Bestar reports 9.9% sales dip but smaller loss in 4Q

Revenues decline 8.1% for year

Michael Knell -- Furniture Today, March 10, 2010

LAC MEGANTIC, Quebec — Ready to assemble furniture and component manufacturer Bestar said its sales were down 9.9% in the fourth quarter, although there were some improvements in overall financial performance.

Net revenues for the quarter were C$8.4 million, and the net loss was C$337,000 or three Canadian cents per share — bettering the loss of C$1.1 million or eight cents per share recorded for the fourth quarter of the prior year.

The company said the combination of current exchange rates and the market value of its exchange contracts contributed C$53,000 to its bottom line in 2009. In 2008, they had a negative effect of C$1 million.

 

For the full year, revenues were C$37.2 million, off 8.1% from the C$40.4 million reported for 2008. The net loss for the year was C$65,000 or one cent per share, compared with a net loss of C$1.6 million or 12 cents per share in 2008.

The upturn in the value of the Canadian dollar over the year contributed C$774,000 to the company's earning in 2009. In 2008, it had a negative impact on earnings of C$1 million.

Bestar said its sales were severely affected by the economic crisis in the United States, which accounted for 54% of company shipments in 2009. A successful first quarter promotion by one of its retail partners and increasing component sales weren't enough to compensate for decreasing RTA furniture sales to U.S. retailers throughout the rest of the year.

"In addition, the recession provoked an important decrease in sales in the component market during the last half of 2009," Bestar said in a statement.

However, the company said its financial performance was aided in 2009 by factors including a reduction in fixed expenses and inventories, increased productivity and the continuing effort to standardize and improve raw materials.

President and CEO Paulin Tardiff said the company used the unstable climate to rethink its product lines and marketing strategies. In December, it delivered a new product to major client "and the results so far are encouraging," he said. Bestar has also developed a product line for the commercial market, which it will roll out this year.

"In 2010 we continue to focus our management based on mobilization, responsibility, flexibility and team work. We continue to strive for improvements in productivity in an effort to increase profitability. We remain open to opportunities which could favor our development and results," Tardiff said.

He said the emerging economy recovery and the launch of new product should generate increased sales for 2010.

"However, we are still susceptible to the fluctuating markets, as the recovery in our sector isn't predicted until the end of 2010," he said, adding, "We still need to improve our performance to survive against the global competition.