MANAGEMENTS DISCUS SION AND ANAL YSIS OF FINANCIAL CONDITION AND RESUL TS OF OPER A TIONS Managements discussion and analysis is a review of the results of operations the liquidity and the capital resources of the Company It should be read in conjunction with the financial statements of the Company and the notes thereto included elsewhere in this prospectus This discussion contains forward looking statements Please see F orwardL ooking Statements for a discussion of the risks uncertainties and assumptions relating to these statements In this discussion and analysis Orbit Garant refers to Orbit Garant Drilling Inc and its whollyowned subsidiaries including Soudure R oyale Drift US A and Drift Mexico the latter two of which are referred to collectively as Drift All annual figures in this discussion and analysis refer to fiscal years which end on June 30 Overview F rom its head office in V aldOr Qu ebec the Company manages a fleet of approximately 116 drilling rigs that are used to service the mining industry in Canada and internationally The Company has a competitive advantage because of its low cost infrastructure vertical integration with Soudure R oyale which manufactures drilling rigs for the Company and third parties and its focus on specialized drilling The Company has four operating divisions underground drilling domestic surface drilling international surface drilling and fabrication Soudure R oyale The domestic surface international surface and fabrication divisions were added to the Company as part of the Orbit and Drift including the assets of PhylDon acquisitions completed on January 31 2007 and April 16 2007 respectively The increase in profitability that the Company has experienced and is reviewed below can be attributed to those acquisitions and an increase in demand for its drilling services as a result of robust activity in the mining sector Selected Financial Information The following selected financial information has been derived from and should be read in conjunction with the historical consolidated financial statements of Orbit Garant and Garant contained elsewhere in this prospectus Summary of Quarterly R esults The following summary financial information has been derived from and should be read in conjunction with the historical consolidated financial statements of Orbit Garant and Garant contained elsewhere in this prospectus March 31 December 31 September 30 June 30 March 31 December 31 September 30 June 30 2008 2007 2007 2007 2007 2006 2006 2006 Contract R evenue 22070986 18053492 17378479 17878932 13127435 5726453 6481279 6716222 Gross profit 7515692 6315549 6248683 5381952 3779406 1439304 1924170 1197509 EBT 1 4019879 3146985 2898414 2032998 1080628 54005 1244249 734723 Net earnings per Common Share Basic 011 010 010 005 003 000 815196 560572 Net earnings per Common Share Diluted 011 010 009 005 003 000 815196 3149 Note 1 EBT is not a financial or earnings measure recognized by G A AP Therefore it may not be comparable to similar measures presen ted by other issuers including other issuers that operate in the same business as Orbit Garant and it should not be construed as an alternative to net income determined in accordance with G A AP as an indicator of performance of the cash flows from operating investing a nd financing activities or as a measure of the liquidity and funds from operations See NonG A AP Measures F or a reconciliatio n of EBT to net earnings see R econciliations of P ro F orma Financial R esults to EBT EBITD A and Normalized EBITD A in the Selected Financial Information section of this prospectus 44