SYS-CON MEDIA Authors: Trevor Parsons, Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel

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Foremost Income Fund Reports 2013 Results

CALGARY, ALBERTA -- (Marketwired) -- 03/26/14 -- Foremost Income Fund ("Foremost" or the "Fund") announces the financial results for the 12 months ended December 31, 2013.

OVERVIEW

The Fund is an unincorporated open end mutual fund trust conducting its business through Foremost Universal LP ("Universal") and Foremost Industries LP ("Foremost"). The Fund derives its operational income from both Universal and Foremost. Universal's overall business is focused on the oil and gas industry and includes activity from eight manufacturing sites throughout Alberta. Foremost manufactures off-highway large wheeled and tracked vehicles, and equipment for custom drilling, construction, water wells, and mining sectors. Foremost also maintains a focus on custom built vehicles for its clientele and is located in Calgary, Alberta.

ANNUAL FINANCIAL RESULTS:

The key elements from 2013 are:


--  Revenue decrease of 12% when comparing year over year. The Fund
    experienced the results of a general slowdown in oilfield equipment
    demand. Ongoing market and political concerns regarding transportation
    of product to foreign markets, and market price discrepancies led to
    depressed outlooks and product demand by key oilfield producers. Further
    information on the decrease in revenue by segment, and product line, can
    be found in the segmented information section of the MD&A.
--  2013 gross profit dropped to 13% from 20% in 2012. This is a result of
    lower customer demand, adjustments made to margin on field work and an
    increase in inventory allowance.
--  During 2013, the Fund decreased the discretionary employee bonus payout
    in order to reflect the financial performance of the Fund. The decrease
    in bonus payouts significantly decreased administrative expenses for the
    year - enough to offset costs from new business unit acquisitions.
--  The 2013 amortization balance increased due to late 2012 assets being
    used for a full year. Items such as the new Lloydminster office
    building, a major Calgary office renovation, a new 130 ton crane, as
    well as depreciated software and hardware purchased to bring systems up-
    to-date served to increase amortization on a year-over-year analysis.
    Disposals and sales during the year were on low value or slow
    depreciating items.
--  Consistent with the Fund's strategy, Universal acquired control of
    manufacturing assets in Edmonton, Alberta. This business is in the Vac
    truck market and was purchased to complement and increase the existing
    hydro excavation operations. This transaction resulted in goodwill of
    $1.0 million.
--  EBITDA for 2013 dropped to $7.7 million, from $27.9 million in 2012.
    This is a reflection of lower gross profit, due to industry conditions
    and adjustments made to margins on field work. It also includes an
    increase in inventory obsolescence provision of $1.0 million


SUMMARY OF QUARTERLY
 INFORMATION
(000's, except per
 Trust Unit amount)
2013                         Q1         Q2         Q3         Q4      Total
----------------------------------------------------------------------------
Revenue               $  64,001  $  56,602  $  50,232  $  59,094  $ 229,929

Gross profit ($)      $  10,149  $   4,770  $   7,169  $   7,763  $  29,850
Gross profit (%)             16%         8%        14%        13%        13%

Admin. expenses ($)   $   5,517  $   5,920  $   5,519  $   5,171  $  22,127
Admin. expenses (% of
 total revenue)               9%        10%        11%         9%        10%
Exchange rate
 gain/(loss)          $     (48) $     225  $      54  $     (38) $     193
EBITDA                $   4,631  $  (1,150) $   1,649  $   2,592  $   7,723
Income from
 operations           $   3,484  $  (2,334) $     423  $   1,325  $   2,898
Comprehensive
 income/(loss)        $   2,810  $  (1,504) $  (2,890) $   1,031  $    (553)

Trust units redeemed      8,560     13,326     76,451     30,394    128,731
Redemption payouts    $      70  $     107  $     627  $     229  $   1,033
Basic and diluted
 gain/(loss) per
 trust unit                0.15      (0.08)     (0.15)      0.05      (0.03)

2012                         Q1         Q2         Q3         Q4      Total
----------------------------------------------------------------------------
Revenue               $  70,822  $  62,499  $  64,746  $  63,363  $ 261,430

Gross profit ($)      $  15,393  $  13,081  $  14,236  $   9,389  $  52,099
Gross profit (%)             22%        21%        22%        15%        20%

Admin. expenses ($)   $   6,080  $   5,977  $   5,823  $   6,222  $  24,102
Admin. expenses (% of
 total revenue)               9%        10%         9%        10%         9%
Exchange rate
 gain/(loss)          $     (32) $      41  $    (273) $      34  $    (230)
EBITDA                $   9,313  $   7,104  $   8,413  $   3,166  $  27,996
Income from
 operations           $   8,328  $   6,096  $   7,384  $   2,092  $  23,900
Comprehensive
 income/(loss)        $   7,653  $   5,078  $   5,625  $   1,371  $  19,727

Trust units redeemed  $   8,486  $   7,709  $   2,500  $  10,090  $  28,785
Redemption payouts    $      62  $      60  $      19  $      84  $     225
Basic and diluted
 gain/(loss) per
 trust unit           $    0.41  $    0.27  $    0.30  $    0.07  $    1.05

TRUST UNIT REDEMPTIONS AND DISTRIBUTIONS

The Fund redeemed 128,731 Trust Units during the year through its normal redemption program resulting in cash payments of $1.0 million. During 2012 the Fund redeemed 28,785 Trust Units for $225,000. No options were exercised during 2013.

An annual Trust Unit cash distribution was made on December 6, 2013, at $.32 per unit. This resulted in a cash payment of $5.9 million for 2013. In 2012 the Fund paid a cash distribution equal to $.70 per unit for a total of $13.1 million.

The Trustees have determined that, as of the date of March 19, 2014 the Fund will redeem tendered Trust Units at tangible book value + 3.5% or $7.13 per unit.

BEVAN MAY APPOINTED INTERIM CEO, REPLACING PAT BREEN

Foremost Income Fund's Board of Trustees has appointed Board member Bevan May as Interim President and CEO of Foremost Industries Ltd., effective immediately. Mr. May succeeds Pat Breen, as President and CEO. The Board will immediately start a process that in the course of time will result in a new CEO being named.

The Board is confident that Mr. May is qualified, capable, and the right person to lead the Fund in this interim period. Mr. May has served as Foremost board Chairman since Nov 2012 and has served as a board advisor since 2010. The Board looks forward to enhancing execution of the Fund's objectives.

On behalf of the Trustees Foremost Income Fund

Bevan May, Trustee

FORWARD-LOOKING STATEMENT

Certain statements in this news release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this news release, such statements use words such as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements include statements the Fund's intention to proceed with a Unitholders' meeting and information regarding the Trustees' views of the future prospects and tax treatment of the Fund and tax treatment of the Special Redemption, the Fund's expectations regarding the future availability of cash to meet redemption requests and the Trustee's expectations for redemption prices in December 2011 and January 2012. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this news release. These forward-looking statements involve a number of risks and uncertainties, including: the impact of general economic conditions, industry conditions, changes in laws and regulations, increased competition, fluctuations in commodity prices and foreign exchange, and interest rates and stock market volatility.

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