SOURCE: Lattice Incorporated

Lattice Incorporated

August 14, 2015 09:16 ET

Lattice Announces Second Quarter 2015 Financial Results

Conference Call Today, Friday, August 14 at 12:00 p.m. ET

PENNSAUKEN, NJ--(Marketwired - Aug 14, 2015) - 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 second quarter ended June 30, 2015.

Second Quarter Highlights:

  • Revenue increased 7% compared to the second quarter in 2014
  • Direct call provisioning revenue increased 23% compared to the second quarter in 2014
  • Average revenue per inmate is over $800, versus industry average of $515 per inmate
  • Recurring revenues accounted for 50% of total revenue
  • Gross margin percentage increased to 48%, up from 40% in the second quarter in 2014 due to an increase in wholesale technology revenue during the quarter

"We continued to make progress on multiple fronts during the second quarter," stated Paul Burgess, CEO of Lattice. "With the proven success of our market share gains in Oklahoma, where we now service more than 50% of the small and mid-sized correctional facilities we've targeted, we've embarked on a strategy to replicate this success in eight additional markets. To date, we've obtained certification to provide communications services in five of these eight new states, and we are actively engaged in sales and marketing activities in all five."

Burgess continued, "We also launched our new Video Arraignment solution during the second quarter, which is currently being installed in three facilities. This is a solution that we believe has great potential across our entire target demographic as it complements our existing service platform, helping facilities further reduce labor costs and security risks associated with transporting inmates for courtroom arraignments."

"Another addition to our growing suite of services, our CellMate™ Mobile platform, is on track for launch late in the third quarter. A wireless device for inmates to maintain contact with friends and family and to access self-improvement resources, the CellMate platform provides a compelling value proposition and is expected to lead to increased inmate morale, which will ultimately lead to a reduction in recidivism. Overall, its advances in our service offerings like this that provide Lattice with a significant differentiating factor as we seek to further our market share gains across the U.S. and internationally. We look forward to providing additional updates on our progress in the months ahead," concluded Burgess.

Total revenues for the three months ended June 30, 2015 increased 7% to $2,415,000, up from $2,254,000 for the three months ended June 30, 2014. Recurring service revenue, which breaks down into wholesaled services and direct services, accounted for 50% of total revenue in the current quarter. Direct call provisioning revenue increased 23% as we added customers, which was offset by a decrease in wholesale revenue due to a large contract that ended during 2014.

Technology product revenues, where Lattice provides wholesaled technology systems embedded with its proprietary software to other service providers, increased 82% to $1,205,000, up from $661,000 in the year ago period.

Gross profit for the three months ended June 30, 2015 increased to $1,166,000, up from $904,000 in the prior year period. Gross margin, as a percentage of revenues, increased to 48% from 40% for the same period in 2014. The increase in percentage is largely attributable to a shift in revenue mix primarily due to the effects of a higher level of wholesaled technology revenue during the quarter compared to the prior year quarter. Technology product revenue accounted for 50% of total revenue compared to 30% in the year ago quarter. Gross profit as a percentage of revenues for service revenues was consistent with prior year levels, at approximately 30%. The gross margin for wholesaled technology products will vary with larger sales orders, but the Company expects the margins to continue to be in the 60% range on average.

Cash and cash equivalents increased 5% to $268,000 at June 30, 2015, up from $256,000 at December 31, 2014.

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

Conference Call

Lattice will hold a conference call today, August 14, with CEO Paul Burgess and CFO Joseph Noto, at 12:00 p.m. Eastern time (9:00 a.m. Pacific).

To participate in the call, please dial (888) 438-5525, or (719) 325-2393 for international calls, approximately 10 minutes prior to the scheduled start time. Conference ID: 6668716.

A replay of the call will be available for two weeks from 3:00 p.m. ET on August 14, 2015, until 11:59 p.m. ET on August 28, 2015. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the passcode for the replay is 6668716. In addition, a recording of the call will be available at http://bit.ly/1J2FNN6 for one year.

About Lattice Incorporated

Lattice is a provider of inmate management and communications solutions that improve efficiency, reduce administrative burden, and deliver recurring revenue opportunities for corrections facilities globally. Lattice's Corrections Operating Platform™ (COP) is comprised of innovative, highly secure solutions including phone systems, prepaid calling options, voicemail, on-site and remote video visitation and arraignment, point-of-sale kiosks, e-mail, text messaging, and social media. COP's inmate management module efficiently manages prison processes, including communications monitoring, commissary purchases, account funding and billing, biometrics, booking, incident reporting, and more. 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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