Melcor Developments Ltd. (MRD) Earnings Call Transcript & Summary

Well, it's silent. So I assume that means we're ready to start. It comes up so quickly, and I never feel totally ready, but I'd like to welcome everybody to the Melcor AGM. Great to see everybody here. I've got shareholders and a lot of employees and lot of stakeholders. It's great to see everybody. Great to be here in this beautiful sunny Alberta day. And it's a nice location. It's been 3 years since we've been out of -- able to come to a nice live event. We had our last 3 AGMs on virtually. So I took my suit out of hibernation today after 3 years in the closet. I reserve this for bankers meetings and shareholder meetings. Anyhow I'll just make a few general comments. My name is Timothy Melton, Chairman of Melcor and CEO. This is our 54th meeting as a public company, our 54th AGM. But it's our 100th year of operation as a company. We'll talk a bit about that later. But a lot of you have been here through the morning. We had a REIT meeting at 9:30 this morning. And then we followed it up with a Melcor meeting just now. And I want to thank the people, the REIT people that organized that meeting, Ralph and Andy and Naomi, thanks to them and [ Larry ] for the great meeting they held. So we're pleased to host the meeting again in person, but we're also still webcasting this event to those who are unable to be at the meeting. So a warm welcome, both to everybody here personally and also those people watching on webcast. And we're pleased to have guests in the audience that aren't shareholders, but just remind everybody that the shareholders do the voting, and everybody else is welcome and certainly for the reception, but the shareholders only can vote. We'll try and move pretty quickly through the formal part of the meeting as required. And we've already found motioners and seconders to make the motions. So following the formal component of the meeting, Naomi is going to present our 2022 results and talk a bit about our 100th anniversary. And Naomi together with our management team will be making those presentations. And after the meeting -- after the meetings and presentation, we'll open the floor to questions regarding Melcor and the future. So we'll keep our questions mainly for that period of the meeting. And we invite everybody in the room, everyone attending to join us for a nice white reception luncheon after the meeting. During lunch, you'll have the opportunity to talk to the members of our Board and our management team and visit. I'd like to turn the meeting over now to Nicole Forsythe, who I got to give a lot of credit to her and her team for putting up all the celebration items for our 100th and organizing these meetings. Management come in and make the presentation and talks, but it wouldn't be possible without all the work from our team that put it together. So I would appreciate that. Anyhow, Nicole, could you please make some comments.

Yes. So number one, I'd like to let everybody know that the meeting materials, including the information circular MD&A and annual report were available to our in-person audience on arrival. And our webcast audience can access them by clicking on the button on the side of your screen. For voting, our against votes were sufficient to meet quorum and pass all matters. And we will conduct voting on meeting matters by a show of hand. For Q&A, following management's presentation, we will open the floor. In person attendees, can please step up to the microphone, which will be placed in the middle of the room and ask your questions so that the webcast audience can benefit from hearing it as well. [Operator Instructions]. Finally, I would like to remind you that certain statements during this presentation might be forward-looking and for complete discussion of the items that may cause actual results to differ, you may try to read that very tiny print on the screen or you can read all about it in the business environment in this section of our annual MD&A. And I will now turn it over to Tim.

Thank you, Nicole. Before we continue, I'd like to make a few introductions. First of all, Naomi Stefura, our CFO and COO of the company is with me here. And I'd like to also acknowledge and mention we have got some directors with us today. Cathy Roozen, our Lead Director. And we've got Andrew Melton, who chaired -- who is the CEO of the REIT; Bruce Pennock, who's Chair of our Audit Committee for Melcor and Ralph Young, who's been around forever, and he's the Chair of the REIT. And also, unfortunately, they send their regrets in regards to the company. Doug Goss, Kathy Melton, Janet Riopel, unfortunately, can't be here today, but they will likely be connecting through the web. Just on directors, we're so fortunate through the years that Melcor has always had the good fortune of having excellent directors and director is quite an honor. They've got the responsibility of looking after all shareholders' interest. But directors here don't get a fee, of course, but it is tough to get good people. And the good people really don't need the job to come and be a director. So I totally respect and acknowledge that we're so lucky we get people that are dedicated to the company and we'll appreciate their time and effort today. They don't need another job, but we're lucky to have them on it. I think we've been very fortunate through the years. I'll share the meeting and today, and Naomi Stefura will act as Secretary. Gloria Gherasim of Odyssey Trust Company will act as scrutineer. However, all motions have been already passed. First item now that we called the meeting to order. The first item business. Notice has been sent to all shareholders of record of this annual meeting. And I have an affidavit of the mailing, which indicates the mailing date of March 27, 2023, as proof that the notice of this meeting has been properly served. It is certified by our transfer agent. As such, I request the motion dispense with reading of the notice. Thank you, [ Robin ]. Thank you, Nicole. Just slight change. We have a motion that we require a show of hands for all those in favor. Thank you. Opposed, if any? The motion has been carried. Thank you. I want to ask the secretary to keep a copy of the notice and proof of mailing with the records of this meeting. We have received a report on shareholders' attendance at the meeting from our scrutineers. We have received proxies or people in person totaling 25,484,340 shares, representing 81.553% of the outstanding shares -- of the 81% of the outstanding shares. So quorum requirements have been met. I now declare that the meeting is regularly called and properly constituted to conduct business. I now request a motion to dispense with the reading of the minutes of Melcor's last Annual General Meeting of Shareholders held on May 19, 2022. Thank you. Questions, comments? Those in favor? Thank you. Opposed if any? Thank you. Motion Carried. Next item of business is a presentation of financial statements for the period ending December 31, 2022, and the related auditor's report. When you receive notice of meeting, you also received instructions for assessing Melcor's annual report online or requesting that a printed copy be sent to you. This information is also available on our website at melcor.ca or sedar.com. It will be available to anyone who requests it. As you've had ample of time an opportunity to review this material, I would request a motion dispensing with reading of the financial statements and auditors report. Thank you, Robin. Graham, thank you. Those in favor of the motion. Thank you. Opposed, if any? Thank you. Motion carried. Next item of business is to appoint external auditors and to authorize the directors to set their remuneration. I ask for a resolution in this regard. Thank you for the motion of the seconder, discussion questions. Those in favor? Thank you. Opposed if any? Motion Carried. Next item of about business is to fix the number of directors to be elected at this meeting. Thanks. Those in favor. Opposed if any. Thank you. Motion carried. Next, we have election of directors. All our directors elected today will hold our office until our next Annual General Meeting unless his or her office is earlier vacated. The 8 nominees as listed in the information circular are proposed for election. They are Douglas Goss, Andrew Melton, Kathy Melton, Timothy Melton, Bruce Pennock, Janet Riopel, Cathy Roozen and Ralph Young. We've had sufficient proxies to individually elect these nominees and we will not be seeking nominations from the floor. Thank you. Those in favor of the motion? Opposed if any? Motion carried. Thank you. Okay. Hopefully, this concludes the formal business of the Annual General Meeting as described in the notice of meeting. We go very quick, and it always seems very scripted and it's nice to have the formal part complete and done. So I'll declare this part of the meeting -- this formal part of the meeting terminated. Prior to turning over to Naomi and team, I would like to personally acknowledge and thank our Board of Directors for their service through this past period, difficult, challenging time for their good guidance and counsel and stewardship of the company. I would also like to thank the total Melcor team that's here and current leadership of the company for the satisfactory results they deliver day in and day out. It's a tough and ever-changing business. We really appreciate everyone. Everyone in the company is a leader and everyone does a very important job in carrying out the company's mandate. So thank you all for your tremendous dedication effort. I'd like to also thank our shareholders for your continued and ongoing support and commitment. Before turning it over to Naomi, I'm just going to make a few general remarks. Don't want to be too long-winded. Anyhow, there's a lot of things we could talk about, but it is our 100th birthday. We've got some time to kill before lunch. So anyhow, I can think back, I can remember very vividly our 50th anniversary -- don't know if we held it here or not. I know we had our 75th and we held it here, and everyone is very congratulatory and saying how wonderful it is, the company has been around for so long and then say, what are you going to do for your 100th. It seems so far in the future at the time we really didn't even think about it. But all of a sudden here we are. And like who can believe the 100 years of business running here in Edmonton and family sort of startup become a public, but who had ever believed and the other thing that comes to mind, how quickly time goes. I mean it just seems literally like yesterday, all those memories of the past, and now we reached this tremendous milestone. Up on stage here, right in front of the hall here is pictures of -- well, we'll start over here. Pictures of the grandfather. I can't say my grandfather because I've got siblings here, it's our grandfather, Timothy Louis Melton, who headed West. He was in Winnipeg and there was no work back in the 1919 era. And he said to the family at the time who were all young and he said to his wife, "I got to go to Vancouver, find some work." He got on the train. The train stopped here in Edmonton. He got off and said, "Well, I must just look around the city." And he got off like the vibrations, liked the city. So he telegraphed his wife in Winnipeg, Doreen Melton and said," I wanna stop here. This city looks like it's got a lot of interesting things happening." So the family moved to Edmonton in 1919 from Winnipeg. Our granddad, we'll him old Tim. He started selling real estate with another company here in town in 1919. And he liked business. Old Tim was quite a character. So the roots to our sort of family history here, just around the corner of the building that he started working at. I forgot the name of the real estate company, it was just around the corner. He sold with them 2 or 3 years and then he decided to hang up his own shingle. So he started the company. Picture there of the house, that's the first house he called it, I think he called the company, Stanley Investments. But I don't think he owned it. He probably rented it, didn't make money. But -- so that is where he began that little house and it was downtown Edmonton. The address is on there. Anyhow, he started the business, in Roaring Twenties and then the Great Depression hit in 1929 and the total economies throughout the world collapsed. And there was many bankruptcies up and down. Things were -- things were very challenging through the Great Depression. He was a character. He was very passionate about providing housing for young people. And he felt all young people should have their home, their home is their castle. And it's the best investment people could make. And he was very passionate about taking young people to try and get them into a house. And houses in those days were $2,000 or $3,000. He didn't have a car. He used to meet them on his bicycle. And he rode on the bike for the passion about that. Other little thing I remember him saying is, one of his saying, and he died when I was about 6, but I don't remember him saying this, but it was part of his feeling, "buy land on the west side of a growing city, keep it, and it will keep you." So he tend then to move his operations more to the western end of town. He focused mainly on selling houses in West Edmonton acreages, farmland and Witten Jasper Place at the time. The other thing I mentioned, he was very passionate about youth and he said that youth and enthusiasm will always win out over age and experience. I mean, we could change that. I think the combination isn't bad, but he was really -- he really thought of the enthusiasm and [indiscernible] was an integral part of success. We were too started. And our father, Stan, we'll call him Stan. He was 19 at the time. In 1939, he went over to Europe and fought with the Canadian forces, The Loyal Edmonton Regiment. He fought the World War II for the duration of 6 years. While he was away, he was sending home his little military paychecks to his father. He said, "dad I like you buy me a farm, a little farm, want to come farming when I finish the service." And so the old Tim bought him an acreage out west of CFRN-DT station in West Edmonton. It actually was a half section of swamp muskeg. So anyhow, he -- dad came back from war -- Stan came back from war in 1945. He was very decorated soldier and received military medal and he wounded 3 times. When he came back to Edmonton to go farming, but his father, old Tim was sick. So old Tim said, "will you help me out Stan. See if we can do something with this company "and it was a very small at that time one office and just a few salespeople working on the west end. So dad got in, helping his father out and business grew on. Now his kids are totally grateful. We're not farmers, I think instead, our dad got us into real estate. Stan was -- so he purchased -- in the late 40s, he purchased the business off his mom and dad. It was mainly a retirement benefit sort of purchase, just to give them a little living allowance out of the company. He purchase it and Stan was a very ambitious, very driven to succeed kind of guy, passionate about the business. He is very motivated by serving others and adding value, providing a necessary service. He -- certainly, through that era, he was aided by the post war recovery in the economy in Canada and all the war bonds and everything after the war. They wanted to get the engine of the economy going again. That was a boost for all the allies after the war. But also the great growth that took place in Alberta through the late 40s and early 50s with the discovery of oil and economic viable oil and gas business that was tremendous catalyst. But he grew the company to be the biggest brokerage company in Western Canada, mainly selling real estate to others. Expanded through all the major cities in Western Canada. We have 40 -- Melcor Real Estate today have roughly 40 offices and 400-plus people. And he was very professional. He made a team. He transformed it from a little proprietorship to a very professional, managed organization. And wanted to provide opportunities. He was really motivated by providing housing and providing jobs for people. That was his big motivation. He figured, if you took care of the basics, success and profitability will follow those important items. He also was really involved in organized real estate. He was instrumental in setting up the Edmonton Real Estate Board. He was President of the Alberta Real Estate Association. And as a young man, he was President of the Canadian Real Estate Association. So he really put in a lot, gave that -- an awful lot to the industry as a whole. In 1968, he sold half the business, half of Melton Real Estate to the employees. He felt it was really important to have employees connected and owning part of the company. So essentially at that time, Melton Real Estate employees purchased half of the company. And it was a pretty generous arrangement. They had some easy finance terms for the employees to buy into it. Paralleling that he needed to provide liquidity for the employees. So they decided to take the company public. And there's a long story to that. We won't get into all the details and mechanisms, but the company went public in 1968. I can think back to those days, and we -- family remembers the set of the Board of Directors. I already mentioned names [ Cliff Willis, ] who was Head of the accounting firm. Willis McMahon and a lot of the people here from PricewaterhouseCoopers. That's how they got started in this city through Willis McMahon and became more national. But Cliff Willis and also like we had put together a great Board of Directors. In other words, at that time, Stan decided to turn over the governance and owner and management direction of the company from himself as an individual owner to the Board, representing all shareholders. And we had a great -- we put together a great Board. [indiscernible] was on the Board and many others. And we've had that tradition of great Boards obviously continue. Stan, I believe very much in getting resolved through people. You can't do it alone. And if you want to succeed, you need a good motivated team of people and which we're so lucky to have with us through history and acknowledge all the people that have contributed. Ralph Young sitting here has been with the company for 50 years, and we have a lot of people in the room that have got their 25th anniversary plaques. So we've had the longevity, which is good. So getting we got results through people that also believed that you've got to first give it to receive and results and success will follow. But you've got to -- you've got to walk to talk first. The golden rule is a very part of our DNA of our company, the Golden Rule, "treat others as you would like to be treated, put yourself in the shoes of other people. " It's so fundamental, I think, to the values that have made our company survive through the years and prosper through the years. I call it -- that's our ESG policy. The good rule -- that's all [ ESG ] is all about treating others as you like to be treated. And so that -- they were sort of, had premonition of where it was all going. They got with that program long before it became unpopular in vogue. So companies yes, we're just today because of these values that have passed on. There's been many changes. I mean, for example, we talk about real estate, this beautiful hotel like some of your younger people may not know, this hotel closed down for about 10 years from the late '80s until sometime in the 90s, maybe longer, like when Edmonton was struggling, hard to believe this iconic hotel would shut right down. And sold very, very cheaply. But we're in an ever-changing business. And economy, that's one thing. The only thing that's been constant is change. So we've got ups and downs in the company. But the values -- people are going to ask where things are going to go or what's your prediction? I don't think anybody really knows. But what's worked for us is just stick into those values, showing up every day, treating people right, just stay in the course and things work out. And that's the only thing that you really can control. We can't control interest rates or rural events or inflation, but we can take care of our own business and our own and that way, I think we do relatively well. And you've got to be financially prudent. And the other thing we're very fortunate about is, we've been lucky enough to be born in Alberta at this particular time and do our business in Alberta. It's been a very good place to do business. So pointing to over there, I just want to make a few acknowledgments. And certainly, I mentioned the team that got us here, and we'll focus a bit on that through our presentation. Ralph Young and Andy and some of our long-term employees. Gary Holmes is not with us, but I hope he's watching from up above, played a vital role in the company. Naomi up on stage with me here and our CFO and COO, been with us 14 years. And I've been very lucky to have the opportunity to work with Naomi. I think safe to say, I can say on behalf of all the staff, she's a tremendous person, very smart and knows what's going on, both on the financial and the things, but also really getting a good understanding of our operations and quite I feel very fortunate and lucky to work with her on a day-to-day basis. Today's focus a little bit on this presentation will be history, but I know it's with the future, there is present in the future that really count. So we don't want to be totally preoccupied in history because it's what have you done for us lately. We know we can never rest on our laurels. And it's good to be proud of your history and recognized history and how it's led to today's status. But -- so anyhow I want to thank the Melcor team. We're a public company. And often people describe the Melcor as a public company with a family flavor. Because controlling shareholder, obviously, family. So I want to thank the staff, as I mentioned. I want to thank all our shareholders that have been with us through the years. I want to thank my siblings because the control ownership group of my siblings, 7 of us have stayed fully united in our goals and objectives. We want to be good stewards of Melcor developments. So I acknowledge and thank them. I've got my sister, Mary Beth today and Andrew. The other siblings are not here today. But we've also had fourth generation involved. We're the third generation. We've got the fourth generation involvement in the company and some are working with the company and the 26th and the fourth generation, Graham's here, and Patrick's here. Kathy mentioned, she's on the Board. She couldn't be here today but we've got 26 in that category, and they're very involved, and their interest in the company. I know when time for us to retire, they'll take over the interest of the shareholders in excellent manner. And we've got a -- looming in the background, we got a fifth generation. I think we're up to about 40 people so far. So we're growing and expanding. But I've talked long enough. It's a pleasure to be here and celebrate this AGM and the 100th-year anniversary and pictures are worth a thousand words. We're going to turn it over to Naomi and the team, and they can go from here and look forward to chatting after. So back -- over to you, Naomi. Thank you.

Thank you, Tim. I'd just like to start everything, Tim, is very humble and he thanks all of us -- sort of where Melcor is today. And I think it goes without saying we all need to turn around and thank him. So thank you, Tim, for 50 years of leadership in this company. Thank you for being a mentor to me and we all love hearing your stories. So some of what you might hear is a little bit repetitive, I thought it's great to hear from Tim first. I love hearing the true personal stories -- about the stories about his granddad and his father but what I'm going to do today is try to sort of run everybody through a little pictorial history of Melcor. Before I get there. I'm going to do one last thank you and thank you to our senior leadership team. The pictures are up on the screen for you. Our senior leadership team is comprised of 6 Vice President; Randy Ferguson, Leah Margiotta, Sue Keating, Graeme Melton, Sinead O'Meara and Guy Pelletier. Thanks to each of you and all of your team. And to all of the Melcor staff here today, all of your faces are here. It's so great to see you. We have people here from our regional offices, Red Deer and Calgary. So thanks for making the drive. As Tim said, we couldn't do this without you. 100 years. This is such an absolutely remarkable achievement. While we are here today to report to you our shareholders on the annual results from 2022. We can't help but acknowledge that right now, in the year 2023, the company is in its 100th year of business and real estate operations. And it's not a birthday without guests and cake. So I just want to make sure that everyone knows after lunch, everybody needs you to cut cake. Some of them have candles, some of them don't, take them home, light it up. We can't light them here. Light them up, make a wish. It is good to go with boxes and we're also giving cupcake here. Make sure to take some home because we have a lot of cupcakes. And last but not least, a little guess for everybody. We've made this Melcor 100th commemorative pens. There's one for everybody in the little gift bag, so make sure you don't miss these on your way out. Now I'm proud to tell you the story of Melcor Development. An Alberta-based family business that, as Tim mentioned, now spans for generations. 1923, Ford Model T is the best-selling automobile of the year. The first home game was played at Yankee Stadium. Time Magazine published its very first issue. Insulin is used for diabetes treatment in Canada for the first time. The original Hollywood sign was erected and led Hollywoodland to promote the name of the new housing developments in the hills above Los Angeles. And Melcor Developments started its operations. It all began to man scanning Edmonton's westernizing, exploring opportunities and achieving his dream of helping young families purchase a home of their own. A century later, his grandchildren and great grandchildren survey the impact the company has had on the Edmonton region and realized that indeed L.T. Melton vision has been realized. The Angola drought home ownership for tens of thousands of Edmonton and area families over the years and has had a substantial impact on Alberta. On this Google Earth overlay of Edmonton and surrounding region, the blue represents communities where Melcor has developed and the green is our current active developments. L.T. named his company, Stanley Investment Company after his oldest son, Stanley Louis Melton, who was 3 years old when the company was founded. L.T., his wife, Doreen and 3-year-old, Stan are highlighted in this photo of the family and during times and friends. This is the place that all began. Stanley Investment Company's first office. As Tim mentioned, L.T. rode his bicycle to meet the clients and sold lots in the Jasper Place area for $100 with $5 down and $5 payments per month. The family moved on the second floor of this building in the early years. The location of the building was the corner of 101 Street and 102 Avenue. The present day site of the Edmonton City Center Mall, just a few blocks north of here. In 1932, the company name was change to L.T. Melton Real Estate. And the company began to expand throughout the growing metropolis of Edmonton and surrounding communities. L. T. specialized in majority of Jasper Place, West of Edmonton. This map is a very good example of early advertising for L.T. Melton Real Estate to build board for claims, organize for service specialized for value. L.T. Melton Real Estate's significant transactions was arranged by L.T. in 1949 when we negotiated the sale of dairy farmland to investors looking to build Edmonton's first drive-in movie theater. L.T. did not make any money on the transaction, but did it for the good of the community and his commitment to Jasper Place and providing amenities to residents. The size of the theater is evident in this aerial shot taken in 1960. Today, Melcor remains committed to building amenities into our neighborhoods and commercial projects that bring people together. Amenities such as this modern day reclining seat cinema and Jensen Lakes. Our many golf courses, community gardens and Orchard and playground and gathering thoughts of all kinds. This is a photo of Mike, L.T and Stanley Melton. While L.T grew business, Stanley grew up and went on to serve his country in World War II. He was a member of the 49th Loyal Edmonton Regiment. Stan received 7 medals for his service, including 3 stars for service on the front lines of France, Germany, Italy and Britain, where he met his wife, Peggy. Stan returned to Edmonton with Peggy and Baby Timothy Charles in 1945. His dream was to be a farmer, however, he started helping out his father in one of the branch offices, and his leadership, people skills and business sense quickly became evident in spite of declaring from an early age that he did not want to be involved in real estate, Stan was hooked. 1947 to 1973 for building years. In 1947, Stan bought the company from L.T, whose health was failing. L.T died in 1951. The poster period and stands unique strategies for growth and expansion throughout Western Canada. Melton's progressive style of real estate and the top-notch well-trained sales team took the others real estate market by storm. By 1953, Edmonton's population was 170,000, and there were 16 Melton branch offices, each strategically situated in a section of the city to provide specialized service to the area. This provided up-to-date market data and is considered a strategic competitive advantage at the time. Melton Real Estate began expanding across Western Canada by the mid-50s, adding cities of Calgary and Red Deer and then Vancouver in the 50s, Saskatoon in the '60s, and Winnipeg, Regina, Cameroon, Victoria and Kelowna in the early '70s. This chart taken from Melton Real Estate's 1967 annual report demonstrates the growth in the MLS sales volume. Melton Real Estate was the MLS sales volume leader for 7 consecutive years at Edmonton and 4 consecutive years in Calgary during that era. In 1953, the company started using the Melton Real Estate 4 sale lines, which brings out hundreds of front yards all over the city. Billboards, like the one picture here, replaced all throughout Edmonton in the 40s and 50s. The company's famous, call Melton man and start packing signs were introduced in this period and appeared in advertisements all over, including bumper stickers on the salesman's cars . Slogans were also used to have some positive messages like this example from 1954. And here, the company made a play on their size compared to the other real estate service companies. We're going backwards. Thank you. And we're making a choice. [indiscernible] Melton is always the way to go. And finally, this one suggesting that Melton Real Estate had all the listings for blocks and blocks of Edmonton Finest home. This photo is of the Southwest brand sales office team with the office in the background in 1967, understand leadership, Melton Real Estate prospered and diversified into a fully integrated real estate company including complementary services such as mortgages, insurance, home construction and land development. The fine development offering helps you listing to the brokerage arm. Advertising campaigns also promoted Melcor's other businesses such as Melton Homes, the connection between getting married and buying your own home with L.T's original vision and is nicely summed up by this billboard. Home plans included neighborhood models such as the Glenora and Lynnwood. The price of this Glenora model was $12,871 with interest and principal payments of $83 per month. Other Melton marketing innovations included providing free comprehensive city maps for the public and with guaranteed sales plan, which guarantees the sale of the current home so that a new one could be purchased. Together, these marketing innovations contributed to the success of Melton Real Estate. From the late 1950s through to the 1970s, Melton Real Estate expanded to a peak of 40 branch offices and over 500 sales agents. Becoming the leading broker in Western Canada with sales of $222 million. Stan Melton felt very strongly that employees should have the ability to own a piece of the company for which they work. So in 1968, Melton Real Estate became a publicly traded company on the Vancouver Stock Exchange. The company graduated to the Toronto Stock Exchange in 1972. This tradition of employee company ownership carries on today with Melcor's employee share purchase plan, which matches employee contributions towards purchasing the Melcor shares. Many of our employee shareholders are here with us in the room today, and we're so happy to have you as shareholders. Tragically, Stan Melton died of a sudden heart attack in November 1973 who was at the Western Final football game between the Edmonton Eskimos and the Saskatchewan Roughriders at the age of 54. He is in the prime of his business career and is well-liked and respected by all Melton staff and industry colleagues. 1974 to 1988, developing the future. Stan was a charismatic leader who was loved by all those he worked with and through his leadership, he also built a strong Board and senior management team who are able to carry on his Vision. Immediately following his death, the Board appointed Gary Holmes as President of the company. Tim Melton has been with Melton Real Estate for 3 years since Stan died. He worked in residential and commercial sales in Edmonton, Saskatoon and Calgary. He was appointed President from 1975 when the brokerage business was at its peak. [indiscernible] was whether to continue the growth and expansion of the brokers business to Eastern Canada or to focus on the growing and lucrative land development activities that the company had started. In response to changing trends in the brokerage business, the company made the difficult but prudent decision to divest of the brokerage division. In 1976, with sale of the brokerage division to A.E. LePage now known as Royal LePage was completed for $4.25 million. As a result of the transaction, the company name was changed to Melcor Developments and the focus of the company shifted to land development and investment properties. Since 1966, the company's headquarters that was located at the corner of 103 Street at Jasper Avenue. Melton Real Estate bought this 2-story building with plans to eventually expand. The Giant Melton sign had a rotating [indiscernible] man and start packing topper. On the left, the company's 1972 annual report cover featured a rendering of the proposed expanded Melton building, while the photo on the right is the building today, which is still the home of the company's head office. Through early 70s, Melcor continue to plan and build communities throughout Western Canada from Country Club, Primrose, the Westridge in Edmonton, Dalhousie type and Hawkwood and Calgary and many more communities in between. The company began acquiring and building apartments. Commercial and office buildings in the 1960s within the Investment Properties division. And at one point, Melton's portfolio included 1.2 million square feet of suburban and downtown office space, industrial projects, retail centers and low-rise residential construction, such as the award-winning, Harmony Project depicted here. The late 70s brought brand economic conditions in Alberta and Melcor prospered. In 1977, the growing town of Spruce Grove annex a substantial chunk of Melcor owned land Melcor developed a significant portion of the city, particularly around our Links Golf Course. Several Melcor and Melton developments captured national and international awards for innovation and excellence in efficient design. 44 Capital Boulevard on 108 Street Edmonton was one such building. A 380,000 square feet, the wide building has been described as a Skyscraper turned on its side. For the crowning achievement, this building is also a financial strain on the company in the '80s in conjunction with the major recession that hit Alberta. The building was completed in 1982 and sold in 1984 along with many other properties that were in the Melcor portfolio during these very tough times. In 1982, Melcor open the Links in Spruce Grove. The company's first golf course has proven to be one of the areas most popular golf courses for tournaments and many of Melcor's first golf communities surround the course. [indiscernible] 70's came to a sudden halt in the early '80s with following oil and gas prices and the impact of the National Energy program. In 1982, the company post its first and only loss to date. Melcor's focus on land development and on investing in the United States, carry it through this devastating recession. This slide is an illustrative plan of the Village Oaks Community, Melcor developed in the '80s in California. This area of photo is the build-out result of that Village Oaks development. By 1983., Melcor's U.S. sales exceeded $13 million and served to offset the troubled Canadian market. By 1988, developments in both California and Arizona were concluded and the U.S. branch offices were closed. Melcor also continued its on again off again home building status. The business is the first to feel the impact of changing economic conditions and could be quickly scaled up or down as a result. By 1998, investment properties owned had dwindled to only 360,000 square feet with many properties forced to be sold during the recession of the '80s to manage cash flow and service debt. In 1999 to 2023, rebuilding growth and harvesting. The recession of the 80s had a lasting impact on Alberta, and it took many years to achieve the recovery. But by the late '90s, the company was in a position to start rebuilding. As usual, Melcor's steadfast safe balance sheet provided us financial stability to manage this growth. Mr. Ralph Young, who was named President in 1997 and added the CEO title a few years later in the year 2000. Ralph started with Melcor in 1971, and we're all grateful for his over 50 years of service to the company. He currently remains active as a Board member from Melcor Development and is Chair of the Board for Melcor REIT. With the 2002 appointment of Darin Rayburn, who headed up the Investment Properties division; and Brian Baker, who headed up the newly formed Property Development division. Melcor began announcing commercial assets once again through both acquisition and internal development. In 2013, Brian became President and CEO of the company; and in 2017, Darin followed too. We also resumed a massive raw land for future developments and strategic growth quarters, including the 2011 purchase of 1,000 acres of raw land in the Denver area that would eventually become our Harmony Project. Following the U.S. housing market crash in 2008, we issued a $40 million convertible debenture and invested heavily in the U.S. In addition to the raw land purchase in Denver, we acquired residential rental units in Arizona and Texas. The Dakotas pictured here was recently sold in 2022. In total, we got 959 residential units for CAD 86 million and have since sold 884 of those units for CAD 167 million, doubling our investment during that period. In 2013, Melcor has sign off the Melcor's Real Estate Investment Trust, otherwise known as Melcor REIT, with an initial public offering of $91.3 million. The proceeds were used to purchase 27 properties with 1.5 million square feet of gross leasable area from Melcor. The photo on the right is from the official signing of the closing document, which I can attest, literally took hours and they don't think my hand will ever be the same for a lot of signatures. To date, the REIT has paid out $5.98 in distributions to unitholders since inception. Communities developed during this latest period include a variety of lot profiles that meet the needs of modern home buyers with everything from multifamily developments, including duplex and townhome slots to single-family and state communities and walkout basement amenity-rich communities with golf courses and lakes. The eagerly anticipated Beach Lake at Jensen Lake opened last summer and is a huge hit with residents of all ages. This is the Harmony Community Center in Denver, which includes fitness equipment, meeting space, and pool. The community center won the Metro Denver Homebuilders Association Award for Best Community Amenity in 2022. The mixed-use community of Greenwich brings New York south brown houses, brownstone and condo styles to Calgary and continues to be built around our anchor tenants that Calgary farmers look at. The quality products that property development team brings is consistent for rendering to full build-out as we see in this example of an office building lendering at the Village apartment. And here, the completed product continue to tell. And then this example, the wondering is a Landmark cinemas at Jensen Lakes and St. Albert and the completed product. So thinking about the success of Melcor Development, staff always reminisce on its rich tradition. Many of the traditions that were started when the real estate brokerage was growing remain in place today. Going back through old company photos was so much fun, whether it's old [indiscernible], barbecue luncheon or the kids Christmas party. All of these traditions remain today. Every year at Christmas, staff received a grocery gift cards to go by a turkey for their families. The tradition was started where real turkeys were distributed in the brokerage days. Some other very important traditions include our service awards, which have proudly been handed out for over 70 years as staff hit 5-year service increments. 22 people are now members of Melcor's Quarter Century Club recognizing employees who have served 25 years to the company. Here, you can see [ Carol Wallace ] receiving her award. [ Beth Halford ] is here today. He's also a member of the Quarter Century Club. This 25-year recognition earns you a picture on the wall in our head office in Edmonton. Many employees have actually more than surpassed their 25-year mark, hitting 30 years and onwards. This is Karen Alberta and Emma Paris pictured here. Another long-standing tradition of the Melcor manager meeting, where in addition to an obligatory group photo their educational sessions and leadership development and strategy development. This consistent annual organizational training and group bonding has grown staff throughout the eras and has led to most promotions and most senior leadership coming from within the company. Management meetings in Kelowna have been in tradition for the most recent generation, for many held at Black Mountain golf course. And I can't help to comment that those are some epic golf [indiscernible] first time he used to run the course. Here we are now. At our most recent meeting held in Kelowna this past fall on our joint venture owned lakes property soon to be developed in North Clifton state. Divisional meetings are another important part of tradition, like this most recent community development team meeting we held in Cameron, Alberta, where employees from across our many regions can get together for camaraderie and to share best practices, identify problems and brainstorm solutions. So that brings us to today, last year, 2022, where we are now. 2022 was a solid year for the company. We reported revenue of $241 million and net income of $89.4 million. Revenue was down year-over-year, primarily due to the lack of sales activity in the U.S. However, from the Canadian perspective, revenue is stable year-over-year. We also reported net income of $89.4 million, up from the prior year. However, because our accounting results can be scaled by fair value gains, we focus on funds from operations, or FFO, as a better measure of performance. FFO eliminates all the noncash items included in our balanced income statement. In the current year, FFO was $60.9 million, down from $81 million in the prior year. However, not included in FFO was the sale of the Dakotas condo property, which I spoke to, which generated CAD 35 million in cash to the company. This cash was used to pay down our operating line subsequent to year-end, helping to reduce our interest costs going forward during these high interest rate times. In 2022, we continue to increase the dividend, paying out $0.58 per share, up from $0.44 per share in the prior year. This is consistent with our company goal of returning profits to you, our shareholders. In addition, the dividends paid and our focus of increasing shareholder return, we were very active in our NCIB program. We allocated in spend of $20 million buying back 1.6 million of our shares and subsequently canceling them. This represented our full 5% allowable purchase of issued and outstanding shares under the NCIB. We do not currently have an active NCIB in place today. However, this continues to be an initiative we believe in, and it will be discussed at upcoming Board meeting. We sold over 1,000 lots in Canada but do not complete any lot sales in the U.S. The U.S. housing market was probably much stronger to the increased interest rate and builders were dealing with long construction real times due to supply chain issues. We've seen a resurgence in the U.S. in 2023 and expect sales to resume. The property development group completed the construction of over 36,000 square feet in the retail space transferred to our IP division. Occupancy rates have increased from 84% to 88%, thanks to the strong efforts of our leasing team and our property management teams to provide top service to our tenants. And last but not least our golf course, who also had a tremendous year with over 123,000 rounds of golf played due to whether we had a shorter season in 2022 than the prior year, the rounds were down. However, despite the decrease in rounds, the courses actually recorded higher profits made up by strong food and beverage and tournament revenue. In closing, I just want to thank all our past and present employees, Board members and stakeholders in the room today. Melcor and predecessor companies regarding concerns throughout the Great Depression, World War II, the 80s, Y2K, 9/11, a global pandemic, and many more momentous events that shaped the past century. Melcor has survived through booms and busts, fluctuating oil prices and changes in management. Although proud of the past, we know that continued success rests in the future. At Melcor, the operative word is tomorrow, now, yesterday, and we look forward to serving you for generations ahead. This concludes the formal portion of the presentation. And I'll now be happy to open it up for questions. Thanks for listening. That was all.

[Operator Instructions]

While you're thinking about your questions, I would just thank, Naomi. Very good, Naomi and very organized. Thank you. That was a nice -- I never -- I have seen the presentation. So you and the team, Nicole on other there's a lot of inputs. So thank you. I know somebody said earlier, I think there's a Nicole she only makes us look good. So thank you. History, we're proud of everybody. Anyhow, questions where we're at, where we're going. We're open for -- went a little longer, but we've got 5 or 10 minutes, if you want any other questions or comments. Sean?

A few questions. Yes. That was a great presentation. I'm always myself interested in history of companies and respect in the past, and it's nice to see all that. And thank you. So you mentioned the liquidity in 1968, that was so that the employees could have liquidity with their shares. And so one of the questions comes to mind I've never been sure if the company is too concerned about the share price. I mean, look, I don't -- you don't go on television or you don't promote the company on business news network or something like that. And then your employees have -- so we're all shareholders and of course, the employees and yourselves are interested in the share price. So what are your thoughts on that? And I guess, could more to be done to -- because I think the share price is undervalued.

Tackle that, and you can add Naomi. Well, most -- our main objective is success and results -- positive results for the company. In terms of share price, we can't do much about share price, except deliver good results, and that's our main focus. We haven't been wanted to promote the share price per se. We like our results and our performance to do the talk. And once you get into promoting stock, you can do the talk, employees and promote it. But if you don't have the fundamental success, it's going to be very volatile and fluctuate. So we choose a lot of results do the talking. And we know we're undervalue of many, many companies based on book value, we know we're undervalued. But that's just the way the market is. And we just -- well, let's put all our efforts instead of promoting price of shares. Let's work on profits, revenue as a result. So that's been our consistent pattern. Can you add to that, Naomi?

Okay. No, I think, Sean, just to add a little bit to Tim's question. I think reflecting that no matter how good our results are, we often don't see a large movement in share price. I think that speaks a little bit to maybe a little of our focus on last year on the NCIB. What are some other ways that we can help the shareholder base increase sort of their value in the company. So we've been very active in the NCIB and then increasing dividends as sort of another way to get returned to shareholders that's different just from sort of price appreciation.

Thank you. And if anybody else has a question, I can step aside. Meanwhile, we just got a couple of minutes I have a couple more. So I was interested in the history, your grandfather and your father really promoting and trying to get young people into houses. And you still do that today. Houses are very expensive though, and it generally consensus is that, that is very tough for young people to afford houses, whether single family or even apartments. And I wondered if a company has been approaching the government's provincial and municipal. If there's any big -- some kind of partnership that can be done to promote that and get some cheaper housing or to people and to realize on some assets at the same time and just do some good for the community. More good. Yes. Thanks, Sean. And for those of you in the audience, Sean's a long-term investor in the company with a nice portfolio, and Sean gives us some good e-mails and good ideas. So I appreciate those through the year, Sean, and very knowledgeable about the company. You talk about affordability of housing. It's funny when I started selling in the late '60s. Conventional houses were selling for around $17,000 to $20,000. And I graduated with a lot of friends, and I said, buy a house on. Are they too expensive, we're going to wait for the prices to go down. So it's like because they were used to be $10,000, that is still $20,000. But so who knows where the price is going. And even though 20 years ago, people thought the prices were too high, they're going to wait. So there's whatever people can do to try to get in their own house prices may fluctuate a bit, but it's better to start paying off your mortgage than pay on rent. But in terms of government, well, we -- our good people are involved in various associations, UDI and also we try get policy to governments, but they don't reask the industry much often. They come up with their own game plans. So there's not -- I mean we work through governments on a local level, but we can't really have a lot of influence on government policy. I admire all the people to try, but, yes.

So just one follow-up one and one last one, at least. I think I saw in the report that we have close to 200,000, I think square feet of already developed commercial and multifamily land. I don't know if you can talk a little bit about like where those parcels are? Or is there opportunity? Of course, you're always trying to sell those, but that sounded like quite a bit of that you go developed commercial and multifamily land deserve some activity to realize on that.

Do you want to take and tackle on that, Naomi?

Yes. Interestingly, we had an investor meeting yesterday, Sean, who asked the same question. I think what's interesting about the multifamily land is the predictability of selling it is not as easy as with a lot. Obviously, we have had a lot more interest in our multifamily and I think with the introduction of the new CMHC financing. I think cost of constructing a lot of those multifamily projects is getting a lot better so we can finance a lot of it. So with our major in any guarantees, I hope to see more multifamily sales of that land and sort of realizing and harvesting on that coming through. As far as the commercial land we have, our property development team is actively planning on some of those sites as we speak. So I would hope that some of those come to fruition over the next year. And in terms to answer the question of where it is, most of that is in communities where we have development. It is in sort of our neighborhoods where we're actively developing single-family lots. So they're great sites. It's just a matter of market demand, and it does seem like that's returning.

Question. Question over there.

Sorry, I'd like to ask you to just come to the mic to ask your question, please. But I also do have some questions from the webcast audience. So I'll flip one of those in right now. And so this comes from Charles [ Dodoo ] I hope I didn't mispronounce his name. The last 10 years have been hard on it from a shareholder's perspective. It's kind of a redundant question. Why the share price is so low. But he asked another question, and that is, do you have a plan for a new NCIB or is it substantial issuer bids ?

Naomi?

Yes, substantial issue is very difficult for us. Our liquidity is quite low. And in order to actually launch a substantial issuer bid, you have to sort of meet liquidity test before you're allowed to do one. We typically do our lower trading volume do not need the test for that. So it would be unlicensed that you would see a substantial issuer bid in our future. I spoke about the NCIB is something that we believe very strongly and is a way of sort of returning value to shareholders. We are constantly talking about implementing that program, and it's something that is going to be discussed at the upcoming board meeting.

I'll ask one question. If you just want to make your way over here. I have kind of a little bit of a 2-part question from Richard Stobel, and it is just asking if you can comment on sales at Harmony so far this year and also what the kind of development horizon is for Harmony as a community.?

So we -- I don't want to overcommit on something that is an issue, but we do have good conversations ongoing with all of the builders in Harmony. In fact, not yet released, but we have closed on some on in the current year, so those will be reported on soon as we start to release sort of our Q1 and coming up next quarter Q2 results. So while I would not guarantee that total sales volume, I can tell you sales are occurring already this year. So that's positive to see. And as far as the total time line to develop, we still have 10 years of land and I would venture to say, so there's still a long sort of horizon development in our community.

I'm very happy to attend this meeting today. I was a very, very small builder. I used to build 1 or 2 house a year. I started my company, Akash from 2001? My name is Ash Gupta. I own Akash Homes, very small company. And my big brother, Ralph Young, he helped me. I appreciate. Thank you very much. Tim, Thank you very much. I learned so much from here today. The biggest thing I learned, you're so kind. Number second, I don't know how you do it. How you maintain your and get together with your family. Generation is coming to work for you. That's wonderful. It was wonderful. And don't mind. My English is a little weak. So I'm very, very happy to attend the meeting. I don't know what's business myself from the beginning. And I met him at the Black Mountain, Kelowna, the golf course. Soon where we become friends. And Mr. Ralph Young winning 5 or 7 lots in summer side, and that's how we grow our relationship. And many years ago, I met him in the University of Alberta function. You opened the floor for us. Thank you very much. I really, really appreciate the help for us. Thank you. Thank you. And [indiscernible] father picture there. That's the biggest thing I like it. I'm a people person. I meet everybody and that's a big thing. He kept the fifth generation in the company. People don't believe to keep one generation. Am I right, sir? Maybe I am wrong, but I think -- I say kingdom, very nice. Thank you, sir. Thank you. I appreciate you invite me and give me chance to speak. Thank you, again, and I hope this company become 3 times more bigger than this one in many years. Thank you.

Thank you very much, Ash. I feel great actually. It's the first time we've had one of our builder customers come up and really thank us and give us a lot of credits. So thank you very much, and Ash who is a builder, and we've been -- our development team, our property and community development team work with several builders and Ash is one of them. And often, builders start as a small company. And so I complement Ash for their company, they're growing their company. And Ash just got an award the other day, Queen Elizabeth Award honoring citizen of [indiscernible] Alberta. It was wonderful thing. Thank you for that. You mentioned about the family, and we're lucky. I think our parents had no one envisioned where things were going to go 100 years ago or even 50 years ago, but family, my siblings and the next generation, likely think the biggest legacy parents going to have is for their family to carry on in a good happy harmoniously. So we've been lucky to have, that we -- the success of the company is secondary to the fact that we also get along and like to be with each other. So we acknowledge that. Thanks.

I have another follow-up question from the webcast audience. And it is again from Richard Stobel and he is interested to know how many acres or lots are in the new Kelowna community of North Clifton.

I ask [indiscernible] Sue Keating who is our Vice President of the region and I am not sure if she is on the call. If that something we could maybe get back to him with after the meeting, I'd be happy to provide that.

Sure. Can you come to the mic...

Thank you for that question. We're actively working on the planning for the next phase in North Clifton, which has about 100 to 120 lots, and that will probably lasts a few kind of phases of development kind of broken up sort of one year at a time. So we're leasing 20 to 40 lots per year until we get through that 120. And then we do have more land after that, but that's a little further in the future. So we don't have an exact lot count at this point.

Well, I don't see any more questions, and it's been a nice past 1.5 hours or so. And there is one more question. Okay.

My name is [indiscernible] Engineering Limited. 20 years ago, July 1, I ran over the -- or find my way over what would be through a waterfall on a high-level bridge to move to Edmonton. I move from Winnipeg and I found the stories of moving to Edmonton coincidental. So many years ago that it started this company and 5 generations. And the reason I want to come to the microphone was that I wanted to present getting results through people and then the contribution of this company in just the short time that I was here. So as an engineer, I move to Edmonton and realized the dream of being a land development engineer and I had the fortune of working with -- working on more core projects in U.S. states. And it was like a dream. And so I'm here on behalf of what would be all the people that I worked with, whether they're planners, engineers, contractors, folks that are involved in the process and each day and for everything that I have been involved with. There's always been pride in working with Melcor, providing what would be engineering and our life of what we know to be a small part of something that's a lot bigger. And so as a proud [indiscernible], as a proud engineer, as a proud person that values everybody that I've worked with, I really just want to celebrate 100 years. I hope to hear a forecast of 125th that's coming up. And I really just wanted to present that and acknowledge that. This really is, for me, for many others, a dream come true to be able to work with such fine people.

Thank you, Mike, for those kind remarks. On our 100th birthday, that's great to hear. And I'd like to mention 25 years. I'm sure with all the talent we got in this room, we're going to have another very good report card there. I think that's it for questions, Nicole. And yes, as for the future, if many want to look at the past, how we've done, and we never like to overpromise. We like to underpromise and overperform. We know there's a lot of challenges out there today in many areas. Life's not without its complications. But if we stick to basics, I think we can perform who knows where the overall economy goes. But Alberta is looking very good and positive. The oil and gas industry is wonderful, responsible resource that we've got in this province, and we're going to need it for a long time. And I think we're the best producers in the world. So that's very fundamental to our economy. So we'll do good. And the States, we've got a good asset position and things are picking up. We're -- so we're well positioned. Were the overall economy goes, is a big question, but we think we will continue to provide satisfactory results. Cautiously optimistic as we always say. But I know you're all getting hungry, and I'd like to think we're done, Naomi. Thanks, everybody, for their contribution and look forward to quizzing and having a little lunch with you. So thanks for attending.