InterCloud Systems, Inc. (the "Company" or "InterCloud")
(Nasdaq:ICLD), a leading provider of cloud networking orchestration
and automation solutions and services, today reported certain
financial results for the full year 2015.
Financial Highlights:
- The Company significantly improved liquidity with the sale of
data storage assets in February 2016 for approximately $24
Million
- Adjusted Gross Revenue jumped to $87.6 million (including $9.9
million of revenue from the assets sold in February 2016)
Mark Munro, Chairman and CEO of InterCloud,
stated, “We are very pleased to report that InterCloud’s revenue
for 2015 grew substantially over the same period in 2014. In
addition to revenue growth, and equally important, we have
increased our gross profit margins from the same period in 2014.
After the sale of our data storage assets in February 2016, we have
greater liquidity than the Company has ever had, and a business
that still generated approximately $77.5 Million in revenue during
2015. The data storage assets accounted for $9.9 million in
gross revenues during 2015 for an adjusted total of $87.5
million. Our goal is to take advantage of our cash liquidity
to grow our cloud revenues with a focus on Dpod private cloud
solutions, our Virtual Network Function (VNF) validation services,
and drive sales of our NFVgrid SDN/NFV Orchestration
platform. Our exciting new cloud products and services
will help us achieve those goals in the near term. We continue to
be bullish about our near term and long term outlooks. InterCloud
is well positioned competitively with a disruptive portfolio of
cloud orchestration products, an industry leading software
development team, and an aggressive sales and engineering group. In
the past three months we have seen a increase in demand for our
cloud portfolio of services in both the enterprise and carrier
markets.”
Full Year 2015 Financial Results
(unaudited):
Revenue for the year ended December 31, 2015
increased by 5% to $77.7 million, compared to $73.8 million for
2014. This does not include $9.9 million of 2015 revenue from the
Company’s online data backup related business which was sold in
February 2016. During 2015, the Company had increased revenue
from its managed services segment.
Our gross profit increased by 7% to $19.3
million, compared to $18.0 million in 2014. The gross profit
percentage increased to 25% for the year ended December 31, 2015,
compared to 24% for the comparable period in 2014. This does
not include the gross profit of approximately $8.2 million and a
gross profit percentage of 83% from the Company’s online data
backup related business which was sold in February 2016. The
increase in gross profit and gross profit percentage was driven by
operations in our managed services segment.
Term Loans and Related Party Notes as of
December 31, 2015 (in millions)
Unsecured: |
|
|
Related
Parties and Private Investor |
$ |
19.3 |
|
|
(1 |
) |
Private Equity Firms -
Former Owners of Vaultlogix |
|
15.6 |
|
|
(2 |
) |
Other Unsecured |
|
4.2 |
|
|
|
|
|
Secured: |
|
|
White Oak Term
Loan |
|
11.8 |
|
|
(3 |
) |
Senior Secured |
|
5.1 |
|
|
(4 |
) |
|
|
|
Total Term Loans and
Related Party Payables |
$ 55.9* |
|
(1) Blended interest rate of 5.5%.
Maturing between May 2016 and January 2018. $12.5 million is
convertible into common shares.
(2) Interest rate of 8.0%. Maturing in October 2017.
Convertible at $6.36 per share.
(3) Liabilities available for sale.
(4) Secured by the assets of the Company (excluding
Vaultlogix). Interest rate at 12%.
*This balance is net of debt discounts and
original issue discounts totaling $6.7 million.
Use of Non-GAAP Financial
Measures
This earnings release includes the following
Non-GAAP financial measures; Adjusted Revenue and Adjusted Gross
Profit.
We define Adjusted Revenue and Adjusted Gross
Profit to include 2015 revenue of $9.9 million and gross profit of
$8.2 million from a data storage subsidiary that sold all of its
assets during February 2016. As a result, the Company will not be
recognizing revenue and gross profit from these assets in 2016 and
future years.
We believe that Adjusted Revenue and Adjusted Gross Profit are
useful because they facilitate operating performance comparisons on
period to period basis during 2015. Also please note, these
adjustments are not instead or better than GAAP measures.
About InterCloud Systems,
Inc.
InterCloud Systems, Inc. is a cloud computing
company which provides end-to-end information technology (IT) and
next-generation network solutions including Software Defined
Networking (SDN) and Network Function Virtualization (NFV)
orchestration to the telecommunications service provider (carrier)
and corporate enterprise markets through cloud solutions and
professional services. Additional information regarding
InterCloud may be found on InterCloud's website at
www.intercloudsys.com.
Forward Looking Statements
Statements in this press release regarding
InterCloud that are not historical facts are forward-looking
statements and are subject to risks and uncertainties that could
cause actual future events or results to differ materially from
such statements. Any such forward-looking statements, including,
but not limited to, financial guidance, are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include all statements that
do not directly or exclusively relate to historical facts. In some
cases, you can identify forward-looking statements by terms such as
“may,” “will,” “should,” “could,” “would,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “projects,” “forecasts,”
“predicts,” “potential,” or the negative of those terms, and
similar expressions and comparable terminology. These include, but
are not limited to, statements relating to future events or our
future financial and operating results, plans, objectives,
expectations and intentions. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable, these expectations may not be achieved. Forward-looking
statements represent our intentions, plans, expectations,
assumptions and beliefs about future events and are subject to
known and unknown risks, uncertainties and other factors outside of
our control that could cause our actual results, performance or
achievement to differ materially from those expressed or implied by
these forward-looking statements. In addition to the risks
described above, these risks and uncertainties include: our ability
to successfully execute our business strategies, including
integration of the recent acquisitions of AW Solutions, Inc.,
Integration Partners-NY Corporation, RentVM, Inc. and VaultLogix,
LLC and the future acquisition of other businesses to grow our
company; customers’ cancellation on short notice of master service
agreements from which we derive a significant portion of our
revenue or our failure to renew such master service agreements on
favorable terms or at all; our ability to attract and retain key
personnel and skilled labor to meet the requirements of our
labor-intensive business or labor difficulties which could have an
effect on our ability to bid for and successfully complete
contracts; our failure to compete effectively in our highly
competitive industry could reduce the number of new contracts
awarded to us or adversely affect our market share and harm our
financial performance; our ability to adopt and master new
technologies and adjust certain fixed costs and expenses to adapt
to our industry’s and customers’ evolving demands; our history of
losses, deficiency in working capital and a stockholders’ deficit
and our ability to achieve sustained profitability; material
weaknesses in our internal control over financial reporting and our
ability to maintain effective controls over financial reporting in
the future; our substantial indebtedness could adversely affect our
business, financial condition and results of operations and our
ability to meet our payment obligations; the impact of new or
changed laws, regulations or other industry standards that could
adversely affect our ability to conduct our business; and changes
in general market, economic and political conditions in the United
States and global economies or financial markets, including those
resulting from natural or man-made disasters.
These forward-looking statements represent our
estimates and assumptions only as of the date of this release and,
except as required by law, we undertake no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise after the date of
this release. Given these uncertainties, you should not place undue
reliance on these forward-looking statements and should consider
various factors, including the risks described, among other places,
in our most recent Annual Report on Form 10-K and in our Quarterly
Reports on Form 10-Q, as well as any amendments thereto, filed with
the SEC.
CONTACT: Investor Relations
InterCloud Systems, Inc.
561.988.1988
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