Bestar Inc.
TSX : BES

Bestar Inc.

May 08, 2008 11:45 ET

Bestar Continues its Development Strategy

LAC-MEGANTIC, QUEBEC--(Marketwire - May 8, 2008) - Gross revenue for the first quarter ending March 31st, 2008 totalled CA$10,950,000 a decrease of 2.9% compared with CA$11,279,000 for the same period last year.

"Several factors explain this slight decrease: The increased strength of the Canadian dollar versus our US counterpart, has had a negative effect of CA$850,000 on sales compared to last year; the US recession has also influenced sales of several of our clients; as well as a decrease in sales of one of our major clients due to the transition of a new product that will be introduced during our second quarter. However, on a positive note, we have seized many opportunities in the last year to compensate and almost totally make up for the sales decrease" explained Mr. Paulin Tardif, Bestar's president and CEO.

A loss before taxes of CA$149,000 was recorded for the first quarter of 2008 compared to a profit before taxes of CA$144,000 for the same three months of 2007. The net loss for the first quarter of 2008 is CA$103,000. or (CA$0.01) per share compared to a net profit of CA$104,000 or CA$0.01 per share for the same period in 2007.

"The slight sales decrease along with the negative effect of Foreign exchange gains compared to Forward exchange contract losses explain the 2008 first quarter results" commented M. Tardif.

"There is a considerable effervescence in the market and discussions are underway with several potential clients. It is clear that Bestar's way of doing business generates more and more interest for clients and partners in our traditional RTA furniture market as well as in the components market. We have recently signed an agreement to be appointed the Authorized Distributor to the California Closet Company Inc. franchisees for the Northeast of North America. We are currently negotiating to take over an important part of the fabrication of yet another client's production. Other associations will be reviewed in the months to come which should have a direct and positive impact on our sales especially during the last 6 months of 2008" added Mr. Tardif.

"At the same time we continue the integration of new production equipment which should be completed by the end of the 3rd quarter. This new equipment, better adapted to the present market requirements, will enable us to seize opportunities we were unable to realize in 2007. We are currently testing the first new machinery installed. Important gains in productivity and flexibility, which will increase progressively, particularly in the last half of 2008 are evident. In addition, our main supplier of particle board has returned to 100% production capacity during this first quarter. We will now be able to benefit by optimum sizes of board for our production requirements" continued Mr. Tardif.

"We know that 2008 will not be an easy year but we feel it will bring opportunities. Even though our results for the first quarter are a disappointment , we remain determined to offer innovative business solutions to respond to our customers and market requirements. We are confident that this year and the years to come will bring us much success" concluded Mr. Tardif.

Results Summary



(Results in thousands of dollars, except earnings per share)

----------------------------------------------------------------
Q1 Q2 Q3 Q4 Total
----------------------------------------------------------------
Revenue 2006 8,535 6,619 8,338 9,817 33,309
2007 11,279 11,093 10,613 10,448 43,433
2008 10,950 - - - 10,950

Net
earnings
(loss) 2006 3 (599) (498) 127 (967)
2007 104 79 17 50 250
2008 (103) - - - (103)

Earnings
(loss)
per common
share 2006 0.00 (0.05) (0.04) 0.01 (0.07)
2007 0.01 0.01 0.00 0.00 0.02
2008 (0.01) - - - -

Fully
diluted
earnings
(loss) per
common
share 2006 0.00 (0.05) (0.04) 0.01 (0.07)
2007 0.01 0.01 0.00 0.00 0.02
2008 (0.01) - - - -

Total
Assets 2006 25,916 24,076 24,640 24,409 24,409
2007 25,671 25,783 25,337 25,874 25,874
2008 26,390 - - - -

Total
Liabil-
ities 2006 11,481 10,226 11,274 10,902 10,902
2007 12,123 12,089 11,586 12,104 12,104
2008 12,723 - - - -

Weighted
average
of out-
standing
shares (in
thou-
saands) 2006 13,038 13,038 13,038 13,038 13,038
2007 13,038 13,038 13,038 13,038 13,038
2008 13,038 - - - -
----------------------------------------------------------------


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 was incorporated in 1986 and operates from its plant in Lac-Megantic, Quebec, Canada.

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 or on SEDAR at www.sedar.com . The management report and comprehensive financial statements for the quarter ended Marsh 31, 2007 , as well as all other regulatory documents will be available, no later than May 15, 2008, through the SEDAR database at www.sedar.com and on our website at www.bestar.ca.

Contact Information

  • Bestar Inc.
    Paulin Tardif - Chairman of the Board
    President and Chief Executive Officer
    819-583-1017