Pollard Banknote Limited announced unaudited consolidated earnings results for the fourth quarter and year ended December 31, 2015. For the quarter, sales were $57.2 million compared to $43.2 million a year ago. Income from operations was $3.8 million compared to $3.6 million a year ago. Income before income taxes was $2.0 million compared to $2.1 million a year ago. Net income was $1.2 million compared to $2.1 million a year ago. Adjusted EBITDA was $6.3 million compared to $5.6 million a year ago. The primary reasons for the increase in Adjusted EBITDA were the increase in gross profit (net of amortization and depreciation) of $2.2 million, partially offset by higher administration expenses of $1.1 million, higher selling expenses of $0.3 million and an increase in other expenses of $0.2 million. The primary reason for the decrease in net income was the increase in income tax expense of $0.8 million. Additionally, the primary reasons for the decrease in income before income taxes were the increase in administration expenses of $1.1 million, the increase in selling expense of $0.3 million, the increase in other expense of $0.2 million and the increase in interest expense of $0.2 million. Partially offsetting these decreases in income before income taxes was the increase in gross profit of $1.8 million. Earnings per share (basic and diluted) decreased to $0.05 per share in the fourth quarter of 2015 from $0.09 per share in the fourth quarter of 2014.

For the year, sales were $221 million compared to $194.5 million a year ago. Income from operations was $18 million compared to $17.5 million a year ago. Income before income taxes was $12.2 million compared to $12.4 million a year ago. Net income was $7.5 million compared to $8.7 million a year ago. Adjusted EBITDA was $26.8 million compared to $25.6 million a year ago. The primary reasons for the increase in Adjusted EBITDA of $1.2 million were the increase in gross profit of $3.1 million (net of amortization and excluding $0.6 million in non-recurring iLottery start-up costs in 2014) and the increase in the realized foreign exchange gains of $0.9 million.  These increases were partially offset by increased administration expenses of $2.2 million and an increase in selling expenses of $0.5 million. The primary reason for the decrease in net income was the increase in income taxes of $1.0 million.  Additionally, the primary reasons for the decrease in income before income taxes were the increase in administration expenses of $2.2 million, the increase in selling expenses of $0.5 million and an increase in foreign exchange loss of $1.2 million. Basic and diluted earnings per share decreased to $0.32 per share in fiscal 2015 from $0.37 per share in fiscal 2014. 
 

For the year 2016, budgeted capital expenditures are expected to be significantly lower than those that occurred over the past two years due to the completion of the new press installation. The company is anticipating capital expenditure focus to be in maintenance areas and smaller growth projects and be at a dollar level more consistent with that experienced in 2012 and 2013. As a result of lower capital expenditures, the company anticipates free cash flow to be higher than experienced in the last few years.