Bestar Inc.

Bestar Inc.

November 13, 2007 10:48 ET

Bestar: Increased Sales for a Forth Quarter in a Row

LAC-MEGANTIC, QUEBEC--(Marketwire - Nov. 13, 2007) - Bestar Inc. (TSX:BES) -

Gross revenue for the quarter ending September 30, 2007 totaled CA$10,613,000, an increase of 27.3% compared with CA$8,338,000 for the same period last year. During the first nine months of 2007, gross revenue reached CA$32,927,000 compared to CA$23,491,000 for the same period in 2006, an increase of 40.2%

"As stated in the press releases from previous quarters, this increase is due mostly to the success of our diversification into the components market as well as the success of new furniture collections in our traditional market," comments Bestar's President and Chief Executive Officer, Mr. Paulin Tardif.

For the third quarter ending September 30, 2007 earnings before income taxes is CA$21,000 compared to a loss before income taxes of CA$725,000 for the same period last year. For the first nine months of 2007, earnings before investment income and income taxes is CA$230,000 while there was a loss before investment income and income taxes of CA$1,595,000 for the same period in 2006.

A net profit of CA$17,000 or CA$ 0.00 per share, for the third quarter of 2007, compared to a net loss of CA$498,000 or CA$(0.04) per share for the same quarter in 2006. Net profit for the nine months ending September 30, 2007 is CA$200,000 or CA$0.02 per share, compared to a net loss of CA$1,094,000 or CA$(0.08) per share for the same nine months of 2006.

"In the third quarter of 2007, the increase of the fair value of derivative financial instruments counterbalanced the impact on our results of the raising value of the Canadian dollar compared to the US dollar. A decrease in sales from one of our major accounts combined with the difficulties experienced in acquiring adequate supplies due to the explosion and fire at our main supplier of particle board and melamine had an adverse affect on results during the same quarter of 2006," Mr. Tardif explains.

The increase in sales illustrates Bestar's capacity to realize its development strategy while the results show the necessity to increase productivity thus increasing our competitiveness. This is essential especially in view of the significant and constant gains of our Canadian dollar versus its US counterpart," Mr. Tardif continues.

"We are happy to announce that a new agreement, in effect until the end of 2010 has recently been concluded with our unionized employees. Many changes were brought to this new agreement, enabling more flexibility which will help to increase productivity," highlights Mr. Tardif.

"Moreover, a study, nearing completion, for the modernization of certain production equipment is currently underway . This investment would permit us to reduce production costs and increase our competitiveness. We hope to confirm the implementation of this project within the next few weeks," declares Mr. Tardif.

"The new agreement with our unionized employees, as well as the realization of the investment project currently under review are two main ingredients to increase competitiveness and assure the viability of the Company," concludes Mr. Tardif.

Interim Results Summary

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

Q1 Q2 Q3 Q4 Total

Revenue 2005 9,948 9,055 10,277 9,392 38,672
2006 8,535 6,619 8,338 9,817 33,309
2007 11,221 11,093 10,613 - 32,927

Net earnings (loss)(i) 2005 (52) 235 (163) 369 389
2006 3 (599) (498) 127 (967)
2007 104 79 17 - 200

Earnings (loss) per
common share(i) 2005 (0.00) 0.02 (0.01) 0.03 0.03
2006 0.00 (0.05) (0.04) 0.01 (0.07)
2007 0.01 0.01 0.00 - -

Fully diluted earnings
(loss) per common share(i) 2005 (0.00) 0.02 (0.01) 0.03 0.03
2006 0.00 (0.05) (0.04) 0.01 (0.07)
2007 0.01 0.01 0.00 - -

Total Assets 2005 28,215 28,335 28,502 27,578 27,578
2006 25,916 24,076 24,640 24,409 24,409
2007 25,671 25,783 25,337 - -

Total Liabilities 2005 14,281 14,153 14,470 13,160 13,160
2006 11,481 10,226 11,274 10,902 10,902
2007 12,123 12,089 11,586 - -

Weighted average of
outstanding shares
(in thousands) 2005 13,038 13,038 13,038 13,038 13,038
2006 13,038 13,038 13,038 13,038 13,038
2007 13,038 13,038 13,038 - -

(i)The Emerging Issues Committee (EIC) of Canadian Institute of Chartered
Accountants has issued a draft entitled "Stock-based Compensation for
retirement-Eligible Employees". These recommendations specify how to
recognize a stock-based award to an employee who can continue vesting in
an award without continuing to provide services to the company. In this
situation, the compensation cost of such an award should be recognized
on the grant date and not over the vesting period.

In the past years, the Company granted certain employees options with
modalities allowing them to continue vesting in these options in
situations where they no longer have to render services to the Company.
The Company decided to anticipate these EIC recommendations and
retroactively applied them, which resulted in a decrease of the net loss
for fiscal year ended December 31, 2006 by an amount of $215,128
(increase of net earnings of $215,128 in 2005). Furthermore, retained
earnings as at December 31, 2006 and 2005 were decreased by $268,872 and
$484,000 respectively ($699,128 as at January 1, 2005), and in
counterpart the December 31, 2006 and 2005 contributed surplus was
increased by $268,872 and $484,000 respectively ($699,128 as at January
1, 2005).

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 Marketwire news file at or on SEDAR at . The management report and comprehensive financial statements for the quarter ended September 30, 2007 , as well as all other regulatory documents will be available, no later than November 15, 2007, through the SEDAR database at and on our website at

Contact Information

  • Bestar Inc.
    Paulin Tardif
    Chairman of the Board
    President and Chief Executive Officer