PENNSAUKEN, NJ -- (Marketwired) -- 08/14/14 -- 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 second quarter ended June 30, 2014.
First Quarter Financial Highlights:
"We are pleased to report that we continued to make further progress toward our return to historical growth rates during the second quarter," stated Paul Burgess, CEO of Lattice. "The temporary slow-down in growth from the 2013 launch of ICON and the integration of our new call center into our platform is now behind us, and we're in a solid position to capitalize on opportunities both domestically and internationally."
Burgess continued, "While past inquiries and installations of our technology in the international market came with little marketing effort, we took the initiative to embark on a more strategic approach for our international expansion by retaining Communication Media Advisors ("CMA") early in the second quarter. The first phase of this project was completed in the second quarter with the entire project being completed in early third quarter. CMA is now moving into the next phase of their work with us by evaluating and refining our domestic strategy with a focus on expanding sales and marketing efforts, geographic focus, and identifying the appropriate product mix."
Total revenue for the second quarter increased 18% year-over-year to $2.3 million, compared to $1.9 million in the second quarter of 2013, while recurring revenues accounted for 71% 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 components of its revenue during fiscal 2014.
Gross profit increased 40% to $904,000 in the second quarter, up from $645,000 in the second quarter of 2013. Gross margin, as a percentage of revenues, increased to 40% in the second quarter from 34% 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, at approximately 60% and 23% respectively.
Cash and cash equivalents increased to $1.0 million at June 30, 2014, up from $313,000 at December 31, 2013. Net cash used by operating activities was $515,000 for the six months ended June 30, 2014, compared to net cash used by operating activities of $394,000 in the year ago period.
"Our sales pipeline continues to grow, and we have a number of technology projects underway that we anticipate being completed later in 2014. With revenue being recognized upon project completion, the work currently underway should provide a solid boost to our numbers as we move through the remainder of fiscal 2014," concluded Burgess.
Additional information may be found in the Company's 10-Q filing with the U.S. Securities and Exchange Commission.
Lattice will host a conference call today, Thursday, August 14, with CEO Paul Burgess and CFO Joseph Noto, at 2:00 p.m. Eastern time (11:00 a.m. Pacific). To participate in the call, please dial (888) 329-8877, or (719) 325-2455 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 http://www.latticeinc.com. Conference ID: 6269167
A replay of the call will be available for two weeks from 5:00 p.m. ET on August 14, 2014, until 11:59 p.m. ET on August 28, 2014. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the passcode for the replay is 6269167. In addition, a recording of the call will be available via the Company's website at http://www.latticeinc.com for one year.
About Lattice Incorporated
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 http://www.latticeinc.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-Q previously filed with the SEC.