Thursday, April 24, 2014 - 7:00pm

Mosaic Capital Corporation Reports Annual 2013 Financial Results and Net Income of $11.6 million

RECONCILIATIONS FOR NON-IFRS FINANCIAL MEASURES

The following table reconciles Adjusted EBITDA and Free Cash Flow to income from continuing operations before tax, which is the most directly comparable measure under IFRS:

Adjusted Return on Common Equity compared to IFRS measure:

There is no IFRS measure comparable to Adjusted Return on Common Equity. However, this ratio utilizes Free Cash Flow in its calculation and the most directly comparable measure under IFRS to Free Cash Flow is income from continuing operations before tax. Accordingly, dividing (i) income from continuing operations before tax less distributions/dividends declared to holders of preferred securities and series "A" shares, in each case during the twelve-month rolling period ending December 31, 2013, by (ii) weighted average common shareholders' equity for the same period, yields a ratio of 43% (2012 – 37%) for such twelve-month period.

Preferred Security Payout Ratio compared to IFRS measure:

There is no IFRS measure comparable to Preferred Security Payout Ratio. However, this ratio utilizes Free Cash Flow in its calculation and the most directly comparable measure under IFRS to Free Cash Flow is income from continuing operations before tax. Accordingly, dividing the total amount of distributions/dividends declared to holders of Mosaic preferred securities and series "A" shares during the period by income from continuing operations before tax for the period, for each of the twelve month periods ended December 31, 2013 and 2012, yields payout ratios of  56% and 49% respectively.

Combined Payout Ratio compared to IFRS measure:

There is no IFRS measure comparable to Combined Payout Ratio. However, this ratio utilizes Free Cash Flow in its calculation and the most directly comparable measure under IFRS to Free Cash Flow is income from continuing operations before tax. Accordingly, dividing the total amount of distributions/dividends declared to holders of Mosaic preferred securities, series "A" shares and common shares during the period by income from continuing operations before tax for the period, for each of the twelve month periods ended December 31, 2013 and 2012, yields payout ratios of  66% and 57% respectively.

Three month financial highlights

Revenue for the three months ended December 31, 2013 increased 8% or $1,702 to $23,758 when compared to the same period in 2012, primarily due to the addition of revenue from Industrial Scaffold which was acquired on September 1, 2013. This increase was partially offset by a decrease in revenue at Ambassador due to project delays and Winnipeg experiencing its coldest winter since 1979, as well as decreased revenue in the Real Estate segment as a result of the sale of two properties in February 2013.

Adjusted EBITDA for the three months ended December 31, 2013 decreased 15% or $551 to $3,239 when compared to the same period in 2012. The following were the major contributing factors between the periods in 2013 compared to 2012:

• During the three-month period ended December 31, 2013, Ambassador experienced a decrease in income as a result of the completion of a number of lower margin projects, project delays, and adverse weather conditions which accounted for the underutilization of direct labour and increased operating costs. However, over the same period Ambassador's backlog increased from approximately $40,000 to over $60,000.
• During the three-month period ended December 31, 2013, the Real Estate segment income decreased as a result of the sale of the two properties in February 2013. This decrease was not fully offset by the additional income generated from the commercial property acquired in November 2013.
• During the three-month period ended December 31, 2013, activity in southeast Saskatchewan experienced a decrease due to reduced industry activity levels and adverse weather conditions which impacted Mosaic's businesses in the region.
• During the three-month period ended December 31, 2013, activity in northern Alberta experienced an increase in exploration activity levels which impacted Mosaic's businesses in the region.
• The addition of positive income from operations for Industrial Scaffold that was not part of Mosaic in the 2012 comparative period.

Free Cash Flow for the three-month period ended December 31, 2013 increased 10% or $318 to $3,392 when compared to the same period in 2012. The primary reasons for the increase in Free Cash Flow are a decrease in the non-controlling interest of Adjusted EBITDA due to the acquisition of the remaining 25% of Remote Waste and the reduction of Mosaic's share of current income tax expense.

Annual Financial Highlights

Revenue for the year ended December 31, 2013 increased 18% or $13,474 to $89,289 when compared to the same period in 2012. The primary reasons for the increase in revenue are organic revenue growth within four businesses in the Industrial segment, the addition of four months of revenue for Industrial Scaffold and the additional seven months of revenue for Kendall's Supply. This increase was partially offset by decreased revenue as a result of the sale of two properties in the Real Estate segment in February 2013.

The Adjusted EBITDA for the year ended December 31, 2013 increased 8% or $1,285 to $18,049 when compared to the same period in 2012. This can be primarily attributed to four factors:

• Four months of operations of Industrial Scaffold that was not part of Mosaic in the 2012 comparative period.
• Twelve months of operations of Kendall's Supply in the current period as compared to five months of operations in the comparative period.
• A gain on sale of real estate within the Real Estate segment.
• A decrease in income from operations for Ambassador due to lower margin projects, project delays, resulting from cold weather conditions which resulted in the underutilization of direct labour and therefore increased operating costs during the three-month period ended December 31, 2013. As of December 31, 2013 Ambassador was working on approximately $25,100 of projects which all had a weather related delay of some type.

Free Cash Flow for the year ended December 31, 2013 increased 22% or $2,377 to $13,224 when compared to the same period in 2012. This increase in Free Cash Flow can be attributed to the same factors as resulted in the increase in Adjusted EBITDA as well as the acquisition of the remaining 25% of Remote Waste. Free Cash Flow per common share for the year ended December 31, 2013 increased 25% to $1.66 from $1.33 in the comparable period.

Mosaic's audited annual consolidated financial results for the year ended December 31, 2013 and Management's Discussion and Analysis dated April 23, 2013 are available on SEDAR (www.sedar.com).

Non-IFRS Financial Measures

Below are definitions of key performance indicators used by management of Mosaic that are not recognized under IFRS and have no standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers.

¹Adjusted EBITDA:  is defined as Income from continuing operations before tax and before (i) gain (loss) on sale of equipment; (ii) non-cash expenses such as amortization; (iii) finance income and expenses; (iv) securities compensation expense; and (v) any unusual non-operating one-time items such as acquisition and reorganization costs. Adjusted EBITDA is used by management to assess Mosaic's normalized cash generated on a consolidated basis and in its operating segments. Adjusted EBITDA is also a performance measure which may be utilized by investors to analyze the cash generated by Mosaic and its operating segments.

²Free Cash Flow:  is defined as Adjusted EBITDA less (i) non-controlling interest of Adjusted EBITDA; (ii) Mosaic's share of current income tax expense; and (iii) Mosaic's share of the Sustaining Capital Expenditures. Free Cash Flow is a performance measure used by management to summarize the funds available for (i) the payment of distributions to holders of preferred securities, series "A" shares and common shares; (ii) investment in capital expenditures made to grow the enterprise; (iii) new acquisitions and working capital.

Sustaining Capital Expenditures:  is defined as capital expenditures required to sustain the operations of Mosaic at its current level of operations and is calculated by subtracting those capital expenditures which are, as determined in the discretion of management, made to grow the enterprise and expected to generate additional Adjusted EBITDA from total capital expenditures for the period. An example of Sustaining Capital Expenditures would be the replacement of vehicles that have completed their useful life.

³Preferred Security Payout Ratio:  means that number, expressed as a percentage, which is the total amount paid (including dividends, cash paid and satisfied by the issuance of preferred securities pursuant to Mosaic's distribution reinvestment plan) to holders of preferred securities and series "A" shares during the period divided by Free Cash Flow for the period. Management believes that this measure may be useful to investors in assessing the likelihood that Mosaic is able to continue to make distributions on preferred securities and series "A" shares.

4Adjusted Return on Common Equity: means that number, expressed as a percentage, that is obtained by dividing (i) Free Cash Flow less distributions declared to holders of preferred securities and series "A" shares during the period indicated by (ii) weighted average Common Shareholders' equity for the period. Management believes Adjusted Return on Common Equity is a key performance measure as it indicates the return generated by Mosaic on its common equity.

ABOUT MOSAIC CAPITAL CORPORATION

Mosaic is an investment company based in western Canada that owns a portfolio of established businesses with competitive advantages that have a history of generating cash flow from their operations. Mosaic's objective is to create long term value for our shareholders and business partners and to have that reflected in our share price. We believe that this is achieved by growing free cash flow per share and retained earnings. We do this by acquiring businesses that we understand at attractive prices and we manage our risk through extensive due diligence, creative transaction structuring and working closely with our businesses after acquisition.

FOR FURTHER INFORMATION PLEASE CONTACT:

Tim Taylor
Vice President
Mosaic Capital Corporation
400, 2424 – 4th Street SW
Calgary, AB T2S 2T4

Tel:  (403) 270-4658

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information

This news release contains forward-looking information and statements within the meaning of applicable Canadian securities laws (herein referred to as "forward-looking statements") that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All information and statements in this press release which are not statements of historical fact may be forward-looking statements. The words "believe", "expect", "intend", "estimate", "anticipate", "project", "scheduled", and similar expressions, as well as future or conditional verbs such as "will", "should", "would", and "could" often identify forward-looking statements. In particular this news release may contain forward-looking statements regarding anticipated financial and operating performance for Mosaic. Such statements or information, if any, are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements due to these statements being subject to a number of risks and uncertainties. Undue reliance should not be placed on these forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature forward-looking statements involve assumptions and known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, projections and other forward-looking statements will not occur. A number of factors could cause actual results to differ materially from the results stated in the forward-looking statements, including, but not limited to, risks related to: general economic and business conditions; the failure of Mosaic to identify acquisition targets or complete announced acquisitions; third parties honouring their contractual obligations with Mosaic and its subsidiaries; results of management's on­going efforts to sell, re-lease, lease, develop and improve real estate owned and being acquired indirectly by Mosaic through its subsidiaries; the failure to realize the anticipated benefits of Mosaic's recent and future acquisitions; adverse fluctuations in commodity prices; competition for, among other things, capital, equipment and skilled personnel; the inability to generate sufficient cash flow from operations to meet current and future obligations; the inability to obtain required debt and/or equity capital on suitable terms; competition for acquisition targets; supply disruptions; adverse weather conditions; seasonality and fluctuations in results; and limited diversification of Mosaic's subsidiaries. Should any of the risks or uncertainties facing Mosaic and its subsidiaries materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, activities or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this news release.

Readers are cautioned that the foregoing list of risks is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Mosaic and its subsidiaries are included in Mosaic's annual information form for the year ended December 31, 2013 which has been filed under Mosaic's profile on SEDAR (www.sedar.com).

Although Mosaic believes that the expectations represented by any forward-looking-statements contained herein are reasonable based on the information available to them on the date of this news release, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. Any forward-looking statements herein contained are made as of the date of this press release and Mosaic does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law

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