Pollard Banknote Reports Forth Quarter and Annual Financial Results.

WINNIPEG, MB: Pollard Banknote Limited (TSX: PBL) ("Pollard") today released its financial results for the three months and year ended December 31, 2022.

Results and Highlights for the Fourth Quarter ended December 31, 2022

Revenue reached a new fourth quarter record, $126.9 million, up 8.9% from the previous record last year.

Combined sales(1) in the quarter, including our share of our NeoPollard Interactive LLC ("NPi") joint venture sales, reached $144.6 million, up 13.9% from the $127.0 million in 2021.

Income from operations was $9.4 million, compared to $4.7 million in the fourth quarter of 2021.

Adjusted EBITDA(1) of $22.4 million increased from $18.7 million in the fourth quarter of 2021.

Our iLottery operations continued to show significant growth in the fourth quarter, attaining record combined income before income taxes of $11.6 million, over 40% higher than the previous quarterly record in the third quarter of 2022.

Our charitable gaming and eGaming systems businesses continued to see unprecedented demand for their products, achieving record revenue and earnings.

Our instant ticket margins remain significantly negatively impacted by the large inflationary price increases on all of our major ticket inputs including paper, ink, packaging and freight.

We continue to see ongoing success in our strategy of repricing our instant ticket customer contracts when up for rebid to recover the inflationary input cost increases.

Results and Highlights for 2022

Established a new record for revenue at $482.3 million, up 5.1% from last year.

Combined sales(1) in the year, including our share of NPi's joint venture sales, attained $537.4 million, up 7.7% from the $499.2 million in 2021.

Net income was $19.3 million, a decrease of $0.4 million from $19.7 million or 2% compared to 2021.

Adjusted EBITDA(1) achieved $80.5 million, $3.5 million or 4.2% lower than the previous year.

Cash flow from operating activities before change in non-cash working capital generated $45.8 million during the year, similar to 2021.

Instant ticket margins were significantly compressed during the year as a result of unprecedented inflationary cost increases on raw materials and other manufacturing inputs.

We have successfully repriced a number of important instant ticket customer contracts during 2022 to recover the higher input costs as part of contracts that have come up for rebid.

Charitable gaming, including our eGaming operations, attained record revenue levels and very strong profitability due to high customer demand and expanded capacity.

Our existing iLottery operations generated very strong results, contributing $33.2 million in combined income before income taxes to our 2022 results.

Continued significant investments in the development of our iLottery platform and game content offerings positively...

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