Foremost Income Fund Reports Q2 2024 Results Page 1

The Fund is an unincorporated open-ended mutual fund trust that conducts its business through three operating segments, FEE, FME and Corporate. FEE, which focuses on the oil and gas industry in Western Canada, consists of two active manufacturing and service locations in Alberta. The locations manufacture oil handling systems, workshop tanks, field tanks, agricultural equipment, oil and gas process treatment equipment and gas separators. FME manufactures and services hydrovac and vacuum trucks and equipment; all-terrain vehicles, large wheeled and tracked vehicles; and custom equipment for the drilling, construction, water well and mining industries. FME focuses on custom vehicles for its global customer base which it serves through two manufacturing and service locations in Alberta.

Message to Unit Holders

Summary Q2 2024

The Fund closed the second quarter of 2024 with revenues of $54.6 million, an increase of $7.2 million compared to Q1 2024. Revenue growth was recorded in both Foremost Energy Equipment (FEE) and Foremost Mobile Equipment (FME). The Fund’s gross margin improved compared to the previous quarter, as margins in both FEE and FME strengthened. Earnings before income tax, depreciation and amortization (EBITDA) for the quarter were $7.0 million, supported by $0.3 million of insurance proceeds. Normalized for this, EBITDA increased by $3.0 million compared to the previous quarter’s figure of $3.8 million. The Fund’s robust bottom-line performance was driven by higher margins and lower administrative expenses. Three of Foremost’s four operating plants are operating near capacity, with strong demand for Foremost products.

Main mobile equipment
Gain: $39.5 million in Q2 2024, up 14% from $34.7 million in the previous quarter.
Gross margin: $8.5 million, representing 21% of revenue, up from $6.7 million and 19% in Q1 2024.

FME Q2 sales increased compared to Q1, with strong demand for vacuum trucks, water well drilling and parts. Capital spending in the infrastructure market segments supported continued strong vacuum truck sales in the U.S. and Canada. Operational efficiencies at the Stettler facility increased production capacity, helping to deliver 65 trucks in the quarter, the highest quarterly production level since the introduction of the vacuum truck product line. The Calgary facility maintained a strong capital sales backlog of more than 18 months, supported by spending in the infrastructure, mining and water well sectors in the Americas.