NEWARK, N.J., Feb. 5, 2018 – IDT Corporation (NYSE: IDT) today announced that the record date for the spin-off of its subsidiary, Rafael Holdings, Inc. (Rafael), to IDT stockholders, will be February 15, 2018, and that distribution date for the spin-off will be on or about March 5th.

Rafael is comprised of IDT’s real estate holdings, its interests in Rafael Pharmaceuticals and Lipomedix, two clinical and early stage pharmaceutical companies, and $50–$60 million in cash, cash equivalents, marketable securities and/or interests in hedge funds.

A copy of Rafael’s amended Form 10 Information Statement is available on the IDT website at www.idt.net/ir.

The current timeline for the spin-off, subject to the Securities and Exchange Commission declaring the Registration Statement effective and approval of the Rafael Class B common stock for listing on the NYSE American exchange, is as follows:

• the record date will be 5:00 PM EDT on February 15, 2018;
• beginning on February 14, 2018, the entitlement to shares of Rafael Class B common stock will trade on the NYSE American “when issued” market with the ticker symbol “RFL WI”.  On the first day of trading following the distribution date, “when issued” trading will cease, and “regular-way” trading of Rafael Class B common stock will begin on the NYSE American with the ticker symbol “RFL”;
• beginning on February 14, 2018, and continuing through the distribution date, there will be two NYSE markets in IDT Class B common stock: a “regular-way” market and an “ex-distribution” market. Shares of IDT Class B common stock exchanged in the “regular-way” market will trade with an entitlement to receive shares of Rafael Class B common stock through the distribution. Shares of IDT Class B common stock exchanged in the “ex-distribution” market will trade without such an entitlement;
• the spin-off will be effective at 11:59 p.m. EDT on the distribution date, which will be on or about March 5, 2018.  On the distribution date, each IDT stockholder entitled will receive one share of Rafael Class A common stock for every two shares of IDT Class A common stock and one share of Rafael Class B common stock for every two shares of IDT Class B common stock;
• IDT expects to receive a legal opinion from Goulston & Storrs that the distribution should qualify as a tax-free transaction for U.S. federal income tax purposes. However, cash distributed in lieu of fractional shares generally will be taxable to the recipient stockholders. Stockholders are urged to consult their financial advisors and tax advisors regarding the particular consequences of the distribution in their situation, including, without limitation, the specific implications of selling IDT common stock on or prior to the distribution date and the applicability and effect of any U.S. federal, state, local and foreign tax laws.
• Rafael Holdings Class B common stock has been assigned CUSIP # 75062E 106

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 IDT’s 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. IDT’s filings with the SEC and Rafael’s amended Form 10 Information Statement provide detailed information on such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, neither IDT nor Rafael assumes any obligation to update any forward-looking statements.

About Rafael Holdings Inc:

Rafael Holdings will own the commercial real estate assets currently held by IDT and interests in certain clinical and early stage pharmaceutical companies. The real estate includes the IDT headquarters building and associated public garage in Newark, New Jersey and other real estate interests in New Jersey and Jerusalem, Israel. The pharmaceutical holdings include convertible debt interests and warrants in Rafael Pharmaceuticals, Inc., a clinical-stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells, and a majority equity interest in Lipomedix Pharmaceuticals Ltd., an early stage pharmaceutical development company based in Israel. Rafael will also hold approximately $50–$60 million in cash, cash equivalents, marketable securities and/or interests in hedge funds at the time of the spin-off.

About IDT Corporation:

IDT Corporation (NYSE: IDT), through its IDT Telecom division, provides telecommunications and payment services to individuals and businesses primarily through its flagship Boss Revolution® and net2phone® brands.  IDT Telecom’s wholesale business is a leading global carrier of international long-distance calls.  For more information on IDT, visit www.idt.net.

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SOURCE IDT Corporation

NEWARK, N.J., Dec. 11, 2017 — net2phone, a global provider of cloud-based communications solutions and division of IDT Corporation (NYSE: IDT), today announced a partnership with TeleDomani, Inc., a leading telecom and technology services master agent.

Through the partnership, TeleDomani agents will offer net2phone’s hosted PBX and SIP Trunking solutions to their rapidly growing base of enterprise customers. 

net2phone’s hosted PBX offering includes unlimited domestic and international calling to all destinations in over 20 countries, free Polycom phones, and advanced feature sets including real-time quality of service visibility and optimization.  net2phone’s solutions are optimized to fit the needs of every business regardless of size or current infrastructure.

“net2phone is a perfect fit for our agent community,” said Gina Pigott, Founder and CEO of TeleDomani. “With their robust feature sets, unlimited international calling and free phones all offered in conjunction with agent-driven pricing, an advanced quoting tool, and generous commissions, net2phone’s solutions provide outstanding value for both our agents and their clients.”

net2phone’s president, Jonah Fink, said, “TeleDomani is a remarkable company that has demonstrated the benefits to a highly consultative approach to technology applications.  We look forward to providing TeleDomani’s agents with the tools they need to bring their clients all the benefits of net2phone’s cloud communications solutions.”

net2phone draws on twenty years of industry experience and the power of IDT Telecom to deliver cloud-based communications solutions that are flexible, cost-effective and reliable. 

About net2phone:
net2phone is a rapidly-growing unified communications as a service (UCaaS) provider. net2phone’s flagship hosted PBX and SIP Trunking services are offered exclusively through channel partners. net2phone is a subsidiary of IDTCorporation (NYSE: IDT), a global provider of telecommunications and payment services.  To learn more, please visit net2phone.com, connect with us on LinkedIn, or email partner@net2phone.com.  

About TeleDomani:
TeleDomani, Inc. offers our partners access to managed & professional IT services, Cloud based UcaaS Providers and much more.Top-notch back office support allows agents to focus on their core business, not quotas, commitments or carrier follow up. Technology is constantly evolving; TeleDomani’s dedication to excellence and provider relationships as a leading Master Agent assists our partners in Bringing It All Together.

 

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SOURCE IDT Corporation

NEWARK, N.J., Dec. 5, 2017 – IDT Corporation (NYSE: IDT) reported a loss per share of $0.08 and non-GAAP earnings per share (EPS)* of $0.01 on revenue of $393.6 million for the first quarter of FY 2018, the three months ended October 31, 2017.  

HIGHLIGHTS  
(1Q18 results are compared to 1Q17)

• Revenue of $393.6 million compared to $369.2 million;
• Income from operations of $0.1 million compared to $5.2 million;
• Adjusted EBITDA* of $7.0 million compared to $10.7 million;
• Loss per share of $0.08 compared to diluted EPS of $0.96, which included a net benefit from income taxes of $0.63 per share;
• Non-GAAP EPS* of $0.01 compared to $0.28;
• IDT has declared a dividend of $0.19 per share for 1Q18 to be paid on or about December 29^th.

REMARKS BY SHMUEL JONAS, CEO OF IDT CORPORATION

“Revenue growth in our wholesale carrier business accelerated as we invested to gain market share, more than offsetting the measured decline in revenue from our retail voice communications offerings.  Telecom margins, however, narrowed during the quarter.

“Our growth initiatives met or exceeded our expectations.  BOSS Revolution money transfer – and particularly transactions initiated online or through the BOSS Money app – as well as net2phone’s cloud communications offerings and our National Retail Solutions POS network are growing rapidly.  Subsequent to the quarter close, we formally launched our BOSS Revolution Mobile offering, and are in the process of rolling out this new wireless service to our retail partners nationwide.

“We are making good progress on the planned spin-off of Rafael Holdings.  Rafael recently filed a registration statement, including a preliminary information statement, for the spin-off with the Securities and Exchange Commission.  We expect to conclude the separation and distribution of Rafael Holdings to our shareholders in the first quarter of calendar 2018.  The spin-off will more tightly focus IDT on communications and payments services, and we have begun the planning to streamline our corporate structure and operations to function more efficiently and effectively post-spin.

“Based on our results and financial condition, IDT’s Board of Directors declared a dividend of $0.19 per share for the first quarter.”

1Q18 CONSOLIDATED RESULTS 
(Results are for 1Q18 and compared to 1Q17 unless otherwise noted).

 

 

Consolidated results for all periods presented include corporate overhead.  The corporate loss from operations increased to $3.2 million from $1.3 million in 1Q17 primarily as a result of increased legal expenses.

Net loss attributable to IDT in 1Q18 was $2.1 million or $0.08 per share, including a provision for income tax of $1.4 million, compared to net income attributable to IDT of $21.9 million and diluted EPS of $0.96 in 1Q17, including a $2.1 million gain on foreign currency transactions and a net benefit from income taxes of $14.4 million, mostly due to the reversal of a previous valuation allowance on foreign deferred tax assets. 

At October 31, 2017, IDT held $107.0 million in unrestricted cash, cash equivalents and marketable securities, compared to $148.6 million at July 31, 2017. Current assets totaled $342.4 million and current liabilities totaled $338.4 million.  The decrease in cash, cash equivalents and marketable securities primarily reflects payments during 1Q18 of previously accrued liabilities including seasonal personnel expenses, regulatory fees, and a legal settlement as well as other changes in working capital. IDT also set aside $11.8 million dollars in an escrow account pursuant to its most recent wholesale carrier outsourcing initiative, resulting in a decrease in Cash and Cash Equivalents and a corresponding increase in Other Current Assets.

Net cash used in operating activities during 1Q18 was $30.5 million compared to net cash provided by operating activities of $5.5 million in 1Q17. In the same periods, capital expenditures were $5.3 million and $5.5 million, respectively. 

1Q18 RESULTS BY SEGMENT
(Results are for 1Q18 and compared to 1Q17 unless otherwise noted).

 

Telecom Platform Services (TPS)
TPS is comprised of communications and payment offerings grouped in three broad verticals: Retail Communications, Wholesale Carrier Services and Payment Services.  Effective 1Q18, TPS’ Retail Communications vertical also includes the results of IDT’s Consumer Phone Services (CPS).  All comparative prior periods have been adjusted to conform to the current presentation.  CPS was previously reported as a separate segment. The TPS segment contributed 97.8% of IDT’s consolidated revenue in 1Q18 and 97.9% in 1Q17. 

TPS’ 1Q18 revenue increased 6.5% to $385.1 million.  The Wholesale Carrier Services and Payment Services verticals achieved robust revenue growth – more than offsetting a decline in Retail Communications’ revenue. 

 

Retail Communications:  IDT’s flagship BOSS Revolution^® calling service – which accounted for over 90% of Retail Communications’ revenue in 1Q18 – continued to be impacted by increased adoption of over-the-top voice and messaging, unlimited calling plans, as well as decreased immigration into the U.S.  These long-term, macro trends resulted in a 5.4% reduction in BOSS Revolution calling service’s revenue compared to the year ago quarter.  Revenue from other Retail Communications offerings, including the sale of traditional ‘hard’ prepaid calling cards in the U.S. and overseas, continued to decrease in line with expectations.

Wholesale Carrier Services:  Wholesale Carrier Services’ revenue increased 19% and minutes of use increased 20% compared to the year ago quarter even as the market for international voice calling continued to contract.  Wholesale Carrier Services’ revenue has historically been more volatile than Retail Communications’ revenue, and changes in revenue do not necessarily generate corresponding changes in gross profit.

Payment Services:  Payment services revenue increased 14.6% year over year reflecting growth in mobile top-up sales from new mobile partners and diversification of mobile top-up offerings.  Sales generated by the BOSS Revolution international money transfer service and National Retail Solutions’ merchant services offerings also increased. 

TPS’ direct cost of revenue expressed as a percentage of revenue increased to 86.7% from 85.7%.  This increase reflects margin pressure on Wholesale Carrier Services’ offerings and a shift of revenue mix within TPS towards Wholesale Carrier Services, which generates relatively lower gross margins than Retail Communications’ offerings.

TPS’ SG&A expense – $42.1 million – increased 2.6% from 1Q17 primarily on higher personnel expense.  Expressed as a percentage of revenue, SG&A expense decreased to 10.9% from 11.4% in the year ago quarter, primarily due to the significant revenue increase over the corresponding period.  IDT expects to significantly streamline its operations in conjunction with the spin-off of Raphael Holdings.

TPS’ income from operations decreased to $4.6 million, including the impact of $0.4 million in severance expense, from $6.5 million in 1Q17.  Margin pressure on TPS’ Wholesale Carrier Services’ offerings, the decrease in Retail Communications’ revenue and the increase in SG&A expense contributed to the decrease.

net2phone – Unified Communications as a Service (UCaaS)
The net2phone-UCaaS segment (formerly known as UCaaS) 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’ 1Q18 revenue increased to $7.8 million from $7.1 million in 1Q17 due to continued growth from its cable telephony service and cloud-based communications offering – both in the U.S. and in South America.  In light of the strong growth in net2phone’s cloud communications offering in Argentina and Brazil, net2phone anticipates additional international expansion in South America and Asia in FY 2018.

net2phone-UCaaS’ 1Q18 loss from operations was $674 thousand compared to a loss from operations of $174 thousand in 1Q17 reflecting increased SG&A spending including commissions and other personnel expenses reflecting IDT’s continued investment in this business, as well as increased depreciation and amortization expense.

All Other
All Other includes interests in clinical and early stage pharmaceutical companies, including an investment in Rafael Pharmaceuticals, Inc., as well as IDT’s real estate holdings, comprised of its public garage in Newark and commercial properties in Newark, Piscataway and Jerusalem, and other small businesses and investments.

Rafael Pharmaceuticals is a clinical stage, oncology-focused, pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells.

All Other’s financial results for 1Q18 were consistent with expectations.

IDT’s subsidiary, Rafael Holdings, has filed a registration statement, including a preliminary information statement, for the spin-off to IDT’s shareholders of IDT’s real estate and pharmaceutical holdings included in All Other.  IDT expects to effectuate the spin-off of Rafael Holdings in the first quarter of calendar 2018.

DIVIDEND
On December 4, 2017, IDT’s Board of Directors declared a quarterly dividend of $0.19 per share of IDT’s Class A and Class B common stock for 1Q18 to be paid on or about December 29, 2017.  The dividend will be paid to stockholders of record as of the close of business on December 18^th.  This distribution will be treated as a return of capital for tax purposes.

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 today beginning today 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 one hour after the call concludes through December 12, 2017, by dialing 1-844-512-2921 (toll-free from the US) or 1-412-317-6671 (international) and providing this call number: 10114550.  The recording will also be available via streaming audio at the IDT investor relations website (http://idt.net/ir) following the call.

ABOUT IDT:
IDT Corporation (NYSE: IDT), through its IDT Telecom division, provides communications and payment services to individuals and businesses primarily through its flagship Boss Revolution® and net2phone® brands.  IDT Telecom’s wholesale 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.

 

 

 

 

 

 

Reconciliation of Non-GAAP Financial Measures for the First 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 1Q18, 4Q17 and 1Q17, Adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per share, or EPS, 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 from operations, add depreciation and amortization, severance expense and other operating expense, and subtract other operating gain.

IDT’s measure of non-GAAP net income starts with net (loss) income in accordance with GAAP and adds severance expense, stock-based compensation, other operating expense, and the tax expense from the increase in the valuation allowance on deferred tax assets, and subtracts other operating gain, and the tax benefit from the release of the valuation allowance and full recognition of deferred tax assets. 

IDT’s measure of non-GAAP diluted EPS 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 2018 and fiscal 2017 periods.

Management believes that IDT’s Adjusted EBITDA, non-GAAP net income and non-GAAP EPS 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 EPS 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, 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 EPS. 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 realitie
s 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 and other operating gain are components of income from operations. In fiscal 2018, other operating expense included legal fees related to potential liabilities and claims under agreements related to IDT’s spin-off of Straight Path Communications Inc. in 2013. In the fourth quarter of fiscal 2017, other operating gain was primarily the result of insurance proceeds related to the claims. Other operating expense and other operating gain are excluded from the calculation of Adjusted EBITDA, non-GAAP net income and non-GAAP EPS. 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 income and non-GAAP EPS 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 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 benefit and expense are excluded from IDT’s calculation of non-GAAP net income and non-GAAP EPS because neither was directly related to the current results of IDT’s core operations. These income tax benefit and expense are not expected to be reoccurring items.

Adjusted EBITDA, non-GAAP net income and non-GAAP EPS 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 EPS 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 EPS 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 for IDT on a consolidated basis, (b) for non-GAAP net income, net income and, (c) for non-GAAP EPS, basic and diluted earnings per share.

 

 

 

 

 

 

 

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SOURCE IDT Corporation

NEWARK, N.J., Nov. 24, 2017 – IDT Corporation (NYSE: IDT), a global provider of communications and payment services, has scheduled its report of first quarter fiscal 2018 (the three months ended October 31, 2017) financial and operational results for Tuesday, December 5, 2017.

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 one hour after the call concludes through December 12, 2017, by dialing 1-844-512-2921 (toll-free from the US) or 1-412-317-6671 (international) and providing this call number: 10114550.  A recording will also be available via streaming audio at the IDT investor relations website (www.idt.net/ir) following the call.

About IDT Corporation:
IDT Corporation (NYSE: IDT), through its IDT Telecom division, provides communications and payment services to individuals and businesses primarily through its flagship Boss Revolution^® and Net2Phone^® brands.  IDT Telecom’s wholesale business is a leading global carrier of international long-distance calls.  For more information on IDT, visit www.idt.net.

 

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SOURCE IDT Corporation

NEWARK, N.J., Nov. 1, 2017 – IDT Corporation (NYSE: IDT) today announced that its wholly-owned subsidiary, Rafael Holdings, Inc. (Rafael), has filed a Form 10 Registration Statement with the Securities and Exchange Commission related to the planned spin-off of Rafael to IDT stockholders. 

Rafael will own certain commercial real estate assets and interests in clinical and early stage pharmaceutical companies.  The real estate holdings consist of IDT’s headquarters building and a public garage in Newark, New Jersey, an office/data center building in Piscataway, New Jersey and an office condominium in Israel that hosts offices for IDT and its affiliates.  The pharmaceutical holdings include interests in Rafael Pharmaceuticals, Inc., which is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells, and in Lipomedix Pharmaceuticals Ltd., an early stage pharmaceutical development company based in Israel.   

 ”We are very excited to begin the process of spinning Rafael off to our stockholders,” said Howard Jonas, IDT’s Chairman. “We believe that there is significant value in the Rafael assets and separating them from IDT’s core telecom and payments operations will help unlock that value and permit both companies to better operate their businesses.”

The Rafael spin-off is intended to be tax-free to IDT’s shareholders.  Prior to consummation of the spin-off, IDT expects to receive a legal opinion as to the spin-off’s tax-free status.

In connection with the spin-off, each IDT stockholder will receive one share of Rafael Class A common stock for every two shares of IDT Class A common stock and one share of Rafael Class B common stock for every two shares of IDT Class B common stock.  Upon completion of the spin-off, IDT stockholders as of the record date will hold 100 percent of Rafael.

As of October 31, 2017, there were approximately 1.6 million shares of IDT Class A common stock, and 23.3 million shares of IDT Class B common stock issued and outstanding.

No action is required by IDT stockholders to receive the shares of Rafael common stock.

The Form 10 and related materials, including an information statement, are available through the Securities and Exchange Commission’s website at: https://www.sec.gov/Archives/edgar/data/1713863/000121390017011145/0001213900-17-011145-index.htm

Rafael will apply to have the Rafael Class B common stock listed on NYSE American under the ticker symbol “RFL”.  Shares of IDT Class B Common Stock will continue to trade on the New York Stock Exchange under the symbol “IDT”.

Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling IDT and Rafael common stock.

About IDT Corporation:
IDT Corporation (NYSE: IDT), through its IDT Telecom division, provides telecommunications and payment services to individuals and businesses primarily through its flagship BOSS Revolution^® and Net2Phone^® brands. IDT Telecom’s wholesale business is a leading global carrier of international long distance calls. For more information on IDT, visit www.idt.net.

About Rafael Holdings, Inc.:
Rafael will own certain commercial real estate assets and interests in clinical and early stage pharmaceutical companies.  Rafael’s pharmaceutical holdings include IDT’s interests in Rafael Pharmaceuticals, Inc., which is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells, and in Lipomedix Pharmaceuticals Ltd., an early stage pharmaceutical development company based in Israel.  Its commercial real estate holdings consist of IDT Corporation’s headquarters facilities in Newark, New Jersey, an office/data center building in Piscataway, New Jersey and an office condominium in Israel that hosts offices for IDT and its affiliates. 

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.

 

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SOURCE IDT Corporation

NEWARK, N.J., Oct. 31, 2017 – IDT Corporation (NYSE: IDT), a global provider of communication and payment services, today launched BOSS Revolution Mobile^SM, a new U.S. mobile phone service that delivers big cost savings by allowing customers to pay for only what they use. 

BOSS Revolution Mobile customers pay just $5/month for their line and then pay only for what they use. Pay-as-you-go rates are affordable and simple:

• Domestic Airtime – just 1.5 cents per minute
• Domestic Texts – just 0.5 cents, and
• Data – just 1.5 cents per megabyte.

Also, BOSS Revolution Mobile customers’ data spend is capped at only $30 per month.  After a customer spends $30 on data, data is free at speeds of 64 kbps or higher for the remainder of their month, providing big cost savings and eliminating surprise overage charges. 

BOSS Revolution Mobile customers can save even more using the BOSS Revolution Calling app:

• Wi-Fi calls from the app are FREE to any phone in the U.S., Mexico and many other countries
• Wi-Fi app-to-app calling is FREE – anywhere in the world
• Wi-Fi app-to-app messaging is also FREE – anywhere in the world

“BOSS Revolution Mobile offers a different approach to wireless that can lead to substantial savings and no contracts,” said Bill Pereira, CEO of IDT Telecom.  “Using the BOSS Revolution Calling app and Wi-Fi, our customers will enjoy unlimited domestic calling, unlimited calling to Mexico and other popular international destinations, and unlimited messaging — all included with their $5 per month line fee.”

Visit the savings calculator at www.BossRevolutionMobile.com to see how much you can save.

“When using Wi-Fi is not convenient, calls, text and data over the BOSS Revolution Mobile network are extremely affordable,” Pereira added.  “And you can use all the data you want without fear of a ‘gotcha’ phone bill because the monthly data charge is capped at $30.”

Customers can open a BOSS Revolution Mobile account and purchase a system-ready phone (including models from Apple, Samsung and Alcatel) or bring their own phone and purchase a SIM card with cash or credit directly from many of the 35,000 Boss Revolution retailers nationwide, or online at www.BossRevolutionMobile.com.    

“Sprint is proud to be the wireless communication network supporting Boss Revolution Mobile,” said Scott Kalinoski, Vice President of Sprint Wholesale Solutions. “Our nationwide 4G LTE network, together with IDT’s expansive distribution model and their innovative approach to wireless with the Boss Revolution brand, is certain to be a success in the marketplace.”

Visit www.BossRevolutionMobile.com for complete terms and conditions, current rates, network coverage and additional information.   

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 IDT Corporation:

IDT Corporation (NYSE: IDT), through its IDT Telecom division, provides telecommunications and payment services to individuals and businesses primarily through its flagship BOSS Revolution^® and Net2Phone^® brands.  IDT Telecom’s wholesale business is a leading global carrier of international long distance calls. For more information on IDT, visit www.idt.net.

 

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SOURCE IDT Corporation

NEWARK, N.J., Oct. 3, 2017 – IDT Corporation (NYSE: IDT) reported a $(0.41) loss per share and non-GAAP earnings per share (EPS)* of $0.07 on revenue of $395.0 million for the fourth quarter of FY 2017, the three months ended July 31, 2017.  

For the full FY 2017, IDT reported EPS of $0.35 and non-GAAP EPS of $0.51 on revenue of $1.5 billion.

HIGHLIGHTS  
(4Q17 results are compared to 4Q16.  FY 2017 results refer to full fiscal year 2017 results and are compared to FY 2016)

• 4Q17 revenue of $395.0 million compared to $368.1 million.  FY 2017 revenue of $1,501.7 million compared to $1,496.3 million;
• 4Q17 income from operations of $3.7 million compared to $6.2 million.  FY 2017 income from operations of $5.5 million compared to $26.2 million;
• 4Q17 Adjusted EBITDA* of $8.6 million compared to $10.0 million.  FY 2017 Adjusted EBITDA of $37.7 million compared to $45.0 million;
• 4Q17 loss per share of $(0.41) compared to diluted EPS of $0.48.  FY 2017 diluted EPS of $0.35 compared to $1.03;
• 4Q17 non-GAAP EPS* of $0.07 compared to $0.35.   FY 2017 non-GAAP EPS of $0.51 compared to $1.00;   
• On June 22, 2017, IDT announced an agreement to sell its Gibraltar-based bank.  The deal is awaiting regulatory approval and is expected to close later this calendar year;
• IDT has declared a dividend of $0.19 per share for 4Q17 to be paid on or about October 20, 2017. 

REMARKS BY SHMUEL JONAS, CEO OF IDT CORPORATION
“This quarter showcased the resilience of our core communications and payments businesses while we continued to invest heavily in our growth initiatives including net2phone’s unified communications as a service business, National Retail Solutions, BOSS Revolution international money transfer, and the BOSS Revolution mobile service that we expect to launch later this quarter.

“IDT’s Board of Directors has declared a 4th quarter dividend of $0.19. The dividend will be paid on or about October 20th.

“We continue to work toward the spin-off our non-core assets to IDT stockholders, including our real estate assets, our interests in Rafael Pharmaceuticals, Inc. and other investments, and $50 to $60 million in cash.”

4Q17 AND FY 2017 CONSOLIDATED RESULTS  
The IDT Corporation FY 2017 audit by its independent auditors is ongoing and has not yet been completed.

 

Consolidated results in 4Q16 and FY 2016 include the results of Zedge, which was spun off to IDT stockholders on June 1, 2016.  In 4Q16, Zedge contributed revenue of $812 thousand, a loss from operations of $32 thousand and Adjusted EBITDA of $15 thousand.  In FY 2016, Zedge contributed revenue of $9.5 million, income from operations of $2.3 million and Adjusted EBITDA of $2.6 million. 

Consolidated results for all periods presented include corporate overhead.  In 4Q17, corporate G&A expense decreased 17.4% to $2.2 million from $2.7 million in the year ago quarter.  For FY 2017, corporate G&A expense decreased 20.5% to $8.0 million from $10.1 million in FY 2016.

Income from operations in 4Q17 totaled $3.7 million including a gain of $0.8 million related to certain regulatory and legal matters.   Income from operations in 4Q16 of $6.2 million included a gain of $7.5 million on the sale of IDT’s Gibraltar-based bank’s member interest in Visa Europe and $6.3 million in severance expense.  Income from operations in FY 2017 was $5.5 million including a charge of $10.1 million related to a legal settlement.  Income from operations in FY 2016 was $26.2 million, including gains totaling $8.2 million and severance expense of $6.5 million.

IDT’s loss per share in 4Q17 was $(0.41), which included income tax expense of $11.1 million from a decrease in the book value of deferred tax assets, compared to diluted EPS of $0.48 in 4Q16 including a $2.7 million gain on foreign currency transactions and a benefit from income taxes of $2.1 million.  IDT’s diluted EPS in FY 2017 was $0.35 compared to $1.03.

At July 31, 2017, IDT reported $148.6 million in unrestricted cash, cash equivalents and marketable securities. Current assets totaled $371.1 million and current liabilities totaled $362.8 million.  Reflecting IDT’s agreement to sell its Gibraltar-based bank, all of the bank’s assets and liabilities at July 31, 2017 and 2016 are classified as “Held for sale” in the consolidated balance sheets.

Net cash provided by operating activities during 4Q17 was $18.5 million compared to $13.2 million in 4Q16. In the corresponding periods, capital expenditures were $5.9 million and $4.4 million, respectively.  FY 2017 net cash provided by operating activities totaled $19.0 million compared to $49.1 million in FY 2016. In the corresponding periods, capital expenditures were $22.9 million and $18.4 million, respectively.

4Q17 AND FY 2017 RESULTS BY SEGMENT
(Results are for 4Q17 unless otherwise noted).

 

 

Telecom Platform Services (TPS)
The TPS segment contributed 97.4% of IDT’s revenue in 4Q17 and 97.5% of IDT’s revenue in FY 2017.  TPS markets and distributes multiple communications and payment services across three verticals each comprised of multiple offerings: Retail Communications, Wholesale Carrier Services and Payment Services. 

TPS’ 4Q17 revenue increased 7.4% to $384.8 million – the highest level in two years – while TPS’ revenue less direct costs declined 3.7% to $51.3 million.  The Wholesale Carrier Services and Payment Services verticals achieved robust revenue growth – more than offsetting a decline in Retail Communications revenues.  TPS’ FY 2017 revenue increased by 0.9% to $1,464.1 million, while revenue less direct costs decreased 8.7% to $203.1 million.

 

Retail Communications:  IDT’s flagship BOSS Revolution® calling service – which accounted for over 90% of Retail Communications’ revenue in 4Q17 – continued to be impacted by increased adoption of over-the-top voice and messaging, unlimited calling plans, as well as decreased immigration into the US.  These secular trends and events resulted in a 4.8% reduction in BOSS Revolution calling service revenues compared to the year ago quarter and a 5.4% reduction compared to FY 2016.  Revenues from the sale of traditional ‘hard’ prepaid calling cards in the US and overseas as well as other legacy offerings also continued to decrease in line with expectations.

Wholesale Carrier Services:  Wholesale Carrier Services grew revenue in the fourth quarter compared to 4Q16 and full fiscal year compared to FY 2016 by 20.4% and 7.3% respectively, and increased overall minutes of use by 4.4% compared to the year ago quarter and by 2.9% compared to the prior fiscal year.  Wholesale Carrier Services’ operations are managed to maximize gross profit.  Wholesale Carrier Service’s revenues have historically been more volatile than Retail Communications revenues, and changes in revenue do not necessarily generate corresponding changes in gross profit.

Payment Services:  Payment Services revenue increased by $10.5 million in the fourth quarter and by $25.9 million in fiscal 2017. The recent introduction of new mobile partners has contributed to the renewed growth of mobile top-up revenues, which achieved a record level in 4Q17. The continued growth of the BOSS Revolution international money transfer service and National Retail Solutions’ merchant services offerings also contributed to the robust growth of Payment Services’ revenue. 

TPS’ direct cost of revenue in 4Q17, expressed as a percentage of TPS’ revenue, increased to 86.7% from 85.1% in 4Q16, and to 86.1% in FY2017 from 84.7% in FY 2016.  This increase primarily reflects a mix shift within TPS towards Wholesale Carrier Services revenue, which generates relatively lower gross margins than Retail Communications’ offerings.

TPS’ SG&A expense in 4Q17 – $41.9 million – was unchanged compared to the year ago quarter as increases in legal and marketing costs were offset by lower personnel and bad debt expense.  TPS’ full fiscal year SG&A expense decreased 7.1% to $162.4 million on reduced personnel expense. SG&A expense expressed as a percentage of revenue decreased 80 basis points to 10.9% in 4Q17 compared to the year ago quarter.  For the full fiscal year 2017, SG&A expense as a percentage of revenue decreased 90 basis points to 11.1% compared to the prior year.

TPS’ D&A expense increased to $4.0 million in 4Q17 from $3.9 million in the year ago quarter, and increased to $16.1 million in FY 2017 from $15.8 million in FY 2016.

TPS’ income from operations decreased to $5.4 million in 4Q17 from $9.1 million in 4Q16.  Income from operations in 4Q16 included a gain of $7.5 million on the sale of IDT’s Gibraltar-based bank’s member interest in Visa Europe, and severance expense of $6.0 million.  TPS’ income from operations in FY 2017 was $24.4 million compared to income from operations of $32.8 million in FY 2016 (that included other gains of $7.1 million – primarily from the sale of the member interest in Visa Europe – and severance expense of $6.2 million).   

TPS’ Adjusted EBITDA decreased to $9.4 million in 4Q17 from $11.4 million in 4Q16 reflecting the increase in the direct cost of revenue as a percentage of revenue.  The same factor – partially offset by the reduction in SG&A expense – reduced FY 2017’s Adjusted EBITDA to $40.6 million from $47.7 million in FY 2016.

Unified Communications as a Service (UCaaS)
The UCaaS segment is comprised of offerings from IDT’s net2phone^® division, including cable telephony, hosted PBX, and SIP trunking.

UCaaS’ 4Q17 revenue increased to $7.8 million from $7.0 million in 4Q16.  UCaaS’ FY 2017 revenue increased to $29.4 million from $26.4 million in FY 2016.  The quarterly and full year revenue growth was driven by sales of net2phone’s cloud-based communications offering and, to a lesser extent, by SIP trunking and cable telephony. 

UCaaS’ loss
from operations in 4Q17 increased to $771 thousand from $190 thousand in 4Q16.  UCaaS’ loss from operation in FY 2017 increased to $1.9 million from $1.6 million in FY 2016.  The increases in the quarterly and full year losses primarily reflect increased employee compensation and commission expense as IDT increased investment in net2phone sales and technical personnel and increased depreciation and amortization expense, partially offset by a significant decrease in direct costs. 

Consumer Phone Services (CPS)
The Consumer Phone Services segment sells postpaid local and long-distance services in the U.S., marketed under the brand name IDT America.  CPS has been in harvest mode for more than a decade – maximizing revenue from current customers while maintaining SG&A and other expenses at the minimum levels essential to operate the business.  CPS’ financial results are provided in the segment results chart above and conformed to expectations.

All Other
All Other includes IDT’s real estate holdings, comprised of its public garage in Newark and commercial properties in Newark, Piscataway and Jerusalem, as well as other small businesses and investments, including an investment in Rafael Pharmaceuticals, Inc., (formerly Cornerstone Pharmaceuticals, Inc.).

Rafael Pharmaceuticals is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells.

All Other previously included Zedge, a platform and mobile app centered on self-expression.  Zedge was fully spun off from IDT to IDT’s shareholders on June 1, 2016.  Because the disposition of IDT’s interest in Zedge did not meet the criteria to be reported as a discontinued operation, Zedge’s results of operations and cash flows continue to be included in prior comparative periods.

All Other’s financial results are provided in the segment results chart above and conformed to expectations.

IDT intends to spin-off the real estate and pharmaceutical holdings included in All Other to its shareholders under the name Rafael Holdings, Inc.

DIVIDEND
On September 28^th, 2017, IDT’s Board of Directors declared a quarterly dividend of $0.19 per share of Class A and Class B common stock for 4Q17 to be paid on or about October 20, 2017.  The dividend will be paid to stockholders of record as of the close of business on October 16^th.  The ex-dividend date will be October 12^th.  This distribution will be treated as a return of capital for tax purposes.

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 10, 2017 by dialing 1-844-512-2921 (toll free from the US) or 1-412-317-6671 (international) and providing this pin code: 10111313.  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), through its IDT Telecom division, provides telecommunications and payment services to individuals and businesses primarily through its flagship BOSS Revolution^® and net2phone^® brands.  IDT Telecom’s wholesale 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.

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Financial Measures for the Fourth Quarter Fiscal 2017 and 2016

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 4Q17, 3Q17 and 4Q16, Adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per share, or EPS, 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 from operations, add depreciation and amortization, severance expense and other operating expenses, and subtract other operating gain, the gain on the sale of member interest in Visa Europe Ltd. and the gain on sale of interest in Fabrix Systems Ltd.

IDT’s measure of non-GAAP net income s
tarts with net income in accordance with GAAP and adds severance expense, stock-based compensation, other operating expenses, and the tax expense from the increase in the valuation allowance on deferred tax assets, and subtracts other operating gain, the gain on the sale of member interest in Visa Europe Ltd., the gain on sale of interest in Fabrix Systems Ltd. and the tax benefit from the release of the valuation allowance and full recognition of deferred tax assets. 

IDT’s measure of non-GAAP diluted EPS is calculated by dividing non-GAAP net income by the diluted weighted-average shares.

Beginning in 4Q17, depreciation and amortization expense is no longer an adjustment to net income in IDT’s measure of non-GAAP net income. Comparative results have been restated in all periods presented.

These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2017 and fiscal 2016 periods.

Management believes that IDT’s Adjusted EBITDA, non-GAAP net income and non-GAAP EPS 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 EPS 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, 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 EPS. 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 expenses and other operating gain, the gains on the sale of member interest in Visa Europe Ltd. and the sale of interest in Fabrix Systems Ltd. are components of income from operations. In fiscal 2017, other operating expenses included a non-routine expense for a settlement and mutual release, and the associated legal fees, related to potential liabilities and claims under agreements related to IDT’s spin-off of Straight Path Communications Inc. in 2013. In the fourth quarter of fiscal 2017, the other operating gain was primarily the result of insurance proceeds related to the claims. In fiscal 2016, other operating expenses included a loss on disposal of property, plant and equipment. Other operating expenses, other operating gain, and the gains on the sale of member interest in Visa Europe Ltd. and the sale of interest in Fabrix Systems Ltd. are excluded from the calculation of Adjusted EBITDA, non-GAAP net income and non-GAAP EPS. From time-to-time, IDT may incur costs related to non-routine legal and regulatory matters or disposal of certain assets. In addition, IDT may select and incubate promising early stage businesses outside of its core business for eventual sale or spin-off to its stockholders. However, such legal and regulatory matters and disposals do not occur each quarter. IDT does not believe the gains or losses from asset sales or 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 income and non-GAAP EPS 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 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 benefit and expense are excluded from IDT’s calculation of non-GAAP net income and non-GAAP EPS because neither was directly related to the current results of IDT’s core operations. These income tax benefit and expense are not expected to be reoccurring items.

Adjusted EBITDA, non-GAAP net income and non-GAAP EPS 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 EPS 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 EPS 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 for IDT on a consolidated basis, (b) for non-GAAP net income, net income and, (c) for non-GAAP EPS, basic and diluted earnings per share.

 

 

 

 

 

 

 

 

 

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SOURCE IDT Corporation