IDT Corporation (NYSE: IDT, IDT.C) announces operating results for the
third quarter of fiscal 2008, the three months ended April 30, 2008.
-
Q3 revenues: $453.2 million, down 6.6% year-over-year.
-
Q3 net loss: ($82.2) million, versus net loss of ($15.9) million one
year ago.
-
Q3 loss from operations ($70.5) million, compared with ($48.0) million
in the year-ago period.
-
Q3 net loss per share ($1.10), versus net loss per share of ($0.20)
one year ago.
-
Cash, cash equivalents, marketable securities, and investments totaled
$393.9 million as of the end of the third fiscal quarter.
SUMMARY OF OPERATING RESULTS
The following table summarizes the operating performance of IDT‘s
continuing businesses:
| $ millions |
|
Revenues |
|
Income (Loss) from Operations |
|
|
Q308 |
|
Q208 |
|
Q307 |
|
Q308 |
|
Q208 |
|
Q307 |
|
Wholesale Telecom
|
|
$
|
248.1
|
|
|
$
|
264.4
|
|
|
$
|
289.2
|
|
|
($10.4
|
)
|
|
$
|
1.9
|
|
|
($6.2
|
)
|
|
Prepaid Products
|
|
|
182.8
|
|
|
|
202.9
|
|
|
|
230.7
|
|
|
(24.5
|
)
|
|
|
(15.1
|
)
|
|
(16.9
|
)
|
|
Consumer Phone Services
|
|
|
20.8
|
|
|
|
23.0
|
|
|
|
30.7
|
|
|
7.6
|
|
|
|
4.0
|
|
|
3.9
|
|
|
Inter-segment
|
|
|
(90.6
|
)
|
|
|
(103.9
|
)
|
|
|
(134.9
|
)
|
|
–
|
|
|
|
–
|
|
|
–
|
|
|
IDT Telecom Total
|
|
|
361.0
|
|
|
|
386.3
|
|
|
|
415.6
|
|
|
(27.3
|
)
|
|
|
(9.2
|
)
|
|
(19.2
|
)
|
|
IDT Energy
|
|
|
66.3
|
|
|
|
65.1
|
|
|
|
57.3
|
|
|
0.9
|
|
|
|
1.9
|
|
|
2.5
|
|
|
IDT Capital
|
|
|
13.5
|
|
|
|
13.0
|
|
|
|
11.5
|
|
|
(17.0
|
)
|
|
|
(14.4
|
)
|
|
(8.8
|
)
|
|
IDT Carmel
|
|
|
12.5
|
|
|
|
12.4
|
|
|
|
1.0
|
|
|
1.9
|
|
|
|
(12.2
|
)
|
|
(3.3
|
)
|
|
Corporate
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
(28.9
|
)
|
|
|
(19.0
|
)
|
|
(19.1
|
)
|
|
Total IDT
|
|
$
|
453.2
|
|
|
$
|
476.7
|
|
|
$
|
485.4
|
|
|
($70.5
|
)
|
|
|
($52.9
|
)
|
|
($48.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columns in table may not add accurately due to rounding.
|
In Q1 2008 we changed our accounting for IDT Carmel operations, as
described below.This change accounts for the majority of the
changes in revenues from IDT Carmel operations as compared to the
year-ago period.
RECENT DEVELOPMENTS
On February 15, 2008, we announced the formation of a new IDT division,
the American Shale Oil Corporation (AMSO), to manage IDT’s U.S. oil
shale ventures, including the company’s majority stake in E.G.L. Oil
Shale LLC (EGL), which was acquired in two transactions, in January and
April of 2008, for a total consideration of $5.5 million. EGL is one of
three holders of 10-year leases granted by the U.S. Bureau of Land
Management to research, test and demonstrate the potential for
commercial oil shale production in western Colorado.
On February 7th, we closed on the purchase of
our headquarters building at 520 Broad St., Newark NJ, for $24.8 million
in cash and the assumption of the remainder of the existing mortgage on
the building in the amount of $26.9 million.
In March, we received payment of approximately $46 million for the
Altice One lawsuit settlement recognized in Q1 2008.
On March 27th, we announced that we have
appointed Grant Thornton LLP as our independent auditors. The change was
not the result of any disagreement between the company and Ernst & Young
LLP, our prior independent auditors.
On April 1st, we announced further executive
changes as part of a broader restructuring program designed to cut costs
and achieve profitability. Liore Alroy replaced Motti Lichtenstein as
CEO of IDT Telecom. Also, Marc J. Oppenheimer, COO of IDT Corporation,
has resigned from that position and will be leaving the company.
As we restructure, we have recognized severance and associated charges
in recent quarters. In the third quarter we recognized $16.5 million in
consolidated restructuring charges, primarily for severance, of which
$12.0 million was due to changes at IDT Telecom and $4.5 million related
to Corporate, mostly resulting from the elimination of certain
positions. Also during the quarter we accrued a $10.5 million pre-tax
litigation charge (which impacts the Corporate SG&A) to reserve for a
litigation judgment which we are currently appealing.
|
RESULTS OF IDT TELECOM OPERATIONS
|
|
|
|
Telecom Line of Business Detail
|
| $ millions |
|
Q2 07 |
|
Q3 07 |
|
Q4 07 |
|
FY 07 |
|
Q1 08 |
|
Q2 08 |
|
Q3 08 |
| REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL |
|
447.0 |
|
415.6 |
|
431.9 |
|
1765.7 |
|
402.6 |
|
386.3 |
|
361.0 |
| Prepaid Products |
|
251.6 |
|
230.7 |
|
228.7 |
|
971.8 |
|
208.9 |
|
202.9 |
|
182.8 |
|
CC- United States
|
|
204.9
|
|
180.0
|
|
175.1
|
|
776.0
|
|
159.5
|
|
161.5
|
|
139.2
|
|
CC- Europe
|
|
25.9
|
|
25.4
|
|
27.5
|
|
104.7
|
|
23.4
|
|
24.1
|
|
22.2
|
|
CC- Rest of World
|
|
7.8
|
|
10.1
|
|
7.4
|
|
32.5
|
|
8.1
|
|
7.9
|
|
7.6
|
|
Other
|
|
12.9
|
|
15.2
|
|
18.8
|
|
58.7
|
|
17.8
|
|
9.4
|
|
13.8
|
| Wholesale |
|
314.6 |
|
289.2 |
|
301.8 |
|
1220.6 |
|
280.1 |
|
264.4 |
|
248.1 |
|
Intersegment Revenues
|
|
153.5
|
|
134.9
|
|
128.6
|
|
575.5
|
|
111.6
|
|
103.9
|
|
90.6
|
|
Wholesale -Third Party
|
|
161.1
|
|
154.3
|
|
173.1
|
|
645.1
|
|
168.5
|
|
160.5
|
|
157.4
|
| Consumer Phone Services |
|
34.3 |
|
30.7 |
|
30.0 |
|
148.8 |
|
25.3 |
|
23.0 |
|
20.8 |
|
United States
|
|
33.4
|
|
29.5
|
|
28.4
|
|
127.1
|
|
23.5
|
|
21.1
|
|
19.0
|
|
Europe
|
|
–
|
|
–
|
|
–
|
|
17.5
|
|
–
|
|
–
|
|
–
|
|
Other
|
|
.8
|
|
1.2
|
|
1.6
|
|
4.2
|
|
1.7
|
|
1.9
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT TOTAL
|
|
86.2 |
|
80.6 |
|
75.1 |
|
349.6 |
|
86.9 |
|
84.8 |
|
78.7 |
| Prepaid Products |
|
34.4 |
|
37.3 |
|
32.2 |
|
154.3 |
|
38.5 |
|
38.2 |
|
33.4 |
| Wholesale |
|
36.5 |
|
30.6 |
|
27.6 |
|
130.9 |
|
35.7 |
|
36.0 |
|
31.8
|
| Consumer Phone Services |
|
15.3 |
|
12.8 |
|
15.4 |
|
64.5 |
|
12.7 |
|
10.6 |
|
13.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN TOTAL
|
|
19.3% |
|
19.4% |
|
17.4% |
|
19.8% |
|
21.6% |
|
22.0% |
|
21.8% |
| Prepaid Products |
|
13.7% |
|
16.2% |
|
14.1% |
|
15.9% |
|
18.4% |
|
18.8% |
|
18.3% |
| Wholesale |
|
11.6% |
|
10.6% |
|
9.1% |
|
10.7% |
|
12.8% |
|
13.6% |
|
12.8% |
| Consumer Phone Services |
|
44.8% |
|
41.6% |
|
51.3% |
|
43.3% |
|
50.2% |
|
46.2% |
|
65.2% |
|
|
|
|
SG&A Including Bad Debt TOTAL
|
|
81.3 |
|
80.5 |
|
113.0 |
|
358.5 |
|
78.4 |
|
78.0 |
|
77.1
|
| Prepaid Products |
|
45.5 |
|
45.8 |
|
86.2 |
|
218.8 |
|
46.8 |
|
46.0 |
|
42.4 |
| Wholesale |
|
26.4 |
|
26.4 |
|
22.4 |
|
99.3 |
|
24.6 |
|
25.8 |
|
29.8 |
| Consumer Phone Services |
|
9.3 |
|
8.3 |
|
4.4 |
|
40.4 |
|
7.0 |
|
6.2 |
|
4.9 |
|
United States
|
|
7.7
|
|
6.5
|
|
2.8
|
|
25.3
|
|
5.6
|
|
4.7
|
|
3.4
|
|
Europe
|
|
–
|
|
–
|
|
–
|
|
8.8
|
|
–
|
|
–
|
|
–
|
|
Other
|
|
1.7
|
|
1.8
|
|
1.6
|
|
6.3
|
|
1.4
|
|
1.5
|
|
1.4
|
IDT Telecom carried 5.56 billion minutes of traffic for third-party
customers in the third quarter of fiscal 2008, a decrease of 4.5%
sequentially, and 0.7% versus Q3 2007. Revenues declined 6.6%
sequentially and 13.1% compared with the 2007 third quarter. IDT Telecom‘s
($27.3) million loss from operations compares to the year-ago loss of
($19.2) million, and the Q2 2008 loss of ($9.2) million.
For IDT Telecom overall, gross profit dollars were 2.3% lower than the
year-ago figure and 7.2% lower than the immediately preceding quarter,
even though this quarter benefited from the favorable settlement of a
longstanding dispute with a telecom supplier and from continued focus on
reducing connectivity costs. SG&A expenses fell 4.2% versus one year
ago, and 1.2% sequentially, despite one-time expenses related to the
Altice One settlement in the current quarter and additional consulting
expenses due to a consulting agreement with Mr. Lichtenstein, former CEO
of IDT Telecom. Depreciation and amortization expenses for IDT Telecom
fell from $18.1 million in the year-ago period and $14.4 million in the
second quarter of 2008 to $14.3 million in the current quarter. A $12.0
million restructuring expense in the quarter relating to eliminating
positions to reduce expenses was incurred primarily by Wholesale ($4.8
million) and Prepaid Products ($6.5 million).
Wholesale Telecommunications Services
Wholesale revenues from third-party customers during the quarter
increased 2.1% year-over-year but decreased 1.9% sequentially, which is
partially explained by the current quarter being two days (2.2%) shorter
than Q2. Inter-segment sales continued to decline, primarily as a result
of the continued decline in minutes sold by our U.S. calling card
business. Total Wholesale segment revenues declined 6.2% sequentially
and 14.2% from the third quarter one year ago. In the third quarter,
Wholesale carried 5.47 billion minutes, a 0.4% and 4.3% decline compared
to the minutes volume delivered in the third quarter one year ago and in
Q2 2008, respectively. Gross profit dollars of $31.8 million in Q3 2008
increased 3.9% year-over-year and declined 11.7% sequentially. Gross
margins of 12.8% declined sequentially, but were markedly stronger than
the 10.6% of the year-ago quarter. Wholesale SG&A expenses increased
12.9% year-over-year and 15.6% sequentially, primarily due to the
recognition of expenses associated with the Altice One settlement. Also,
depreciation and amortization expense declined 20.5% year-over-year and
0.3% sequentially. The Wholesale Telecom loss from operations of ($10.4)
million compares with ($6.2) million in the year-ago quarter and a $1.9
million operating profit in Q2 2008.
Prepaid Products
Prepaid Products revenues during the quarter decreased 9.9% versus Q2
2008 and decreased 20.8% from the third quarter one year ago. In the
third quarter, our global prepaid products business terminated 2.04
billion minutes, as compared to 2.24 billion minutes in the second
quarter of fiscal 2008 and 2.59 billion minutes in 2007‘s
third quarter.
Gross profit margins of 18.3% in the third quarter of fiscal 2008 for
Prepaid Products were slightly weaker than the Q2 figure, but still
stronger than those recorded for most of fiscal 2007. SG&A expenses for
Prepaid Products decreased 7.4% versus the prior year dollar amount and
7.8% versus Q2 2008. SG&A expenses as a percentage of Prepaid Products
revenues were 23.2% in Q3 2008, versus 19.9% in the year-ago quarter and
22.7% in Q2 2008. Also, depreciation and amortization expense declined
21.8% year-over-year and 0.2% sequentially. The Prepaid Products
operating loss of ($24.5) million compares with ($16.9) million a year
ago and ($15.1) million in the second quarter of 2008.
Consumer Phone Services
Consumer Phone Services revenues for the third quarter were 9.7% lower
than those recorded in the second quarter of fiscal 2008, and 32.3%
lower than last year‘s comparable quarter due
to continued attrition of customers. Our strategy is to continue to
manage this business for cash-flow maximization. In the third quarter,
we were able to reduce direct costs by 41.7% and 59.7% compared with the
Q2 2008 and year-ago levels, respectively, primarily due to the
favorable settlement of a long-standing dispute with one of our telecom
suppliers. Additionally, we reduced SG&A expenses by 21.6% and 41.1%,
compared with the Q2 2008 and year-ago levels, respectively. As a
result, we recorded gross margins of 65.2% in the quarter, compared with
margins in a range of 46.2% to 51.3% in the previous three quarters. We
do not expect gross margins in excess of 52% in future quarters. Income
from operations increased 89.5% and 93.4% compared with the Q2 2008 and
year-ago levels, respectively, to $7.6 million.
|
RESULTS OF IDT ENERGY OPERATIONS
|
| $ millions, except % |
|
Q2 07 |
|
Q3 07 |
|
Q4 07 |
|
FY 2007 |
|
Q1 08 |
|
Q2 08 |
|
Q3 08 |
|
REVENUES
|
|
$
|
51.9
|
|
|
$
|
57.3
|
|
|
$
|
45.3
|
|
|
$
|
190.7
|
|
|
$
|
42.1
|
|
|
$
|
65.1
|
|
|
$
|
66.3
|
|
|
GROSS PROFIT
|
|
|
7.1
|
|
|
|
6.4
|
|
|
|
4.6
|
|
|
|
26.5
|
|
|
|
5.4
|
|
|
|
6.8
|
|
|
|
6.4
|
|
|
GROSS MARGIN %
|
|
|
13.7
|
%
|
|
|
11.2
|
%
|
|
|
10.1
|
%
|
|
|
13.9
|
%
|
|
|
12.9
|
%
|
|
|
10.4
|
%
|
|
|
9.7
|
%
|
|
SG&A, including bad debt
|
|
|
3.5
|
|
|
|
4.0
|
|
|
|
4.0
|
|
|
|
15.0
|
|
|
|
3.8
|
|
|
|
4.7
|
|
|
|
5.5
|
|
|
ENDING METERS SERVED (000)
|
|
|
271
|
|
|
|
284
|
|
|
|
300
|
|
|
|
300
|
|
|
|
312
|
|
|
|
318
|
|
|
|
343
|
|
IDT Energy increased its base of meters served 20.6% in Q3 2008 compared
to the year-ago period, and 7.9% versus the Q2 2008 total. IDT Energy
continues to expand its customer base opportunistically in New York with
the goal of acquiring profitable customers in low-risk markets; more
specifically in regions where receivables are guaranteed under purchase
of receivables (POR) programs, billing is handled by the utility, and
commodity procurement can be effectuated on a real-time market basis.
IDT Energy regularly monitors other deregulated markets to determine if
they are ripe for entry, and will initiate the licensing process in any
selected region, should deregulated conditions develop favorably.
Revenues increased 15.8% compared with the year-ago period, driven by an
18.6% increase in gas meters, a 22.1% increase in electric meters, and
increases in our average quarterly pricing of about 11% for gas and 2%
for electricity. This was moderately offset by lower consumption per
meter versus the year ago period, primarily related to gas consumption
per meter.
Gross margins in IDT Energy for the quarter were 9.7%, compared with
11.2% in the year-ago period. Operating income for the quarter fell to
$0.9 million from $2.5 million in the year-ago period due primarily to
an increase in SG&A of $1.5 million compared to Q3 2007. The largest
contributor to this increase was expenses related to gross customer
additions. Gross customer additions were almost double those of the
year-ago period, as we continue to take advantage of market
opportunities to acquire profitable customers. IDT Energy plans to
continue to target margins per unit that will achieve profitability, and
will take advantage of its natural short position in the commodity
markets to maximize the margin per unit, as they arise. Additionally,
the Company will continue to employ a conservative, non-speculative risk
management policy to help protect its margins.
| RESULTS OF IDT CAPITAL OPERATIONS |
| $ millions, except % |
|
Q2 07 |
|
Q3 07 |
|
Q4 07 |
|
FY 2007 |
|
Q1 08 |
|
Q2 08 |
|
Q3 08 |
| REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
12.8
|
|
|
$
|
11.5
|
|
|
$
|
13.6
|
|
|
$
|
50.9
|
|
|
$
|
13.6
|
|
|
$
|
13.0
|
|
|
$
|
13.5
|
|
|
Local Media
|
|
|
5.4
|
|
|
|
4.9
|
|
|
|
6.7
|
|
|
|
23.0
|
|
|
|
6.0
|
|
|
|
5.2
|
|
|
|
5.4
|
|
|
Internet Mobile Group
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
1.5
|
|
|
|
1.7
|
|
|
|
2.3
|
|
|
|
2.4
|
|
|
|
2.6
|
|
|
Alternative Energy
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
All Other
|
|
|
7.3
|
|
|
|
6.5
|
|
|
|
5.4
|
|
|
|
26.2
|
|
|
|
5.4
|
|
|
|
5.4
|
|
|
|
5.4
|
|
| GROSS PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
8.7
|
|
|
|
5.0
|
|
|
|
7.4
|
|
|
|
27.9
|
|
|
|
6.0
|
|
|
|
5.8
|
|
|
|
5.1
|
|
|
Local Media
|
|
|
3.9
|
|
|
|
3.1
|
|
|
|
4.9
|
|
|
|
16.2
|
|
|
|
4.4
|
|
|
|
3.4
|
|
|
|
3.7
|
|
|
Internet Mobile Group
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
|
1.0
|
|
|
|
1.1
|
|
|
Alternative Energy
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
All Other
|
|
|
4.7
|
|
|
|
1.8
|
|
|
|
1.9
|
|
|
|
10.9
|
|
|
|
0.7
|
|
|
|
1.4
|
|
|
|
0.3
|
|
| GROSS MARGIN % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
68.1
|
%
|
|
|
43.1
|
%
|
|
|
54.2
|
%
|
|
|
54.9
|
%
|
|
|
43.9
|
%
|
|
|
44.7
|
%
|
|
|
37.5
|
%
|
|
Local Media
|
|
|
72.6
|
%
|
|
|
62.6
|
%
|
|
|
73.3
|
%
|
|
|
70.7
|
%
|
|
|
72.7
|
%
|
|
|
66.2
|
%
|
|
|
67.6
|
%
|
|
Internet Mobile Group
|
|
|
100.0
|
%
|
|
|
83.5
|
%
|
|
|
37.9
|
%
|
|
|
43.2
|
%
|
|
|
39.5
|
%
|
|
|
42.1
|
%
|
|
|
41.8
|
%
|
|
Alternative Energy
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
All Other,
|
|
|
64.5
|
%
|
|
|
27.7
|
%
|
|
|
34.7
|
%
|
|
|
41.6
|
%
|
|
|
13.4
|
%
|
|
|
25.3
|
%
|
|
|
5.0
|
%
|
| SG&A, including bad debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
10.5
|
|
|
|
11.8
|
|
|
|
14.3
|
|
|
|
45.5
|
|
|
|
14.3
|
|
|
|
17.6
|
|
|
|
13.6
|
|
|
Local Media
|
|
|
4.3
|
|
|
|
4.1
|
|
|
|
5.0
|
|
|
|
17.0
|
|
|
|
4.6
|
|
|
|
5.2
|
|
|
|
4.7
|
|
|
Internet Mobile Group
|
|
|
1.0
|
|
|
|
0.6
|
|
|
|
1.5
|
|
|
|
3.4
|
|
|
|
1.9
|
|
|
|
2.6
|
|
|
|
2.4
|
|
|
Alternative Energy
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
All Other
|
|
|
5.3
|
|
|
|
7.1
|
|
|
|
7.8
|
|
|
|
25.2
|
|
|
|
7.8
|
|
|
|
9.8
|
|
|
|
6.4
|
|
IDT Capital consists of the IDT Local Media businesses (principally the
CTM brochure distribution operation and other advertising-based new
product initiatives geared towards small to medium sized businesses,
plus our WMET Washington, D.C. based AM radio station), the Internet
Mobile Group (Zedge—a social networking
website providing a free creation and distribution platform for mobile
content—and our majority holding in IDW
Publishing, an established leader in the publication of comic books and
graphic novels), and Alternative Energy which consists of AMSO, our U.S.
shale oil research and development business and other alternative energy
initiatives. IDT Capital also contains some of our intellectual property
as well as other smaller businesses, some of which are early stage
initiatives, and other smaller initiatives in the process of being shut
down. During the quarter, we shut down our Depot USA project, which we
decided not to pursue.
In Q3 2008, IDT Capital reported a revenue increase of 16.7%
year-over-year and 3.8% sequentially. The primary reason for the revenue
increase compared with the year-ago period is the Internet Mobile Group‘s
acquisition of its stake in IDW. IDT Capital reported an operating loss
of ($17.0) million in the third quarter of fiscal 2008, versus a loss of
($8.8) million in the year-ago quarter and ($14.4) million in Q2 2008.
In Q3 2008, ($6.2) million of IDT Capital‘s
operating loss was the result of including Alternative Energy. In the
sequential comparison, IDT Capital improved its operating performance by
$3.6 million, excluding the impact of Alternative Energy. Of this
improvement, $2.4 million was attributable to other smaller Capital
businesses. We closed down our Puerto Rico call center which eliminated
associated costs, and reduced litigation expenses, offset by charges
associated with downsizing our Israeli call center due to our focus on
lowering costs. The remaining sequential improvement (excluding
Alternative Energy) was predominantly due to Local Media‘s
reducing SG&A expenses while increasing gross profits.
In addition to the impact of Alterative Energy on the comparison with
the year ago quarter, the Internet Mobile Group increased its SG&A
expenses more than its gross profits. Also, our results from our Israeli
call center and litigation expenses contributed greater losses than in
the year-ago quarter.
Local Media
Local Media reported a revenue increase of 10.1% and 4.9% versus the
year-ago quarter and sequentially, respectively. Its operating loss of
($1.4) million represented a 1.7% deterioration year-over-year, but a
38.4% improvement sequentially. Aside from the effects of increasing
revenues, most of the change in operating profits was due to increased
spending on SG&A devoted to the Local Media New Products Group.
CTM Brochure Display has shown strength both from a year over year as
well as quarter over quarter perspective. CTM has been successfully
upselling its existing customer base other relevant products, such as
printing services and advertising in its owned tourism guides. In
addition, various divisional restructurings have resulted in a reduction
in sales SG&A while not adversely affecting sales growth. CTM continues
to test new products. Similarly, the New Products Group within Local
Media has been testing new media products, such as search engine
marketing, with small to medium sized businesses.
Internet Mobile Group
The Internet Mobile Group reported a revenue increase of 11.2%
sequentially to $2.6 million. The year-ago comparison is not meaningful
because the group was just being formed a year ago. The Q3 2008
operating loss was ($1.5) million, versus ($1.8) million in the second
quarter.
Zedge (http://www.zedge.net), the
online user-generated mobile content and social networking community
which is a major component of the Internet Mobile Group, released its
3.0 site design in April 2008. The newly streamlined website makes it
significantly easier for users to find the content that they want,
connect with one another, and create and share content. The site has 9.8
million registered users (a 33.3% increase sequentially), mostly men in
the 18 to 35 year old age bracket. An average of 20,000 new members are
registering each day. Members upload about 7,500 items of content per
day; this is a 45% increase since the new site launched. The content
library is up to 1.5 million items such as ringtones, wallpaper, games
and themes. Zedge, which has a truly international following, has become
one of the most popular sites for mobile content in the U.K. About one
million content items are downloaded per day, a 30% increase with the
new site. There are close to 5 million unique users per month, up from 4
million in Q2 2008, and 10 million page views per day. Further
developments planned for Zedge include algorithms to match the content
displayed to the country from which the user is logging on, and adding a
mobile registration capability.
Zedge is planning to build advertising revenue by introducing direct
revenue streams on the site through sales force channels. We are working
toward making the group break-even by the end of fiscal 2009.
IDW Publishing, the other business in the IDT Internet Mobile Group,
publishes 35 to 40 graphic novel titles a month. Recent successful
titles include Angel, Transformers, Speed Racer, Doctor Who, and Star
Trek. Michael Recycle, the first book published by our new
children‘s imprint, Worthwhile Books, is
selling well at comic stores, bookstores, book fairs, through a
prominent catalog, and as an endcap in a national discount chain. In
April 2008,artist Ben Templesmith, whose professional comic book
debut, 30 Days of Night was made into a major motion picture in
2007, signed an exclusive contract with IDW Publishing. He will continue
writing certain current series, notably Wormwood Gentleman Corpse,
create new series, the first of which, Welcome to Hoxford, has
already been identified, and also associate with IDW Publishing for
everything he writes for print. He plans to release two books in August.
Alternative Energy
The planning phase for the RD&D (Research, Development and
Demonstration) project for Alternative Energy is continuing and we
expect to initiate field work later this year, after the Bureau of Land
Management approves the plan of operations. We will begin with
characterizing the site to better understand the oil shale resource as
well as the hydrology. Our total expenditures and their timing will
depend on a number of factors, including the early results of our R&D.
Should we decide not to fund further research after benchmarks have been
achieved, our equity stake will be reduced. We expect our Q4 2008
funding to be approximately $2 million.
| RESULTS OF IDT CARMEL OPERATIONS |
| $ millions, except % |
|
Q2 07 |
|
Q3 07 |
|
Q4 07 |
|
FY 2007 |
|
Q1 08 |
|
Q2 08 |
|
Q3 08 |
|
REVENUES
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
|
$1.8
|
|
|
$
|
5.5
|
|
|
$9.7
|
|
|
$
|
12.4
|
|
|
$
|
12.5
|
|
|
GROSS PROFIT
|
|
|
(0.9
|
)
|
|
|
(2.3
|
)
|
|
(3.6
|
)
|
|
|
(6.3
|
)
|
|
3.3
|
|
|
|
5.7
|
|
|
|
3.8
|
|
|
GROSS MARGIN %
|
|
|
-113.7
|
%
|
|
|
-241.3
|
%
|
|
-202.9
|
%
|
|
|
-116.7
|
%
|
|
34.2
|
%
|
|
|
46.0
|
%
|
|
|
30.4
|
%
|
|
SG&A
|
|
|
1.0
|
|
|
|
1.0
|
|
|
1.5
|
|
|
|
4.2
|
|
|
1.2
|
|
|
|
1.7
|
|
|
|
1.8
|
|
|
BAD DEBT EXPENSE
|
|
|
–
|
|
|
|
–
|
|
|
–
|
|
|
|
–
|
|
|
–
|
|
|
|
16.1
|
|
|
|
–
|
|
|
RECEIVABLES UNDER MANAGEMENT
|
|
|
14.3
|
|
|
|
34.3
|
|
|
51.1
|
|
|
|
51.1
|
|
|
81.1
|
|
|
|
90.3
|
|
|
|
82.0
|
|
|
FACE AMOUNT OF PURCHASES
|
|
|
159
|
|
|
|
300
|
|
|
372
|
|
|
|
990
|
|
|
412
|
|
|
|
344
|
|
|
|
0
|
|
|
NET EXPENDITURES TO PURCHASE RECEIVABLES
|
|
|
13
|
|
|
|
28
|
|
|
31
|
|
|
|
79
|
|
|
37
|
|
|
|
30
|
|
|
|
0
|
|
IDT Carmel recorded an operating profit of $1.9 million for the third
quarter of fiscal 2008, compared with losses of ($3.3) million in the
year-ago period and ($12.2) million in the preceding quarter. IDT Carmel‘s
revenues increased by $11.5 million when compared to the year-ago period
and were virtually flat sequentially. Direct costs increased 30.6%
sequentially and SG&A expenses rose 5.7% sequentially. The revenue
increase and the consequent operating profits compared to fiscal 2007
resulted primarily from changing the method of accounting from Cost
Recovery to Effective Yield for recognizing revenue in our purchased
debt portfolios business. Under Effective Yield, revenue is recognized
on a calculated internal rate of return based on our gross cash flow
expectations for each portfolio. Under Cost Recovery, no revenue is
recognized until the cost of the portfolio is completely recovered or
sold. Also contributing to the increase in revenue versus the year-ago
period, the total amount of receivables under management increased to
$82.0 million at the end of Q3 2008 from $34.3 million at the end of Q3
2007. Revenue was flat sequentially because under the Effective Yield
Method revenues decrease as portfolios age and there were no portfolio
purchases in Q3 2008. This decrease was offset by two portfolio resales
in Q3 2008 and the revenues from several portfolios purchased at the end
of Q2 2008 for which we began recording revenue in Q3 2008.
IDT CONFERENCE CALL INFORMATION
|
Conference call today, June 4, 2008, at 5:00 PM Eastern Time.
|
|
|
-
From the U.S., please dial 877-407-8033, Passcode IDT.
-
International callers, please dial 201-689-8033, Passcode IDT.
-
Replay available for one week at:
1-877-660-6853, Account
#: 286; Conference ID #: 286712 for domestic callers, or
1-201-612-7415,
Account #: 286; Conference ID #: 286712 for international
callers.
-
Webcast of the conference call will be available at the direct
link on www.idt.net. An
archived copy of the call will be available at the IDT Website,
in the Investor Relations section under the Presentations
heading for at least six months after the call.
-
Additional financial and statistical information is available on
the Investor Relations portion of IDT‘s
website, at https://www.idt.net/about/ir/overview.asp.
|
ABOUT IDT CORPORATION
IDT
Corporation is a multinational holding company with operations that
span several industries. Our principal businesses consist of:
-
IDT Telecom, through which we provide telecommunications services and
products worldwide to retail and wholesale customers, including
prepaid and rechargeable calling cards, consumer local and long
distance service, prepaid wireless phone services and wholesale
carrier services;
-
IDT Energy, which operates our Energy Services Company, or ESCO, in
New York State;
-
IDT Carmel, our receivables portfolio management and collection
business;
-
American Shale Oil Corporation (AMSO), formed in February 2008 to
manage IDT‘s U.S. oil shale ventures;
-
IDT Local Media, which is primarily comprised of CTM Brochure Display,
our brochure distribution company and other advertising-based new
product initiatives geared towards small to medium sized businesses,
plus the WMET-AM radio station in the Washington D.C. metropolitan
area; and
-
IDT Internet Mobile Group, which is a new media company that leverages
digital, mobile, and traditional distribution mechanisms to create and
distribute content. It does this through its Zedge and IDW arms. Zedge
is a website and platform geared toward the production and
distribution of mobile content. IDW is a comics, graphic novel, and
children‘s book publisher that creates and
licenses original IP.
We also hold assets and operate other smaller or early-stage initiatives
and operations, including intellectual property held in units of IDT
Capital, IDT Spectrum, which holds a significant number of Federal
Communications Commission licenses for commercial fixed wireless
spectrum in the United States, IDT Global Israel, which is primarily
comprised of call center operations, and certain real estate investments.
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 with the words “believe,““anticipate,““expect,““plan,““intend,““estimate,““target“
and similar expressions, are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. While
these forward-looking statements represent IDT‘s
current judgment of what may happen in the future, actual results may
differ materially from the results expressed or implied by these
statements due to various risks and uncertainties. These risks and
uncertainties include, but are certainly not limited to the specific
risks and uncertainties discussed in our reports filed with the SEC. All
forward-looking statements and risk factors included in this document
are made as of the date hereof, based on information available to IDT as
of the date thereof, and IDT assumes no obligation to update any
forward-looking statements or risk factors.
|
IDT CORPORATION
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 30, |
|
Nine Months Ended
April 30, |
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
|
(In thousands, except per share data) |
|
Revenues
|
|
$
|
453,248
|
|
|
$
|
485,356
|
|
|
$
|
1,398,039
|
|
|
$
|
1,520,182
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Direct cost of revenues (exclusive of depreciation and amortization)
|
|
|
359,276
|
|
|
|
395,654
|
|
|
|
1,099,388
|
|
|
|
1,205,893
|
|
|
Selling, general and administrative (i)
|
|
|
118,551
|
|
|
|
112,283
|
|
|
|
350,771
|
|
|
|
327,163
|
|
|
Research and development
|
|
|
8,885
|
|
|
|
55
|
|
|
|
9,808
|
|
|
|
4,814
|
|
|
Bad debt
|
|
|
3,078
|
|
|
|
3,100
|
|
|
|
24,373
|
|
|
|
7,481
|
|
|
Depreciation and amortization
|
|
|
17,460
|
|
|
|
20,500
|
|
|
|
52,027
|
|
|
|
60,476
|
|
|
Restructuring and severance charges
|
|
|
16,537
|
|
|
|
1,756
|
|
|
|
20,719
|
|
|
|
8,082
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
523,787
|
|
|
|
533,348
|
|
|
|
1,557,086
|
|
|
|
1,613,909
|
|
|
Arbitration award
|
|
|
— |
|
|
|
— |
|
|
|
40,000
|
|
|
|
— |
|
|
Gain on sale of U.K.-based Toucan business
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44,671
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(70,539
|
)
|
|
|
(47,992
|
)
|
|
|
(119,047
|
)
|
|
|
(49,056
|
)
|
|
Interest (expense) income, net
|
|
|
(301
|
)
|
|
|
4,762
|
|
|
|
5,301
|
|
|
|
13,518
|
|
|
Other (expense) income, net
|
|
|
(8,348
|
)
|
|
|
30,643
|
|
|
|
(9,633
|
)
|
|
|
29,222
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before minority interests and income
taxes
|
|
|
(79,188
|
)
|
|
|
(12,587
|
)
|
|
|
(123,379
|
)
|
|
|
(6,316
|
)
|
|
Minority interests
|
|
|
(345
|
)
|
|
|
(2,699
|
)
|
|
|
(980
|
)
|
|
|
(9,059
|
)
|
|
Provision for income taxes
|
|
|
(2,193
|
)
|
|
|
(638
|
)
|
|
|
(9,012
|
)
|
|
|
(4,664
|
)
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(81,726
|
)
|
|
|
(15,924
|
)
|
|
|
(133,371
|
)
|
|
|
(20,039
|
)
|
|
Discontinued operations, net of tax:
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,165
|
)
|
|
(Loss) gain on sale of discontinued operations
|
|
|
(485
|
)
|
|
|
— |
|
|
|
(4,529
|
)
|
|
|
198,235
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations
|
|
|
(485
|
)
|
|
|
— |
|
|
|
(4,529
|
)
|
|
|
191,070
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(82,211
|
)
|
|
$
|
(15,924
|
)
|
|
$
|
(137,900
|
)
|
|
$
|
171,031
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted:
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
$
|
(1.09
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.74
|
)
|
|
$
|
(0.24
|
)
|
|
Total discontinued operations
|
|
|
(0.01
|
)
|
|
|
— |
|
|
|
(0.06
|
)
|
|
|
2.32
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1.10
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.80
|
)
|
|
$
|
2.08
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares used in calculation of basic and
diluted earnings per share
|
|
|
75,014
|
|
|
|
81,357
|
|
|
|
76,553
|
|
|
|
82,417
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
— |
|
|
$
|
0.25
|
|
|
|
— |
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
(i) Stock-based compensation included in selling, general and
administrative expenses
|
|
$
|
— |
|
|
$
|
1,473
|
|
|
$
|
3,221
|
|
|
$
|
5,924
|
|
|
IDT CORPORATION
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
2008 |
|
July 31,
2007 |
|
|
(Unaudited) |
|
(Audited) |
|
|
(in thousands) |
| Assets |
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
143,127
|
|
|
$
|
153,845
|
|
|
Marketable securities
|
|
|
126,100
|
|
|
|
388,140
|
|
Trade accounts receivable, net of allowance for doubtful accounts of
$21,549 at April 30, 2008 and $19,654 at July 31, 2007
|
|
|
163,477
|
|
|
|
164,802
|
|
|
Prepaid expenses
|
|
|
20,465
|
|
|
|
28,920
|
|
|
Investments
|
|
|
43,356
|
|
|
|
— |
|
|
Other current assets
|
|
|
54,074
|
|
|
|
60,452
|
|
|
Total current assets
|
|
|
550,599
|
|
|
|
796,159
|
|
|
Property, plant and equipment, net
|
|
|
269,389
|
|
|
|
251,318
|
|
|
Goodwill
|
|
|
100,805
|
|
|
|
101,515
|
|
|
Licenses and other intangibles, net
|
|
|
10,111
|
|
|
|
13,824
|
|
|
Investments
|
|
|
81,335
|
|
|
|
119,052
|
|
|
Deferred income tax assets, net
|
|
|
233,996
|
|
|
|
— |
|
|
Other assets
|
|
|
87,219
|
|
|
|
78,465
|
|
|
Total assets
|
|
$
|
1,333,454
|
|
|
$
|
1,360,333
|
|
| Liabilities and stockholders‘ equity |
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Trade accounts payable
|
|
$
|
65,740
|
|
|
$
|
47,467
|
|
|
Accrued expenses
|
|
|
219,057
|
|
|
|
288,017
|
|
|
Deferred revenue
|
|
|
94,268
|
|
|
|
112,757
|
|
|
Capital lease obligations—current portion
|
|
|
11,277
|
|
|
|
21,049
|
|
|
Notes payable—current portion
|
|
|
4,172
|
|
|
|
8,095
|
|
|
Other current liabilities
|
|
|
7,066
|
|
|
|
17,598
|
|
|
Total current liabilities
|
|
|
401,580
|
|
|
|
494,983
|
|
|
Income taxes payable
|
|
|
365,603
|
|
|
|
— |
|
|
Deferred income tax liabilities, net
|
|
|
— |
|
|
|
105,049
|
|
Capital lease obligations—long-term
portion
|
|
|
11,948
|
|
|
|
23,401
|
|
|
Notes payable—long-term portion
|
|
|
106,679
|
|
|
|
82,847
|
|
|
Other liabilities
|
|
|
9,137
|
|
|
|
12,928
|
|
|
Total liabilities
|
|
|
894,947
|
|
|
|
719,208
|
|
|
Minority interests
|
|
|
8,427
|
|
|
|
10,963
|
|
|
Commitments and contingencies
|
|
|
|
|
|
Stockholders‘ equity:
|
|
|
|
|
Preferred stock, $.01 par value; authorized shares—10,000;
no shares issued
|
|
|
— |
|
|
|
— |
|
Common stock, $.01 par value; authorized shares—100,000;
25,075 and 25,075 shares issued and 14,542 and 14,996 shares
outstanding at April 30, 2008 and July 31, 2007, respectively
|
|
|
251
|
|
|
|
251
|
|
Class A common stock, $.01 par value; authorized shares—35,000;
9,817 shares issued and outstanding at April 30, 2008 and July 31,
2007
|
|
|
98
|
|
|
|
98
|
|
Class B common stock, $.01 par value; authorized shares—200,000;
63,640 and 63,261 shares issued and 51,017 and 56,043 shares
outstanding at April 30, 2008 and July 31, 2007, respectively
|
|
|
636
|
|
|
|
633
|
|
|
Additional paid-in capital
|
|
|
715,049
|
|
|
|
711,103
|
|
Treasury stock, at cost, consisting of 10,533 and 10,079 shares of
common stock and 12,623 and 7,218 shares of Class B common stock at
April 30, 2008 and July 31, 2007, respectively
|
|
|
(285,461
|
)
|
|
|
(240,355
|
)
|
|
Accumulated other comprehensive income
|
|
|
9,544
|
|
|
|
10,750
|
|
|
Retained earnings (deficit)
|
|
|
(10,037
|
)
|
|
|
147,682
|
|
|
Total stockholders‘ equity
|
|
|
430,080
|
|
|
|
630,162
|
|
|
Total liabilities and stockholders‘ equity
|
|
$
|
1,333,454
|
|
|
$
|
1,360,333
|
|
|
IDT CORPORATION
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
April 30, |
|
|
2008 |
|
2007 |
|
|
(In thousands) |
|
Net cash used in operating activities
|
|
$
|
(108,337
|
)
|
|
$
|
(83,671
|
)
|
| Investing activities |
|
|
|
|
|
Capital expenditures
|
|
|
(15,149
|
)
|
|
|
(26,358
|
)
|
|
Purchase of building
|
|
|
(24,778
|
)
|
|
|
— |
|
|
Collection of notes receivable, net
|
|
|
14,789
|
|
|
|
228
|
|
|
Investments and acquisitions, net of cash acquired
|
|
|
(21,829
|
)
|
|
|
(4,094
|
)
|
|
Proceeds from sale of investments
|
|
|
10,945
|
|
|
|
— |
|
|
Proceeds from sale of building
|
|
|
4,872
|
|
|
|
— |
|
Proceeds from sale of IDT Entertainment, net of cash sold and
transaction costs
|
|
|
— |
|
|
|
261,604
|
|
Proceeds from sale of U.K.-based Toucan business, net of transaction
costs
|
|
|
— |
|
|
|
38,380
|
|
|
Purchase of debt portfolios
|
|
|
(67,331
|
)
|
|
|
(47,276
|
)
|
|
Principal collections and proceeds from resale of debt portfolios
|
|
|
20,399
|
|
|
|
14,399
|
|
|
Proceeds from sales and maturities of marketable securities
|
|
|
633,242
|
|
|
|
1,331,938
|
|
|
Purchases of marketable securities
|
|
|
(387,808
|
)
|
|
|
(1,325,194
|
)
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
|
167,352
|
|
|
|
243,627
|
|
| Financing activities |
|
|
|
|
|
Dividends paid
|
|
|
— |
|
|
|
(20,560
|
)
|
|
Distributions to minority shareholders of subsidiaries
|
|
|
(3,897
|
)
|
|
|
(9,860
|
)
|
|
Proceeds from exercises of stock options
|
|
|
94
|
|
|
|
5,195
|
|
|
Proceeds from employee stock purchase plan
|
|
|
808
|
|
|
|
1,075
|
|
|
Proceeds from sale leaseback transactions on capital leases
|
|
|
— |
|
|
|
13,283
|
|
|
Repayments of capital lease obligations
|
|
|
(22,340
|
)
|
|
|
(15,594
|
)
|
|
Repayments of borrowings
|
|
|
(3,032
|
)
|
|
|
(2,876
|
)
|
|
Repurchases of common stock and Class B common stock
|
|
|
(45,279
|
)
|
|
|
(3,918
|
)
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(73,646
|
)
|
|
|
(33,255
|
)
|
| Discontinued operations |
|
|
|
|
|
Net cash used in operating activities
|
|
|
— |
|
|
|
(20,261
|
)
|
|
Net cash provided by investing activities
|
|
|
— |
|
|
|
3,847
|
|
|
Net cash provided by financing activities
|
|
|
— |
|
|
|
7,536
|
|
|
|
|
|
|
|
Net cash used in discontinued operations
|
|
|
— |
|
|
|
(8,878
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
3,913
|
|
|
|
5,601
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(10,718
|
)
|
|
|
123,424
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
153,845
|
|
|
151,192 (*)
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
143,127
|
|
|
$
|
274,616
|
|
|
|
|
|
|
Supplemental schedule of non-cash investing and financing
activities |
|
|
|
|
Assumption of mortgage payable in connection with the purchase of
the Company‘s headquarters office building
|
|
$
|
26,851
|
|
|
$
|
— |
|
|
|
|
|
|
Receipt of the Company‘s Class B common
stock and IDT Telecom shares as part of the proceeds from the sale
of IDT Entertainment
|
|
$
|
— |
|
|
$
|
226,649
|
|
|
|
|
|
|
Receipt of marketable securities as part of the proceeds from the
sale of U.K.-based Toucan business
|
|
$
|
— |
|
|
$
|
7,851
|
|
|
|
|
|
|
|
|
|
|
|
(*) Includes cash and cash equivalents of discontinued operations
of $32.1 million as of July 31, 2006.
|
|
SELECTED CONSOLIDATED FINANCIAL DATA
THREE MONTHS
ENDED APRIL 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total IDT |
|
Inter- |
|
Wholesale |
|
Prepaid Products |
|
CPS |
|
IDT |
|
IDT |
|
IDT |
|
|
|
(In thousands)
|
|
Corporation |
|
Segment |
|
Telecom |
|
Telecom |
|
Telecom |
|
Carmel |
|
Energy |
|
Capital |
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| STATEMENT OF OPERATIONS DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
453,248
|
|
|
|
( $ 90,619
|
)
|
|
$
|
248,062
|
|
|
$
|
182,762
|
|
|
$
|
20,779
|
|
$
|
12,513
|
|
$
|
66,290
|
|
$
|
13,461
|
|
|
$
|
–
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct cost of revenues (exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization)
|
|
|
359,276
|
|
|
|
(90,619
|
)
|
|
|
216,288
|
|
|
|
149,375
|
|
|
|
7,223
|
|
|
8,726
|
|
|
59,870
|
|
|
8,413
|
|
|
|
–
|
|
|
Selling, general and administrative
|
|
|
118,551
|
|
|
|
–
|
|
|
|
29,685
|
|
|
|
40,411
|
|
|
|
4,287
|
|
|
1,783
|
|
|
5,337
|
|
|
13,390
|
|
|
|
23,658
|
|
|
Research and development
|
|
|
8,885
|
|
|
|
–
|
|
|
|
–
|
|
|
|
2,648
|
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
6,237
|
|
|
|
–
|
|
|
Bad debt
|
|
|
3,078
|
|
|
|
–
|
|
|
|
114
|
|
|
|
2,014
|
|
|
|
581
|
|
|
–
|
|
|
203
|
|
|
166
|
|
|
|
–
|
|
|
Depreciation and amortization
|
|
|
17,460
|
|
|
|
–
|
|
|
|
7,651
|
|
|
|
6,260
|
|
|
|
403
|
|
|
115
|
|
|
30
|
|
|
2,252
|
|
|
|
749
|
|
|
Restructuring and severance charges
|
|
|
16,537
|
|
|
|
–
|
|
|
|
4,762
|
|
|
|
6,516
|
|
|
|
689
|
|
|
30
|
|
|
–
|
|
|
29
|
|
|
|
4,511
|
|
|
Total costs and expenses
|
|
|
523,787
|
|
|
|
(90,619
|
)
|
|
|
258,500
|
|
|
|
207,224
|
|
|
|
13,183
|
|
|
10,654
|
|
|
65,440
|
|
|
30,487
|
|
|
|
28,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from operations
|
|
|
(70,539
|
)
|
|
$
|
–
|
|
|
$
|
(10,438
|
)
|
|
$
|
(24,462
|
)
|
|
$
|
7,596
|
|
$
|
1,859
|
|
$
|
850
|
|
$
|
(17,026
|
)
|
|
$
|
(28,918
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(301
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
(8,348
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before minority interests and
income taxes
|
|
|
(79,188
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests
|
|
|
(345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(2,193
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(81,726
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of discontinued operations
|
|
|
(485
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(82,211
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IDT Corporation
Bill Ulrey, 973-438-3838
