Pollard Banknote Reports 3rd Quarter Financial Results

WINNIPEG, MB , Nov. 6, 2026 /CNW/ -- Pollard Banknote Limited (TSX: PBL) ("Pollard") today released its financial results for the three and nine months ended September 30, 2026.

Third Quarter Results and Highlights

• Revenue reached $158.9, up 1.7% from the third quarter of last year.  - Combined sales⁽¹⁾ in the quarter, including our share of our NPi's joint venture sales, were $193.7 million, up 3.4% from $187.3 million in the same quarter last year.
• - Adjusted EBITDA⁽¹⁾ of $28.3 million, was down $4.0 million from $32.3 million in the third quarter of 2025. $2.1 million of the decrease was due to the Michigan Lottery iLottery contract which ended July 17, 2026.
• - Income from operations attained $14.9 million, down 16.3% from $17.8 million in the third quarter of 2025, or 5.1% after excluding the $2.1 million contribution from the Michigan Lottery iLottery contract. 
• - On September 2, 2026, Pollard successfully launched its playON® Player Engagement solutions with the Oklahoma Lottery.  
• - On October 22, 2026, the Kansas Lottery notified Pollard that it had been selected as the apparent successful bidder for the Kansas iLottery contract  following a formal competitive bid process.  The new contract is expected to start late 2026, and extends for a five-year term with 1 two-year extension available.
• - On June 15, 2026, the Colorado Lottery published a notice of intent to award Pollard their lottery digital solution contract.  Initial planning and scoping are under way while contract details are being finalized.
• - On October 8, 2026, Norsk Tipping, the national lottery of Norway, announced its intent to award Pollard its new instant ticket contract, following a competitive request for proposal process. The contract starts in December 2026, with a three-year term plus a one year extension. Pollard has been providing Norsk Tipping instant tickets since 2004, and this win reaffirms our long-term partnership with an important customer.
• - On September 23, 2026, the North Carolina Education Lottery executed a 1-year extension with our NeoPollard Interactive LLC joint venture to operate their iLottery business, extending the contract term until June of 2029.
• - We also announced that Verica Simic will join Pollard on November 16, 2026, and will be appointed Chief Financial Officer effective January 1, 2027. Ms. Simic will succeed Rob Rose who, as previously announced, will retire as Chief Financial Officer effective December 31, 2026. (1) See Non-GAAP measures for explanation 

"Although our third quarter operating results were disappointing, our contract wins and extensions over the past number of months validate our ongoing strategic investments in both the digital and retail parts of our business and provide the foundation for continued growth, "commented John Pollard, Co-Chief Executive Officer.  "As expected, our Michigan iLottery contract ended at the beginning of the third quarter this year, accounting for a significant portion of the lower results when compared to last year."

"Third quarter instant ticket volumes were slightly higher than last year's comparative figures and also slightly higher compared to the second quarter of 2026. Our average selling price was slightly lower than the comparative period last year, due primarily to the customer mix. Our production volume this quarter was weighted more toward lower-valued international work compared to historical third quarter levels, which lowered our margin.  In addition, manufacturing challenges resulted in lower production volumes than expected, and also caused higher direct material spoilage and greater rework compared to last year and the second quarter of this year. These factors negatively impacted our gross margin during the quarter.  We continue to focus considerable resources, including new manufacturing management in our print operations, on mitigating these issues and improving our manufacturing processes going forward."

"Our charitable business continued to experience strong demand which translated to near record volumes of pull-tab tickets, vending machine and eTab sales."

"A number of significant positive developments occurred during the third quarter helping to grow and position our digital business for greater future success," stated Doug Pollard, Co-Chief Executive Officer.  "The Kansas Lottery has advised that Pollard has been selected as  the apparent successful bidder for a new 5-year contract expected to commence in late  2026, with one 2-year extension, taking the contract to late 2033.  The iLottery contract was conducted through a competitive proposal process, and our win reflects the great results we have achieved with the successful Kansas iLottery startup last year. We are looking forward to building revenue growth and generating more funds for good causes throughout Kansas."

"Work is increasing on our Belgium Lottery gaming platform contract as more development resources are dedicated to the multiple deliverables under this long-term contract. Revenue recognition increased in the third quarter compared to the previous quarters of 2026 and we anticipate this trend will continue.  The customer is pleased with our progress, as we continue to build a reputation in the lottery industry for effective and timely management of complex digital projects."

"On June 15, 2026, the Colorado Lottery published a notice of intent to award Pollard their lottery digital solution contract.  Initial planning and scoping are under way while contract details are being finalized. We look forward to implementing our lottery-specific playON® player engagement and Catalyst iLottery gaming platforms to enhance this significant lottery's ability to meet its fundraising goals. We anticipate go-live to occur in the later part of 2027."

"Our NeoPollard Interactive LLC business was awarded the final 1-year extension to continue to provide the iLottery solution for the North Carolina Education Lottery. The award of this final extension expands our existing contract to June of 2029."

"Our combined NPi joint venture iLottery operations contributed $15.3 million in before profit share and income tax margin in the third quarter, down $2.1 million compared to $17.4 million earned in the third quarter of 2025. This reduction was primarily due to the expiry of the Michigan iLottery contract on July 17, 2026."

"We continue to acquire our common shares for cancellation under our previously approved Normal Course Issuer Bid. During the third quarter we purchased for cancellation 64,200 shares."

"As our new CFO, Ms. Simic brings more than 30 years of senior financial leadership experience, with extensive experience in public company financial reporting, strategic planning, mergers and acquisitions and driving enterprise value creation in fast-growing, multi-country environments. Most recently, she served as Senior Vice President, Finance at Spin Master Corporation, a global toy, digital games and entertainment company."

"We would like to both congratulate and thank Rob Rose, our retiring CFO, on behalf of the Company, our employees and the Board of Directors for his remarkable contributions. Over the last thirty-one years, Mr. Rose has been an integral member of Pollard Banknote's executive management team, helping guide the Company through tremendous growth and strategic transformation with professionalism and steady leadership."

"With the ongoing investments we are making in our retail, charitable and digital businesses, we are confident these investments will show improved results in the fourth quarter and beyond," remarked John Pollard.  "Our scheduled instant ticket volumes remain busy going forward with an expected improved mix.  Demand for charitable solutions in both printed and digital areas remains strong.  Major steps expanding our digital business, including the intent to award the Colorado iLottery contract, were achieved in the past quarter which lay the foundation for long term future success."

Use of GAAP and Non-GAAP Financial Measures

The selected financial and operating information has been derived from, and should be read in conjunction with, the unaudited condensed consolidated financial statements of Pollard as at and for the three and nine months ended September 30, 2026. These financial statements have been prepared in accordance with the International Financial Accounting Standards ("IFRS" or "GAAP").

Reference to "EBITDA" is to earnings before interest, income taxes, depreciation, amortization and purchase accounting amortization, including our share of NeoPollard Interactive LLC's ("NPi"). Reference to "Adjusted EBITDA" is to EBITDA before unrealized foreign exchange gains and losses, and certain non-recurring items including consultant transfer costs, ERP implementation costs, severance costs, acquisition costs and contingent consideration fair value adjustments. Adjusted EBITDA is an important metric used by many investors to compare issuers on the basis of the ability to generate cash from operations and management believes that, in addition to net income, Adjusted EBITDA is a useful supplementary measure.

Reference to "Combined sales" is to sales recognized under GAAP plus Pollard's 50% proportionate share of NeoPollard Interactive LLC's ("NPi") sales, its iLottery joint venture operation. Reference to "Combined iLottery sales" is to sales recognized under GAAP for Pollard's 50% proportionate share of its Michigan Lottery joint iLottery operation plus Pollard's 50% proportionate share of NPi's sales, its iLottery joint venture operation.

EBITDA, Adjusted EBITDA, Combined sales and Combined iLottery sales are measures not recognized under GAAP and do not have a standardized meaning prescribed by GAAP.  Therefore, these measures may not be comparable to similar measures presented by other entities. Investors are cautioned that EBITDA, Adjusted EBITDA, Combined sales and Combined iLottery sales should not be construed as alternatives to net income or sales as determined in accordance with GAAP as an indicator of Pollard's performance or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows.

Forward-Looking Statements

Certain statements in this report may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.  When used in this document, such statements include such words as "may," "will," "expect," "believe," "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this document.  There should not be an expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.

POLLARD BANKNOTE LIMITED

Pollard is one of the leading providers of products and solutions to lottery and charitable gaming industries throughout the world. Management believes Pollard is the largest provider of instant tickets based in Canada and the second largest producer of instant tickets in the world. In addition, management believes Pollard is also the second largest bingo paper and pull-tab supplier to the charitable gaming industry in North America and, through our internal proprietary iLottery solution and our 50% joint venture, one of the largest supplier of iLottery solutions to the U.S. lottery market.

On April 1, 2025, Pollard acquired 100% of the equity of Pacific Gaming, LLC and LIF Capital Group, LLC (collectively "Pacific"), for a purchase price of $10.0 million U.S. dollars ($14.4 million) prior to standard working capital adjustments. Pacific is a recognized leader in bingo electronics, handhelds, blowers, point-of-sale systems and bingo management systems. The purchase price was funded from Pollard's credit facility and cash on hand.

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