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Lattice Inc.
RedChip Conference
April 24, 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 in2014
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"  Outdated Technology generating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 with
Sodexo Justice Services
"  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	
  
EMAIL	
  
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.
!  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
Jon@Redchip.com
Paul Burgess
CEO
pburgess@latticeinc.com
856-910-1166 ext 2111

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LTTC Presentation April 2014

  • 1. Lattice Inc. RedChip Conference April 24, 2014 Ticker Symbol: LTTC © 2011, Lattice Incorporated. All Rights Reserved.
  • 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 !  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.
  • 4. 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
  • 5. 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.
  • 6. 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 in2014
  • 7. 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
  • 8. 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)
  • 9. 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
  • 10. 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
  • 11. 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
  • 12. 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
  • 13. 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.
  • 14. Device Agnostic SECURE COMMUNICATIONS CLOUD COMMISSARY  ORDERING   SCHEDULING  SERVICES   LEGAL  COUNSEL   INMATE  E  DEVICE   EMAIL   INTEGRATION  SERVICES   MUSIC  DOWNLOAD   EDUCATION   INVESTIGATION   VIDEO  VISITATION   SOCIAL  MEDIA   DEDICATED  INMATE  STATION   TEXT  MESSAGING   VOICE  MAIL   HOME  PC   SECURE  FIREWALL  
  • 15. 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
  • 16. Secure Products  and  Services  managed  and   accounted  for  by  ICON Communication PIN Debit and PPC Phone Accounts ICON Application Management Jail Management System
  • 17. 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
  • 18. 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.
  • 19. 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