IDT Corporation – Results for Fourth Quarter and Full Year
Fiscal 2010
NEWARK, NJ — October 14, 2010: IDT
Corporation (NYSE: IDT; IDT.C) reported net income of $7.5 million ($0.33 per
diluted share) for its fourth quarter of fiscal 2010 and net income of $20.3
million ($0.94 per diluted share) for its fiscal year ended July 31, 2010.
FOURTH QUARTER FISCAL 2010 SUMMARY
|
$ in
millions, except EPS
|
Q4 2010
|
Q3 2010
|
Q4 2009
|
YoY Change (%/$)
|
|
Revenues
|
$356.0
|
$355.4
|
$343.0
|
+3.8%
|
|
Gross
profit
|
$73.2
|
$74.2
|
$78.0
|
(6.2)%
|
|
Gross
margin percentage
|
20.6%
|
20.9%
|
22.8%
|
(220 basis points)
|
|
Total SG&A expense (including corporate
SG&A, bad debt expense, and research and development expense)
|
$58.1
|
$56.1
|
$64.7
|
(10.2)%
|
|
Corporate
SG&A expense
|
$2.0
|
$1.4
|
$5.6
|
(63.5)%
|
|
Adjusted
EBITDA
|
$15.1
|
$18.1
|
$13.4
|
+12.9%
|
|
Income
(loss) from operations
|
$7.8
|
$16.6
|
$(0.2)
|
+$8.0
|
|
Net income
attributable to IDT
|
$7.5
|
$12.6
|
$7.2
|
+3.1%
|
|
Diluted
EPS attributable to IDT
|
$0.33
|
$0.58
|
$0.35
|
$(0.02)
|
|
Net cash provided
by (used in) operating activities
|
$8.7
|
$32.2
|
$(2.4)
|
+$11.2
|
FULL-YEAR FISCAL 2010 SUMMARY
|
$ in
millions, except EPS
|
Fiscal 2010
|
Fiscal 2009
|
Change (%/$)
|
|
Revenues
|
$1,401.4
|
$1,507.7
|
(7.0)%
|
|
Gross profit
|
$290.7
|
$347.5
|
(16.3)%
|
|
Gross margin
percentage
|
20.7%
|
23.1%
|
(230 basis points)
|
|
Total SG&A expense (including corporate
SG&A, bad debt expense, and research and development expense)
|
$230.4
|
$298.1
|
(22.7)%
|
|
Corporate SG&A expense
|
$11.8
|
$28.4
|
(58.6)%
|
|
Adjusted
EBITDA
|
$60.3
|
$49.5
|
+21.9%
|
|
Income (loss)
from operations
|
$32.2
|
$(43.3)
|
+$75.5
|
|
Net income
(loss) attributable to IDT
|
$20.3
|
$(155.4)
|
+$175.7
|
|
Diluted
EPS (LPS) attributable to IDT
|
$0.94
|
($6.90)
|
+$7.84
|
|
Net cash provided by (used in) operating activities
|
$56.2
|
($100.8)
|
+$157.0
|
NOTE:
Adjusted EBITDA for all periods presented is a non-GAAP measure representing
income (loss) from operations exclusive of depreciation and amortization,
impairments, restructuring charges, gains on settlements and other, net, and
gain on the sale of interest in AMSO, LLC. 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.
MANAGEMENT COMMENTS
Howard Jonas,
IDT’s Chairman and CEO, said, “I’m very pleased with our results for both the
fourth quarter and the full 2010 fiscal year.
Our successful restructuring program helped us to achieve substantial
improvements in our bottom line, operating cash flow, and balance sheet for
fiscal 2010 compared to prior years. At
the same time, we continue to invest prudently in our oil shale and other long
term initiatives which, we believe, offer our shareholders superior long-term
growth potential.”
IDT’s Chief Financial Officer, Bill
Pereira, added, “IDT’s core Telecom and Energy businesses
delivered solid operational performances throughout fiscal 2010. IDT Telecom leveraged its distribution network
and network platform to introduce new products and services, contributing to
the third consecutive quarter of sequential growth in both revenue and Adjusted
EBITDA in our Telecom Platform Services segment. IDT Energy reported solid year over year operating
income growth for the fourth quarter with strong demand for electricity spurred
by the hot weather across New York
in June and July, and generated margins that again exceeded expectations.”
BALANCE SHEET AND CASH FLOW HIGHLIGHTS
At July 31, 2010, IDT reported $233.8
million of cash, cash equivalents and marketable securities, including $11.8
million of restricted cash and cash equivalents. Current assets totaled $381.1 million, and
current liabilities totaled $285.0 million. During Q4, IDT sold a building in New Jersey for cash of
$3.1 million and used $2.7 million of the proceeds to repay a portion of the
mortgage secured by the property. The Company recognized a gain of $0.7 million
on the sale.
Net cash provided by operating activities was $8.7 million
in Q4, compared to net cash used in operating activities of $2.4 million during
the year ago quarter. Net cash provided
by operating activities during fiscal 2010 totaled $56.2 million compared to
net cash used in operating activities of $100.8 million for fiscal 2009. Capital expenditures in fiscal 2010 totaled $8.3
million, compared to $14.6 million in the prior year.
OPERATING RESULTS BY SEGMENT
Unless otherwise noted, all results are for
the fourth quarter of IDT’s 2010 fiscal year. In addition, Fabrix T.V., Ltd., which was historically included in
the Telecom Platform Services segment, was transferred to ‘All Other’ in the
fourth quarter of fiscal 2010. To the extent possible, comparative historical
results have been reclassified and restated as if the fiscal 2010 business
segment structure existed in all periods presented, although these results may
not be indicative of the results for the specific segments which would have
been achieved had the business segment structure been in effect during those
periods.
§
IDT TELECOM: Telecom Platform Services (TPS)
TPS – FOURTH QUARTER FISCAL 2010 SUMMARY
|
$ in
millions
|
Q4 2010
|
Q3 2010
|
Q4 2009
|
YoY Change (%/$)
|
|
Revenues
|
$299.7
|
$291.3
|
$293.1
|
+2.3%
|
|
Minutes of use
|
5,559
|
5,364
|
4,743
|
+17.2%
|
|
Gross profit
|
$55.7
|
$52.6
|
$60.7
|
(8.3)%
|
|
Gross margin
percentage
|
18.6%
|
18.1%
|
20.7%
|
(210 basis points)
|
|
SG&A expense (including bad debt expense)
|
$44.4
|
$42.5
|
$49.1
|
(9.6)%
|
|
Adjusted
EBITDA
|
$11.3
|
$10.1
|
$11.6
|
(3.0)%
|
|
Income
from operations
|
$4.5
|
$12.8
|
$0.4
|
+$4.1
|
TPS – FULL-YEAR FISCAL 2010 SUMMARY
|
$ in
millions
|
Fiscal 2010
|
Fiscal 2009
|
Change (%/$)
|
|
Revenues
|
$1,156.7
|
$1,183.5
|
(2.3)%
|
|
Minutes of use
|
20,991
|
19,001
|
+10.5%
|
|
Gross profit
|
$206.8
|
$240.1
|
(13.9)%
|
|
Gross margin
percentage
|
17.9%
|
20.3%
|
(240 basis points)
|
|
SG&A expense (including bad debt expense)
|
$172.0
|
$209.8
|
(18.0)%
|
|
Adjusted
EBITDA
|
$34.8
|
$30.3
|
+14.9%
|
|
Income (loss)
from operations
|
$14.4
|
($45.8)
|
+$60.2
|
For the fourth quarter of fiscal 2010, TPS’ revenues increased
2.3% year over year to $299.7 million, and rose 2.9% sequentially. Compared to both the year ago and sequential
quarters, growth in prepaid services revenues were partially offset by
declining revenues from the wholesale carrier business. (Comparisons of both minutes of use and
financial results versus Q3 are influenced by the three additional calendar
days in the fourth quarter of fiscal 2010 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.)
TPS’ minutes of use totaled 5.6 billion in Q4, a 17.2% increase
compared to 4Q09 and a 3.6% increase compared to the prior quarter. The year over year increase was generated
primarily by TPS’ wholesale carrier and European prepaid services businesses,
while the sequential increase was primarily a function of the additional
calendar days in the fourth quarter.
For fiscal 2010, TPS’ revenues totaled $1,156.7 million, a
2.3% decline compared to fiscal 2009.
Compared to the prior year, prepaid services revenues increased modestly
but were offset by declining revenues in wholesale carrier. TPS’ minutes of use increased 10.5% year over
year to 21.0 billion, driven by strong volume increases in both our prepaid
services and wholesale carrier businesses.
During Q4, revenues in our U.S. prepaid services business increased
15% year over year, despite phasing out sales of low-margin, non-IDT provided, domestic
mobile top-up cards. The revenue
increase is attributable to both IDT’s branded calling cards, and continued
growth in our international mobile top-up (IMTU) card offerings. IMTU cards enable customers to transfer
minutes purchased in the U.S.
directly to accounts held by friends and family at participating wireless
carriers overseas. In addition, prepaid services revenues in Europe – which
were negatively impacted by the weakening of local currencies versus the U.S.
dollar during Q4 – grew in both Q4 and fiscal 2010 compared to the prior year,
as a result of increased sales, primarily in Germany
and Italy. Wholesale carrier revenues declined in
fiscal 2010 compared to the prior year despite substantial growth in minutes of
use, reflecting continued price competition.
TPS’ gross margin percentage in Q4 was 18.6% on gross
profit of $55.7 million. Gross margin
percentage declined 210 basis points year over year as management pursued a
top-line growth strategy in its prepaid services offerings, both in the U.S.
and abroad, coupled with increased sales in the U.S. of lower margin IMTU
cards, partially offset by the phase-out of very low-margin non-IDT provided mobile
domestic top-up card sales. Sequentially,
gross margin percentage increased 50 basis points.
For fiscal 2010, TPS’ gross margin percentage declined 240
basis points compared to the prior year primarily because of the same factors that
influenced the quarter over quarter comparisons.
TPS’ SG&A expense was reduced to $42.9 million in Q4, representing
an 11.6% decline year over year but an increase of 3.5% sequentially. The year over year decline reflects reductions
in legal services, facilities and network maintenance, and call center costs,
partially offset by increases in advertising and marketing costs. The modest sequential increase
reflects higher advertising and marketing costs, as well as an increase in
compensation costs.
For fiscal 2010, TPS’ SG&A expense totaled $169.0 million,
a 17.0% reduction compared to fiscal 2009, primarily due to reductions in
compensation and benefits, third-party commissions, legal services, and facilities
and network maintenance costs.
TPS generated $11.3 million in Adjusted EBITDA in Q4, a
$0.3 million decrease compared to the year-ago period, but a $1.2 million
increase compared to the prior quarter.
For fiscal 2010, TPS’ Adjusted EBITDA totaled $34.8
million, a $4.5 million increase from the prior year, primarily as a result of
the significant SG&A expense reductions achieved, mostly offset by declines
in revenues and gross profit.
TPS’ depreciation and amortization expense was $7.0 million
in Q4, a 33.7% decline from the year ago period. For fiscal 2010, TPS’ depreciation and
amortization expense was $29.2 million, a 30.7% reduction compared to fiscal
2009. Year over year, the carrying
values of IDT Telecom’s fixed assets declined due to assets becoming fully
depreciated and lower levels of capital expenditures in recent periods.
TPS’ income from operations was $4.5 million in Q4, up
from $0.4 million in 4Q09. Sequentially,
TPS’ income from operations declined from $12.8 million in 3Q10, when TPS
benefitted from a $10.0 million gain on a legal settlement.
For fiscal 2010, TPS’ income from operations totaled $14.4
million, including the impact of the $10.0 million gain on a legal settlement
and $1.6 million in restructuring charges, compared to a loss from operations
of $45.8 million in fiscal 2009, which included impairment charges totaling
$29.1 million and $4.8 million in restructuring charges.
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’ 4Q10 revenues were $8.3 million, a 28.5% decline year
over year, and a 4.2% decline sequentially.
For fiscal 2010, CPS’ revenues totaled $37.2 million, a 30.7% decline
compared to fiscal 2009.
Gross margin for CPS in Q4 was 60.1%, a 780 basis point
increase year over year, and a 710 basis point increase sequentially, as
margins for the quarter benefitted from the reversal of certain regulatory
accruals. For fiscal 2010, CPS’ gross
margin averaged 56.2%, a 10 basis point decrease from the prior year.
CPS’ SG&A expense for Q4 was $1.7 million, a 28.5% decline
year over year, and a 12.3% decrease sequentially. For fiscal 2010, SG&A
expense declined to $7.5 million, a 33.2% reduction compared to fiscal 2009.
CPS’ Adjusted EBITDA in Q4 was $3.1 million, a 7.5%
decline year over year, but a 25.9% increase sequentially, due to the gross
margin increase noted above. For fiscal
2010, Adjusted EBITDA totaled $12.7 million, a 33.7% decrease compared to
fiscal 2009.
CPS’ income from operations for Q4 was $3.0 million, an
8.9% decline year over year, but a 23.8% increase compared to the prior
quarter. For fiscal 2010, income from
operations totaled $12.5 million, a 33.0% reduction compared to the prior year.
GENIE ENERGY
Genie Energy includes the IDT Energy and Genie Oil &
Gas (formerly ‘Alternative Energy’) segments. The Genie Oil & Gas segment consists
of IDT’s interests in AMSO, LLC – a joint venture to develop oil shale on federal
lands in Colorado, and Israel Energy
Initiatives, Ltd. (IEI), a shale oil exploration and production venture in Israel, and
other smaller investments.
IDT Energy
FOURTH QUARTER FISCAL 2010 SUMMARY
|
$ in
millions
|
Q4 2010
|
Q3 2010
|
Q4 2009
|
YoY Change (%/$)
|
|
Revenues
|
$46.5
|
$53.8
|
$37.0
|
+25.6%
|
|
Gross profit
|
$11.2
|
$15.7
|
$9.4
|
+19.3%
|
|
Gross margin
percentage
|
24.0%
|
29.1%
|
25.3%
|
(130 basis points)
|
|
SG&A expense (including bad debt expense)
|
$5.5
|
$5.7
|
$4.3
|
+28.1%
|
|
Adjusted
EBITDA
|
$5.7
|
$9.9
|
$5.0
|
+12.5%
|
|
Income
from operations
|
$5.6
|
$9.9
|
$5.0
|
+12.3%
|
FULL-YEAR FISCAL 2010 SUMMARY
|
$ in
millions
|
Fiscal 2010
|
Fiscal 2009
|
Change (%/$)
|
|
Revenues
|
$201.4
|
$264.7
|
(23.9)%
|
|
Gross profit
|
$57.8
|
$72.2
|
(19.9)%
|
|
Gross margin
percentage
|
28.7%
|
27.3%
|
+150 basis points
|
|
SG&A expense (including bad debt expense)
|
$19.8
|
$26.7
|
(25.6)%
|
|
Adjusted
EBITDA
|
$38.0
|
$45.5
|
(16.5)%
|
|
Income
from operations
|
$37.8
|
$45.4
|
(16.6)%
|
IDT Energy’s revenues were $46.5 million during 4Q10, a 25.6%
increase compared to 4Q09, but a 13.7% decrease sequentially. For fiscal
2010, IDT Energy revenues totaled $201.4 million, a 23.9% decline compared to
fiscal 2009 reflecting a decline in both electric and gas prices charged to customers,
and total kilowatt hours (kWh) and therms sold primarily reflecting a reduction
in average meters served.
Total meters served as of July 31, 2010 were approximately 369,000,
6.9% lower than on July 31, 2009 but a
1.6% increase compared to the total on April 30, 2010, the last day of
3Q10. While gross new additions fell year
over year as a result of the restructuring of IDT Energy’s sales and marketing
efforts undertaken in the fourth quarter of fiscal 2009, the average net churn
rate also declined from 4.9% in fiscal 2009 to 3.1% in fiscal 2010. The sequential increase in meters reflects
the impact of customer acquisitions in new markets.
Electric revenue of $40.8 million increased 26.9% compared
to 4Q09, and 38.8% sequentially. Year
over year, kWh sold increased 5.5% as the impact of hotter weather in June and
July of 2010 was only partially offset by the decline in meters served, and
average revenue per kWh increased 20.2% reflecting higher market prices for
electricity. As of July 31, 2010, IDT
Energy served approximately 210,000 electric meters compared to approximately
228,000 at July 31, 2009.
The sequential increase in electric revenue primarily
reflects the result of the seasonal impact on kWh sold, which increased 26.1%, as
well as a 10.1% sequential increase in revenue per kWh. Electric meters served also increased sequentially
by approximately 4,700.
For fiscal 2010, electric revenue was $132.1 million, a
15.9% decline compared to fiscal 2009. kWh
sold declined 2.2% compared to fiscal 2009 primarily reflecting a reduction in
average meters served, while average revenue per kWh declined 14.0% reflecting
lower commodity prices corresponding to lower rates charged to customers for
electricity.
Gas revenue in Q4 increased to $5.7 million, 17.4% higher
than in 4Q09, but 76.9% lower than in 3Q10. Year over year, the increase reflects a 51.7%
increase in revenue per therm, partially offset by a 22.3% decline in therms
sold reflecting a decline in gas meters served and changes in the composition
of IDT Energy’s customer base which reduced therms sold per meter. IDT Energy served approximately 159,000 gas
meters as of July 31, 2010, compared to 169,000 at July 31, 2009 and 159,000 at
April 30, 2010. The sequential decline
in gas revenue was primarily a result of a 69.1% decline in therms sold as a
result of seasonal factors, augmented by a 25.2% decline in revenues per therm.
For fiscal 2010, gas revenues were $69.2 million, a 35.6%
decline compared to fiscal 2009. Factors
contributing to the decline in gas revenue included lower average revenue per
therm – an 18.9% decline year over year – as a result of falling commodity
prices corresponding to lower rates, and decreases in meters served and therms
sold per meter which contributed to a 20.6% decline in therms sold.
Gross margin at IDT Energy was 24.0% in Q4, a 130 basis
point decline compared to the year ago period, and a 510 basis point decrease
compared to the prior quarter.
For fiscal 2010, gross margin averaged 28.7%, a 150 basis
point increase compared to the prior year.
The levels of gross margin obtained throughout fiscal 2010 may not be sustainable
going forward.
SG&A expense in Q4 was $5.5 million, a 28.1% increase
compared to the year ago period, but a 4.4% decrease compared to the prior
quarter. The year over year increase was primarily due to the impact
of customer acquisition programs in New Jersey
and Pennsylvania,
while the sequential decrease primarily reflected a seasonal decrease in
purchase of receivable (POR) fees, partially offset by higher customer
acquisition costs.
For fiscal 2010, SG&A expense was $19.8 million, a 22.9%
decline compared to fiscal 2009. The
reduction was primarily due to lower customer acquisition costs and POR fees reflecting,
in part, the lower pace of gross customer acquisitions following the sales and
marketing restructuring effort. IDT
Energy anticipates that its SG&A expense will increase in fiscal 2011 as a
result of continuing customer acquisition programs in new markets.
Adjusted EBITDA for Q4 was $5.7 million, a 12.5% increase
compared to the year ago, primarily as a result of higher electric and, to a
lesser extent, gas, revenues, partially offset by increased SG&A costs. Sequentially,
Adjusted EBITDA declined 43.0% primarily as the result of the seasonal
reductions in gas revenue and decreased gross profit.
For fiscal 2010, IDT Energy’s Adjusted EBITDA totaled $38.0
million, a 16.5% decrease compared to fiscal 2009 reflecting a significant
decrease in revenues and gross profit partially offset by reduced SG&A expenses.
Income from operations in Q4 was $5.6 million, a 12.3%
increase year over year, and a 43.4% decrease sequentially.
For fiscal 2010, IDT Energy generated $37.8 in income from
operations, a 16.6% decline compared to the prior year.
Genie Oil & Gas
Presently, Genie Oil & Gas’ operating expenses consist primarily
of costs incurred by IEI. IDT accounts
for its 50% stake in AMSO, LLC using the equity method.
Genie Oil & Gas reported a loss from operations of $1.9
million including research and development expenses of $1.6 million in 4Q10
compared to a loss from operations of $0.8 million in 4Q09, and a loss
from operations of $2.0 million in 3Q10.
For fiscal 2010, Genie Oil & Gas’ loss from operations totaled $6.5
million, a 69.1% increase compared to fiscal 2009. Genie Oil & Gas’ loss from operations in
fiscal 2009 is net of a $2.6 million gain on the sale to Total of a 50%
interest in AMSO, LLC.
IDT’s equity in the net loss of AMSO, LLC – $0.5 million in 4Q10
and $1.6 million in the full 2010 fiscal year – is included in “Other income
(expense), net” in its consolidated statement of operations.
During Q4, AMSO, LLC, a joint venture oil shale exploration
and production initiative with Total, SA, continued construction and ongoing
research and development work to prepare an oil shale pilot test to be
conducted in calendar 2011. 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.
IEI holds an exclusive Shale Oil Exploration and Production
License covering 238 square kilometers in the Shfela basin region in Israel.
During Q4, IEI continued resource appraisal and characterization work in the license
area. IEI has begun permitting and other preparatory work required prior to
construction of a pilot plant. The pilot
test will provide a basis for determining the technical, environmental and
economic viability of IEI’s proposed process for extracting oil from shale. If not delayed by regulatory action or a pending
litigation, pilot test construction could begin as early as calendar 2011, and pilot
test operations could begin as early as calendar 2012. The pilot test results would serve as the basis
for permitting and designing any future commercial project.
OTHER RECENT DEVELOPMENTS
On July 28, 2010, IDT sold land and a building in Piscataway, New
Jersey for $3.1 million, of which $2.7 million was
used to repay a portion of the mortgage on the property. The Company recorded a
gain of $0.7 million on the sale.
In August 2010, the Internal Revenue Service completed its
audit of IDT’s federal tax returns for fiscal years 2006, 2007 and 2008. As a
result of the audit, IDT’s pending refund claim was reduced by $0.4 million to
$1.8 million, and its domestic net operating loss carry forward was reduced by
$41 million to approximately $225 million at July 31, 2010.
On August 5, 2010, IDT announced the settlement of all
outstanding disputes with eBay Inc., and Skype, Inc., and related parties including
two patent infringement lawsuits pending in the United States District Court
for the Western District of Arkansas.
The terms of the settlement are confidential and were not disclosed.
Following the end of
the 2010 fiscal year, IDT received a net payment of $5.7 million from the
settlement of an arbitration claim it had brought related to certain auction
rate securities holdings. The securities’ original cost was $14.3 million. At July 31, 2010, the carrying value of these
securities was $0.2 million.
On August 31, 2010, Genie Energy announced the formation of
its Strategic Advisory Board to advise management on strategic, financial,
operational, and public policy matters related to Genie’s shale oil ventures. Members of the Genie Strategic Advisory Board
announced were: Alan K. Burnham, PhD;
former Vice President Dick Cheney; W. Wesley Perry, Chairman of the Board of
Genie Energy; Allan Sass, PhD; Michael Steinhardt; Stephen M. Trauber; and
Harold Vinegar, PhD. On September 14,
2010, Genie Energy announced two additions to its Strategic Advisory Board:
Rupert K. Murdoch and Eugene A. Renna. The
Board’s activities will be coordinated by Jim Courter,
Vice Chairman of IDT Corporation.
On September 7, 2010, IDT’s Board of Directors voted to
increase the size of IDT’s Board from five to six members and appointed W.
Wesley Perry to fill the vacancy. In
addition to serving in the positions described above, Mr. Perry owns and
operates S.E.S. Investments, Ltd., an oil and gas investments company, and serves
as the mayor of Midland, Texas.
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.
§
As in recent quarters, 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 Monday, October 18, 2010. 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 Thursday, October 21, 2010 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 and
Common Stock trade on the New York Stock Exchange under the ticker symbols IDT
and IDT.C, respectively.
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
william.ulrey@idt.net
973-438-3838
IDT CORPORATION
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
July 31
(in thousands)
|
2010
|
2009
|
|
ASSETS
|
|
|
|
CURRENT ASSETS:
|
|
|
|
Cash
and cash equivalents
|
$ 221,753
|
$ 117,902
|
|
Restricted
cash and cash equivalents
|
11,831
|
64,992
|
|
Marketable
securities
|
221
|
5,702
|
|
Trade
accounts receivable, net of allowance for doubtful accounts of $12,628 and
$15,740 at July 31, 2010 and 2009, respectively
|
105,232
|
138,697
|
|
Prepaid
expenses
|
25,476
|
17,597
|
|
Investments-short-term
|
1,517
|
631
|
|
Other
current assets
|
15,084
|
17,394
|
|
Assets
of discontinued operations
|
—
|
18,790
|
|
TOTAL CURRENT ASSETS
|
381,114
|
381,705
|
|
Property, plant and equipment, net
|
96,892
|
129,066
|
|
Goodwill
|
18,429
|
17,275
|
|
Other intangibles, net
|
3,675
|
5,350
|
|
Investments—long-term
|
8,375
|
13,099
|
|
Other assets
|
9,310
|
13,125
|
|
TOTAL ASSETS
|
$ 517,795
|
$ 559,620
|
|
LIABILITIES AND EQUITY
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
Trade
accounts payable
|
$ 52,957
|
$ 68,120
|
|
Accrued
expenses
|
143,822
|
151,530
|
|
Deferred
revenue
|
69,186
|
67,505
|
|
Income
taxes payable
|
10,085
|
9,533
|
|
Capital
lease obligations—current portion
|
6,032
|
7,058
|
|
Notes
payable—current portion
|
628
|
820
|
|
Other
current liabilities
|
2,272
|
4,852
|
|
Liabilities
of discontinued operations
|
—
|
5,496
|
|
TOTAL CURRENT LIABILITIES
|
284,982
|
314,914
|
|
Capital lease obligations—long-term portion
|
407
|
5,211
|
|
Notes payable—long-term portion
|
33,640
|
43,281
|
|
Other liabilities
|
12,793
|
16,772
|
|
TOTAL LIABILITIES
|
331,822
|
380,178
|
|
Commitments and contingencies
|
|
|
|
EQUITY:
|
|
|
|
IDT Corporation stockholders’ equity:
|
|
|
|
Preferred
stock, $.01 par value; authorized shares—10,000; no shares issued
|
—
|
—
|
|
Common
stock, $.01 par value; authorized shares—100,000; 9,241 and 9,241 shares
issued and 3,728 and 4,202 shares outstanding at July 31, 2010 and 2009,
respectively
|
92
|
92
|
|
Class A
common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued
and outstanding at July 31, 2010 and 2009
|
33
|
33
|
|
Class
B common stock, $.01 par value; authorized shares—200,000; 23,213 and 22,913
shares issued and 15,625 and 15,503 shares outstanding at July 31, 2010
and 2009, respectively
|
232
|
229
|
|
Additional
paid-in capital
|
711,701
|
720,804
|
|
Treasury
stock, at cost, consisting of 5,513 and 5,039 shares of common stock and
7,588 and 7,410 shares of Class B common stock at July 31, 2010 and
2009, respectively
|
(295,626 )
|
(293,901 )
|
|
Accumulated
other comprehensive (loss) income
|
(1,017 )
|
953
|
|
Accumulated
deficit
|
(231,626 )
|
(251,916 )
|
|
Total IDT Corporation stockholders’ equity
|
183,789
|
176,294
|
|
Noncontrolling interests
|
2,184
|
3,148
|
|
TOTAL EQUITY
|
185,973
|
179,442
|
|
TOTAL LIABILITIES AND EQUITY
|
$ 517,795
|
$ 559,620
|
IDT CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
Year ended July 31
(in thousands,
except per share data)
|
2010
|
2009
|
|
REVENUES
|
$ 1,401,449
|
$ 1,507,659
|
|
COSTS AND EXPENSES:
|
|
|
|
Direct cost of revenues (exclusive of depreciation and amortization)
|
1,110,723
|
1,160,121
|
|
Selling, general and administrative
|
218,595
|
281,896
|
|
Depreciation and amortization
|
33,426
|
47,698
|
|
Bad debt
|
3,777
|
7,122
|
|
Research and development
|
8,008
|
9,035
|
|
Impairments
|
(86 )
|
38,351
|
|
Restructuring charges
|
4,927
|
9,332
|
|
TOTAL COSTS AND EXPENSES
|
1,379,370
|
1,553,555
|
|
Gains on settlements and other, net
|
10,084
|
—
|
|
Gain on sale of interest in AMSO, LLC
|
—
|
2,598
|
|
Income (loss) from operations
|
32,163
|
(43,298 )
|
|
Interest expense, net
|
(6,262 )
|
(2,640 )
|
|
Other income (expense), net
|
27
|
(32,459 )
|
|
Income (loss) from continuing operations before income taxes
|
25,928
|
(78,397 )
|
|
(Provision for) benefit from income taxes
|
(5,275 )
|
4,633
|
|
Income (loss) from continuing operations
|
20,653
|
(73,764 )
|
|
Discontinued operations, net of tax:
|
|
|
|
Loss from discontinued operations
|
(151 )
|
(77,287 )
|
|
Loss on disposal/sale of discontinued operations
|
(229 )
|
(2,628 )
|
|
Total discontinued operations
|
(380 )
|
(79,915 )
|
|
NET INCOME (LOSS)
|
20,273
|
(153,679 )
|
|
Net loss (income) attributable to
noncontrolling interests
|
17
|
(1,770 )
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO IDT CORPORATION
|
$ 20,290
|
$ (155,449 )
|
|
Amounts attributable to IDT Corporation common
stockholders:
|
|
|
|
Income (loss) from continuing operations
|
$ 20,569
|
$ (74,249 )
|
|
Loss from discontinued operations
|
(279 )
|
(81,200 )
|
|
Net income (loss)
|
$ 20,290
|
$ (155,449 )
|
|
Earnings per share attributable to IDT Corporation
common stockholders:
|
|
|
|
Basic:
|
|
|
|
Income (loss) from continuing operations
|
$ 1.00
|
$ (3.30 )
|
|
Loss from discontinued operations
|
(0.01 )
|
(3.60 )
|
|
Net income (loss)
|
$ 0.99
|
$ (6.90 )
|
|
Weighted-average number of shares used in calculation
of basic earnings per share
|
20,451
|
22,542
|
|
Diluted:
|
|
|
|
Income
(loss) from continuing operations
|
$ 0.95
|
$ (3.30 )
|
|
Loss
from discontinued operations
|
(0.01 )
|
(3.60 )
|
|
Net
income (loss)
|
$ 0.94
|
$ (6.90 )
|
|
Weighted-average
number of shares used in calculation of diluted earnings per share
|
21,546
|
22,542
|
Click on attachment to download entire news release and financial tables including non-GAAP reconciliation tables.
