percentage of total product purchases
accounted for by RVP will decline.

         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 three 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 installing 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 led to realignments of relationships among manufacturers,
distributors and retail dealers within the After-Market that resulted in supply
problems and product shortages for the Company in 1996 and, as a result,
adversely affected the Company's operating results in 1996 and 1997. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

         In addition, since 1996 the Company has been encountering increased
price competition from other wholesale distributors of branded products that
compete with the Company's proprietary products. That increased price
competition continued well into 1997 and contributed to the declines in the
Company's sales and operating income in 1997. 

         The Company resolved its supply problems during the second half of 1997
and during 1998, the Company was able to implement selected price increases on
the products it sells. As a result, the Company was able to increase its sales
by nearly 10% and increase its gross margin to 16.3% in 1998, from 13.7% in
1997. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

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, 


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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 the first and
fourth calendar quarters 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.


    We Finance Growth through Borrowing; 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 1998 operations generated
approximately $5,194,000 of positive cash flow, and we expect to fund our 1999
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. Among other things, (i) we may find it
more difficult to obtain additional financing to fund expansion or take
advantage of other business opportunities; and (ii) we need 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."


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EMPLOYEES

         At December 31, 1998, the Company had approximately 360 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, 1999
San Antonio, Texas...............       27,300      April 30, 2001
Denver, Colorado.................       50,000      September 30, 1999
Elkhart, Indiana.................      109,000      December 31, 1999
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, 2000
Portland, Oregon.................       72,000      Owned
Albany, New York.................       52,500      April 30, 2004
Eau Claire, Wisconsin............       36,000      July 31, 2001
Anchorage, Alaska................       13,200      December 31, 1999
Montreal, Quebec.................       40,715      January 1, 2000
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 now 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.


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.


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EXECUTIVE OFFICERS OF REGISTRANT

<TABLE>
<CAPTION>
NAME                             AGE                       POSITION
----                             ---                       --------
<S>                              <C>    <C>
Thomas R. McGuire...........     55     Chairman of the Board and Chief Executive Officer

Sandra A. Knell.............     41     Executive Vice President - Finance and Chief Financial
                                        Officer and Secretary

Jeffrey R. Wannamaker.......     38     Executive Vice President - Operations and President of the
                                        Coast Distribution Division of the Company

David A. Berger.............     45     Executive Vice President - Marine Sales and Marketing

Dennis A. Castagnola........     51     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 for more
than five years has been Chairman of the Board and Chief Executive Officer of
the Company. 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.

         DENNIS A. CASTAGNOLA. Mr. Castagnola was appointed to his 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.


                                       9
<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>
         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

         1997:

            First Quarter............         $4.63          $3.63
            Second Quarter...........          3.75           2.19
            Third Quarter............          4.00           3.25
            Fourth Quarter...........          4.50           2.88
</TABLE>

         On March 17, 1999, the closing price per share of the Company's common
stock on the American Stock Exchange was $2.75. There were approximately 1,265
holders of record of the Company's common stock as of March 1, 1999.

DIVIDENDS

         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.

         During the first quarter of 1999, the Company received the consent 
from its bank lender for and then inaugurated a program to repurchase up to 5% 
of the Company's outstanding shares. A total of approximately 450,000 shares of 
common stock were purchased pursuant to this program at a total cost to the 
Company of $1,470,000. See Note O to the Company's Consolidated Financial 
Statements.

                                       10
<PAGE>   11

ITEM 6.  SELECTED FINANCIAL DATA

         The selected operating data set forth below for the fiscal years ended
December 31, 1998, 1997 and 1996, and the selected balance sheet data at
December 31, 1998 and 1997, 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, 1995 and 1994 and at December 31, 1996, 1995, and 1994
are derived from audited financial statements which are not included in this
report.

<TABLE>
<CAPTION>
                                                YEAR ENDED DECEMBER 31,
                             -------------------------------------------------------------
                                1998        1997         1996         1995         1994
                             ---------    ---------    ---------    ---------    ---------
                                          (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                          <C>          <C>          <C>          <C>          <C>      
Operating Data:
Net Sales.................   $ 148,680    $ 135,952    $ 139,286    $ 169,559    $ 177,774
Cost of sales (including
 distribution costs)......     124,452      117,272      118,361      138,806      146,987
                             ---------    ---------    ---------    ---------    ---------
          Gross margin....      24,228       18,680       20,925       30,753       30,787
Selling, general and
 administrative expenses..      20,301       20,147       21,525       22,260       23,216
                             ---------    ---------    ---------    ---------    ---------
     Operating margin.....       3,927       (1,467)        (600)       8,493        7,571

Equity in net earnings of
 affiliated companies.....        (170)         673        1,529        1,204        1,237
Other Income (expense)....      (2,704)      (5,775)      (1,246)      (4,271)      (3,395)
                             ---------    ---------    ---------    ---------    ---------
Earnings (loss) before
 income taxes.............       1,053       (6,569)        (317)       5,426        5,413
Income taxes (credits)....         927       (1,303)        (194)       2,082        1,828
                             ---------    ---------    ---------    ---------    ---------
Net earnings (loss).......   $     126    $  (5,266)   $    (123)   $   3,344    $   3,585
                             =========    =========    =========    =========    =========
Net earnings (loss)
 per share-diluted(1).....   $     .02    $   (1.01)   $    (.03)   $     .64    $     .70
                             =========    =========    =========    =========    =========
Weighted average number
 of shares................       5,282        5,239        5,198        5,206        5,186
                             =========    =========    =========    =========    =========
</TABLE>

<TABLE>
<CAPTION>
                                                  AS OF DECEMBER 31,
                             -------------------------------------------------------------
                                1998        1997         1996         1995         1994
                             ---------    ---------    ---------    ---------    ---------
                                          (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                          <C>          <C>          <C>          <C>          <C>      
Balance Sheet Data:
Working capital............. $  42,937    $  48,999    $  45,639    $  50,004    $  42,127
Total assets................    66,813       72,663       88,442       92,136       85,957
Long-term obligations(2)....    23,175       29,726       33,771       38,376       32,624
Shareholders' equity .......    33,831       33,996       39,450       39,392       35,722
</TABLE>

------------
(1)      Basic and diluted earnings (loss) per share were identical in each of
         the years presented. 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. 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 recreational vehicle 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 recreational vehicles and boats. As a result, the Company's sales
and operating results can be, and in the past have been, adversely affected by
recessionary economic conditions, increases in interest rates, which affect the
availability and affordability of financing for purchases of RVs and boats,
increases in gasoline prices which adversely affect the costs of using RVs and
boats, and weather conditions.

         Over the past three years, the recreational products after-market in
North America has become increasingly competitive, as participants in the
after-market have sought to reduce their costs of goods and their prices and to
increase market share. The Company, itself, was one of the first after-market
participants to change its business by designing and arranging for the
manufacture, by third party contract manufacturers, in North America, Europe and
Asia, of a growing line of proprietary products that it is able to obtain at
lower costs than functionally equivalent products from traditional sources. Over
this same period, some product manufacturers have chosen to integrate their
operations vertically to include distribution as well as manufacturing, thereby
becoming competitors of the Company and other distributors. Additionally, RV and
boat manufacturers are increasingly installing, as original equipment on the RVs
and boats which they manufacture, products, such as air conditioners and awnings
and other accessories, that had previously been sold almost exclusively in the
After Market. These developments resulted in significant changes in supply
relationships within the recreational products after-market and adversely
affected the Company's operating results in 1997 and 1996. During 1997 the
Company began to implement strategies to respond to the changed conditions in
the After-Market. Those strategies enabled the Company to improve its operating
results in 1998 (see "Selected Financial Data"). However, there is no assurance
that other changes in supply relationships, adverse to the Company, will not
occur in the future.

         Sale of Burden and HWH Investments. In September 1997, the Company sold
its minority ownership interest in H. Burden Limited ("Burden"), which
distributed RV and boating accessories, parts and supplies in Western Europe,
for a cash purchase price of $4,198,000, plus a right to receive additional
payments of up to $330,000 if certain contingencies were satisfied. In early
1998, the Company completed the sale of its minority ownership interest in HWH
Corporation, a privately owned manufacturer of after-market products for
recreational vehicles ("HWH"), for a cash price of $5,388,000. Although the
amounts received from each of these sales exceeded the Company's cost of
acquiring those investments; for financial reporting purposes, the Company
reported (non-cash) losses on these sales of $524,000 and $1,669,000,
respectively, because the carrying values of those investments had been
increased over the years by the Company's proportionate share of the earnings of
Burden and HWH. Those earnings were included in the Company's results under the
equity method of accounting. See, Business - Sale of Investments" in Part I of
this Report.

RESULTS OF OPERATIONS

         Net Sales. Net sales in 1998 increased by approximately $12,728,000 or
9.4% as compared to 1997, due primarily to a strengthening in consumer demand
for the products that the Company sells, new marketing programs implemented by
the Company and the acquisition, in May 1998, of the aftermarket wholesale
distribution business of Marine Distributors, Inc., which resulted in an
increase in the Company's marine product sales.


                                       12
<PAGE>   13

         In 1997, net sales decreased by approximately $3,334,000 or 2.4% as
compared to 1996, due primarily to (i) the continuing adverse effects of the
changes in supply relationships that occurred in 1996; (ii) continued increased
price competition that began in 1996; and (iii) adverse weather conditions which
affected the Northern United States and Canada beyond the winter months and into
the second quarter of 1997.

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

         The Company's gross margin decreased to 13.7% of net sales in 1997 as
compared to 15.0% in 1996 due to (i) changes in product mix to a greater
proportion of lower margin products, and (ii) the impact of fixed costs on a
lower sales base, the combined effect of which more than offset the more
favorable margins which the Company realizes on sales of its proprietary
products.

         Selling, General and Administrative Expenses. As a percentage of net
sales, selling, general and administrative expenses declined to 13.7% in 1998
from 14.8% in 1997 and 15.5% in 1996. These decreases were due primarily to
increased sales in 1998, a reduction of the Company's telephone expenses in each
year, and, in 1997, the expiration of certain non-competition agreements that
were obtained by the Company in connection with its acquisition of other
businesses in previous years.

         Operating Income. Due to the combined effects of the increases in sales
and gross margin during 1998, the Company's operating income increased to
$3,927,000 in 1998 as compared to losses from operations of $1,467,000 in 1997
and $600,000 in 1996. This increased loss was attributable to the decline in
sales and gross margin in 1997 as compared to 1996.

         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., a manufacturer of
hydraulic leveling devices and other products for recreational vehicles, in
which the Company held 34% ownership interest ("HWH"), 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
Burden 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. See "Business - Sale of Investments" in Part I of this Report. As
a result, equity in the net earnings of affiliates is not expected to be
material to the Company's operating results in the future.

         Other Expense. Interest expense is the most significant component of
Other Income and Expense. 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. During 1997, interest
expense decreased by $264,000 or 7% as compared to 1996. This decrease was due
to the Company's inventory reduction program and the sale, in the latter half of
1997, of its investment in Burden.

         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. The Company's effective income tax rate in 1998 was 88%.
The substantial increase in that rate, as compared to 1997 and 1996 was due
primarily to (i) an increase in non-tax deductible expenses as a percentage of
pre-tax income; 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. The Company expects that
its effective income tax rate will be lower in 1999.

LIQUIDITY AND CAPITAL RESOURCES

         The Company finances its working capital requirements for its
operations primarily with borrowings under a long-term revolving bank credit
facility and internally generated funds. Under that credit facility, the Company
is entitled to borrow up to the lesser of (i) $35,000,000 with a seasonal
reduction to $30,000,000 between October 1 and January 1 of each year, or (ii)
an amount equal to 80% of its eligible accounts receivable and 50% of 


                                       13
<PAGE>   14

its 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 .75% or, at the Company's option but subject to certain limitations,
borrowings under the credit facility will bear interest at the bank's available
LIBOR rate, plus 2.5% per annum.

         At March 16, 1999 outstanding borrowings under the bank credit facility
were approximately $31,400,000. Borrowings under the credit facility are secured
by substantially all of the Company's assets and rank senior in priority to
other indebtedness of the Company.

         Borrowings under the Company's credit facility decreased by $3,876,000
in 1998, as compared to a decrease of $2,835,000 in 1997. The Company made
principal payments of $2,333,000 on its outstanding senior subordinated notes in
1998 and 1997, principally with borrowings under its long term revolving bank
credit facility. The remaining aggregate principal balance of the subordinated
notes is $2,334,000, which is payable in June 1999.

         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 and cash requirements over the next 12
months.

         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 receivable increase, as its customers begin
increasing their product purchases for the spring and summer selling seasons.

         The Company generated cash from operating activities of $5,194,000,
$1,544,000 and $4,182,000 in 1998, 1997 and 1996 respectively. In 1998, the cash
was generated primarily from net earnings and non-cash expenses and the receipt
of income tax refunds arising from the taxable loss in 1997. The inventory
reduction program, which the company initiated in 1996, generated cash of
$1,267,000 in 1998, $5,612,000 in 1997 and $5,032,000 in 1996.

         Investing activities generated net cash of $3,294,000 in 1998, as
compared to $3,615,000 in 1997 and net cash used in investing activities of
$1,082,000 in 1996. During the first quarter of 1998, the Company received
proceeds of $5,388,000 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. The Company used cash of $1,142,000 in 1998 to acquire the
inventory of Marine Distributors, Inc., a distributor of marine products, and
$687,000 in 1996 to acquire additional shares of Burden. Capital expenditures
were $258,000 in 1998, and $428,000 in 1997 and $305,000 in 1996. Capital
expenditures during these years related principally to the acquisition of
warehouse equipment, the establishment and equipping of the national customer
service center, and additional investments in data processing equipment.

         The Company leases the majority of its facilities and certain of its
equipment under non-cancelable operating leases. In 1998, rent expense under all
operating leases totaled approximately $2,900,000. The Company's future lease
commitments are described in Note F to the Company's Consolidated Financial
Statements contained elsewhere in this Report.

SEASONALITY AND INFLATION

         Seasonality. Sales of recreational vehicle and boating parts,
accessories and supplies are seasonal. The Company has significantly higher
sales during the six-month period from April through September than it does
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 in the winter months when sales are lower, particularly in years in which
there occurs unusually severe winter weather conditions in large regions of the
country.

         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
adversely affect the purchase and usage of recreational vehicles and boats,
which can adversely affect sales of the Company's products.


                                       14
<PAGE>   15

YEAR 2000

         The Year 2000 ("Y2K") issue is the result of computer programs using a
two-digit format, as opposed to four digits, to indicate the year. Such computer
systems will be unable to interpret dates beyond the year 1999, which could
cause a system failure or other computer errors, leading to disruptions in
operations. In 1998, the Company developed a three-phase program for Y2K
information systems compliance. Phase I, which has been completed, involved the
identification of those operational areas in which the Company had exposure to
Y2K issues. Phase II, which has also been completed, involved the development
and implementation of action plans designed to achieve Y2K compliance. Phase
III, to be completed during the third quarter of 1999, involves the final
testing of each major area of exposure to confirm compliance. 

         The Company recently replaced its existing computer systems with new or
upgraded systems, as part of a capital equipment improvement program, to take
advantage of improvements in computer technology and functionality that have
occurred since the last major upgrading of its computer systems. Although the
primary purpose of this program was not to address the Y2K Issue, the Company
has been assured by its computer vendors and consultants that the new and
upgraded systems are Y2K compliant. Most of the costs of the new and upgraded
systems, which total approximately $2,000,000 and are being financed with bank
borrowings or equipment lease financing, would have been incurred without regard
to the Y2K Issue. As a result, the Company believes that the costs of achieving
Y2K compliance will represent only a fraction of the costs of obtaining the new
and upgraded systems and such costs will not have a material effect on the
Company's financial condition or operating results.

         Based on currently available information, the Company believes that the
impact of the Year 2000 Issue, as it relates to its internal computer systems,
will not be material to the Company. However, notwithstanding the Company's Y2K
compliance and testing programs, it will not be possible, until the beginning of
2000, to determine, with certainty, whether or not some processing problems or
disruptions will occur that could cause delays in the processing, shipping and
invoicing of customer orders, the processing and transmission of product
purchase orders to and the receipt of products from vendors, and the gathering
and analysis of financial data used by the Company in its operations. The impact
of any such delays on the Company's operating results and financial condition
cannot be accurately predicted, however, as this would depend on which computer
systems are affected by, and the time it takes and expense that must be incurred
to correct those problems.

         The Company currently expects that most of its vendors and customers
that rely heavily on computer systems in transacting business with the Company,
including public utilities that provide phone and other utility services to the
Company and the financial institutions with which the Company has banking and
borrowing relationships, will be Y2K compliant prior to the beginning of 2000.
However, that expectation is based on information furnished to the Company by
those vendors and customers, and the Company has no cost effective means of
independently confirming that these third parties will, in fact, achieve Y2K
compliance in sufficient time to avoid disruptions in their businesses that
could affect the Company. As a result, the Company's business operations and its
results of operations could be adversely affected, if any of its major vendors
or customers fail to remedy their Y2K issues on a timely basis.

FOREIGN EXCHANGE AGREEMENTS AND RELATED MARKET RISKS

         The Company sometimes enters into forward exchange agreements to reduce
the effect of foreign currency fluctuations on a portion of its inventory
purchases in Canada for its Canadian operations. The gains and losses on these
contracts are reflected in earnings in the period when 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, 1998, there were no such agreements outstanding.


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, 1998

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              ----
<S>                                                                           <C>
Consolidated Financial Statements:

         Report of Independent Certified Public Accountants.................   16

         Consolidated Balance Sheets, December 31, 1998 and 1997............   17

         Consolidated Statements of Operations for the Years Ended
         December 31, 1998, 1997 and 1996...................................   18

         Consolidated Statements of Cash Flows
         for the Years Ended December 31, 1998, 1997 and 1996...............   19

         Consolidated Statement of Shareholders' Equity for the
         Years Ended December 31, 1998, 1997 and 1996.......................   21

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

Financial Statement Schedules:

         Schedule II - Valuation and Qualifying Accounts                       
         for the Years Ended December 31, 1998, 1997 and 1996...............   30
</TABLE>

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


                                       15
<PAGE>   16

                        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, 1998 and 1997, and
the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 1998.
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 generally accepted auditing
standards. 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, 1998 and 1997, and
the consolidated results of their operations and their consolidated cash flows
for each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles.

We have also audited Schedule I of The Coast Distribution System, Inc. and
Subsidiaries for each of the three years in the period ended December 31, 1998.
In our opinion this schedule presents fairly, in all material respects, the
information required to be set forth herein.

/s/ Grant Thornton LLP

San Jose, California
March 11, 1999


                                       16
<PAGE>   17


                 CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
As of December 31,                                          1998         1997
--------------------------------------------------------------------------------
                                                          (dollars in thousands)
<S>                                                       <C>         <C>     
ASSETS
    CURRENT ASSETS
            Cash                                          $    435    $    308
            Accounts receivable (less allowance for
                  doubtful receivables of $890 in
                  1998 and $1,080 in 1997)                  12,412      11,268
            Inventories                                     37,246      37,581
            Prepaid expenses                                   390         676
            Deferred income taxes                            1,823       1,980
            Investment in affiliate                             --       3,888
            Income tax refunds receivable                       45       1,703
                                                          --------    --------
                  Total current assets                      52,351      57,404

                                                             3,904       4,709
    PROPERTY, PLANT & EQUIPMENT
    OTHER ASSETS
            Investments in affiliates                          159         409
            Costs in excess of net assets of acquired
              businesses                                     8,086       8,466
            Other                                            2,313       1,675
                                                          --------    --------
                                                            10,558      10,550
                                                          --------    --------
                                                          $ 66,813    $ 72,663
                                                          ========    ========

LIABILITIES
    CURRENT LIABILITIES
            Accounts payable                              $  4,647    $  3,421
            Accrued liabilities                              2,071       2,226
            Current maturities of long-term obligations      2,696       2,758
                                                          --------    --------
                  Total current liabilities                  9,414       8,405

    LONG-TERM OBLIGATIONS                                   23,175      29,726
    DEFERRED INCOME TAXES                                      156         182
    COMMITMENTS                                                 --          --
    REDEEMABLE PREFERRED STOCK OF SUBSIDIARY                   237         354

    SHAREHOLDERS' EQUITY
            Common stock, no par value; authorized
              10,000,000 shares; issued and
              outstanding, 5,279,854 shares in 1998
              and 5,246,879 shares in 1997                  19,640      19,559
            Cumulative translation adjustment                 (665)       (305)
            Retained earnings                               14,856      14,742
                                                          --------    --------
                                                            33,831      33,996
                                                          --------    --------
                                                          $ 66,813    $ 72,663
                                                          ========    ========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       17
<PAGE>   18

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended December 31,                                  1998         1997         1996
------------------------------------------------------------------------------------------
                                                             (dollars in thousands,
                                                          except for per share amounts)
<S>                                                    <C>          <C>          <C>      
Net sales                                              $ 148,680    $ 135,952    $ 139,286
Cost of products sold (including distribution costs)     124,452      117,272      118,361
                                                       ---------    ---------    ---------
Gross margin                                              24,228       18,680       20,925
Selling, general and administrative expenses              20,301       20,147       21,525
                                                       ---------    ---------    ---------
Operating margin                                           3,927       (1,467)        (600)

Equity in net earnings of affiliated companies              (170)         673        1,529
Other income (expense)
    Interest expense                                      (2,662)      (3,336)      (3,600)
    Loss from sale of investments in affiliates               --       (2,193)          --
    Other                                                    (42)        (246)       2,354
                                                       ---------    ---------    ---------
Earnings (loss) before income taxes                        1,053       (6,569)        (317)
    Income tax provision (benefit)                           927       (1,303)        (194)
                                                       ---------    ---------    ---------
Net earnings (loss)                                    $     126    $  (5,266)   $    (123)
                                                       =========    =========    =========

Earnings (loss) per share:
    Basic                                              $     .02    $   (1.01)   $    (.03)
                                                       =========    =========    =========
    Diluted                                            $     .02    $   (1.01)   $    (.03)
                                                       =========    =========    =========
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       18
<PAGE>   19

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,                                      1998       1997       1996
---------------------------------------------------------------------------------------
                                                               (dollars in thousands)
<S>                                                        <C>        <C>        <C>     
Cash flows from operating activities:
    Net earnings (loss)                                    $   126    $(5,266)   $  (123)
    Adjustment to reconcile net earnings (loss) to net     
      cash provided by operating activities:
         Depreciation                                          972      1,015      1,166
         Amortization                                          604        608      1,084
         (Loss) Gain from sale of equipment                     51         (9)       (62)
         Equity in net earnings of affiliated companies,
              net of dividends                                 170       (148)      (950)
         Loss from sale of investments in affiliates            --      2,193         --
         Deferred income taxes                                (344)       227       (110)
         Change in assets and liabilities net of
           effects from business acquisitions:
              Accounts receivable                           (1,144)     2,299     (1,202)
              Inventory                                      1,267      5,612      5,032
              Prepaids and tax refunds receivable            1,944       (924)      (505)
              Accounts payable                               1,226     (3,901)       (54)
              Accrued liabilities                              322       (162)       (94)
                                                           -------    -------    -------
                                                             3,615      2,924      3,177
                                                           -------    -------    -------
    Net cash provided by operating
           activities                                        5,194      1,544      4,182

Cash flows from investing activities:
    Proceeds from sale of equipment                             11         45        124
    Increase in other assets                                  (705)      (200)       (74)
    Acquisitions of businesses, net of cash acquired        (1,142)        --       (827)
    Proceeds from sale of investments in affiliates          5,388      4,198         --
    Capital expenditures                                      (258)      (428)      (305)
                                                           -------    -------    -------
         Net cash provided by (used in)
           investing activities                              3,294      3,615     (1,082)

Cash flows from financing activities:
    Net borrowings (repayments) under notes
      payable and line-of-credit agreements                 (5,376)    (2,835)    (1,068)
    Proceeds from issuance of long-term debt                    50        259        161
    Repayment of long-term debt                             (2,779)    (2,372)    (2,613)
    Issuance of common stock under employee
      stock purchase and stock option plans                     81        119        285
    Redemption of redeemable preferred stock
      of subsidiary                                            (96)      (103)      (106)
    Dividends on preferred stock of subsidiary                 (12)       (13)       (18)
                                                           -------    -------    -------
      Net cash used by financing activities                 (8,132)    (4,945)    (3,359)
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       19
<PAGE>   20

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,                                1998       1997       1996
-----------------------------------------------------------------------------------
                                                         (dollars in thousands)
<S>                                                  <C>        <C>        <C>     
Effect of exchange rate changes on cash              $  (229)   $  (120)   $   (28)
                                                     -------    -------    -------
NET INCREASE (DECREASE) IN CASH                          127         94       (287)

Cash beginning of year                                   308        214        501
                                                     -------    -------    -------
Cash end of year                                     $   435    $   308    $   214
                                                     =======    =======    =======

Supplemental disclosures of cash flow information:
            Cash paid during the year for:
                        Interest                     $ 2,671    $ 3,312    $ 3,733
                        Income taxes                    (920)      (608)       673
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       20
<PAGE>   21

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                             Other
                                                 Common      Retained    Comprehensive
Three Years Ended December 31, 1998              Stock       Earnings    Earnings (Loss)    Total
---------------------------------------------------------------------------------------------------
                                                             (dollars in thousands)
<S>                                              <C>         <C>           <C>             <C>     
Balance at January 1, 1996                       $ 19,155    $ 20,162      $     75        $ 39,392

Net loss for the year                                  --        (123)           --            (123)
Foreign currency translation adjustments               --          --           (86)            (86)
                                                                                           --------
Comprehensive Loss                                                                             (209)
                                                                                           --------
Issuance of common stock under employee                                                   
    stock purchase plan                               198          --            --             198
Exercise of stock options                              87          --            --              87
Dividends on preferred stock of subsidiary             --         (18)           --             (18)
                                                 --------    --------      --------        --------
Balance at December 31, 1996                       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                               119          --            --             119
Dividends on preferred stock of subsidiary             --         (13)           --             (13)
                                                 --------    --------      --------        --------
Balance at December 31, 1997                       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                                  81          --            --              81
Dividends on preferred stock of subsidiary             --         (12)           --             (12)
                                                 --------    --------      --------        --------
Balance at December 31, 1998                     $ 19,640    $ 14,856      $   (665)       $ 33,831
                                                 ========    ========      ========        ========
</TABLE>


         The accompanying notes are an integral part of this statement.


                                       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 (Note D) 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 market. 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. Industry Segment. The Company operates in one industry segment which is the
distribution of recreation- al 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 1998, 1997, or 1996.

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, 1998 and 1997, the accumulated amortization
applicable to intangible assets was approximately $5,450,000 and $4,898,000
respectively. On an ongoing basis, management reviews the valuation and
amortization of intangibles. As part of this review, the Company evaluates the
recoverability of the intangibles based upon the cash flows generated by the
related acquired businesses to determine if impairment has occurred.

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.

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, 1998, 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 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.


                                       22
<PAGE>   23

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 No. 130, "Reporting Comprehensive Income,"
Statement 130 establishes new rules for the reporting and display of
comprehensive income (loss) and its components. Statement 130 requires
unrealized gains or losses on the Company's available-for-sale investments and
foreign currency translation adjustments, which prior to adoption were reported
separately in stockholder's equity, to be included in other comprehensive
income. Prior year financial statements have been reclassified to conform to the
requirements of Statement 130. The adoption of this Statement had no effect on
the Company's net income or stockholder's equity.

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

NOTE B: PROPERTY, PLANT& EQUIPMENT

         Property and equipment consists of the following at December 31:

<TABLE>
<CAPTION>
                                     1998      1997
------------------------------------------------------
                                (dollars in thousands)
<S>                               <C>         <C>    
Buildings                         $ 2,771     $ 2,791
Warehouse equipment                 3,340       3,434
Office equipment                    3,518       4,427
Leasehold improvements                695         744
Automobiles                            49          55
                                   ------      ------
                                   10,373      11,451
Less accumulated depreciation
    and amortization                7,106       7,379
                                   ------      ------
                                    3,267       4,072
Land                                  637         637
                                   ------      ------
                                  $ 3,904     $ 4,709
                                  =======     =======
</TABLE>

NOTE C: INVESTMENTS IN AFFILIATED COMPANIES

         In 1993, the Company began acquiring shares of H. Burden Limited
("Burden"). In 1996 the Company increased its ownership to 35% of the
outstanding shares. The cumulative purchase price paid for the shares was
$4,025,000. The investment in Burden was accounted for by the equity method and,
accordingly, the equity in net earnings of Burden was included in the Company's
consolidated statements of operations from the date of acquisition through
September 30, 1996. 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.

         Pro forma results of operations assuming the Burden acquisition had
occurred as of the beginning of each respective year presented have not been
presented as such results do not differ materially from the reported results of
operations.


                                       23
<PAGE>   24
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Summarized financial information of Burden for the year ended September
30, 1996 is presented as follows:

<TABLE>
<CAPTION>
Condensed Statements of Earnings
Year Ended September 30,                          1996
----------------------------------------------------------
                                               (dollars in
                                                thousands)
<S>                                              <C>    
Net sales                                        $64,526
Cost of goods sold                                52,316
                                                 -------
Gross margin                                      12,210
Selling, general and administrative expenses       8,818
Other (income) expense                               803
                                                 -------
Earnings before income taxes                       2,589
Provision for income taxes                         1,030
                                                 -------
    Net earnings                                 $ 1,559
                                                 =======
</TABLE>

The Company accounted for its 34% investment in HWH Corporation using the equity
method of accounting. In February 1998, HWH repurchased all of the shares Coast
owned 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. Summarized financial information of HWH for the year
ended December 31, 1996, is presented below:

<TABLE>
<CAPTION>
Condensed Statements of Earnings
Year Ended December 31,                            1996
----------------------------------------------------------
                                               (dollars in
                                                thousands)
<S>                                             <C>    
Net sales                                         $32,279
Cost of goods sold                                 21,544
                                                  -------
Gross margin                                       10,735
Selling, general an administrative expenses         6,837
Other income                                          375
                                                  -------
Earnings before income taxes                        4,273
Provision for income taxes                          1,535
                                                  -------
  Net earnings                                    $ 2,738
                                                  =======
</TABLE>

The Company's investments in unconsolidated affiliates are summarized as
follows:

<TABLE>
<CAPTION>
                                   HWH        Burden        Other
-------------------------------------------------------------------
                                      (dollars in thousands)
<S>                              <C>          <C>          <C>    
Balance at 1/1/97                $ 6,705      $ 5,071      $   682
  Investments                         --           --           --
  Equity in earnings (loss),
   net of goodwill amortization      877           --         (203)
  Dividends received                (525)          --           --
  Translation adjustments             --          (67)         (70)
  Sale/writedown of investment    (1,669)      (5,004)          --
                                 -------      -------      -------
Balance at 12/31/97                5,388           --          409

Investments                           --           --           --
Equity in earnings (loss),
 net of goodwill amortization         --           --         (169)
Dividends received                    --           --           --
Translation adjustments               --           --          (81)
Sales/writedown of investment    (5,388)          --           --
                                 -------      -------      -------
Balance at 12/31/98              $    --      $    --      $   159
                                 =======      =======      =======
</TABLE>

In May 1998 the Company acquired the inventory of Marine Distributors, Inc.
("MDI"), a Seattle based distributor or marine parts and accessories, for
$1,142,000. The acquisition was recorded under the purchase method of accounting
and accordingly, results of operations of MDI are included in the accompanying
consolidated financial statements subsequent to acquisition. Pro forma results
of operations assuming the MDI acquisition had occurred as of the beginning of
each respective year presented have not been presented as such results do not
differ materially from the reported results of operations.

                                       24
<PAGE>   25

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE D: LONG-TERM OBLIGATIONS

<TABLE>
<CAPTION>

Long-term obligations consist of the following at
December 31:                         1998        1997
--------------------------------------------------------
                                  (dollars in thousands)
<S>                                <C>         <C>    

Secured note payable to bank       $21,245     $25,121

11.2% senior subordinated
 secured notes-due June 1,1999       2,334       4,668

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                       1,349       1,346

10% note collateralized
 by a deed of trust on land
 and building, due in
 monthly installments of
 $11, final payment
 due in September 2004                 590         663

Other                                  353         686
                                   -------     -------
                                    25,871      32,484
Current portion                      2,696       2,758
                                   -------     -------
                                   $23,175     $29,726
                                   =======     =======
</TABLE>

         Subsequent to 1999, annual maturities of long-term obligations (in
thousands) are $263 in 2000, $21,409 in 2001, $175 in 2002, $193 in 2003, and
$1,135 due thereafter.


Secured Note Payable to Bank

         The secured note payable to bank represents a revolving credit
agreement, collateralized by substantially all assets of the Company. The
Company may borrow up to the lesser of (i) $35,000,000 with a seasonal reduction
to $30,000,000 between October 1 and January 1 of each year, or (ii) an amount
equal 80% of the value of eligible accounts receivable and 50% of the value of
eligible inventory. Interest is payable at the bank's prime rate plus 75 basis
points or, at the Company's option but subject to certain limitations,
borrowings will bear interest at the bank's LIBOR rate, plus 250 basis points.


11.2% Senior Subordinated Secured Notes--Due June 1, 1999

         The notes are collateralized by substantially all of the assets of the
Company and bear interest at 11.2%. The notes require semiannual interest
payments on June 1 and December 1 of each year. Annual principal payments of
$2,333,000 commenced June 1, 1994 and continue through June 1, 1999. 

         The note agreements relating to the secured note payable to bank and to
the 11.2% senior subordinated secured notes contain certain restrictive
covenants. Included are covenants regarding profitability, minimum liquidity
ratios, restrictions on investments, and limitations on indebtedness, payment of
dividends, long-term leases, and mergers and consolidations.

         The Company is in compliance with all the covenants.

At December 31, 1997 the Company owed its affiliate HWH $1,500,000. The note
payable was due on demand and interest was paid monthly at the Company's current
rate payable on its secured note payable to bank. At December 31, 1997 the note
has been reclassified and netted against the HWH investment. In February 1998
the note was repaid.


















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 twelve 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, 1998 are as follows:

<TABLE>
<CAPTION>

Year Ending 
December 31,        Equipment   Facilities    Total
----------------------------------------------------
                         (dollars in thousands)
<S>                 <C>         <C>          <C>    

      1999           $    57     $ 2,521     $ 2,578
      2000                15       1,734       1,749
      2001                 8       1,632       1,640
      2002                 1       1,368       1,369
      2003                --       1,313       1,313
      Thereafter          --       4,250       4,250
                     -------     -------     -------
                     $    81     $12,818     $12,899
                     =======     =======     =======
</TABLE>

Rent expense charged to operations amounted to (in thousands) $2,899 in 1998,
$2,758 in 1997 and $3,116 in 1996.


                                       25
<PAGE>   26

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE F: STOCK OPTION AND STOCK PURCHASE PLANS

Stock Option Plans

         The Company has in effect a 1987 Nonqualified Stock Option Plan and a
1993 Stock Option and Incentive Plan ("the plans") which authorize the issuance
of options to purchase 700,000 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 grants made from the plans. Had compensation cost for the plans been
determined based on the fair value of the options at the grant dates, consistent
with the method prescribed in Statement of Financial Accounting Standards 123,
Accounting for Stock-Based Compensation ("SFAS 123"), the Company's net earnings
(loss) and earnings (loss) per share would have been reduced to the pro forma
amounts indicated below. Pro forma amounts may not be indicative of pro forma
results in future periods because the pro forma amounts below do not include pro
forma compensation cost for options granted prior to January 1, 1995.

<TABLE>
<CAPTION>
                             1998          1997          1996
---------------------------------------------------------------
                                  (dollars in thousands)
<S>                         <C>         <C>            <C>     
Net earnings (loss) attributable
 to common shareholders
  As reported               $   114     $  (5,279)     $  (141)
  Pro forma                 $    53        (5,351)        (211)

Per share - Basic
  As reported               $   .02     $   (1.01)     $ (0.03)
  Pro forma                 $   .01         (1.02)       (0.04)

Per share - Diluted
  As reported               $   .02     $   (1.01)     $ (0.03)
  Pro forma                 $   .01         (1.02)       (0.04)
</TABLE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes options-pricing model with the following assumptions used: no
expected dividends; expected volatility of 70% for 1998, 50% for 1997 and 45%
for 1996; risk-free interest rates of 6.0%, 6.2%, and 6.1%; an expected
forfeiture rate of 46%; and expected lives of 4 years. A summary of the status
of the Company's stock option plans is presented below:

<TABLE>
<CAPTION>
                                  1998                        1997                     1996
                         ---------------------------------------------------------------------------
                             Weighted Average           Weighted Average         Weighted Average
                         ---------------------------------------------------------------------------
                         Shares   Exercise Price     Shares  Exercise Price   Shares  Exercise Price
                         ---------------------------------------------------------------------------
<S>                      <C>          <C>            <C>          <C>         <C>          <C>  
Outstanding at
  beginning of year      335,700      $5.67          183,200      $7.03       198,250      $6.00
Granted                  183,000       3.18          163,500       4.09        10,000       5.63
Exercised                     --         --               --         --       (24,675)      3.50
Forfeited                (39,200)      5.93          (11,000)      5.08          (375)      3.62
Outstanding at end
  of year                479,500       4.69          335,700       5.67       183,200       7.03

Weighted average
  fair value of
  options granted
  during the year                     $1.79                       $1.87                    $2.40
----------------------------------------------------------------------------------------------------
</TABLE>

The following information applies to options outstanding at December 31, 1998:

<TABLE>
<CAPTION>
                                                      Weighted Average
                  Options    Weighted Average   Remaining Contractual Options           Weighted Average
    Range       Outstanding   Exercise Price            Life (Years)             Exercisable     Exercise Price
---------------------------------------------------------------------------------------------------------------
<S>             <C>          <C>                <C>                              <C>             <C>        
$3.25 - $5.63     345,000        $  3.65                     9                     119,000          $   3.83
$6.50 - $7.88     134,500           7.37                     6                     113,500              7.42
                  479,500        $  4.69                                           232,500          $   5.58
</TABLE>


                                       26
<PAGE>   27

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Employee Stock Purchase Plans

         The Company had in effect a 1987 Employee Stock Purchase Plan and a
1997 Employee Stock Purchase Plan under which 850,000 shares of the Company's
common stock were reserved for issuance to all permanent employees who have met
minimum employment criteria. Employees who do not own 5% or more of the
outstanding shares are eligible to participate through payroll deductions. At
the end of each offering period, shares are purchased by the participants at 85%
of the lower of the fair market value at the beginning or the end of the
offering period. The 1987 plan expired on October 13, 1997. During the years
ended December 31, 1998 and 1997, 32,975 and 36,156 shares, respectively, of
common stock were issued, at weighted average prices of $2.44, $3.29 and $6.48.
The weighted average per share fair values of the awards were $0.80, $0.81 and
$2.11 respectively. At December 31, 1998, 367,025 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 beginning on the first quarter following
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 $65,825 in 1998, $54,364 in 1997, and $39,803
in 1996.

NOTE H: FOREIGN OPERATIONS

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

<TABLE>
<CAPTION>
                                      1998       1997
--------------------------------------------------------
                                 (dollars in thousands)
<S>                             <C>            <C>      
Sales to external customers
    United States               $ 123,861      $ 114,563
    Canada                         24,819         21,389
Operating margin
    United States                   2,142         (2,038)
    Canada                          1,785            571
Identifiable assets
    United States                  58,402         64,129
    Canada                          8,411          8,534
</TABLE>

         Transfers between geographic areas have not been presented as they are
not significant.

NOTE I: INCOME TAXES

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

<TABLE>
<CAPTION>
                      1998         1997         1996
------------------------------------------------------
                         (dollars in thousands)
<S>                 <C>          <C>          <C>     
Domestic            $  (276)     $(6,842)     $  (378)
Foreign               1,329          273           61
                    -------      -------      ------- 
                    $ 1,053      $(6,569)     $  (317)
                    =======      =======      ======= 
</TABLE>



























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

<TABLE>
<CAPTION>
                      1998         1997        1996
------------------------------------------------------
                         (dollars in thousands)
<S>                 <C>          <C>          <C>     
Current:
        Federal     $   577      $(1,619)     $  (137)
        State            98          (19)          12
        Foreign         596          108           41
                    -------      -------      ------- 
                      1,271       (1,530)         (84)
                    -------      -------      ------- 
Deferred:
        Federal        (402)         412         (129)
        State            66         (152)          14
        Foreign          (8)         (33)           5
                    -------      -------      ------- 
                       (344)         227         (110)
                    -------      -------      ------- 
Income tax
  provision         $   927      $(1,303)     $  (194)
                    =======      =======      ======= 
</TABLE>

         The total operating loss carryforwards available for state income tax
purposes at December 31, 1998 aggregate $3,400,000. The earliest carryforwards
begin to expire in 1999.


                                       27
<PAGE>   28

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                1998         1997         1996
----------------------------------------------------------------
                                     (dollars in thousands)
<S>                            <C>          <C>          <C>    
Deferred tax assets
  Inventory
    capitalization             $   892      $   936      $ 1,034
  Bad debt provision               314          382          382
  Inventory reserve                457          427          507
  Property, plant and
    equipment                       21           --            1
  Loss carryforwards               196          261          145
  Other                             43           34           45
                               -------      -------      -------
  Gross deferred
    tax assets                   1,923        2,040        2,114
  Less valuation
    allowance                     (100)         (60)         (72)
                               -------      -------      -------
                               $ 1,823      $ 1,980      $ 2,042
                               -------      -------      -------
Deferred tax liabilities
  Investment in affiliates          --      $  (474)     $  (257)
  Property, plant and
    equipment                     (156)        (182)         (91)
                               -------      -------      -------
  Gross deferred
    tax liabilities               (156)        (656)        (348)
                               -------      -------      -------
  Net deferred tax assets      $ 1,667      $ 1,324      $ 1,694
                               =======      =======      =======
</TABLE>

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

<TABLE>
<CAPTION>
                                    1998        1997         1996
-------------------------------------------------------------------
                                        (dollars in thousands)
<S>                               <C>         <C>          <C>     
Earnings (loss) before
  income taxes                    $ 1,053     $(6,569)     $  (317)
                                  -------     -------      ------- 
Expected income tax
  expense at 34%                      358      (2,233)        (108)
Higher rates on earnings
  of foreign operations               121         (34)           8
Goodwill amortization                 254         231          229
Dividend exclusion on
  earnings of affiliate                --        (143)        (242)
Temporary differences related
  to sold affiliates not
  previously recognized                --         913           --
State taxes
  (net of federal benefit)             78        (129)          44
Change in valuation
  allowance                            40         (12)          (4)
Exclusion of earnings of
  foreign affiliates                   31          65         (133)
Other                                  45          39           12
                                  -------     -------      ------- 
Income tax provision              $   927     $(1,303)     $  (194)
                                  =======     =======      ======= 
</TABLE>

Deferred income taxes have not been provided on the undistributed earnings of
foreign subsidiaries or foreign joint ventures 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.


                                       28
<PAGE>   29

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE J: EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                For the Year Ended December 31,
                                                1998          1997         1996
--------------------------------------------------------------------------------
                                                     (dollars in thousands)
<S>                                            <C>          <C>          <C>     
Numerator:
Net earnings (loss)                            $   126      $(5,266)     $  (123)
Preferred dividends                                (12)         (13)         (18)
                                               -------      -------      ------- 
Numerator for basic earnings (loss)
 per share                                     $   114      $(5,279)     $  (141)
                                               =======      =======      ======= 
Numerator for diluted earnings (loss)
 per share                                     $   114      $(5,279)     $  (141)
                                               =======      =======      ======= 
Denominator:
(in thousands)
Denominator for basic earnings per share
Weighted average shares outstanding              5,275        5,239        5,198

Dilutive effect of stock options                     7           --           --
                                               -------      -------      ------- 
Denominator for diluted earnings per share       5,282        5,239        5,198
                                               =======      =======      ======= 
</TABLE>

         Not all of these options were included in the computation of diluted
EPS 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 or
1996 would have been antidilutive because the company experienced a net loss in
those years.

NOTE K: ACCRUED LIABILITIES

         Accrued liabilities consist of the following at December 31:

<TABLE>
<CAPTION>
                                  1998       1997
-----------------------------------------------------
                               (dollars in thousands)
<S>                              <C>        <C>   
Payroll and related benefits     $  753     $  641
Rent                                 62        127
Income and other taxes              828        890
Other                               428        568
                                 ------     ------
                                 $2,071     $2,226
                                 ======     ======
</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 their short
maturities. The fair values of investments in affiliates consist of securities
for which a reasonable estimate of fair value could not be made as no quoted
market prices for the securities exist and the costs of determining fair value
would be excessive. As of December 31, 1998, 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
$153,000.

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 Recreational Vehicle
Products, Inc. ("RVP"), which manufactures air conditioners under the
Coleman((R)) brand name and awnings under the Faulkner((R)) brand name. RVP is
the Company's principal supplier of these products, the sales of which accounted
for approximately 17% of the Company's net sales in 1998 and 1997, and 15% of
the Company's net sales in 1996.

NOTE N: OTHER INCOME

         Other income in 1996 consists primarily of the proceeds to the Company
from the favorable settlement of a lawsuit with a former leading supplier. The
resultant gain is shown net of certain expenses incurred as a result of the
Company's involvement in the lawsuit.

NOTE O: STOCK REPURCHASES

         During the first quarter of 1999, the Company implemented a program to
repurchase up to approximately 5% of its shares in open market and private share
transactions. A total of approximately 450,000 shares of common stock were
repurchased at a total cost to the Company of $1,470,000.


                                       29
<PAGE>   30

SCHEDULE II

              THE COAST DISTRIBUTION SYSTEM, INC. AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS
                        December 31, 1996, 1997 and 1998

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

   Year Ended December 31, 1996      $  937,000      $ 534,000      $ 385,000      $1,086,000
   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
</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       PERIOD
--------------------------------    ------------     ---------      ----------     ----------
<S>                                 <C>              <C>            <C>            <C>         
Allowance for obsolete or slow-moving inventory:

   Year Ended December 31, 1996      $1,323,000      $ 427,000      $ 380,000      $1,370,000
   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
</TABLE>

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


                                       30
<PAGE>   31

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 April 30, 1999 for the
Company's 1999 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 April 30, 1999 for the Company's 1999 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 April 30, 1999 for the Company's 1999 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 April 30, 1999 for the Company's 1999 annual
shareholders' meeting.

                                     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 15 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


                                       31
<PAGE>   32

                         1993 Stock Option and Incentive Plan, as amended
                         -- See Exhibit 10.31

                         1997 Employee Stock Purchase Plan
                         -- See Exhibit 10. 35

         (b) Current Reports on Form 8-K.

                  The Company did not file any reports on Form 8-K during the
         quarter ended December 31, 1998.


                                       32
<PAGE>   33

                                   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 30, 1999                  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 30, 1999
--------------------------------------------     Officer and Director
               Thomas R. McGuire                 


/s/ SANDRA A. KNELL                              Executive Vice President (Principal Financial and             March 30, 1999
--------------------------------------------     Principal Accounting Officer)
                Sandra A. Knell                  


/s/ JOHN E. TURCO                                Director                                                      March 30, 1999
--------------------------------------------
                 John E. Turco


                                                 Director                                                      March   , 1999
--------------------------------------------
               Louis B. Sullivan


/s/ ROBERT S. THROOP                             Director                                                      March 30, 1999
--------------------------------------------
               Robert S. Throop


/s/ BEN A. FRYDMAN                               Director                                                      March 30, 1999
--------------------------------------------
                Ben A. Frydman


                                                 Director                                                      March __, 1999
-------------------------------------------- 
                John W. Casey
</TABLE>


                                      S-1
<PAGE>   34

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                                    SEQUENTIALLY
EXHIBIT                                                                                               NUMBERED
NUMBER                                                                                                  PAGE
-------                                                                                             ------------
<C>       <S>                                                                                       <C>
   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.)                                                                             --

  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.)                                                                          --
</TABLE>


                                      E-1
<PAGE>   35

<TABLE>
<CAPTION>
                                                                                                    SEQUENTIALLY
EXHIBIT                                                                                               NUMBERED
NUMBER                                                                                                  PAGE
-------                                                                                             ------------
<C>       <S>                                                                                       <C>
  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                                                                                   -- 

  21      Subsidiaries.                                                                                  --

  23.1    Consent of Grant Thornton, LLP, Independent Certified Public Accountants, re Consolidated
          Financial Statements of The Coast Distribution System, Inc.                                    37


  24      Power of Attorney - Included on Signature Page.                                                --

  27.1    1998 Financial Data Sheet                                                                      38
</TABLE>

----------
*        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.


                                       E-2