Press Release

Pollard Banknote Announces Purchase Of New 22-station Press — The Most Advanced Press In The Industry

WINNIPEG, Manitoba, April 2, 2014 /CNW/ – Pollard Banknote Limited (TSX: PBL) (Pollard Banknote) is pleased to announce that it has signed an agreement for the purchase of a new 22-station Tresu press—the most advanced instant ticket printing press in the lottery industry. The press is scheduled to begin live production in the second quarter of 2015 and will provide a substantial 35% net increase to Pollard Banknote’s available print capacity. This state-of-the-art press—with a $20 million price tag—includes a number of unique features that will ensure it provides the most efficient and flexible inline instant ticket printing available.

“Pollard Banknote is very excited to announce this major expansion, as it comes as a result of the tremendous support the lottery industry has shown us,” said Doug Pollard, Co -Chief Executive Officer, Pollard Banknote. “Our sales volumes continue to increase significantly, with our 2013 sales volumes up 8% over 2012, and we continue to have high expectations for 2014 and beyond. We are proud of the recent expansion of our client base and, more importantly, the support we’ve been able to provide our lottery customers in order to grow their proceeds for good causes. This investment in a new press is significant evidence of our belief in the growth potential of the lottery retail space, particularly when supported by an omni-channel marketing strategy.”

The new press will be housed in Pollard Banknote’s 90,000-square-foot production facility located in Ypsilanti, Michigan, allowing the company to continue providing unprecedented service to its customers in the United States. In conjunction with the commissioning of the new Tresu press in Ypsilant i, Pollard Banknote will be moving its existing production presses from Ypsilanti to its manufacturing facility in Winnipeg, Manitoba, thereby utilizing the company’s proven manufacturing capabilities to support its expanding Canadian and international lottery customers. This capacity expansion will allow Pollard Banknote to transition to a more efficient, lower cost production platform overall.

Financing for this expansion will come from a number of sources, including the company’s ongoing operating cash flow, an increase in its secured credit facility of approximately $5 million, and a subordinated loan of approximately $7 million from the Pollard family’s holding company, Pollard Equities Limited.

“These are very exciting times in the lottery industry,” summed up Doug Pollard. “We continue to see great opportunities for our partners and this announcement highlights our ongoing commitment to our customers and the sector.”