Stocks & Investing
Stocks and Investing
Stocks and Investing
Tue, November 24, 2009
Mon, November 23, 2009 Lattice Announces Third Quarter Earnings; Conference Call Today at 2:00 EST
PENNSAUKEN, NJ--(Marketwire - November 23, 2009) - Lattice Incorporated (
Total revenues for the three months ended September 30, 2009 decreased by $282,083 or 6.7% to $3,922,064 compared to $4,204,147 for the three months ended September 30, 2008. The decrease in the quarter included timing impacts from product sales and service revenues attributable to subcontractors. For the nine months ended September 30, 2009, total revenues increased by $373,505 or 3.2% to $11,896,647 compared to $11,523,142 for the nine months ended September 30, 2008.
Gross profit for the quarter rose 13% to $1.257 million from $1.112 million in the same quarter a year ago. The increase in gross profit was primarily due to the rate increase on the company's cost-plus contract vehicles. For the nine months, gross profit was up 15.8% to $3.79 million from $3.27 million in last year's third quarter.
The three months ended September 30, 2009 showed a net loss of $302,000 compared with net income of $321,000 in the third quarter of 2008. For the first nine months of 2009, the net loss was $877,000 against net income a year earlier of $5.2 million. The large swing in net income to net loss was due to last year's non-cash derivative income of $2.7 million, gain on extinguishment of $2.6 million related to the exchange of Preferred Series C stock for outstanding warrants held by Baron Partners, L.P. and a settlement gain of $970,000 on a contingent earnout liability from the purchase of RTI. Excluding those amounts, the year ago net income would have shown a net loss of $1.1 million.
CEO Paul Burgess said, "We recorded a solid third quarter gain in gross profit of 13% reflecting the initial returns from the investments we have made in the past few quarters in sales and marketing and an improvement in gross margin from government services related to pricing on our cost-plus contract vehicles.
"Revenues from government contracts accounted for approximately $11.0 million or 93% of our overall revenues for the nine months ended September 30, 2009. Of our total government contract revenues, approximately 96% were from prime contract vehicles.
"During 2009 we expanded our direct sales force in both our Government Services group and our Technology group. This has resulted in an increased sales pipeline in both divisions of the company. We anticipate further expansion in both of these areas and more importantly, we anticipate being able to capitalize on our expanded pipeline in the coming months," Burgess said.
The company will host a conference call with CEO Paul Burgess and CFO Joseph Noto today, November 23 at 2:00 p.m. Eastern. To participate in this call, dial 1-877-941-4775 any time after 1:50 p.m. ET. International callers should dial 1-480-629-9761.
An audio replay of the call will be available at [ http://www.hawkassociates.com ] for approximately 90 days after the call.
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 September 30, December 31, 2009 2008 (Unaudited) (Audited) ------------ ------------ ASSETS: Current assets: Cash and cash equivalents $ 342,717 $ 1,363,130 Accounts receivable, net 3,840,719 3,560,690 Inventories 41,684 30,704 Other current assets 185,175 51,008 ------------ ------------ Total current assets 4,410,295 5,005,532 Property and equipment, net 212,075 21,090 Goodwill 3,599,386 3,599,386 Other intangibles, net 1,512,004 2,409,748 Other assets 54,141 54,459 ------------ ------------ Total assets $ 9,787,901 $ 11,090,215 ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,952,353 $ 1,698,551 Accrued expenses 1,578,420 1,726,891 Customer advances 87,625 15,000 Notes payable 1,713,574 1,766,098 Derivative liability 257,178 200,606 ------------ ------------ Total current liabilities 5,589,150 5,407,146 Long term liabilities: Long Term Debt 203,951 666,515 Deferred tax liabilities 710,218 1,200,283 ------------ ------------ Total long term liabilities 914,169 1,866,798 ------------ ------------ Total liabilities 6,503,319 7,273,944 Minority interest 175,180 193,280 Shareholders' equity Preferred Stock - .01 par value Preferred Stock series A 9,000,000 shares authorized, 7,810,686 and 7,838,686 issued 78,107 78,387 Preferred Stock series B 1,000,000 shares authorized 1,000,000 issued 10,000 10,000 Preferred Stock series C 575,000 shares authorized 520,000 issued 5,200 5,200 Common stock - .01 par value, 200,000,000 authorized, 16,942,428 and 16,842,428 issued, and 16,639,441 and 16,539,441 outstanding respectively 169,425 168,425 Additional paid-in capital 38,800,717 38,418,897 Accumulated deficit (35,395,951) (34,499,822) ------------ ------------ 3,667,498 4,181,087 Common stock held in treasury, at cost (558,096) (558,096) ------------ ------------ Shareholders' equity 3,109,402 3,622,991 ------------ ------------ Total liabilities and shareholders' equity $ 9,787,901 $ 11,090,215 ============ ============ Lattice Incorporated And Subsidiaries Consolidated Statements Of Operations (Unaudited) Nine Months Ended Three Months Ended September 30, September 30, ------------------------ ---------------------- 2009 2008 2009 2008 ----------- ----------- ---------- ---------- Revenue - Technology Services $11,000,359 $10,656,897 $3,632,911 $3,775,213 Revenue - Technology Products 896,288 866,245 289,153 428,934 ----------- ----------- ---------- ---------- Total Revenue 11,896,647 11,523,142 3,922,064 4,204,147 Cost of Revenue - Technology Services 7,763,288 7,916,610 2,545,333 2,924,049 Cost of Revenue - Technology Products 342,455 335,386 119,400 167,370 ----------- ----------- ---------- ---------- Total cost of revenue 8,105,743 8,251,996 2,664,733 3,091,419 ----------- ----------- ---------- ---------- Gross Profit 3,790,904 3,271,146 1,257,331 1,112,728 Operating expenses: Selling, general and administrative 3,628,756 3,359,768 1,247,510 1,024,628 Research and development 409,141 384,692 132,917 123,720 Amortization expense 897,744 1,116,171 299,248 372,057 ----------- ----------- ---------- ---------- Total operating expenses 4,935,641 4,860,631 1,679,675 1,520,405 ----------- ----------- ---------- ---------- Loss from operations (1,144,737) (1,589,485) (422,344) (407,677) Other income (expense): Derivative income (expense) (56,572) 2,750,199 7,498 195,609 Extinguishment gain (loss) - 2,607,525 0 - Other expense - 970,150 0 370,150 Interest expense (181,066) (140,910) (56,754) (32,703) Finance expense (3,092) (2,636) (1,289) (1,170) ----------- ----------- ---------- ---------- Total other income (expense) (240,730) 6,184,328 (50,545) 531,886 Minority Interest income 18,100 79,119 7,653 23,700 ----------- ----------- ---------- ---------- Net income (loss) before taxes (1,367,367) 4,673,962 (465,236) 147,909 Income taxes (benefit) (490,065) (521,171) (163,355) (172,755) ----------- ----------- ---------- ---------- Net Income (loss) $ (877,302) $ 5,195,133 $ (301,881) $ 320,664 =========== =========== ========== ========== Net income (Loss) applicable to common shareholders: Net income (loss) $ (877,302) $ 5,195,133 $ (301,881) $ 320,664 Series B Preferred stock dividend (18,831) (37,500) (6,277) (12,500) ----------- ----------- ---------- ---------- Income (Loss) applicable to common stockholders $ (896,133) $ 5,157,633 $ (308,158) $ 308,164 =========== =========== ========== ========== Income (Loss) per common share Basic $ (0.05) $ 0.24 $ (0.02) $ 0.25 Diluted $ (0.05) $ 0.03 $ (0.02) $ 0.03 Weighted average shares: Basic 16,727,592 16,829,428 16,739,444 16,829,428 Diluted 16,727,592 56,172,092 16,739,444 53,592,883
