BEK.B Becker Milk Co Ltd

The Becker Milk Company Limited (the “Company”) (TSX-BEK.B) is pleased to report the results for the six months ended October 31, 2022.

HIGHLIGHTS

• Total revenues for the six months ended October 31, 2022 were $1,360,032 compared to $1,454,704 for the same period in 2021;
• Net loss for the first half fiscal 2023 was $ 1.19 per share, compared to net income of $0.25 per share in the first half fiscal 2022.
• The non-GAAP financial measure Net Operating Income for the first half fiscal 2023 was $1,153,009 compared to $1,211,929 in the first half fiscal 2022.

FINANCIAL HIGHLIGHTS

Revenues and net income

Total revenues for the six months ended October 31, 2022 declined $94,672 compared to the six months ended October 31, 2022, a result of reduced property revenue, partially offset by improved finance income.

								Six months ended
								October 31
						2022		2021
Property revenue					$	1,303,395				$	1,434,893
Finance income						56,637					19,811
Total revenues					$	1,360,032				$	1,454,704
Net income (loss) attributable to common and special shareholders					($	2,153,525			)	$	444,734
Average common and special shares outstanding						1,808,360					1,808,360
Income (loss) per share					($	1.19	)			$	0.25

Components of the $2,598,259 decrease in net income for the six months ended October 31, 2021 compared to the six months ended October 31, 2020 are:

Changes in net income - Six months ended October 31, 2022
compared to six months ended October 31, 2021
Unfavourable change in fair value adjustment					($	2,945,958	)
Decrease in net operating income						(58,920	)
Increase in current taxes						(43,074	)
Increase in strategic review expenses						(40,456	)
Increase loss on disposal						(10,254	)
Decrease in administrative expenses						13,914
Increase in finance income						36,826
Increase in recovery of deferred taxes						449,663
Decrease in net income					($	2,598,259	)

Non-GAAP financial measures

Net operating income

The non-GAAP financial measure Net Operating Income for the six months ended October 31, 2022 was $1,153,009, a $58,920 decrease compared with the previous year as a result of reduced revenue for the quarter. Property disposals and the impact of settlement of rent negotiations with the Company’s largest tenant were the principal reasons for the revenue reduction.

								Six months ended
								October 31
						2022		2021
Property revenue					$	1,303,395			$	1,434,893
Property operating expenses						(150,386	)			(222,964	)
Net operating income					$	1,153,009			$	1,211,929

Funds from operations and adjusted funds from operations

For the six months ended October 31, 2022 the Company recorded funds from operations of $417,188 ($0.17 per share) compared to $429,602 ($0.24 per share) in 2021. Adjusted funds from operations were $305,230 ($0.17 per share) in the six months ended October 31, 2022 compared to $429,602 ($0.24 per share) in 2021.

								Six months ended
								October 31
						2022		2021
Net income (loss)					($	2,153,525	)		$	444,734
Add (deduct) items not affecting cash:
	Unfavourable fair value adjustment to investment properties					2,956,958				11,000
	Loss (gain) on sale of investment properties					10,254				0
	Tax on gains from sale of property					45,296				0
	Deferred income taxes					(441,795	)			7,868
	Sustaining capital expenditures					(111,958	)			(34,000	)
Adjusted funds from operations					$	305,230			$	429,602
Adjusted funds from operations per share					$	0.17			$	0.24

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 29 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.

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 Directors G.W.J. Pottow, President Tel: 416-698-2591