Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
ICLD > SEC Filings for ICLD > Form 10-Q on 14-Nov-2013All Recent SEC Filings

Show all filings for INTERCLOUD SYSTEMS, INC.

Form 10-Q for INTERCLOUD SYSTEMS, INC.


14-Nov-2013

Quarterly Report


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations for the three and nine months ended September 30, 2013 and 2012 should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2012, as previously filed on April 1, 2013, and amended on October 16, 2013, with the Securities and Exchange Commission. We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements.

Overview

We operate as a specialty contractor and staffing service, providing engineering, construction, maintenance and installation services to telecommunications providers and underground facility locating services, as well as related staffing services to various utilities, including telecommunications providers, and other construction and maintenance services to electric and gas utilities and others. All of our operating divisions have been aggregated into one reporting segment due to their similar economic characteristics, products, production methods and distribution methods.

Results of Operations for the three months ended September 30, 2013

Revenues:

Three Months Ended September 30,
2013 2012 Change %

Total $ 16,158,045 $ 2,950,728 $ 13,207,317 $ 448 %

Revenues for the three-month period ended September 30, 2013 increased by $13.2 million, or 448%, to $16.2 million, as compared to $3.0 million for the corresponding period of 2012. The increases in revenues resulted primarily from our inclusion of revenues from our acquisitions of ADEX, ERFS and TNS in 2012 and AWS in April 2013. The acquisitions of TNS, ERFS, ADEX and AWS accounted for $14 million, or 87%, of the revenues in the three months ended September 30, 2013, as compared to $1.5 million in the three months ended September 30, 2012. During the three month period ended September 30, 2012, substantially all of our revenue was derived from our specialty contracting services, while for the three month period ended September 30, 2013, 42% of our revenues were derived from specialty contracting services, 51% were derived from our telecommunication staffing services and 7% were derived from our environmental remediation services.

Cost of revenue and gross profit:

Cost of revenue:

                                                   Three Months Ended September 30,
                                            2013            2012           Change          %

                                Total   $ 10,659,188     $ 1,729,683     $ 8,929,505       516 %



Gross Profit:

                                                   Three Months Ended September 30,
                                            2013            2012           Change          %

                                 Total   $ 5,498,857     $ 1,221,045     $ 4,277,812       350 %
                                                  34 %            41 %

Cost of revenue for the three-month periods ended September, 2013 and 2012 primarily consisted of direct labor provided by employees, services provided by subcontractors, direct material and other related costs. For a majority of the contract services we perform, our customers provide all necessary materials and we provide the personnel, tools and equipment necessary to perform installation and maintenance services. Cost of revenue increased by $8.9 million, or 516%, for the three-month period ended September 30, 2013, to $10.7 million, as compared to $1.7 million for the same period in 2012. Costs of revenue as a percentage of sales were 66% for the three-month period ended September 30, 2013, as compared to 59% for the same period in 2012. The increase was primarily due to the acquisitions completed during 2012 and April 2013. For the three-month period ended September 30, 2012, all of our operations were in the specialty contracting services business.

Our gross profit percentage was 34% for the three month period ended September 30, 2013, as compared to 41% for the comparable period in 2012. This was a result of the acquisitions we completed in 2012 and April 2013. The gross margin on our telecommunications staffing services, which was our largest service sector, was 22% for the three-month period ended September 30, 2013, which decreased our overall gross margin. It is expected that as the telecommunications staffing services portion of our revenue increases, our overall gross margin percentage will continue to decline, while the gross margin dollars will increase.


Salaries and wages:

                                                     Three Months Ended September 30,
                                               2013            2012          Change        %
                   Salaries and wages       $ 1,817,452     $ 1,117,254     $ 700,198       63 %
                   Percentage of revenues            11 %            38 %

For the three-month period ended September 30, 2013, salaries and wages increased $.7 million, to $1.8 million as compared to approximately $1.1 million for the same period in 2012. The increase was due to the acquisitions we completed in 2012 and April 2013. Salaries and wages were 11% of revenue in the three-month period ended September 30, 2013, as compared to 38% for the same period in 2012. Salaries and wages as a percentage of revenues declined due to the increase in revenues, which was a result of the acquisitions completed in 2012 and 2013. Our salaries and wages will not increase proportionally to the increase in our revenue.

General and Administrative:

                                                    Three Months Ended September 30,
                                              2013           2012          Change          %
              General and administrative   $ 1,955,225     $ 692,175     $ 1,263,050       182 %
              Percentage of revenues                12 %          23 %

General and administrative costs include all of our corporate costs, as well as costs of our subsidiaries management personnel and administrative overhead. These costs consist of office rental, legal, consulting and professional fees, travel costs and other costs that are not directly related to the performance of our services under customer contracts. General and administrative expenses increased $1.3 million, or 182%, to $2.0 million in the three-month period ended September 30, 2013, as compared to $.7 million in the comparable period of 2012. The increase was primarily the result of increased overhead expenses relating to the acquisitions we completed in 2012 and April of 2013. General and administrative expenses decreased to 12% of revenues in the three-month period ended September 30, 2013, from 23% in the comparable period in 2012. This decrease in percentage was a result of the increased revenue, which did not cause a corresponding percentage increase in general and administrative expenses. We expect that as our revenues increase, our general and administrative expenses will continue to increase, but at a slower rate than revenue, as a result of our ability to use our existing resources to manage additional revenue growth.

Interest Expense:

Three Months Ended September 30,
2013 2012 Change %
Interest expense $ 1,021,945 $ 723,675 $ 298,270 41 %

Interest expense increased by $.3 million to $1.0 million for the three month period ended September 30, 2013. The three-month period ended September 30, 2013 also included $.1 of loan restructuring fees paid to a lender.

Net Income (Loss) Attributable to our Common Stockholders.

Net income attributable to our common stockholders was $1.3 million for three-month period ended September 30, 2013, as compared to net loss attributable to common stockholders of $0.8 million for the three months ended September 30, 2012.

Results of Operations for the nine months ended September 30, 2013

Revenues

Nine Months Ended September 30,
2013 2012 Change %

Total $ 42,916,458 $ 5,874,314 $ 37,042,144 631 %


Revenues for the nine-month period ended September 30, 2013 increased by $37.0 million, or 631%, to $42.9 million, as compared to $5.9 million for the corresponding period of 2012. The increases in revenues resulted primarily from our inclusion of revenues from our acquisitions of ADEX, ERFS and TNS in 2012 and AWS in April 2013. The acquisitions of TNS, ERFS, ADEX and AWS accounted for $38.7 million, or 90%, of the revenues in the nine months ended September 30, 2013, as compared to $1.5 million in the nine months ended September 30, 2012. During the nine month period ended September 30, 2012, substantially all of our revenue was derived from our specialty contracting services, while for the nine month period ended September 30, 2013, 31%, of revenues were derived from specialty contracting services, 62% were derived from our telecommunication staffing services and 7% were derived from our environmental remediation services.

Cost of revenue and gross profit:

Cost of revenue:

Nine Months Ended September 30,
2013 2012 Change %

                    Total              $ 29,532,506     $ 3,582,824     $ 25,949,682       724 %




                        Gross profit
                                                   Nine Months Ended September 30,
                                           2013            2012            Change          %

                        Total          $ 13,383,952     $ 2,291,490     $ 11,092,462       484 %
                                                 31 %            39 %

Cost of revenue for the nine-month periods ended September 30, 2013 and 2012 primarily consisted of direct labor provided by employees, services provided by subcontractors, direct material and other related costs. For a majority of the contract services we perform, our customers provide all necessary materials and we provide the personnel, tools and equipment necessary to perform installation and maintenance services. Cost of revenue increased by $25.9 million, or 724%, for the nine-month period ended September 30, 2013, to $29.5 million, as compared to $3.6 million for the same period in 2012. Costs of revenue as a percentage of sales were 69% for the nine-month period ended September 30, 2013, as compared to 61% for the same period in 2012. The increase was primarily due to the acquisitions completed during 2012 and April 2013. For the nine-month period ended September 30, 2012, all of our operations were in the specialty contracting services business.

Our gross profit percentage was 31% for the nine month period ended September 30, 2013, as compared to 39% for the comparable period in 2012. This was a result of the acquisitions we completed in 2012 and April 2013. The gross margin on our telecommunications staffing services, which was our largest service sector, was 21% for the nine-month period ended September 30, 2013, which decreased our overall gross margin. It is expected that as the telecommunications staffing services portion of our revenue increases, our overall gross margin percentage will continue to decline, while the gross margin dollars will increase.

Salaries and wages:

                                                    Nine Months Ended September 30,
                                            2013            2012           Change          %
                Salaries and wages       $ 5,184,551     $ 1,901,695     $ 3,282,856       173 %
                Percentage of revenues            12 %            32 %

For the nine-month period ended September 30, 2013, salaries and wages increased $3.3 million, to $5.2 million as compared to approximately $1.9 million for the same period in 2012. The increase was due to the acquisitions we completed in 2012 and April 2013. Salaries and wages were 12% of revenue in the nine month period ended September 30, 2013, as compared to 31% for the same period in 2012. Salaries and wages as a percentage of revenues declined due to the increase in revenues, which was a result of the acquisitions completed in 2012 and 2013. Our salaries and wages will not increase proportionally to the increase in our revenue.

General and Administrative:

                                                    Nine Months Ended September 30,
                                            2013            2012           Change          %
            General and administrative   $ 4,972,032     $ 1,473,192     $ 3,498,840       238 %
            Percentage of revenues                12 %            25 %

General and administrative costs include all of our corporate costs, as well as costs of our subsidiaries management personnel and administrative overhead. These costs consist of office rental, legal, consulting and professional fees, travel costs and other costs that are not directly related to the performance of our services under customer contracts. General and administrative expenses increased $3.5 million, or 238%, to $5.0 million in the nine-month period ended September 30, 2013, as compared to $1.5 million in the comparable period of 2012. The increase was primarily the result of increased overhead expenses relating to the acquisitions we completed in 2012 and April of 2013. General and administrative expenses decreased to 12% of revenues in the nine-month period ended September 30, 2013, from 25% in the comparable period in 2012. This decrease in percentage was a result of the increased revenue, which did not cause a corresponding percentage increase in general and administrative expenses. We expect that as our revenues increase, our general and administrative expenses will continue to increase, but at a slower rate than revenue, as a result of our ability to use our existing resources to manage additional revenue growth.

Interest Expense:

Nine Months Ended September 30,
2013 2012 Change %
Interest expense $ 3,118,490 $ 1,012,697 $ 2,105,793 208 %

Interest expense increased by $2.1 million to $3.1 million for the nine month period ended September 30, 2013. The nine-month period ended September 30, 2013 also included $.6 million of loan restructuring fees paid to a lender. Interest in the nine-month period ended September 30, 2013 also included interest of $.1 million on debt converted to equity.


Net (Loss) Attributable to our Common Stockholders

Net loss attributable to our common stockholders was $1.1 million for nine-month period ended September 30, 2013, as compared to a net loss of $1.7 million for the nine-month period ended September 30, 2012.

  Add ICLD to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for ICLD - All Recent SEC Filings
Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.