Bestar back in black as 4Q revenues dip 3%
By Michael J. Knell -- Furniture Today, March 5, 2006
Lac-Megantic, Quebec — Growing Asian competition, a stronger Canadian dollar and a delay in introducting new product dragged down sales for ready-to-assemble specialist Bestar in the 2005 fourth quarter and year.
Gross revenues in the fourth quarter came to C$9.4 million, down 3% from the comparable period a year earlier. For the year, gross revenues of C$38.7 million were down 11.6%.
But Bestar bounced back to a profit, earning C$319,000, or 2 cents per share, in the fourth quarter, compared with a loss of C$894,000, or 7 cents per share, in the 2004 quarter. For 2005, earnings were C$174,000, or 1 cent per share, compared with a loss of C$442,000, or 4 cents per share, the previous year.
CEO Jacques Hétu said, "Excluding C$1.39 million in restructuring costs, 2005 shows an improvement of C$905,000 in operating results despite a decrease in sales of C$5 million."
Hétu noted that investment income added C$260,000 to earnings in 2005 and C$1.27 million in 2004.
Earnings in the fourth quarter were cut by about C$400,000 due to adjustments in the premiums paid to Quebec's workers' compensation and safety agency, and the reversal of volume rebate allowances due to lower sales from some customers.
"On the other hand, 2004 fourth-quarter results were impacted by restructuring costs in the amount of C$944,000," Hétu said.
"2005 results clearly demonstrate the effectiveness of ... the the restructuring (and) the soundness of the decisions that were made while reviewing our cost structure," he said. "This systematic process of continuing improvement will allow the company to constantly adapt to the reality of the market."
Hétu said this year remains challenging, with continued pressure from emerging countries and the strength of the Canadian dollar.
"We will start the first quarter of 2006 with a significant decrease in sales with a key customer as Asian products will temporarily take the floor spaces we traditionally occupy. We anticipate regaining this space at the end of the second quarter with products currently under development," he said.
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Bestar back in black as 4Q revenues dip 3%
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