IDT Corporation to Report Second Quarter Fiscal Year 2020 Results
NEWARK, N.J., Feb. 26, 2020 —IDT Corporation (NYSE: IDT), a global provider of communications and payment services, is scheduled to report financial and operational results for the second quarter of its fiscal year 2020 (the three-months ended January 31, 2020) on Thursday, March 5, 2020.
IDT’s earnings release will be issued and posted on the IDT investor relations website (http://ir.idt.net/) at approximately 4:30 PM Eastern.
IDT will host an earnings conference call beginning at 5:30 PM Eastern with management’s discussion of results, outlook and strategy followed by Q&A with investors.
To listen to the call and participate in the Q&A, dial toll-free 1-888-348-8417 (from US) or 1-412-902-4243 (international) and request the IDT Corporation call.
A replay of the conference call will be available approximately three hours after the call concludes through March 12, 2020. To access the replay, dial toll free 1-844-512-2921 (from US) or 1-412-317-6671 (international) and provide this replay number: 10139692. A replay will also be accessible via streaming audio at the IDT investor relations website (http://ir.idt.net/).
About IDT Corporation: IDT Corporation (NYSE: IDT) provides communications and payment services to individuals and businesses primarily through its Boss Revolution®, net2phone® and National Retail Solutions® brands. IDT’s wholesale carrier services business is a leading global carrier of international long-distance calls. For more information on IDT, visit www.idt.net.
Attention Independent Grocery and Bodega Owners of NYC: Boost Your Business by Expanding Your Fresh Foods to Go!
NEWARK, N.J., Feb. 6, 2020 —National Retail Solutions (NRS), the operator of a leading point-of-sale (POS) network for independent retailers, announced today that it is sponsoring a Lunch & Learn for New York City’s bodega, grocery and convenience store owners. The Lunch & Learn is a great opportunity for independent store owners to learn how to grow their businesses with City Harvest’s fresh food program, subsidized point-of-sale (POS) systems and related tax benefits.
The Lunch and Learn is sponsored by NRS, City Harvest – NYC’s premier food rescue organization, United Bodegas of America (UBA), and the New York City Economic Development Corporation (NYC/EDC).
WHO: NYC bodega owners and other independent grocery and convenience retailers
WHAT: Lunch & Learn: How to Boost Your Business and Expand Your Fresh Foods to Go
WHERE: Fairway Market’s Facility, 400 Walnut Avenue, Bronx, NY 10454
WHEN: Thursday, February 20, 2020 from 10:00 a.m. to 12:00 noon
SPONSORS: National Retail Solutions, City Harvest, UBA and NYC/EDC
HOW: Reserve your place at the Lunch & Learn by contacting Roque Azcona of NRS (973/438-5048) or Elizabeth Vispo of City Harvest (347/203-7498)
“Bodegas and other neighborhood grocers feed millions of New Yorkers every day and are a crucial part of New York City’s food supply chain,” said Elie Y. Katz, President of NRS. “We are delighted to participate in this event and help these store owners provide New Yorkers with fresher, locally grown and nutritious foods.”
NRS operates a leading POS network for independent retailers in the US. Over 8,000 retailers use its POS platform to process transactions, track sales and inventory, bring in new customers and manage their businesses more efficiently and easily.
In conjunction with the Lunch & Learn, NRS will demonstrate its POS terminals and offer them at subsidized low rates to bodega, grocery and convenience store owners in the five boroughs.
“Bodegas and other independent retailers are hungry for tools to help them compete against large retail chains and big box stores,” Katz added. ”Our POS platform helps bodegas and convenience stores to boost sales and gain new customers. Plus, our mobile app makes it easy for store owners to manage their operations, whether they are in the store, at home or on the road.”
About National Retail Solutions (NRS):
NRS operates a point-of-sale (POS) terminal-based platform plus NRS PAY credit card processing for independent retailers and bodega owners nationwide. The platform provides a robust portfolio of tools to help these retailers compete more effectively, including inventory tracking, store statistics, user management, one-touch Boss Revolution® pinless recharge, and integration with the BR Club customer loyalty program. Consumer packaged goods (CPG) suppliers are able to leverage the NRS platform to provision promotions, coupons and special offers to independent retailers and their predominantly urban customer bases nationwide. NRS is a subsidiary of IDT Corporation (NYSE: IDT).
net2phone SIP Trunking Solutions Certified by Mitel
NEWARK, N.J., Dec. 30, 2019 – net2phone, a global provider of cloud communications solutions to businesses, today announced that its SIP Trunking solution has achieved certification from Mitel. As a Mitel-certified SIP provider, net2phone has joined the Mitel Solutions Alliance (MSA) that supports services that are fully compatible with Mitel’s enterprise, cloud and mobile communications.
“net2phone SIP Trunking solution is now certified to be interoperable with Mitel IP-PBX communications systems,” said Jonah Fink, President of net2phone. “Businesses with Mitel IP-PBXs can count on net2phone to provide a seamlessly integrated voice solution featuring unlimited calling, virtual phone numbers, and an enhanced communications experience.
net2phone’s SIP Trunking solution includes:
Unlimited domestic calling to landlines and mobile phones throughout the United States, Canada, Mexico, and India;
Unlimited calling to landlines in 28 additional countries (Argentina, Austria, Brazil, Chile, Colombia, Costa Rica, Cyprus, Denmark, Dominican Republic, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Netherlands, Norway, Panama, Peru, Portugal, Romania, Singapore, Slovakia, Spain, Sweden, United Kingdom, and Venezuela) and to Puerto Rico;
International virtual phone numbers for over 300 cities in 50 countries;
Support for both high quality and low bandwidth codecs (G.711 and G.729);
Enhanced security incorporating four complementary types of authentication.
“Building and maintaining the right technology relationships to deliver customers high-value integrated solutions is a critical component for success in the business communications marketplace,” said David Lowenstein, Director of Business Development for the Mitel Solutions Alliance. “Mitel works with best-of-breed companies like net2phone to deliver complete solutions that address the business challenges of our customers.”
About net2phone:
net2phone’s cloud communications solutions help businesses around the globe succeed through smarter conversations. net2phone is a subsidiary of IDT Corporation (NYSE: IDT), a provider of telecommunications and payment services. To learn more, please visit net2phone.com, connect with us on LinkedIn, or email partner@net2phone.com.
net2phone Acquires Spanish UCaaS Provider RingSouth Europa
Acquisition Marks Expansion into European Business Communications Market
NEWARK, N.J., Dec. 17, 2019 – net2phone, a global provider of cloud communications solutions to businesses, today announced that it has acquired RingSouth Europa (RingSouth), a business communications provider headquartered in Murcia, Spain.
Jonah Fink, President of net2phone, said, “RingSouth is a highly regarded provider of cloud communications services to Spanish businesses with a roster of corporate and institutional clients including the University of Murcia. We look forward to pursuing the tremendous opportunities for further expansion in Spain and other European markets.”
RingSouth was founded in Murcia in the Southeast of Spain in 2005. Since launch, the company has expanded its footprint to Madrid and beyond while achieving notable enterprise customer wins. Its EcoVoz platform offers advanced features and facilitates integration with popular CRM and ERP solutions.
RingSouth’s General Manager, Jonathan Garcia, said, “We are excited to have net2phone’s formidable backing as we expand our footprint in the business communications market. Businesses throughout Europe are eager to take advantage of the powerful capabilities of communications in the cloud. We are in an excellent position to serve this rapidly growing market.”
net2phone’s acquisition of RingSouth follows its 2018 acquisition of Canadian UCaaS provider Versature. In addition to addressing the Spanish market through RingSouth, net2phone now offers cloud communications services to businesses throughout North America – the U.S., Canada and Mexico – and in the three largest South American markets – Brazil, Argentina and Colombia.
About net2phone: net2phone’s cloud communications solutions help businesses around the globe succeed through smarter conversations. net2phone is a subsidiary of IDT Corporation (NYSE: IDT), a provider of telecommunications and payment services. To learn more, please visit net2phone.com, connect with us on LinkedIn, or email partner@net2phone.com.
IDT Corporation to Present at LD Micro Investor Conference
NEWARK, N.J., Dec. 10, 2019 – IDT Corporation (NYSE: IDT), a global provider of communications and payment services, today announced that its Chief Executive Officer, Shmuel Jonas, will present at the LD Micro Main Event XII investor conference in Bel Air, CA – on Wednesday, December 11th, at 1:00 PM PST.
The IDT investor presentation slides will be available on the presentations page of the IDT investor relations website at the time of the presentation and will be filed in a Form 8-K with the SEC. The presentation will not be webcast.
The LD Micro Main Event XII will be held at the Luxe Sunset Bel Air Hotel from December 10th-12th. It is one of the largest and most influential independent micro-cap conferences. This year, the conference will host more than 250 innovative companies in technology, biotech, pharmaceuticals, mining, energy and other sectors.
IDT Corporation (NYSE: IDT) provides communications and payment services to individuals and businesses primarily through its Boss Revolution®, net2phone® and National Retail Solutions® brands. IDT’s wholesale carrier services business is a leading global carrier of international long-distance calls. For more information on IDT, visit www.idt.net.
IDT Corporation Reports First Quarter Fiscal Year 2020 Results
NEWARK, N.J., Dec. 5, 2019 — IDT Corporation (NYSE: IDT) reported a loss per diluted share of $0.06 and Non-GAAP earnings per diluted share* of $0.10 on revenue of $340.2 million for the first quarter of FY 2020, the three months ended October 31, 2019.
1Q20 OPERATIONAL HIGHLIGHTS (Results are for 1Q20 and are compared to 1Q19)
net2phone’s cloud-based Unified Communications as a Service (UCaaS) offering served 112,000 seats at October 31st compared to 68,000 a year earlier. Subscription revenue increased 87.0% to $5.9 million. The results include the acquisition of Versature, a Canadian UCaaS provider, during 1Q19;
National Retail Solutions (NRS) had deployed over 10,600 point-of-sale (POS) terminals with independent retailers nationwide by October 31st of which approximately 8,200 were active compared to 5,900 a year earlier. NRS revenue increased 93.4% to $2.4 million;
BOSS Revolution Money Transfer transactions increased to 1.1 million from 715,000 in the year ago quarter. Revenue increased 55.8% to $7.4 million with solid growth from both direct-to-consumer (DTC) and retail channels. DTC revenue increased 68.9% to $4.6 million.
REMARKS BY SHMUEL JONAS, CEO “IDT delivered consistent results in the first quarter of our 2020 fiscal year highlighted by expansion of our higher-margin growth initiatives and our lower margin Mobile Top-Up services offset by decreases of our BOSS Revolution Calling and Carrier Service revenues in line with our expectations.
“In IDT’s growth initiatives, net2phone’s cloud-based UCaaS offering increased revenue 50% year-over-year, and 35% exclusive of our acquisition of Versature. National Retail Solutions turned in a strong quarter, increasing revenue by 93% year-over-year. NRS’ advertising, data analytics and credit card processing offerings drove the expansion as they began to gain traction in their respective markets. BOSS Revolution Money Transfer boosted revenue by 56% year-over-year to $7.4 million. DTC revenue increased 69% year-over-year to $4.6 million while retail channel revenue increased 38% to $2.8 million.
“In IDT’s Core operations, Mobile Top-Up revenue increased 18% year-over-year to $76.8 million boosted by expanded sales of bundled offerings.
“Expansion of our growth initiatives and Mobile Top-Up drove an increase in gross profit for the fourth consecutive quarter, while Adjusted EBITDA* climbed to $7.3 million from $7.1 million a year ago.”
CONSOLIDATED RESULTS
Results
(in millions, except EPS)
1Q20
4Q19
1Q19
1Q20 – 1Q19 change (%/$)
Revenue
$340.2
$356.1
$362.3
(6.1)%
Direct cost of revenue
$279.5
$295.4
$304.7
(8.3)%
Revenue less direct cost of revenue
$60.8
$60.8
$57.6
+5.5%
Revenue less direct cost of revenue as a percentage of revenue
17.9%
17.1%
15.9%
+200 BP
SG&A expense
$53.5
$53.4
$50.6
+5.8%
Depreciation and amortization
$5.3
$5.8
$5.6
(5.3)%
Severance expense
$0.6
$0.9
–
$(0.6)
Other operating expense, net
$(2.8)
$(1.9)
$(1.3)
$(1.5)
(Loss) income from operations
$(1.4)
$(1.2)
0.2
$(1.6)
Adjusted EBITDA*
$7.3
$7.4
$7.1
+$0.2
Net (loss) income attributable to IDT
$(1.5)
$1.6
$(2.3)
+$0.8
Diluted (loss) earnings per share
$(0.06)
$0.06
$(0.10)
+$0.04
Non-GAAP net income (loss)*
$2.8
$4.1
$(0.5)
+$3.3
Non-GAAP earnings (loss) per share*
$0.10
$0.15
$(0.02)
+$0.12
*Throughout this release, Non-GAAP earnings (loss) per share, Adjusted EBITDA, and Non-GAAP net income (loss) for all periods presented are Non-GAAP measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measures at the end of this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measure.
Notes on Consolidated Results and Balance Sheet Consolidated results for all periods presented include corporate overhead. Corporate G&A expense decreased to $2.2 million in 1Q20 from $2.3 million in 1Q19.
At October 31, 2019, IDT held $77.8 million in unrestricted cash, cash equivalents, debt securities and current equity investments. Current assets totaled $373.7 million and current liabilities totaled $396.4 million.
Net cash used in operating activities during 1Q20 was $5.0 million, including the impact of a $1.8 million increase in customer deposits at IDT’s Gibraltar-based bank, compared to net cash provided by operating activities of $8.2 million in the year ago quarter, including a $5.6 million increase in customer deposits at the bank. The year-over-year decrease in cash-flow from operations is mostly due to the timing of prepayments made to disbursement agents in the BOSS Revolution Money Transfer business.
Capital expenditures were $3.9 million and $4.5 million in 1Q20 and 1Q19, respectively.
RESULTS BY SEGMENT (Results are for 1Q20 and are compared to 1Q19)
Telecom & Payment Services (TPS) IDT’s TPS segment accounted for 96.3% and 97.1% of IDT’s consolidated revenue in 1Q20 and 1Q19, respectively. The segment includes Core and Growth verticals:
Core includes IDT’s three largest communications and payments offerings by revenue: BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the U.S., Carrier Services, which provides international long-distance termination and outsourced traffic management solutions to telecoms worldwide, and Mobile Top-Up, which enables customers to transfer airtime and bundles of airtime, messaging and data credits to mobile accounts internationally and domestically. Core also includes smaller communications and payments offerings, many in harvest mode.
Growth comprises National Retail Solutions, which operates a POS, terminal-based network for independent retailers, BOSS Revolution Money Transfer, an international money remittance service for customers in the U.S., and BOSS Revolution Mobile, a mobile virtual network operator.
net2phone IDT’s net2phone segment accounted for 3.7% and 2.9% of IDT’s consolidated revenue in 1Q20 and 1Q19, respectively. The segment comprises two verticals:
net2phone-UCaaS, a unified cloud communications service for businesses in North and South America and certain other international markets.
net2phone-Platform Services provides telephony services to cable operators and other businesses by leveraging a common technology platform.
Revenue in 1Q20 and comparative periods for all verticals and for the most significant core offerings is provided in the following chart:
Revenue by Segment and Vertical
(in millions)
1Q20
4Q19
1Q19
1Q20-1Q19 change
TPS
Core
$317.8
$334.4
$345.8
(8.1%)
BOSS Revolution Calling
$116.2
$124.5
$123.5
(5.9%)
Carrier Services
$113.5
$123.1
$142.2
(20.2%)
Mobile Top-Up
$76.8
$74.8
$65.3
+17.6%
Other
$11.2
$11.9
$14.8
(23.8%)
Growth
$9.8
$8.9
$6.0
+63.1%
Total TPS
$327.6
$343.3
$351.8
(6.9%)
net2phone
net2phone-UCaaS
$7.2
$7.0
$4.8
+50.3%
net2phone-Platform Services
$5.4
$5.9
$5.7
(4.5%)
Total net2phone
$12.6
$12.9
$10.5
+20.6%
Segment level financial results are summarized in the following chart:
Results by Segment
(in millions)
TPS
net2phone
1Q20
4Q19
1Q19
1Q20
4Q19
1Q19
Revenue
$327.6
$343.3
$351.8
$12.6
$12.9
$10.5
Direct cost of revenue
$276.5
$292.1
$301.7
$3.0
$3.2
$3.0
Revenue less direct cost of revenue
$51.2
$51.1
$50.2
$9.6
$9.6
$7.4
SG&A expense
$40.8
$41.7
$40.9
$10.4
$9.6
$7.4
Depreciation and amortization
$3.2
$4.2
$4.0
$2.1
$1.5
$1.5
Severance expense
$0.6
$0.9
–
–
–
–
Other operating expense, net
$(2.2)
$(2.6)
$(1.1)
$(0.4)
$(0.3)
–
Income (loss) from operations
$4.4
$1.7
$4.2
$(3.3)
($1.8)
($1.5)
Adjusted EBITDA
$10.3
$9.4
$9.3
$(0.8)
–
–
TPS Segment Takeaways:
BOSS Revolution Calling revenue decreased 5.9% to $116.2 million and Carrier Services revenue decreased 20.2% to $113.5 million, in line with expectations;
Mobile Top-Up revenue increased 17.6% to $76.8 million boosted by expanded sales of bundled offerings;
NRS revenue increased by 93.4% to $2.4 million led by increased sales of advertising capacity to digital-out-of-home advertisers, transaction data to data analyt
ics and consumer package goods marketers, and credit card processing services to retailers operating NRS terminals. NRS increased the number of active terminals in its POS network at October 31, 2019 to 8,200 from 5,900 a year earlier;
BOSS Revolution Money Transfer revenue increased 55.8% to $7.4 million with solid growth from both DTC and retail channels.
net2phone Segment Takeaways:
net2phone-UCaaS revenue increased 50.3% to $7.2 million led by growth in South American markets. The year-over-year increases include the impact of the acquisition of Versature, a Canadian UCaaS provider, during 1Q19. Exclusive of the Versature acquisition, net2phone-UCaaS revenue increased 34.9%.
net2phone-UCaaS subscription revenue for its cloud communications offering – exclusive of equipment sales and SIP-trunking offerings – increased 87.0% to $5.9 million inclusive of the Versature acquisition;
net2phone’s cloud communications offering served 112,000 seats at October 31st, compared to 68,000 a year earlier, including seats served by Versature.
IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION This release is available for download in the “Investors & Media” section of the IDT Corporation website (http://ir.idt.net/) and has been filed on a current report (Form 8-K) with the SEC.
IDT will host an earnings conference call beginning at 5:30 PM Eastern today with management’s discussion of results, outlook and strategy followed by Q&A with investors.
To listen to the call and participate in the Q&A, dial toll-free 1-888-348-8417 (from US) or 1-412-902-4243 (international) and request the IDT Corporation call.
A replay of the conference call will be available approximately three hours after the call concludes through December 12, 2019. To access the replay, dial toll free 1-844-512-2921 (from US) or 1-412-317-6671 (international) and provide this replay number: 10137108. A replay will also be accessible via streaming audio at the IDT investor relations website (http://ir.idt.net/).
ABOUT IDT: IDT Corporation (NYSE: IDT) provides communications and payment services to individuals and businesses primarily through its Boss Revolution®, net2phone® and National Retail Solutions® brands. IDT’s wholesale carrier services business is a leading global carrier of international long-distance calls. For more information on IDT, visit www.idt.net.
All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.
IDT CORPORATION CONSOLIDATED BALANCE SHEETS
Assets
October 31, 2019
July 31, 2019
Current assets:
(Unaudited) (in thousands)
Cash and cash equivalents
$ 62,183
$ 80,168
Restricted cash and cash equivalents
190,218
177,031
Debt securities
9,894
2,534
Equity investments
5,710
5,688
Trade accounts receivable, net of allowance for doubtful accounts of $5,675 at October 31, 2019 and $5,444 at July 31, 2019
50,963
58,060
Prepaid expenses
27,809
20,276
Other current assets
26,964
24,704
Total current assets
373,741
368,461
Property, plant and equipment, net
32,874
34,355
Goodwill
11,214
11,209
Other intangibles, net
4,110
4,196
Equity investments
9,337
9,319
Operating lease right-of-use assets
11,597
–
Deferred income tax assets, net
4,110
4,589
Other assets
12,054
11,574
Total assets
$ 459,037
$ 443,703
Liabilities and equity
Current liabilities:
Trade accounts payable
$ 37,159
$ 37,077
Accrued expenses
121,058
127,834
Deferred revenue
40,739
42,479
Customer deposits
188,258
175,028
Other current liabilities
9,180
6,652
Total current liabilities
396,394
389,070
Operating lease liabilities
9,335
–
Other liabilities
977
1,076
Total liabilities
406,706
390,146
Commitments and contingencies
Equity:
IDT Corporation stockholders’ equity:
Preferred stock, $.01 par value; authorized shares-10,000; no shares issued
–
–
Class A common stock, $.01 par value; authorized shares-35,000; 3,272 shares issued and 1,574 shares outstanding at October 31, 2019 and July 31, 2019
33
33
Class B common stock, $.01 par value; authorized shares-200,000; 25,835 and 25,803 shares issued and 24,927 and 24,895 shares outstanding at October 31, 2019 and July 31, 2019, respectively
258
258
Additional paid-in capital
274,953
273,313
Treasury stock, at cost, consisting of 1,698 shares of Class A common stock and 908 shares of Class B common stock at October 31, 2019 and July 31, 2019
(51,739)
(51,739 )
Accumulated other comprehensive loss
(6,062)
(4,858)
Accumulated deficit
(162,276 )
(160,763 )
Total IDT Corporation stockholders’ equity
55,167
56,244
Noncontrolling interests
(2,836 )
(2,687)
Total equity
52,331
53,557
Total liabilities and equity
$ 459,037
$ 443,703
IDT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended October 31,
2019
2018
(in thousands, except per share data)
Revenues
$ 340,245
$ 362,316
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)
279,461
304,693
Selling, general and administrative (i)
53,480
50,552
Depreciation and amortization
5,295
5,594
Severance
626
–
Total costs and expenses
338,862
360,839
Other operating expense, net
(2,775)
(1,295)
(Loss) income from operations
(1,392)
182
Interest income, net
272
108
Other income (expense), net
234
(1,349)
Loss before income taxes
(886)
(1,059)
Provision for income taxes
(536)
(939)
Net loss
(1,422)
(1,998)
Net income attributable to noncontrolling interests
(91)
(301)
Net loss attributable to IDT Corporation
$ (1,513)
$ (2,299)
Basic and diluted loss per share attributable to IDT Corporation common stockholders
$ (0.06)
$ (0.10)
Weighted-average number of shares used in calculation of basic and diluted loss per share
26,279
23,831
(i) Stock-based compensation included in selling, general and administrative expenses
$ 1,364
$ 413
IDT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended October 31,
2019
2018
(in thousands)
Operating activities
Net loss
$ (1,422)
$ (1,998)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
5,295
5,594
Deferred income taxes
479
1,117
Provision for doubtful accounts receivable
549
447
Stock-based compensation
1,364
413
Other
(34)
46
Change in assets and liabilities:
Trade accounts receivable
7,975
97
Prepaid expenses, other current assets and other assets
(9,166)
(8,766)
Trade accounts payable, accrued expenses, other current liabilities and other liabilities
(10,012)
6,919
Customer depositsat IDT Financial Services Limited, our Gibraltar-based bank
1,793
5,567
Deferred revenue
(1,798)
(1,206)
Net cash (used in) provided by operating activities
(4,977)
8,230
Investing activities
Capital expenditures
(3,851)
(4,463)
Payment for acquisition, net of cash acquired
–
(5,453)
Purchases of debt securities and equity investments
(8,195)
–
Proceeds from maturities and sales of debt securities and sales of equity investments
782
3,372
Net cash used in investing activities
(11,264)
(6,544)
Financing activities
Distributions to noncontrolling interests
(240 )
(339)
Repayment of other liabilities
(19 )
(599)
Proceeds from exercise of stock options
276
–
Repurchases of Class B common stock
–
(3,854)
Net cash provided by (used in) financing activities
17
(4,792)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents
11,426
(4,590)
Net decrease in cash, cash equivalents, and restricted cash and cash equivalents
(4,798)
(7,696)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period
257,199
203,197
Cash, cash equivalents, and restricted cash and cash equivalents at end of period
$ 252,401
$ 195,501
Reconciliation of Non-GAAP Financial Measures for the First Quarter Fiscal 2020 and 2019
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), IDT also disclosed, for 1Q20, 4Q19, and 1Q19, Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share, which are non-GAAP measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.
IDT’s measure of Adjusted EBITDA consists of revenue less direct cost of revenues and selling, general and administrative expense. Another way of calculating Adjusted EBITDA is to start with income (loss) from operations, add depreciation and amortization, severance expense, and other operating expense, and deduct other operating gains.
IDT’s measure of non-GAAP net income (loss) starts with net income (loss) in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expense, net.
IDT’s measure of non-GAAP earnings (loss) per share is calculated by dividing non-GAAP net income (loss) by the diluted weighted-average shares.
These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2020 and fiscal 2019 periods.
Management believes that IDT’s Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share measures provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of IDT’s or the relevant segment’s core operating results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share to evaluate operating performance in relation to IDT’s competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, IDT has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting.
Management refers to Adjusted EBITDA, as well as the GAAP measures income (loss) from operations and net income (loss), on a segment and/or consolidated level to facilitate internal and external comparisons to the segments’ and IDT’s historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.
While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or capitalized in prior periods. IDT’s Adjusted EBITDA, which is exclusive of depreciation and amortization, is a useful indicator of its current performance.
Severance expense is excluded from the calculation of Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share. Severance expense is reflective of decisions made by management in each period regarding the aspects of IDT’s and its segments’ businesses to be focused on in light of changing market realities and other factors. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of IDT’s core and continuing operations.
Other operating expense, net, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share. Other operating expense, net includes accruals for non-income related taxes related to one of IDT’s foreign entities, legal fees related to Straight Path Communications Inc.’s stockholders’ putative class action and derivative complaint, and expense for the indemnification of a net2phone cable telephony customer related to patent infringement claims brought against the customer. From time-to-time, IDT may incur costs related to non-routine tax and legal matters. However, these matters do not occur each quarter. IDT does not believe the gains or losses from these non-routine matters are components of IDT’s or the relevant segment’s core operating results.
The other calculation of Adjusted EBITDA consists of revenue less direct cost of revenues and selling, general and administrative expense. As the other excluded items are not reflected in this calculation, they are excluded automatically and there is no need to make additional adjustments. This calculation results in the same Adjusted EBITDA amount and its utility and significance is as explained above.
Stock-based compensation recognized by IDT and other companies may not be comparable because of the variety of types of awards as well as the various valuation methodologies and subjective assumptions that are permitted under GAAP. Stock-based compensation is excluded from IDT’s calculation of non-GAAP net income (loss) and non-GAAP earnings (loss) per share because management believes this allows investors to make more meaningful comparisons of the operating results per share of IDT’s core business with the results of other companies. However, stock-based compensation will continue to be a significant expense for IDT for the foreseeable future and an important part of employees’ compensation that impacts their performance.
Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share should be considered in addition to, not as a substitute for, or superior to, income (loss) from operations, cash flow from operating activities, net income (loss), basic and diluted earnings (loss) per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, IDT’s measurements of Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share may not be comparable t
o similarly titled measures reported by other companies.
Following are reconciliations of Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share to the most directly comparable GAAP measure, which are, (a) for Adjusted EBITDA, income (loss) from operations for IDT’s reportable segments and net income (loss) for IDT on a consolidated basis, (b) for non-GAAP net income (loss), net income (loss), and (c) for non-GAAP earnings (loss) per share, basic and diluted earnings (loss) per share.
IDT Corporation
Reconciliation of Adjusted EBITDA to Net (Loss) Income
(unaudited)
in millions
Figures may not foot or cross-foot due to rounding to millions.
Total IDT Corporation
Telecom & Payment Services
net2phone
Corporate
Three Months Ended October 31, 2019
(1Q20)
Adjusted EBITDA
$ 7.3
$ 10.3
$ (0.8)
$ (2.2)
Subtract:
Depreciation and amortization
5.3
3.2
2.1
–
Severance expense
0.6
0.6
–
–
Other operating expense, net
2.8
2.2
0.4
0.3
(Loss) income from operations
(1.4)
$ 4.4
$ (3.3)
$ (2.5)
Interest income, net
0.3
Other income, net
0.2
Loss before income taxes
(0.9)
Provision for income taxes
(0.5)
Net loss
(1.4)
Net income attributable to noncontrolling interests
(0.1)
Net loss attributable to IDT Corporation
$ (1.5)
Total IDT Corporation
Telecom & Payment Services
net2phone
Corporate
Three Months Ended July 31, 2019
(4Q19)
Adjusted EBITDA
$ 7.4
$ 9.4
$ -
$ (2.1)
Subtract (Add):
Depreciation and amortization
5.8
4.2
1.5
–
Severance expense
0.9
0.9
–
–
Other operating expense (gains), net
1.9
2.6
0.3
(1.0)
(Loss) income from operations
(1.2)
$ 1.7
$ (1.8)
$ (1.1)
Interest income, net
0.3
Other income, net
1.2
Income before income taxes
0.3
Benefit from income taxes
0.6
Net income
0.9
Net income attributable to noncontrolling interests
0.7
Net income attributable to IDT Corporation
$ 1.6
IDT Corporation Reconciliation of Adjusted EBITDA to Net Loss (unaudited) in millions Figures may not foot or cross-foot due to rounding to millions.
Total IDT Corporation
Telecom & Payment Services
net2phone
Corporate
Three Months Ended October 31, 2018
(1Q19)
Adjusted EBITDA
$ 7.1
$ 9.3
$ -
$ (2.3)
Subtract:
Depreciation and amortization
5.6
4.0
1.5
–
Other operating expense
1.3
1.1
–
0.2
Income (loss) from operations
0.2
$ 4.2
$ (1.5)
$ (2.5)
Interest income, net
0.1
Other expense, net
(1.3)
Loss before income taxes
(1.1)
Provision for income taxes
(0.9)
Net loss
(2.0)
Net income attributable to noncontrolling interests
(0.3)
Net loss attributable to IDT Corporation
$ (2.3)
IDT Corporation Reconciliations of Net (Loss) Income to Non-GAAP Net Income (Loss) and Earnings (Loss) per share to Non- GAAP Earnings (Loss) per share (unaudited) in millions, except per share data Figures may not foot due to rounding to millions.
1Q20
4Q19
1Q19
Net (loss) income
$ (1.4)
$ 0.9
$ (2.0)
Adjustments (add) subtract:
Stock-based compensation
(1.3)
(1.0)
(0.4)
Severance exp
ense
(0.6)
(0.9)
–
Other operating expense, net
(2.8)
(1.9)
(1.3)
Total adjustments
(4.7)
(3.8)
(1.7)
Income tax effect of total adjustments
0.5
0.6
0.2
4.2
3.2
1.5
Non-GAAP net income (loss)
$ 2.8
$ 4.1
$ (0.5)
Earnings (loss) per share:
Basic
$ (0.06)
$ 0.06
$ (0.10)
Total adjustments
0.17
0.09
0.08
Non-GAAP – basic
$ 0.11
$ 0.15
$ (0.02)
Weighted-average number of shares used in calculation of basic earnings (loss) per share
26.3
26.3
23.8
Diluted
$ (0.06)
$ 0.06
$ (0.10)
Total adjustments
0.16
0.09
0.08
Non-GAAP – diluted
$ 0.10
$ 0.15
$ (0.02)
Weighted-average number of shares used in calculation of diluted earnings (loss) per share
IDT Corporation to Report First Quarter Fiscal Year 2020 Results
NEWARK, N.J., Nov. 20, 2019 — IDT Corporation (NYSE: IDT), a global provider of communications and payment services, is scheduled to report financial and operational results for the first quarter of its fiscal year 2020 (the three-months ended October 31, 2019) on Thursday, December 5, 2019.
IDT’s earnings release will be issued and posted on the IDT investor relations website (http://ir.idt.net/) at approximately 4:30 PM Eastern.
IDT will host an earnings conference call beginning at 5:30 PM Eastern with management’s discussion of results, outlook and strategy followed by Q&A with investors.
To listen to the call and participate in the Q&A, dial toll-free 1-888-348-8417 (from US) or 1-412-902-4243 (international) and request the IDT Corporation call.
A replay of the conference call will be available approximately three hours after the call concludes through December 12, 2019. To access the replay, dial toll free 1-844-512-2921 (from US) or 1-412-317-6671 (international) and provide this replay number: 10137108. A replay will also be accessible via streaming audio at the IDT investor relations website (http://ir.idt.net/).
About IDT Corporation: IDT Corporation (NYSE: IDT) provides communications and payment services to individuals and businesses primarily through its flagship Boss Revolution® and net2phone® brands. IDT’s wholesale carrier services business is a leading global carrier of international long-distance calls.
NRS Promotes Retail Executive Vanessa Strain to Vice President of Data Sales
NEWARK, N.J., Nov. 11, 2019 – National Retail Solutions (NRS), operator of a leading point-of-sale network for independent retailers, today announced the promotion of Vanessa Strain to Vice President of Data Sales.
“Our nationwide network of terminals operated by independent retailers around the country generates rich data flows for insight in the dynamic independent retailer market. Vanessa has proven an invaluable leader to NRS as we continue to drive data-set based value to consumer package goods clients and safeguard the personal data of customers,” said Eli Korn, COO of NRS.
Ms. Strain, who formerly served as NRS’ Director of Data Sales, has over 30 years of experience in the Consumer Goods Industry on both the manufacturer and supplier sides. Prior to joining NRS, she served at Nielsen as Vice President of Multicultural and E-Commerce Growth and Strategy. During her career, Ms. Strain led client relationships with several Fortune 500 companies.
“Vanessa’s superior analytical and leadership skills, her deep understanding of category management and her ability to develop and execute on strategic priorities have proven invaluable to NRS. This new position is a great fit for her and for our company,” added Elie Y. Katz, NRS’ CEO.
About National Retail Solutions (NRS):
NRS operates a point-of-sale (POS) terminal-based platform for independent retailers and bodega owners nationwide. The platform provides a robust portfolio of tools to help these retailers compete more effectively, including inventory tracking, store statistics, user management, integration with Boss Revolution® communication and payment services, and integration with the BR Club loyalty program. Consumer packaged goods (CPG) suppliers are able to leverage the NRS platform to provision promotions, coupons and special offers to independent retailers and their predominantly urban customer bases nationwide. NRS is a subsidiary of IDT Corporation (NYSE: IDT).
IDT Corporation Reports Fourth Quarter and Full Fiscal Year 2019 Results
NEWARK, N.J., Oct. 10, 2019 — IDT Corporation (NYSE: IDT) reported EPS of $0.06 and Non-GAAP EPS* of $0.15 on revenue of $356.1 million for the fourth quarter of FY 2019, the three months ended July 31, 2019. For the full fiscal year 2019, IDT reported EPS of $0.01 and Non-GAAP EPS of $0.38 on revenue of $1,409.2 million.
4Q19 & FISCAL YEAR OPERATIONAL HIGHLIGHTS (4Q19 results are compared to 4Q18. FY 2019 results are compared to FY 2018)
net2phone’s Unified Communications as a Service (UCaaS) attained the 100,000-seat milestone. Growth was particularly strong in Brazil and other South American markets. net2phone-UCaaS revenue increased 78% to $7.0 million in 4Q19, and for FY 2019 increased 84% to $24.5 million. The year-over-year increases include the impact of the acquisition of Versature, a Canadian UCaaS provider, in 1Q19;
National Retail Solutions (NRS) operated approximately 7,800 active terminals in its retailer point-of-sale (POS) network at July 31, 2019 compared to 5,200 a year earlier. Revenue increased 72% to $1.9 million in 4Q19 driven in part by relatively new offerings to digital out-of-home advertisers and data analytics providers. FY 2019 revenue increased 56% to $6.2 million;
BOSS Revolution international money transfer processed over one million transactions in 4Q19. Money transfer revenue increased 42% to $6.9 million in 4Q19. Revenue from the direct-to-consumer (D2C) channel increased 88% to $4.4 million. FY 2019 revenue increased 33% to $23.1 million powered by a 113% increase in D2C channel revenue which increased to $14.4 million.
REMARKS BY SHMUEL JONAS, CEO “Our growth initiatives – net2phone’s UCaaS offerings, National Retail Solutions and our BOSS Revolution international money transfer service – continued their rapid expansions in the fourth quarter.
“As expected, revenue from our core Carrier Services and BOSS Revolution Calling offerings continued to decrease as a result of industry-wide headwinds in the paid minute communications market, but the company-wide margin impact was dampened by increased contributions from our growth initiatives. Consolidated revenue less direct cost of revenue has increased sequentially in each of the last three quarters.
“Consolidated Adjusted EBITDA* was $7.4 million in the fourth quarter. In the year ago quarter, consolidated Adjusted EBITDA was $16.8 million — a significant outlier to the upside as a result of changes to estimates for recognizing breakage revenue. For the full fiscal year, consolidated Adjusted EBITDA was $30.8 million compared to $38.2 million in fiscal 2018.
“Overall, the fourth quarter marked a consistent end to a solid year, and I want to thank everyone in our company for all their hard work. As fiscal 2020 gets underway, we are working from a strong position to vigorously pursue our exciting growth opportunities.”
4Q19 AND FISCAL YEAR 2019 CONSOLIDATED RESULTS
Results
(in millions, except EPS)
4Q19
3Q19
4Q18
4Q19 – 4Q18
Change (%/$)
Fiscal Year 2019
Fiscal Year
2018
FY2019 –
FY2018
Change
(%/$)
Revenue
$356.1
$341.3
$392.6
(9.3%)
$1,409.2
$1,547.5
(8.9%)
Direct cost of revenue
$295.4
$282.8
$325.1
(9.2%)
$1,174.0
$1,306.0
(10.1%)
Revenue less direct cost of revenue
$60.8
$58.5
$67.5
(10.0%)
$235.2
$241.5
(2.6%)
Revenue less direct cost of revenue as a percentage of revenue
17.1%
17.1%
17.2%
(0.1%)
16.7%
15.6%
+1.1%
SG&A expense
$53.4
$49.5
$50.7
+5.3%
$204.4
$203.3
+0.5%
Depreciation and amortization
$5.8
$5.5
$5.6
+2.8%
$22.6
$22.8
(0.7%)
Severance expense
$0.9
$0.6
$0.3
+162.7%
$1.4
$4.6
(68.9%)
(Loss) income from operations
$(1.2)
$0.4
$10.5
($11.7)
$(1.0)
$8.4
($9.4)
Adjusted EBITDA*
$7.4
$8.9
$16.8
($9.4)
$30.8
$38.2
($7.4)
Net income attributable to IDT
$1.6
$2.2
$8.2
($6.6)
$0.1
$4.2
($4.1)
Diluted earnings per share
$0.06
$0.08
$0.33
($0.27)
$0.01
$0.17
($0.16)
Non-GAAP net income*
$4.1
$5.2
$9.8
($5.7)
$9.7
$12.5
($2.8)
Non-GAAP earnings per share*
$0.15
$0.20
$0.40
($0.25)
$0.38
$0.51
($0.13)
*Throughout this release, Non-GAAP earnings per share, Adjusted EBITDA, and Non-GAAP net income for all periods presented are Non-GAAP measures intended to provide useful information that supplements IDT’s or the relevant segment’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measures at the end of this release for an explanation of these terms and their respective reconciliations to the most directly comparable GAAP measure.
Notes on Consolidated Results and Balance Sheet Income from operations and net income include accruals of $2.6 million, $2.3 million and $8.0 million for 4Q19, 3Q19 and FY 2019, respectively, for non-income related taxes pertaining to one of our foreign entities in our Telecom & Payment Services (TPS) segment. Also within TPS, 4Q18 revenue increased $9.5 million as a result of changes to estimates for recognizing certain breakage revenue, and direct cost increased by $4.5 million as a result of a change in accrued regulatory fee expense. Consolidated and TPS revenue less direct cost increased by the net of the changes, $5.0 million.
Consolidated results for all periods presented include corporate overhead. Corporate G&A expense decreased to $2.1 million in 4Q19 from $2.6 million in 4Q18, and decreased to $9.2 million in FY 2019 from $9.8 million in FY 2018.
At July 31, 2019, IDT held $88.4 million in unrestricted cash, cash equivalents, debt securities and current equity investments. Current assets totaled $368.5 million and current liabilities totaled $389.1 million. As of 3Q19, IDT no longer classifies its Gibraltar-based bank’s assets and liabilities as “held for sale” in the consolidated balance sheets for all periods presented.
On August 1, 2018, IDT adopted a change in GAAP related to the classification and presentation of changes in restricted cash in the statement of cash flows and has conformed prior period results.
Net cash provided by operating activities during 4Q19 was $37.8 million, including a $26.0 million increase in customer deposits at IDT’s Gibraltar-based bank, compared to $19.3 million in the year ago quarter, including a $3.8 million reduction in customer deposits. In the corresponding periods, capital expenditures were $5.0 million and $4.6 million, respectively. FY 2019 net cash provided by operating activities was $85.1 million including a $59.1 million increase in customer deposits at IDT’s Gibraltar-based bank, compared to $20.4 million in FY 2018 including a $14.7 million increase in customer deposits. In the corresponding periods, capital expenditures were $18.7 million and $20.6 million, respectively.
4Q19 AND FISCAL YEAR 2019 RESULTS BY SEGMENT (4Q19 results are compared to 4Q18 and FY 2019 results are compared to FY 2018).
Beginning with fiscal year 2019, IDT has modified the way it reports its business verticals within its two reporting segments to align more closely with IDT’s business strategy and operational structure, as follows:
Telecom & Payment Services (TPS) IDT’s TPS segment accounted for 96.4% and 97.5% of IDT’s consolidated revenue in 4Q19 and 4Q18, respectively, and 96.6% and 97.7% of consolidated revenue in FY 2019 and FY 2018, respectively. The segment includes Core and Growth verticals:
Core includes IDT’s three largest communications and payments offerings from both a revenue and cash generation perspective: BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the US; Carrier Services, which provides international long-distance termination and outsourced traffic management solutions to telecoms worldwide, and; Mobile Top-Up, which enables customers to transfer airtime and bundles of airtime, messaging and data credits to mobile phones overseas and within the US. TPS Core also includes smaller communications and payments offerings – some of which are in harvest mode.
Growth is comprised of NRS’ retailer POS terminal-based services, the BOSS Revolution international money transfer service, and the BOSS Revolution Mobile service.
net2phone IDT’s net2phone segment accounted for 3.6% and 2.5% of IDT’s consolidated revenue in 4Q19 and 4Q18, respectively, and 3.4% and 2.3% of FY 2019 and FY 2018 consolidated revenue, respectively. The segment comprises two verticals:
net2phone-UCaaS comprises unified cloud communications in the US and certain international markets and SIP-trunking offerings in South America.
net2phone-Platform Services includes other offerings leveraging a common technology platform to provide cable telephony and other voice services.
Revenue in 4Q19, fiscal year 2019 and comparative periods for all verticals and the most significant core offerings is provided in the following chart:
Revenue by Segment and Vertical
(in millions)
4Q19
3Q19
4Q18
4Q19- 4Q18 % change
FY 2019
FY 2018
FY 2019-FY 2018
% change
TPS
Core
$334.4
$321.2
$376.9
(11.3%)
$1,332.5
$1,490.2
(10.6%)
BOSS Revolution Calling
$124.5
$120.5
$136.3
(8.6%)
$490.7
$529.7
(7.4%)
Carrier Services
$123.1
$121.0
$156.9
(21.5%)
$514.2
$639.0
(19.5%)
Mobile Top-Up
$74.8
$67.6
$67.4
+11.0%
$272.0
$253.6
+7.3%
Other
$11.9
$12.2
$16.4
(27.6%)
$55.6
$67.9
(18.1%)
Growth
$8.9
$7.7
$6.0
+48.0%
$29.4
$21.3
+38.1%
Total TPS
$343.3
$328.8
$383.0
(10.4%)
$1,361.9
$1,511.5
(9.9%)
net2phone
net2phone-UCaaS
$7.0
$6.7
$3.9
+77.6%
$24.5
$13.3
+84.4%
net2phone-Platform Services
$5.9
$5.8
$5.7
+2.0%
$22.8
$21.6
+5.6%
Total net2phone
$12.9
$12.4
$9.7
+32.8%
$47.3
$34.9
+35.6%
Segment level financial results are summarized in the following chart:
Results by Segment
(in millions)
TPS
net2phone
4Q19
4Q18
FY2019
FY2018
4Q19
4Q18
FY2019
FY2018
Revenue
$343.3
$383.0
$1,361.9
$1,511.5
$12.9
$9.7
$47.3
$34.9
Direct cost of revenue
$292.1
$322.1
$1,161.2
$1,294.8
$3.2
$3.1
$12.9
$11.3
Revenue less direct cost of revenue
$51.1
$60.9
$200.7
$216.7
$9.6
$6.6
$34.4
$23.6
SG&A expense
$41.7
$42.7
$161.1
$170.1
$9.6
$5.4
$34.1
$20.9
Depreciation and amortization
$4.2
$4.0
$16.1
$16.3
$1.5
$1.6
$6.5
$5.3
Severance expense
$0.9
$0.3
$1.4
$4.5
–
–
–
–
Income (loss) from operations
$1.7
$13.8
$14.3
$25.8
($1.8)
($0.4)
($6.5)
($2.7)
Adjusted EBITDA
$9.4
$18.2
$39.6
$46.7
–
$1.2
$0.3
$2.7
TPS Segment Takeaways – Core:
4Q19 revenue from core offerings decreased $42.5 million (11.3%) to $334.4 million reflecting continuing headwinds in the paid minute communications market globally;
FY 2019 revenue from core offerings decreased $157.7 million (10.6%) to $1,332.5 million. From a margin perspective, the impact of the revenue decline was partially offset by an increase in the percentage of margin contribution generated by Carrier Services revenue and by the mix increase in the relatively higher margin BOSS Revolution Calling revenue as a component of all Core revenue.
TPS Segment Takeaways – Growth:
NRS 4Q19 revenue increased by 71.9% compared to the year ago quarter to $1.9 million, while FY 2019 revenue rose 55.9% to $6.2 million. The increases were driven by expansion of NRS’ POS network to additional retailers and emerging NRS offerings to other participants, including sales of advertising capacity to digital-out-of-home advertisers and transaction data to data analytics and consumer package goods marketers;
BOSS Revolution money transfer revenue increased 42.2% compared to the year ago quarter to $6.9 million led by an 87.6% increase in sales through D2C channels. FY 2019 money transfer revenue increased 33.3% year-over-year to $23.1 million. D2C sales contributed over 60% of money transfer revenue in FY 2019;
IDT is optimizing its BOSS Revolution mobile offering including enhanced marketing, training of IDT’s direct to retailer sales force and improving the user experience.
net2phone Segment Takeaways:
net2phone-UCaaS revenue increased 77.5% compared to the year ago quarter to $7.0 million led by growth in South American markets and reflecting the acquisition of Canadian provider Versature in 1Q19. Revenue totaled $24.5 million in FY 2019 compared to $13.3 million in FY 2018;
net2phone-UCaaS served 100,000 seats at July 31st, compared to 89,000 at April 30th and 42,000 at July 31st of 2018.
IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION This release is available for download in the “Investors & Media” section of the IDT Corporation website (http://idt.net/ir) and has been filed on a current report (Form 8-K) with the SEC.
IDT will host an earnings conference call beginning at 5:30 PM Eastern today with management’s discussion of results, outlook and strategy followed by Q&A with investors.
To listen to the call and participate in the Q&A, dial toll-free 1-888-348-8417 (from US) or 1-412-902-4243 (international) and request the IDT Corporation call.
A replay of the conference call will be available approximately two hours after the call concludes through October 17, 2019. To access the replay, dial toll free 1-844-512-2921 (from US) or 1-412-317-6671 (international) and provide this replay number: 10134470. A replay will also be accessible via streaming audio at the IDT investor relations website (http://ir.idt.net/).
ABOUT IDT: IDT Corporation (NYSE: IDT) provides communications and payment services to individuals and businesses primarily through its flagship Boss Revolution® and net2phone® brands. IDT’s wholesale carrier services business is a leading global carrier of international long-distance calls. For more information on IDT, visit www.idt.net.
All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, IDT assumes no obligation to update any forward-looking statements.
CONSOLIDATED BALANCE SHEETS
July 31 (in thousands, except per share data)
2019
2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 80,168
$ 73,981
Restricted cash and cash equivalents
177,031
129,216
Debt securities
2,534
5,612
Equity investments
5,688
360
Trade accounts receivable, net of allowance for doubtful accounts of $5,444 and $5,358 at July 31, 2019 and 2018, respectively
58,060
70,746
Prepaid expenses
20,276
20,566
Other current assets
24,704
28,400
TOTAL CURRENT ASSETS
368,461
328,881
Property, plant and equipment, net
34,355
36,080
Goodwill
11,209
11,315
Other intangibles, net
4,196
496
Equity investments
9,319
6,633
Deferred income tax assets, net
4,589
5,668
Other assets
11,574
10,524
TOTAL ASSETS
$ 443,703
$ 399,597
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade accounts payable
$ 37,077
$ 45,900
Accrued expenses
127,834
130,225
Deferred revenue
42,479
55,015
Customer deposits
175,028
127,571
Other current liabilities
6,652
8,273
TOTAL CURRENT LIABILITIES
389,070
366,984
Other liabilities
1,076
1,310
TOTAL LIABILITIES
390,146
368,294
Commitments and contingencies
EQUITY:
IDT Corporation stockholders’ equity:
Preferred stock, $.01 par value; authorized shares-10,000; no shares issued
–
–
Class A common stock, $.01 par value; authorized shares-35,000; 3,272 shares issued and 1,574 shares outstanding at July 31, 2019 and 2018
33
33
Class B common stock, $.01 par value; authorized shares-200,000; 25,803 and 25,594 shares issued and 24,895 and 22,872 shares outstanding at July 31, 2019 and 2018, respectively
258
256
Additional paid-in capital
273,313
294,047
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 908 and 2,722 shares of Class B common stock at July 31, 2019 and 2018, respectively
(51,739)
(85,597)
Accumulated other comprehensive loss
(4,858)
(4,972)
Accumulated deficit
(160,763)
(173,103)
Total IDT Corporation stockholders’ equity
56,244
30,664
Noncontrolling interests
(2,687)
639
TOTAL EQUITY
53,557
31,303
TOTAL LIABILITIES AND EQUITY
$ 443,703
$ 399,597
CONSOLIDATED STATEMENTS OF INCOME
Year ended July 31 (in thousands, except per share data)
2019
2018
2017
REVENUES
$ 1,409,172
$ 1,547,495
$ 1,501,729
COSTS AND EXPENSES:
Direct cost of revenues (exclusive of depreciation and amortization)
1,174,015
1,306,037
1,275,708
Selling, general and administrative (i)
204,366
203,251
188,293
Depreciation and amortization
22,632
22,801
21,704
Severance
1,438
4,630
–
TOTAL COSTS AND EXPENSES
1,402,451
1,536,719
1,485,705
Other operating expense, net
(7,726)
(2,398)
(10,475)
(Loss) income from operations
(1,005)
8,378
5,549
Interest income, net
776
1,071
1,254
Other income (expense), net
682
(1,348)
817
Income before income taxes
453
8,101
7,620
(Provision for) benefit from income taxes
(123)
(2,902)
2,021
NET INCOME
330
5,199
9,641
Net income attributable to noncontrolling interests
(196)
(991)
(1,464)
NET INCOME ATTRIBUTABLE TO IDT CORPORATION
$ 134
$ 4,208
$ 8,177
Earnings per share attributable to IDT Corporation common stockholders:
Basic
$ 0.01
$ 0.17
$ 0.35
Diluted
$ 0.01
$ 0.17
$ 0.35
Weighted-average number of shares used in calculation of earnings per share:
Basic
25,293
24,655
23,182
Diluted
25,308
24,718
23,309
(i) Stock-based compensation included in selling, general and administrative expenses
$ 2,236
$ 3,581
$ 3,740
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended July 31 (in thousands)
2019
2018
2017
OPERATING ACTIVITIES
Net income
$ 330
$ 5,199
$ 9,641
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
22,632
22,801
21,704
Deferred income taxes
285
6,174
(2,329)
Provision for doubtful accounts receivable
2,028
2,199
686
Stock-based compensation
2,236
3,581
3,740
Other
(1,765)
7
(679)
Change in assets and liabilities:
Trade accounts receivable
7,594
(6,668)
(17,972)
Prepaid expenses, other current assets, and other assets
4,119
(18,889)
(4,856)
Trade accounts payable, accrued expenses, other current liabilities, and other liabilities
(7,546)
12,769
16,722
Customer deposits at IDT Financial Services Limited, our Gibraltar-based bank
59,077
14,660
18,980
Deferred revenue
(3,853)
(21,439)
(9,543)
Net cash provided by operating activities
85,137
20,394
36,094
INVESTING ACTIVITIES
Capital expenditures
(18,681)
(20,567)
(22,949)
Proceeds from sale of interest in Straight Path IP Group Holding, Inc
–
6,000
–
Purchase of IP interest from Straight Path Communications Inc
–
(6,000)
–
Payments for acquisitions, net of cash acquired
(5,526)
–
(1,827)
Cash used for purchase of investments
(1,000)
(53)
(9,438)
Proceeds from redemptions of investments
1,000
–
15
Purchases of marketable securities
(7,276)
(22,523)
(53,402)
Proceeds from maturities and sales of marketable securities
5,312
41,502
47,99
6
Net cash used in investing activities
(26,171)
(1,641)
(39,605)
FINANCING ACTIVITIES
Dividends paid
–
(13,941)
(17,874)
Distributions to noncontrolling interests
(1,520)
(1,040)
(1,482)
Repayment of other liabilities acquired
(654)
–
–
Proceeds from sales of Class B common stock to Howard S. Jonas
13,272
–
24,930
Proceeds from sale of interest and rights in Rafael Pharmaceuticals, Inc. to Howard S. Jonas
–
–
1,000
Proceeds from sale of member interests in CS Pharma Holdings, LLC
–
–
1,250
Cash of Rafael deconsolidated as a result of spin-off
–
(9,287)
–
Proceeds from exercise of stock options
–
–
836
Proceeds from borrowings under revolving credit facility
3,000
22,320
–
Repayments of borrowings under revolving credit facility
(3,000)
(22,320)
–
Repurchases of Class B common stock
(3,882)
(2,293)
(1,838)
Net cash provided by (used in) financing activities
7,216
(26,561)
6,822
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents
(12,180)
(957)
293
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents
54,002
(8,765)
3,604
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of year
203,197
211,962
208,358
Cash, cash equivalents, and restricted cash and cash equivalents at end of year
$ 257,199
$ 203,197
$ 211,962
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments made for interest
$ 186
$ 94
$ 288
span class="prnews_span">Cash payments made for income taxes
$ 46
$ 192
$ 576
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES
Howard S. Jonas’s advance payment used for sale of Class B common stock
$ 1,500
$ –
$ –
Net assets excluding cash and cash equivalents of Rafael deconsolidated as a result of spin-off
$ –
$ (105,632)
$ –
Reclassification of liability for member interests in CS Pharma Holdings, LLC
$ –
$ –
$ 8,750
Reconciliation of Non-GAAP Financial Measures for the Fourth Quarter and Full Fiscal Years 2019 and 2018
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), IDT also disclosed, for 4Q19, 3Q19, 4Q18 and the full fiscal years 2019 and 2018, Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share, which are non-GAAP measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.
IDT’s measure of Adjusted EBITDA consists of revenue less direct cost of revenues and selling, general and administrative expense. Another way of calculating Adjusted EBITDA is to start with income from operations, add depreciation and amortization, severance expense, and other operating expense, and deduct other gains, net.
IDT’s measure of non-GAAP net income starts with net income in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expense, net, and subtracts the income tax benefit from The Tax Cuts and Jobs Act.
IDT’s measure of non-GAAP earnings per share is calculated by dividing non-GAAP net income by the diluted weighted-average shares.
These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2019 and fiscal 2018 periods.
Management believes that IDT’s Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share measures provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of IDT’s or the relevant segment’s core operating results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share to evaluate operating performance in relation to IDT’s competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, IDT has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting at this time.
Management refers to Adjusted EBITDA, as well as the GAAP measures (loss) income from operations and net income, on a segment and/or consolidated level to facilitate internal and external comparisons to the segments’ and IDT’s historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.
While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. IDT’s Adjusted EBITDA, which is exclusive of depreciation and amortization, is a useful indicator of its current performance.
Severance expense is excluded from the calculation of Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share. Severance expense is reflective of decisions made by management in each period regarding the aspects of IDT’s and its segments’ businesses to be focused on in light of changing market realities and other factors. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of IDT’s core and continuing operations.
Other operating expense, net, which is a component of (loss) income from operations, is excluded from the calculation of Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share. In 4Q19, 3Q19 and fiscal 2019, other operating expense, net included an accrual for non-income related taxes related to one of our foreign entities. In fiscal 2019 and fiscal 2018, other operating expense, net also included legal fees net of insurance proceeds related to Straight Path Communications Inc.’s stockholders’ putative class action and derivative complaint. In addition, in 2Q19, other operating expense, net included a gain on the sale of a calling card business in Asia. From time-to-time, IDT may incur costs related to non-routine tax, legal and regulatory matters or disposal of certain assets. However, these matters and disposals do not occur each quarter. IDT does not believe the gains or losses from these non-routine matters or asset sales are components of IDT’s or the relevant segment’s core operating results.
The other calculation of Adjusted EBITDA consists of revenue less direct cost of revenues and selling, general and administrative expense. As the other excluded items are not reflected in this calculation, they are excluded automatically and there is no need to make additional adjustments. This calculation results in the same Adjusted EBITDA amount and its utility and significance is as explained above.
Stock-based compensation recognized by IDT and other companies may not be comparable because of the variety of types of awards as well as the various valuation methodologies and subjective assumptions that are permitted under GAAP. Stock-based compensation is excluded from IDT’s calculation of non-GAAP net income and non-GAAP earnings per share because management believes this allows investors to make more meaningful comparisons of the operating results per share of IDT’s core business with the results of other companies. However, stock-based compensation will co
ntinue to be a significant expense for IDT for the foreseeable future and an important part of employees’ compensation that impacts their performance.
In 2Q18, IDT recorded an income tax benefit of $3.3 million for its anticipated AMT credit refund due to The Tax Cuts and Jobs Act enacted in December 2017. This income tax benefit is excluded from IDT’s calculation of non-GAAP net income and non-GAAP earnings per share because it was not directly related to the results of IDT’s core operations.
Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share should be considered in addition to, not as a substitute for, or superior to, income (loss) from operations, cash flow from operating activities, net income, basic and diluted earnings per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, IDT’s measurements of Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share may not be comparable to similarly titled measures reported by other companies.
Following are reconciliations of Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share to the most directly comparable GAAP measure, which are, (a) for Adjusted EBITDA, (loss) income from operations for IDT’s reportable segments and net income for IDT on a consolidated basis, (b) for non-GAAP net income, net income, and (c) for non-GAAP earnings per share, basic and diluted earnings per share.
IDT Corporation
Reconciliation of Adjusted EBITDA to Net Income
(unaudited)
in millions
Figures may not foot or cross-foot due to rounding to millions.
Total IDT Corporation
Telecom & Payment Services
net2phone
All Other
Corporate
Three Months Ended July 31, 2019
(4Q19)
Adjusted EBITDA
$ 7.4
$ 9.4
$ –
$ –
$ (2.1)
Subtract (Add):
Depreciation and amortization
5.8
4.2
1.5
–
–
Severance expense
0.9
0.9
–
–
–
Other operating expense (gains), net
1.9
2.6
0.3
–
(1.0)
(Loss) income from operations
(1.2)
$ 1.7
$ (1.8)
$ –
$ (1.1)
Interest income, net
0.3
Other income, net
1.2
Income before income taxes
0.3
Benefit from income taxes
0.6
Net income
0.9
Net loss attributable to noncontrolling interests
0.7
Net income attributable to IDT Corporation
$ 1.6
Total IDT Corporation
Telecom & Payment Services
net2phone
All Other
Corporate
Three Months Ended April 30, 2019
(3Q19)
Adjusted EBITDA
$ 8.9
$ 11.3
$ 0.1
$ –
$ (2.4)
Subtract:
Depreciation and amortization
5.5
4.2
1.4
–
–
Severance expense
0.6
0.6
–
–
–
Other operating expense
2.4
2.3
–
–
0.1
Income (loss) from operations
0.4
$ 4.2
$ (1.3)
$ –
$ (2.5)
Interest income, net
0.2
Other income, net
0.4
Income before income taxes
1.0
Benefit from income taxes
1.5
Net income
2.5
Net income attributable to noncontrolling interests
(0.3)
Net income attributable to IDT Corporation
$ 2.2
IDT Corporation
Reconciliation of Adjusted EBITDA to Net Income
(unaudited)
in millions
Figures may not foot or cross-foot due to rounding to millions.
Total IDT Corporation
Telecom & Payment Services
net2phone
All Other
Corporate
Three Months Ended July 31, 2018
(4Q18)
Adjusted EBITDA
$ 16.8
$ 18.2
$ 1.2
$ –
$ (2.6)
Subtract:
Depreciation and amortization
5.6
br />
4.0
1.6
–
–
Severance expense
0.3
0.3
–
–
–
Other operating expense
0.4
–
0.1
–
0.3
Income (loss) from operations
10.5
$ 13.8
$ (0.4)
$ –
$ (2.9)
Interest income, net
0.2
Other expense, net
(0.2)
Income before income taxes
10.5
Provision for income taxes
(2.0)
Net income
8.5
Net income attributable to noncontrolling interests
(0.3)
Net income attributable to IDT Corporation
$ 8.2
IDT Corporation
Reconciliation of Adjusted EBITDA to Net Income
(unaudited)
in millions
Figures may not foot or cross-foot due to rounding to millions.
Total IDT Corporation
Telecom & Payment Services
net2phone
All Other
Corporate
Year Ended July 31, 2019 (FY 2019)
Adjusted EBITDA
$ 30.8
$ 39.6
$ 0.3
$ –
$ (9.2)
Subtract (Add):
Depreciation and amortization
22.6
16.1
6.5
–
–
Severance expense
1.4
1.4
–
–
–
Other operating expense (gains), net
7.7
7.8
0.3
–
(0.3)
(Loss) income from operations
(1.0)
$ 14.3
$ (6.5)
$ –
$ (8.9)
Interest income, net
0.8
Other income, net
0.7
Income before income taxes
0.5
Provision for income taxes
(0.1)
Net income
0.3
Net income attributable to noncontrolling interests
(0.2)
Net income attributable to IDT Corporation
$ 0.1
Total IDT Corporation
Telecom & Payment Services
net2phone
All Other
Corporate
Year Ended July 31, 2018 (FY 2018)
Adjusted EBITDA
$ 38.2
$ 46.7
$ 2.7
$ (1.4)
$ (9.8)
Subtract:
Depreciation and amortization
22.8
16.3
5.3
1.2
–
Severance expense
4.6
4.5
–
–
0.1
Other operating expense
2.4
–
0.1
–
2.3
Income (loss) from operations
8.4
$ 25.8
$ (2.7)
$ (2.6)
$ (12.2)
Interest income, net
1.1
Other expense, net
(1.3)
Income before income taxes
8.1
Provision for income taxes
(2.9)
Net income
5.2
Net income attributable to noncontrolling interests
(1.0)
Net income attributable to IDT Corporation
$ 4.2
IDT Corporation
Reconciliations of Net Income to Non-GAAP Net Income and Earnings per share t
o Non-GAAP Earnings per share
(unaudited)
in millions, except per share data
Figures may not foot due to rounding to millions.
4Q19
3Q19
4Q18
FY 2019
FY 2018
Net income
$ 0.9
$ 2.5
$ 8.5
$ 0.3
$ 5.2
Adjustments (add) subtract:
Stock-based compensation
(1.0)
(0.3)
(0.7)
(2.2)
(3.6)
Severance expense
(0.9)
(0.6)
(0.3)
(1.4)
(4.6)
Other operating expense, net
(1.9)
(2.4)
(0.4)
(7.7)
(2.4)
Income tax benefit
–
–
–
–
3.3
Total adjustments
(3.8)
(3.3)
(1.5)
(11.4)
(7.3)
Income tax effect of total adjustments
0.6
0.6
0.2
2.0
–
3.2
2.7
1.3
9.4
7.3
Non-GAAP net income
$ 4.1
$ 5.2
$ 9.8
$ 9.7
$ 12.5
Earnings per share:
Basic
$ 0.06
$ 0.08
$ 0.33
$ 0.01
$ 0.17
Total adjustments
0.09
0.12
0.07
0.37
0.34
Non-GAAP – basic
$ 0.15
$ 0.20
$ 0.40
$ 0.38
$ 0.51
Weighted-average number of shares used in calculation of basic earnings per share
26.3
26.3
24.7
25.3
24.7
Diluted
$ 0.06
$ 0.08
$ 0.33
$ 0.01
$ 0.17
Total adjustments
0.09
0.12
0.07
0.37
0.34
Non-GAAP – diluted
$ 0.15
$ 0.20
$ 0.40
$ 0.38
$ 0.51
Weighted-average number of shares used in calculation of diluted earnings per share
IDT Corporation Reschedules Report of Fourth Quarter and Full Fiscal Year 2019 Results
NEWARK, N.J., Oct. 3, 2019 – IDT Corporation (NYSE: IDT), a global provider of communications and payment services, has rescheduled the report of its financial and operational results for the fourth quarter and full fiscal year 2019 for Thursday, October 10, 2019 to provide the Company additional time to finalize its financial statements. The report was initially scheduled for today after market close.
IDT’s earnings release will be issued and posted on the IDT investor relations website (http://ir.idt.net/) at approximately 4:30 PM Eastern on October 10th.
IDT will host an earnings conference call beginning at 5:30 PM Eastern with management’s discussion of results, outlook and strategy followed by Q&A with investors.
To listen to the call and participate in the Q&A, dial toll-free 1-888-348-8417 (from US) or 1-412-902-4243 (international) and request the IDT Corporation call.
A replay of the conference call will be available approximately two hours after the call concludes through October 17, 2019. To access the replay, dial toll free 1-844-512-2921 (from US) or 1-412-317-6671 (international) and provide this replay number: 10134470. A replay will also be accessible via streaming audio at the IDT investor relations website (http://ir.idt.net/).
About IDT Corporation: IDT Corporation (NYSE: IDT) provides communications and payment services to individuals and businesses primarily through its flagship Boss Revolution® and net2phone® brands. IDT’s wholesale carrier services business is a leading global carrier of international long-distance calls. For more information on IDT, visit www.idt.net.
