Foremost Income Fund reports 2023 performance

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Calgary, Alberta–(Newsfile Corp. – March 15, 2024) – Foremost Income Fund (“front line” or “fund) will announce its financial results for the fiscal year ending December 2023.

overview

The Fund is an unincorporated open-end investment trust that operates through three operating segments: Foremost Energy Equipment (FEE), Foremost Mobile Equipment (FME), and Corporate. FEE is focused on the oil and gas industry in Western Canada and consists of two active manufacturing and service locations across Alberta. These locations manufacture oil handling systems, shop tanks, field tanks, agricultural equipment, oil and gas processing equipment, and gas separators. FME manufactures and services hydraulic vacuums and vacuum trucks and equipment. Off-highway, large wheel and tracked vehicles. Also includes equipment for custom drilling, construction, water wells and mining sectors. FME focuses on providing custom-made vehicles for customers around the world through his two manufacturing and service locations in Alberta.

Message to unitholders

Foremost’s sales at the end of 2023 were $188 million, an increase of 23% from $152.8 million in 2022. Gross profit margin rose from 13% in 2022 to 17% for the year, as selling prices increased due to increased factory utilization and increased demand. Most of Foremost’s product lines have experienced strong sales volume and production backlog growth. Global demand for capital equipment and spare parts in the mining, energy, infrastructure and water wells sectors continues to be strong, and Foremost is well-positioned to serve customers in these markets.

Foremost Mobile Equipment (FME)’s 2023 revenue was $141.1 million, up 38% from $102.2 million a year ago. Gross profit margin in 2023 was $27.5 million, or 19% of revenue, up from $18.4 million, or 18%, in 2022. FME factories are operating at near full capacity, but labor shortages are negatively impacting throughput. Vacuum truck sales and deliveries to Canada and the United States hit the highest annual numbers in the history of Foremost’s product line. This is due to strong demand for infrastructure equipment and market enthusiasm for Foremost’s industry-leading product portfolio. Water well drilling and mining drills continue to show strong demand as well drilling and metal mining remain active sectors around the world. FME also achieved record annual sales volumes for spare parts and mining tools to support its global customer base.

Foremost Energy Equipment (FEE)’s 2023 revenue was $47.5 million, down 7% year over year. This decline was primarily driven by silver bin volumes that were adversely affected by drought conditions in parts of Western Canada. Despite this revenue decline, FEE gross profit for the current year was $4.6 million, compared to FEE gross profit margin of $1.8 million in 2022. Demand for FEE products increased significantly in the second half of 2023 due to new projects and increased spending in Western Canada’s energy sector. , the backlog of orders is increasing. This increased demand has increased prices and increased gross margins for FEE products. Fee balances for energy products have recovered from the lowest levels experienced due to the impact of COVID-19.

Overview: Key measurements for 2023 compared to 2022

revenue was $188 million, an increase of 23% from $152.8 million in 2022.
gross profit margin Sales were $32 million, representing 17% of sales and an increase of $11.9 million from the prior year. Profit margin in 2022 was 13% of revenue.
Selling, general and administrative expenses It was 9% of revenue. Total spending increased year-over-year, with his $15.5 million in 2022 compared to his $17.4 million.
EBIDTA EBITDA in 2022 was $8.2 million, or 5% of revenue.

Outlook for 2024

Foremost continues to face macroeconomic and supply chain challenges, including global supply chain challenges and lingering volatility in commodity markets related to the Ukraine war. However, we believe that these factors are beginning to subside. Nevertheless, our operations and supply chain teams are taking proactive steps to reduce the impact of these issues. The expected outlook for 2024 is expected to remain weak due to inflationary pressures on input costs and a tight labor market. Still, steps are being taken to proactively transmit the effects of inflation to the market when conditions permit.

kevin johnsonpresident

2023 VS 2022 Highlights

Administrative costs in 2023 were $17.4 million, up from $15.5 million in the prior year. All categories in the government sector increased due to increased business activity, with the payroll category accounting for more than half of the increase. The fund also covers costs associated with recruiting temporary foreign workers to all factories, including consulting fees, travel expenses, and housing-related expenses.

As announced on February 24, 2024, the Fund will pay cash distributions of $0.50 per Trust Unit for fiscal year 2023.

On March 7, 2024, the Fund approved and processed unitholder redemption requests for 2,141,103 units valued at $14 million. Despite the predetermined monthly cash limit of $350,000, the Trustees exercise discretion in approving redemptions, taking into account the Fund’s cash balances and overall working capital position. retained the authority to exercise it.

Forward-looking statements

Certain statements in this news release are subject to known and unknown risks, uncertainties and other risks that may cause the Fund’s actual results, performance or achievements to be materially different from future results, performance or achievements. may constitute “forward-looking” statements that involve factors such as: expressed or implied by such forward-looking statements. When used in this news release, such statements include the words “may,” “will,” “expected,” “believes,” “plans,” and other similar terms. will be done. These statements reflect management’s current expectations regarding future events and performance and speak only as of the date of this news release. These forward-looking statements include the effects of general economic conditions, industry conditions, changes in laws and regulations, increased competition, fluctuations in commodity prices and foreign exchange rates, interest rate and stock market volatility; It involves many risks and uncertainties.

For more information on investor information, please contact us below.
Jackie Shen, California
Phone: (403) 295-5800 or Toll Free 1-800-661-9190 (Canada/USA) – Fax: (403) 295-5832 Email: investorrelations@foremost.ca – Website: www.foremost.ca