SOURCE: Lattice Incorporated

Lattice Incorporated

May 15, 2014 09:00 ET

Lattice Announces First Quarter 2014 Financial Results

Conference Call Today, May 15 at 2:00 p.m. ET

PENNSAUKEN, NJ--(Marketwired - May 15, 2014) - Lattice Incorporated (OTCQB: LTTC) ("Lattice" or the "Company"), a cloud-solutions provider of inmate management network systems for correction facilities, announced its financial results for the first quarter ended March 31, 2014.

First Quarter Financial Highlights:

  • Total revenue increased 7% to $2.3 million
  • Recurring revenues accounted for 67% of total revenue
  • Gross profit increased 31% to $0.9 million
  • Gross margin percentage increased to 38%

"We continue to see robust and growing demand for our proprietary Integrated Corrections Operations Network ("ICON"), the industry-leading communications and management platform for correctional facilities," stated Paul Burgess, CEO of Lattice. "Leveraging the inquiries and installations we've seen internationally over the past year, Lattice is now embarking on a new strategic effort for international expansion, and we've retained Communication Media Advisors to help us evaluate and capitalize on the strongest opportunities in the market."

Burgess continued, "The launch of ICON and the integration of our new call center into our platform temporarily slowed growth, but we are beginning to see a return to historical growth rates. Additionally, with the Company turning back to EBITDA positive in 2013 and continuing growth of our communications business, we've taken on a number of initiatives to improve our balance sheet."

Total revenue for the first quarter increased 7% year-over-year to $2.3 million, compared to $2.2 million in the first quarter of 2013, while recurring revenues accounted for 67% of total revenue. Increasing recurring revenue is attributable to volume growth from direct telecom services to end-user correctional facilities, and the Company expects continued growth in both components of its revenue during fiscal 2014.

Gross profit increased 31% to $893,000 in the first quarter, up from $682,000 in the first quarter of 2013. Gross margin, as a percentage of revenues, increased to 38% in the first quarter from 31% in the year ago period. Gross margin for the Company's technology sales increased to 68% and are anticipated to remain stable in the 60% to 65% range moving forward. The year-over-year improvement was driven by lower-margin large ticket orders in the prior year period compared to more higher-margin application-rich development projects in the currently reported period. Gross margin from recurring revenues was consistent with prior year results at approximately 27%.

Cash and cash equivalents increased to $712,000 at March 31, 2014, up from $312,000 at December 31, 2013. Net cash used by operating activities was $83,000 for the quarter, compared to net cash used by operating activities of $381,000 in the year ago period.

"The foundation building we completed in 2013, from the launch of our ICON platform to the addition of our in-house call center and the divesture of our government assets, have set the stage for strong performance in 2014 and beyond," continued Burgess. "Increasing demand for our products and services, both domestically and internationally, is expected to drive ongoing operational performance, ultimately leading to significant shareholder value improvement."

Additional information may be found in the Company's 10-Q filing with the U.S. Securities and Exchange Commission.

Conference Call

Lattice will host a conference call today, Thursday, May 15, with CEO Paul Burgess and CFO Joseph Noto, at 2:00 p.m. Eastern time (11:00 a.m. Pacific). To participate in the call, please dial (877) 941-8601, or (480) 629-9762 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found via the Company's website at http://www.latticeinc.com.

A replay of the call will be available for two weeks from 5:00 p.m. ET on May 15, 2014, until 11:59 p.m. ET on May 29, 2014. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the passcode for the replay is 4683906. In addition, a recording of the call will be available via the Company's website at http://www.latticeinc.com for one year.

About Lattice Incorporated

Lattice Incorporated provides advanced information and communications technology solutions to corrections facilities globally. The Company's innovative, cost-effective solutions leverage its proprietary Nexus platform, a real-time transaction processing engine, to develop and deliver customized cloud-based software applications with military-grade security for facilities that require highly secure solutions. For more information, visit http://www.latticeinc.com.

Safe Harbor Statement

Safe-Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company's financing plans; (ii) trends affecting the company's financial condition or results of operations; (iii) the company's growth strategy and operating strategy; and (iv) the risk factors disclosed in the Company's periodic reports filed with the SEC. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk factors disclosed in the company's Forms 10-Q previously filed with the SEC.

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