Foremost Income Fund
TSX : FMO.UN

Foremost Income Fund

March 22, 2007 11:48 ET

Foremost Income Fund Reports Record Revenues and Earnings for Fourth Quarter and Fiscal 2006

CALGARY, ALBERTA--(CCNMatthews - March 22, 2007) - Foremost Income Fund announces financial results for the fourth quarter and year ended December 31, 2006.



For the fourth quarters ended December 31,
(000s, except per trust unit amounts) 2006 2005
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Revenue $ 79,748 $ 67,598
Cost of sales 58,581 51,688
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21,167 15,910
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Selling, general and administrative 7,323 4,946
Interest 53 236
Amortization 582 636
Foreign exchange gain (225) (226)
Loss (gain) on disposal of property, plant and equipment (55) 65
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7,678 5,657
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Income before income taxes 13,489 10,253
Future income tax recovery (20) -
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Net income $ 13,509 $ 10,253
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Earnings per trust unit
Basic $ 0.69 $ 0.55
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Diluted $ 0.67 $ 0.53
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For the years ended December 31,
(000s, except per trust unit amounts) 2006 2005
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Revenue $284,054 $207,504
Cost of sales 205,518 160,642
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78,536 46,862
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Selling, general and administrative 26,911 15,045
Interest 664 1,204
Amortization 3,397 2,649
Foreign exchange gain (531) (51)
Loss (gain) on disposal of property, plant and equipment (180) 36
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30,261 18,883
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Income before income taxes 48,275 27,979
Future income tax recovery (166) -
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Net income $ 48,441 $ 27,979
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Earnings per trust unit
Basic $ 2.50 $ 1.49
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Diluted $ 2.45 $ 1.45
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Consolidated revenue for the fourth quarter was $79.7 million compared to $67.6 million last year, a 17.9% increase. The gross profit increased to $21.2 million from $15.9 million in 2005 representing an increase of 33.3%. Net income was $13.5 million as compared to $10.3 million, or an increase of 31.1%. All of these increases are attributable to a very robust economy, the greater number of business operations contained within the Fund from a year ago, and internal growth. Earnings per trust unit for the quarter was $0.69, an increase from $0.55 last year.

Consolidated year-to-date revenue for 2006 was $284.1 million, a 36.9% increase from the $207.5 million generated in 2005. Consolidated 2006 net income was $48.4 million, compared to $27.9 million for 2005 representing an increase of 73.5% over 2005. Basic earnings per trust unit increased from $1.49 in 2005 to $2.50 for the current year. Quarterly trust unit distributions were increased from $0.25 to $0.40 ($1.60 annually) per trust unit effective June 2006. These increases resulted in year-to-date 2006 trust unit distributions of $1.45 per trust unit or $28.2 million in aggregate. 2005 trust unit distributions amounted to $0.58 per trust unit or $10.8 million in total. For 2006, trust unit distributions amounted to 58.3% of consolidated net income as compared to 38.7% in 2005.

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 contains the business units of: Universal Industries, a manufacturer of oil treating systems, shop and field storage tanks; Maloney Industries, a manufacturer of medium to large scale oil and gas process treating equipment; Stettler Universal Limited Partnership, a gas separator manufacturer; Wilco Industries; Corlac Industries; Peace Land Fabricating and Supply Ltd. and De-In Industries Ltd., all shop tank manufacturers. Foremost is comprised of the business units of Foremost Industries, a manufacturer of custom equipment used for the oil and gas, construction, water-well and mining industries; and Mobile Drilling Company, Inc., a U.S. based business which manufactures and sells rigs and parts for the geotechnical industry.

On behalf of the Trustees

Foremost Income Fund

James T. Grenon, Trustee

Note: A complete financial breakdown can be found on www.sedar.com on or before March 31, 2007.

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 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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