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InterCloud Systems Reports Fourth Quarter and Full Year 2012 Results

BOCA RATON, Fla., April 4, 2013 (GLOBE NEWSWIRE) -- InterCloud Systems Inc. (OTCBB:ICLD) ("InterCloud"), an end-to-end solution provider of professional services and infrastructure to the telecommunications industry, major corporations and governmental entities, today announced results for the fourth quarter and full year ended December 31, 2012.

"During 2012, InterCloud began to implement its strategy of growth through the completion of three acquisitions," said Mark Munro, Chief Executive Officer of InterCloud. "We have begun the integration of the three acquired companies and have hired senior level executives with experience in telecommunications and infrastructure to lead our operations management team. We have also entered into definitive agreements for two additional acquisitions that are expected to close during the second quarter of 2013. Upon the completion of these two acquisitions, we believe that pro forma annualized revenue will exceed $85 million. As the market for our solutions and services continues to expand, we are excited by the opportunities for growth in 2013 and beyond."

Full Year 2012 Financial Results

Total revenue for the year ended December 31, 2012 was $17.2 million, which represented an increase of $14.4 million compared to total revenue of $2.8 million for the year ended December 31, 2011. The increase was attributable to the revenue generated by the three companies acquired in 2012. Revenue from telecommunications staffing services accounted for 61% of total revenue for 2012 and revenue from specialty contracting services accounted for 39%, reflecting the acquisition of ADEX Corporation in September 2012. In comparison, substantially all revenue in 2011 was derived from specialty contracting services.

Net loss for 2012 was $2.1 million, or $1.33 per share, compared to a net loss of $6.4 million, or $6.38 per share, for 2011. Adjusted EBITDA for 2012 was $(1.4) million, or $(0.93) per share, compared to $(1.2) million, or $(1.23) per share, in the prior year.

Fourth Quarter 2012 Financial Results

For the fourth quarter of 2012, revenue increased $11.3 million to $11.4 million from $0.1 million in the fourth quarter of 2011. The increase resulted from the completion of three acquisitions in 2012. Net loss for the fourth quarter of 2012 was $0.4 million, or $0.19 per share, compared to a net loss of $2.9 million, or $2.66 per share, in the fourth quarter of 2011. Adjusted EBITDA for the fourth quarter of 2012 was $(0.8) million, or $(0.54) per share, compared to $(0.6) million, or $(0.58) per share, in the fourth quarter of 2011.

About InterCloud Systems, Inc.

InterCloud Systems, Inc. is a global single-source provider of value-added services for both corporate enterprises and service providers. InterCloud offers cloud and managed services, professional consulting services and voice, data and optical solutions to assist its customers in meeting their changing technology demands. Its engineering, design, installation and maintenance services support the build-out and operation of some of the most advanced enterprise, fiber optic, Ethernet and wireless networks. Additional information regarding InterCloud may be found on InterCloud's website at www.intercloudsys.com.

Non-GAAP Financial Measures

Investors are cautioned that adjusted EBITDA, or earnings/(loss) before other income/(expense), taxes, depreciation, amortization, stock-based compensation, and other non-cash charges, if any, as used in this press release, is defined as a "non-GAAP financial measure" by the Securities and Exchange Commission. This measure may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation. In addition, although InterCloud's management has provided a reconciliation of this measure to the nearest comparable GAAP measure, it should not be construed as an alternative to any other measure of performance determined in accordance with generally accepted accounting principles, or as an indicator of InterCloud's operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address. InterCloud's management presents this financial information because they believe that it is helpful to some investors as a measure of InterCloud's performance. InterCloud cautions investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare InterCloud's current results with the results from other reporting periods and with the results of other companies. Definitions and reconciliations between the non-GAAP measure and relevant GAAP measure are set forth in the tables at the end of this press release.

Safe Harbor Provision

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. It is routine for InterCloud's internal projections and expectations to change as the quarter and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which InterCloud bases its expectations may change. Although these expectations may change, InterCloud is under no obligation to inform you if they do. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: InterCloud's inability to integrate recent and future acquisitions, which would adversely affect InterCloud's business, financial condition, result of operations and prospects; the cancellation of master service agreements, from which InterCloud derives a significant portion of its revenue, which may be cancelled by customers on short notice, or which InterCloud may be unable to renew on favorable terms or at all; the inability of InterCloud to attract and retain key personnel and skilled labor, or if labor difficulties are encountered, InterCloud's ability to bid for and successfully complete contracts may be negatively impacted; risks related to InterCloud's failure to compete effectively within its highly competitive industry, especially with a variety of larger companies with greater resources, which could reduce the number of new contracts awarded to InterCloud or adversely affect InterCloud's market share and harm InterCloud's financial performance; risks related to InterCloud's history of losses and deficiencies in working capital and stockholders' equity, which may continue in the future, raising substantial doubts about InterCloud's ability to continue as a going concern; risks related to the identification of material weaknesses in InterCloud's internal control over financial reporting, and a lack of assurance that additional material weaknesses or significant deficiencies will not occur in the future, leading to the possibility that InterCloud may not be able to accurately report financial results, prevent fraud, or file periodic reports in a timely manner, which may cause investors to lose confidence in InterCloud's reported financial information and may lead to a decline in InterCloud's stock price; and InterCloud's substantial indebtedness, which could adversely affect its business, financial condition and results of operations and its ability to meet payment obligations. This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the reports and documents filed from time to time by us with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.

For the years ended
December 31,
2012 2011
(Restated)
Statement of Operations Data:
Revenues $ 17,235,585 $ 2,812,210
Gross profit 5,176,486 961,192
Operating expenses 7,938,345 6,343,931
Loss from operations (2,761,859) (5,382,739)
Other expense, net (1,047,324) (1,021,889)
Net loss before benefit for income taxes and equity earning/loss in affiliates (3,809,183) (6,404,628)
Benefit for income taxes (2,646,523) --
Dividends on preferred stock (843,215) --
Net loss attributable to InterCloud Systems, Inc. common stockholders (2,072,862) (6,404,628)
Loss per share, basic and diluted $ (1.33) $ (6.38)
Basic and diluted weighted average shares outstanding 1,553,555 1,003,264
For the quarters ended
December 31,
2012 2011
Statement of Operations Data:
Revenues $ 11,361,271 $ 108,380
Gross profit 2,884,996 (229,580)
Operating expenses 4,412,456 3,008,804
Loss from operations (1,633,411) (3,238,384)
Other expense, net (532,690) 370,430
Net loss before benefit for income taxes and equity earning/loss in affiliates (2,166,098) (2,867,954)
Benefit for income taxes (2,646,523) --
Dividends on preferred stock (737,264) --
Net loss attributable to InterCloud Systems, Inc. common stockholders (356,937) (2,867,954)
Loss per share, basic and diluted $ (0.19) $ (2.66)
Basic and diluted weighted average shares outstanding 1,878,616 1,078,178
Adjusted EBITDA
For the years ended December 31,
2012 2011
Net loss attributable to common stockholders $ (2,072,862) $ (6,404,628)
Add back
Dividends on preferred stock 843,215
Equity loss attributable to affiliate 50,539
Net loss attributable to non controlling interest 16,448
Interest expense 1,699,746 1,443,229
Depreciation and amortization 348,172 39,229
Stock based compensation 966,244 4,111,000
Total addbacks 3,924,364 5,593,458
Deduct
Benefit for income taxes (2,646,523)
Gain from deconsolidation of subsidiary (453,514)
Change in fair value of derivative instruments (198,908) (421,340)
Total deductions (3,298,945) (421,340)
Adjusted EBITDA $ (1,447,443) $ (1,232,510)
Adjusted EBITDA per share $ (0.93) $ (1.23)
Basic weighted average common shares outstanding 1,553,555 1,003,264
Adjusted EBITDA
For the quarters ended December 31,
2012 2011
Net loss attributable to common stockholders $ (356,937) $ (2,945,667)
Add back
Dividends on preferred stock 737,264
Equity loss attributable to affiliate 50,539
Net loss attributable to non controlling interest 49,559
loss on deconsolidation of subsidiary 74,522
Interest expense 687,043 345,467
Depreciation and amortization 197,170 11,163
Stock based compensation 559,902 2,881,000
Total addbacks 2,355,999 3,237,630
Deduct
Benefit for income taxes (2,646,523)
Gain from deconsolidation of subsidiary --
Change in fair value of derivative instruments (198,908) (915,897)
Total deductions $ (2,845,431) $ (915,897)
Adjusted EBITDA (846,369) (623,934)
Adjusted EBITDA per share $ (0.54) $ (0.58)
Basic weighted average common shares outstanding 1,553,555 1,078,178

CONTACT: Lawrence M. Sands Senior Vice President and Corporate Secretary Office: (561) 988-1988Source:InterCloud Systems, Inc.