BEK.B Becker Milk Co Ltd

The Becker Milk Company Limited (the “Company”) (TSX-BEK.B) is pleased to report the results for the nine months ended January 31, 2023.

HIGHLIGHTS

• Total revenues for the nine months ended January 31, 2023 were $2,162,713 compared to $2,144,664 for the same period in 2022;
• Net loss for the first nine months fiscal 2023 was $1.02 per share, compared to net income of $0.30 per share in the first nine months fiscal 2022.
• The non-GAAP financial measure Net Operating Income for the first nine months fiscal 2023 was $1,767,529 compared to $1,707,230 in the first nine months fiscal 2022.

FINANCIAL HIGHLIGHTS

Revenues and net income

Total revenues for the nine months ended January 31, 2023 improved $18,049 compared to the nine months ended January 31, 2022, a result of higher finance income, partially offset by a decline in property revenue.

	Nine months ended
	January 31
	2023	2022
Property revenue	$2,056,499	$2,114,767
Finance income	106,214	29,897
Total revenues	$2,162,713	$2,144,664
Net income (loss) attributable to common and special shareholders	($1,843,521)	$547,923
Average common and special shares outstanding	1,808,360	1,808,360
Income (loss) per share	($1.02)	$0.30

Components of the $2,391,444 decrease in net income for the nine months ended January 31, 2023 compared to the nine months ended January 31, 2022 are:

Changes in Net Income - Nine months ended January 31, 2023 compared to nine months ended January 31, 2022
Unfavourable change in fair value adjustment	($2,935,158)
Increase in current taxes	(103,349)
Increase in strategic review expenses	(40,641)
Increase in loss on disposal	(10,494)
Increase in net operating income	60,299
Decrease in administrative expenses	67,296
Increase in finance income	76,317
Increase in recovery of deferred income taxes	494,286
Decrease in net income	($2,391,444)

Non-GAAP financial measures

Net operating income

The non-GAAP financial measure Net Operating Income for the nine months ended January 31, 2023 was $1,767,529, a $60,299 increase compared with the previous year. Reduced revenue was more than offset by a reduction in operating expenses. Property disposals and the impact of settlement of rent negotiations with the Company’s largest tenant were the principal reasons for the revenue reduction.

	Nine months ended
	January 31
	2023	2022
Property revenue	$2,056,499	$2,114,767
Property operating expenses	(288,970)	(407,537)
Net operating income	$1,767,529	$1,707,230

Funds from operations and adjusted funds from operations

For the nine months ended January 31, 2023 the Company recorded funds from operations of $675,915 ($0.31 per share) compared to $535,819 ($0.30 per share) in 2022. Adjusted funds from operations were $561,398 ($0.31 per share) in the nine months ended January 31, 2023 compared to $535,819 ($0.30 per share) in 2022.

	Nine months ended
	January 31
	2023	2022
Net income (loss)	($1,843,521)	$547,923
Add (deduct) items not affecting cash:
Unfavourable fair value adjustment to investment properties	2,960,158	25,000
Loss (gain) on sale of investment properties	15,077	4,583
Tax on gains from sale of property	55,239	9,065
Deferred income taxes	(511,038)	(16,752)
Expenses related to strategic review	40,641	0
Sustaining capital expenditures	(155,158)	(34,000)
Adjusted funds from operations	$561,398	$535,819
Adjusted funds from operations per share	$0.31	$0.30

STRATEGIC REVIEW

The Board of Directors continually evaluates strategic directions for the Company and has engaged in discussions with potential acquirers. While the Company has engaged in some discussions within the last year, none of those discussions are active at this time. The Board has followed a programme of divesting less desirable sites, which has resulted in the sale of 30 investment properties over the past 8 years. The Company continues to review its strategic alternatives and will update the market as appropriate, and as required.

DIVIDEND

The Directors of the Company have declared the regular semi-annual dividend on Class B Special and Common Shares of 40 cents per share. This dividend of 40 cents will be paid to those shareholders of record as of March 22, 2023 and payable on March 30, 2023.

The dividends for Canadian tax purposes will be considered as an eligible dividend.

Readers are cautioned that although the terms “Net Operating Income”, and “Funds From Operations” are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate companies and such terms are defined in the Management’s Discussion and Analysis, such terms are not recognized terms under Canadian generally accepted accounting principles. Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.

For the Board of DirectorsG.W.J. Pottow, PresidentTel: 416-698-2591