Bestar revenues drop 13.7% in second quarter

Company is optimistic about second-half prospects

Staff Staff -- Furniture Today, August 25, 2008

LAC MEGANTIC, Quebec - Ready -to-assemble furniture producer and components supplier Bestar Inc. reported a 13.7% drop in gross revenues in the second quarter ended June 30, with a net loss of C$277,000 or 2 cents per share.

"We actually had more customers carrying more products than in the comparable 2007 period," said President and CEO Paulin Tardif. "But with the current economic situation, these increases were not sufficient to offset the decrease in sales we experienced with many of our customers.

"The increased strength of the Canadian dollar also had a negative impact of more than C$400,000 on our U.S. sales compared to last year," he said.

Gross revenue in the quarter came to C$9.6 million, compared with C$11.1 million in last year's second quarter. The net loss of C$277,000 reversed a net profit of $79,000 or one cent per share, in last year's period.

For the first six months, gross revenues totaled C$20.5 million, a drop of 8.3% from the C$22.4 million recorded in last year's first half. The six-month net loss stood at C$380,000, compared with a net profit of C$183,000 in the first half of 2007.

Tardif described the latest results as "less than satisfactory," adding that the company is optimistic about its prospects for the second half.

"The installation of recently purchased new equipment will be finalized around the end of September. This will enable us to respond more efficiently to the industry's demands, thus allowing us to seize new opportunities that will help increase our sales, whether with new products or new clients," he said.

Bestar continues to invest to diversify its product line, Tardif continued. "We strongly believe we have chosen the best avenues for continued success, which will enable us to maintain our place in both the furniture and components industries.

In recent years, Bestar has specialized in RTA office furniture, sold mainly in the United States and Canada. In 2006, the company began making furniture components.