A Captive Market with Breakout Profit Potential

America has the highest documented incarceration rate in the world. There are currently 2.3 million inmates in the U.S. at the federal, state, and county levels – a rate of one inmate per every 135 citizens. The rate of incarceration for countries comparable to the U.S. stands at only one per 1,000.

One thing desired by nearly all inmates is to maintain communication with friends and family. A company that’s bringing state-of-the-art secure communications to a large number of smaller and mid-sized correctional facilities is the nearly 40-year old Lattice, Inc. (OTCQB: LTTC).

The Company’s Lattice Secure Communications (LSC) division provides both wholesale and direct communications services to correctional facilities and their providers. Its technology includes a patented and proprietary call control system built on an infrastructure that allows LTTC to provide the same feature-rich systems to both small and large facilities, enabling the Company to provide services traditionally unavailable to smaller facilities.

An attractive feature of LTTC’s correctional facility communications solution is that it is operated on a prepaid basis, reducing the bad-debt risk previously associated with traditional collect calling at correctional facilities. Its systems also offer sophisticated investigative tools to facility administrators and value-added technology solutions, including kiosk integration, video visitations, live monitoring and recording features.

While the Company’s LSC division is expected to drive rapid growth for LTTC moving forward, its Lattice Government Services (LGS) division continues to leverage its long, successful history of securing government contracts and delivering both custom and turn-key solutions to government agencies and the military.

Typical LGS solutions include strategic management, systems engineering, modeling and simulation, sensor integration, and secure communications products. Critical mission support is provided to the U.S. Department of Defense and Homeland Security, and for mid-to large-sized enterprises.

As of the quarter ended June 30, 2012, LTTC had trailing twelve month revenues of $10.9 million. The Company’s LSC division saw a 54% increase in revenues during the June quarter, and now accounts for 74% of total company revenues compared to only 37% in the same period 2011.

Currently trading at a price-to-sales ratio of only 0.2x, compared to a peer group average of 0.7x, LTTC has substantial near-term upside and could generate a significant return on investment. To learn more about this exciting opportunity, you can view a presentation from the Company’s President and CEO, Paul Burgess.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.

Bookmark and Share

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>