NEWARK, N.J., Dec. 7, 2016 — IDT Corporation (NYSE: IDT) reported diluted earnings per share (EPS) of $0.96 and Non-GAAP diluted EPS* of $0.44 on revenue of $369.2 million for the first quarter of its fiscal year 2017, the three months ended October 31, 2016.  

HIGHLIGHTS  
(Results for 1Q17 compared to 1Q16)

• Revenue was $369.2 million compared to $390.6 million;
• Income from operations was $5.2 million compared to $7.9 million;
• Adjusted EBITDA* was $10.7 million compared to $13.0 million;
• Diluted EPS was $0.96 – including a net benefit from income taxes of $14.4 million – compared to $0.18;
• Non-GAAP diluted EPS* was $0.44 compared to $0.35;   
• IDT has declared a dividend of $0.19 per share for 1Q17 to be paid on or about December 23, 2016.

*Throughout this release, Adjusted EBITDA, Non-GAAP Net Income, and Non-GAAP diluted EPS 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 reconciliation to the most directly comparable GAAP measure.  

Management Remarks
Shmuel Jonas, IDT’s Chief Executive Officer, said, “IDT’s financial results for the first quarter fiscal 2017 include a year over year decline in revenue and a decrease in SG&A expense.  Our continuing efforts to reduce overhead expense and streamline our operations mitigated the impact of the revenue loss on our bottom line. Our net income was impacted positively by a one-time benefit from income taxes among other factors.

“Operationally, we had a productive first quarter highlighted by the introduction of several new retail and wholesale products.  Significantly, our key growth initiatives – Net2Phone Office, PicuP, National Retail Solutions and our Boss Revolution international money transfer business – all performed well.  Beginning this quarter, we are expanding our reporting segment disclosure to provide additional visibility into some of these initiatives.”    

1Q17 CONSOLIDATED RESULTS 

1Q17 OPERATING RESULTS BY SEGMENT
(Results are for 1Q17 unless otherwise noted).

Effective this quarter, IDT is creating a new reportable segment, Unified Communications as a Service (UCaaS).  This new segment consists predominantly of the business lines formerly comprising the Hosted Platform Solutions product category within the Telecom Platform Services (TPS) segment.  Accordingly, the TPS segment will now consist of three business categories: Retail Communications, Wholesale Carrier Services and Payment Services. All comparative periods presented have been reclassified and restated to reflect this new segment presentation.

Telecom Platform Services (TPS)
The Telecom Platform Services segment accounted for 97.5% of IDT’s revenue in 1Q17 compared to 96.9% in 1Q16 and 97.3% in 4Q16.  TPS markets and distributes multiple communications and payments services across three broad business categories: Retail Communications, Wholesale Carrier Services and Payment Services.  Most of the lines of business revenue previously reported in TPS’ Hosted Platform Services category are now included in the new UCaaS segment and the remainder has been shifted into the Wholesale Carrier Services category.

TPS’ quarterly minutes of use (MOU) in 1Q17 were 5.91 billion, a decrease from 6.72 billion (-12.1%) in 1Q16 and from 6.62 billion (-10.8%) in 4Q16.  MOU in both Wholesale Carrier Services and Retail Communications decreased year over year and sequentially. In Retail Communications, MOU decreased for both BOSS Revolution voice products and traditional calling cards sold domestically and overseas.

TPS’ revenue in 1Q17 was $360.0 million, a decrease from $378.6 million (-4.9%) in the year ago quarter and an increase from $358.1 million (+0.5%) in the prior quarter. The year over year revenue decline resulted from softness in both Retail Communications and Wholesale Carries Services, partially offset by growth in Payment Services.  The sequential quarterly increase reflects growth in both Wholesale Carrier Services’ and Payment Services’ revenue offset by a decline in Retail Communications’ revenue.

Retail Communications’ revenue in 1Q17 declined $14.3 million (-8.4%) year over year to $157.0 million.  Sales of BOSS Revolution voice products, which accounted for over 85% of
Retail Communications’ revenue, decreased 5.1%, reflecting continued declines in revenue generated in the US – Mexico corridor.  Sales of traditional calling card products in the U.S. and overseas also decreased year over year in line with expectations.

Wholesale Carrier Services’ revenue in 1Q17 decreased $8.5 million (-5.6%) year over year to $143.3 million.  The decrease resulted primarily from the absence in 1Q17 of a Latin American pricing opportunity pertaining to local currency exchange rate disparities, which existed in the year ago period.

Payment Services’ revenue in 1Q17 increased $4.2 million (+7.4%) year over year to $59.7 million.  The sale of international mobile top-up (IMTU) minutes, which allows customers in the US to purchase air time for mobile phone users overseas, is currently the dominant line of business in the Payment Services vertical.  IMTU revenue increased 4.2% compared to the year ago quarter, and was augmented by revenue gains generated by the BOSS Revolution international money remittance business (where revenue increased 151.8% year over year) and the smaller but also rapidly growing retail point-of-sale based services business, National Retail Solutions.

TPS’ direct cost of revenue in 1Q17, expressed as a percentage of TPS’ revenue, was 85.9%, an increase of 150 basis points year over year and 80 points sequentially, primarily reflecting margin pressure on Retail Communications and Wholesale Carrier Services offerings.

The year over year decreases in TPS’ MOU and revenue, as well the increase in direct cost as a percentage of revenue, reflect the collapse of rates industry-wide on the US to Mexico corridor as well as longer term secular trends impacting the telecom industry. These include increased competition from wireless network operators and MVNOs and alternative communications solutions such as over-the-top voice and messaging. In anticipation of these developments, IDT has increased investment in long term growth initiatives in recent years while reducing SG&A expense and streamlining operations.

TPS’ SG&A expense in 1Q17 decreased to $40.5 million from $45.2 million (-10.4%) in 1Q16 and from $41.9 million (-3.2%) in 4Q16.  The year over year and sequential decreases primarily reflect reduced employee compensation costs and lower bad debt expense.  TPS’ SG&A expense was 11.3% of TPS’ revenue in 1Q17, a 60 basis points decrease compared to the year ago quarter and a 40 basis point decrease compared to the prior quarter.  

TPS’ depreciation and amortization expense in 1Q17 increased to $4.2 million from $3.8 million (+10.5%) in 1Q16 and from $3.9 million (+7.9%) in 4Q16.  Depreciation increased year-over-year due to higher levels of capital expenditures in recent periods to support investments in new products, including our payment services’ offerings, Net2Phone Office, National Retail Solutions and the new BOSS Revolution calling app with messaging. 

TPS’ income from operations in 1Q17 decreased to $6.2 million from $10.0 million (-37.7%) in 1Q16 and from $9.1 million (-31.1%) in 4Q16.  TPS’ Adjusted EBITDA decreased to $10.4 million from $13.8 million (-24.6%) in 1Q16 and from $11.4 million (-8.8%) in 4Q16.

Unified Communications as a Service (UCaaS)
The UCaaS segment is comprised of offerings from IDT’s Net2Phone division, including (1) cable telephony (2) Net2Phone Office, a hosted PBX service, (3) SIP trunking which supports inbound and outbound domestic and international calling from an IP PBX and, 4) PicuP, a highly-automated business phone service that answers, routes and manages voice calls. PicuP is currently in open beta. UCaaS’ lines of business were previously included in the TPS segment.

UCaaS’ revenue was $7.1 million in 1Q17 compared to $7.0 million in both 1Q16 and 4Q16.  Year over year, revenue of Net2Phone Office increased by over 350%, but was mostly offset by a decrease in SIP trunking revenue.  Sequentially, both Net2Phone Office and SIP trunking revenues increased.

UCaaS’ direct cost of revenue in 1Q17 expressed as a percentage of UCaaS’ revenue was 46.1%, a significant improvement from 53.2% in 1Q16 and from 49.5% in 4Q16.

SG&A expense for the segment was $3.3 million compared to $2.9 million (+11.9%) in 1Q16 and $3.0 million in 4Q16 (+8.0%).  As a percentage of UCaaS’ revenue, SG&A in 1Q17 increased to 46.1%, compared to 41.8% in 1Q16 and 43.6% in 4Q16.  The increases resulted from investments in both technology development and customer acquisition costs for Net2Phone Office and PicuP.

Depreciation and amortization expense in 1Q17 was $726 thousand compared to $657 thousand (+10.5%) in 1Q16 and $673 thousand (+7.9%) in 4Q16, reflecting the increase in capitalized costs relating to new products offerings.

UCaaS’ loss from operations was $174 thousand in 1Q17 compared to $302 thousand (-42.2%) in 1Q16 and $190 thousand (-8.2%) in 4Q16.

UCaaS’ Adjusted EBITDA in 1Q17 was $552 thousand compared to $355 thousand (+55.2%) in the year ago quarter and $483 thousand (+14.2%) in the sequential quarter.

Consumer Phone Services (CPS)
Consumer Phone Services sells local and long distance services domestically in 11 states, marketed under the brand name IDT America.  CPS has been in harvest mode since fiscal 2006 – maximizing revenue from current customers while maintaining SG&A and other expenses at the minimum levels essential to operate the business.  Results this quarter conformed to expectations.

CPS’ revenue decreased to $1.5 million in 1Q17 from $1.8 million (-18.5%) in 1Q16.  CPS’ income from operations and Adjusted EBITDA in both 1Q17 and 1Q16 were $0.3 million.

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 a minority interest in Cornerstone Pharmaceuticals, Inc.

During 1Q17, IDT invested $8 million in Cornerstone, 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.   IDT has invested $10 million in Cornerstone to date.

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 our 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
revenue in 1Q17 was $0.5 million, a decrease from $3.1 million (-83.6%) in 1Q16.  Exclusive of Zedge, revenue in 1Q16 was also $0.5 million. 

All Other’s income from operations in 1Q17 was $90 thousand compared to $430 thousand in 1Q16.

Exclusive of Zedge, income from operations in 1Q16 was $79 thousand.

OTHER CONSOLIDATED RESULTS  
Consolidated results for all periods presented include corporate overhead.  In 1Q17, corporate G&A expense decreased to $1.1 million from $2.6 million (-58.1%) in the year ago quarter and from $2.7 million (-59.6%) in the prior quarter.  The year over year and sequential reductions resulted from lower compensation costs and legal expenses, primarily due to non-routine reversals that may not be repeated in future periods.

Net income attributable to IDT in 1Q17 was $21.9 million, an increase from $4.2 million in the year ago quarter and from $11.0 million in 4Q16.  Net income attributable to IDT in 1Q17 included a $2.1 million gain resulting from 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.  Net income attributable to IDT in 1Q16 of $4.2 million included a provision for income taxes of $2.9 million. Net income attributable to IDT in 4Q16 was $11.0 million, including a $2.7 million gain on foreign currency transactions and a benefit from income taxes of $2.1 million.

At October 31, 2016, IDT had $149.7 million in unrestricted cash, cash equivalents and marketable securities. Additionally, at that date, IDT reported $81.1 million in current restricted cash and cash equivalents, which included $80.8 million of customer deposits held by IDT’s Gibraltar-based bank.  Current assets and current liabilities were $318.7 million and $320.2 million, respectively.

Net cash provided by operating activities during 1Q17 was $5.5 million, compared to $14.0 million in 1Q16 and $13.2 million in 4Q16. For the same periods, capital expenditures were $5.5 million compared to $5.5 million and $4.4 million, respectively. 

DIVIDEND
IDT’s Board of Directors has declared a quarterly dividend of $0.19 per share of Class A and Class B common stock for 1Q17 to be paid on or about December 23, 2016.  The dividend will be paid to stockholders of record as of the close of business on December 19, 2016. The ex-dividend date will be December 15, 2016.  This distribution will be treated as an ordinary dividend for tax purposes.

IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION
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 one hour after the call concludes through December 14, 2016 by dialing 1-844-512-2921 (toll free from the US) or 1-412-317-6671 (international) and providing this pin code: 10096086.  The recording will also be available via streaming audio at the IDT investor relations website (www.idt.net/ir) following the call.

Copies of this release – including the reconciliation of the non-GAAP financial measures that are both used herein and referenced during management’s discussion of results – are also available in the Investor Relations portion of IDT’s website.

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 First 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 1Q17, 4Q16 and 1Q16, 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 the gain on the sale of member interest in Visa Europe Ltd. 

IDT’s measure of non-GAAP net income starts with net income in accordance with GAAP and adds depreciation and amortization, severance expense, stock-based compensation and other operating expense, and subtracts the gain on the sale of member interest in Visa Europe Ltd. and the tax benefit from group relief.

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 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 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 operating results exclusive of depreciation and amortization charges are useful indicators of its current performance.

Severance expense is also 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.

The other operating expense and the gain on the sale of member interest in Visa Europe Ltd., which are components of income from operations, are excluded from the calculation of Adjusted EBITDA, non-GAAP net income and non-GAAP EPS. From time-to-time, IDT may dispose of certain assets or incur costs related to non-routine legal and regulatory matters. However, such disposals and legal and regulatory matters do not occur each quarter. IDT does not believe the gains or losses from asset sales or from non-routine legal and regulatory matters should be included in 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. 

The tax benefit from group relief is excluded from IDT’s calculation of non-GAAP net income and non-GAAP EPS because it only indirectly related to the current results of IDT’s core operations. Group relief is only available after all prior net operating losses are utilized by one entity and that entity is able to utilize the current period losses of a related entity. The income tax benefits were recorded by Elmion Netherlands B.V., a Netherlands subsidiary, in 1Q17 and IDT Global, a U.K. subsidiary, in 4Q16. Group relief is not anticipated to be ongoing and the related entities are expected to have a valuation allowance in future periods.

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. 28, 2016 – IDT Corporation (NYSE: IDT) has scheduled its report of first quarter fiscal year 2017 financial and operational results for Wednesday, December 7, 2016.

The first quarter (the three months ended October 31, 2016) earnings release will be issued and posted on the IDT investor relations website (www.idt.net/ir) at approximately 4:30 PM ET.

IDT will host an earnings conference call beginning at 5:30 PM ET 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 14, 2016 by dialing 1-844-512-2921 (toll free from the US) or 1-412-317-6671 (international) and providing this pin code: 10096086.  The 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 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., Nov. 10, 2016 — IDT Corporation (NYSE: IDT) today announced a strategic investment in Cornerstone Pharmaceuticals, Inc., a privately-held biotechnology company. IDT and a group of “A list” co-investors invested $10 million for a minority interest in the company, adding to a prior investment by IDT’s Chairman, Howard Jonas. Under the investment agreements, IDT has board representation, and IDT and its co-investors have the right to acquire a majority interest in Cornerstone.

“Cornerstone Pharmaceuticals, with its impressive pipeline of oncology drugs, exemplifies the promise of the biotech sector, and we are proud to support the company’s ground-breaking work,” said Howard Jonas, IDT Chairman. “We view Cornerstone as a wise investment, as its success to date has been nothing short of remarkable. The company’s lead compound, CPI-613, has generated encouraging preliminary results in early-stage trials in patients with advanced pancreatic cancer, acute myeloid leukemia (AML), and T-cell lymphoma. Those results have helped to attract an unmatched group of personnel, scientific advisors, investors and board members, strengthening Cornerstone’s position as the company charts its path forward.”

Biotechnology is an extremely well-positioned industry sector for growth and return. Annual global growth in the oncology drug market is expected to be 7.5 – 10.5 percent through 2020, reaching $150 billion. (IMS Health Data on file) IDT has long viewed the biotechnology sector as an attractive target for strategic investment, particularly in the area of oncology drug development, where numerous research initiatives are investigating agents with the potential to transform anticancer treatment. IDT’s co-investors include:

• The Abramson Family Foundation: The foundation supports the Abramson Family Cancer Research Institute and Abramson Cancer Center, a world leader in cancer research, patient care, and education. The Center’s preeminent position is reflected in its exceptional merit rating by the National Cancer Institute (NCI) and continuous designation as a Comprehensive Cancer Center by the NCI since 1973, one of 41 such Centers in the United States.
• Chetrit Brothers: The Chetrit brothers are highly disciplined and successful investors, focused primarily on real estate. Their holdings have at various times included buildings such as the Willis Tower and Sony building.
• Michael Steinhardt: Legendary hedge fund manager, financier, investor, newspaper publisher, and philanthropist; founded Steinhardt, Fine, Berkowitz & Co. in 1967.
• Mortimer Zuckerman: Co-founder, executive chairman and former CEO of Boston Properties, one of the largest real estate investment trusts in the United States. Mr. Zuckerman is also the owner and publisher of the New York Daily News and the U.S. News & World Report, where he serves as editor-in-chief. He formerly owned The Atlantic and Fast Company. He also established the Zuckerman Mind Brain Behavior Institute at Columbia University which is creating the most comprehensive brain science institute in the world.

“The science driving Cornerstone Pharmaceuticals has always been robustly innovative. Now, it is building the leadership and personnel necessary to deliver new cancer therapies to patients,” said Chi Van Dang, MD, PhD, Director of the Abramson Cancer Center of the University of Pennsylvania, who has agreed to chair Cornerstone’s Scientific Advisory Board. “Supported by committed investors, the passion and dedication of Cornerstone’s scientists and senior management will surely enhance our understanding of cancer cell metabolism as a therapeutic target for a host of innovative drug compounds, especially CPI-613.”

About CPI-613

Cornerstone’s first-in-class clinical lead compound, CPI-613, targets enzymes that are involved in cancer cell energy metabolism and are located in the mitochondria of cancer cells. CPI-613 is being evaluated in multiple Phase I, I/II, and II clinical studies as a single agent, as well as in combination with standard drug therapies, in patients diagnosed with advanced solid tumors or blood cancers. Developed as part of Cornerstone’s proprietary Altered Energy Metabolism Directed (AEMD) drug platform, CPI-613 was discovered at Stony Brook University and patented by Cornerstone. CPI-613 is designed to target the mitochondrial tricarboxylic acid (TCA) cycle, an indispensable process essential to tumor cell multiplication and survival, selectively in cancer cells.

CPI-613’s attack on the TCA cycle also substantially increases the sensitivity of cancer cells to a diverse range of chemotherapeutic agents. This synergy allows for combinations of CPI-613 with lower doses of these generally toxic drugs to be highly effective with lower patient side effects. Combinations with CPI-613 represent a diverse range of potential opportunities to substantially improve patient benefit in many different cancers.

The U.S. Food and Drug Administration (FDA) has designated CPI-613 an Orphan Drug for the treatment of acute myeloid leukemia (AML), pancreatic cancer and myelodysplastic syndromes (MDS). As a next step, Cornerstone intends to apply for Orphan Drug designation for MYC amplified lymphoma/Burkitt lymphoma and T-cell lymphoma. With Orphan designation, CPI-613 will be granted market exclusivity for 7 years (higher than non-Orphan drugs), 50% tax credits on all clinical trials and exemption from the $2.2 million PDUFA fee.

About Cornerstone Pharmaceuticals, Inc.

Cornerstone Pharmaceuticals, Inc. 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. The company’s primary objective is to develop highly selective and effective agents with minimal toxic effects on normal cells and tissues. The company’s unique approach to targeting cancer metabolism has led to two distinct technology platforms: altered energy metabolism directed, or AEMD compounds, and an Emulsiphan lipid nanoemulsion-based drug delivery system. www.cornerstonepharma.com.

About IDT Corporation

IDT Corporation is a Fortune 1000 technology company, currently traded on the New York Stock Exchange. After beginning in the telecom industry, IDT has become an important innovator in Payment Services, VOiP Solutions, and Mobile Applications. IDT has spun off and sold many successful companies including Genie Energy, Straight Path Communications, IDW Publishing, Zedge, and IDT Entertainment. IDT has recently moved its headquarters to a state of the art facility in Newark that complements its commitment to remaining an important technological disruptor for years to come.

Safe Harbor Statement

This press release contains forward-looking statements. These statements relate to future events or the c
ompany’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the company, or any other person, that such forward looking statements will be achieved. The business and operations of the company are subject to substantial risks which increase the uncertainty inherent in forward-looking statements. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements.

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SOURCE IDT Corporation

NEWARK, N.J., Oct. 13, 2016 – net2phone, a leading cloud-based telephony provider, today announced that it will partner with Telecom Consulting Group (TCG), one of the most experienced and largest master agencies in the United States with over 1800 agents nationwide. The two companies are teaming to offer TCG’s clients net2phone’s Hosted PBX and SIP Trunking services with unlimited domestic and international calling to 25 countries.

Jonah Fink, President of net2phone, said, “TCG’s commitment to technological innovation and the global focus of its client base is a perfect fit for net2phone.  Our partnership enables TCG’s national agent network to provide Hosted PBX and SIP Trunking with net2phone’s all-encompassing VoIP solutions, while leveraging IDT’s global network.  We look forward to working with TCG to serve its valued channel partners.”

Dan Pirigyi, Partner at TCG, said, “We’re very excited about this new and unique partnership with net2phone. Their flat rate, unlimited international calling programs make their cloud-based offerings truly exceptional. TCG has experienced tremendous growth in areas such as South Florida, California, Texas, and New York where local and regional economies are keyed to international trade opportunities.  The net2phone suite of products is perfectly aligned for these markets.”

net2phone’s Hosted PBX and SIP Trunking services provide unlimited calling for flat low monthly rates.  These unlimited calling plans include the US and Canada plus 23 additional destinations: Austria, Cyprus, Denmark, France, Germany, Greece, Hungary, India, Ireland, Israel, Italy, Mexico, Netherlands, Norway, Peru, Portugal, Puerto Rico, Romania, Singapore, Slovakia, Spain, Sweden, and the UK.

About net2phone:

net2phone, a leading cloud based telephony provider, offers a full suite of cloud-based UCaaS solutions in over 160 countries.  net2phone routes millions of minutes daily over data networks, offering high quality voice services and saving consumers and businesses up to 90% off international calling rates.  For more information about net2phone’s products and services, please visit www.net2phone.com. net2phone is a subsidiary of IDT Corporation (NYSE: IDT). 

About Telecom Consulting Group:

Telecom Consulting Group (TCG) is a Master Agency based out of Fort Lauderdale, FL and has been in business for 26 years. TCG has over 1800 nationwide agents and 12 channel managers across the country. 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 don’t have quotas. TCG has the best back office in the business to serve their agents. TCG strives to deliver the best support in the industry. They specialize in COAX cable, Metro Ethernet, Hosted VoIP, PRI, Analog lines, dynamic T1’s, SIP, and numerous Cloud services. TCG gives their agents access to the best of breed Cable Companies, CLEC’s, LECs, and Hosted VoIP Carriers.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/net2phone-enters-partnership-with-telecom-consulting-group-300344395.html

SOURCE IDT Corporation

NEWARK, N.J., Sept. 28, 2016 – IDT Corporation (NYSE: IDT) reported diluted earnings per share (EPS) of $0.48 and Non-GAAP diluted EPS* of $0.50 on revenue of $368.1 million for the fourth quarter of its fiscal year 2016, the three months ended July 31, 2016.

For FY 2016, IDT reported diluted EPS of $1.03 and Non-GAAP diluted EPS* of $1.63 on revenue of $1,496.3 million. 

FOURTH QUARTER AND FULL FISCAL YEAR 2016 HIGHLIGHTS
(Results for 4Q16 are compared to 4Q15, and results for FY 2016 are compared to FY 2015).

• Revenue in 4Q16 was $368.1 million compared to $405.8 million. FY 2016 revenue was $1,496.3 million compared to $1,596.8 million;
• Income from operations in 4Q16 was $6.2 million compared to $7.2 million. FY 2016 income from operations was $26.2 million compared to $93.1 million;
• Adjusted EBITDA* in 4Q16 was $10.0 million compared to $12.4 million. FY 2016 Adjusted EBITDA* was $45.0 million compared to $44.5 million;
• Diluted EPS in 4Q16 was $0.48 compared to $0.05. FY 2016 diluted EPS was $1.03 compared to $3.63;
• Non-GAAP diluted EPS* in 4Q16 was $0.50 compared to $0.25. FY 2016 Non-GAAP diluted EPS* was $1.63 compared to $1.27;
• IDT has declared a dividend of $0.19 per share for 4Q16 to be paid on or about October 20, 2016;
• On June 1, 2016, IDT completed the spin-off of Zedge to its stockholders.

MANAGEMENT REMARKS
Shmuel Jonas, IDT’s Chief Executive Officer, said, “Our financial results in the fourth quarter were consistent with recent trends.  Our core telecom offerings continued to face revenue and margin pressure stemming in significant part from deregulation of the Mexico telecom market.  The impact was mitigated by our continued focus on reducing SG&A expense.”

“Operationally, our BOSS Revolution international money transfer business, Net2Phone’s unified communications as a service offerings and our National Retail Solutions initiative are all meeting or beating expectations.  As they achieve scale, each of these initiatives has the potential to become a significant contributor to IDT’s bottom line.  In addition, we beta launched two new products after the quarter close — PicuP, a telephony solution for very small businesses and, just two weeks ago, the next generation of the BOSS Revolution app with free peer-to-peer calling and messaging.  Both are getting rave reviews.  Across the IDT enterprise, we are intensifying our commitment to developing, deploying, investing and supporting innovative growth initiatives,” Mr. Jonas added.

*Throughout this release, Adjusted EBITDA, Non-GAAP Net Income, and Non-GAAP diluted EPS 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 reconciliation to the most directly comparable GAAP measure.

4Q16 AND FULL FISCAL YEAR 2016 CONSOLIDATED RESULTS 

4Q16 AND FY 2016 OPERATING RESULTS BY SEGMENT
(Results are for 4Q16 unless otherwise noted).

TPS
IDT’s Telecom Platform Services (TPS) segment accounted for 99.2% of IDT’s revenue in 4Q16 and 98.8% in FY 2016. 
TPS markets and distributes multiple communications and payment services across four broad business verticals: Retail Communications, Wholesale Carrier Services, Payment Services and Hosted Platform Solutions.

TPS’ quarterly minutes of use (MOU) were 7.08 billion, a decrease from 7.47 billion (-5.1%) in 4Q15 and an increase from 6.97 billion (+1.6%) in 3Q16.  The year over year decrease reflects declines in MOU in Retail Communications including both BOSS Revolution and traditional calling cards, and in Wholesale Carrier Services, while the sequential increase was due mostly to 4Q16 having 92 days compared to 90 in the prior quarter.  For FY 2016, TPS’s MOU were 28.25 billion, a decrease from 29.31 billion (-3.6%) in FY 2015, primarily due to a decrease in Retail Communications MOU. 

TPS’ revenue was $365.1 million, a decrease from $400.8 million (-8.9%) in the year ago quarter and an increase from $350.4 million (+4.2%) in the prior quarter. The sequential quarterly increase was driven by the greater number of days in the fourth quarter and an increase in Wholesale Carrier Services’ revenue.  For FY 2016, TPS’ revenue was $1,477.9 million, a decrease from $1,572.7 million (-6.0%) in FY 2015.  

Retail Communications revenue was $165.3 million in 4Q16, a decrease from $185.0 million (-10.6%) in the year ago quarter, due to declines in our BOSS Revolution PIN-less service’s sales on the US – Mexico corridor and in sales of our legacy traditional card products both in the U.S. and overseas. For FY 2016, Retail Communications revenue totaled $672.2 million, a decrease from $735.0 million (-8.6%) in FY 2015.

Wholesale Carrier Services’ revenue decreased to $136.5 million from $151.5 million (-9.9%) in 4Q15.  For the full year, Wholesale Carrier Services’ revenue decreased to $555.1 million from $590.9 million (-6.1%) in FY 2015. The quarterly and full year decreases resulted primarily from the termination of a Latin American pricing opportunity pertaining to local currency exchange rate disparities coupled with declining sales of traditional carrier services. 

Payment Services’ revenue decreased to $55.5 million from $55.7 million (-0.5%).  The decrease reflected declines in revenue from IDT’s Gibraltar-based bank and in sales of International Mobile Top-Up (IMTU) products, partially offset by a 52% increase in revenue from the BOSS Revolution international money transfer business.  FY 2016 Payment Services’ revenue increased to $219.2 million from $208.3 million (+5.2%) in FY 2015. The full year increase was driven primarily by continued growth of both IMTU products and international money transfer sales. 

Hosted Platform Solutions’ revenue decreased to $7.8 million from $8.6 million (-9.9%) while full year revenue declined to $31.4 million from $38.5 million (-18.5%) for FY 2015.  The decreases were in-line with expectations as they reflected lower rates incorporated into contract renewals with key cable telephony customers.  

TPS’ direct cost of revenue as a percentage of TPS’ revenue was 84.4% in 4Q16, an increase of 10 basis points year over year and an increase of 100 basis points sequentially.  For FY 2016, TPS’ direct cost of revenue was 84.1% of TPS’ revenue – unchanged from the prior year.

TPS’ SG&A expense decreased to $44.9 million from $49.4 million (-8.9%) in 4Q15 and from $46.7 million (-3.8%) in 3Q16.  The year over year and sequential decreases primarily reflect reduced employee compensation and legal costs.  Expressed as a percentage of TPS’ revenue, TPS’ 4Q16 SG&A remained at 12.3% compared to the year ago quarter and dropped 100 basis points compared to the prior quarter.  TPS’ SG&A expense in FY 2016 decreased to $186.6 million from $199.6 million (-6.5%) in FY 2015, reflecting reduced employee headcount and compensation expense, marketing and advertising costs, and call center expense.  As a percentage of revenue, SG&A expense in FY 2016 decreased 10 basis points to 12.6% compared to FY 2015.

TPS’ depreciation and amortization expense increased to $4.5 million from $4.3 million (+4.1%) in 4Q15 and decreased from $4.9 million (-8.5%) in 3Q16.  Depreciation increased year-over-year due to higher levels of capital expenditures in recent periods to support investments in new products, including Net2Phone’s ‘unified communications as a service’ offerings, National Retail Solutions and the new BOSS Revolution calling app with messaging.  For FY 2016, depreciation and amortization expense increased to $18.5 million from $16.2 million (+14.7%) in FY 2015 for the same reason.

TPS’ income from operations increased to $8.9 million from $8.8 million (+0.7%) in 4Q15 and from $6.3 million (+40.3%) in 3Q16.  For FY 2016, TPS’ income from operations totaled $31.2 million compared to $27.0 million (+15.8%) in FY 2015.  Income from operations in 4Q16 and FY 2016 include severance expense of $6.0 million (compared to $0.2 million in both 4Q15 and 3Q16) and a gain of $7.5 million on the sale of IDT’s Gibraltar based bank’s member interest in Visa Europe.  In FY 2015, TPS’ income from operations also included $7.7 million in severance expense.

TPS’ Adjusted EBITDA decreased to $11.9 million from $13.4 million (-11.3%) in 4Q15 and increased from $11.5 million (+3.4%) in 3Q16.  For FY 2016, Adjusted EBITDA decreased to $48.8 million from $50.8 million (-3.9%) in FY 2015.

CPS
Consumer Phone Services (CPS) sells local and long distance services domestically in 11 states, marketed under the brand name IDT America.  CPS has been in harvest mode since fiscal 2006 – maximizing revenue from current customers while maintaining SG&A and other expenses at the minimum levels essential to operate the business.  Results this quarter and fiscal year conformed to expectations.

CPS’ revenue decreased to $1.6 million from $2.0 million (-19.2%) in 4Q15 and from $1.7 million (-5.0%) in the prior quarter.  FY 2016 revenue decreased to $6.9 million from $8.6 million (-20.3%) in FY 2015.  CPS’ income from operations decreased to $0.2 million from $0.3 million (-12.3%) in 4Q15 and $0.4 million (-31.7%) in 3Q16.  Income from operations in FY 2016 was $1.2 million compared to $1.3 million (-3.2%) in FY 2015. 

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. 

All Other previously included Zedge, a platform and mobile app centered on self-expression, and Fabrix, a software development company specializing in cloud-based video storage and processing.  Zedge was spun off from IDT to IDT’s shareholders on June 1, 2016.  Because the disposition of Zedge did not meet the criteria to be reported as a discontinued operation, Zedge’s assets, liabilities, results of operations and cash flows were not reclassified. Accordingly, 4Q16 and FY 2016 results of operations for All Other include only one month and ten months of Zedge activity, respectively. 

Fabrix was included in All Other until it was sold and deconsolidated in October 2014.  In FY 2015, All Other includes two months of Fabrix’ results of op
erations compared to none in FY 2016 and none in the fourth quarter of either fiscal year.

All Other’s revenue was $1.4 million, a decrease from $3.0 million (-54.5%) in 4Q15. Zedge contributed revenue of $0.8 million in 4Q16 and $2.4 million in 4Q15.  All Other’s FY 2016 revenue was $11.5 million compared to $15.4 million (-25.5%) in FY 2015.  Zedge contributed $9.5 million and $9.1 million of All Other’s revenue in FY 2016 and FY 2015, respectively.   In FY 2015, Fabrix contributed revenue of $4.2 million.   

All Other’s income from operations in 4Q16 was $86 thousand compared to $449 thousand in 4Q15. Zedge generated a loss from operations of $32 thousand in 4Q16 and income from operations of $270 thousand in the year ago quarter.  All Other’s income from operations was $4.2 million in FY 2016 compared $78.0 million in FY 2015.  Zedge contributed $2.3 million to income from operations in FY 2016 and $100 thousand in FY 2015.  Fabrix’s income from operations in FY 2015 was $948 thousand. All Other’s results also included a gain of $1.1 million in FY 2016 and $76.9 million in FY 2015 on the sale of IDT’s interest in Fabrix.

OTHER CONSOLIDATED RESULTS
Consolidated results for all periods presented include corporate overhead.  In 4Q16, corporate G&A expense increased to $2.7 million from $2.3 million (+15.9%) in the year ago quarter and decreased from $2.8 million (-5.0%) in the prior quarter.  Corporate G&A expense was $10.1 million in FY 2016 compared to $10.9 million (-7.8%) in FY 2015.

4Q16 net income attributable to IDT increased to $11.0 million from $1.3 million in the year ago quarter and from $4.2 million in 3Q16.  Net income attributable to IDT in 4Q16 included a $2.7 million gain on foreign currency transactions and a benefit from income taxes of $2.1 million.  For 4Q15, net income attributable to IDT was $1.3 million including a foreign currency transaction loss of $0.9 million and a provision for income taxes of $3.8 million.  Net income attributable to IDT in 3Q16 included a foreign currency transaction gain of $0.6 million and a provision for income taxes of $1.3 million.  FY 2016 net income attributable to IDT was $23.5 million including a $1.0 million gain on foreign currency transactions and a provision for income taxes of $4.1 million.  In FY 2015, net income attributable to IDT was $84.5 million including a $1.7 million loss on foreign currency transactions and a provision for income taxes of $6.1 million. The full year decrease primarily reflects the $76.9 million gain on the sale of IDT’s interest in Fabrix in FY 2015.

At July 31, 2016, IDT had $162.5 million in unrestricted cash, cash equivalents and marketable securities. Additionally, at that date, IDT reported $98.8 million in current restricted cash and cash equivalents, which included $98.5 million of customer deposits held by IDT’s Gibraltar-based bank.  Current assets and liabilities were $339.1 million and $343.8 million, respectively.

Net cash provided by operating activities during 4Q16 was $13.2 million, compared to $2.8 million during 4Q15 and $10.7 million in 3Q16.  For the same periods, capital expenditures were $4.4 million compared to $5.7 million and $4.7 million, respectively.  For FY 2016, cash provided by operating activities was $49.1 million compared to $30.5 million in FY 2015.  Capital expenditures for FY 2016 totaled $18.4 million compared to $28.6 million in the prior year.  The full year decrease in capital expenditures pertains primarily to investments made in FY 2015 to refurbish IDT’s headquarters building at 520 Broad Street in Newark, New Jersey.

DIVIDEND
IDT’s Board of Directors has declared a quarterly dividend of $0.19 per share of Class A and Class B common stock for the fourth quarter of FY 2016 to be paid on or about October 20, 2016.  The dividend will be paid to stockholders of record as of the close of business on October 11, 2016. The ex-dividend date will be October 6, 2016.  This distribution will be treated as an ordinary dividend for tax purposes.

IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION
IDT will host an earnings conference call today beginning at 5:30 PM ET 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 October 5, 2016 by dialing 1-877-870-5176 (toll free from the US) or 1-858-384-5517 (international) and providing this conference code: 10091025.  The recording will also be available via streaming audio at the IDT investor relations website (www.idt.net/ir) following the call.

Copies of this release – including the reconciliation of the non-GAAP financial measures that are both used herein and referenced during management’s discussion of results – are also available in the Investor Relations portion of IDT’s website.

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 2016 and 2015

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 the fourth quarters of fiscal 2016 and 2015, 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, selling, general and administrative expense and research and development expense. Another way of calculating Adjusted EBITDA is to start with income from operations, add depreciation and amortization, severance expense, and other operating losses, and subtract the gain on the sale of member interest in Visa Europe Ltd. and the gain on the sale of interest in Fabrix Systems Ltd.

IDT’s measure of non-GAAP net income starts with net income in accordance with GAAP and adds depreciation and amortization, severance expense, stock-based compensation, and other operating losses, and subtracts the gain on the sale of member interest in Visa Europe Ltd., the gain on the sale of interest in Fabrix Systems Ltd. and the tax benefit from group relief in the United Kingdom.

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 2016 and fiscal 2015 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 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 operating results exclusive of depreciation and amortization charges are useful indicators of i
ts current performance.

Severance expense is also 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.

The gains on the sale of member interest in Visa Europe Ltd. and the sale of the interest in Fabrix Systems Ltd., and the other operating losses, which are components of income from operations, are excluded from the calculation of Adjusted EBITDA, non-GAAP net income and non-GAAP EPS. From time-to-time, IDT may select and incubate promising early stage businesses outside of its core business for eventual sale or spin-off to its stockholders. In addition, IDT will dispose of certain assets or incur costs related to legal matters. However, such gains or losses do not occur each quarter nor are they part 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, selling, general and administrative expense and research and development 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. 

The tax benefit from group relief in the United Kingdom is excluded from IDT’s calculation of non-GAAP net income and non-GAAP EPS because it only indirectly related to the current results of IDT’s core operations. Group relief is only available after all prior net operating losses are utilized by one entity and that entity is able to utilize the current period losses of a related entity. Group relief is not anticipated to be ongoing and the related entities are expected to have a valuation allowance in future periods.

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.