BEK.B Becker Milk Co Ltd

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

HIGHLIGHTS

• Total revenues for the three months ended July 31, 2023 were $742,639 compared to $697,122 for the same period in 2022;
• The non-GAAP financial measure Net Operating Income for Q1 fiscal 2024 was $583,806 compared to $592,376 in fiscal 2023;
• Net income for Q1 fiscal 2024 was $0.14 per share for the year, compared to $0.02 net income per share in Q1 fiscal 2023.

FINANCIAL HIGHLIGHTS

Total revenues for the three months ended July 31, 2023 improved $45,517 compared to the three months ended July 31, 2022, a result of higher finance income.

	Three months ended
	July 31
	2023	2022
Property revenue	$669,478	$678,652
Finance income	73,161	18,470
Total revenues	$742,639	$697,122
Net income (loss) attributable to common and special shareholders	$247,951	$32,763
Average common and special shares outstanding	1,808,360	1,808,360
Income (loss) per share	$0.14	$0.02

Components of the $215,188 decrease in net income for the three months ended July 31, 2023 compared to the three months ended July 31, 2022 are:

Changes in Net Income - Three months ended July 31, 2023
compared to three months ended July 31, 2022
Favourable change in fair value adjustment	$240,000
Increase in finance income	54,691
Decrease in expenses related to strategic review	14,440
Increase in gain on disposal	12,376
Decrease in net operating income	(8,570)
Increase in administrative expenses	(9,770)
Increase in current taxes	(32,329)
Decrease in recovery of deferred income taxes	(55,650)
Increase in net income	$215,188

As investment property capitalization rates were unchanged during the three months ended July 31, 2023, compared to the three months ended July 31, 2022 there was a favourable change in the fair value adjustment to investment properties.

Non-GAAP financial measures

Net operating income

The non-GAAP financial measure Net Operating Income for the three months ended July 31, 2023 was $583,806, a $8,570 decrease compared with the previous year. Reduced revenue was partially offset by a reduction in operating expenses.

	Three months ended
	July 31
	2023	2022
Property revenue	$669,478	$678,652
Property operating expenses	(85,672)	(86,276)
Net operating income	$583,806	$592,376

Funds from operations and adjusted funds from operations

For the three months ended July 31, 2023 the Company recorded Adjusted funds from operations of $246,390 ($0.14 per share) compared to $162,697 ($0.09 per share) in 2022.

	Three months ended
	July 31
	2023	2022
Net income (loss)	$247,951	$32,763
Add (deduct) items not affecting cash:
Adjustment to fair value of investment properties	0	240,000
Loss (gain) on sale of investment properties	(2,122)	10,254
Tax on gains from sale of property	54,736	9,065
Deferred income taxes	(54,175)	(109,825)
Funds from operations	246,390	182,257
Add (deduct) non-operating items:
Expenses related to strategic review	0	14,440
Sustaining capital expenditures	0	(34,000)
Adjusted funds from operations	$246,390	$162,697
Adjusted funds from operations per share	$0.14	$0.09

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 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 September 21, 2023, and payable on September 29, 2023.

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

The Company’s interim financial statements for the three months ended July 31, 2023, along with the Management’s Discussion and Analysis will be filed with SEDAR at www.sedar.com.

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