Foremost Income Fund
TSX : FMO.UN

Foremost Income Fund

March 24, 2008 13:22 ET

Foremost Income Fund Reports Revenues and Earnings for Fourth Quarter and Fiscal 2007

CALGARY, ALBERTA--(Marketwire - March 24, 2008) - Foremost Income Fund (TSX:FMO.UN) announces financial results for the fourth quarter and year
ended December 31, 2007.



Quarter ended December 31,
(000s, except per trust unit amounts) 2007 2006
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Revenue $ 56,116 $ 79,748
Cost of sales 39,541 58,581
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16,575 21,167
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Selling, general and administrative 5,736 7,323
Interest 285 53
Amortization 1,309 582
Foreign exchange gain (63) (225)
Gain on disposal of property, plant and equipment (322) (55)
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6,945 7,678
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Income before income taxes 9,630 13,489
Future income taxes recovery - 20
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Net income and comprehensive income $ 9,630 $ 13,509
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Earnings per trust unit
Basic $ 0.46 $ 0.69
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Diluted $ 0.45 $ 0.67
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Year ended December 31,
(000s, except per trust unit amounts) 2007 2006
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Revenue $ 232,359 $ 284,054
Cost of sales 166,867 205,518
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65,492 78,536
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Selling, general and administrative 23,137 26,911
Interest 1,366 664
Amortization 5,211 3,397
Foreign exchange loss (gain) 753 (531)
Gain on disposal of property, plant and equipment (619) (180)
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29,848 30,261
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Income before income taxes 35,644 48,275
Future income taxes recovery 19,843 166
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Net income and comprehensive income $ 55,487 $ 48,441
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Earnings per trust unit
Basic $ 2.71 $ 2.50
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Diluted $ 2.68 $ 2.45
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Consolidated revenue for the fourth quarter was $56.1 million compared to $79.7 million last year, a 29.6% decrease. The gross profit was $16.6 million a $4.6 million decrease over the $21.1 million in 2006. Fourth quarter net income was $9.6 million as compared to $13.5 million for 2006. The reason for the decline is the continued weakness in the natural gas sector and the resultant effect on revenues and net income. Fourth quarter 2007 earnings per trust unit was $0.46, a decrease from $0.69 last year.

Fiscal 2007 consolidated annual revenue was $232.4 million, an 18.2% decrease over the $284.1 million for 2006. Consolidated income before income taxes was $35.6 million for 2007 down 26.2% from the $48.3 million in 2006. Net income for 2007, reflecting the recognition of a $19.8 million future income tax recovery, increased to $55.5 million in 2007 as compared to $48.4 million in 2006. Basic earnings per trust unit were $2.71 for 2007 as compared to $2.50 in 2006. Quarterly trust unit distributions were $0.40 per trust unit, unchanged since June 2006. Trust unit distributions declared in 2007 amounted to $1.60 per unit or $32.7 million in aggregate as compared with $1.45 per trust unit or $28.2 million in aggregate for 2006.

The Fund currently expects that it will continue to benefit from strong business activity in the Western Canadian conventional oil and heavy-oil markets as well as the global waterwell, mining and geotechnical industries. Offsetting these benefits is the expectation for the Western Canadian natural gas sector to remain slow throughout fiscal 2008. Changes in customer business activity in response to changing government royalty programs and regulations may also impact fiscal 2008 revenues from the Western Canadian conventional oil and heavy-oil industries. Based on these expectations, the Fund has and will continue to take steps to rationalize operations. However, the Fund anticipates similar levels of income before income taxes as for 2007.

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, 2008.

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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