M ANAGEMENT S DISCUSSION AND ANALYSIS continued 18 Orbit G arant 2012 annual rep O rt SUMMARY ANALYSIS OF FISCAL 2011 COMPARED TO FISCAL 2010 Figures for fscal 2011 have been restated to comply with IFRS Fiscal 2010 remains unchanged as previously reported under Canadian GAAP Revenue for the fscal year ended June 30 2011 was 1277 million compared to 1100 million for fscal 2010 representing an increase of 177 million or 162 Adjusted gross margins for fscal 2011 were 276 compared to 306 for fscal 2010 Total gross proft during fscal 2011 was 285 million compared to 336 million for fscal 2010 representing a dec rease of 153 The decline was a result of a more competitive pricing environment due to prevailing market conditions at that time Net earnings for fscal 2011 totalled 114 million or 035 per share 034 per share diluted compared to 126 million or 038 per share basic and diluted in fscal 2010 OVERALL PERFORMANCE SUMMARY OF QUARTERLY RESULTS 1 Fiscal 2012 Fiscal 2011 millions June 30 Mar 31 Dec 31 Sept 30 June 30 Mar 31 Dec 31 Sept 30 Contract revenue 436 417 324 371 410 334 259 274 Gross proft 77 100 71 89 101 68 59 57 Gross margin 177 239 217 240 247 204 229 205 Adjusted Gross margin 2 226 294 283 295 292 257 291 261 Net earnings 13 35 19 37 46 23 23 22 EBITDA 3 55 83 58 83 93 60 54 53 Net earnings per common share Basic 004 010 006 011 014 007 007 007 Diluted 004 010 005 011 013 007 007 007 1 F i g u r e s f o r f s c a l 2 0 1 1 have been restated to comply with IFRS 2 Refects gross margin excluding amortization expenses See Reconciliation of nonIFRS fnancial measures 3 E B I T D A S e e R e c o n c i l iation of nonIFRS fnancial measures SEASONALITY The Companys revenue shows some seasonal trends In the underground drilling division scheduled mine shutdowns over holiday and summer periods at some locations reduce revenue during these periods In the domestic surface drilling division weather condi tions in the spring and fall seasons often cause drilling programs to pause or be planned around the seasonal fuctuations Similarly i n the international surface drilling division weather conditions at certain times of the year make drilling diffcult resulting in revenue fuc tuations ANALYSIS OF T h E FOURT h QUARTER OF FISCAL 2012 COMPARED TO FISCAL 2011 Contract revenue Revenue for the fourth quarter of the fscal year ended June 30 2012 Q4 FY2012 totalled 436 million an increase of 26 million or 59 compared to the quarter ended June 30 2011 Q4 FY2011 The number of metres drilled decreased to 402126 in Q4 FY2012 from 426525 in Q4 FY2011 The Companys average revenue per meter drilled in Q4 FY2012 was 10583 compared to 9412 in Q4 FY2011 Domestic drilling revenue was 389 million in Q4 FY2012 compared to 338 million in Q4 FY2011 representing an increase of 147 refecting higher revenue per metre drilled and the contribution from L antech Drilling Most of the increase was attributable to the Companys new Lantech Drilling operations International drilling revenue was 47 million in Q4 FY2012 compared to 73 million in Q4 FY2011 a decrease of 351 due to lower demand for drilling services