Calgary, Alberta--(Newsfile Corp. - August 14, 2026) - Foremost Income Fund ("Foremost" or the "Fund") announces its financial results for the six month period ended June 30, 2026.
Overview
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 two 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
Summary of Q2 2026
Foremost delivered a strong second quarter in 2026, with revenue increasing 20% year-over-year to $72.5 million and EBITDA rising to $12.8 million. The improvement was led by Foremost Mobile Equipment (FME), while Foremost Energy Equipment (FEE) also improved meaningfully from the first quarter.
For the quarter, the Fund generated revenue of $72.5 million, compared with $60.2 million in Q2 2025. Gross profit increased to $17.0 million from $14.5 million, while gross margin was 23%, compared with 24% in Q2 2025. EBITDA increased to $12.8 million from $11.4 million, and adjusted EBITDA increased to $12.8 million from $11.2 million. SG&A expenses were $5.6 million and accounted for 8% of revenue, consistent with Q2 2025. Administrative expenses remain near the low end of the Fund's historical range, reflecting continued discipline in managing overhead costs while supporting current activity levels.
Foremost remains in a good financial position, ending Q2 with $54.6 million of cash, no long-term debt, and working capital of $121.9 million.
Foremost Mobile Equipment
Revenue: $51.1 million in Q2 2026, compared with $39.5 million in Q2 2025.
Gross Margin: $13.2 million, representing 26% of revenue, compared with $10.6 million and 27% of revenue in Q2 2025.
FME was the primary contributor to the Fund's revenue growth in the quarter, with revenue increasing across all product lines compared with Q2 2025. Drill sales led the improvement, supported by continued operational efficiencies that increased production throughput and the division's ability to maintain pricing on drilling equipment. Truck, parts, and vehicle revenue also increased compared to the prior-year quarter.
Trade conditions with the United States became more challenging during the quarter. FME derives a significant portion of its revenue from U.S. customers, and tariffs on certain steel derivative products and chassis-mounted work equipment now affect products shipped by Foremost into the U.S. Foremost continues to work with distributors and customers to mitigate the impact through pricing adjustments and alternative component sourcing.
Despite this pressure, FME maintained a strong gross margin of 26%, modestly below the 27% achieved in Q2 2025. Demand for drilling equipment, hydrovacs, and aftermarket parts remains healthy.
Foremost Energy Equipment
Revenue: $21.6 million in Q2 2026, compared with $20.8 million in Q2 2025.
Gross Margin: $3.8 million, representing 18% of revenue, compared with $3.9 million and 19% of revenue in Q2 2025.
FEE generated modest revenue growth compared with Q2 2025 and improved meaningfully from the first quarter, with gross margin rising from 11% to 18% on revenue of $21.6 million compared with $18.0 million in Q1 2026. The improvement was supported by increased vessel and gas-separation activity, higher ULC tank revenue, and work on a significant field project that began near the end of Q1.
The large multi-year vessel project continues to support activity and backlog, with work expected to continue into 2027. The field project is expected to continue through to late 2026. The FEE sales environment remains competitive for shorter-cycle work as fluctuating energy prices continue to influence customer spending.
Summary of Key Fund Metrics for Q2 2026 Compared to Q1 2026
- Revenue: $72.5 million, a 21% increase over the $60.0 million in Q1 2026.
Gross Margin $17.0 million, representing 23% of revenue, compared with $13.6 million and 23% of revenue in Q1 2026
SG&A Expenses: $5.6 million, representing 8% of revenue, compared with $5.3 million and 9% of revenue in Q1 2026
EBITDA: $12.8 million, representing 18% of revenue, compared with $9.7 million and 16% of revenue in Q1 2026.
Adjusted EBITDA: (refer to page 21 of the MD&A): After removing non-operating items, increased from $9.8 million in Q1 2026 to $12.8 million in Q2 2026. EBITDA and Adjusted EBITDA are non-GAAP financial measures and do not have standardized meanings under IFRS. Refer to the non-GAAP measures section of the Fund's Q2 2026 MD&A for definitions, usefulness to management, and reconciliations to the most directly comparable IFRS measures.
2026 Outlook
As we move through 2026, our focus remains on maintaining execution, protecting margins, and managing working capital in an uncertain trade and commodity-price environment. Tariffs continue to affect U.S.-bound sales and deliveries, although strong product demand is helping to mitigate the impact. Foremost remains well positioned, with a diverse product portfolio, a strong reputation, and a solid balance sheet that provides flexibility to manage through near-term volatility while continuing to pursue growth opportunities.
Kevin Johnson
President, Foremost Income Fund
Q2 2026 VS Q2 2025 Highlights
Revenue for the second quarter of 2026 was $72.5 million, compared to $60.2 million for the same period of the previous year. More information is in the Segmented Results of Operations section of the MD&A.
Gross profit for Q2 2026 was $17.0 million and 23% of revenue, an increase from Q2 2025 gross profit of $14.5 million and 24% of revenue. More information is in the Segmented Results of Operations section of the MD&A.
Administrative expenses accounted for 8% of revenue in Q2 2026 consistent with Q2 2025. In absolute terms, these costs increased $0.8 million from the previous year. The increase was primarily driven by professional fees, consulting fees for upgrades to software, computer hardware upgrades and increased option expenses.
Adjusted EBITDA (defined on page 21 of the MD&A) was $12.8 million for Q2 2026 compared to $11.2 million in Q2 2025. Note that one-time non-operating items have been removed for purposes of adjusted EBITDA.
During the first quarter of 2026, the Fund paid an annual distribution of $24.4 million related to the Fund's 2025 taxable income.
As of August 12, 2026, the stated redemption price increased to $9.90 per trust unit.
The Fund's Q2 2026 financial statements and MD&A are available at www.sedarplus.ca and www.foremost.ca.
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/ Forward-looking statements include statements regarding tariff impacts, expected continuation of vessel and field work, pricing and sourcing responses, margin protection, working capital management, and future growth opportunities. 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, interest rates and stock market volatility.
For further Investor Relations information please contact:
Jackie Schenn, CPA, CA
Tel: (403) 295-5800 or toll free 1-800-661-9190 (Canada/US) - Fax: (403) 295-5832
E-mail: investorrelations@foremost.ca - Website: www.foremost.ca
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/309664
Source: Foremost Income Fund
