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IDT Entertainment Acquires Manga Entertainment Company Gains Extensive Library of Japanese Animation Programming

Newark, N.J. May 13, 2004 – IDT Entertainment today announced it has signed an agreement to acquire Manga Entertainment, a film company specializing in the production, distribution and worldwide marketing of Japanese animation or “anime” for home video releases, theatrical, and television broadcast. “Anime,” a form of animation developed in Japan, is derived from and styled after Japanese comic books. IDT Entertainment is a subsidiary of IDT Corporation (NYSE: IDT, IDT.C), a multinational carrier, telephone and technology company.

Established in 1991 in London, UK, Manga Entertainment is one of the largest distributors of Japanese “anime” outside of Asia, with rights to over 300 titles. Over the last 10 years, the company has played an important role in establishing the market for “anime” in Europe and the United States. In 2003, the worldwide market for anime, including theatrical, broadcast television and direct to consumer products was estimated at over 2 billion dollars.

“In a little more than two years IDT Entertainment has established itself as a worldwide entertainment leader,” said Jim Courter, IDT’s CEO. “IDT Entertainment leads the world in primetime broadcast animation programming, and is quickly emerging as a top producer of animated feature films. Now, with the acquisition of Manga Entertainment, IDT Entertainment has a foothold in the hottest genre of “anime” style projects coming out of Asia. It will allow IDT Entertainment to develop and co-produce new titles for worldwide broadcast and distribution.”

Manga Entertainment gained international acclaim with its co-production of the Japanese animated sci-fi thriller “Ghost in the Shell,” the first and only Japanese animated film to reach No. 1 on the Billboard Top Video Sales Chart. “Ghost in the Shell” won awards at The World Animation Festival for Best Theatrical Film and for Best Director of a Theatrical Feature Film. A new, related television series has been scheduled to air late 3rd quarter of 2004 on the Cartoon Network. In the past seven years, the US division of Manga Entertainment has released over 200 titles on DVD and VHS into U.S. retail and rental stores, with over 100 titles currently active.

“With the acquisition of Manga, IDT Entertainment instantly moves into the top rank of ‘anime’ distribution companies,” said Morris Berger, CEO of IDT Entertainment. “’Anime’, along with 3-D Computer Generated (CG) animation, is driving the worldwide growth and popularity of animation. With this acquisition we gain a library of popular titles in an important genre that will add significant strength to Anchor Bay’s position in the marketplace as a leading video distribution company. IDT Entertainment is one of the few animation companies with the depth, resources and technology to develop and market properties worldwide.”

IDT Entertainment, a division of IDT Corporation, is a vertically integrated entertainment concern that develops, produces and distributes proprietary and licensed entertainment content, with a particular focus on high-quality animation. IDT Entertainment is in the early stages of production on two proprietary CG animated feature films, Gene Roddenberry’s Starpoint Academy and a feature yet to be named, directed by Christopher Reeve. IDT Entertainment consists primarily of the following wholly owned or controlled subsidiaries:

·Digital Production Solutions, or DPS, is a Computer Generated (CG) animation production company. DPS’s proprietary Global Animation Studio platform enables numerous animators at diverse locations to work cooperatively and simultaneously on the same animation project utilizing IDT’s telecommunications infrastructure.
·Anchor Bay Entertainment is one of the largest independent distributors of DVDs and videos to retail outlets, and has a significant presence in the children’s, horror and fitness genres. Anchor Bay’s library consists of over 3,500 owned or licensed titles, including the Thomas the Tank Engine series, the Halloween series and the Crunch fitness series.
·DPS Film Roman is a leading third-party provider of television animation services and special effects. Film Roman has been the animation studio for The Simpsons, King of the Hill, and Tripping the Rift, now airing on the Sci-Fi network.
·Mainframe Entertainment is a leading provider of CG animation for television and direct-to-video products such as the Barbie DVD collection for Mattel, Popeye and Scary Godmother.
·DKP Effects is a 3-D animation, and special effects production company, well known for its innovative work for movies and television.

IDT Entertainment has completed several investments and joint ventures to secure access to brand name characters and content as well as distribution channels for family-friendly content. In July 2003, IDT purchased a minority equity interest in Vanguard Animation and entered into a joint venture with Vanguard to co-produce and co-own future Vanguard properties distributed in theaters, direct-to-video and on television. Vanguard Animation is a CG animated feature film company founded by John Williams, the originating producer of Shrek. Vanguard’s initial production, Valiant, is the first in a series of four Vanguard-produced films to be distributed by Disney. IDT Entertainment has an equity interest in Archie Comics Entertainment as well as rights to co-develop and co-produce animated properties based upon selected Archie comics characters as well as Josie and the Pussycats and Sabrina, the Teenage Witch. IDT has also entered into a joint venture with the Christian Broadcasting Network to develop and distribute family-friendly programming. IDT Entertainment also owns a minority interest in Stan Lee’s POW! Entertainment. In connection with IDT Entertainment’s investment in POW!, the companies agreed to co-develop and co-produce a minimum of six animation projects for Direct-to-DVD distribution and broadcast. Recently, IDT Entertainment entered into a multi-faceted development, production, and distribution agreement with Todd McFarlane Productions (TMP) to produce animated programming and merchandise based on Spawn and other TMP original intellectual properties.

Important Note: 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 numerous important factors, including, but not limited to, those described in IDT’s most recent report on SEC Form 10-K (under the heading “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 and other filings IDT may make with the SEC.