CALGARY, ALBERTA -- (Marketwire) -- 03/22/13 -- Foremost Income Fund ("Foremost" or the "Fund") announces the financial results for the 12 months ended December 31, 2012.

ANNUAL FINANCIAL RESULTS:

The key elements from 2012 are:

--  Revenues have remained stable with a slight increase of 1%. Consolidated
    revenues were $261.4 million versus $259.4 million for 2011. 
--  Revenues outside of Canada have increased to 19.09% from 12.72% of total
    revenues. 
--  Operating activities generated a gross profit percentage of 19.9% as
    compared with 21.1% in 2011. Gross profits were $52.1 million as
    compared with $54.7 million for 2011. 
--  Administrative expenses increased to 9.2% of revenue versus 8.0% of
    revenue in 2011. Administrative expenses were $24.1 million in 2012 and
    $20.7 million for 2011. 
--  Fluctuations in the exchange rates between the Canadian dollar against
    the U.S. dollar resulted in a $230,000 exchange loss compared to a
    $6,000 loss in 2011. 
--  Income from operations decreased 21.3% to $24.3 million versus $30.9
    million for 2011. 
--  Comprehensive income was $19.7 million compared to a $30.2 million in
    2011; comprehensive income includes a $4.3 million income tax expense
    for 2012 and $.5 million for 2011. 
--  The overall financial performance of 2012 was negatively impacted by a
    highly competitive market, continued labour supply and cost issues, new
    lower margin product lines and a significant change in overall product
    mix moving away from traditional short cycle, controllable shop tanks to
    very complex oil sands related field tanks and vessels. These products
    require significant incremental technical resources and are subject to
    ever increasing customer expectations in safety, quality, project
    management and cost discipline which are all compounded by an overall
    project life of 18-24 months. Throughout 2012 the company developed
    processes to mitigate the impacts of this changing business environment
    and we have incorporated them into all new quotes on a go forward basis.
    We believe as these new controls come into effect in the coming years we
    will be able to improve the margins. 
--  Basic and diluted earnings per Trust Unit were $1.05 per Trust Unit as
    compared with $1.45 per Trust Unit in 2011. 
--  During the year the Fund acquired the operating and debt facilities of
    Steelhead Welding Ltd. (Steelhead), a hydrovac and vacuum truck
    manufacturer in Edmonton, Alberta. The Fund also acquired and
    subsequently leased back the operating assets of Steelhead. To date the
    Fund has advanced a total of $3.9 million in connection with its
    agreement with Steelhead. 
--  Year to date cash flow generated from operations for 2012, calculated as
    comprehensive income adjusted for items not involving cash such as
    amortization, gains on disposals of property, plant and equipment, Trust
    Units based compensation and changes in non-cash working capital totaled
    $10.5 million versus $16.2 million in 2011. 
--  Cash has decreased $10.7 million since December 31, 2011. This decrease
    was the result of $10.5 million of funds generated from operations, $8.0
    million of net capital expenditures, $13.2 million of Trust Unit
    redemptions, exercised options and distributions to Trust Unit holders.
    Working capital, defined as current assets less current liabilities
    increased $6.6 million to $73.5 million. 
--  Property, plant and equipment at December 31, 2012 amounted to $59.8
    million. The $4.0 million increase relative to 2011 reflects $8.3
    million in acquisitions, $4.0 million decrease from amortization, and
    $0.3 million in disposals. 
    
--  Short-term indebtedness increased to $14.1 million at December 31, 2012,
    compared to $3.5 million at December 31, 2010. The increase is due
    mainly to the $13.1 million cash distribution that occurred on December
    31, 2012. 
    
--  Unitholders' equity increased from $156.7 million at December 31, 2011
    to $163.2 million at December 31, 2012. 

SUMMARY OF QUARTERLY INFORMATION (unaudited)

(000's, except per trust unit amounts)

2012                             Q1        Q2        Q3        Q4      Total
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Revenue                     $70,822   $62,499   $64,746   $63,363   $261,430
Income from operations      $ 8,952   $ 6,102   $ 7,386   $ 1,869   $ 24,309
Comprehensive Income        $ 7,653   $ 5,078   $ 5,625   $ 1,371   $ 19,727
Net income                                                                  
 Per trust unit, basic &                                                    
  diluted                   $  0.41   $  0.27   $  0.30   $  0.07   $   1.05
                                                                            
2011                             Q1        Q2        Q3        Q4      Total
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Revenue                     $56,398   $65,856   $65,631   $71,496   $259,381
Income from operations      $ 4,742   $ 7,535   $ 8,616   $10,001   $ 30,894
Comprehensive Income        $ 4,717   $ 7,445   $ 8,741   $ 9,268   $ 30,171
Net income (loss)                                                           
 Per trust unit, basic                                                      
  and diluted               $  0.23   $  0.35   $  0.42   $  0.45   $   1.45
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TRUST UNIT REDEMPTIONS AND DISTRIBUTIONS

The Fund redeemed 28,785 Trust Units during the year through its normal redemption program resulting in cash payments of $225,000. During 2011 the Fund redeemed 758,098 Trust Units for $4.9 million along with 1,844,075 units through a special redemption on December 21, 2011 resulting in the distribution of $20.3 million of income and redemption proceeds of $18,441. During the year 24,000 Trust Unit Options were exercised at a price of $8.75 per unit, resulting in a cash inclusion of $210,000. No options were exercised during 2011.

An annual Trust Unit cash distribution was made on December 31, 2012, at $.70 per unit. This resulted in a cash payment of $13.2 million for 2012. In 2011 the Fund paid both a cash distribution of $2.1 million and a special redemption amount of $20.2 million.

The Trustees have determined that, as of the date of March 20, 2013 the Fund will redeem tendered Trust Units at tangible book value + 10% or $8.00 per unit.

OVERVIEW

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; 
--  Universal Bonnyville, shop tank manufacturer; 
--  Maloney Industries, a manufacturer of medium- to large-scale oil and gas
    process treating equipment; 
--  Stettler Universal Limited Partnership, a gas separator and hydrovac
    manufacturer; 
--  Corlac Industries and Peace Land Fabricating and Supply Ltd., both shop
    tank manufacturers and  
--  Brahma, a sub-200 horsepower compressor manufacturer.  
--  Foremost is comprised of the business unit of Foremost Industries, a
    manufacturer of custom equipment used for the oil and gas, construction,
    water-well and mining industries.  

During the first quarter of 2012, the building and land relating to the De-In manufacturing operations were sold to a third party for $700,000.

At year end, and subsequent to, Foremost Universal LP completed an internal re-organization. This change was effected in order to bring clarification and consistency to the legal structure, resulting in fewer wholly owned subsidiaries and a corresponding increase in operating divisions. This restructuring transaction also resulted in simplified and streamlined processes for both external, including customers and vendors, and internal users.

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.