lattice: redchip's global online ceo conference
DESCRIPTION
Lattice Incorporated (“Lattice” or the “Company”), founded in 1973, provides secure communications and information technology, specializing in deploying advanced technology and services to create innovative, cost - effective solutions for the Company’s global customers. The Company provides both wholesale and direct services to correctional facilities and their service providers in the U.S., Canada and Europe. Expansion of Lattice’s direct and wholesale services, including increased techno logy equipment and software sales to wholesale customers, is expected to drive revenue growth and increased margins in the quarters aheadTRANSCRIPT
Lattice Inc.
RedChip Conference July 17, 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
Technology leader in the correctional facilities
market.
700% revenue growth from 2009 to 2013.
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 2013
Revenue 1,096 3,554 4,572 7,530 8,270
COGS 464 2,343 3,243 5,094 5,461
GP 632 1,211 1,329 2,436 2,809
SGA 1,104 1,299 2,116 1,982 2,769
EBITDA*
(472) 104 (483) 830 44
* 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-
communication based services
2.3 Million Inmates
Strong recurring revenue base
Prison population steadily growing at 3%
annually, capturing market share.
Communications revenues are split with
prison, alleviating pressure on state and
county budgets.
Innovisit Acquisition
Industry Leader in Video Visitation Technology
Integrated with Lattice ICON Platform in 2013
Implemented first installation in Q1 2013
Acquired Company Q4 2014
Adds 15 new states
Currently serving 90 correctional facilities
Will add $1.5 - $2.0M additional revenue in 2014
Competitive Landscape
Small Regional Service Providers
Solid regional relationships with
smaller facilities
Outdated Technology generating
lower revenues per inmate
Large National Service Providers
Focusing on larger facilities
Multiple technology platforms through
acquisition making service
inconsistent to smaller facilities.
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 in 400
bed facility. Currently responding to
RFPs for multiple facilities
90,000+ inmate potential in UK
Foreign Market Opportunity
Retained Communication Media
Advisors to Accelerate International
Expansion:
Identify most attractive markets for
expansion.
Identify potential partners and
licensees that best enable Lattice to
successfully win new business in
these markets.
Phase I of the project will be
completed in Q2 of this year.
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 Communication Layer
ICON will consist of five major components:
• Products and Services management
• Customer Information Database
• Payment Processing
• Accounting/Billing
• Customer Care
ICON Core
All communication between payments and services will utilize ICON’s Secure
Communication Layer. Outside development firms will have standard interfaces to utilize
Integrated Corrections Operations Networks (ICON)
Communication
ICON
Application
Management
ICON will provide centralized database management and payment capability. Utilizing the a central core engine will
allow multiple software applications to reuse software processes saving
development time and producing far more efficient business practices.
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 correctional facility processes, inmate
booking, inmate information, and trust accounting
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.
700% revenue growth 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
Paul Burgess CEO
[email protected] 856-910-1166 ext 2111