Bestar Inc.
CNSX : BES

Bestar Inc.

August 17, 2010 12:14 ET

Bestar Inc. : Results for the Second Quarter Ending June 30th, 2010

LAC-MÉGANTIC, QUEBEC--(Marketwire - Aug. 17, 2010) - Bestar Inc. (CNSX:BES). Sales for the second quarter ending June 30th, 2010 are $7,171,000, compared to $8,565,000 for the same period last year, a decrease of 16.3% A net loss of $738,000 or ($0.06) per share was recorded in comparison to a net profit of $1,000 or $0.00 per share for the second quarter in 2009.

For the first half of 2010, total sales are $17,311,000 a decrease of 13.8% compared to $20,088,000 for the same period in 2009. A net loss for the first six months of 2010 total $851,000 or ($0.07) per share in comparison to a net profit of $207,000 or $0.02 per share for the same period last year. This turnaround is the result of an unfavorable exchange rate (1.0339 versus 1.2090) , a decrease in sales and the combination of the fair market value of forward exchange contracts which have had a positive effect of $22,000 in comparison to a positive effect of $401,000 for the same period in 2009.

"Our results continue to be negatively affected by sluggish sales and the increased value of our Canadian dollar." Explained Mr. Paulin Tardif, Chairman of the Board.

"Furthermore, under the credit agreements, the Company must comply with certain restrictive covenants. At the end of the second quarter of 2009, the Company was not in compliance with certain ratios. Subsequently the Company reclassified a long-term portion of the term debt, amounting to $3,040,000, to current liability, even though no accelerated repayment has been demanded by those lenders. As management does not foresee any significant improvement in sales before a few months, an action plan to improve profitability is underway.' added Mr. Tardif.

Bestar's management asked that the current union contract be re-opened in order to obtain changes in working conditions which would help the Company's short term profitability. On August 11, an agreement has been ratified by unionized employees, by a proportion of 72%. Non-union employees also consent to make concessions. "I take this opportunity to outline the efforts and dedication of our employees, who agreed to actively participate in the recovery efforts of Bestar." argued Mr. Tardif.

"This measure and several others are part of a vast restructuring plan which are necessary to cut costs and increase competitiveness. In addition, important changes have been made within the last few weeks, in the corporate structure of Bestar." stated Mr. Tardif.

On June 23rd, Bestar's board of directors announced the nomination of Mr. Daniel Mercier as President of the Company. Mr. Mercier has over twenty years of experience in upper level management in the industrial and aerospace fields, more particularly in operations and chain management supplies. In addition, during the Board meeting, held on August 17th, 2010, Mr. Roger Charbonneau CGA. was appointed Vice President, Finance to replace Mr. Eric Ménard who left the Company at the end of June 2010. Mr. Charbonneau held that position, for Bestar, from 2000 to 2004.

"These two new executives and other members of the management team will combine efforts to increase sales and reduce costs in order to become profitable once again. All resources will be deployed in order to insure the stability and viability of Bestar." concluded Mr. Tardif.

Interim Results Summary           
(Results in thousands of dollars, except earnings per share)                      
                       
                       
    Q1   Q2   Q3   Q4   Total  
                       
Revenue 2008 10,950   9,569   10,605   9,304   40,428  
  2009 11,523   8,565   8,702   8,381   37,171  
  2010 10,140   7,171           17,311  
                       
Net earnings (loss) 2008 (103 ) (277 ) (160 ) (1,074 ) (1,614 )
  2009 206   1   65   (337 ) (65 )
  2010 (113 ) (738 )         (851 )
                       
Earnings (loss) per common share 2008 (0.01 ) (0.02 ) (0.01 ) (0.08 ) (0.12 )
  2009 0.02   0.00   0.00   0.03   (0.01 )
  2010 (0.01 ) (0.06 )         (0.07 )
                       
Fully diluted earnings (loss) per common share 2008 (0.01 ) (0.02 ) (0.01 ) (0.08 ) (0.12 )
  2009 0.02   0.00   0.00   (0.03 ) (0.01 )
  2010 (0.01 ) (0.06 )         (0.07 )
                       
Total Assets 2008 26,390   28,751   28,512   28,937   28,937  
  2009 28,644   26,737   24,981   25,120   25,120  
  2010 24,246   24,037           24,037  
                       
Net debt (1) 2008 6,742   8,987   9,259   8,198   8,198  
  2009 8,696   7,955   6,568   7,836   7,836  
  2010 7,324   7,137           7,137  
                       
Weighted average of outstanding shares (in thousands) 2008 13,038   13,038   13,038   13,038   13,038  
  2009 13,038   13,038   13,038   13,038   13,038  
  2010 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 since 2006 added the fabrication of components which are both mainly distributed in the United States and Canada.

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

Bestar's common 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 CCN news file at www.marketwire.com, on SEDAR at www.sedar.com or on CNSX at www.cnsx.ca. The management report and comprehensive financial statements for the quarter ended June 30, 2010, as well as all other regulatory documents will be available, no later than August 27, 2010, through the SEDAR database and CNSX database and on Bestar website at www.bestar.ca.

Contact Information

  • Bestar Inc.
    Paulin Tardif
    Chairman of the Board
    819-583-1017