Bestar Inc.
TSX : BES

Bestar Inc.

March 12, 2009 11:48 ET

Bestar Inc.: Results for 2008

LAC-MEGANTIC, QUEBEC--(Marketwire - March 12, 2009) - Bestar Inc. (TSX:BES) - Sales for the year ended December 31, 2008, total CA$40,428,000 - down 6.9% from CA$43,433,000 for 2007.

Loss before taxes for 2008 is CA$2,347,000, compared to a CA$240,000 profit for 2007. For 2008, this result includes a loss of CA$1,655,000 on the fair market value of our currency forward contracts. A net loss of CA$1,614,000, (CA$0.12) per share was recorded in 2008, compared to a net profit of CA$250,000, CA$0.02 per share in 2007.

Sales for the fourth quarter of 2008 were CA$9,304,000, down 10.9% from CA$10,448,000 for the same period in 2007. A loss before taxes of CA$1,605,000 - including a CA$1,537,000 loss on the fair market value of our currency forward contracts - and a net loss of CA$1,074,000, (CA$0.08) per share were recorded in 2008, compared to a net profit of CA$50,000, CA$0.00 per share for the same quarter in 2007.

"2008 saw a global economic crisis - probably the worst the U.S.A. has seen in eighty years. For Bestar, as for most companies in all sectors, that has meant a drop in sales. However, the addition of new products and new clients during the year cushioned partially the fall" stated Bestar CEO Paulin Tardif.

"Declining sales, interest rates for financing new equipment, major investments in training our production employees, and significant fluctuations in the USD/CAD exchange rate all affected our results. However, the recent weakening of the Canadian dollar will give Bestar an edge throughout 2009," stated Tardif.

"We have taken every possible measure to get through the crisis. Results from recent quarters prevented us from complying with one of the ratios of a credit agreement signed with one of our borrowers. A new private investment by the Fonds de solidarite des travailleurs du Quebec (F.T.Q.) and a 6-month moratorium on loan capital on current debts from Investissement Quebec and Laurentian Bank of Canada allowed us to address the issue and normalize our financial situation in order to face this difficult year," announced Tardif.

"Our management team has been adjusted in response to the current economic situation. It has been reorganized to position Bestar within a market that demands ever-increasing added value and a just-in-time approach.

Although, given the drop in sales, we had to make some thirty temporary layoffs, and our employees agreed to a reduction in work hours," explained Tardif.

"We are continuing our efforts to standardize our raw materials and optimize our production capacity, particularly with the new equipment we have been using since last fall.

"Already, in early 2009, sales to one of our biggest clients have slightly increased despite the gloomy economy. We are also still in talks with some partners to manufacture their products and to form associations because we are convinced that this is the best solution to the current economic crisis," added Tardif.

"The growth potential for the coming months is obviously quite limited. However, thanks to the support or our partners and improvements made within the company during the last year, Bestar is in a position to face the current crisis and seize every opportunity that arises as the economy picks up," stated Tardif in closing.



Results Summary

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(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 9,569 10,605 9,304 40,428

Net earnings (loss) 2006 3 (599) (498) 127 (967)
2007 104 79 17 50 250
2008 (103) (277) (160) (1,074) (1,614)

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) (0.02) (0.01) (0.08) (0.12)

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) (0.02) (0.01) (0.08) (0.12)

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 28,751 28,512 28,937 28,937

Total Liabilities 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 15,361 15,282 16,781 16,781

Weighted average of
outstanding shares
(in thousands) 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 13,038 13,038 13,038 13,038
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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-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 MARKETWIRE news file at www.marketwire.com or on SEDAR at www.sedar.com . The management report and comprehensive financial statements for the fiscal year ended December 31, 2008, as well as all other regulatory documents will be available, no later than March 31, 2009, 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