Beaumont Select Corporations Inc. Announces Second Quarter Financial Results



    CALGARY, Feb. 27 /CNW/ - Beaumont Select Corporations Inc. ("Beaumont")
reported today its financial results for the fiscal second quarter ended
December 31, 2008.
    The second quarter proved difficult for Beaumont, as the Investment
Division suffered substantial realized and unrealized losses. Beaumont's
portfolio size has been reduced to $4.965 million on December 31, 2008 from
$18.2 million as of September 30, 2008. Investments in the energy sector
suffered the most, as oil prices fell from their summer highs, dragging down
energy stocks even though many investments saw record cash flows.

    FINANCIAL HIGHLIGHTS

    Beaumont's financial results for the six and three months ended December
31, 2008 compared to the same period in the previous fiscal year included the
following:

    
    -   Investment losses materially reduced the size of Beaumont's
        marketable securities portfolio with the following impacts:

                                      Dec 31, 2008    Jun 30, 2008    Change
                                      ------------    ------------    ------
        Portfolio value                 $    4,965      $   29,937     -83.4%
        Margin Loan                          1,704          16,695     -89.8%
        Equity in Portfolio                  3,261          13,242     -75.4%

    -   Sales increased by 9.9% in the first six months compared to the first
        half of previous fiscal year and by 6.9% in the second quarter
        compared to Q2 2007-8.
    -   Operating margin for the first six months moved towards historical
        levels increasing to 7.3% as direct expenses declined slightly in the
        quarter, coupled with the sales increase. The second quarter
        operating margin was 13.5% compared to 5.4% for Q2 2007-8.
    -   Operating income for the first six months increased by $983 thousand
        to an operating loss of $335 thousand compared to the first six
        months of 2008-9 (or for the second quarter only, a $788 thousand
        increase in operating income to $138 thousand) due to lower operating
        expenses and an expanded operating margin.
    -   The marketable securities division realized a total investment loss
        of $9.64 million for the first six months ($7.47 million during the
        second quarter). The investment loss for the first six months was
        made up mostly from $5.24 million of realized losses ($5.96 million
        in the second quarter) and $4.80 million in unrealized losses ($1.67
        million in the second quarter) as the market continued to fall. This
        was slightly offset by $649 thousand of investment income, before
        margin interest of $243 thousand during the first six months (or in
        the second quarter by $215 thousand in investment income, before
        margin interest of $53 thousand).
    -   Net loss after income taxes for the first six months was $8.68
        million or $0.51 per share due to the investment losses, compared to
        a net loss of $4.51 million or $0.26 per share for the same period of
        2007-8. For the second quarter of 2008-9 the net loss after income
        taxes was $6.07 million or $0.37 per share for the same reason,
        compared to a net loss of $609 thousand or $0.04 per share in the
        second quarter of 2007-8.
    -   The working capital ratio moved down to 1.24:1 in second quarter of
        2008-9 from 1.55:1 at the beginning of the fiscal year.
    -   During the second quarter of 2008-9 Beaumont decreased its
        indebtedness including reducing long term debt by $390 thousand,
        reducing bank indebtedness by $122 thousand, repaying an outstanding
        $250 thousand advance from a shareholder bearing 13% interest. The
        repayments were from cash resources supplemented with proceeds from
        asset sales by the Bakery Unit and reducing its margin loans both in
        amount and as a percentage of the total portfolio. The margin loan
        balance declined to $1.7 million from $7.88 million at the beginning
        of the quarter and $16.70 million outstanding at June 30th, 2008. The
        outstanding margin loan balance at December 30, 2008 represented 34%
        of the portfolio's market value, a reduction compared to 56% of the
        portfolio's market value as of June 30, 2008.
    -   The Calgary building owned by the Realty division was sold, and
        closing was completed subsequent to the second quarter. Beaumont
        realized $3.78 million on the sale, net of expenses, and paid off
        long-term debt of $3.54 million during February 2009.


    Financial Highlights
    (in thousands of dollars except share and per share information)

                              Three Months Ended         Six Months Ended
    -------------------------------------------------------------------------
                            31-Dec-08    31-Dec-07    31-Dec-08    31-Dec-07
    -------------------------------------------------------------------------

    Net Sales                  $5,480       $5,128      $10,432       $9,491
    Operating Income (Loss)       138         (650)        (335)      (1,318)
    Net Income (Loss)          (6,067)        (609)      (8,623)      (4,506)
    Net Income (Loss) per
     share - basic              (0.36)       (0.03)       (0.51)       (0.26)
    Net Income (Loss) per
     share - diluted            (0.36)       (0.03)       (0.51)       (0.26)
    Funds from (required by)
     Operations                   556         (268)         483         (587)
    Funds from operations
     per share - basic           0.03        (0.02)        0.03        (0.03)
    Funds from operations
     per share - diluted         0.03        (0.02)        0.03        (0.03)
    EBITDA                     (6,908)         575       (9,371)      (3,084)
    EBITDA per share - basic    (0.41)        0.03        (0.56)       (0.18)
    EBITDA per share -
     diluted                    (0.41)        0.03        (0.56)       (0.18)

                                    as at                      as at
                           --------------------------------------------------
                            31-Dec-08    31-Dec-07    31-Dec-08    31-Dec-07
                           --------------------------------------------------
    Total Assets               28,682       53,805       28,682       53,805
    Total Long-Term Debt        5,812        6,592        5,812        6,592
    Shareholder's Equity       15,840       21,779       15,840       21,779
    Shares outstanding     16,857,097   16,820,597   16,857,097   16,820,597

    ------------------------------------------------------------------------
    

    ADDITIONAL INFORMATION

    The complete Second Quarter Report, including the unaudited financial
statements and Management's Discussion and Analysis, together with other
information on Beaumont, is available at www.sedar.com.
    Beaumont Select Corporations Inc. is a management and investment
corporation, which has investments in a portfolio of marketable securities and
the food processing and real estate industries. Beaumont charges fees and
interest on its investments to its subsidiary companies.

    
    The TSX Venture Exchange Does Not Accept Responsibility for the Adequacy
    or Accuracy of This Release.
    





For further information:

For further information: Winston Ho Fatt, Chairman and Chief Executive
Officer, Telephone: (403) 250-8757, Fax: (403) 250-8709, Email:
whofatt@beaumontselect.com

Organization Profile

BEAUMONT SELECT CORPORATIONS INC.

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