"We are extremely pleased with the performance of our instant ticket business during the second quarter, with significantly improved gross margins reflecting the impact of our focused efforts on repricing our contracts," remarked John Pollard, Co-Chief Executive Officer.
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Aug 13, 2024, 16:00 ET
WINNIPEG, MB, Aug. 13, 2024 /CNW/ - Pollard Banknote Limited (TSX: PBL) ("Pollard") today released its financial results for the three and six months ended June 30, 2024.
Results and Highlights for the Second Quarter ended June 30, 2024
"We are extremely pleased with the performance of our instant ticket business during the second quarter, with significantly improved gross margins reflecting the impact of our focused efforts on repricing our contracts," remarked John Pollard, Co-Chief Executive Officer. "We have repriced a majority of our contracts over the past two years and as these new contracts are now coming into effect, we are seeing gross margins increasing considerably. This trend will continue as more of the already repriced contracts come on stream."
"Despite the increased positive impact of higher average selling prices in the second quarter, we have not yet recognized the benefits of all of our repriced contracts in our recorded revenue. New prices in a number of contracts will not be reflected in our revenue numbers until the end of 2024. After repricing a majority of our existing contracts, there still remains contracts to be repriced, as their current end dates have not yet come due."
"Higher sales and production volumes relative to our first quarter of 2024 also contributed to the improved margin, and the mix of product included higher value items relative to the previous quarter. This improved mix is expected to continue in the third quarter, which historically includes higher value specialty work for the holiday season."
"Our iLottery joint venture generated $16.2 million in combined income before income taxes, which is further noteworthy given there were fewer significant Powerball® and Mega Millions® jackpots in the quarter compared to the past year, however the strong organic growth experienced across our contract portfolio is extremely encouraging. We look forward to the successful roll out of our joint venture's West Virginia iLottery contract in the fall of 2024."
"We continue to receive significant interest and positive feedback in our own proprietary omni-channel iLottery platform and game content. We are confident our ongoing significant investment and innovation in our solution will result in our continuing growth in iLottery."
"We are also excited to launch our Pollard iLottery game content with a major North American lottery in the third quarter and are in active discussions to provide game content to both North American and international lotteries in 2025."
"Our charitable gaming group, which includes both our printed pull-tabs and bingo paper products, and our eGaming systems, experienced continued solid demand which also contributed to our strong financial results. Our volumes of printed charitable gaming products increased compared to the first quarter of 2024 and we believe this trend will continue."
"Acquisitions are an important component of our strategic plan and this was evident in the second quarter with the purchase of electronic bingo gaming content supporting our eGaming systems," noted Doug Pollard, Co-Chief Executive Officer. "Great gaming content is a cornerstone of Pollard's success across all of our products and solutions. Subsequent to quarter end we purchased Clarence J. Venne, the leader in the bingo dabber market and a great compliment to our existing charitable gaming offerings."
"We are extremely proud of the work performed by our team to grow our business and generate these excellent financial results," concluded John Pollard. "Strong demand continues across all of our product and solution offerings and the second quarter results demonstrate the success of our strategy to improve instant ticket margins. We are very confident these trends will continue and support our future success as a leading partner of choice for lottery and charities."
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 six months ended June 30, 2024. 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. Reference to "Adjusted EBITDA" is to EBITDA before unrealized foreign exchange gains and losses, and certain non-recurring items including severance costs, acquisition costs, contingent consideration fair value adjustments and net insurance proceeds. 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 its 50% joint venture, the largest supplier of iLottery solutions to the U.S. lottery market.
Results of Operations – Three months ended June 30, 2024
https://www.newswire.ca/news-releases/pollard-banknote-reports-2nd-quarter-financial-results-895930519.html