Foremost Income Fund

Foremost Income Fund

August 05, 2005 08:39 ET

Foremost Acquires De-In Industries Ltd. and Peaceland Fabricating and Supply Ltd.

CALGARY, ALBERTA--(CCNMatthews - Aug. 5, 2005) - Foremost Industries Income Fund (TSX:FMO.UN) (the "Fund") announced today that it has acquired the business operations of both De-In Industries Ltd. and Peaceland Fabricating and Supply Ltd. Both businesses are located close to Grande Prairie, Alberta and are the largest manufacturers of oil storage tanks in the area. This is a key geographical region for the oilfield service industry with access to the high activity areas of Northwestern Alberta, Northeastern British Columbia and the Northwest Territories. These acquisitions will further strengthen the Fund's presence within the storage tank industry already serviced by the Fund's business units of Universal Industries, Corlac Industries and Wilco Industries. In addition, it will allow for synergistic benefits within the related entities.

Together, at current revenue levels, before consideration of any synergies, these acquisitions will generate $25 to $30 million of incremental revenues and EBITDA of approximately $4.0 million. The acquisitions will add approximately 75,000 square feet of productive plant and office space on 30 acres of land, in aggregate. The Fund financed both of these acquisitions through its current credit facilities.

The Fund is an unincorporated open end mutual fund trust conducting its business through Foremost Industries Limited Partnership ("Foremost"), and Foremost Universal Limited Partnership ("Universal"). The Fund derives its operational income from both Foremost and Universal. Foremost is comprised of the business units of Foremost Industries, a manufacturer of equipment used for the oil and gas, construction and waterwell industries; and Mobile Drilling, a U.S. based entity which manufacturers and sells parts for the geotechnical industry. Universal's overall business is focused on the oil and gas industry and contains the business units of: Universal Industries, a manufacturer of oil treating systems, shop and field storage tanks; Stettler Oil and Gas Equipment, a gas separator manufacturer; Wilco Industries Ltd., a shop tank manufacturer; and Corlac Industries, a shop and field tank manufacturer.

On behalf of the Trustees

Foremost Industries Income Fund

(signed: J.T. Grenon)

James T. Grenon, Trustee


"Certain statements in this press 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 press release, such statements use words such as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this press 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. The Fund is not undertaking to update any forward-looking statements."

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