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Lattice Biologics Ltd. Reports First Quarter 2017 Highlights

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Lattice Biologics Ltd. Reports First Quarter 2017 Highlights

Lattice Biologics Ltd. Reports First Quarter 2017 Highlights

Record Gross Margin of 36.6% or $326,620

SCOTTSDALE, ARIZONA--(Marketwired - Mar 1, 2017) - Lattice Biologics Ltd. (TSX:LBL) (OTCQB:LBLTF) ("Lattice Biologics" or the "Company") announces financial results for the first quarter ended December 31, 2016:

Highlights:

  • Record Gross Margins increased 44% Q1 2017 over Q1 2016
  • Continued sales focus to higher margin product mix
  • Acellular Dermal Products sales growth 306% Q1 2017 over Q1 2016
  • DBM Putty sales growth 14.2% Q1 2017 over Q1 2016
  • First commercial sale of newly launched amnion based products now account for 5% of Q1 2017 sales
  • Restructured sales force to include 4 direct sales representatives, and new international distributors

Q1 2017 Business Update:

The Company remains focused on raising additional capital to: assist with its working capital constraint; fulfill open purchase orders; launch the Company's new product lines; and support R&D efforts. Appropriate working capital conditions will allow the Company to expand current operations by accepting and processing a greater number of donors each month, launch new higher-margin product lines, and to create a direct sales force of 15-20 new sales representatives in 2017.

Furthermore, Lattice Biologics is proactively working to complete key additions to its Scientific Advisory Boards (SABs) which are comprised of strategic Key Opinion Leaders (KOLs) in each of the Company's targeted surgical specialties. These professionals play a significant role in influencing industry perception and opinion and can be instrumental in the recruitment of new surgeon partners and generation of critical clinical data.

"I am extremely pleased with our R&D team's efforts to create a next generation amniotic fluid based product. We can now super-concentrate amniotic based stem cells up to 20 million cells per mL, while still increasing cell viability, and removing unwanted contaminants. We are working closely with leading KOL's in the field to further our clinical data in multiple new areas and to increase our understanding of this revolutionary new product," states CEO Guy Cook.

Lattice Biologics maintains its commitment to honoring the gift of donation by implementing a strong quality control environment for the recovery and processing of donors. The Company has significantly expanded its processing throughput, and has substantial inventory reserves to meet customer demand.

As indicated above, the Company continues efforts to diversify the sales mix across the new higher margin product lines added in 2016 and expected new products in 2017.

First Quarter 2017 Financial Results (all figures denoted in USD):

The product launches have been well received by surgeons and the Company continues to replace unprofitable legacy contracts and focus on the newer higher margin products. Lattice Biologics' total revenue was $891,451 in the three months ended December 31, 2016 compared to $1,065,654 for the three months ended December 31, 2015, a decrease of 16%, however gross margin increased 44% over the same period, as shown in the following quarter sales table:

Dec-31 Sep-30 Jun-30 Mar-31 Dec-31 Sep-30 Jun-30 Mar-31
2016 2016 2016 2016 2015 2015 2015 2015
ADM dermis $ 208,912 23% $ 130,575 18% $ 220,365 23% $ 48,336 5% $ 51,430 5% $ 92,659 9% $ 53,544 6% $ 15,110 1%
DBM putty 58,110 7% 151,071 21% 246,235 25% 104,856 10% 50,856 5% 21,175 2% 8,984 1% 84,392 8%
Bone scaffold 567,841 64% 411,131 56% 505,603 52% 847,326 84% 954,496 89% 918,983 89% 840,033 92% 956,592 90%
Other 56,588 6% 40,128 5% 117 0% 6,457 1% 8,872 1% 4,348 0% 11,995 1% 9,701 1%
Total revenue $ 891,451 100% $ 732,905 100% $ 972,320 100% $ 1,006,975 100% $ 1,065,654 100% $ 1,037,165 100% $ 914,556 100% $ 1,065,795 100%

The following table sets out selected unaudited financial information, prepared in accordance with IFRS. The information contained herein is drawn from interim financial statements of the Company for each of the following quarterly periods ending:

Dec-31 Sep-30 Jun-30 Mar-31 Dec-31 Sep-30 Jun-30 Mar-31
2016 2016 2016 2016 2015 2015 2015
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