InterCloud Systems Inc (OTCMKTS:ICLD) has been possibly basing on the chart after very long and steady trek down Mount Doom, giving up over 99% of its value over the past couple years. However, the company’s recent 10-Q shows a potential improvement, and management is finding some creative ways to turn up cash levels and manage debt.
Recent action has seen about 30% tacked on to share pricing for the stock in the past week, but that move comes in the context of a larger bearish trend. Market participants may want to pay attention to this stock right now. ICLD has evidenced sudden upward volatility on many prior occasions. Furthermore, the name has witnessed a pop in interest, as transaction volume levels have recently pushed about 180% beyond its prior sustained average level.
InterCloud Systems Inc (OTCMKTS:ICLD) frames itself as a company that provides end-to-end IT and network solutions to the telecommunications service provider and corporate enterprise markets through cloud platforms and professional services in the United States and internationally. It operates through four segments: Applications and Infrastructure, Professional Services, Managed Services, and Cloud Services.
The company offers various services, including platform as a service, infrastructure as a service, database as a service, and software as a service; and network management, 24x7x365 monitoring, security monitoring, and storage and backup services. It also provides software-defined networking (SDN) training, SDN software development and integration, virtualized network functions validation in a multi-vendor environment, unified communications, interactive voice response, and session initiation protocol based call centers, as well as structured cabling and other field installations.
In addition, the company designs, engineers, installs, and maintains various types of Wi-Fi and wide-area, distributed antenna system, and small cell distribution networks for incumbent local exchange carriers, telecommunications original equipment manufacturers (OEMs), cable broadband multiple system operators, and enterprise customers, as well as designs, installs, and maintains hardware solutions for the OEMs that support voice, data, and optical networks.
Further, it provides consulting and professional staffing solutions to the service-provider and enterprise market in support of IT and next-generation networks comprising project management, network implementation, network installation, network upgrades, rebuilds, maintenance, and consulting services. Additionally, the company’s engineering, design, installation, and maintenance services support the build-out and operation of enterprise, fiber optic, Ethernet, and wireless networks.
InterCloud Systems, Inc. was founded in 2006 and is based in Shrewsbury, New Jersey.
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As noted above, the company recently put out its Q3 10-Q results for the quarter. Mark Munro, CEO, summed things up succinctly:
“Our third quarter net income of $2.1 million versus $2.9 million net loss in Q3 2015, third quarter revenue grew 11% to $19.6 million. Third quarter gross profit increased 15% to $5.6 million, and overall nine-month revenue in 2016 increased 8% year-over-year to $59.8 million in total revenue thus far.
“Reported revenue and margin growth for Q3 2016 and year-to-date results are a significant accomplishment given some of the challenges we have faced during 2016. Our sales and operations organizations have performed well during the year, and I want to take this opportunity to thank our entire staff for the incredibly hard work in 2016 and we look forward to a strong fourth quarter and even better 2017.”
In addition, on November 15, 2016, the company sold approximately $1 million of receivables to an accredited investor in exchange for $950,000. In other words, they were able to reduce the time discount of money to generate immediate cash resources by giving up 5%.
It’s hard to know what, if any, associated default risk was embedded in the receivables account, or accounts, monetized. But the proceeds of the sale were used to make amortization payments to the Company’s senior lender, and for general working capital purposes, which reduces a burden. The stock reacted favorably to the strategy, reflecting a standing concern of either that associated default risk in client accounts or more likely the standing debt held by ICLD.
At this time, carrying a capital value in the market of $3.4M, ICLD has a significant war chest ($2.62M) of cash on the books, alongside total assets topping $70M, which leans against an appreciable load ($44.29M) of total accumulated debt. ICLD is making real money, with trailing revs already coming in at $79.28M.
The key take-away here is that the company is starting to see major topline growth, with quarterly y/y revs increasing at 11%. This one could start to get interesting, but traders will probably want to remain to traders and investors should keep an eye on the $44M in debt. If that basic tone changes, it will have to be through more rapid growth. And we will be sure to update the story with our thoughts. For continuing coverage on shares of $ICLD stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!