Foremost Income Fund Reports 2021 Results

March 18, 2022 2:07 PM EDT | Source: Foremost Income Fund

Calgary, Alberta--(Newsfile Corp. - March 18, 2022) - Foremost Income Fund ("Foremost" or the "Fund") announces the financial results for the year ended December 31, 2021.


The Fund is an unincorporated open end mutual fund trust conducting its business through three operating segments, Foremost Energy Equipment (FEE), Foremost Mobile Equipment (FME), and Corporate. FEE, with its focus on the oil and gas industry in Western Canada, consists of three active manufacturing and service locations across Alberta. The locations manufacture oil-treating systems, shop tanks, field tanks, agriculture equipment, oil and gas process-treating equipment, and gas separators. FME manufactures and services hydrovac and vacuum trucks and equipment; off-highway, large-wheeled and tracked vehicles; and equipment for the custom drilling, construction, water well, and mining sectors. FME focuses on custom-built vehicles for its global clientele whom it serves through two manufacturing and service locations across Alberta.

Message to Unitholders

Foremost finished 2021 with increases in Revenue, EBIDTA and Gross Margin over the 2020 results. Increased sales volume in the Drills, Mining Tools, Hydrovac Trucks and Agriculture Bins lines drove revenue growth in both the Mobile and Energy divisions.

Foremost Mobile Equipment (FME) produced revenues of $102.8 million versus $84.4 million in 2020, and a gross margin of $19.9 million versus $14.9 million in 2020. Demand for Hydrovacs increased in 2021, due to infrastructure spending, and a small increase in oil and gas activity in North America. Sales of Drills and Mining Tools were bolstered by the continued growth in equipment purchases in mining and water-well markets, including the sale of two of the newest Foremost mining exploration drill, the APEX65. Gross margins also increased over 2020 as price increases and cost reductions took effect.

Foremost Energy Equipment (FEE) produced revenues of $32.4 million versus $27.9 million in 2020, and a gross margin loss of $1.6 million versus a loss of $2.1 million in 2020. Sales of Agriculture Bins and ULC Tanks were in a growth phase for FEE, as gross margins and market penetration increased in Western Canada. Sales in the Western Canadian energy sector remained sluggish, and margins were depressed for most of the year as investment in the sector remained muted.

Foremost received $4.6 million in government assistance in 2021, compared to the $8.9 million in 2020, through the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) programs. This allowed Foremost to mitigate some of the impact of the business downturn. Foremost used these assistance programs to keep employees working through the year and helped fund company workplace safety initiatives.

The safety of everyone who works at Foremost remains the highest priority for management. Foremost remains fully compliant with all provincial and municipal mandates and laws related to workplace and public safety instituted due to the COVID-19 pandemic.

The overview: key measurements

Revenue is $134.7 million, an increase of 20.5% from the 2020 revenue of $111.9 million.
Gross margin increased to $18.3 million, up 43% from $12.8 million in 2020.
SG&A expenses are 10% of revenue, consistent with last year. Total spend in 2021 in this category is $13.1 million
compared to $11.8 million in 2020.
Adjusted EBIDTA is $9.1 million, an increase of 82.5% from the 2020 value of $5.0 million.

2022 outlook

Markets remain unpredictable, as the response to the novel COVID-19 virus continues to evolve. Foremost is actively monitoring the latest developments and assessing the impact of the outbreak and the unprecedented drop in global economic activity. Significant uncertainty remains around the spread of the COVID-19 virus and the impact it will have on the Fund's operations, the demand for the Fund's products, global supply chains, and economic activity in general.

Kevin Johnson, President

2021 VS 2020 Highlights

  • The mining industry has seen a surge in demand with increases in commodity prices and the ability for companies to resume operations safely during the pandemic. However, while the oil and gas industry experienced increases in commodity prices, this has not yet been reflected in the return of capital spend by our customers. At Foremost, this contributed to an increase in revenue of $22.9 million when comparing year to date 2020 and 2021. The FME segment recognized $18.4 million more revenue in 2021 over 2020, while the FEE segment recognized a $4.5 million increase in revenue. International revenue remained consistent year over year at $14 million- revenue in United States increased $3.5 million from demand in parts and drills, and Canadian revenue increased by $19 million.
  • Gross profit for 2021 was $18.3 million and 14% of revenue, compared to $12.8 million and 11% of revenue in 2020. More information is in the Segmented Results of Operations section of the MD&A.
  • Administration costs increased to $13.1 million and 10% of revenue, up from $11.7 million in 2020. The majority of spend in this category is related to personnel costs.
  • Adjusted EBITDA (defined on page 14 of the MD&A) was $9.1 million for 2021 compared to $5.0 million in 2020.
  • In the first quarter of 2021, certain costs were reclassified, which will result in a lower gross margin and higher SG&A expenses going forward. Refer to note 3 of the Financial Statements for more information.
  • As announced on February 25, 2022, the Fund paid a cash distribution of $0.30 per trust unit in respect of the 2021 fiscal year.
  • The stated redemption price at March 18, 2022, remains at $6.35 per trust unit.

Transfer Agent Notice

Effective March 16, 2022, the Fund changed Transfer Agents from Computershare Trust Company to Olympia Trust Company. For contact information please refer to the investor section of the Foremost website at


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 pay a cash distribution to Unitholders in 2022 and the estimates of the amount and date of such distribution. 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.

For further Investor Relations information please contact:

Jackie Schenn, CA
Tel: (403) 295-5800 or toll free 1-800-661-9190 (Canada/US) - Fax: (403) 295-5832 E-mail: - Website:

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