Pollard Banknote Announces 2nd Quarter Results

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WINNIPEGAug. 9, 2017 /CNW/ - Pollard Banknote Limited (TSX: PBL) ("Pollard") today released its financial results for the three and six months ended June 30, 2017, achieving record quarterly levels of Revenue and Adjusted EBITDA.

Pollard Banknote Limited (CNW Group/Pollard Banknote Limited)

"We are extremely pleased with our financial results for the second quarter," commented Co-Chief Executive Officer John Pollard.  "Very strong orders from our existing client portfolio generated significantly higher production volumes compared to last year, continuing the impressive levels achieved in the first quarter.  Robust sales of our specialty products contributed positively to our average sales prices and gross margin.  This highlights the importance of our ongoing innovation focus and the success of our creative process in developing unique products and services that generate market leading returns for our customers."

"Our second quarter sales were up by 44% from last year to $77.9 millionand Adjusted EBITDA increased 118% to $13.1 million.  As discussed last quarter, our second quarter sales volumes were boosted by the significant amount of product in transit at the end of the first quarter.  This in transit volume had accounted for approximately 15% of our first quarter production and the incremental revenue relating to this work provided an extra boost to our revenue for the second quarter.  One needs to really look at the first half results for 2017 in total rather than the individual quarters to more clearly understand our current year's results.  Nevertheless, for the first six months our sales are up by 15% and Adjusted EBITDA by 52%.  These results clearly illustrate our ongoing success of growing our share of the instant ticket market and the impact of additional ancillary products sales in categories such as iLottery and licensed games."

"Our manufacturing operations continue to yield positive results through increased productivity and improving cost structures as we continue to more efficiently utilize our expanded capacity to produce increased volumes.  Once again our operating results generated considerable cash flow which was used to lower our net financial debt although in the quarter there was some investment in working capital to support our growth.  In the first six months of this year we have generated sufficient cash to pay down our total net debt (long-term debt plus subordinated debt less cash) by $13.1 million to $56.4 million.  We expect this positive cash generation to continue in the longer term allowing us to lower our debt leverage even further and provide funding for future investments."

"On August 3rd, 2017, we acquired 17,929,021 common shares (89.3%) of INNOVA Gaming Group Inc. in conjunction with our friendly bid to acquire the company.  The mandatory 10 day extension for the remaining shareholders to tender their shares will end August 15th.  We encourage all remaining shareholders to tender their shares in accordance with the bid instructions.  We expect to commence the normal steps to privatize the company upon completion of the extension.  The addition of INNOVA and its Diamond Game business is a very exciting new chapter for Pollard and we look forward to the combined strengths of the two companies serving the lottery and charitable gaming sectors in the future."

"The lottery market remains very healthy and we are thrilled with the traction and support we are receiving from lotteries around the world," stated Doug Pollard, Co-Chief Executive Officer.  "During this past year we have renewed a number of our important instant ticket lottery contracts and are actively pursuing additional opportunities through the RFP process.  We are very pleased to see a number of lotteries increasing Pollard's share of their instant ticket business in situations with multiple ticket suppliers and believe this is a reflection of the products, services and knowledge we're bringing to our customers.  Our vision is to be the best partner to help our customers grow their lottery sales and our results for the first six months of 2017 demonstrate that we are achieving our vision.  We look forward to continuing to expand the depth and breadth of products and services that we offer lotteries, as we help our customers continue to achieve record sales levels."

"The first half of 2017 has been very gratifying for us, as many of the investments and developments in process for some time have produced some very encouraging results," concluded John Pollard.  "Going forward our existing business is well positioned to continue to organically generate successful results and to provide a solid foundation for additional growth through acquisitions.  We are thrilled with the addition of INNOVA and their operating business Diamond Game to our family and we look forward to their future contributions."

HIGHLIGHTS

 

 

Three months ended

June 30, 2017

Three months ended

June 30, 2016

       

Sales

 

$

77.9 million

$

54.0 million

Gross Profit

 

$

18.6 million

$

10.9 million

Gross Profit % of sales

   

23.9%

 

20.2%

       

Administration expenses

 

$

6.6 million

$

5.1 million

Selling expenses

 

$

2.1 million

$

1.8 million

       

Net Income

 

$

6.0 million

$

2.0 million

       

Adjusted EBITDA

 

$

13.1 million

$

6.0 million

       
   

Six months ended

June 30, 2017

Six months ended

June 30, 2016

       

Sales

 

$

135.3 million

$

118.0 million

Gross Profit

 

$

30.0 million

$

22.3 million

Gross Profit % of sales

   

22.2 %

 

18.9%

       

Administration expenses

 

$

12.0 million

$

10.4 million

Selling expenses

 

$

4.1 million

$

3.7 million

       

Net Income

 

$

7.8 million

$

5.6 million

       

Adjusted EBITDA

 

$

19.4 million

$

12.8 million

 

POLLARD BANKNOTE LIMITED

Pollard is one of the leading providers of products and services to lottery and charitable gaming industries throughout the world.  Management believes Pollard is the largest provider of instant tickets based in Canadaand the second largest producer of instant tickets in the world.

The selected financial and operating information has been derived from, and should be read in conjunction with, the condensed consolidated unaudited interim financial statements of Pollard as at and for the three and six months ended June 30, 2017.  These financial statements have been prepared in accordance with the International Financial Accounting Standards ("IFRS" or "GAAP").

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