Lttc 01222014-reduced
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Transcript of Lttc 01222014-reduced
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Lattice Inc.
RedChip Conference January 22, 2014
Ticker Symbol: LTTC
© 2011, Lattice Incorporated. All Rights Reserved.
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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.
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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.
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Financials
2009 2010 2011 2012 Revenue 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
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Correctional Technology Market Overview
! $5.0B+ Market total in Federal, State, and County
! Additional revenue from other non-communications 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
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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smaller under 50 bed facilities " Outdated Technology generating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
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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)
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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
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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
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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
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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
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Device Agnostic
SECURE COMMUNICATIONS CLOUD
COMMISSARY ORDERING
SCHEDULING SERVICES
LEGAL COUNSEL
INMATE E DEVICE
INTEGRATION SERVICES
MUSIC DOWNLOAD
EDUCATION
INVESTIGATION
VIDEO VISITATION
SOCIAL MEDIA
DEDICATED INMATE STATION
TEXT MESSAGING VOICE MAIL
HOME PC
SECURE FIREWALL
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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
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Secure
Products and Services managed and accounted for by ICON
Communication
PIN Debit and PPC Phone Accounts
ICON Application Management
Jail Management System
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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
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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.
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Q&A
Contact:
Jon Cunningham RedChip Companies, Inc.
1.800.REDCHIP x107 | 407.644.4256 x107 [email protected]
Paul Burgess
856-910-1166 ext 2111