Bestar Inc.
CNSX : BES

Bestar Inc.

August 15, 2011 13:38 ET

Bestar Inc.: Results for the Second Quarter Ended June 30, 2011

LAC-MÉGANTIC, QUÉBEC--(Marketwire - Aug. 15, 2011) - Bestar Inc. (CNSX:BES) - Gross revenues for the second quarter ended June 30, 2011 amount to $7,823,532, an increase of 9.1% compared to $7,171,200 reported for the same period last year. Sales in Canada rose by 35.5%, driven by a seasonal introduction of a new promising collection with a major customer. However, U.S. sales declined 14.9%. One third of this decline is attributable to the falling U.S. dollar.

Net loss for this quarter amount to $130,243 or ($0.01) per share, compared to a net loss of $736,941 or ($0.06) per share for the same quarter last year, which was particularly affected by the abrupt end of a promotion with a major customer. The progressive implementation of corrective measures introduced during the third quarter of 2010, accompanied by a slight increase in sales contributed to improved results for this quarter.

Cash Flow Situation

Operating activities generated negative cash flow of $165,918 for the second quarter of 2011. The finished goods inventory increases required during the summer production slowdown has eroded some of our liquidity.

Investing activities generated negative cash flow of $3,108. Virtually no capital expenditure was made during this period.

Financing activities generated positive cash flow of $568,462 in the second quarter, due to the increase of the operating line of credit that was used to finance working capital. The company also benefited, during the quarter, a moratorium on 100% of principal payments due on nearly all of its term debt. The moratorium runs from March 15 to September 15, 2011. (See Note 10 to the 2010 Annual Financial Statements.).

Outlook

"The strength of the Canadian dollar coupled with a weak North American economic recovery in our business segment will limit growth perspective for the next few months. Bestar's management continue to execute its action plan for the recovery of its financial position. Given that no significant improvement in sales is expected for several months, every effort, including the search for strategic partners, will continue to be made to maintain and improve the current situation" explains Mr. Daniel Mercier, President of Bestar.

Although our results are still below expectations, the restructuring of our operations progressively undertaken during 2010 allows us to publish, for a fourth consecutive quarter, better results than the previous quarters" concluded Mr. Mercier.

IFRS

The unaudited interim financial statements for the period ended June 30, 2011 are Bestar Inc.'s first financial statements established according to the International Financing Reporting Standards (IFRS). The interim financial statements are in accordance with the Interim Financial Reporting IAS 34 of the International Accounting Standards. Since it was the first time the Company's financial statements were presented according to the IFRS, the IFRS 1 norm, First-time Adoption of IFRS, was applied.

Previously, the Company's financial statements were prepared in accordance with Canadian generally accepted auditing standards (Canadian GAAP) applicable before the transition to the IFRS. Canadian GAAP differs from the IFRS in some respects. During the preparation of the interim financial statements following the IFRS, management did not modify any reporting or valuation methods previously used in accordance to Canadian GAAP that were applicable before the transition to the IFRS.

Interim Results Summary

(Results in thousands of dollars, except earnings per share)
Q1 Q2 Q3 Q4 Total
Revenue 2009 11,523 8,565 8,702 8,381 37,171
2010 10,140 7,171 8,874 7,554 33,739
2011 9,070 7,824 - - 16,894
Net earnings (loss) 2009 206 1 65 (337 ) (65 )
2010 (113 ) (737 ) 3 (2 ) (849 )
2011 32 (130 ) - - (98 )
Earnings (loss) per common share 2009 0.02 0.00 0.00 0.00 (0.01 )
2010 (0.01 ) (0.06 ) 0.00 0.00 (0.07 )
2011 0.00 (0.01 ) (0.01 )
Fully diluted earnings (loss) per common share 2009 0.02 0.00 0.00 0.00 (0.01 )
2010 (0.01 ) (0.06 ) 0.00 0.00 (0.07 )
2011 0.00 (0.01 ) (0.01 )
Total Assets 2009 28,595 26,690 24,682 25,120 25,120
2010 23,883 23,387 23,100 23,934 23,934
2011 24,406 24,592 - - -
Net debt (1) 2009 9,424 9,179 6,596 8,032 8,032
2010 6,848 7,515 6,605 6,438 6,438
2011 6,352 6,568 - - -
Weighted average of outstanding shares (in thousands) 2009 13,038 13,038 13,038 13,038 13,038
2010 13,038 13,038 13,038 13,038 13,038
2011 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 production 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, Quebec, 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, 2011, as well as all other regulatory documents will be available, no later than August 29, 2011, through the SEDAR database and CNSX.

Contact Information

  • Daniel Mercier
    President
    Bestar Inc.
    (819) 583-1017