The Becker Milk Company Limited
TSX : BEK.B

September 11, 2015 08:00 ET

The Becker Milk Company Limited: Three Month Financial Results and Regular Dividend

TORONTO, ONTARIO--(Marketwired - Sept. 11, 2015) - The Becker Milk Company Limited (the "Company") (TSX:BEK.B) is pleased to report the results for the three months ended July 31, 2015.

HIGHLIGHTS

  • Total revenues for the three months ended July 31, 2015 were $994,815 compared to $976,569 for the same period in 2014;
  • Net operating income for Q1 fiscal 2016 was $874,072 compared to $874,851 in 2015;
  • Net income for Q1 fiscal 2016 was $ 0.16 per share, compared to $0.10 per share in 2015.

FINANCIAL HIGHLIGHTS

Three months
July 31
2015 2014
Property revenue $ 990,988 $ 971,533
Finance income 3,827 5,036
Total revenues $ 994,815 $ 976,569
Property revenue $ 990,988 $ 971,533
Property operating expenses (116,916 ) (96,682 )
Net operating income $ 874,072 $ 874,851
Adjusted funds from operations $ 398,997 $ 386,441
Net income attributable to common and special shareholders $ 285,111 $ 181,003
Average common and special shares outstanding 1,808,360 1,808,360
Income per share $ 0.16 $ 0.10

Significant components of the $104,108 increase in net income between the three months ended July 31, 2015 compared to the three months ended July 31, 2014 are:

Changes in net income - Three months ended July 31, 2015
compared to Three months ended July 31, 2014
Increase in adjustment of fair value of investment properties 161,630
Decrease in administrative expenses 42,905
Decrease in net operating income (779 )
Decrease in finance income (1,209 )
Increase in current taxes (9,705 )
Increase in deferred taxes on investment properties (28,448 )
Increase in expenses related to strategic review (60,286 )
Increase in net income $ 104,108

NET OPERATING INCOME

Net operating income for the three months ended July 31, 2015 was almost unchanged compared with the previous year, increasing $779 to $874,072 compared to $874,851 in 2014, as slightly higher revenues were offset by slightly higher operating costs.

ADJUSTED FUNDS FROM OPERATIONS

Three months
July 31
2015 2014
Funds from operations $ 384,067 $ 413,141
Items not affecting cash:
Straight line rent 14,930 15,590
Sustaining capital expenditures (42,290 )
Adjusted funds from operations $ 398,997 $ 386,441
Adjusted funds from operations per share $ 0.22 $ 0.21

For the three months ended July 31, 2015 the Company recorded adjusted funds from operations of $398,997 ($0.22 per share) compared to $386,441 ($0.21 per share) in 2014. The absence of sustaining capital expenditures in 2015 offset reduced funds from operations.

STRATEGIC REVIEW

During the second quarter of fiscal 2014, the Company's Board of Directors re-initiated its 2008 review of strategies available to the Company to enhance shareholder value. The Company retained PricewaterhouseCoopers Real Estate Inc. ("PWC") to explore a possible sale of the Company. The Company previously announced that PWC had completed the initial steps in the sale process and that the Company was engaged in advanced discussions with a single potential acquirer. These discussions have now been terminated. The Company will continue to review its strategic alternatives and will update the market as appropriate and as required.

In support of this process an engineering firm has conducted property condition surveys and environmental assessments of all properties. Management believes none of these assessments have found any circumstances that require immediate remediation to meet currently legislated environmental obligations.

As at July 31, 2015 legal and engineering costs of $767,315 had been incurred in connection with the potential sale of the Company.

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 23, 2015 and payable on October 6, 2015.

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, 2015, 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 Directors

G.W.J. Pottow, President

Contact Information

  • The Becker Milk Company Limited
    G.W.J. Pottow
    President
    416-698-2591