during 2010 we were able to refocus on adding manufacturing capacity, optimising our rig fleet, and hiring over 2,200 people – all in preparation for the ongoing and future growth







This past year was a very profitable year of growth for Boart Longyear. This is the direct result of a surprisingly strong mining industry recovery and our restructuring programs during the 2009 Global Financial Crisis (GFC).

Therefore, during 2010 we were able to refocus on adding manufacturing capacity, optimising our rig fleet, and hiring over 2,200 people – all in preparation for the ongoing and future growth. Thus, a 47 percent decline in 2009 revenue turned into a 51 percent revenue increase in 2010. More importantly, we delivered a 100 percent increase in 2010 EBITDA. These strong results also allowed us to reinstate our dividend policy in 2010.

I would like to highlight several important accomplishments from last year. We successfully restructured our global and diverse organisation into four regions, focusing on "GLOBAL alignment, REGIONAL ownership, and LOCAL execution". This is the foundation for each customer, in each region, seeing "One Boart Longyear". As I said last year, our customers want the same Boart Longyear products or services, no matter where we operate. This new structure has allowed us to start delivering on that commitment.

The "One Boart Longyear" initiative is also being applied to our global compliance program. The nature of the mining exploration business takes us to some of the most remote and politically challenged places in the world. We have one uniform code of conduct and one compliance standard … regardless of the region, country or customer. Some examples of this initiative: mandatory online compliance training for all employees, being a registered legal entity in each country in which we operate, and a confidential global compliance hotline.

Fortunately, we were able to allocate significant capital to organic growth in 2010. This capital was used for new product development, manufacturing capacity additions, fleet optimisation, and geographic expansion. Each of these initiatives drives shareholder value and positions us for further growth in 2011.

As we invested in the business, we continued to remain focused on total operating cost. Continuing to maintain a variable cost structure and a strong balance sheet has also allowed us to maximise market share in this growth environment.

Our new product development roadmap extends well into 2013. We remain focused on aggressive R&D programs and new product launches. In 2010 alone, 173 patent applications were filed and 11 new products launched. Many of these programs are focused on continuing to improve rig operator safety and efficiency. These development programs will continue, allowing us to maintain our technology leadership and position as a safety innovator.

As mentioned, safety remains a core value. The rapid growth in 2010 required over 2,200 new employees to be hired and, more importantly, properly trained. As a result, our Lost Time Incident Rate (LTIR) and Total Case Incident Rate (TCIR) increased from 2009. No excuses … we will improve. However, our corresponding Lost Time Days was reduced by a significant 19 percent.

With our world-class EHS daily tracking and reporting system, best practices will continue to be developed and shared around the world. Primarily, we remain focused on driving "personal ownership" of safety to all levels in the organisation.

Finally, I would like to comment on our global leadership team. A large number of our local, regional and HQ leadership teams remained with Boart Longyear through the GFC and the ongoing recovery. As an example, 11 out of 12 of our executive leaders who were here in September of 2008 (the start of the GFC) are still with us today. Similar statistics exist for our regional leadership teams around the world.

All these leaders took the challenge head on, made the difficult decisions, and brought Boart Longyear back to profitability. Going forward, this is a real value for the shareholders. The team has been through both the steepest decline and the fastest recovery in the industry's memory. More importantly, these leaders committed the single most important asset to the company … their careers.

As always, I would like to thank our Board of Directors, and our new Chairman, Dave McLemore. With their help, we made the rapid 2010 transition from restructuring and downsizing to growth and expansion.

In closing, I am very optimistic about Boart Longyear's position in this market and our possibilities going into 2011. I would also like to thank all our shareholders for their ongoing support over the last couple of years.