WINNIPEG, MB, May 8, 2024 /CNW/ - Pollard Banknote Limited (TSX:PBL) ("Pollard") today released its financial results for the three months ended March 31, 2024. Results and Highlights for the First Quarter ended March 31, 2024 First quarter revenue reached $125.7 million, up slightly from the first quarter of last year. Combined sales(1) in the quarter, including our share of our NeoPollard Interactive LLC ("NPi") joint venture sales, reached $151.2 million, up 5.4% from $143.6 million in 2023. Income from operations was $13.4 million, compared to $7.6 million in the first quarter of 2023. Adjusted EBITDA(1) reached $23.7 million, a record for the first quarter, increasing $5.1 million from $18.6 million attained in the first quarter of 2023. Our iLottery operations achieved combined income before income taxes of $14.9 million, a new quarterly record and 34.6% higher than the first quarter of 2023. Instant ticket margins continued to recover during the first quarter, reflecting the increasing impact of repriced customer contracts on our average selling prices. (1) See Non-GAAP measures for explanation  "We are very satisfied with the financial results of our first quarter of 2024, significantly exceeding all of our critical metrics from the comparative quarter of 2023," remarked John Pollard, Co-Chief Executive Officer. "Both our Combined Sales (which includes our 50% share of our iLottery joint venture revenue) and our Adjusted EBITDA established new first quarter records, attaining $151.2 million and $23.7 million respectively. The lottery and charitable gaming segments performed well with strong consumer demand continuing." "One of our core businesses is the production and sale of instant tickets and our strategy of repricing our contracts continues to be successful, helping to lay the foundation for increasing margins as our new contract terms come into effect. We have repriced the majority of our contracts and we expect to see growing positive impacts on our financial results through the end of 2024 and into 2025. We also experienced some small cost reductions on our key inputs for instant ticket production and are hopeful this trend will continue." "Of particular note is the success of our iLottery joint venture, which continues to be the market leader in North America, generating a record $14.9 million in combined income before income taxes. These results reflect a number of positive factors experienced during the quarter, including: very high Powerball® and Mega Millions® jackpot runs through the entire first quarter; continued strong growth of eInstants in North Carolina after their introduction in November of 2023; and significant organic growth throughout our entire portfolio of iLottery contracts. Implementation work continues on our recently awarded West Virginia iLottery contract and we look forward to its successful roll out in the fall of 2024." "Our charitable gaming group, which includes both our printed pull-tabs and bingo paper products, and our eGaming systems, experienced continued strong demand.  eGaming revenue grew, reflecting the increasing engagement with consumers in social settings such as restaurants and taverns. Our volumes of printed charitable gaming products were still somewhat constrained during the quarter as we work on increasing capacity to meet demand, and we believe we will see improved results going forward." "These strong first quarter results are particularly satisfying given the beginning of the year historically has seen lower revenue following the busier second half of the calendar year. Quarterly financial results can vary depending on the timing of orders, and our first quarter did experience some lower than anticipated volumes in our instant ticket production and sales. However, our scheduled production volumes of instant tickets over the next two quarters are noticeably higher than the first quarter." "We continue to be very excited about the investments we are making in our Pollard iLottery platform and our expanding game studio," commented Doug Pollard, Co-Chief Executive Officer. "The development of modern iLottery solutions for both existing and new jurisdictions is a cornerstone of our strategy and an important complement to our existing joint venture.  We are actively presenting our solution to the lottery market and are very pleased with the feedback." "Our first quarter reflects the results of our focused strategy on being the partner of choice to the lottery and charitable gaming markets," concluded Doug Pollard. "Strong demand across all of our product and solution offerings and improving instant ticket margins continue to lay the foundation for growth and success moving forward." 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 months ended March 31, 2024. These financial statements have been prepared in accordance with the IFRS 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 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. HIGHLIGHTS Three months ended March 31, 2024 Three months ended March 31, 2023(1) Sales    $     125.7 million    $    125.1 million Gross profit    $       21.5 million    $      17.7 million Gross profit % of sales 17.1 % 14.1 % Administration expenses    $       15.3 million    $      13.4 million Selling expenses    $         5.4 million $        4.7 million NPi equity investment income   ($      12.2 million)   ($       8.2 million) Unrealized foreign exchange (gain) loss    $         2.2 million   ($       0.2 million) Net income    $         6.9 million   $        4.8 million Net income per share – basic $         0.26 $         0.18 Net income per share – diluted $         0.25 $         0.18 Adjusted EBITDA    $       23.7 million    $       18.6 million (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current period. Results of Operations – Three months ended March 31, 2024SELECTED FINANCIAL INFORMATION (millions of dollars) Three months March 31, 2024 (unaudited) Three months March 31, 2023(1) (unaudited)