Bestar Inc.

Bestar Inc.

March 09, 2010 09:27 ET

Bestar Inc.: Results for Year Ending December 2009

LAC-MÉGANTIC, QUÉBEC--(Marketwire - March 9, 2010) - Bestar Inc. (CNSX:BES) - Gross revenues for the year ending December 2009 are $37,171,000 CA, a decrease of 8.1% compared to gross revenues of $40,428,000 CA reported for 2008.

Earnings before taxes of $78,000 CA were recorded for 2009 compared to a loss before taxes of $2,347,000 CA for 2008. For comparison purposes, the combination of exchange rates and the fair market value of our exchange contracts had a negative effect of $1,014,000 CA in 2008 while these two elements had a positive effect of $774,000 CA in 2009.

A net loss of $65,000 CA or ($0.01) per share was recorded for 2009, compared to a net loss of $1,614,000CA or ($0.12) per share for 2008. An amount of $143,000 for income taxes payable for 2009 is reported compared to recovered income taxes of $733,000 for 2008. It must be noted that due to the reduction of the income tax rate for 20l0 an adjustment on recoverable income taxes of $126,000 was added in the last quarter of 2009.

Gross revenues for the fourth quarter of 2009 are $8,381,000 CA, a decrease of 9.9% compared to gross revenues of $9,304,000 CA recorded for the same quarter in 2008. A loss before taxes of $323,000 CA was recorded for 2009 compared to a loss before taxes of $1,605,000 CA for the same period in 2008. For this fourth quarter, the combination of exchange rates and the fair market value of our exchange contracts had a negative effect of $1,033,000 CA in 2008 and a positive effect of $53,000 CA in 2009.

A net loss of $337,000 CA or ($0.03) per share (see note above for the recoverable income taxes) was recorded for this quarter in 2009 compared to a net loss of $1,074,000 CA or ($0.08) per share for the same quarter in 2008.

Gross revenues were affected by the extent of the economic crisis which hit the furniture industry, and more particularly , the U.S. market which represents 54% of Bestar sales in 2009. The increase in sales in the first quarter of 2009, due to the success of a promotion at one of our major clients along with increased sales of one of our component clients was not enough to compensate for the decrease in furniture sales to our US clients throughout the year. In addition, the recession provoked an important decrease in sales in the component market during the last half of 2009.

In spite of the reduction of over $3M in total revenues, without taking into account the effects of the combination of the rate of exchange and exchange contracts, there was a net improvement in the 2009 results.

Many factors contributed to this improvement, among others:

  • A reduction in our fixed expenses and inventories;
  • A continued effort to standardize and improve raw materials;
  • Increased productivity, due to new equipment which enabled us to re-orient our production by favoring flexibility and a Just-in-Time approach.

Cash Flow

For the year ending 2009 cash flows generated by operations are positive at $759,000. This is essentially due to the variations in working capital of which the main sources are a reduction of $2.9M in inventories and $2.0M reduction in our accounts payable. The cash flow generated by investments is negative $302,000 A financial contribution helped to reduce the effects of the acquisition cost of computer equipment. In spite of financing agreements completed during the first quarter, the reimbursement of bank loans and the reimbursement of certain long terms debts explain the negative cash flow of $986,000 generated by financing activities.


In an effort to maintain our qualified workforce, during these difficult economic times, in the beginning of the year we took part in a work share program. This program ended at the end of October in order to prepare our inventories for a new product launch in December and promotion scheduled for January 2010.

During the first quarter of 2009 Bestar`s capital structure was strengthened by a credit agreement in the form of non guaranteed debentures totaling $750 000.

Finally, after studying the different possibilities in order to continue trading its ordinary shares, the Company decided that the Canadian National Stock Exchange (CNSX ) represented the best market to list and trade its shares. Since November 6th, 2009 Bestar`s shares are listed and traded on the CNSX, under the symbol "BES".


"We have taken advantage of these unstable years to re-think our product lines. In addition, in December 2009, we began delivery of a new product to a major client and the results so far are encouraging. We have also developed a product line aimed at commercial markets which will permit us to open new markets in 2010.

"We have undertaken an important review of our marketing plans, in order to update our image and rejuvenate our products.

"In 2010 we continue to focus our management based on mobilization, responsibility, flexibility and team work. We continue to strive for improvements in productivity in an effort to increase profitability. We remain open to opportunities which could favor our development and results," declared Paulin Tardif, President, CEO.

"The economic recovery and the introduction of new products during this year should change the tendency in sales resulting in a slight increase for 2010. However we are still susceptible to the fluctuating markets, as the recovery in our sector isn't predicted until the end of 2010. We still need to improve our performance to survive against the global competition and the arising countries who fight for a better place in this competitive world. Thus, measures taken during these difficult years have permitted us to confront one on the most important economic crisis in history and prepared us for the imminent economic recovery," concluded Paulin Tardif.

Results Summary

(Results in thousands of dollars, except earnings per share)            
    Q1 Q2 Q3 Q4 Total
Revenue 2007 11,279 11,093 10,613 10,448 43,433
  2008 10,950 9,569 10,605 9,304 40,428
  2009 11,523 8,565 8,702 8,381 37,171
Net earnings (loss) 2007 104 79 17 50 250
2008 (103) (277) (160) (1,074) (1,614)
2009 206 1 65 (337) (65)
Earnings (loss) per common share 2007 0.01 0.01 0.00 0.00 0.02
2008 (0.01) (0.02) (0.01) (0.08) (0.12)
2009 0.02 0.00 0.00 (0.03) (0.01)
Fully diluted earnings (loss) per common share 2007 0.01 0.01 0.00 0.00 0.02
2008 (0.01) (0.02) (0.01) (0.08) (0.12)
2009 0.02 0.00 0.00 (0.03) (0.01)
Total Assets 2007 25,671 25,783 25,337 25,874 25,874
2008 26,390 28,751 28,512 28,937 28,937
2009 28,644 26,737 24,981 25,120 25,120
Net debt (1) 2007 5,500 5,651 5,326 4,605 4,605
2008 6,742 8,987 9,259 8,198 8,198
2009 8,696 7,955 6,568 7,836 7,836
Weighted average of outstanding shares (in thousands) 2007 13,038 13,038 13,038 13,038 13,038
2008 13,038 13,038 13,038 13,038 13,038
2009 13,038 13,038 13,038 13,038 13,038

Note 1 : Net debt comprises bank loans and the long-term debt, net of cash.

Corporate Profile

Founded in 1948, Bestar Inc. designs, manufactures, and distributes a vast array of ready-to-assemble furnishings that meet customer needs in terms of quality, design, and functionality. During the last years Bestar has specialized in office furniture and distributes its products mainly in the United States and Canada. In order to offset a decrease in sales Bestar developed a new business plan in 2006 which includes the fabrication of components.

The company became public in 1986 and operates from its plant in Lac-Mégantic, Québec, Canada.

Bestar'shares are listed on the Canadian National Stock Exchange ("CNSX") under the symbol "BES".

Release Declaration

This press release may contain information and declarations on the future performance of the company that are, by nature, speculative. These declarations are based on suppositions, uncertainties and the best possible evaluation of future events by management. They are subject to certain risk factors such as exchange rates, the growing competition from emerging countries as well as fluctuating costs in raw material and shipping.

Shareholder Information

Shareholders may find this press release under the MARKETWIRE news file at , on SEDAR at and on CNSX website at : The management report and comprehensive financial statements for the year ended December 31, 2009 will be available, as soon as published, through the SEDAR database, on CNSX website and our website at

Contact Information

  • Bestar Inc.
    Paulin Tardif
    Chairman of the Board
    President and Chief Executive Officer