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Lattice Inc.
RedChip Conference January 22, 2014
Ticker Symbol: LTTC
© 2011, Lattice Incorporated. All Rights Reserved.
Safe Harbor Statement Management’s prepared remarks contain forward-looking statements which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore we refer you to a more detailed discussion of the risks and uncertainties in the company’s filings with the Securities and Exchange Commission.
The Company
! Communications technology leader in the
correctional facilities market. ! 400% growth from 2009 to 2012, CAGR 90% ! Provides a suite of cloud based services
enabling smaller facilities access to technology traditionally only available to large facilities.
! Providing secure communications and
information technology since 1973.
Financials
2009 2010 2011 2012 Revenue 1,096 3,554 4,572 7,530 COGS 464 2,343 3,243 5,094 GP 632 1,211 1,329 2,436 SGA 1,104 1,299 2,116 1,982 EBITDA* (472) 104 (483) 830 * Excludes Government services Division and associated corporate expenses
Correctional Technology Market Overview
! $5.0B+ Market total in Federal, State, and County
! Additional revenue from other non-communications services
! 2.3 Million Inmates ! Strong recurring revenue base ! Prison population steadily growing at 3%
annually ! Communications revenues are split with
prison, enhancing their profits
Competitive Landscape
! Small Regional Service Providers " Solid regional relationships with
smaller under 50 bed facilities " Outdated Technology generating
lower revenues per inmate ! Large National Service Providers
" Focusing on 500+ bed facilities " Technology and service is
inconsistent " Losing smaller facilities as customers
Business Model – US Market
! Exclusive Rights to Facility " Revenue sharing with Facility " Provides extra revenue for strapped
state budgets " Range from 20-60%
! Up-sell Leading Features & Products Provides customer stickiness " Ability for family members to credit
inmate’s call account " Video Visitation " Kiosk for cash management and value
added services " Integrated jail management software
solution (difficult to replace)
Sales and Marketing
! Direct Sales to Facilities " Local sales presence " Expand upon established local
concentration " Referrals important for winning county
customers ! Indirect Wholesale & Technology License
Sales " Utilized by channel partners for larger
facilities and State bids " For out of direct sales region " Builds Lattice footprint and brand
recognition
Foreign Market Overview
! Competitive Landscape " Incumbent Telcos primary competition " Legacy payphone model (collect
calling) " New technology yet to be introduced
! Lattice has Unique Technology Advantage " Lattice technology provides cost
reductions " Lattice Model provides enhanced
revenue streams " Lattice technology provides enhanced
security and investigative tools
Foreign Market Overview
! Business Model " Technology sales/license revenue " Transaction revenue " Services revenue
! Current Foreign Sales Pipeline Asia Canada Israel Mexico U.K. India Belgium Caribbean
Foreign Market Overview
! Canadian Market " Awarded four installations " All 4 being implemented in 2013 " Partnered with Telus Canada for
larger provinces " Smaller facilities partnering with
Wymactel ! U.K. Market
" First site operational in Gibraltar (2011)
" Successful trial completed with Sodexo Justice Services
" 90,000+ inmate potential in UK
Device Agnostic
SECURE COMMUNICATIONS CLOUD
COMMISSARY ORDERING
SCHEDULING SERVICES
LEGAL COUNSEL
INMATE E DEVICE
INTEGRATION SERVICES
MUSIC DOWNLOAD
EDUCATION
INVESTIGATION
VIDEO VISITATION
SOCIAL MEDIA
DEDICATED INMATE STATION
TEXT MESSAGING VOICE MAIL
HOME PC
SECURE FIREWALL
Secure
Secure Communica-on Layer
ICON will consist of five major components:
• Products and Services management • Customer Informa-on Database
• Payment Processing
• Accoun-ng/Billing • Customer Care
ICON Core
All communica-on between payments and services will u-lize ICON’s Secure
Communica-on Layer. Outside development firms will have standard interfaces to u-lize
Integrated Correc-ons Opera-ons Networks (ICON)
Communication
ICON Application Management
ICON will provide centralized database management and payment capability. U-lizing the a central core engine will allow mul-ple soMware applica-ons to reuse soMware processes saving
development -me and producing far more efficient business prac-ces.
Jail Management System
Secure
Products and Services managed and accounted for by ICON
Communication
PIN Debit and PPC Phone Accounts
ICON Application Management
Jail Management System
Secure
The ICON JMS includes the following features:
• Reporting • Scheduling
• Multi-Facility/Multi Agency Integration
• Special Diet/Meal Count • Workflow
• Biometrics • Booking
• Trust Accounting/General Ledger • Medical Records
• Incident Reporting • NCIC Background screening
Communication
ICON Application Management
The ICON Jail Management System (JMS) is a key component to the ICON
core. The JMS stores and manages correc-onal facility processes, inmate
booking, inmate informa-on, and trust accoun-ng
Jail Management System
ICON Jail Management System
Investment Highlights
! Rapid expansion of the Company’s service and technology sales to drive overall growth and margin improvement.
! Lattice offers industry leading proprietary technology to traditionally underserved area of the market—small and midsized correctional facilities.
! International expansion with key partnerships growing sales and margin growth while increasing the Company’s footprint.
! CAGR of 90% over the last 4 years. Early stages of growth potential.
Q&A
Contact:
Jon Cunningham RedChip Companies, Inc.
1.800.REDCHIP x107 | 407.644.4256 x107 [email protected]
Paul Burgess
856-910-1166 ext 2111
