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
Revenue

2010

2011

2012

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 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
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"  Outdated Technology generating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
Israel
U.K.
Belgium

	

Canada	

	

Mexico	

	

India	

	

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
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
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
Products	
  and	
  Services	
  managed	
  and
	
  
accounted	
  for	
  by	
  ICON

Secure

ICON
Application
Management
Jail Management
System

Communication

PIN Debit and PPC
Phone Accounts
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
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
Jon@Redchip.com
Paul Burgess
CEO
pburgess@latticeinc.com
856-910-1166 ext 2111

Lttc 01222014-reduced

  • 1.
    Lattice Inc. RedChip Conference January22, 2014 Ticker Symbol: LTTC © 2011, Lattice Incorporated. All Rights Reserved.
  • 2.
    Safe Harbor Statement Management’sprepared 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 !  Communicationstechnology 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.
  • 4.
  • 5.
    Correctional Technology MarketOverview !  $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 !  SmallRegional 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 !  Rapidexpansion 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.
  • 17.
    Q&A Contact: Jon Cunningham RedChip Companies,Inc. 1.800.REDCHIP x107 | 407.644.4256 x107 Jon@Redchip.com Paul Burgess CEO pburgess@latticeinc.com 856-910-1166 ext 2111