LAC-MEGANTIC, QUEBEC — (MARKET WIRE)
Bestar Inc. (TSX:BES) – Gross revenue for the quarter ended March 31, 2013 totalled CA$8,535,000, a decrease of 14.2% compared with CA$9,948,000 for the same period last year. “This situation relates to a substantial decrease in sales of one of our major accounts.” comments Mr. Jacques Hetu, Bestar’s Chief Executive Officer.
“As previously mentioned in our annual report, this major account has been using floor space, usually reserved for Bestar furniture, to test different products.
Contrarily to what we expected at the time of the annual report writing, this situation may last beyond the end of the second quarter, even though, upon the client’s request, new Bestar products will be submitted. We also remain present on the client’s web site.” adds Mr. Hetu.
Earnings before income taxes on benefits reaches CA$4,000 for the first quarter of 2013, compared with a loss before income taxes on benefits of CA$70,000 for the same period in 2012. “The reversal of CA$440,000 in restructuring costs related to severance benefits had a significant impact on 2013 first quarter results. The settlement of a grievance with our union members enabled us to proceed with this reversal.” Explains Mr. Hetu.
Concerning the net earnings for the first quarter, it is in the amount of CA$3,000, or CA$0.00 per share, compared with the net loss of CA$52,000, or CA$(0.00) per share, for the same quarter in 2012.
“The first quarter of 2013 confirmed the importance of several challenges which we continue to face. The increasing presence of imports from emerging countries and the strength in the Canadian dollar versus our US counterparts continue to put pressure on the entire furniture industry. This situation will weaken any company that does not react promptly.” highlights Mr. Hetu.
“In addition to the significant improvements brought about by the restructuring plan over the last two years, Bestar has recently turned its focus to the fabrication of components for other large manufacturers. We hope to become an important player in this new venture as well as maintaining our presence in our traditional markets. Moreover, in late 2012, the Bestar Board of Directors formed a development committee to study merger, acquisition, strategic alliance, and/or subcontracting opportunities that could help us diversify our product line and develop new niche markets.” continues Bestar’s CEO.
Finally, two weeks following the end of the first quarter, an explosion and fire caused considerable damage to one of our major suppliers. “A plan for alternative sources is presently underway, but temporary raw material shortages are a possibility. The situation is currently changing by the hour as we issue this press release. We are analyzing every possible solution. Our main objective is to continue to serve our clients. We also expect a cost increase in particle board and this will likely have an impact on our next quarter results.” concludes Mr. Hetu.
Interim Results Summary
(Results in thousands of dollars, except earnings per share)
Q1 Q2 Q3 Q4 Total
Revenue 2004 11,403 9,895 12,760 9,670 43,728
2012 9,948 9,055 10,277 9,392 38,672
2013 8,535 – – – –
Net earnings (loss)(i) 2004 (246) (1,419) 1,384 (860) (1,141)
2012 (52) 234 (164) 372 390
2013 3 – – – –
Earnings (loss) per
common share(i) 2004 (0.02) (0.12) 0.11 (0.07) (0.09)
2012 (0.00) 0.02 (0.01) 0.03 0.03
2013 0.00 – – – –
Fully diluted
earnings (loss) per
common share(i) 2004 (0.02) (0.12) 0.11 (0.07) (0.09)
2012 (0.00) 0.02 (0.01) 0.03 0.03
2013 0.00 – – – –
Total Assets 2004 30,507 29,987 29,515 28,228 28,228
2012 28,215 28,335 28,502 27,578 27,578
2013 25,916 – – – –
Total Liabilities 2004 17,506 16,479 14,774 14,256 14,256
2012 14,281 14,153 14,470 13,160 13,160
2013 11,481 – – – –
Weighted average of
outstanding shares
(in thousands) 2004 11,088 11,738 13,038 13,038 12,231
2012 13,038 13,038 13,038 13,038 13,038
2013 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 no longer
providing services to the entity. In this situation, the
compensation cost such an award should be recognized on the grant
date and not over the vesting period.
In the past year, 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. Th Company decided to anticipate these EIC recommendations
and retroactively applied them, which resulted in a decrease of the
net loss for the three-month periods ended March 31, 2013 and 2012 by
an amount of $55,000 each. Furthermore, retained earnings as at March
31, 2013 and December 31, 2012 were decraesed by $429,000 and
$484,000 respectively ($699,000 as at January 1, 2012), and in
counterpart the March 31, 2013 and December 31, 2012 contributed
surplus was increased by $429,000 and $484,000 respectively ($699,000
as at January 1, 2012).
Corporate Profile
Founded in 1948, Bestar Inc. designs, manufactures, and distributes a vast array of furniture and ready-to-assemble furnishings that meet customer needs in terms of quality, design, and functionality.
The company was incorporated in 1986 and operates from its plant in Lac-Megantic.
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 and uncertainties and the best possible evaluation of future events by management, and are subject to certain risk factors such as exchange rates, the growth of emerging countries competitors, and raw materials and shipping cost fluctuations.
Shareholder Information
Shareholders may find this press release under the CCN news file at www.cdn-news.com or on SEDAR at www.sedar.com . The management report and comprehensive financial statements for the quarter ended March 31, 2013, as well as all other regulatory documents will be available, no later than May 15, 2013, through the SEDAR database at www.sedar.com and on our website at www.bestar.ca.
