Mr. Tim Taylor reports

MOSAIC CAPITAL CORPORATION REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS, NET INCOME OF $4.6 MILLION AND OTHER MATTERS

Mosaic Capital Corp. has released its unaudited condensed interim consolidated financial statements for the three months ended March 31, 2013.

"I am very pleased with our first quarter results showing the continued growth of our subsidiaries," commented John Mackay, executive chairman and chief executive officer.

Mr. Mackay added: "We worked closely with our partners and operators of our subsidiaries in 2012, focusing on growth initiatives and cost savings. As these initiatives are put to work, we believe that we will see long-term benefits for Mosaic and our shareholders. Looking ahead, we are reviewing many acquisition opportunities that may fit within our investment criteria, and, with a current cash position as of March 31, 2013, of approximately $34-million, Mosaic is well positioned for future acquisitions."

First quarter 2013 financial and operational highlights:

• First quarter 2013 revenue increased 29 per cent from first quarter 2012 to $21.1-million.
• First quarter 2013 income from operations and adjusted earnings before interest, taxes, depreciation and amortization increased 91 per cent from first quarter 2012 to $6.5-million.
• First quarter 2013 free cash flow increased 117 per cent from first quarter 2012 to $4.9-million.
• First quarter 2013 net income and comprehensive income increased 92 per cent from first quarter 2012 to $4.6-million.
• First quarter 2013 preferred security payout ratio was 38 per cent.
• First quarter 2013 organic growth for the industrial segment gave rise to growth in revenue of 11.9 per cent and growth in income from operations of 12.2 per cent, each as compared with first quarter 2012. This organic growth does not take into account the acquisition of Kendall's Supply Ltd.
• Gain on sale of real estate was $2.2-million, which contributed to a large portion of the percentage change in income from operations, adjusted EBITDA and free cash flow.

            SELECTED FIRST QUARTER 2013 HIGHLIGHTS
               (all amounts are in thousands)
                                                 2013     2012    

Revenue                                       $21,102  $16,307   
Income from operations and adjusted EBITDA     $6,510   $3,406   

Results for the three months ended March 31, 2013

On a consolidated basis for the three months ended March 31, 2013, the positive change in the financial performance of Mosaic was primarily attributable to three factors: first, the inclusion of Kendall's Supply, which was not part of Mosaic in the 2012 comparative period; second, organic growth during the quarter in the company's existing businesses (exclusive of Kendall's Supply) in both revenue (an increase of 11.9 per cent over the period ended March 31, 2012) and income from operations (an increase of 12.2 per cent over the period ended March 31, 2012); and third, a $2,249 gain on sale of real estate within our real estate segment. The $2,249 gain on sale of real estate had a significant positive impact on a number of key performance indicators, including, free cash flow and adjusted EBITDA and metrics derived therefrom. Such gains have been a periodic occurrence within the company's real estate segment, but not on a predictable basis, due to the nature of the real estate business. The actual increase in EBITDA was $3,104 (or 91 per cent) to $6,510 (as at March 31, 2013) from $3,406 (as at March 31, 2012), and this primarily resulted in the increase in free cash flow of $2,643 (or 117 per cent) to $4,893 (as at March 31, 2013) from $2,250 (as at March 31, 2012).

The strong financial condition of Mosaic as at March 31, 2013, is attributable to the solid financial performance during the first quarter of 2013, as well as the strong financial condition of Mosaic entering the year, which was significantly aided by completion of a short-form prospectus offering of Mosaic preferred securities in October, 2012, which raised gross proceeds of $25,054. To date, the proceeds of this offering have been, and are still anticipated to be, utilized consistent with the disclosure of the use thereof as set for in Mosaic's final short-form prospectus dated Oct. 23, 2012, and filed on SEDAR under Mosaic's profile.

As of March 31, 2013, Mosaic had a cash position of $34,805 (Dec. 31, 2012: $30,818) and net working capital of $53,219 (Dec. 31, 2012: $53,052), which give rise to a current ratio of 3.9 to 1 (Dec. 31, 2012: 3.2 to 1). The increase in the current ratio was largely due to: (i) Mosaic's positive cash flow from operations in the period of $3,665, which was driven primarily by the strong financial performance of Remote Waste LP, Ambassador Mechanical Ltd. and Kendall's Supply within the company's industrial segment, and (ii) the positive results of the disposition during the quarter of two buildings held for sale resulting in net cash of $8,527 after costs of disposition and repayment of the operating loan of $5,828 necessitated by the disposition.

During the three months ended March 31, 2013, total assets decreased from $122,405 (Dec. 31, 2012) to $116,717 (March 31, 2013). Total liabilities also decreased from $28,232 (Dec. 31, 2012) to $22,434 (March 31, 2013). A primary factor in both these reductions was the previously mentioned sale of two buildings in the company's real estate segment, which collectively had a book value of $12,087 and which gave rise to the required repayment of the operating loan of $5,828. The asset reduction caused by the sale was mitigated somewhat by an increase during the period in Mosaic's net cash position by $3,987, as well as an increase in accounts receivable of $2,477, in both cases as compared with the net cash and accounts receivable position as at Dec. 31, 2012.

For the three months ended March 31, 2013, revenue increased by $4,795 to $21,102 (March 31, 2012: $16,307), which was primarily related to an increase in activity from Remote Waste and Ambassador Mechanical, as well as the addition of Kendall's Supply within the company's industrial segment. The increase in activity not only drove an increase in revenue but also drove an increase in income from operations to $4,261 (March 31, 2012: $3,406). The increase in operating expenses for the three-month period to $16,841 (March 31, 2012: $12,901) was primarily related to additional costs associated with the increased activity in the company's industrial segment.

Restricted securities units

In 2012, Mosaic previously conditionally issued, as part of its variable compensation incentive program, restricted securities units to its executive officers and certain employees. The RSUs conditionally issued were both RSUs to be settled for common shares, as well as RSUs to be settled for preferred securities. The terms of the plan provide that the RSUs conditionally issued to each plan participant are subject to cancellation in whole or in part based upon: (i) Mosaic's subsequent determination of the actual amount of variable compensation earned by a participant for a fiscal year (which is based upon the attainment of personal performance and corporate performance over the fiscal year) and (ii) certain elections and allocations made by the participant, both of which then determine the number of RSUs which shall remain issued and outstanding to the benefit of the participant. All remaining RSUs conditionally issued to the participant in that fiscal year will then be terminated and cancelled. The RSUs are to be settled on a one-for-one basis for the underlying security.

Mosaic today reports that, based upon Mosaic's determination of actual variable compensation entitlements earned by participants under the plan for the fiscal year 2012, and following certain elections made by the participants, the number of RSUs which remain issued and outstanding in respect of the 2012 issuances are: (i) 325,475 RSUs to be settled for 325,475 common shares, each at a settlement price of $3.30 per share, and (ii) 19,791 RSUs to be settled for 19,791 preferred securities, each at a settlement price of $8.59 per security. The RSUs will vest yearly in three equal tranches with the first tranche vesting immediately. An arm's-length and independent party to Mosaic has been appointed as trustee in connection with the plan for the purpose of performing various duties and functions, including utilizing funds provided by Mosaic for the purchase of securities in the market to be held in trust by the trustee for the benefit of plan participants for subsequent allocations and settlements of RSUs. To date, the trustee has acquired 250,000 common shares of Mosaic for the purpose of RSU settlements.

We seek Safe Harbor.