/EINPresswire.com/ -- CALGARY, ALBERTA -- (Marketwired) -- 05/13/16 -- Foremost Income Fund ("Foremost" or the "Fund") announces the financial results for the three months ended March 31, 2016.

OVERVIEW

The Fund is an unincorporated open end mutual fund trust conducting its business through two operating segments, Foremost Energy Equipment ("FEE") and Foremost Mobile Equipment ("FME"). FEE's overall business is focused on the oil and gas industry and includes activity from six manufacturing sites throughout Alberta. FME manufactures off-highway large wheeled and tracked vehicles, hydrovac and vacuum trucks, equipment for custom drilling, construction, water wells, and mining sectors. FME has three manufacturing facilities located in Alberta.

MESSAGE TO UNITHOLDERS

The hard lifting and enormous headwinds that Foremost faced in 2015 have only intensified at the start of 2016. The sharp, broad based drop in commodity prices at the start of 2016 severely changed the sales trajectory for all of Foremost's product lines. This forced Foremost's management to make additional cuts across all spend categories including headcount, SG&A costs and the already thin discretionary costs bucket. As of Q1 2016 Foremost had less than 500 employees, which is the lowest number in many years.

Financial performance in these challenging conditions was fair. The Fund recorded a $1.15 million loss on $35.84 million of revenue.

The Foremost senior and operational management teams continually drive to find efficiencies in direct product costs by sourcing better-priced materials and by investigating ways to automate operations in the plants. The push to consolidate operations across Foremost continues as market demand reduces further. Competitors in the Alberta space continue to fall by the wayside, the victims of harsh conditions in the energy markets. This provides opportunities for Foremost to capture business that was otherwise unavailable.

The Foremost balance sheet remains strong, and management maintains a strong will to convert non-working inventory into cash at the best prices possible.

Kevin Johnson, President

Highlights from Q1 2016:

--  Revenue decreased by $20.8 million, or 37%, when comparing quarter over
    quarter. This is a result of ongoing weak demand for most product lines
    in response to low commodity prices. Field tank and vehicle revenue
    experienced slight growth compared to 2015, while all other product
    lines fell. During the first quarter of 2016, $1.5 million in
    cancellation fee revenue was recognized in the FEE segment. More
    information can be found in the Segmented Results of Operations section
    of the MD&A.
--  Gross profit decreased to 10% in 2016, compared with 14% in the first
    quarter of 2015. Included in the 2016 gross profit is a cancellation fee
    charge on a customer contract recognized in the period. Overall the drop
    in margin reflects the slowdown in the oil and gas market and the
    increased pricing pressures.
--  Administration costs decreased $1.2 million, from $4.4 million in the
    first quarter of 2015 to $3.2 million in 2016. Reduction of personnel
    costs accounted for $0.6 million of the overall savings as headcount
    continues to drop.
--  During the first three months of 2016 the Fund recognized a $0.5 million
    foreign exchange loss compared to a $1.3 million gain for the same
    period in 2015. The foreign exchange gain or loss reflects changes in
    the value of U.S. dollar-denominated net monetary assets and
    liabilities. The Fund's monetary assets consist of cash and accounts
    receivable, both of which have decreased during the first quarter of
    2016.



SUMMARY OF QUARTERLY
 INFORMATION
(000's, except per Trust
 Unit amount)
2016                              Q1        Q2        Q3        Q4     Total
----------------------------------------------------------------------------
Revenue                    $ 35,847                                $ 35,847

Gross profit ($)           $  3,657                                $  3,657
Gross profit (%)                 10%                                     10%

Admin. expenses ($)        $  3,198                                $  3,198
Admin. expenses (% of
 total revenue)                   9%                                      9%
Exchange rate loss         $   (454)                               $   (454)
EBITDA                     $     16                                $     16
Loss from operations       $   (659)                               $   (659)
Comprehensive (loss)       $ (1,146)                               $ (1,146)

Trust units redeemed          5,000                                   5,000
Redemptions                $     29                                $     29
Basic and diluted earnings
 per trust unit            $  (0.06)                               $  (0.06)

2015                             Q1        Q2        Q3        Q4     Total
----------------------------------------------------------------------------
Revenue                    $ 56,672  $ 48,358  $ 43,538  $ 43,639  $192,207

Gross profit ($)           $  8,021  $  3,342  $  7,290  $  9,549  $ 28,202
Gross profit (%)                 14%        7%       17%       22%       15%

Admin. expenses ($)        $  4,428  $  4,310  $  3,916  $  4,062  $ 16,716
Admin. expenses (% of
 total revenue)                   8%        9%        9%        9%        9%
Exchange rate gain/(loss)  $  1,254  $   (168) $    289  $      4  $  1,379
EBITDA                     $  4,769  $ (1,126) $  3,696  $  5,470  $ 12,809
Income/(loss) from
 operations                $  2,362  $ (2,177) $  2,136  $  4,275  $  6,596
Comprehensive
 income/(loss)             $  2,775  $ (1,874) $  2,567  $  6,436  $  9,904

Trust units redeemed         77,350     1,379       267         -    78,996
Redemptions                $    484  $      8  $      1  $      -  $    493
Basic and diluted earnings
 per trust unit            $   0.15  $  (0.10)     0.14      0.34  $   0.53
----------------------------------------------------------------------------

TRUST UNIT REDEMPTIONS AND DISTRIBUTIONS

The Fund redeemed 5,000 Trust Units during the quarter through its normal redemption program resulting in promissory notes payable of $29,250. During Q1 2015 the Fund redeemed 77,350 Trust Units for cash payments of $400,000 and promissory notes payable equal to $83,438.

The Trustees have determined that, as of May 11, 2016 the Fund will redeem tendered Trust Units at tangible book value of $6.05 per unit.

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.

Contacts:
For further Investor Relations information please contact:
Foremost Income Fund
Jackie Schenn, CA
(403) 295-5800 or toll free 1-800-661-9190 (Canada/US)
(403) 295-5832 (FAX)
investorrelations@foremost.ca
www.foremost.ca

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