First-Quarter 2009 Highlights

• Total revenues were $3.8 million, up 6.0% from approximately $3.6 million in the first quarter of 2008
• Gross margin was 32.9%, slightly up from 31.6% in the first quarter of 2008
• “Adjusted” Operating Income was $108,000 versus a $73,000 loss in the year ago period

“Despite uncertainties related to the economy and the ultimate spending roadmap of the new administration, we continue to succeed steadily in achieving organic growth, as we expand contract work with our existing government customers,” said Paul Burgess, Lattice’s Chief Executive Officer. “Simultaneously, we continue to emphasize cost-cutting as we focus on consolidating our businesses under the Lattice brand.”

First-Quarter 2009 Results

Lattice’s total revenue in the first quarter of 2009 was $3.8 million, up 6.0% from approximately $3.6 million in the same period last year. The year-over-year increase in quarterly total revenues was attributable to an increase in rates on the Company’s cost-plus contracts in its Government services unit and higher sales in the Company’s technology product segment.

Cost of revenues increased to approximately $2.6 million from approximately $2.5 million in the same period of 2008. Gross profit in the 2009 first quarter was approximately $1.3 million compared to $1.1 million in the comparable period of 2008. As a percent of revenues, gross profit was 32.9% in the first quarter of 2009, up from 31.6% in the first quarter of 2008. The year-over-year increase in gross profit was primarily due to a higher percentage of overall revenues attributable to higher-margin technology products,an increase in government services margins due to the rate increase on the Company’s cost plus contracts, partially offset by increased use of subcontractors in supporting the Government service revenues.

Operating expenses for the first quarter of 2009 totaled $1.6 million, approximately even with the comparable period of 2008. Selling, general and administrative expenses in the 2009 first quarter were $1.1 million, approximately even with SG&A recorded for the first quarter of 2008 Amortization expense was down 19.8% to $299,248 compared to $372,057 recorded in the corresponding period of 2008, as some of the Company’s intangibles have been fully amortized.

The Company posted an “Adjusted” operating income of $108,000 compared to a loss for the 2008 first quarter of $73,000. The Company uses “Adjusted” operating income, a non-GAAP measure, as an internal gauge on the Company’s operating performance. Below is a reconciliation of “Adjusted” operating income to reported operating loss.

Other expense in the first quarter of 2009 totaled $254,500, compared to other income of $128,394 recorded in the first quarter of 2008. Included in other expense for the first quarter of 2009 was $172,000 non-cash derivative expense which compared to derivative income of $179,000 in the comparable quarter of 2008.

Net loss applicable to common shareholders for the 2009 first quarter was $409,358, or $0.02 per fully diluted share, compared to a $140,836 and $0.01, respectively in the first quarter of 2008.

Conference Call

The Company will host a conference call at 5:00 p.m. ET on May 11, 2009, to discuss first-quarter 2009 results. Joining Paul Burgess, Lattice’s Chief Executive Officer, will be Joe Noto, Chief Financial Officer. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: +1(866) 800-8648. The conference ID for the call is 83148794.

If you are unable to participate in the call at this time, a replay will be available on May 11 at 7:00 p.m. ET for seven days. To access the replay, dial +1(888)286-8010 or +1(617)801-6888; the conference ID is 41548873.

About Lattice Incorporated

Lattice Incorporated is a provider of advanced information and communications technology solutions to the government and commercial markets. The company's technology services division designs, deploys and manages advanced technological solutions at key government agencies and for mid- to large-sized enterprises. Lattice's technology products division consists of several core proprietary platforms used to develop customized software applications with military grade security in a number of different markets. For more information, visit http://www.latticeincorporated.com.

Safe Harbor Statement

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-K previously filed with the SEC.

Lattice Incorporated
Paul Burgess, CEO
+(1) 856-910-1166 x.2111

pburgess@latticeincorporated.com