Science & Technology
Science and Technology
Science and Technology
Tue, May 25, 2010
Mon, May 24, 2010 
PENNSAUKEN, NJ--(Marketwire - May 24, 2010) - Lattice Incorporated (
Total revenue for the quarter ended March 31, 2010 was $3.7 million compared to $3.8 million for the quarter ended March 31, 2009. Net loss was ($532,000) or EPS of ($0.02) compared with net loss of ($403,000) or EPS of ($0.02) in 2009.
Gross profit for the quarter was $1.19 million compared to $1.25 million a year ago. Gross margin was 31.8% compared to 32.9%.
Total operating expense for the quarter was $1.48 million, a decrease of 5.9% from $1.57 million in the comparable period a year ago. As a percentage of sales, operating expenses decreased to 39.5% from 41.2% for 2009.
CEO Paul Burgess said, "Our first quarter results are continued confirmation of our successful business transition. Communication Services segment revenue increased to $829,000, or 22.2% of our total revenues in Q1 '10 compared to $301,000 or just 7.9% of total revenues in the first quarter a year ago. We are gratified by this significant 175% increase in our communications revenues, a clear demonstration of the success we are experiencing due to our entry into the services model late last year.
"As we explained last month in our year-end conference call, our communications services segment opens a new market for us that exceeds $1 billion. We anticipate continued growth in this area and expect that our services model will provide us with monthly recurring revenues. The dip in government revenue should be short lived as we have a strong pipeline."
Financial tables are below.
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 ].
An investment profile about Lattice Incorporated may be found at [ http://www.hawkassociates.com/lttcprofile.aspx ].
An online investor relations kit including copies of press releases, current price quotes, stock charts and other valuable information for investors may be found at [ http://www.hawkassociates.com ]. To receive free e-mail notification of future releases for this company, sign up at [ http://www.hawkassociates.com/about/alert/ ].
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 AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, December 31, 2010 2009 unaudited audited ------------ ------------ ASSETS: Current assets: Cash and cash equivalents $ 580,631 $ 212,616 Accounts receivable 3,882,375 3,560,293 Inventories 29,402 29,402 Other current assets 105,880 133,405 ------------ ------------ Total current assets 4,598,288 3,935,716 Property and equipment, net 276,714 264,753 Goodwill 3,599,386 3,599,386 Other intangibles, net 2,105,319 977,455 Other assets 78,262 54,259 ------------ ------------ Total assets $ 10,657,969 $ 8,831,569 ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,140,530 $ 1,780,143 Accrued expenses 1,615,539 1,719,831 Licensing agreement payable 1,100,000 - Customer deposits 240,888 94,954 Notes payable 1,396,579 1,503,742 Derivative liability 169,732 161,570 ------------ ------------ Total current liabilities 6,663,268 5,260,240 Long term liabilities: Long term debt 616,011 188,466 Deferred tax liabilities 379,392 440,832 ------------ ------------ Total long term liabilities 995,403 629,298 ------------ ------------ Total liabilities 7,658,671 5,889,538 ------------ ------------ Shareholders' equity Preferred Stock - .01 par value Series A 9,000,000 shares authorized 7,530,681 and 7,567,685 issued respectively 75,307 75,677 Series B 1,000,000 shares authorized 1,000,000 issued and 502,160 outstanding 10,000 10,000 Series C 520,000 shares authorized 520,000 issued 5,200 5,200 Common stock - .01 par value, 200,000,000 authorized, 22,942,437 and 17,810,281 issued, 22,639,450 and 17,507,294 outstanding respectively 229,425 178,104 Additional paid-in capital 39,473,907 38,925,743 Accumulated deficit (36,390,593) (35,851,892) ------------ ------------ 3,403,246 3,342,832 Stock held in treasury, at cost (558,096) (558,096) ------------ ------------ Equity Attributable to shareowners of Lattice Incorporated 2,845,150 2,784,736 ------------ ------------ Equity Attributable to non-controlling interest 154,148 157,295 ------------ ------------ Total liabilities and shareholders' equity $ 10,657,969 $ 8,831,569 ============ ============ LATTICE INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATION MARCH 31, 2010 2009 ----------- ----------- Revenue $ 3,741,058 $ 3,807,883 Cost of Revenue 2,552,846 2,555,164 ----------- ----------- Gross Profit 1,188,212 1,252,719 31.8% 32.9% Operating expenses: Selling, general and administrative 1,181,322 1,117,470 31.6% 29.3% Research and development 155,531 152,494 Amortization expense and depreciation expense 140,596 300,086 ----------- ----------- Total operating expenses 1,477,449 1,570,050 ----------- ----------- Loss from operations (289,237) (317,331) EBITDA 28,919 108,385 Other income (expense): Derivative expense (95,947) (172,443) Extinguishment (loss) (130,055) - Other income - (4,840) Interest expense (81,771) (77,217) ----------- ----------- Total other income (307,773) (254,500) ----------- ----------- Minority Interest 3,147 5,395 ----------- ----------- Income before taxes (593,863) (566,436) Income taxes (benefit) (61,440) (163,355) ----------- ----------- Net loss (532,423) (403,081) Reconciliation of net loss to Loss applicable to common shareholders: Net loss (532,423) (403,081) Preferred stock dividends (6,777) (6,777) ----------- ----------- Loss applicable to common stockholders (539,200) (409,858) Loss per common share Basic $ (0.02) $ (0.02) Diluted $ (0.02) $ (0.02) Weighted average shares: Basic 22,639,450 16,700,554 Diluted 22,639,450 16,700,554 LATTICE INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS March 31, ---------------------- 2010 2009 ---------- ---------- Cash flow from operating activities: Net loss $ (532,423) $ (403,081) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Derivative income 95,947 172,443 Amortization of intangible assets 172,136 299,248 Deferred income taxes (61,440) (163,355) Extinguishment loss 130,055 - Minority interest (3,147) (5,395) Share-based compensation 131,275 125,631 Depreciation 14,745 837 Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable (322,082) (359,568) Other current assets 27,525 (61,862) Other assets 6,997 32 Increase (decrease) in: Accounts payable and accrued liabilities 1,410,829 205,554 Customer advances 84,923 - ---------- ---------- Total adjustments 1,687,763 213,565 ---------- ---------- Net cash provided by (used for) operating activities 1,155,340 (189,516) Cash Used in investing activities: Purchase of intangibles (1,300,000) Purchase of equipment (26,706) - ---------- ---------- Net cash used for investing activities (1,326,706) - ---------- ---------- Cash flows from financing activities: Revolving credit facility (payments) borrowings, net 373,579 (775,950) Payments on capital equipment lease (9,189) - Proceeds from issuance of Series A preferred stock 250,000 - Loans paid director (12,509) (21,000) Payments on short term notes payable (62,500) - ---------- ---------- Net cash provided by (used in) financing activities 539,381 (796,950) ---------- ---------- Net increase (decrease) in cash and cash equivalents 368,015 (986,466) ---------- ---------- Cash and cash equivalents - beginning of period 212,616 1,363,130 ---------- ---------- Cash and cash equivalents - end of period $ 580,631 $ 376,664 ========== ========== Supplemental cash flow information Interest paid in cash $ 81,771 $ 57,289 Taxes paid $ 4,805 Supplemental disclosures of Non-Cash Investing & Financing Activities Proceeds from Factoring agreement paid directly to Private Bank Facility 682,232 Preferred stock dividends 6,277 Conversion of preferred shares into common (14,370) (280) Conversion of preferred shares into common 51,322 1,000 Additional paid in capital (36,951) (720) Exchange of warrants for preferred series A Derivative liabilities 87,785 Additional paid in Capital 453,840 LATTICE INCORPORATED AND SUBSIDIARIES CONDENSED SEGMENT DATA (unaudited) Three Months Ended March 31, ----------------------- 2010 2009 ----------- ----------- Revenues: Government Services $ 2,911,835 $ 3,506,525 Communication Services 829,222 301,358 ----------- ----------- Total Consolidated Revenues $ 3,741,057 $ 3,807,883 =========== =========== Gross Profit: Government Services $ 967,177 $ 1,066,768 Communication Services 221,035 185,951 ----------- ----------- Total Consolidated $ 1,188,212 $ 1,252,719 =========== ===========
