ARLINGTON, Va.–(BUSINESS WIRE)–IDT Corporation (NYSE: IDT) today said that its technology licensing subsidiary, Innovative Communications Technologies, Inc. (ICTI), has filed complaints in the United States District Court for the Eastern District of Virginia against Stalker Software, Inc. (d/b/a CommuniGate Systems, Inc.), ooVoo, LLC, and Vivox, Inc. claiming infringement of a number of its key patents. ICTI seeks both damages and injunctive relief from the defendants. 
 

“We believe that ICTI’s patented technology is being improperly exploited by many companies, including these defendants. These actions are the first steps in a broader campaign to protect these valuable intellectual property assets,” said Howard Jonas, Chairman and CEO of IDT.

ICTI IP Counsel
Vandana Koelsch, 202-480-5075
or
IDT Corporation
Bill Ulrey, 973-438-3838
william.ulrey@idt.net

 

 

 

NEWARK, NJ — December 12, 2011:  IDT Corporation (NYSE: IDT) reported record revenue of $376.8 million and a net loss attributable to IDT of $(4.3) million – $(0.21) per diluted share -for its first quarter of fiscal 2012, the three months ended October 31, 2011.  Operating results for the quarter include the impact of $11.3 million in expense resulting from the settlement of a legal claim.

IDT’s Board also declared a quarterly dividend of $0.13 per share of common stock. The dividend will be paid on January 5, 2012 to shareholders of record of IDT’s Class A and Class B common stock as of the close of business on December 22, 2011.  The ex-dividend date is December 20, 2011.  The Board anticipates continuing to pay quarterly dividends commensurate with the Company’s financial results, available resources and strategic goals. For tax purposes, the $0.13 per share payment will be treated as a return of capital and not as a dividend.  Payments classified as returns on capital generally reduce the basis in the shares on which the payment is made, unless the basis is lower than the amount of the payment.  

As a result of the successful spin-off of Genie Energy Ltd. (NYSE: GNE), which was completed on October 28, 2011, IDT’s operating results for 1Q12, including all comparative periods presented, have been adjusted to reflect Genie Energy as a discontinued operation. 

FIRST QUARTER FISCAL 2012 HIGHLIGHTS

·    Revenue of $376.8 million in the current quarter increased 21.6% versus the year ago period.

·    Gross profit of $57.4 million in the current quarter was flat compared with the year ago period.

·    Gross margin of 15.2% declined 330 basis points versus the year ago period.

·    Adjusted EBITDA of $4.6 million versus $7.5 million in the year ago period.

·    (Loss) from operations of $(11.1) million including the impact of $11.3 million in expense related to the settlement of a lawsuit previously filed by T-Mobile against IDT Telecom, versus income from operations of $4.3 million in the year ago period.

·    Net (loss) attributable to IDT of $(4.3) million versus net income of $15.6 million in the year ago period.

·     Diluted (loss) per share of $(0.21) versus diluted income per share of $0.70 in the year ago period.

·     Net cash (used in) operating activities totaled $(13.4) million, including the impact of the legal settlement, versus net cash provided by operating activities of $3.6 million in the year ago period.

·    Cash and cash equivalents were $146.5 million at October 31, 2011.  This includes $17.4 million in restricted cash and cash equivalents, and $11.9 million due to Genie Energy, which was transferred to Genie Energy after the quarter end.

$ in millions, except EPS	1Q12	4Q11	1Q11	YoY Change (%/$)
Revenue	$376.8	$361.1	$309.8	+21.6%
Gross profit	$57.4	$59.2	$57.4	0.1%
Gross margin percentage	15.2%	16.4%	18.5%	(330) basis points
SG&A expense (including R&D)	$52.8	$54.4	$49.9	+5.8%
Adjusted EBITDA	$4.6	$4.8	$7.5	(38.2)%
Depreciation and amortization expense	$4.4	$4.5	$5.7	(21.8)%
Other operating (loss) gains	$(11.3)	$(1.1)	$2.5	$(13.8)
(Loss) income from operations	$(11.1)	$(0.8)	$4.3	$(15.4)
Net (loss) income attributable to IDT	$(4.3)	$0.2	$15.6	$(19.9)
Diluted EPS attributable to IDT	$(0.21)	$0.01	$0.70	$(0.91)
Net cash (used in) provided by operating activities	$(13.4)	$14.1	$3.6	$(17.0)

 

NOTES:

·         Adjusted EBITDA for all periods presented is a non-GAAP measure representing income (loss) from operations exclusive of depreciation and amortization, and other operating (loss) gains.  It is one of several key metrics used by management to evaluate the operating performance of the Company and its individual business units.  See reconciliations provided below.

·         The results of operations for Genie Energy have been reclassified to discontinued operations for all periods presented.

Howard Jonas, IDT’s Chairman and CEO, said, “IDT spun-off Genie Energy to our stockholders in the first quarter, and delivered strong top line results, with revenues 21.6% higher than the year ago quarter.  We have been particularly pleased by the rapid expansion of our Boss Revolution payment platform, which increased revenues by over 400% compared to the year ago quarter and is now larger than our traditional pre-paid calling card business in the U.S. on a revenue basis.  Our bottom line and cash from operations were impacted by a significant legal settlement and other expenses which we undertook to facilitate the spin-off of Genie Energy.  Absent these items, we would have had positive net income and cash from operations. 

“Looking ahead, we expect to deliver positive net income and cash from operations in the second quarter of fiscal 2012 even as we continue to invest in building-out the Boss Revolution payment platform, our direct retail sales force and other initiatives essential to our long term growth strategy,” Mr. Jonas added.

BALANCE SHEET AND CASH FLOW HIGHLIGHTS

At October 31, 2011, IDT reported $146.5 million of cash and cash equivalents, including $17.4 million of restricted cash and cash equivalents, compared to $240.3 million as of July 31, 2011.  

During 1Q12, IDT transferred $70.3 million to Genie Energy in connection with Genie Energy’s spin-off to IDT’s stockholders.  In 2Q12, IDT transferred an additional $11.9 million to Genie in connection with the spin-off. These cash transfers, in addition to $23.8 million in cash, cash equivalents and restricted cash held by Genie Energy prior to the spin-off, totaled $106.0 million, which represents the total cash that Genie Energy was expected to receive at spin-off, in accordance with IDT management’s intent as disclosed in Genie’s filed Registration Statement on Form 10.

At October 31, 2011, IDT’s total assets were $394.0 million and total liabilities were $323.5 million, compared to total assets of $568.2 million and total liabilities of $364.4 million at July 31, 2011. The decline in IDT’s net assets reflects predominantly the $94.1 million of cash mentioned above plus $30.7 million of other net working capital assets distributed to Genie Energy in the spin-off.

Net cash (used in) operating activities was $(13.4) million in 1Q12, compared to net cash provided by operating activities of $3.6 million during the year ago quarter.  Most of the decline in cash for 1Q12 is due to the $10.0 million cash payment made to T-Mobile to settle pending litigation, as discussed above.  In addition, IDT paid annual employee performance compensation in 1Q12 totaling $5.7 million. 

Capital expenditures in 1Q12 totaled $1.9 million, compared to $3.3 million in the year ago quarter.  Dividends paid to stockholders in 1Q12 totaled $5.2 million.  IDT did not pay any dividends in the year ago quarter.

OPERATING RESULTS BY SEGMENT

IDT TELECOM

IDT Telecom is comprised of two reportable business segments: Telecom Platform Services (TPS) and Consumer Phone Services (CPS).  TPS, representing 99% of IDT Telecom’s revenue and 86% of its Adjusted EBITDA in 1Q12, markets and distributes multiple communications and payment services across four broad business categories, including: 

·        Retail Communications sells international long distance calling products primarily to immigrant communities worldwide, with core markets in the US and Europe. This includes our flagship Boss Revolution – a pay-as-you-go, card-less international calling service and payment platform, mobile applications, as well as many of our established calling card brands including Boss, La Leyenda, Feliz, and Pennytalk. 

·        Wholesale Termination Services is a global telecom carrier terminating international long distance calls around the world for Tier 1 fixed line and mobile network operators as well as other aggregators through its network of 800-plus carrier interconnects.

·        Hosted Platform Solutions enables operators to leverage IDT’s proprietary networks, platforms and/or technology to assist them in providing customized communications solutions.  Included in this category is our cable telephony product offering, which is in “harvest mode”.

·        Payment Services markets payment products such as international mobile top-up, or IMTU, as well as gift cards in both the US and Europe.  IMTU enables purchasers to top-up a prepaid mobile phone in another country.  IMTU is available in both traditional cards as well as on the Boss Revolution payment platform. IDT also offers a reloadable debit card and Bank Identification Number (BIN) Sponsorship services in Europe through its Gibraltar bank.

CPS provides both bundled (unlimited local and long distance) services as well as long distance-only services to consumers in the United States.  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. We anticipate that CPS’ customer base and revenue will continue to decline, however, given the current customer behavior and churn trends, we expect this business to continue to generate positive cash flow for at least another three years.

Telecom Platform Services (TPS)

For 1Q12, TPS’ minutes of use rose to 7.3 billion, a 20.0% increase compared to the year ago quarter and a 4.5% increase sequentially, driven by the continued strength in both our Wholesale Termination Services and Retail Communications businesses.  Consistent with the growth in minutes, TPS’ revenue increased 22.9% year over year and 4.5% sequentially to $369.1 million.

·        Retail Communications revenue of $131.9 million (35.7% of TPS’ revenue in 1Q12) grew 11.5% year over year and 3.3% sequentially.  Growth was led by aggressive penetration and acceptance of Boss Revolution within the U.S. retail distribution network, partially offset by a continued decline in sales of traditional IDT-branded disposable calling cards

·        Wholesale Termination Services revenue of $187.0 million (50.7% of TPS’ revenue in 1Q12) grew 33.0% year over year and 6.5% sequentially.  This growth was due to our continued focus on optimal execution as well as an effective pricing and costing strategy, which we believe has increased our market share presence in a very competitive international long distance market.    

·        Hosted Platform Solutions revenue of $15.0 million (4.1% of TPS’ revenue in 1Q12) declined 23.5% year over year and 12.0% sequentially.  The decline in revenue is primarily due to the loss of IDT’s largest cable telephony customer. 

·        Payment Services revenue of $35.2 million (9.5% of TPS’ revenue in 1Q12) grew 60.5% year over year and 7.0% sequentially.  The year over year growth was driven by the success of our IMTU products.  However, because of increased competition in the IMTU marketplace, sales of IMTU products are likely to grow at a slower pace in fiscal 2012.  Future growth will be contingent, in large part, on our ability to enter into new IMTU partnerships with wireless providers, as well as on a recently launched initiative to sell IMTU through the Boss Revolution payment platform.

TPS’ gross margin percentage in 1Q12 was 14.3%, generating $52.6 million in gross profit.  Gross margin percentage declined 290 basis points year over year and 110 basis points sequentially, while gross profit increased 1.7% year over year and declined 2.9% sequentially.  The declines in gross margin reflect the loss of the large, high margin cable telephony customer, as well as the evolution of our product mix, as revenue from higher margin traditional disposable calling cards decline while revenue of our lower margin Wholesale Termination Services, Boss Revolution and IMTU, increase.  In addition, during 1Q12, the gross profit and margins for our European Retail Communications business was negatively impacted by the weakening of the European currencies versus the US dollar. 

TPS’ SG&A expense in 1Q12 was $44.9 million, an 8.2% year over year increase in absolute terms, primarily due to the increase in our variable costs as our top-line grew as well.  As a percentage of TPS’ revenue, SG&A expense declined to 12.2%, compared to 13.8% in the year ago period and 13.4% in 4Q11.  Variable SG&A includes costs such as marketing, bad debt, third-party transaction processing costs, and internal sales commissions that closely track top-line performance.  In particular, internal sales commissions have grown rapidly as a direct result of IDT Telecom’s ongoing effort to grow and strengthen its retail direct sales force in the U.S.  Similarly, third-party transaction processing costs have increased in direct proportion to the explosive growth of Boss Revolution. Excluding these variable costs, SG&A expense was relatively flat year over year.

Sequentially, TPS’ SG&A decreased by 5.2%, reflecting a sharp reduction in legal fees.  Legal fees typically relate to legacy litigation activities not associated with the ongoing costs necessary to operate our businesses.  In addition, during 1Q12, IDT recognized a higher level of bad debt due to a significant deterioration in our ability to collect on amounts due from a wholesale carrier customer.  In general, management has identified a somewhat increased liquidity and/or solvency risk in the wholesale termination marketplace, and continues to attentively monitor credit exposure and the credit quality of our wholesale trade partners. 

TPS generated $7.7 million in Adjusted EBITDA in 1Q12, compared to $10.2 million in the year-ago period and $6.8 million in the prior quarter.   

TPS’ depreciation and amortization expense was $3.8 million in 1Q12, a 19.8% decline from the year ago period and a 1.1% decline sequentially.  The slowing in the rate of decline in depreciation and amortization expense reflects the normalized levels of depreciation and amortization, after a period of sustained reductions related to the move to an IP-based network and reduced capital expenditures.

 

TPS’ loss from operations was $(7.3) million in 1Q12, including the impact of $11.3 million in costs related to the lawsuit settlement discussed above.  Income from operations was $5.5 million in 1Q11, and $1.8 million in 4Q11.

ALL OTHER

All Other is comprised of operating businesses or assets of IDT that are not included within our TPS or CPS reportable segments.  It includes Fabrix, a software development company specializing in highly efficient video processing, storage and delivery; Zedge, the worlds’ largest distribution platform for personalization of feature phones, smart phones and tablets; IDT Spectrum, which holds, leases and sells fixed wireless spectrum; and ICTI which holds intellectual property developed by IDT’s Net2Phone subsidiary related to computer-to-computer communications.  All Other also includes IDT’s real estate holdings.

During 1Q12, Fabrix successfully deployed its deep video storage product with a North American tier-1 operator.  In addition, a major cable operator based in the United States that is utilizing Fabrix for a cloud based DVR solution continues to roll out that service to its customer base successfully.  Recently, Fabrix also closed a modest but strategically significant DVR deal in Europe.  

 

Zedge continues its robust growth, with more than 12 million active installations of its app for Android.  The Zedge app ranks in the top 15 most popular apps across Google’s Android Marketplace.

IDT Spectrum is seeing increased interest from wireless operators for its 38 and 28 GHz licenses to support wireless backhaul build-outs.

ICTI is moving forward in its effort to monetize its patent portfolio. Review and due diligence regarding the patents and potential defendants/licensees is ongoing, and negotiations with infringers are expected to commence in the first half of calendar 2012.

 

IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION

§         Management’s discussion of IDT’s financial and operational results is posted in an audio file on the IDT website at https://www.idt.net/about/ir/overview.asp.  The audio file (in MP3 format) may be played directly from the website or downloaded for later playback.

§         An archived copy of this audio file will be available on the Investor Relations page of the IDT website, under the “Presentations” heading, for at least one year after the webcast.

§         Copies of this release – which includes a reconciliation of the Non-GAAP financial measures that are both used herein and referenced during management’s discussion of results – are available in the Investor Relations portion of IDT’s website, at https://www.idt.net/about/ir/overview.asp.

§         Q&A will be in a written format.  Investors and others interested in IDT are invited to e-mail questions for management to invest@idt.net.  IDT will accept questions received through the close of business on Thursday, December 15, 2011. Questioners must identify themselves by name and (if applicable) firm. When management can constructively answer the question, the initial question, the questioner’s name and firm, and management’s response will be posted in a document available on IDT Corporation’s website and in a Form 8-K filing as early as Monday, December 19, 2011 following the market close.

ABOUT IDT CORPORATION

IDT Corporation (NYSE: IDT) through its IDT Telecom division, markets and distributes multiple communication and payment services.  IDT Telecom’s retail communications, hosted solutions and payment services allow people to communicate and share financial resources around the world while its wholesale termination services business is a global leader in wholesale voice termination. For more information, visit www.idt.net.

 

 

In this press release, all statements that are not purely about historical facts, including, but not limited to, payment of dividends and 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, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.  These factors include, but are not limited to, the following: potential declines in prices for our products and services; our ability to maintain and grow our telecommunication businesses; availability of termination capacity to particular destinations; our ability to maintain carrier agreements with foreign carriers; our ability to obtain telecommunications products or services required for our services; the  financial stability of our major customers; our ability to return to profitability and improve our cash flow; impact of government regulation; effectiveness of our marketing and distribution efforts; and general economic conditions.  We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.

Contact:

IDT Corporation Investor Relations

Bill Ulrey

william.ulrey@idt.net

973-438-3838

NEWARK, NJ — October 6, 2011: IDT Corporation (NYSE: IDT) reported net income of $0.2 million, or $0.01 per diluted share, for its fourth quarter of fiscal 2011. For its fiscal year ended July 31, 2011, net income was $26.8 million, or $1.19 per diluted share.

FOURTH QUARTER FISCAL 2011 SUMMARY

$ in millions, except EPS	4Q11	3Q11	4Q10	YoY Change (%/$)
Revenues	$407.5	$394.0	$354.6	+14.9%
Gross profit	$70.2	$74.4	$71.8	(2.2)%
Gross margin percentage	17.2%	18.9%	20.2%	(300 basis points)
Total SG&A expense (including corporate SG&A, and research and development expense)	$68.1	$62.9	$56.7	+20.0%
Adjusted EBITDA	$2.1	$11.5	$15.1	(85.8)%
(Loss) income from operations	$(3.5)	$6.2	$7.8	$(11.3)
Net income attributable to IDT	$0.2	$7.0	$7.5	(97.0)%
Diluted EPS attributable to IDT	$0.01	$0.31	$0.33	$(0.32)
Net cash provided by operating activities	$11.4	$21.0	$8.7	+30.5%

 

 

FULL-YEAR FISCAL 2011 SUMMARY

$ in millions, except EPS	FY11	FY10	Change (%/$)
Revenues	$1,555.5	$1,394.9	+11.5%
Gross profit	$286.1	$284.2	+0.7%
Gross margin percentage	18.4%	20.4%	(200 basis points)
Total SG&A expense (including corporate SG&A and research and development expense)	$248.5	$223.9	+11.0%
Adjusted EBITDA	$37.6	$60.3	(37.7)%
Income from operations	$21.9	$32.2	(32.0)%
Net income attributable to IDT	$26.8	$20.3	+32.1%
Diluted EPS attributable to IDT	$1.19	$0.94	+$0.25
Net cash provided by operating activities	$61.8	$56.2	+10.0%

 

NOTES:

 Adjusted EBITDA for all periods presented is a non-GAAP measure representing income (loss) from operations exclusive of depreciation and amortization, severance and other charges, and other operating gains (losses), net. It is one of several key metrics used by management to evaluate the operating performance of the Company and its individual business units.  See reconciliations provided below. 

Certain reclassifications have been made to prior periods to conform to the current presentation.

MANAGEMENT COMMENTS

Howard Jonas, IDT’s Chairman and CEO, said, “Fiscal 2011 was a great year for IDT. We grew revenue, increased cash flow from operations and paid our quarterly dividends while stepping up investment in our key growth initiatives. In Colorado and Israel, our oil shale projects continued to progress toward their respective pilot tests. Looking ahead, as we prepare to spin-off Genie Energy to our stockholders, both IDT and Genie are well positioned to grow and reward stockholders as separate entities.”

IDT’s Chief Financial Officer, Bill Pereira, said, “IDT continued to grow its top line at an impressive rate in the fourth quarter. Both of our core telecom and energy businesses accelerated investment in their respective businesses resulting in significantly higher SG&A expense. This investment, however, is intended to grow market share and create long term value for our shareholders.”

INCOME STATEMENT, BALANCE SHEET AND CASH FLOW HIGHLIGHTS

Net income attributable to IDT in 4Q11 was $0.2 million, compared to $7.5 million in 4Q10 and $7.0 million in the prior quarter.   For fiscal 2011, net income attributable to IDT increased to $26.8 million ($1.19 per diluted share) from $20.3 million ($0.94 per diluted share) in fiscal 2010.

 

Net income attributable to IDT included a $3.5 million non-cash gain from discontinued operations.  In September 2011, IDT finalized a settlement of open issues related to the 1Q07 sale of IDT Entertainment to Liberty Media Corporation.  Liberty Media also paid IDT $2.0 million in cash, which will be recorded as income from discontinued operations in 1Q12. 

 

At July 31, 2011, IDT reported $264.4 million of cash, cash equivalents and certificates of deposit, including $6.6 million of restricted cash and cash equivalents, compared to $233.9 million, including $11.8 million in restricted cash and cash equivalents, a year earlier. Cur
rent assets totaled $434.4 million compared to $381.1 million a year earlier, and current liabilities totaled $325.1 million, compared to $285.0 million at the close of fiscal year 2010.

 

Net cash provided by operating activities was $11.4 million in 4Q11, compared to $8.7 million during the year ago quarter. Net cash provided by operating activities during fiscal 2011 totaled $61.8 million compared to $56.2 million for fiscal 2010. Capital expenditures in fiscal 2011 totaled $13.5 million, compared to $8.3 million in the prior year. The increase in capital expenditures resulted from IDT’s efforts to move components of the telecommunications network to a hosted facility and upgrades to internal systems and network. IDT expects to recoup this investment over the next few years through operational cost savings.

 

OPERATING RESULTS BY SEGMENT

IDT TELECOM 

IDT Telecom is comprised of two reporting segments: Telecom Platform Services (TPS) and Consumer Phone Services (CPS). TPS provides various telecommunications solutions, including prepaid and rechargeable calling cards, a range of Voice over Internet Protocol (VoIP) communications services and wholesale carrier services. CPS provides both bundled (unlimited local and long distance) services as well as long distance-only services to consumers in the United States. 

IDT TELECOM – FOURTH QUARTER FISCAL 2011 SUMMARY

$ in millions	4Q11	3Q11	4Q10	YoY Change (%)
Revenues	$358.9	$337.7	$306.6	+17.1%
Gross profit	$57.4	$55.6	$59.2	(2.9)%
Gross margin percentage	16.0%	16.5%	19.3%	(330 basis points)
SG&A expense	$49.1	$44.9	$44.9	+9.5%
Adjusted EBITDA	$8.3	$10.7	$14.4	(42.2)%
Income from operations	$3.4	$6.4	$7.5	(55.1)%

 

IDT TELECOM – FULL-YEAR FISCAL 2011 SUMMARY

$ in millions	FY11	FY10	Change (%)
Revenues	$1,343.0	$1,187.3	+13.1%
Gross profit	$224.9	$221.1	+1.7%
Gross margin percentage	16.7%	18.6%	(190 basis points)
SG&A expense	$181.2	$173.7	+4.3%
Adjusted EBITDA	$43.8	$47.4	(7.7)%
Income from operations	$28.7	$26.9	+6.8%

 

IDT TELECOM:   Telecom Platform Services (TPS)

TPS – FOURTH QUARTER FISCAL 2011 SUMMARY

$ in millions	4Q11	3Q11	4Q10	YoY Change (%)
Revenues	$353.1	$331.5	$298.3	+18.4%
Minutes of use (in millions)	6,987	6,615	5,603	+24.7%
Gross profit	$54.2	$52.3	$54.3	(0.1)%
Gross margin percentage	15.3%	15.8%	18.2%	(290 basis points)
SG&A expense	$47.4	$43.1	$43.0	+10.3%
Adjusted EBITDA	$6.8	$9.2	$11.3	(40.0)%
Income from operations	$1.8	$4.9	$4.5	(59.1)%

 

TPS – FULL-YEAR FISCAL 2011 SUMMARY

$ in millions	FY11	FY10	Change (%)
Revenues	$1,316.6	$1,150.1	+14.5%
Minutes of use (in millions)	26,240	20,685	+26.9%
Gross profit	$210.6	$200.3	+5.2%
Gross margin percentage	16.0%	17.4%	(140 basis points)
SG&A expense	$174.0	$165.5	+5.1%
Adjusted EBITDA	$36.6	$34.8	+5.3%
Income from operations	$21.6	$14.4	+50.0%

 

NOTE: Certain reclassifications have been made to prior periods to conform to the current presentation.

 

For the fourth quarter of fiscal 2011, TPS’ revenues increased 18.4% year over year to $353.1 million, and rose 6.5% sequentially.  Compared to both the year ago and sequential quarters, strong growth in the wholesale carrier business – which accounted for approximately 45% of TPS’ revenues in fiscal 2011 – was supplemented by revenue increases in our retail channel – which accounted for approximately 42% of TPS’ revenues in fiscal 2011. (Comparisons of both minutes of use and financial results versus 3Q11 are influenced by the three additional calendar days in the fourth quarter of fiscal 2011 compared to the third quarter, and by the significant minutes of use typically generated by Mothers’ Day and Fathers’ Day, both of which fall within the fourth quarter of IDT’s fiscal year.) The increase in revenue in our retail channel was driven by sales of BOSS Revolution, IDT Telecom’s pay-as-you-go cardless international calling service, and international mobile top-up (IMTU) products.

TPS’ minutes of use totaled 7.0 billion in 4Q11, a 24.7% increase compared to 4Q10 and a 5.6% increase sequentially. TPS’ wholesale carrier and reseller businesses generated most of the minutes increase year over year, while wholesale carrier and the U.S. retail channel led minutes growth sequentially.

For fiscal 2011, TPS’ revenues totaled $1,316.6 million, a 14.5% increase over fiscal 2010 primarily reflecting growth in the wholesale carrier channel. Wholesale carrier revenue increased 28.1% as a result of good execution of sales and marketing strategies as well as an effective pricing and costing strategy despite continuing declines in wholesale’s average revenue per minute. Within our retail channel, revenues from the sale of traditional, IDT-branded disposable calling cards declined compared to fiscal 2010, but were more than offset by increases in revenues from BOSS Revolution and IMTU sales. 

 

TPS’ minutes of use increased 26.9% compared to fiscal 2010 to 26.2 billion minutes, driven by strong volume increases in both the wholesale carrier and reseller businesses. Our retail channels in Europe and South America also generated minutes of use growth, which more than offset decreases in our retail channels in the U.S. and Asia.

 

TPS’ gross margin percentage in 4Q11 was 15.3%, generating $54.2 million in gross profit. Gross margin percentage declined 280 basis points year over year. Sequentially, gross margin percentage declined by 50 basis points. For fiscal 2011, TPS’ gross margin percentage was 16.0%, a 140 basis point decline. The declines in gross margin for both 4Q11 and fiscal 2011 were primarily due to product mix changes, specifically revenues from our relatively lower margin wholesale carrier, BOSS Revolution and IMTU products, and reseller channel traffic have increased while revenues from relatively higher margin traditional prepaid calling cards have declined.

TPS’ SG&A expense in 4Q11 was $47.4 million, a 10.3% increase compared to 4Q10
, and a 10.0% increase sequentially. For fiscal 2011, TPS’ SG&A expense totaled $174.0 million, a 5.1% increase compared to fiscal 2010. The increases in SG&A expenses in 4Q11 and fiscal 2011 were primarily due to higher external legal fees (primarily related to litigations). 

TPS generated $6.8 million in Adjusted EBITDA in 4Q11, a 40.0% decrease compared to the year-ago period, and a 26.3% decrease compared to the prior quarter.  

For fiscal 2011, TPS’ Adjusted EBITDA totaled $36.6 million, a 5.3% increase from the prior year.

TPS’ depreciation and amortization expense was $3.9 million in 4Q11, a 45.0% decline from the year ago period and a 10.3% decline sequentially. For fiscal 2011, TPS’ depreciation and amortization expense was $17.6 million, a 39.7% reduction compared to fiscal 2010.  TPS’ depreciation and amortization expense declined due to more of its assets becoming fully depreciated and lower levels of capital expenditures in recent periods. 

 

TPS’ income from operations was $1.8 million in 4Q11, a 59.1% decline compared to 4Q10. For fiscal 2011, TPS’ income from operations totaled $21.6 million, a 50.0% increase compared to the prior year. 

TPS’ income from operations included net other operating (losses) gains of $(1.1) million in 4Q11, $0.4 million in 4Q10, $3.5 million in fiscal 2011 and $10.4 million in fiscal 2010.  The net other operating gain in fiscal 2011 reflected a $14.4 million payment received from Cablevision in December 2010, offset by a $10.8 million accrual recorded in connection with the verdict in the patent litigation initiated by Alexsam, Inc. The other operating gain in fiscal 2010 was the result of the March 2010 settlement of calling card litigation between IDT and certain defendants in which IDT received $10.0 million, as well as a gain of $0.4 million in 4Q10 for the settlement of certain other claims. The expense of $1.1 million in 4Q11 was due to an adjustment to our accrual for the Alexsam patent litigation.    

IDT TELECOM: Consumer Phone Services (CPS)

CPS, which includes sales of both bundled (unlimited local and long distance) services as well as long distance-only services, has been in “harvest mode” since fiscal 2006 – maximizing revenues from current customers while maintaining SG&A and other expenses at the minimum levels essential to operate the business.

CPS’ 4Q11 revenues were $5.8 million, a 29.7% decline year over year, and a 7.3% decline sequentially. For fiscal 2011, CPS’ revenues totaled $26.4 million, a 28.9% decline compared to fiscal 2010.

Gross margin for CPS in 4Q11 was 55.6%, a 450 basis point decrease year over year, and a 310 basis point decrease sequentially. For fiscal 2011, CPS’ gross margin averaged 54.3%, a 190 basis point decrease from the prior year.

CPS’ SG&A expense for 4Q11 was $1.7 million, a 9.5% decline year over year, and a 3.7% decrease sequentially. For fiscal 2011, SG&A expense declined to $7.2 million, a 12.8% reduction compared to fiscal 2010.

CPS’ Adjusted EBITDA in 4Q11 was $1.5 million, a 50.3% decline year over year, but a 0.4% increase sequentially. For fiscal 2011, Adjusted EBITDA totaled $7.2 million, a 43.4% decrease compared to fiscal 2010.

CPS’ income from operations for 4Q11was $1.5 million, a 49.1% decline year over year, but a 0.8% increase compared to the prior quarter. For fiscal 2011, income from operations totaled $7.1 million, a 43.1% reduction compared to the prior year.

Overall, CPS’ performance was in line with expectations. Management anticipates that CPS’ customer base and revenues will continue to decline, and that sometime in calendar 2013, CPS will no longer generate positive cash flow. At that point, IDT Telecom intends to exit the business.

§                     GENIE ENERGY

Genie Energy includes the IDT Energy and Genie Oil and Gas segments. The Genie Oil and Gas segment consists of Genie’s interest in AMSO, LLC – a 50/50 joint venture with Total SA to develop oil shale on federal lands in Colorado, and Israel Energy Initiatives, Ltd. (IEI), an oil shale exploration and production venture in Israel. IDT has announced that it will spin-off Genie Energy to its stockholders later this year.

GENIE ENERGY – FOURTH QUARTER FISCAL 2011 SUMMARY

 

$ in millions	4Q11	3Q11	4Q10	YoY Change (%/$)
Revenues	$46.4	$53.8	$46.5	(0.1)%
Gross profit	$11.0	$16.8	$11.2	(1.2)%
Gross margin percentage	23.8%	31.2%	24.0%	(20 basis points)
SG&A expense (including R&D expense)	$13.7	$10.9	$7.4	+85.3%
Adjusted EBITDA	$(2.6)	$5.9	$3.8	$(6.4)
(Loss) income from operations	$(2.6)	$5.9	$3.7	$(6.4)

 

 

GENIE ENERGY – FULL-YEAR FISCAL 2011 SUMMARY

$ in millions	FY11	FY10	Change (%)
Revenues	$203.6	$201.4	1.1%
Gross profit	$53.8	$57.8	(6.9)%
Gross margin percentage	26.5%	28.7%	(220 basis points)
SG&A expense (including R&D expense)	$41.6	$26.3	+58.2%
Adjusted EBITDA	$12.2	$31.5	(61.2)%
Income from operations	$12.2	$31.3	(61.0)%

 

IDT Energy

 

 IDT ENERGY – FOURTH QUARTER FISCAL 2011 SUMMARY

 

$ in millions	4Q11	3Q11	4Q10	YoY Change (%/$)
Revenues	$46.4	$53.8	$46.5	(0.1)%
Gross profit	$11.0	$16.8	$11.2	(1.2)%
Gross margin percentage	23.8%	31.2%	24.0%	(20 basis points)
SG&A expense	$11.3	$8.2	$5.5	+106.6%
Adjusted EBITDA	$(0.3)	$8.6	$5.7	$(6.0)
(Loss) income from operations	$(0.3)	$8.6	$5.6	$(5.9)

 

IDT ENERGY – FULL-YEAR FISCAL 2011 SUMMARY

$ in millions	FY11	FY10	Change (%)
Revenues	$203.6	$201.4	1.1%
Gross profit	$53.8	$57.8	(6.9)%
Gross margin percentage	26.5%	28.7%	(220 basis points)
SG&A expense	$31.4	$19.8	58.2%
Adjusted EBITDA	$22.5	$38.0	(40.8)%
Income from operations	$22.5	$37.8	(40.6)%

 

IDT Energy’s revenues were $46.4 million during 4Q11, a negligible decrease compared to 4Q10.  For fiscal 2011, IDT Energy revenues totaled $203.6 million, a 1.1% increase compared to fiscal 2010.

 

Total meters served as of July 31, 2011 were approximately 405,000, a 9.7% increase compared to July 31, 2010 and a 7.2% increase compared to the total on April 30, 2011, the last day of 3Q11.   Customer churn increased to 5.2% in 4Q11 compared to 3.5% in the year ago quarter reflecting, in part, the increased proportion of new customers resulting from accelerated rates of customer acquisition. New customers typically churn more frequently than long term customers.

 

The average rates of annualized energy consumption for all IDT Energy meters served, as measured by residential customer equivalents (RCEs), are presented in the chart below. (An RCE represents a natural gas customer with annual consumption of 100MM Btus or an electricity customer with annual consumption of 10 MWhrs.)  Because different customers have different rates of energy consumption, RCEs are a useful metric for evaluating the consumption profile of IDT Energy’s customer base. The sequential and year over year increases in customer RCEs resulted primarily from growth in meters served and the acquisitions of customers with relatively higher consumption profiles.

 

IDT Energy – RCEs at End of Quarter (in thousands)
	4Q11	3Q11	2Q11	1Q11	4Q10
Electricity customers	136	119	124	122	117
Natural gas customers	99	94	91	87	88
Total	235	213	215	209	205

 

 

Electric revenue of $40.0 million in 4Q11 decreased 2.0% compared to 4Q10, and increased 36.0% sequentially. Year over year, IDT Energy sold more kWh as a result of an increase in meters served, but consumption per meter and revenue per kWh both declined. The decline in revenue per kWh reflected a reduction in the underlying commodity cost and reduced target margin per kWh sold.

 

During 4Q11, IDT Energy added approximately 22,000 net electric meters. As of July 31, 2011, IDT Energy served approximately 232,000 electric meters compared to approximately 210,000 at both July 31, 2010 and at April 30, 2011.

 

For fiscal 2011, electric revenue was $137.8 million, a 4.3% increase compared to fiscal 2010.  KWh sold increased compared to the prior year reflecting relatively higher usage meters added in new territories, coupled with warmer temperatures in 1Q11 compared to the same period in fiscal 2010. Average revenue per kWh also increased compared to the prior year as a result of an increase in the underlying commodity cost. 

 

Gas revenue in 4Q11 was $6.4 million, a 13.2% increase compared to 4Q10 reflecting a 6.2% increase in revenue per therm, and a 6.6% increase in therms sold. IDT Energy served approximately 173,000 gas meters as of July 31, 2011, compared to 159,000 at July 31, 2010 and 168,000 at April 30, 2011. 

 

For fiscal 2011, gas revenues were $65.8 million, a 5.0% decline compared to fiscal 2010. Although therms sold increased by a modest 1.4% compared to fiscal 2010 reflecting the increase in meters served in the second half of fiscal 2011 compared to the same period in fiscal 2010, revenue per therm declined 6.3% reflecting discounted promotional rates for new customers as well as a de
cline in the cost per therm.

 

Gross margin at IDT Energy was 23.8% in 4Q11, a 20 basis point decline compared to the year ago period and a 740 basis point decrease compared to the prior quarter.  Unit pricing to customers and gross margin targets were reduced to facilitate new customer acquisitions. 

 

For fiscal 2011, gross margin averaged 26.5%, a 220 basis point decrease compared to the prior year. Management previously cautioned that fiscal year 2010’s gross margin levels were likely not sustainable. The decline in gross margin compared to fiscal 2010 reflects increased competition, and the impact of expansion into new territories in New Jersey and Pennsylvania, where gross margin was sacrificed in an effort to facilitate new customer acquisitions.

 

SG&A expense in 4Q11 was $11.3 million, a 106.6% increase compared to the year ago period, and a 38.7% increase compared to the prior quarter.  The year over year and sequential increases reflected the impact of increased customer acquisition costs and marketing expense reflecting the accelerated pace of customer acquisitions and an accrual related to ongoing tax audits. The accrual represents management’s best estimate of the potential liability that could result from these audits.

 

For fiscal 2011, SG&A expense was $31.4 million, a 58.2% increase compared to fiscal 2010. The increase was primarily due to investment in customer base growth including the launch of new marketing channels to acquire higher consumption customers and higher customer acquisition costs associated with the expansion of the business into new territories.

 

Adjusted EBITDA for 4Q11 was $(0.3) million, a $6.0 million decrease compared to the year ago quarter reflecting the decrease in gross profit and increase in SG&A expense. Sequentially, Adjusted EBITDA declined $8.9 million primarily as the result of the seasonal reduction in gas revenue and gross profit, as well as the increase in SG&A expense.

 

For fiscal 2011, IDT Energy’s Adjusted EBITDA totaled $22.5 million, a 40.8% decrease compared to fiscal 2010 reflecting the reduced gross profit and increased SG&A expenses associated with entering the initial territories within the new Pennsylvania and New Jersey markets as well as the tax accrual previously mentioned.

 

Loss from operations in 4Q11 was $(0.3) million, a $5.9 million decrease year over year and an $8.9 million decrease sequentially.

 

For fiscal 2011, IDT Energy generated $22.5 million in income from operations, a 40.6% decline compared to the prior year.

 

Genie Oil and Gas

 

Genie Oil and Gas has no revenue. Its operating expenses consist primarily of costs incurred by IEI.  

 

IEI holds an exclusive Shale Oil Exploration and Production License covering 238 square kilometers in the Shfela basin region in Israel.  During 4Q11, IEI continued resource appraisal and characterization work in the license area. To date, the results from the appraisal process, both from field tests and laboratory experiments, confirm IEI’s expectations as to the attractiveness of the oil shale resource in the license area from the standpoint of richness, thickness and hydrology.  

 

IEI is continuing permitting and other preparatory work required prior to construction of a pilot plant and operation of a pilot test. The pilot test will provide a basis for determining the technical, environmental and economic viability of IEI’s proposed process for extracting oil from the oil shale resource. Pilot plant design has begun, and construction is scheduled to begin in calendar 2012 if not delayed by permitting, regulatory action or pending litigation. Pilot test operations could begin as early as calendar 2013.

 

Genie Oil and Gas’ loss from operations of $2.3 million in 4Q11 was comprised of $0.2 million in SG&A expense and $2.1 million in research and development expense. In the year ago quarter, the loss from operations totaled $1.9 million and was comprised of $0.3 million in SG&A expense and $1.6 million in research and development expense. The loss from operations increased $0.4 million compared to the year ago quarter reflecting the increase in research and development expense partially offset by adjustments to the valuations of stock based compensation included in SG&A expense.

 

For fiscal 2011, Genie Oil and Gas’ loss from operations was $10.2 million, compared to $6.5 million in fiscal 2010.  Management expects that Genie’s loss from operations will further increase materially in fiscal 2012 reflecting costs associated with the expected construction, drilling and operations of IEI’s pilot test as well as further staffing to support engineering and scientific operations and business development activities.

 

Genie accounts for its 50% interest in AMSO, LLC using the equity method.  Genie’s equity in the net loss of AMSO, LLC – $2.3 million in 4Q11 and $5.2 million in fiscal 2011 – is included in “Other (expense) income, net” in the consolidated statement of income. During 4Q11, AMSO, LLC, a joint venture oil shale exploration and production initiative with Total, SA, continued construction and ongoing research and development work to prepare for its upcoming pilot test. The pilot test is expected to begin in the fall of 2011 barring permitting or operational delays. The pilot test is intended to confirm the accuracy of several of the key underlying assumptions of AMSO, LLC’s proposed in-situ heating and retorting process.

 

OTHER RECENT DEVELOPMENTS

On June 20, 2011, a Special Committee of IDT’s Board of Directors approved the purchase by IDT of 0.3 million shares of IDT’s Class B common stock from Howard Jonas at $24.83 per share, the closing price for the Class B common stock on that day. IDT paid an aggregate of $7.5 million to purchase the shares.

 

On August 5, 2011, the Administrative Court in Gothenburg, Sweden rejected IDT’s appeal and upheld the Swedish Tax Agency’s imposition of a value added tax (“VAT”) assessment including penalties and interest of approximately SEK 147 million ($23.3 million) for the period from January 2004 through June 2008. Our potential exposure for VAT, penalties and interest for the period from July 2008 through July 2011 is an additional SEK 38 million ($6.0 million). IDT, in consultation with its counsel, has determined that it is likely to prevail upon appeal and accordingly has not recorded an accrual for this matter. However, in the event its appeal is unsuccessful, imposition of assessments and penalties could have a material adverse effect on IDT’s results of operations, cash flows and financial condition.

 

On August 26, 2011, Genie Energy Ltd. (“Genie”) filed an initial registration statement, including an information statement, related to the anticipated spin-off of Genie to IDT stockholders. The filed materials are available through the Securities and Exchange Commission's website at http://www.sec.gov/cgi-bin/browse-edgar?CIK=0001528356&action=getcompany. IDT has also obtained a private letter ruling from the IRS opining on the tax free nature of the spin-off. T
he spin-off is scheduled to occur before the end of the calendar year, and as early as October 31^st.

 

On September 19, 2011, IDT’s Board of Directors declared a $0.23 dividend for the fourth quarter payable to stockholders of both IDT Class A and Class B common stock. 

 

IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL INFORMATION

§         Management’s discussion of IDT’s financial and operational results is posted in an audio file on the IDT website at https://www.idt.net/about/ir/overview.asp. The audio file (in MP3 format) may be played directly from the website or downloaded for later playback.

§         An archived copy of this audio file will be available on the Investor Relations page of the IDT website, under the “Presentations” heading, for at least one year after the webcast.

§         Copies of this release – which includes a reconciliation of the Non-GAAP financial measures that are both used herein and referenced during management’s discussion of results – are available in the Investor Relations portion of IDT’s website, at https://www.idt.net/about/ir/overview.asp.

§         Q&A will be in a written format. Investors and others interested in IDT are invited to e-mail questions for management to invest@idt.net. IDT will accept questions received through the close of business on Tuesday, October 11, 2011. Questioners must identify themselves by name and (if applicable) firm. When management can constructively answer the question, the initial question, the questioner’s name and firm, and management’s response will be posted in a document available on IDT’s website and in a Form 8-K filing as early as Monday, October 17, 2011 following the market close.

ABOUT IDT CORPORATION

IDT Corporation (www.idt.net) is a consumer services company with operations primarily in the telecommunications and energy industries. IDT Corporation's Class B Common Stock trades on the New York Stock Exchange under the ticker symbol IDT.

In this press release, all statements 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, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.  These factors include, but are not limited to, the following: potential declines in prices for our products and services; our ability to maintain and grow our calling card business, our wholesale telecommunication businesses and our retail energy business; availability of termination capacity to particular destinations; our ability to maintain carrier agreements with foreign carriers; our ability to obtain telecommunications products or services required for our products and services; the business and regulatory evolution of and competition and unfair business practices in, the energy services business in New York State, New Jersey and Pennsylvania; financial stability of our major customers; our ability to maintain our income and improve our cash flow; impact of government regulation; effectiveness of our marketing and distribution efforts; and general economic conditions.  We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.

Contact:

IDT Corporation Investor Relations

Bill Ulrey

invest@idt.net

973-438-3838

 

IDT CORPORATION

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

IDT CORPORATION

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Note: Certain reclassifications have been made to prior periods to conform to the current presentation.

Year ended July 31 (in thousands)	2011	2010
	(Unaudited)
OPERATING ACTIVITIES
Net income	$        23,371	$         20,273
Adjustments to reconcile net income to net cash provided by operating activities:
Net (income) loss from discontinued operations	(3,500 )	380
Depreciation and amortization	20,976	33,426
Severance and other payments	(2,978 )	(2,457 )
Deferred income taxes	(2,814 )	—
Provision for doubtful accounts receivable	3,377	3,777
Net realized gains from sales of marketable securities	(5,379 )	(336 )
Gain on proceeds from insurance	(2,637 )	—
Gain on sales of buildings	—	(675 )
Interest in the equity of investments	5,295	3,467
Stock-based compensation	4,832	2,541
Change in assets and liabilities:
Trade accounts receivable	(24,381 )	21,672
Prepaid expenses, other current assets and other assets	(2,784 )	(8,072 )
Trade accounts payable, accrued expenses, other current liabilities and other liabilities	42,741	(21,348 )
Income taxes payable	(2,385 )	552
Deferred revenue	8,115	3,003
Net cash provided by operating activities	61,849	56,203
INVESTING ACTIVITIES
Capital expenditures	(13,453 )	(8,310 )
(Repayment) collection of notes receivable, net	(88 )	130
Capital contributions to AMSO, LLC	(3,943 )	(1,991 )
Increase in investments	(3,015 )	(400 )
Proceeds from sales and redemptions of investments	2,446	2,762
Decrease in restricted cash and cash equivalents	5,250	53,161
Proceeds from sales of buildings	100	5,270
Proceeds from insurance	3,524	500
Proceeds from marketable securities	5,731	4,618
Purchases of certificates of deposit	(5,503 )	—
Proceeds from maturities of certificates of deposit	2,258	—
Net cash (used in) provided by investing activities	(6,693 )	55,740
FINANCING ACTIVITIES
Cash of subsidiaries deconsolidated as a result of the CTM Spin-Off	—	(9,775 )
Dividends paid	(15,178 )	—
Distributions to noncontrolling interests	(2,010 )	(1,939 )
Proceeds from sales of stock of subsidiaries	10,000	5,690
Repurchase of noncontrolling interests	(1,528 )	—
Proceeds from exercise of stock options	1,674	90
Repayments of capital lease obligations	(4,821 )	(5,955 )
Repayments of borrowings	(4,602 )	(622 )
Repurchases of Class B common stock from Howard S. Jonas	(7,499 )	—
Repurchases of common stock and Class B common stock	(205 )	(1,879 )
Net cash used in financing activities	(24,169 )	(14,390 )
DISCONTINUED OPERATIONS
Net cash provided by operating activities	—	930
Net cash used in investing activities	—	(44 )
Net cash used in financing activities	—	(471 )
Net cash provided by discontinued operations	—	415
Effect of exchange rate changes on cash and cash equivalents	1,513	(597 )
Net increase in cash and cash equivalents	32,500	97,371
Cash and cash equivalents at beginning of year	221,753	124,382
Cash and cash equivalents at end of year	$      254,253	$        221,753
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments made for interest	$          5,008	$           4,822
Cash payments made for income taxes	$          4,235	$           4,898
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES
Receivable for issuance of equity of subsidiary	$          1,000	$               —
Mortgage notes payable settled in connection with the sales of buildings	$              —	$           8,837
Net assets excluding cash and cash equivalents of subsidiaries deconsolidated as a result of the CTM Spin-Off	$              —	$           6,011