Bestar Inc.
CNSX : BES

Bestar Inc.

November 16, 2010 15:54 ET

Bestar Inc.: 3rd Quarter Results Ending September 30th, 2010

LAC-MÉGANTIC, QUÉBEC--(Marketwire - Nov. 16, 2010) - (CNSX:BES) - Sales for the third quarter ending September 30th, 2010 total $8,873,000, an increase of 2% compared to $8,702,000 for the same quarter last year. The net profit for this third quarter is $4,000 or $0.00 per share, compared to a net profit of $65,000 or $0.00 per share, for the third quarter of 2009. The combined effects of increased sales, improved productivity along with tighter controls on operating expenses have lead to a slight profit for this quarter, and that, despite non- recurrent costs of $80,000 directly related to the restructuring plan executed during this same quarter.

Sales for the first nine months of 2010 total $26,184,000, a decrease of 9% compared to $28,790,000 for the same period in 2009. The net loss for the first nine months totals $847,000 or $(0.06) per share compared to a net profit of $272,000 or $0.02 per share for the same period in 2009. These results are due to the unfavourable rate of exchange (1.0357 versus 1.1741), a marked decrease in sales of $2,606,000 and the negative combination of fair market value of forward exchange contracts and gains or losses on exchange of $607,000.

"The increased sales in the third quarter compared to the second quarter of 2010 were not sufficient to compensate for the weak sales in the first half of 2010. Even with a 28.5% increase in our Canadian sales, the weak rate of exchange along with a decrease in sales volumes of certain of our American clients has annihilated our sales efforts," explained Mr. Paulin Tardif, Chairman of the Board of Bestar.

"Our results do not permit us to respect certain ratios in our credit agreements with two of our lenders. We have had to reclassify a portion of the long-term debt to short term liabilities. A plan of action is being executed in order to correct this situation as quickly as possible," added Mr. Tardif.

Bestar's management had requested the anticipated opening of the union contract in order to obtain changes in working conditions, which would help contribute to the return of profitability in the short term. On last August 11th, 72% of Bestar's unionized employees approved the agreement concluded a few days earlier with their union executives. Non-unionized employees have also consented to similar concessions.

"These agreements and the recent increase in sales allow us to avoid the lay- offs previously announced at the beginning of the quarter, while 15 Bestar employees have taken advantage of a pre-retirement program which was offered to them" stated Mr. Tardif.

The Board of directors of Bestar, anxious to attract, retain and motivate certain key members of its personnel, in order to attain strategic objectives, has adopted a new compensation policy for certain members of senior management, of which one of the components is the granting of options from the Company. To put this new compensation plan into effect, a resolution was adopted to modify the actual stock option plan of the Company to increase the number of shares issuable for this plan. During a special meeting of the shareholders held today, Bestar's shareholders have approved the proposed modifications to the stock option purchase plan. Thus the maximum number of common shares issuable within this plan went from 1,085,250 to 2,060,250.

"On another note, Mr. Gilles Genest of the  Fonds de solidarité des travailleurs du Québec (FSTQ), after sharing with us his valuable advice and experience since December 2005, has left the board of directors. Mr. François Gagner, also from FSTQ, who has a significant track record in helping companies facing the challenges Bestar will tackle in the coming years, was appointed as director of Bestar today" announced Mr. Tardif.

"Every effort is being made to maximize potential sales to our current and future clients. The launching of a new marketing image, accompanied by a new rejuvenated logo along with the introduction of new product models for our major clients are just some examples of the measures which will be introduced in the fourth quarter," 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   8,873   -   26,184  
                       
Net earnings (loss) 2008 (103 ) (277 ) (160 ) (1,074 ) (1,614 )
  2009 206   1   65   (337 ) (65 )
  2010 (113 ) (738 ) 4   -   (847 )
                       
Earnings (loss) per common share 2008 (0.01 ) (0.02 ) (0.01 ) (0.08 ) (0.12 )
  2009 0.02   -   -   0.03   (0.01 )
  2010 (0.01 ) (0.06 ) 0.00   -   (0.07 )
                       
Fully diluted earnings (loss) per common share 2008 (0.01 ) (0.02 ) (0.01 ) (0.08 ) (0.12 )
  2009 0.02   -   -   (0.03 ) (0.01 )
  2010 (0.01 ) (0.06 ) 0.00   -   (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   23,745   -   23,745  
                       
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   6,609   -   6,609  
                       
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   -   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 September 30, 2010, as well as all other regulatory documents will be available, no later than November 29, 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