NEWARK, N.J., Feb. 6, 2019 — IDT Corporation (NYSE: IDT), a global provider of communications and payment services, held an investor day on Tuesday, February 5, 2019 at the New York Stock Exchange.
IDT’s management discussed the ongoing transformation within IDT’s core businesses and investment initiatives. The presentation highlights the early success of IDT’s Net2Phone subsidiary’s unified communications as a service (UCaaS) business, as well as Net2Phone’s market opportunity, strategy and outlook. The IDT and Net2Phone management teams held a Q&A with investors following the presentation.
The IDT investor day presentation slides and webcast are now available here.
About IDT: 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.
Sandler Partners to Offer Net2Phone Communications Solutions
NEWARK, N.J., Jan. 22, 2019 – Net2Phone, a global provider of unified communications solutions to businesses, today announced that Sandler Partners, “America’s Fastest Growing Distributor of Connectivity and Cloud Services,” will represent Net2Phone’s unified communications as a service (UCaaS) and SIP Trunking offerings through its 7,000 technology sales partners across North America.
The new partnership will enable Sandler’s technology partners to provide Net2Phone’s communications solutions to enterprise clients who demand all the advantages of unified communications while retaining a localized look and feel for all their offices globally.
Jonah Fink, President of Net2Phone, said, “Sandler Partners’ extraordinary team of technology sales partners is highly regarded for its ability to identify the optimal solution for their clients. Net2Phone’s UCaaS and SIP Trunking services provide enterprise users with a truly localized communications service featuring local numbers in 70+ countries and more than 300 cities. And our global infrastructure means that local calls stay local with ultra-low latency. Net2Phone helps organizations to retain their local identities while accessing all the power and versatility of the cloud across their enterprise.”
“As the leading master agency in enabling complex communications and IT solutions for multilocation and multinational enterprises, Net2Phone’s SIP Trunking and UCaaS solutions are well suited for our clients with an international reach,” said Alan Sandler, Managing Partner at Sandler Partners. “Net2Phone provides great functionality, and access to local phone numbers so that our clients can leverage the power of unified communications not only domestically, but on a global scale.”
Net2phone’s UCaaS service is powered by a proprietary platform that seamlessly integrates voice, text, messaging and web chat services. Team members can manage all of their communications from any device – transferring conversations seamlessly from PCs, to office phones, to mobile devices via net2phone’s iOS and Android apps.
Net2Phone’s UCaaS and SIP Trunking offerings feature robust VoIP functionality and flat-rate plans that include unlimited in-country calling and unlimited international calls to the US and 23+ other popular destination countries as well as free, expert, local support.
About net2phone: net2phone provides unified communications solutions that are revolutionizing the way businesses communicate and collaborate – internally and externally – around the globe. 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.
About Sandler Partners: Sandler Partners is America’s Fastest Growing Distributor of Connectivity & Cloud Services. In 2018, Sandler Partners was named to the Inc. 5000 list of America’s Fastest Growing Private Companies for the ninth straight year. We deliver best-in-class cloud, colo, mobility and continuity solutions from 200+ suppliers through a network of more than 7,000 expert technology sales partners – agents, VARs and MSPs – to thousands of small, medium and enterprise organizations. With our extensive portfolio, 60+ power closers, solutions team and proprietary partner portal, we enable our partners to deliver a range of communications and IT services – from complex multiservice solutions for multilocation enterprises to simple but critical connections for single location startups and small businesses. For more information, visit www.sandlerpartners.com.
NEWARK, N.J., Jan. 7, 2019 —IDT Corporation (NYSE: IDT), a global provider of communications and payment services, has scheduled an investor day on Tuesday, February 5, 2019 in New York City.
IDT’s management team including Howard Jonas (Chairman), Shmuel Jonas (CEO), Bill Pereira (COO) and Marcelo Fischer (CFO) will discuss the ongoing transformation of IDT’s business with a particular focus on net2phone, IDT’s fast-growing provider of cloud-based communications services for businesses. Management’s presentation will be followed by Q&A with investors.
The IDT Investor Day will be held at the New York Stock Exchange from 8:30 to 11:00 AM. Interested investors and analysts can contact the company via email (invest@idt.net) for details and registration. To comply with NYSE security procedures, advance registration is required.
The IDT Investor Day presentation will be webcast live beginning at approximately 9:00 AMhere. A recording will be available for playback through the same URL during and following the event.
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.
NEWARK, N.J., Dec. 7, 2018 – IDT Corporation (NYSE: IDT) announced today that BOSS Revolution, its flagship brand for international prepaid calling, mobile top-up and money transfer services, will offer special promotions on international calling during the holiday season and free photos with Santa Claus at BOSS Revolution retailers around the country.
BOSS Revolution’s special holiday promotions make it more affordable than ever to bring family and loved ones living outside the United States closer:
Upon joining BOSS Revolution any weekend in December, new customers will receive $2 of free calling.
BOSS Revolution Club members will get an additional 10% bonus when recharging $5 or more (up to $100) on December 24th and 31st. Mobile app customers will also get an extra 10% on those two days.
To help families celebrate the holiday season, select BOSS Revolution retailers will host photo sessions with Santa on Saturday, December 15th or Sunday, December 16th. BOSS Revolution customers can meet Santa and have their free picture taken with him, and then share this moment on their social networks directly from the photo booth using the hashtag #BossSantaDay.
“We are very excited to be part of our customers’ Christmas celebrations and to offer families the opportunity to get their picture with Santa,” said Jessica Poverene, Vice President of Marketing for BOSS Revolution. “These sessions can be expensive especially when families are saving to buy presents for their children, family and friends. As part of our ongoing support to the community, we are offering these visits and pictures with Santa completely free, so that everyone can have a family picture during this holiday season.”
The free photo sessions with Santa will be offered at select BOSS Revolution retailers in the following states: New York, New Jersey, Virginia, Maryland, Florida, California, Georgia, Massachusetts, and Texas (Dallas and Houston). Please visit the http://www.promobr.com/ for participating store locations, dates and times.
BOSS Revolution services are available at more than 40,000 retailers, through the BOSS Revolution Calling and BOSS Revolution Money apps (available free on iTunes and Google Play) and through the BOSS Revolution website www.bossrevolution.com. Follow BOSS Revolution on Facebook and Twitter.
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.
NEWARK, N.J., Dec. 6, 2018 —net2phone, a rapidly growing global provider of unified cloud communications solutions, was named ‘VoIP Supplier of the Year’ by the Telecom Consulting Group (TCG) during their 2018 Channel Source event in Miami. TCG is one of the most experienced and largest master agencies in the United States with over 3400 agents nationwide.
“It is a special honor to be selected as the supplier of the year by TCG – both because the TCG organization is so highly regarded and because it was just two years ago that we began working with TCG,” said Jonah Fink, President of net2phone. “In that short time, the outstanding quality of our cloud communications solution and our focus on service to the channel have enabled us to build an extremely productive relationship with TCG and its nationwide agent organization.”
net2phone’s cloud communication solution provides an integrated communications suite featuring powerful collaboration tools such as voice, messaging, and chat, plus unlimited domestic and international calling to 23+ countries — all for a low, flat monthly rate. net2phone’s commitment to TCG includes rapid quote turn-around, industry leading SPIFFs and evergreen residuals.
“Simply put, net2phone has risen to the occasion and embedded themselves with our partners and channel managers nationwide,” said Kevin Zimmerman, Vice President of National Recruitment. “Using a ‘sell with’ model has proven to be effective as we are both 100% channelized businesses. The net2phone partner program provides amazing pricing and channel leading commissions! These characteristics make it easy for our partners to sell net2phone. We have placed our entire faith and trust into the net2phone team, and we’re proud that they are a part of the growing ‘TCG family’.”
About net2phone: net2phone provides unified communications solutions that are revolutionizing the way businesses communicate and collaborate – internally and externally – around the globe. 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.
About TCG: Telecom Consulting Group is a National Master Agency based out of Fort Lauderdale, FL and has been in business for 28 years. TCG offers hands on support and excellent residual commission paid for as long as the customer stays on service. TCG passes through 100% of the carrier bonuses to their agents, and TCG doesn’t have quotas. TCG has over 3400 nationwide agents and 15 channel managers across the country. TCG offers over 120 different carrier options for their agents to sell.
TCG has an outstanding back office to serve their agents. They specialize in COAX cable, Metro Ethernet, Hosted VoIP, PRI, Analog lines, dynamic T1’s, SIP, 3G/4G Wireless Internet, and numerous Cloud services. TCG gives their agents access to the best in breed Cable Companies, CLEC’s, LECs, and Hosted VoIP Carriers. At TCG we support all business from our partners whether a single POTS, small COAX account, all the way to large multi-location customers!
IDT Corporation Reports First Quarter Fiscal Year 2019 Results
NEWARK, N.J., Dec. 4, 2018 – IDT Corporation (NYSE: IDT) reported a loss per share of $0.06 and non-GAAP loss per share* of $0.02 on revenue of $362.3 million for the first quarter of FY 2019, the three months ended October 31, 2018.
1Q19 HIGHLIGHTS (1Q19 results are compared to 1Q18)
Consolidated Results
Revenue less direct cost of revenue increased to $57.6 million from $57.0 million.
Income from operations increased to $1.3 million from $0.1 million.
Adjusted EBITDA* increased to $7.1 million from $7.0 million.
As announced in conjunction with the prior quarter’s results, IDT repurchased 729,110 shares of its Class B common stock during 1Q19 for an aggregate purchase price of $3.9 million.
Growth Initiatives
Revenue of net2phone’s unified communications as a service (UCaaS) offering increased 100.4% to $4.8 million.
Revenue of IDT’s National Retail Solutions (NRS) business increased 68.5% to $1.2 million. NRS now has over 6,000 active terminals in its retailer network compared to approximately 3,000 active terminals a year ago.
Revenue of IDT’s international money transfer business increased 28.2% to $4.9 million. Sales through its direct-to-consumer channel increased 162.4% year over year.
REMARKS BY SHMUEL JONAS, CEO OF IDT CORPORATION
“IDT continued to make progress in the first quarter with increasing operating income and robust investment in our exciting growth initiatives, including net2phone’s UCaaS offerings, National Retail Solutions’ point-of-sale network, our international money transfer business and BOSS Revolution Mobile.
“net2phone’s UCaaS offering doubled its revenue compared to the year ago quarter, expanding through both the domestic channel and adding new markets in Canada, Mexico and Colombia.
“National Retail Solutions now has over 6,000 terminals active on its retailer point-of-sale network compared to roughly 3,000 a year ago, and is now adding about 1,000 new retailers each quarter. NRS revenue increased 69% year over year, and has only just begun to develop promising new network-based services and offerings including data analytics and out-of-home advertising.
“Our money transfer business’s direct-to-consumer channel revenue increased by over 160% driven by the expansion of our global disbursement network.
“These technology-driven initiatives are increasingly impactful and we have only just begun to tap their respective market opportunities. I am increasingly confident that, with investment and disciplined execution, they have the capacity to transform IDT in the coming years.
“On a consolidated basis, the headwinds in the global per-minute calling sector impacted revenues from our BOSS Revolution Calling and wholesale Carrier Services businesses. However, the impact on revenue less direct cost of revenue was entirely offset by improved margins from Carrier Services and increased contributions from our growth initiatives.
“As previously disclosed, we repurchased 729,110 shares of our Class B common stock during 1Q19 for an aggregate purchase price of $3.9 million. Going forward, we will continue our opportunistic approach to repurchases as we look to increase shareholder value.”
1Q19 CONSOLIDATED RESULTS
Results (in millions, except EPS)
1Q19
4Q18
1Q18
1Q19 – 1Q18 Change (%/$)
Revenue
$362.3
$392.6
$393.6
(7.9)%
Direct cost of revenue
$304.7
$325.1
$336.5
(9.5)%
Revenue less direct cost of revenue
$57.6
$67.5
$57.0
+1.0%
Direct cost of revenue as a percentage of revenue
84.1%
82.8%
85.5%
(140) BP
SG&A expense
$50.6
$50.7
$50.1
+1.0%
Depreciation and amortization
$5.6
$5.6
$5.7
(1.4)%
Severance expense
–
$0.3
$0.4
$(0.4)
Other operating expense
$(0.2)
$(0.4)
$(0.8)
+$0.6
Income from operations
$1.3
$10.5
$0.1
+$1.2
Adjusted EBITDA*
$7.1
$16.8
$7.0
+$0.1
Net (loss) income attributable to IDT
$(1.4)
$8.2
$(2.1)
+$0.6
Diluted (loss) earnings per share
$(0.06)
$0.33
$(0.08)
+0.02
Non-GAAP net (loss) income*
$(0.5)
$9.8
$0.2
$(0.7)
Non-GAAP (loss) earnings per share*
$(0.02)
$0.40
$0.01
$(0.03)
*Throughout this release, Non-GAAP (loss) earnings per share, Adjusted EBITDA, and Non-GAAP net (loss) income for all periods presented are Non-GAAP measures intended to provide useful information that supplements IDT’s or the relevant segment’s core 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. In 1Q19 and 1Q18, corporate G&A expense was $2.3 million.
At October 31, 2018, IDT held $61.6 million in unrestricted cash, cash equivalents and debt securities. Current assets totaled $323.6 million and current liabilities totaled $361.8 million. Reflecting IDT’s intention to sell its Gibraltar-based bank, all of the bank’s assets and liabilities at October 31, 2018 and July 31, 2018 are classified as “held for sale” in the consolidated balance sheets.
On August 1, 2018, IDT adopted a change in GAAP related to revenue recognition from customers. As part of the adoption, IDT reduced its deferred revenue and accumulated deficit by $8.6 million as of August 1, 2018.
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. Net cash provided by operating activities during 1Q19 was $8.2 million compared to net cash used in operating activities of $45.3 million in the year ago quarter. In the corresponding periods, capital expenditures were $4.5 million and $5.3 million, respectively.
1Q19 RESULTS BY SEGMENT (Results are for1Q19 and are compared to 1Q18 unless otherwise noted).
IDT has modified the way it reports its business verticals within its two reporting segments to align more closely with the Company’s business strategy and operational structure, as follows:
Telecom & Payment Services (TPS) IDT’s TPS segment accounted for 97.1% and 97.8% of IDT’s consolidated revenue in 1Q19 and 1Q18, respectively. The segment comprises 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, as well as messaging and data credits to friends and family overseas and domestically. TPS Core also includes several smaller communications and payments offerings – many in harvest mode.
Growth is composed of National Retail Solutions’ retailer point-of-sale (POS) terminal-based services and the BOSS Revolution international money transfer service. Sales of international money transfer are generated by direct-to-consumer transfers initiated on the BOSS Revolution Money app or through the BOSS Revolution website as well as transfers initiated through an authorized agent or retailer.
net2phone (formerly net2phone-UCaaS) IDT’s net2phone segment ac
counted for 2.9% and 2.0% of IDT’s consolidated revenue in 1Q19 and 1Q18, respectively. The segment comprises two verticals:
net2phone-UCaaS is a rapidly growing, global unified cloud communications offering for business.
net2phone-Platform Services includes other offerings leveraging a common technology platform to provide cable telephony and other voice services.
Revenue in 1Q19 and comparative periods for all verticals are provided in the following chart:
Revenue by Segment and Vertical (in millions)
1Q19
4Q18
1Q18
1Q19-1Q18 % change
TPS
Core
$345.7
$376.9
$380.5
(9.2)%
BOSS Revolution Calling
$123.5
$136.3
$132.2
(6.6)%
Carrier Services
$142.2
$156.9
$168.8
(15.8)%
Mobile Top-Up
$65.3
$67.4
$61.5
+6.3%
Other
$14.6
$16.4
$18.0
(19.0)%
Growth
$6.2
$6.0
$4.6
+35.5%
Total TPS
$351.8
$383.0
$385.1
(8.6)%
net2phone
net2phone-UCaaS
$4.8
$3.9
$2.4
+100.4%
net2phone-Platform Services
$5.7
$5.7
$5.4
+5.0%
Total net2phone
$10.5
$9.7
$7.8
+34.4%
Segment level financial results are provided in the following chart:
Results by Segment
(in millions)
TPS
net2phone
1Q19
1Q18
1Q19
1Q18
Revenue
$351.8
$385.1
$10.5
$7.8
Direct cost of revenue
$301.7
$334.0
$3.0
$2.5
Revenue less direct cost of revenue
$50.2
$51.1
$7.4
$5.3
SG&A expense
$40.9
$42.3
$7.4
$4.7
Depreciation and amortization
$4.0
$4.0
$1.5
$1.3
Severance expense
–
$0.4
–
–
Income (loss) from operations
$5.3
$4.4
$(1.5)
$(0.7)
Adjusted EBITDA
$9.3
$8.8
–
$0.6
TPS Segment Takeaways: TPS Core:
Consistent with management’s expectations and disclosures in previous quarters, the BOSS Revolution Calling service was again impacted by persistent, market-wide trends including the proliferation of unlimited calling plans offered by wireless carriers and MVNOs and the increasing penetration of free and paid over-the-top voice and messaging services. Minutes-of-use for the BOSS Revolution Calling service declined 12% compared to the year ago quarter, while revenue decreased 6.6% to $123.5 million.
Carrier Services’ minutes-of-use also decreased 12% year over year and revenue declined 15.8% to $142.2 million. In this vertical, over the long-term, minutes-of-use and revenue will continue to be impacted as communications globally transition away from traditional international long-distance voice operators. However, Carrier Services’ minutes and revenue will likely continue to fluctuate significantly from quarter-to-quarter, as the Company seeks to maximize gross profit economics rather than sustain minutes-of-use or revenue.
In 1Q19, the impact of the decrease in TPS Core revenue on margins was substantially mitigated by increased margin contributions generated by the continued migration of BOSS Revolution Calling customers to the direct-to-consumer channel and, in the Carrier Services business, by a shift to higher margin traffic resulting from the implementation of an outsourcing agreement in a key calling corridor.
TPS Growth:
Revenue generated by IDT’s BOSS Revolution money transfer service through direct-to-consumer channels increased 162% year over year driven by expansion of our global disbursement network. Direct-to-consumer sales now contribute the vast majority of our money transfer revenue.
National Retail Solutions (NRS) revenue increased 69% compared to the year ago quarter. NRS’ point-of-sale (POS) terminal network has achieved sufficient scale to enable new revenue sources that supplement the monthly recurring fees generated by the use of its terminals. These emerging services include out-of-home advertising through the terminals’ consumer facing screen, retail analytics, and credit card processing.
TPS Financial Results:
TPS income from operations increased 19.1% to $5.3 million. The impact of the $33.2 million reduction in revenue was mostly offset by improved Carrier Services margins and, to a lesser extent, BOSS Revolution Calling margins and by the continued growth of Mobile Top-Up revenue. SG&A expense decreased 3.3% to $40.9 million reflecting reduced compensation expense partially offset by increased marketing expense. TPS’ Adjusted EBITDA in 1Q19 and 1Q18 was $9.3 million and $8.8 million, respectively.
net2phone Segment Takeaways:
net2phone-UCaaS’s revenue increased 100% compared to the year ago quarter driven by the expansion of its US channel partner network and growth in South American markets. During 1Q19, net2phone launched its service in Mexico and entered the Canadian market through the Versature acquisition. Versature contributed approximately $0.7 million in revenue during 1Q19 after its acquisition in September 2018.
During 1Q19, net2phone initiated beta deployment of a new proprietary platform developed in part on technology and capabilities attained through the acquisition of LiveNinja in early 2017. The platform integrates voice, text, messaging and web chat services across devices. net2phone expects that the unified communications functionality afforded by the new platform will become a key driver of customer acquisitions and increased average revenue per user, or ARPU, following full platform deployment in Q1 of calendar 2019.
IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION This release is available for download in the “For Investors” 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 ET 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 U.S.) or 1-412-902-4243 (international) and request the IDT Corporation call.
A recording of the conference call can be accessed beginning one hour after the call concludes through December 11, 2018 by dialing 1-844-512-2921 (toll free from the US) or 1-412-317-6671 (international) and providing this pin code: 10126607. The rec
ording will also be available via streaming audio at the IDT investor relations website (www.idt.net/ir) following the call.
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.
IDT CORPORATION
CONSOLIDATED BALANCE SHEETS
October 31, 2018
July 31, 2018
(Unaudited)
(in thousands)
Assets
Current assets:
Cash and cash equivalents
$ 59,313
$ 68,089
Debt securities
2,237
5,612
Trade accounts receivable, net of allowance for doubtful accounts of $3,103 at October 31, 2018 and $3,166 at July 31, 2018
66,094
69,481
Prepaid expenses
23,132
19,550
Other current assets
34,333
28,877
Assets held for sale
138,466
137,272
Total current assets
323,575
328,881
Property, plant and equipment, net
36,808
36,068
Goodwill
11,246
11,315
Other intangibles, net
4,238
306
Equity investments
7,827
6,633
Deferred income tax assets, net
4,598
5,668
Other assets
5,634
5,020
Assets held for sale
5,920
5,706
Total assets
$ 399,846
$ 399,597
Liabilities and equity
Current liabilities:
Trade accounts payable
$ 56,441
$ 45,124
Accrued expenses
120,843
129,818
Deferred revenue
45,116
55,003
Other current liabilities
8,817
8,269
Liabilities held for sale
130,550
128,770
Total current liabilities
361,767
366,984
Other liabilities
906
768
Liabilities held for sale
497
542
Total liabilities
363,170
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 October 31, 2018 and July 31, 2018
33
33
Class B common stock, $.01 par value; authorized shares-200,000; 25,594 and 25,594 shares issued and 22,143 and 22,872 shares outstanding at October 31, 2018 and July 31, 2018, respectively
256
256
Additional paid-in capital
294,460
294,047
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 3,451 and 2,722 shares of Class B common stock at October 31, 2018 and July 31, 2018, respectively
(89,451)
(85,597 )
Accumulated other comprehensive loss
(4,417)
(4,972)
Accumulated deficit
(164,806 )
(173
,103 )
Total IDT Corporation stockholders’ equity
36,075
30,664
Noncontrolling interests
601
639
Total equity
36,676
31,303
Total liabilities and equity
$ 399,846
$ 399,597
IDT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended October 31,
2018
2017
(in thousands, except per share data)
Revenues
$ 362,316
$ 393,555
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)
304,693
336,510
Selling, general and administrative (i)
50,552
50,071
Depreciation and amortization
5,594
5,673
Severance
–
439
Total costs and expenses
360,839
392,693
Other operating expense
(195)
(779)
Income from operations
1,282
83
Interest income, net
108
362
Other expense, net
(1,349)
(826)
Income (loss) before income taxes
41
(381)
Provision for income taxes
(1,189)
(1,416)
Net loss
(1,148)
(1,797)
Net income attributable to noncontrolling interests
(301)
(295)
Net loss attributable to IDT Corporation
$ (1,449)
$ (2,092)
Basic and diluted loss per share attributable to IDT Corporation common stockholders
$ (0.06)
$ (0.08)
Weighted-average number of shares used in calculation of basic and diluted loss per share
23,831
24,628
(i) Stock-based compensation included in selling, general and administrative expenses
$ 413
$ 810
IDT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended October 31,
2018
2017
(in thousands)
Operating activities
Net loss
$ (1,148)
$ (1,797)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
5,594
5,673
Deferred income taxes
1,117
1,317
Provision for doubtful accounts receivable
447
566
Recognized loss (gain) on securities
46
(7)
Interest in the equity of investments
–
104
Stock-based compensation
413
810
Change in assets and liabilities:
Trade accounts receivable
97
(13,952)
Prepaid expenses, other current assets and other assets
(8,766)
(12,832)
Trade accounts payable, accrued expenses, other current liabilities and other liabilities
6,069
(9,359)
Customer deposits
5,567
(14,226)
Deferred revenue
(1,206)
(1,556)
Net cash provided by (used in) operating activities
8,230
(45,259)
Investing activities
Capital expenditures
(4,463)
(5,324)
Payment for acquisition, net of cash acquired
(5,453)
–
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)
Purchases of marketable securities
–
(15,671)
Proceeds from maturities and sales of marketable securities
3,372
19,560
Net cash used in investing activities
(6,544)
(1,435)
Financing activities
Dividends paid
–
(4,720)
Distributions to noncontrolling interests
(339 )
(380)
Repayment of other liabilities acquired
(599 )
–
Repurchases of Class B common stock
(3,854 )
(23)
Net cash used in financing activities
(4,792 )
(5,123)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents
(4,590)
575
Net decrease in cash, cash equivalents, and restricted cash and cash equivalents
(7,696)
(51,242)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period
203,197
211,963
Cash, cash equivalents, and restricted cash and cash equivalents at end of period
$ 195,501
$ 160,721
Reconciliation of Non-GAAP Financial Measures for the First Quarter Fiscal 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 1Q19, 4Q18, and 1Q18, Adjusted EBITDA, non-GAAP net (loss) income and non-GAAP (loss) 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 revenu
es 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, and add depreciation and amortization, severance expense, and other operating expense.
IDT’s measure of non-GAAP net (loss) income starts with net (loss) income in accordance with GAAP and adds severance expense, stock-based compensation, and other operating expense.
IDT’s measure of non-GAAP (loss) earnings per share is calculated by dividing non-GAAP net (loss) 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 (loss) income and non-GAAP (loss) 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 (loss) income and non-GAAP (loss) 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 income (loss) from operations and net (loss) 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 (loss) income and non-GAAP (loss) 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, which is a component of income (loss) from operations, is excluded from the calculation of Adjusted EBITDA, non-GAAP net (loss) income and non-GAAP (loss) earnings per share. In fiscal 2019 and 2018, other operating expense included legal fees related to Straight Path Communications Inc.’s stockholders’ putative class action and derivative complaint. From time-to-time, IDT may incur costs related to non-routine legal and regulatory matters. However, such legal and regulatory matters do not occur each quarter. IDT does not believe the gains or losses from non-routine legal and regulatory matters are components of IDT’s or the relevant segment’s core operating results.
The other calculation of Adjusted EBITDA consists of revenues 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 (loss) income and non-GAAP (loss) 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 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 (loss) income and non-GAAP (loss) 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 (loss), 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 (loss) income and non-GAAP (loss) earnings per share may not be comparable to similarly titled measures reported by other companies.
Following are reconciliations of Adjusted EBITDA, non-GAAP net (loss) income and non-GAAP (loss) earnings 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 (loss) income, net (loss) income, and (c) for non-GAAP (loss) earnings per share, basic and diluted earnings 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
All Other
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
0.2
–
–
–
0.2
Income (loss) from operations
1.3
$ 5.3
$ (1.5)
$ –
$ (2.5)
Interest income, net
0.1
Other expense, net
(1.3)
Income before income taxes
0.1
Provision for income taxes
(1.2)
Net loss
(1.1)
Net income attributable to noncontrolling interests
(0.3)
Net loss attributable to IDT Corporation
$ (1.4)
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
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
$ 13.9
$ (0.5)
$ –
$ (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 Loss
(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 October 31, 2017
(1Q18)
Adjusted EBITDA
$ 7.0
$ 8.8
$ 0.6
$ (0.1)
$ (2.3)
Subtract:
Depreciation and amortization
5.7
4.0
1.3
0.4
–
Severance expense
0.4
0.4
–
–
–
Other operating expense
0.8
–
–
–
0.8
Income (loss) from operations
0.1
$ 4.4
$ (0.7)
$ (0.5)
$ (3.2)
Interest income, net
0.4
Other expense, net
(0.8)
Loss before income taxes
(0.4)
Provision for income taxes
(1.4)
Net loss
(1.8)
Net income attributable to noncontrolling interests
(0.3)
Net loss attributable to IDT Corporation
$ (2.1)
IDT Corporation
Reconciliations of Net (Loss) Income to Non-GAAP Net (Loss) Income and (Loss) Earnings per shareto Non-GAAP (Loss) Earnings per share
(unaudited)
in millions, except per share data
Figures may not foot due to rounding to millions.
1Q19
4Q18
1Q18
Net (loss) income
$ (1.1)
$ 8.5
$ (1.8)
Adjustments (add) subtract:
Stock-based compensation
(0.4)
(0.7)
(0.8)
Severance expense
–
(0.3)
(0.4)
Other operating expense
(0.2)
(0.4)
(0.8)
Total adjustments
(0.6)
(1.5)
(2.0)
Income tax effect of total adjustments
–
0.2
–
0.6
1.3
2.0
Non-GAAP net (loss) income
$ (0.5)
$ 9.8
$ 0.2
(Loss) earnings per share:
Basic
$ (0.06)
$ 0.33
$ (0.08)
Total adjustments
0.04
0.07
0.09
Non-GAAP – basic
$ (0.02)
$ 0.40
$ 0.01
Weighted-average number of shares used in calculation of basic (loss) earnings per share
23.8
24.7
24.6
Diluted
$ (0.06)
$ 0.33
$ (0.08)
Total adjustments
0.04
0.07
0.09
Non-GAAP – diluted
$ (0.02)
$ 0.40
$ 0.01
Weighted-average number of shares used in calculation of diluted (loss) earnings per share
IDT Corporation to Report First Quarter Fiscal Year 2019 Results
NEWARK, N.J., Nov. 27, 2018 — IDT Corporation (NYSE: IDT), a global provider of communications and payment services, is scheduled to report financial and operational results for the first quarter fiscal year 2019 (the three months ended October 31, 2018) on Tuesday, December 4, 2018.
IDT’s earnings release will be issued and posted on the IDT investor relations website (www.idt.net/ir) 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 U.S.) or 1-412-902-4243 (international) and request the IDT Corporation call.
A recording of the conference call can be accessed approximately two hours after the call concludes through December 11, 2018, by dialing 1-844-512-2921 (toll-free from the US) or 1-412-317-6671 (international) and providing this call number: 10126607. A recording will also be available via streaming audio at the IDT investor relations website (www.idt.net/ir).
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.
Grandstream and net2phone Team-Up to Revolutionize Mexican Business Communications with Powerful Cloud-Based Solutions
MEXICO CITY and BOSTON, Oct. 24, 2018 – Grandstream, connecting the world with award-winning SIP Unified Communication solutions since 2002, and net2phone, a global provider of cloud communications services, today announced a new partnership to provide Mexican businesses with powerful, cloud-based communications solutions at a fraction of the cost of legacy telecom systems. The solutions feature net2phone’s Hosted PBX Unlimited and SIP Trunking services paired with Grandstream’s award-winning IP-phones and IP-PBXs.
“Every size and type of business in Mexico can now reduce its monthly phone bill by acquiring the cloud-based communications solutions powered by net2phone and Grandstream. Our solutions enable any business to enhance collaboration, productivity and customer service,” said Jonah Fink, President of net2phone.
“We are pleased to partner with net2Phone to bring powerful communication solutions to businesses throughout Mexico,” said David Li, CEO of Grandstream. “The integrated Grandstream and net2Phone solution leverages the power of the cloud to improve business communications at a fraction of the cost of legacy systems.”
net2phone’s Hosted PBX Unlimited and SIP Trunking services offer:
Unlimited domestic calling to landlines and mobile phones throughout Mexico and the United States
Unlimited calling to landlines in Austria, Chile, Denmark, France, Germany, Greece, Guadalupe, Hungary, Ireland, Israel, Italy, Netherlands, Norway, Peru, Portugal, Puerto Rico, Romania, Spain, Sweden, and the United Kingdom
International Virtual Numbers for over 50 countries
Feature-rich VoIP telecommunications functionality and versatility including voicemail-to-email, customized auto-attendants, and find me – follow me call management
These advantages are included in one low, flat monthly rate per seat or user. For more information on net2phone’s Hosted PBX Unlimited Service in Mexico, visit www.net2phoneunlimited.mx.
Grandstream offers an ideal IP phone for every type of user, including basic IP phones from the GXP1600 series, mid-range IP phones from the GXP1700 series, high-end IP phones from GXP2100 series, Cordless DECT Phones from DP series and video IP phones from the GXV series. Grandstream’s IP PBX, the UCM series, has become one of the most popular on-premise IP-PBXs in the world for small-to-medium businesses thanks to its ability to support voice, video, data and mobility communications without requiring any licensing or on-going fees.
About net2phone: net2phone is a global provider of advanced cloud communications solutions. To learn more, please visit www.net2phoneunlimited.mx. For more information on becoming a channel partner, please email partner@net2phone.com. net2phone is a subsidiary of IDT Corporation (NYSE: IDT).
About Grandstream Networks: Grandstream Networks, Inc. has been connecting the world since 2002 with SIP Unified Communications products and solutions that allow businesses to be more productive than ever before. Our award-winning solutions serve the small and medium business and enterprises markets and have been recognized throughout the world for their quality, reliability and innovation. Grandstream solutions lower communication costs, increase security protection and enhance productivity. Their open standard SIP-based products offer broad interoperability throughout the industry, along with unrivaled features and flexibility. Visit www.grandstream.com for more information or connect with us on Facebook, LinkedIn and Twitter.
IDT Corporation Reports Fourth Quarter and Full Fiscal Year 2018 Results
NEWARK, N.J., Oct. 9, 2018 — IDT Corporation (NYSE: IDT) reported EPS of $0.33 per share and non-GAAP EPS* of $0.40 on revenue of $392.6 million for the fourth quarter of FY 2018, the three months ended July 31, 2018.
For FY 2018, IDT reported EPS of $0.17 and non-GAAP EPS of $0.51 on revenue of $1.5 billion.
Fourth quarter and fiscal year 2018 consolidated and Telecom & Payment Services (TPS) segment revenue increased $9.5 million as a result of changes to estimates for recognizing certain breakage revenue, and TPS’ direct cost increased by $4.5 million as a result of a change in accrued regulatory fee expense. TPS’ revenue less direct cost increased by the net of the changes, $5.0 million.
HIGHLIGHTS (4Q18 results are compared to 4Q17. FY 2018 results refer to full fiscal year 2018 results and are compared to FY 2017)
4Q18 revenue of $392.6 million compared to $395.0 million. FY 2018 revenue increased to $1,547.5 million compared to $1,501.7 million;
4Q18 income from operations increased to $10.5 million compared to $3.7 million. FY 2018 income from operations increased to $8.4 million compared to $5.5 million;
4Q18 Adjusted EBITDA* increased to $16.8 million compared to $8.6 million. FY 2018 Adjusted EBITDA increased to $38.2 million compared to $37.7 million;
4Q18 EPS of $0.33 compared to a loss per share of $0.41. FY 2018 EPS of $0.17 compared to $0.35;
4Q18 non-GAAP EPS* increased to $0.40 compared to $0.07. FY 2018 non-GAAP EPS of $0.51 was unchanged compared to FY 2017;
Following the quarter close, IDT’s net2phone subsidiary acquired Versature, a provider of unified communications services to Canadian businesses;
Beginning in July and continuing through October 5th, 2018, IDT repurchased approximately 1.1 million shares of its Class B Common stock for $5.8 million pursuant to an outstanding repurchase authorization of 8.0 million shares;
IDT has discontinued its quarterly dividend, electing instead to return value to stockholders through share repurchases while investing in its growth business initiatives.
REMARKS BY SHMUEL JONAS, CEO OF IDT CORPORATION
“The fourth quarter overall was consistent with recent trends, but our top and bottom lines were positively impacted by the growth in our early stage businesses. The resilience in many of our core offerings also collectively increased profitability despite facing industry-wide headwinds for paid voice minutes.
“Following the quarter close, net2phone took a big leap forward with the launch of a new technology platform – net2phone 2.0. The new platform is built on an internally developed, proprietary stack instead of a third-party platform. It incorporates many of the groundbreaking technologies that we pioneered at IDT and net2phone over the past 25 years as well as those we attained with the Live Ninja acquisition. We expect to integrate additional disruptive technologies including those obtained through the HD Messaging and Versature acquisitions in the near term.
“The need for additional capital to invest in our growth initiatives as they scale and the current low valuation of the company prompted IDT’s Board of Directors to discontinue our quarterly dividend and execute a stock buyback program. The Board determined, and I agree, that we can more effectively enhance long-term shareholder value by using the cash generated by our core offerings to increase investment in our early stage initiatives while retaining the flexibility to return value to shareholders through stock repurchases when warranted by market conditions, available resources, and our business outlook and results.
“Over the past three months, we have bought back 1.1 million shares of our Class B Common stock in the open market for $5.8 million.”
4Q18 AND FY 2018 CONSOLIDATED RESULTS
Results
(in millions, except EPS)
4Q18**
3Q18**
4Q17
4Q18 – 4Q17
Change (%/$)
FY 2018
FY 2017
FY 2018 -FY 2017 Change (%/$)
Revenue
$392.6
$365.4
$395.0
(0.6)%
$1,547.5
$1,501.7
+3.0%
Direct cost of revenue
$325.1
$307.2
$337.1
(3.5)%
$1,306.0
$1,275.7
+2.4%
Direct cost of revenue as a percentage of revenue
82.8%
84.1%
85.3%
(250) BP
84.4%
84.9%
(50) BP
SG&A expense
$50.7
$50.1
$49.3
+2.7%
$203.3
$188.3
+7.9%
Depreciation and amortization
$5.6
$5.8
$5.6
(0.6)%
$22.8
$21.7
+5.1%
Severance expense
$0.3
$3.7
–
+$0.3
$4.6
–
+$4.6
Other (losses) gains
$(0.4)
$(0.3)
$0.8
$(1.2)
$(2.4)
$(10.5)
+$8.1
Income (loss) from operations
$10.5
$(1.7)
$3.7
+$6.7
$8.4
$5.5
+$2.8
Adjusted EBITDA*
$16.8
$8.1
$8.6
+$8.2
$38.2
$37.7
+$0.5
Net income (loss) attributable to IDT
$8.2
$(3.5)
$(9.8)
$18.1
$4.2
$8.2
$(4.0)
Diluted earnings (loss) per share
$0.33
$(0.14)
$(0.41)
$0.74
$0.17
$0.35
$(0.18)
Non-GAAP net income*
$9.8
$1.8
$1.8
$8.0
$12.5
$11.9
$0.6
Non-GAAP EPS*
$0.40
$0.07
$0.07
$0.33
$0.51
$0.51
N.C.
*Throughout this release, Non-GAAP EPS, 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 core 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.
** Note that 4Q18 had 92 days compared to 89 days in 3Q18
Notes on Consolidated Results and Balance Sheet
Consolidated results for all periods presented include corporate overhead. In 4Q18, corporate G&A expense increased 22.6% to $2.6 million from $2.1 million in the year ago quarter. For FY 2018, corporate G&A expense increased 25.2% to $9.8 million from $7.8 million in FY 2017.
At July 31, 2018, IDT held $74.1 million in unrestricted cash, cash equivalents and marketable securities. Current assets totaled $328.9 million and current liabilities totaled $367.0 million. Reflecting IDT’s agreement to sell its Gibraltar-based bank, all of the bank’s assets and liabilities at July 31, 2018 and 2017 are classified as “Held for sale” in the consolidated balance sheets.
Net cash provided by operating activities during 4Q18 was $22.3 million compared to $18.5 million in 4Q17. In the corresponding periods, capital expenditures were $4.6 million and $5.9 million, respectively. FY 2018 net cash provided by operating activities was $6.9 million compared to $19.0 million in FY 2017. In the corresponding periods, capital expenditures were $20.6 million and $22.9 million, respectively.
4Q18 AND FY 2018 RESULTS BY SEGMENT
(Results are for 4Q18 unless otherwise noted).
Results by Segment
(in millions)
TPS
net2phone – UCaaS
4Q18
4Q17
FY 2018
FY 2017
4Q18
4Q17
FY 2018
FY 2017
Revenue
$383.0
$386.5
$1,511.5
$1,470.0
$9.7
$7.8
$34.9
$29.4
Direct cost of revenue
$322.1
$334.3
$1,294.7
$1,263.8
$3.1
$2.8
$11.3
$12.0
SG&A expense
$42.7
$42.5
$170.1
$164.5
$5.4
$4.5
$20.9
$15.5
Depreciation and amortization
$4.0
$4.0
$16.3
$16.1
$1.6
$1.2
$5.3
$3.9
Severance expense
$0.3
–
$4.5
–
–
–
–
–
Income (loss) from operations
$13.8
$5.8
$25.8
$25.5
$(0.4)
$(0.8)
$(2.7)
$(1.9)
Adjusted EBITDA
$18.2
$9.7
$46.7
$41.7
$1.2
$0.4
$2.7
$2.0
Telecom & Payment Services (TPS) The TPS segment contributed 97.5% of IDT’s revenue in 4Q18 and 97.7% of IDT’s revenue in FY 2018. TPS markets and distributes multiple communications and payment services across three verticals, each of which is comprised of multiple offerings: Retail Communications, Wholesale Carrier Services and Payment Services.
TPS’ 4Q18 revenue decreased 0.9% to $383.0 million from $386.5 million, while TPS’ revenue less direct costs increased 16.6% to $60.9 million. For FY 2018, TPS’ revenue increased by 2.8% to $1,511.5 million, while revenue less direct costs increased 5.1% to $216.7 million. 4Q18 and FY 2018 revenue increased $9.5 million as a result of changes to estimates for recognizing certain breakage revenue, and direct cost increased by $4.5 million as a result of a change in accrued regulatory fee expense.
TPS Revenue by Business Vertical
($ in millions)
4Q18
3Q18
4Q17
4Q18 – 4Q17
% Change
4Q18-4Q17 % Change in Minutes of Use
4Q18 Revenue as % of all TPS
FY 2018
FY 2017
FY 2018 – FY 2017 % Change
Retail Communications
$148.9
$142.0
$152.6
(2.4)%
(16.1)%
38.9%
$582.3
$615.6
(5.4)%
Wholesale Carrier Services
$158.4
$144.2
$167.9
(5.7)%
(7.2)%
41.3%
$645.5
$609.1
+6.0%
Payment Services
$75.7
$70.2
$66.0
+14.7%
na
19.8%
$283.7
$245.3
+15.7%
Total TPS
$383.0
$356.4
$386.5
(0.9)%
(9.3)%
100.0%
$1,511.5
$1,470.0
+2.8%
Retail Communications: IDT’s flagship BOSS Revolution® calling service – which accounted for over 90% of Retail Communications’ revenue in 4Q18 and full fiscal year 2018- continued to be negatively impacted by persistent, market-wide trends including the proliferation of unlimited calling plans offered by wireless carriers and MVNOs, increasing penetration of free and paid over-the-top voice and messaging services and decreased immigration into the U.S. Revenue from other Retail Communications offerings, including the sale of traditional ‘hard’ prepaid calling cards in the U.S. and overseas, continued to decline in line with expectations.
Wholesale Carrier Services: Wholesale Carrier Services’ revenue decreased compared to the year ago quarter largely as a result of diminished volumes on certain heavily trafficked, low margin-per-minute routes. For the full fiscal year, Wholesale Carrier Services revenue increased as the business gained market share. Wholesale Carrier Services’ operations are managed to maximize the TPS segment’s gross profit. Revenues in this vertical have historically been more volatile than in Retail Communications, and changes in revenue do not necessarily generate corresponding changes in profitability.
Payment Services: Payment Services’ revenue increased year-over-year primarily reflecting growth in mobile top-up sales, which comprised nearly 90% of Payment Services’ revenue in 4Q18 and full fiscal year 2018. Sales generated by the BOSS Revolution money transfer service – primarily from its direct-to-consumer offering (app and web) – and from NRS’ point of sale (POS) terminal-based services also increased.
TPS’ direct cost of revenue in 4Q18, expressed as a percentage of TPS’ revenue, decreased to 84.1% from 86.5% in 4Q17, and to 85.7% in FY 2018 from 86.0% in FY 2017.
TPS’ SG&A expense in 4Q18 – $42.7 million – increased 0.5% from the year ago quarter. TPS’ full fiscal year SG&A expense increased 3.4% to $170.1 million primarily due to higher employee compensation costs and credit card charges, partially offset by a decrease in marketing expense. TPS’ SG&A expense expressed as a percentage of revenue increased 10 basis points to 11.1% in 4Q18 compared to the year ago quarter. For FY 2018, TPS’ SG&A expense as a percenta
ge of revenue also increased 10 basis points to 11.3% compared to the prior year.
TPS’ income from operations increased to $13.8 million in 4Q18 from $5.8 million in 4Q17. TPS’ FY 2018 income from operations was $25.8 million, including severance expense of $4.5 million, compared to income from operations of $25.5 million in FY 2017 when no severance expense was incurred. The increases were primarily attributable to the net $5.0 million increase in income from operations in 4Q18 resulting from the changes in accounting estimates discussed above.
TPS’ Adjusted EBITDA increased to $18.2 million in 4Q18 from $9.7 million in 4Q17. TPS’s FY 2018 Adjusted EBITDA increased to $46.7 million from $41.7 million in FY 2017.
net2phone – Unified Communications as a Service (UCaaS) The net2phone – UCaaS segment is comprised of offerings from IDT’s net2phone division, including its cloud communications and SIP trunking offerings for businesses and its cable telephony service.
net2phone – UCaaS’ 4Q18 revenue increased to $9.7 million from $7.8 million in 4Q17. net2phone – UCaaS’ FY 2018 revenue increased to $34.9 million from $29.4 million in FY 2017. The quarterly and full year revenue growth was driven predominantly by sales of net2phone’s cloud-based communications offering, which increased by over 150% compared to the year ago quarter and prior year. Less than two years ago, net2phone launched an international expansion program by introducing service in Brazil and Argentina. With the acquisition of Versature, and the launch in Mexico following the quarter close, net2phone now operates throughout North America as well as in certain South American, Asian and European countries.
net2phone – UCaaS’ loss from operations in 4Q17 narrowed to $445 thousand from $771 thousand in 4Q17. net2phone – UCaaS’ loss from operations in FY 2018 increased to $2.7 million from $1.9 million in FY 2017. The increase in the full year loss primarily was driven by increased employee compensation costs and commission expense reflecting increased investment in net2phone sales and technical personnel, as well as increased depreciation and amortization expense.
IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION This release is available for download in the “For Investors” 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 ET 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 U.S.) or 1-412-902-4243 (international) and request the IDT Corporation call.
A recording of the conference call can be accessed beginning one hour after the call concludes through October 16, 2018 by dialing 1-844-512-2921 (toll free from the US) or 1-412-317-6671 (international) and providing this pin code: 10123225. The recording will also be available via streaming audio at the IDT investor relations website (www.idt.net/ir) following the call.
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.
IDT CORPORATION
CONSOLIDATED BALANCE SHEETS
July 31 (in thousands, except per share data)
2018
2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 68,089
$ 90,344
Marketable securities
5,972
58,272
Trade accounts receivable, net of allowance for doubtful accounts of $3,166 and $2,657 at July 31, 2018 and 2017, respectively
69,481
64,979
Prepaid expenses
19,550
14,506
Other current assets
28,517
18,749
Assets held for sale
137,272
124,267
TOTAL CURRENT ASSETS
328,881
371,117
Property, plant and equipment, net
36,068
88,994
Goodwill
11,315
11,326
Investments
6,633
26,894
Deferred income tax assets, net
5,668
11,841
Other assets
5,326
3,657
Assets held for sale
5,706
5,134
TOTAL ASSETS
$ 399,597
$ 518,963
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade accounts payable
$ 45,124
$ 40,989
Accrued expenses
129,818
125,359
Deferred revenue
55,003
76,451
Other current liabilities
8,269
4,659
Liabilities held for sale
128,770
115,318
TOTAL CURRENT LIABILITIES
366,984
362,776
Other liabilities
768
1,080
Liabilities held for sale
542
550
TOTAL LIABILITIES
368,294
364,406
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, 2018 and 2017
33
33
Class B common stock, $.01 par value; authorized shares-200,000; 25,594 and 25,561 shares issued and 22,872 and 23,264 shares outstanding at July 31, 2018 and 2017, respectively
256
256
Additional paid-in capital
294,047
394,462
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 2,722 and 2,297 shares of Class B common stock at July 31, 2018 and 2017, respectively
(85,597)
(83,304)
Accumulated other comprehensive loss
(4,972)
(2,343)
Accumulated deficit
(173,103)
(163,370)
Total IDT Corporation stockholders’ equity
30,664
145,734
Noncontrolling interests
639
8,823
TOTAL EQUITY
31,303
154,557
TOTAL LIABILITIES AND EQUITY
$ 399,597
$ 518,963
IDT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Year ended July 31 (in thousands, except per share data)
2018
2017
2016
REVENUES
$ 1,547,495
$ 1,501,729
$ 1,496,261
COSTS AND EXPENSES:
Direct cost of revenues (exclusive of depreciation and amortization)
1,306,037
1,275,708
1,246,594
Selling, general and administrative (i)
203,251
188,293
204,655
Depreciation and amortization
22,801
21,704
20,535
Severance
4,630
–
6,510
TOTAL COSTS AND EXPENSES
1,536,719
1,485,705
1,478,294
Other operating (losses) gains, net
(2,398)
(10,412)
760
(Adjustment to) gain on sale of member interest in Visa Europe Ltd
–
(63)
7,476
Income from operations
8,378
5,549
26,203
Interest income, net
1,071
1,254
1,216
Other (expense) income, net
(1,348)
817
2,049
Income before income taxes
8,101
7,620
29,468
(Provision for) benefit from income taxes
(2,902)
2,021
(4,110)
NET INCOME
5,199
9,641
25,358
Net income attributable to noncontrolling interests
(991)
(1,464)
(1,844)
NET INCOME ATTRIBUTABLE TO IDT CORPORATION
$ 4,208
$ 8,177
$ 23,514
Earnings per share attr
ibutable to IDT Corporation common stockholders:
Basic
$ 0.17
$ 0.35
$ 1.03
Diluted
$ 0.17
$ 0.35
$ 1.03
Weighted-average number of shares used in calculation of earnings per share:
Basic
24,655
23,182
22,765
Diluted
24,718
23,309
22,815
(i) Stock-based compensation included in selling, general and administrative expenses
$ 3,581
$ 3,740
$ 2,680
IDT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended July 31
(in thousands)
2018
2017
2016
OPERATING ACTIVITIES
Net income
$ 5,199
$ 9,641
$ 25,358
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
22,801
21,704
20,535
Deferred income taxes
6,174
(2,329)
3,809
Provision for doubtful accounts receivable
2,199
686
1,519
Gain on sale of interest in Fabrix Systems Ltd
–
–
(1,086)
Gain on sale of member interest in Visa Europe Ltd
–
–
(7,476)
Net realized loss (gain) from marketable securities
16
(323)
(543)
Interest in the equity of investments
(9)
(356)
362
Stock-based compensation
3,581
3,740
2,680
Change in assets and liabilities:
Restricted cash and cash equivalents
(13,500)
(17,702)
(22,548)
Trade accounts receivable
(6,668)
(17,972)
616
Prepaid expenses, other current assets and other assets
(18,889)
(4,856)
8,372
Trade accounts payable, accrued expenses, other current liabilities and other liabilities
12,769
17,344
(10,099)
Customer deposits
14,660
18,980
25,344
Deferred revenue
(21,439)
(9,543)
2,211
Net cash provided by operating activities
6,894
19,014
49,054
INVESTING ACTIVITIES
Capital expenditures
(20,567)
(22,949)
(18,370)
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)
–
–
Payment for acquisition, net of cash acquired
–
(1,827)
–
Proceeds from sale of interest in Fabrix Systems Ltd
–
–
9,557
Proceeds from sale of member interest in Visa Europe Ltd
(53)
–
5,597
Cash used for purchase of investments
–
(9,438)
(2,002)
Proceeds from sales and redemptions of investments
–
15
634
Purchases of marketable securities
(22,523)
(53,402)
(46,909)
Proceeds from maturities and sales of marketable securities
41,502
47,996
35,011
Net cash used in investing activities
(1,641)
(39,605)
(16,482)
FINANCING ACTIVITIES
Dividends paid
(13,941)
(17,874)
(17,358)
Distributions to noncontrolling interests
(1,040)
(1,482)
(1,834)
Sales of Class B common stock to Howard S. Jonas
–
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
8,750
Cash deconsolidated as a result of spin-off
(9,287)
–
(6,381)
Proceeds from sale of Zedge equity prior to the spin-off
–
–
374
Proceeds from exercise of stock options
–
836
–
Proceeds from borrowings under revolving credit facility
22,320
–
–
Repayments of borrowings including revolving credit facility
(22,320)
–
(6,353)
Repurchases of Class B common stock
(2,293)
(1,838)
(4,773)
Net cash (used in) provided by financing a
ctivities
(26,561)
6,822
(27,575)
Effect of exchange rate changes on cash and cash equivalents
(771)
292
(5,821)
Net decrease in cash and cash equivalents
(22,079)
(13,477)
(824)
Cash and cash equivalents at beginning of year, including $5,716, $5,536 and $571 held for sale at July 31, 2017, 2016 and 2015, respectively
96,060
109,537
110,361
Cash and cash equivalents at end of year, including $5,892, $5,716 and $5,536 held for sale at July 31, 2018, 2017 and 2016, respectively
$ 73,981
$ 96,060
$ 109,537
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments made for interest
$ 94
$ 288
$ 345
Cash payments made for income taxes
$ 192
$ 576
$ 779
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES
Net assets excluding cash and cash equivalents deconsolidated as a result of spin-off
$ (105,632)
$ -
$ (4,681)
Reclassification of liability for member interests in CS Pharma Holdings, LLC
$ –
$ 8,750
$ –
Shares of Visa Inc. Series C preferred stock received from sale of member interest in Visa Europe Ltd
$ –
$ -
$ 1,580
Reconciliation of Non-GAAP Financial Measures for the Fourth Quarter Fiscal 2018 and 2017
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 4Q18, 3Q18 and 4Q17, 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 revenues 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, other operating losses, and the adjustment to the gain on the sale of member interest in Visa Europe Ltd., and subtract other operating gains.
IDT’s measure of non-GAAP net income starts with net income (loss) in accordance with GAAP and adds severance expense, stock-based compensation, other operating losses, the adjustment to the gain on the sale of member interest in Visa Europe Ltd., and income tax expense from the increase in the valuation allowance on deferred tax assets, and subtracts the income tax benefits from The Tax Cuts and Jobs Act, a release of the valuation allowance and full recognition of deferred tax assets, and other operating gains.
IDT’s measure of non-GAAP earnings per share is calculated by dividing non-GAAP net income by the basic or diluted weighted-average shares.
These additions and su
btractions are non-cash and/or non-routine items in the relevant fiscal 2018 and fiscal 2017 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 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 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 losses, other operating gains, and the adjustment to the gain on the sale of member interest in Visa Europe Ltd. are components of income (loss) from operations. In fiscal 2018, other operating losses included legal fees related to Straight Path Communications Inc.’s stockholders’ putative class action and derivative complaint, fees related to other legal matters, and other losses. In fiscal 2017, other operating losses included a non-routine expense for the settlement and mutual release, and the associated legal fees, related to potential liabilities and claims under agreements related to the Straight Path spin-off. In 4Q17, the other operating gain was primarily the result of insurance proceeds related to the claims. Other operating losses, other operating gains, and the adjustment to the gain on the sale of member interest in Visa Europe Ltd. are excluded from the calculation of Adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share. From time-to-time, IDT may incur costs related to non-routine legal and regulatory matters or disposal of certain assets. However, such legal and regulatory matters and disposals do not occur each quarter. IDT does not believe the gains or losses from non-routine legal and regulatory 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 revenues 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 continue 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. In 1Q17, IDT recorded a foreign income tax benefit of $16.6 million from the release of the valuation allowance and full recognition of certain deferred tax assets, and in 4Q17, IDT recorded a federal income tax expense of $11.1 million from the increase in the valuation allowance on deferred tax assets. The income tax benefits and expense are excluded from IDT’s calculation of non-GAAP net income and non-GAAP earnings per share because they were not directly related to the current 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 (loss), 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.
Beginning in the 3Q18, All Other includes only IDT’s real estate holdings and other investments that were included in the Rafael Holdings spin-off. Other smaller businesses that were previously included in All Other have been reclassified to Telecom & Payment Services, and certain other cost centers have been reclassified to Corporate. Comparative results have been reclassified and restated as if these businesses and costs were included in Telecom & Payment Services or Corporate in all periods presented.
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, 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, net income (loss), and (c) for non-GAAP earnings per share, basic and diluted earnings per share.
IDT Corporation Reconciliation of Adjusted EBITDA to Net Income (Loss) (unaudited) in millions Figures may not foot or cross-foot due to rounding to millions.
Total IDT Corporation
Telecom & Payment Services
net2phone -UCaaS
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
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
$ 13.9
$ (0.5)
$ –
$ (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
Total IDT Corporation
Telecom & Payment Services
net2phone -UCaaS
All Other
Corporate
Three Months Ended April 30, 2018 (3Q18)
Adjusted EBITDA
$ 8.1
$ 10.9
$ 0.5
$ (0.8)
$ (2.5)
Subtract:
Depreciation and amortization
5.8
4.2
1.2
0.4
–
Severance expense
3.7
3.6
–
–
0.1
Other operating loss
0.3
–
–
–
0.3
(Loss) income from operations
(1.7)
$ 3.1
$ (0.8)
$ (1.1)
$ (2.9)
Interest income, net
0.2
Other expense, net
(0.7)
Loss before income taxes
(2.2)
Provision for income taxes
(1.0)
Net loss
(3.2)
Net income attributable to noncontrolling interests
(0.2)
Net loss attributable to IDT Corporation
$ (3.5)
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 -UCaaS
All Other
Corporate
Three Months Ended July 31, 2017 (4Q17)
Adjusted EBITDA
$ 8.6
$ 9.7
$ 0.4
$ 0.6
$ (2.1)
Subtract (Add):
Depreciation and amortization
5.6
4.0
1.2
0.4
–
Other operating gain
(0.8)
–
–
–
(0.8)
Income (loss) from operations
3.7
$ 5.8
$ (0.8)
$ 0.1
$ (1.4)
Interest income, net
0.3
Other expense, net
(0.7)
Income before income taxes
3.3
Provision for income taxes
(12.8)
Net loss
(9.5)
Net income attributable to noncontrolling interests
(0.4)
Net loss attributable to IDT Corporation
$ (9.8)
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 -UCaaS
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
Total IDT Corporation
Telecom & Payment Services
net2phone -UCaaS
All Other
Corporate
Year Ended July 31, 2017 (FY 2017)
Adjusted EBITDA
$ 37.7
$ 41.7
$ 2.0
$ 1.8
$ (7.8)
Subtract:
Depreciation and amortization
21.7
16.1
3.9
1.7
–
Adjustment to gain on sale of member interest in Visa Europe Ltd.
0.1
0.1
–
–
–
Other operating loss
10.4
–
–
–
10.4
Income (loss) from operations
5.5
$ 25.5
$ (1.9)
$ 0.1
$ (18.2)
Interest income, net
1.3
Other income, net
0.8
Income before income taxes
7.6
Benefit from income taxes
2.0
Net income
9.6
Net income attributable to noncontrolling interests
(1.5)
Net income attributable to IDT Corporation
$ 8.2
IDT Corporation Reconciliations of Net Income (Loss) to Non-GAAP Net Income and Earnings (Loss) per share to Non-GAAP Earnings per share (unaudited) in millions, except per share data Figures may not foot due to rounding to millions.
4Q18
3Q18
4Q17
FY 2018
FY 2017
Net income (loss)
$ 8.5
$ (3.2)
$ (9.5)
$ 5.2
$ 9.6
Adjustments (add) subtract:
Stock-based compensation
(0.7)
(1.0)
(0.9)
(3.6)
(3.7)
Severance expense
(0.3)
(3.7)
–
(4.6)
–
Other operating (losses) gains
(0.4)
(0.3)
0.8
(2.4)
(10.4)
Adjustment to gain on sale of member interest in Visa Europe Ltd.
–
–
(0.1)
–
(0.1)
Income tax (expense) benefit
–
–
(11.1)
3.3
5.5
Total adjustments
(1.5)
(5.0)
(11.3)
(7.3)
(8.7)
Income tax effect of total adjustments
0.2
–
–
–
6.4
1.3
5.0
11.3
7.3
2.3
Non-GAAP net income
$ 9.8
$ 1.8
$ 1.8
$ 12.5
$ 11.9
Earnings (loss) per share:
Basic
$ 0.33
$ (0.14)
$ (0.41)
$ 0.17
$ 0.35
Total adjustments
0.07
0.21
0.48
0.34
0.16
Non-GAAP – basic
$ 0.40
$ 0.07
$ 0.07
$ 0.51
$ 0.51
Weighted-average number of shares used in calculation of basic earnings per share
24.7
24.7
24.2
24.7
/p>
23.2
Diluted
$ 0.33
$ (0.14)
$ (0.41)
$ 0.17
$ 0.35
Total adjustments
0.07
0.21
0.48
0.34
0.16
Non-GAAP – diluted
$ 0.40
$ 0.07
$ 0.07
$ 0.51
$ 0.51
Weighted-average number of shares used in calculation of diluted earnings per share
net2phone Introduces Disruptive Communications Platform for Businesses
Unified Communications Across Channels and Devices
NEWARK, N.J., Oct. 9, 2018 — net2phone, a global provider of unified communications services, today announced the release of a powerful new business communication platform. The platform seamlessly integrates voice, text, messaging and web chat services across devices– evolving how businesses communicate and collaborate.
“While voice remains the most common form of business communication, employees, customers, partners and suppliers increasingly prefer text, web chat and social media,” said Jonah Fink, President of net2phone. “net2phone's new platform brings these diverse communications channels together through a simple and intuitive online dashboard to create a unified, easy-to-use and powerful communications tool.”
net2phone's new platform also enables team members to be more productive and engaged whether they are in the office or on the road. “With our new platform, team members can manage all of their communications from any device – transferring conversations seamlessly from PCs, to office phones to mobile devices,” Fink added. “Our new mobile apps – available for iOS and Android – turn any smart phone into a convenient, multi-channel communications center for people on the go.”
The new platform builds on net2phone's robust VoIP phone feature set, its unrivaled international calling plan and free, expert, local support. The platform's VoIP features include ring groups, departments, auto attendants, call screening and voicemail-to-email. net2phone's flat rate monthly plans also include unlimited calling in-country to the U.S. and to over twenty other popular destination countries in Europe, the Americas, and Asia.
Channel partners including IT professionals, managed service providers and value-added resellers remain at the core of net2phone's offering. net2phone continues its commitment to channel partners with an advanced set of partner tools including a quick, easy and automated process to generate executable quotes and enroll customers.
The advanced net2phone unified communication platform combined with net2phone's partner program including robust, evergreen incentives make it easy for anyone who has a portfolio of business clients to introduce the new net2phone business communication solution.
For more information, visit net2phone at www.net2phone.com.
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.
About net2phone:
net2phone is a global provider of unified communications services and collaboration tools serving businesses in the Americas, Asia and Europe. net2phone is a subsidiary of IDT Corporation (NYSE: IDT), a provider of communications and payment services. To learn more, please visit net2phone.com.
