Thank you very much, operator. Thank you, everyone, for joining us this morning.

As the operator said, my name is Doug Pollard. With me on the call today is John Pollard, Co-Chief Executive Officer, and Rob Rose, Chief Financial Officer.

We released our 2026 first quarter results yesterday. You can access our news release as well as our complete financial statements and MD&A on our website at pollardbanknote.com and on SEDAR+.

Today, we'll start with a few prepared remarks from me providing an overall business update, and John will then follow up with a discussion of our first quarter results, and then we'll open it up for questions. Our first quarter was a challenging quarter.

It was impacted by negative factors, particularly in our instant ticket product line. These challenges were temporary issues related to the timing of customer orders.

Nothing has systemically changed with our instant ticket business. There've been no changes in our client portfolio and no changes in our pricing.

In addition, the onboarding of California is going well. In parallel, our digital contracts are performing well, led by Kansas and Belgium, and our charitable gaming business outperformed our expectations, driven by a rebound in Minnesota e-tab sales.

Now instant tickets remain a significant part of our business. They represent roughly half of our overall sales.

A temporary mix change resulted in a significantly lower overall average selling price in Q1 compared to last year. In addition, the timing of orders from a couple of our larger customers shifted from late in the first quarter to the second quarter, which reduced our volumes.

Now timing of orders and the timing of revenue recognition can vary significantly quarter to quarter and even within the quarter itself. Particularly through the later part of the first quarter, a number of higher-valued Q1 games were shifted into the second quarter, and the delay of these games, combined with some related production inefficiencies, reduced sales in the quarter and negatively impacted our instant ticket margins.

Looking forward, however, our confirmed order volumes for the second and third quarters have increased compared to Q1 in 2026 and from the comparable quarters last year by the amount of the additional volumes added under our new California primary supply contract. As well as our customer mix of games, including specialty work and game type, has returned to the historical level seen in 2025, which will generate higher average selling prices than the first quarter.

Now based on the recovery of our instant tickets, we expect that our consolidated adjusted EBITDA for the second quarter of 2026 will exceed the comparable quarter of 2025. In our digital division, work ramped up on our new Belgium National Lottery omnichannel gaming platform contract during the first quarter.

Recall this is a 12-year, $289 million Canadian contract—now that number includes VAT—that was awarded last fall for us to provide their technology solution, including an omnichannel central gaming system, which will seamlessly sell lottery products across both retail and digital channels. It also includes a player account management solution to securely manage the player information, their wallets, and their preferences, and of course an integrated marketing engagement platform to deliver personalized, data-driven experiences at every player touchpoint.

Now during the first quarter, we added additional staff resources to our current compliment to work on scoping and planning this large Belgium engagement. As our staff begin working directly on the contract deliverables, our resultant revenue recognition will increase through the second quarter and through 2026.

Work in Q1 began to be rolled out in our Oklahoma loyalty solution, and it is proceeding well. While relatively small in terms of financial impact, this is an important opportunity to showcase our technology implementation ability.

This contract joins our portfolio of five other current lotteries utilizing our lottery-specific loyalty program, and also provides us with a platform for expanding our suite of other services to the Oklahoma lottery. Our Kansas iLottery operation continues to operate well, as we completed 1 year of successful operation in Q1.

We continue to exceed all operational expectations and expect to reduce our startup losses going forward in 2026. Additional investments in expanding our iLottery infrastructure in support of future contracts will continue.

Our Kansas iLottery contract was awarded under an existing loyalty solution contract 2 years ago, which had a pre-existing 10-year contract term with an end date of October 2026 and no remaining extensions. Consistent with the lottery's procurement policies, the lottery is required to issue a new request for proposal for the operations of the iLottery and loyalty solution.

This RFP was recently released with responses due in early summer of this year, and we are confident we will be providing a very compelling proposition for the lottery. Interest in iLottery operations from lotteries remains high, including the current request for proposal underway for the Colorado Lottery.

Our NeoPollard iLottery joint venture grew through strong e-instant and other game style sales compared to the first quarter of last year. This includes strong growth in e-instants and other game content, despite the absence of any large draw-based game jackpot runs this quarter.

Also, as anticipated, the Virginia Lottery has recently issued an RFP for their iLottery operation. NPI's current Virginia contract does not end, however, until October 30, 2028.

Our Board of Directors also announced today they have authorized the launch of a normal course issuer bid, or NCIB, to purchase up to approximately 976,000 of our common shares, representing approximately 10% of our outstanding common shares in our current public float. The NCIB is subject to approval of the Toronto Stock Exchange.

We're undertaking the NCIB because we believe that currently and from time to time, the market price of our common shares may not reflect the underlying value of our company's business and prospects. We believe that at such times, the purchase of common shares for cancellation would be in the best interest of the company's shareholders, an appropriate use of its capital, and clearly illustrates our belief that our current strategy is the correct one.

Charitable gaming and e-tabs generated strong results in the first quarter after e-tabs have been negatively impacted by Minnesota market regulatory changes in 2025 that reduced all suppliers' sales and margins, including ours. Updated game content, increased frequency of new game introductions, and expanded sites have all contributed to higher gross margin in Minnesota, exceeding levels achieved in 2024 under the old regulations.

Demand for consumable charitable products, such as pull-tabs, vending machines, and bingo supplies, remained strong in the first quarter and is expected to continue through 2026. Despite the temporary challenges of the first quarter, our confidence in our future results remains very high based on the new contract implementations, our strong order level for instant tickets, and our growing results in our charitable group.

Now I'll turn it over to John to discuss in detail the first quarter results.

Thanks, Doug. During the 3 months ended March 31, 2026, Pollard achieved GAAP revenue of $141.7 million compared to $146.2 million in the 3 months ended March 31 of 2025.

The factors impacting the $4.5 million revenue decrease were a lower instant ticket average selling price in the first quarter of this year that decreased revenue by $11.7 million as compared to 2025, primarily due to the change in customer mix and the decrease in proprietary product sales. Partly offsetting this decrease in revenue was the increase in instant ticket sales volumes of $4.4 million compared to last year.

Higher sales of ancillary lottery products and services increased revenue in the first quarter of '26 by $3.4 million as compared to the first quarter of 2025. This growth was primarily due to increased digital sales including Pollard's iLottery contracts with the Belgium and Kansas lotteries, and higher distribution-related sales compared to 2025.

Partially offsetting those increases in ancillary lottery sales was the decrease in sales of licensed products. Turning to the charitable side of our business, higher charitable gaming volumes in our printed and consumables part of that division increased revenue by $2.4 million in the first quarter of 2026 compared to the first quarter of 2025.

This is predominantly as a result of the acquisition of Pacific Gaming in the second quarter of 2025. In addition, higher average selling price of charitable printed games further increased sales by $0.4 million.

Charitable e-gaming, or e-tabs, further increased sales by $1.8 million compared to 2025, with revenue generated in Minnesota reaching new records. New game content, increased frequency of new game launches, and a greater number of sites have driven revenue higher than the pre-regulatory change levels in 2024.

During the 3 months ended March 31, 2026, Pollard generated approximately 74.5%, compared to 68.3% last year, of its revenue in U.S. dollars.

During the first quarter of 2026, the actual U.S. dollar value compared to Canadian dollars weakened by 5.8%, resulting in an approximate decrease of $6.5 million in revenue relative to the first quarter of 2025.

Cost of sales was $125.1 million in the first quarter of 2026 compared to $120.8 million in the first quarter of 2025. The increase, the $4.3 million in cost of sales, was primarily the result of the higher costs associated with increased Pollard iLottery operations, including ramping up resources in preparation for the Belgium lottery contract development efforts, and higher instant ticket production inefficiencies.

Further increasing cost of sales in the first quarter of 2026 was the addition of Pacific Gaming. Now these increases to cost of goods sold were partially offset by the impact of lower exchange rates on U.S.

dollar-denominated expenses. Gross profit was $16.6 million, or only 11.7% of sales, in the first quarter of 2026 compared to $25.4 million, or 17.4% of sales, in the first quarter of 2025.

The decrease of $8.8 million in gross profit and the decrease in gross profit percentage were primarily the result of our decreased instant ticket sales margins, which were largely the result of, as we've talked about today, the lower average instant ticket selling prices due to that significant shift in customer mix, and also related to some production inefficiencies in the quarter. In addition, revenue related to the Belgium lottery contract is recognized based on a percentage of completion to date basis over the anticipated entire delivery timeframe.

In the first quarter of 2026, we developed the needed talent to advance the implementation at the development stage to ensure immediate deployment once planning and scoping with the customer is complete. Although this resulted in some costs being incurred without related revenue recognition, but it also ensures a successful start to the contract.

Additionally, lower licensed product sales also contributed to the decrease in gross profit in the quarter. Factors that partially offset those decreases in gross profit and gross profit percentage factors were, as we've discussed previously, the higher printed and e-tab charitable sales positively impacted our gross profit.

Also the acquisition of Pacific Gaming positively impacted gross profit. Administration expenses were $19.2 million in the first quarter of 2026 compared to $17.3 million in the first quarter of 2025.

The increase of $1.9 million from the first quarter of last year was largely a result of the ERP implementation costs of $1.3 million and also the addition of Pacific Gaming's administration costs. Selling expenses were $6 million in the first quarter of 2026, similar to the $6 million in the first quarter of 2025.

Pollard's share of income from its iLottery joint venture increased to $16.6 million in the first quarter of '26 from $16.2 million in the first quarter of '25. This $0.4 million increase was primarily due to the continued strong e-instant sales in North Carolina and Virginia and higher iGaming sales in Alberta.

These increases were partially offset by the expiry of a customer contract at the end of the second quarter of 2025. Adjusted EBITDA decreased $21.2, $21.5 million in the first quarter of 2026 compared to $30.6 million in the first quarter of 2025.

The primary reasons for the $9.1 million decrease in adjusted EBITDA were the decrease in gross profit of $7.6 million—that's net of amortization and depreciation—which was primarily due to the lower instant ticket sales margins and increased digital development resource costs, partially offset by the improved charitable gaming margins. Further reducing adjusted EBITDA was the increase in administrative expenses net of ERP implementation costs of $0.2 million and the increase in realized foreign exchange loss of $0.5 million, and then partially offsetting those decreases was the increase in our share of our NeoPollard joint venture iLottery business of $0.4 million.

Interest expense decreased to $2.3 million in the first quarter of 2026 from $2.8 million in the first quarter of '25, primarily as a result of lower interest rates in the first quarter of 2026 as well as a reduction in average long-term debt outstanding as compared to the prior year. Amortization and depreciation totaled $12.6 million during the first quarter of 2026, which increased from $11.6 million in the first quarter of 2025.

The increase of $1 million was equally a result of increased depreciation of property, plant, and equipment and the increase in amortization of intangible assets. Income tax expense was $1.3 million in the first quarter of 2026, an effective rate of 26.5%, which was lower than our domestic rate of 27.0% due primarily to the effect of lower income tax rates in foreign jurisdictions and the effect of non-taxable items, partially offset by the impact of withholding and other taxes.

Net income decreased to $3.5 million in the first quarter of 2026 compared to $11.7 million in the first quarter of 2025. The primary reasons for the $8.2 million decrease were due to the decrease in gross profit of $8.8 million, which were principally as a result of lower instant ticket sales margins, primarily due again to that lower average selling price.

Also reducing gross profit in the quarter was the impact of increased digital development resource costs. Further reducing net income was the increase in administration expenses, $1.9 million, again primarily a result of our increased ERP implementation costs, the increase in net foreign exchange loss of $0.8 million, and the increase in other expenses of $0.4 million.

Partially offsetting these decreases to net income were the decrease to the income tax expense of $2.8 million, the decrease in interest expense of $0.5 million, and the increase in our NPI share of income of $0.4 million. Net income per share basic and diluted decreased to 11 cents and 11 cents per share, respectively, in the first quarter of 2026 from 43 cents and 43 cents per share basic and diluted in the first quarter of 2025.

To close, I would just like to underline again what Doug mentioned earlier in his remarks. While the first quarter financial results were very disappointing, these were due to temporary factors related to the quarter, and nothing has changed with respect to our business plans and our plans for growth and continued expansion and improvements in profitability.

We remain very confident in both our short- and long-term future. As Doug stated earlier, we expect our consolidated adjusted EBITDA in the second quarter of 2026 will exceed the second quarter of 2025.

That is the end of our prepared part of the discussion. Operator, we'd be happy to entertain any questions at this time.

Hi, good morning. Maybe the first place to start would be around the spoilage and rework that you noted.

You said in the release that it was driven by the nature of the work. I was curious if you could expand on that.

Then given that it was a lower ASP quarter, I was wondering if spoilage was part of the reason why ASP was low, because that was deferred to the current quarter.

Hello, Robert. It's John Pollard answering that question.

We did have some unusually large production inefficiencies and spoilage in the quarter. Those were related partly and to a significant extent to some new products and production processes that we had in the quarter that we did have some difficulty with.

Those issues have been resolved and corrected and will not reoccur in the next quarter. There was some relationship there, a little bit, that some of those new products and processes were related to games that we were producing late in the quarter that, as we mentioned in our remarks, had some high margins related to them and caused some of those games to get shifted to the next quarter.

We have a lot of sort of variety in the size and margins of our various orders from our customer base. Usually, those blend out pretty evenly through one quarter to another, but in this case there was a big difference in Q1.

There was a relationship to those inefficiencies that pushed some of those high-margin games at the end of the quarter to next quarter.

Okay. Can I take that and would it be correct to say that the margin pressure from lower ASP was partly or largely due to the spoilage, or was it more due to the mix of orders?

Obviously, when you have excess spoilage, that will impact your margins in the quarter when it occurs. It didn't relate to the average selling price other than the change in timing of some of those orders.

Robert, I'm not sure if that's fully answering the question, Rob,

but— I'm just trying to understand and in the release you gave good information on the impact of volume and ASP. I'm just trying to get a sense of the impact from the spoilage, because it would be a contributing factor to both of those.

Then the second part would be, is it spilling into Q2, like there's a manufacturing issue continuing in Q2, or is it resolved now?

The impact from the spoilage was much, much smaller than the impact from the average selling price and the volumes. You can tell from the, I think as I've just noted in my comments, I think we saw, if I remember the numbers correctly, an $11 million reduction in sales related to our average selling price.

That's a really big number. Related to that mix problem, and so the spoilage issues were much, much smaller than that.

Still, not immaterial, but they did also affect the timing of those high-margin games.

Got it. Then, also suggested in the release that there are confirmed orders that suggest volumes will be flat in the remainder of the year before you add California in.

I'm curious what confirmed orders means.

We should make sure we get that clear, because we're trying to send a very specific message in our comments in the quarter. We talk about our order volumes for the second and third quarters.

We'd love to talk longer, but the nature of the way our orders come in from our customers, we don't typically get firmed-up orders, they increasingly get firm as we get closer to ship dates, but really, out about 4 or 5 months is about as long as we get a firm order book, because our turnaround time for orders doesn't need to be that long or longer, we don't start to get firmed-up orders from our customers until that time. We can look right now at the second and third quarters, and have a very firm idea of exactly what's on our order schedule, our production schedule, for that time.

What we're saying is that our volumes that we see in that production schedule for all of our non-California customers are back to normal levels essentially, comparable levels to what we saw last year, if we call that normal, the recent normal. In addition to those levels, we will expect to have the full complement also of our expanded California work on top of those orders.

In Q1, as we noted in our comments, our volumes were only up slightly, not as much as they would have been if we had the full complement of California plus our normal level of orders from last year. That is what will change in Q2 and Q3.

I hope that's clear. Sorry.

Got it. Then

is it fair to say the California contract is lower ASP, it was a factor in the ASP mix, was it?

No. California contract, as we noted in the notes, is actually going really well.

Customer is very happy. It's onboarding great.

It's going actually better than planned. In fact, it was a positive influence to our quarter.

We're getting the volumes and the average selling price that we had anticipated from that contract. Our problems with average selling price was related to two or three only, really, but two or three of our other largest customers.

Obviously, those are the ones that are going to influence it most, not surprisingly, where we just had some unusual timing of some of their orders getting pushed to later in the year.

Okay. I think that's it for me.

I'll just close with saying great working with you, Rob Rose, if you're there. Wish you a very healthy retirement and lots of Jets Stanley Cups, and I'll pass the line.

I'll hold you to that, Rob. Thank you.

We're not getting rid of Rob for another quarter or two or three yet, so as we noted, until the end of the year. We have plenty of time to keep thanking Rob for his efforts yet.

Thank you, Robert and Rob.

Morning. Just a follow-up on the orders are comparable to last year.

Is there some change from your customers or consumer buying, is there more caution? Is the economy impacting what you're hearing on the ground in terms of what all your jurisdictions are doing and maybe their constituents?

Thank you, Stephen. It's Doug Pollard speaking.

The short answer is no, we're not seeing any significant changes. The economy and the questions around that, there's always a question about the connection of, for example, gas prices to instant ticket sales, but we're not seeing anything dramatic there.

For the last couple of years, we've seen retail sales have flattened a little bit. For several years, there was close to double-digit growth in sales, but that's flatter.

Now some lotteries are still seeing nice growth, some of the ones we're leading, but we're not seeing any significant sign that people are shifting. It's one of the parts that we really like about instant tickets, right?

I think that those sales are going to prove to be very resilient no matter what's happening in the economic cycle.

Okay. The second question is on Belgium.

Just in terms of the impact on margin, you've talked about put some talent on board to get things moving. Maybe you could just give us a little bit of what's been accomplished so far in terms of implementation.

I know the planning is mentioned in the MD&A. What's the next steps over the next couple quarters and is that margin impact, I don't know if you can quantify it, but is that something that will be steady for the remainder of 2026?

Let me just start by saying that I'll remind everybody this is an extraordinarily complex project, right? It is omnichannel.

It is iLottery. It is retail.

It is a lot. There is a lot of planning that goes into that process and scoping that and figuring out what that process is, and that's broken down into several phases.

We've been intently working at that stage over the last little while and planning it out. I think that planning work that we've done has been pretty intense, but it's been pretty well received by the lottery.

I'm very happy with the trajectory that we're on. As we go forward in the next few quarters, you shift from the planning of that to getting the software developers and engineers and such to start building and doing the developing.

The way the accounting is designed for this is as we do the work on the project, we then recognize more of the revenue. In Q1, there wasn't as much work done as that planning stage is done, but as we go forward into Q2 and further out into 2026, you'll see that slowly ramp up and the revenue recognition will go with that.

Could you just give us a timeline again? Apologize.

Is this 2026 and then you start to see more revenue recognition in 2027 as things kind of go through the cycle?

I would say you'll start to see more revenue recognition in Q2,

and

it will build through 2026.

Okay. All right.

Just last one for me, I'm not sure if you can answer this, but the NCIB, not sure how active it'll be, but I'm just wondering from the Pollard family, is that tendering into that or you're comfortable with your holdings? I don't know if you can talk to that yet.

It's Rob here, Stephen. No, this NCIB is going to be supporting the market shares, and the Pollards have no intention to be tendering into that at all.

Okay. Thanks very much.

Good morning, guys. Maybe just a couple starting with Virginia.

Maybe just remind me of when bids are due, and is it safe to assume that you guys will be bidding independently of your NPI partner?

That RFP just came out, and they've already pushed back the due date on it into later this summer. I don't have the precise date on when that bid is due.

I appreciate your question. It's recent enough, we just got it, and I would say at this point we're still considering what our approach will be for that.

Okay. There is kind of discussions underway that you might submit something together.

As the incumbents there, is that a potential opportunity?

I don't think I can comment on specific conversations. I would just say that we're considering what approach we're going to take.

Fair. Thinking about the e-tabs, I think Alaska was a potential opportunity.

Any updates on e-tab expansion?

The we're pretty remain pretty excited about Alaska. We've been working hard on that for months now to put ourselves in a great position to launch strongly.

The a bill is going through the state legislature in Alaska that has a would have a start kick-off date of January 1 of next year, and we don't quote me exactly on this, there's like a week or two left in the in the legislative session, and we're hopeful that it's going to get approved during that session, but we have to wait wait and see. It seems like it is.

We've got lobbyists working there and various people, and we've been working really hard for months to be ready for a big bang fast rollout there and be very successful. We've joined forces with the largest distributor in in Alaska to be ready.

We've had multiple visits out there, and, we are just seeing just generally on e-tabs some real interest in that product line not just through the the our charitable gaming side of our business, but even lotteries themselves are increasingly seeing the tablet-based e-tab as a way to potentially expand lottery revenues in social establishments in some of their jurisdictions. We've got a several discussions ongoing with with state and provincial lotteries about deploying tablet-based—we wouldn't call them e-tabs, but a tablet-based lottery product.

Alaska, we should find out in the next 2 weeks whether that bill gets approved, and then it'll be off to the races.

That's excellent. Then maybe just one more on Kansas and the iLottery RFP.

Was it North Carolina that quickly came to RFP kind of right after launch of their iLottery, kind of assuming that there wouldn't be a significant change here in such short order? Is that correct?

Is that kind of what you're hoping/expecting for Kansas?

Let me first say I don't think you're thinking of North Carolina, I think you're thinking of Pennsylvania. That may have been the case there where they had a relatively short term.

Look, I don't think we can comment specifically on why Kansas or what they might be thinking. I would just say they had a contract term that ended, and, at the time they wanted to get up and running quickly, and they turned to us to do so, and we delivered for them.

I think that was impressive and we're delivering the financial results that the legislature looked for. All I can say is that as they go forward into an RFP now, that would be both expected because of the contract term, and I think the job that we've done has put ourselves in a very good position.

Like all these bids, it'll be a competitive bid. We're not taking anything for granted, and we will put forward a very competitive proposal.

That's it for me, guys. Thanks.

Thank you, operator. To our shareholders, I want to acknowledge the disappointment of the first quarter results.

Again, I want to help reinforce that we believe these are temporary factors, and we remain highly confident in our outlook for the rest of 2026 and beyond. The game-changing milestones that we achieved during the latter part of 2025 have established a foundation for our growth and success in both the retail side of our business, including various printed products, and the digital solution portion of our business, covering iLottery, e-instants, loyalty, and e-tabs.

We are tremendously excited about the opportunities that lie before us, both in the short and the long term. I want to thank you for joining us, and we look forward to updating you next quarter.

Until then, have a great rest of your day.