Pollard Banknote Announces 2nd Quarter Financial Results

"Our second quarter financial results continue to reflect our ongoing growth and the underlying improvements in our operating efficiencies," commented Co-Chief Executive Officer John Pollard . "Our new press continues to become more fully integrated with our operations and has resulted in improvements in efficiencies and productive capacity. Our free cash flow generating potential is fully evident during this quarter as we produced over $3 million in free cash flow during the three month period after accounting for all of our reinvestments and capital expenditures." "The instant ticket market and, in fact, the overall lottery industry, remains a very positive business," remarked Co-Chief Executive Officer Doug Pollard . "Our clients remain focused on expanding and growing their customer base, revenue and ultimately the proceeds generated to provide to their various good causes. We believe Pollard continues to be well positioned to be their partner of choice to achieve these objectives."

WINNIPEG , Aug. 10, 2016 /CNW/ - Pollard Banknote Limited (PBL.TO) ("Pollard") today released its financial results for the three months ended June 30, 2016 , with continued year over year positive revenue trends and strong free cash flow in the quarter.

"Our second quarter financial results continue to reflect our ongoing growth and the underlying improvements in our operating efficiencies," commented Co-Chief Executive Officer John Pollard . "Our new press continues to become more fully integrated with our operations and has resulted in improvements in efficiencies and productive capacity.  Our free cash flow generating potential is fully evident during this quarter as we produced over $3 million in free cash flow during the three month period after accounting for all of our reinvestments and capital expenditures."

"Our margins and certain cost categories have improved relative to the first quarter and, as noted previously, we expect this trend to continue over the course of 2016 and into 2017 as our press efficiencies progress."

"A couple of specific factors did impact our numbers negatively.  Our production in the quarter was heavily weighted toward more international work which results in a longer time frame for revenue recognition due to longer transit periods as well as a need to produce the goods earlier in our customer's sales cycle.  As such, our sales volumes were 13 percent lower than our production volumes in the quarter.  This product will be recognized as revenue in future quarters when the goods are received by our customers."

"The Canadian dollar strengthened significantly during the quarter, reaching a high of almost 79 cents compared to the U.S. dollar at one point.  Our significant U.S. dollar sales during the first quarter of 2016 were primarily collected in the second quarter, resulting in a large realized foreign exchange loss of $1.3 million during the quarter.  This unusual foreign exchange loss reduced our EBITDA figure for the quarter significantly."

"Despite these unusual issues, our underlying performance progressed, with strong operating results in our Canadian plants and positive trends with our new press in Ypsilanti, particularly in the areas of improved yield and reduced overtime.  There remains significant opportunity for continuing margin improvement from increased productivity and efficiency gains as we continue to gain further experience with the new press."

"The instant ticket market and, in fact, the overall lottery industry, remains a very positive business," remarked Co-Chief Executive Officer Doug Pollard .  "Our clients remain focused on expanding and growing their customer base, revenue and ultimately the proceeds generated to provide to their various good causes.  We believe Pollard continues to be well positioned to be their partner of choice to achieve these objectives."

"During the quarter we were selected to be the primary instant supplier to the Minnesota Lottery.  We are very pleased to have won this important contract in an open competitive bid and we look forward to our continued partnership with the lottery."

"The award of a contract such as this is an important step in building our volume and taking advantage of the new capacity created by our investments over the last few years.    On a continual basis we will strategically bid for new work, but the nature of our industry dictates that it will take some period of time for us to have the opportunity to win new work, grow our volumes and utilize our capacity."

"Notwithstanding outside factors such as foreign exchange movements that impact our short term results, we continue to be pleased with the ongoing integration and development of our manufacturing capabilities," concluded John Pollard . "Our significant internal investments, coupled with the strength of our industry, positions us for long term sustainable growth in revenue, volumes and profits."

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http://finance.yahoo.com/news/pollard-banknote-announces-2nd-quarter-223000936.html




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