By Ken Nagy, CFA
On May 15, 2013, InterCloud Systems Inc. (OTC BB:ICLD) the Boca Raton, Florida based end-to-end solution provider of value added cloud and managed service based platforms, professional services, applications and infrastructure to both the telecommunications industry and corporate enterprises, filed its 10Q quarterly report for its first quarter, ended March 31, 2013.
For the first quarter ended March 31, 2013, revenues jumped $10.881 million year over year to $12.401 million from $1.520 million for the comparable quarter of 2012.
The year over year upturn in revenues was driven by the completion of three acquisitions in 2012.
Furthermore, as a result of the recent acquisitions, InterCloud Systems has become a multi-faceted company with an international platform that is expected to allow the Company to leverage its corporate and other fixed costs and capture gross margin benefits.
It should also be noted that the Company has also entered into definitive agreements for two additional acquisitions that are expected to close during the second quarter of 2013.
Gross profit for the quarter was $3.635 million resulting in gross margin of 29.3 percent. This compares to gross profit of $655,355 and gross margin of 43.1 percent during the quarter ended March 31, 2012.
The lower gross margin was a result of the acquisitions completed in 2012. The gross margin on the Company’s telecommunications staffing services, which was its largest service sector, was 20 percent for the three months ended March 31, 2013, which decreased overall gross margin.
Still, it is expected that as the telecommunications staffing services portion of InterCloud’s revenue increases, the Company’s overall gross margin percentage will continue to decline, while the gross margin dollars will increase.
Operating expenses increased to $3.030 million for the first quarter, up $2.115 million from the comparable three months of 2012.
Operating income for the three months ended March 31, 2013 was $605,485 compared to an operating loss of $259,034 million for the first quarter 2012.
Still, net loss attributable to common shareholders increased year over year by $717,053 to a loss of $1.050 million for the first quarter. This compares to a net loss attributable to common shareholders of $333,815 for three months ended March 31, 2012.
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