Pollard Banknote Reports 1st Quarter Financial Results and Intention to Launch Normal Course Issuer Bid

Pollard Banknote’s Q1 2026 earnings release, published after the close on May 13, 2026, delivers a sharp set of numbers. Revenue slipped 3.1% year‑over‑year to $141.7 M, net income collapsed from $11.7 M to $3.5 M, and Adjusted EBITDA contracted 29.7% to $21.5 M. Gross margin compressed from 17.4% to 11.7% – management blames lower average selling prices (customer mix) and heightened manufacturing spoilage/rework. The quarter also absorbed $1.3 M of ERP implementation costs. On a brighter note, the new California primary supply contract began in Q1 and is expected to lift volumes in Q2/Q3, the Belgium omnichannel platform is in early implementation, and charitable gaming eTab revenue hit a new record. The board authorized a Normal Course Issuer Bid (NCIB) to repurchase up to 10% of the public float, signaling confidence.

This is a material negative quarter. The record‑high 2025 financial performance (revenue $596 M, Adj. EBITDA $119.9 M) and the string of marquee contract wins – California Scratchers primary (~US$375 M), Belgium Catalyst platform (~US$289 M), Oklahoma loyalty (~US$10 M) – had set the stage for a strong 2026. Instead, Q1 shows meaningful profit erosion that cannot be brushed aside. While the California contract kicked in as planned, the revenue decline indicates that either legacy volumes fell off more sharply or that pricing and mix effects overwhelmed any volume lift. The spoilage and rework issues point to operational weakness that might recur. The NCIB is a secondary positive but does not offset the miss. The stock has already drifted from the $23 area post‑contract announcements to the $17.60s, but the earnings shock could pressure it further.

Pollard Banknote is one of North America’s leading suppliers of instant lottery tickets and digital lottery solutions. Its flagship projects include: - California primary Scratchers contract – 6‑year initial term (up to 12 years total), supplying ~70% of California’s Scratchers volume from Dec 1, 2025. - Belgium National Lottery Catalyst platform – 12‑year, ~€177 M (US$289 M) contract for an omnichannel gaming system, the first end‑to‑end Catalyst deployment. - NeoPollard Interactive (NPi) – a 50% joint venture that operates iLottery programs (Kansas, etc.) and contributed $66.2 M equity income in FY2025. - Charitable gaming (eTabs, bingo) bolstered by acquisitions of Venne (2024) and Pacific Gaming (2025).