PENNSAUKEN, NJ — (Marketwired) — 11/14/14 — Lattice Incorporated (OTCQB: LTTC) (“Lattice” or the “Company”), a cloud-solutions provider of inmate management network systems for correction facilities, announced its financial results for the third quarter ended September 30, 2014.
Technology revenue increased 42% year-over-year
Direct call provisioning revenue increased 8% year-over-year
Total revenue decreased 7% to $2.0 million; gains in other segments offset by decrease in wholesale service revenue as Company continues to transition away from wholesale service accounts
Average annual revenue per inmate approximately $830; compared to $515 per inmate industry average
Recurring revenues accounted for 53% of total revenue
Gross margin percentage increased to 41.8%
“Our focus remains on increasing our technology sales and direct service revenues, which increased 42% and 8% respectively in the third quarter,” stated Paul Burgess, CEO of Lattice. “These gains were offset by decreasing wholesale service revenue, due to our continued transition away from wholesale service accounts, which resulted in total revenue decreasing 7% during the period.”
Burgess continued, “Our continually improving product breadth is allowing us to build on our revenue per inmate by deploying products that maximize revenue opportunities. Currently, our average annual revenue per inmate is approximately $830, compared to an industry average of $515 per inmate. We attribute the better revenue performance to our quality of service, accessibility of service, and innovative products.”
“Investments in sales and marketing during the year led to an additional 15 contract wins that we have begun to install. We anticipate the growth in our contract backlog to continue through the remainder of the year and into 2015 as we expand our sales and marketing efforts throughout the additional eight states we have targeted. We expect our market share of the 3,500 facilities we–re targeting in the U.S. to grow significantly from the current 2% we hold today. It is our goal to become the predominant service provider to small and midsized correction facilities in the U.S., and we believe we have built the necessary foundation to achieve this goal,” concluded Burgess.
Total revenue for the third quarter decreased 7% year-over-year to $2.0 million, compared to $2.2 million in the third quarter of 2013, while recurring revenues accounted for 53% of total revenue. Increasing recurring revenue is attributable to volume growth from direct telecom services to end-user correctional facilities, and the Company expects continued growth in both technology sales and recurring direct revenue during fiscal 2014 and into 2015.
Gross profit decreased 6% to $848,000 in the third quarter, down from $903,000 in the third quarter of 2013. Gross margin, as a percentage of revenues, increased to 41.8% in the third quarter from 41.5% in the year ago period. Margins in both lines of the Company–s business, technology sales and recurring service revenue, remained consistent with prior year levels, in the 60% and mid-20% ranges respectively.
Cash and cash equivalents increased to $370,000 at September 30, 2014, up from $313,000 at December 31, 2013.
“Our sales pipeline continues to grow, and we have a number of technology projects underway that we anticipate being completed in the fourth quarter. As we recognize revenue upon project completion, we–re expecting to close out the year strong and report great results for the fourth quarter,” concluded Burgess.
Additional information may be found in the Company–s 10-Q filing with the U.S. Securities and Exchange Commission.
Lattice will hold a conference call today, November 14, with CEO Paul Burgess and CFO Joseph Noto, at 1:00 p.m. Eastern time (10:00 a.m. Pacific). To participate in the call, please dial (888) 401-4668, or (719) 325-2463 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found via the Company–s website at . Conference ID: 3951356
A replay of the call will be available for two weeks from 4:00 p.m. ET on November 14, 2014, until 11:59 p.m. ET on November 28, 2014. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the passcode for the replay is 3951356. In addition, a recording of the call will be available via the Company–s website at for one year.
Lattice Incorporated provides advanced information and communications technology solutions to corrections facilities globally. The Company–s innovative, cost-effective solutions leverage its proprietary Nexus platform, a real-time transaction processing engine, to develop and deliver customized cloud-based software applications with military-grade security for facilities that require highly secure solutions. For more information, visit .
Safe-Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company–s financing plans; (ii) trends affecting the company–s financial condition or results of operations; (iii) the company–s growth strategy and operating strategy; and (iv) the risk factors disclosed in the Company–s periodic reports filed with the SEC. The words “may,” “would,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend” and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company–s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk factors disclosed in the company–s Forms 10-Q previously filed with the SEC.
Contact:
Investor Relations
Jon Cunningham
RedChip Companies, Inc.
Tel: +1-800-733-2447, ext. 107
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