Company Address:
Lattice Incorporated
7150 N. Park Drive,
Suite 500

Pennsauken, NJ
08109
USA
 Phone:
(856) 910-1166
 Website:
www.latticeincorporated.com
 Ticker:
LTTC
 Exchange:
OTC BB
FREE E-MAIL ALERTS

  • ABOUT HAWK
  • HAWK CLIENTS
  • HAWK SERVICES
  • CONTACT HAWK
7150 N. Park Drive, • Suite 500 • Pennsauken • NJ • 08109 • USA • www.latticeincorporated.com
Investor Contact: Frank N. Hawkins, Jr. or Julie Marshall · Hawk Associates Inc. · (305) 451-1888 · www.hawkassociates.com
Lattice Q2 Revenue $3.4 M. Gross Profit $1.4 M. EBITDA Over $300k. Q2 Results Driven by Growth in New Communications Business. Communications Segment Revenue Up 179%, Comprises 25% Total Revenues.
ALERT: On August 20, 2010 Lattice, Inc. held its Second Quarter 2010 Earnings conference call.

To hear the audio replay of that call please click here.

Company Description



Lattice Incorporated has been a provider of advanced information and communications technology to the government and commercial markets since 1977, beginning as a provider of specialized solutions to the telecom industry. Responding to the converged communications industry of today, Lattice is focused on providing advanced solutions for several vertical markets through software and applications developed using its core platform technology.

The company currently derives the majority of its revenue from its Government Services segment, providing technology solutions on a contract basis to the federal government. The company's Communication Services group, which provides telecom products and services, expanded in 2009 from a wholesale business model to offering its products and services directly to end-user facilities.


Differentiators

Government Services


The company’s Government Services division designs, deploys and manages advanced technological solutions including software consulting and development services for the command and control of biological sensors and other Department of Defense requirements to United States federal governmental agencies either directly or through prime contractors of governmental agencies. The company's proprietary products include SensorView, which provides clients with the capability to command, control and monitor multiple distributed chemical, biological, nuclear, explosive and hazardous material sensors.

Lattice also designs, develops and implements business management applications, geographic information systems, web services applications and secure geospatial solutions. Consulting services offered to federal clients include network engineering, architectural guidance, database management and functional area analysis, as well as support for business requirements, change management and financial analysis for several major federal customers.

Lattice maintains a proprietary Department of Defense certified software development platform enabling developers to rapidly create fully compliant, highly secure .NET applications. The company also owns a proprietary transaction processing platform used to develop and enhance a variety of customizable communications platforms.

Lattice uses its proprietary technologies to develop customized solutions for all levels of the federal government and enterprise-level customers. Using DOD-certified platforms, the company develops low-cost web services that incorporate military grade security.

Lattice’s products are specifically designed to reduce the time and cost of developing advanced solutions for clients requiring highly secure, extremely reliable communications systems. The company’s expertise in securing web services with military-grade technology enables more powerful IP-based communications in the defense, intelligence and homeland security agencies.

Government Market


Lattice Incorporated competes in a highly competitive and fragmented market servicing the federal government. In addition to its proprietary technologies and long operating history, the company further distinquishes itself via its ties to key government agencies and the possession of a Department of Defense certification on a core development platform.

Lattice believes it has significant hidden assets and future revenue streams not currently reflected in its financial statements. Many contracts in the government market are initially awarded on a single-year basis but are effectively multi-year awards, providing the original firm satisfactorily performs that first year. Based on its historical track record of successful execution, the company believes it has a high probability of realizing recurring revenue streams from such contract extensions.

Communications Group


Historically, Lattice's revenue from the Communications Group has been derived from wholesaling product and services to service providers providing telecom services to inmate facilities. Based on growth of the inmate telecommunications market, the company expanded its offerings to include direct services to end-user inmate facilities either provided directly to inmate facilities or via a partnering arrangement with other service providers. The transition to the new services model was completed late in 2009.

The company has announced commencement of a trial in Europe with a prison management group. Management expects revenue from a follow-on contract could begin in 2011.

The new services model opens an addressable market of approximately $1.5 billion per year, based on the current inmate population in the U.S. Average revenue per inmate is estimated at $600 - $750 per year, depending on the facility.

The new communication business model will require the company to make upfront capital investments in equipment with each new contract win. To date, Lattice has secured equipment financing to support its contract wins. In the quarter ended June 30, 2010 Lattice made a $1.3 M investment in licensing technology that was financed with a $1.25 M debt financing closed in the current quarter. Recent News
Lattice Announces Second Quarter 2010 Earnings
Lattice Incorporated Schedules Second Quarter 2010 Earnings Release and Conference Call
Lattice Announces First Quarter 2010 Earnings
Lattice Awarded DoD Extension to Continue Supporting Chemical and Biological Defense Programs
Lattice Announces First European Trial of Call Management System

    Risk Factors
  • Larger, better financed competitors
  • Need for additional financing
  • Highly competitive market
  • Ability to successfully commercialize and derive revenue from products

The Outlook Lattice derives a substantial portion of its revenues from government contracts under which the company acts as both a prime contractor and indirectly as a subcontractor to Federal DoD agencies. Revenues in the quarter ended June 30, 2010 from Government Services was $2.5 M or 75% of the company's overall revenues. Gross profit from Government Services during the quarter was $1.14 M.

The company said based on its bid pipeline and teaming arrangements, it continues to anticipate wins in new agencies and expansion on existing contracts in the second half of the year. Management said the majority of the bids the company currently has and are awaiting on awards are with new agencies or new contracts that add to its current contract base. In addition, the company has entered into a number of teaming agreements with other government contractors to provide services on current contracts that they have been awarded.

Management anticipates government contracts will continue to account for the largest portion of its revenue while the percentage of overall revenues from its communications group is expected to increase and provide a consistent recurring revenue stream.

For the three months ended June 30, 2010, revenue from the Communications Group was $855k, representing an increase to 25% of total revenues from 7% in the same quarter a year ago. Gross profit for the quarter in this segment was $301k. For the six months ended June 30, 2010, Communications Group revenue was $1.68 M or 24% of total revenues. Communications Group gross profit for the first six months was $554k. Management
President and Chief Executive Officer -
Paul Burgess

Chief Financial Officer-
Joel Noto

Vice President of Engineering-
Thomas Spadaro

Back To Top