2. 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.
3. 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.
5. Correctional Technology Market Overview
! $5.0B+ Market total in Federal, State, and
County
! Additional revenue from other noncommunications 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
6. 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" Outdated Technology generating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
7. 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)
8. 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
9. 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
10. Foreign Market Overview
! Business Model
" Technology sales/license revenue
" Transaction revenue
" Services revenue
! Current Foreign Sales Pipeline
Asia
Israel
U.K.
Belgium
Canada
Mexico
India
Caribbean
11. 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
12. SECURE COMMUNICATIONS CLOUD
INTEGRATION
SERVICES
INVESTIGATION
LEGAL
COUNSEL
EDUCATION
HOME
PC
EMAIL
MUSIC
DOWNLOAD
SOCIAL
MEDIA
SCHEDULING
SERVICES
DEDICATED
INMATE
STATION
COMMISSARY
ORDERING
INMATE
E
DEVICE
VIDEO
VISITATION
VOICE
MAIL
TEXT
MESSAGING
SECURE
FIREWALL
Device Agnostic
13. Integrated
Correc-ons
Opera-ons
Networks
(ICON)
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.
ICON
Core
ICON
will
consist
of
five
major
components:
• Products
and
Services
management
• Customer
Informa-on
Database
• Payment
Processing
• Accoun-ng/Billing
• Customer
Care
Secure
Communica-on
Layer
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
Secure
ICON
Application
Management
Jail Management
System
Communication
14. Products
and
Services
managed
and
accounted
for
by
ICON
Secure
ICON
Application
Management
Jail Management
System
Communication
PIN Debit and PPC
Phone Accounts
15. ICON
Jail
Management
System
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
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
Secure
ICON
Application
Management
Jail Management
System
Communication
16. 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.
