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IDT Corporation (NYSE: IDT, IDT.C) announces operating results for its
fourth quarter and fiscal 2008 year July 31, 2008.
- Q4 revenues: $480.0 million, down 2.6% year-over-year.
-
Q4 net loss: ($86.4) million, versus net loss of ($112.4) million one
year ago. -
Q4 loss from operations ($79.3) million, compared with ($123.7)
million in the year-ago period. -
Q4 net loss per share ($1.15), versus net loss per share of ($1.38)
one year ago. -
Fiscal 2008 revenues: $1,878.0 million, versus $2,012.7 million in
fiscal 2007. -
Fiscal 2008 net loss: ($224.3) million, versus net income of $58.6
million in fiscal 2007, of which ($4.9) million and $198.1 million,
respectively, were due to discontinued operations. -
Fiscal 2008 loss from operations ($198.3) million, compared with
($172.7) million from operations in fiscal 2007. -
Fiscal 2008 net loss per share ($2.95) and loss per share from
continuing operations ($2.88), versus net income per share of $0.71
and loss per share from continuing operations of ($1.70) in fiscal
2007. -
Cash, cash equivalents, marketable securities, and investments totaled
$343.3 million; $82.9 million of the cash, cash equivalents and
marketable securities was restricted as of the end of the fiscal year.
SUMMARY OF OPERATING RESULTS
The following table summarizes the operating performance of IDT‘s
continuing businesses:
| $ millions | Revenues | Income (Loss) from Operations | ||||||||||||||||||||||||||||
|
Fiscal’08 |
Fiscal’07 |
Q4’08 |
Q3’08 |
Q4’07 |
Fiscal’08 |
Fiscal’07 |
Q4’08 |
Q3’08 |
Q4’07 |
|||||||||||||||||||||
| Wholesale Telecom | $1,062.6 | $1,220.6 | $270.0 | $248.1 | $301.8 | $26.7 | ($19.8 | ) | ($6.8 | ) | ($10.4 | ) | ($8.7 | ) | ||||||||||||||||
| Prepaid Products | 778.4 | 971.8 | 183.9 | 182.8 | 228.7 | (86.2 | ) | (109.0 | ) | (30.7 | ) | (24.5 | ) | (72.3 | ) | |||||||||||||||
| Consumer Phone Service | 88.0 | 148.8 | 18.9 | 20.8 | 30.0 | 19.3 | 65.6 |
2.5 |
7.6 | 9.8 | ||||||||||||||||||||
| Inter-segment | (400.5 | ) | (575.5 | ) | (94.3 | ) | (90.6 | ) | (128.6 | ) | – | – | – | – | – | |||||||||||||||
| IDT Telecom Total | 1,528.5 | 1,765.7 | 378.5 | 361.0 | 431.9 | (40.1 | ) | (63.2 | ) | (35.0 | ) | (27.3 | ) | (71.3 | ) | |||||||||||||||
| IDT Energy | 248.9 | 190.8 | 75.5 | 66.3 | 45.3 | 6.0 | 11.4 | 1.6 | 0.9 | 0.5 | ||||||||||||||||||||
| IDT Capital | 55.0 | 50.8 | 14.8 | 13.5 | 13.5 | (63.8 | ) | (26.6 | ) | (22.7 | ) | (17.0 | ) | (10.5 | ) | |||||||||||||||
| IDT Carmel | 45.7 | 5.4 | 11.1 | 12.5 | 1.8 | (25.3 | ) | (10.7 | ) | (16.9 | ) | 1.9 | (5.2 | ) | ||||||||||||||||
| Corporate | – | – | – | – | – | (75.3 | ) | (83.7 | ) | (6.3 | ) | (28.9 | ) | (37.1 | ) | |||||||||||||||
| Total IDT | $1,878.0 | $2,012.7 | $480.0 | $453.2 | $492.6 | ($198.3 | ) | ($172.7 | ) | ($79.3 | ) | ($70.5 | ) | ($123.7 | ) | |||||||||||||||
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 October 3, 2008, we announced a CEO succession plan, an extended
employment and compensation arrangement with Howard Jonas, an agreement
by Jim Courter, Vice Chairman/CEO to accept his base salary in IDT stock
in lieu of salary and the retention of Jefferies & Company, Inc. to act
as financial advisor to the Company. Mr. Jonas has agreed to become the
Company’s Chief Executive Officer upon the retirement of Jim Courter.
Mr. Jonas will enter into a five-year employment agreement with IDT,
providing for the payment of his base compensation in shares of Common
Stock for the five-year period beginning on January 1, 2009.
The New York Stock Exchange has notified us that we are out of
compliance with the Exchange‘s listing
standards by virtue of IDT‘s market
capitalization and also with the Exchange‘s
one dollar minimum price. Under the rules of the Exchange, we have 45
days from receipt of the Notification on the market capitalization
non-compliance to file a plan with the Exchange demonstrating our
ability to meet the listing requirements. We must be in compliance with
the market capitalization standard within 18 months and with the share
price minimum within 6 months.
On September 4, 2008, we announced a new management team at IDT Carmel
Holdings, Inc., headed by President and COO Mark Meisenbacher. Mr.
Meisenbacher is a twenty year industry veteran who previously served as
COO of Axiant.
As we continue our restructuring, we recognize restructuring and
impairment charges. In the fourth quarter of fiscal 2008 we recognized
$45.5 million in consolidated restructuring and impairment charges,
including $15.7 million primarily for severance due to reductions in our
workforce and $29.8 million in write-downs of goodwill and fixed assets,
primarily in our Prepaid Products – Rechargeable and Wholesale telecom
business units. The $29.8 million of write-downs were recorded primarily
as a result of our annual assessment in accordance with FAS 142, where
the expected discounted future cash flows of those businesses did not
support the carrying value of the assets. Accordingly we recorded an
impairment charge as required by FAS 142. In the fourth quarter of
fiscal 2008, IDT Telecom recorded $10.4 million of the restructuring
charges and $24.6 million of the impairment charges. In fiscal 2008 we
recognized $66.2 million in consolidated restructuring and impairment
charges, of which $49.2 million related to IDT Telecom and $7.4 million
was incurred by Corporate, mostly due to workforce reductions.
In June and August 2008 we received notices from the IRS assessing tax
of approximately $75 million for the period ending July 31, 2001,
approximately $1.0 million for adjustments carried forward to fiscal
years 2005 and 2006 and applicable interest of $39.5 million. In July
2008 we paid $10.0 million of the amount noted as a good faith payment.
We have initiated discussion with the IRS regarding the timing of
payment, however, we cannot assure you that we will be able to conclude
any arrangement with the IRS and the balance could become due and
payable in 30 days.
|
RESULTS OF IDT TELECOM OPERATIONS |
|||||||||||||||||||||||||
| Telecom Line of Business Detail | |||||||||||||||||||||||||
| $ millions, except % | Q1 07 | Q2 07 | Q3 07 | Q4 07 | FY 07 | Q1 08 | Q2 08 | Q3 08 | Q4 08 | FY 08 | |||||||||||||||
| REVENUES | |||||||||||||||||||||||||
| TOTAL | 471.2 | 447.0 | 415.6 | 431.9 | 1,765.7 | 402.6 | 386.3 | 361.0 | 378.5 | 1,528.5 | |||||||||||||||
| Prepaid Products | 260.8 | 251.6 | 230.7 | 228.7 | 971.8 | 208.9 | 202.9 | 182.8 | 183.9 | 778.4 | |||||||||||||||
| CC- United States | 215.9 | 204.9 | 180.0 | 175.1 | 776.0 | 159.5 | 161.5 | 139.2 | 138.1 | 598.2 | |||||||||||||||
| CC- Europe | 25.9 | 25.9 | 25.4 | 27.5 | 104.7 | 23.4 | 24.1 | 22.2 | 23.6 | 93.3 | |||||||||||||||
| CC- Rest of World | 7.2 | 7.8 | 10.1 | 7.4 | 32.5 | 8.1 | 7.9 | 7.6 | 7.5 | 31.1 | |||||||||||||||
| Other | 11.8 | 12.9 | 15.2 | 18.8 | 58.7 | 17.8 | 9.4 | 13.8 | 14.7 | 55.8 | |||||||||||||||
| Wholesale | 315.1 | 314.6 | 289.2 | 301.8 | 1,220.6 | 280.1 | 264.4 | 248.1 | 270.0 | 1,062.6 | |||||||||||||||
| Intersegment Revenues | 158.5 | 153.5 | 134.9 | 128.6 | 575.5 | 111.6 | 103.9 | 90.6 | 94.3 | 400.5 | |||||||||||||||
| Wholesale -Third Party | 156.6 | 161.1 | 154.3 | 173.1 | 645.1 | 168.5 | 160.5 | 157.4 | 175.7 | 662.1 | |||||||||||||||
| Consumer Phone Services | 53.8 | 34.3 | 30.7 | 30.0 | 148.8 | 25.3 | 23.0 | 20.8 | 18.9 | 88.0 | |||||||||||||||
| United States | 35.7 | 33.4 | 29.5 | 28.4 | 127.1 | 23.5 | 21.1 | 19.0 | 16.8 | 80.5 | |||||||||||||||
| Europe | 17.5 | – | – | – | 17.5 | – | – | – | – | – | |||||||||||||||
| Other | 0.6 | 0.8 | 1.2 | 1.6 | 4.2 | 1.7 | 1.9 | 1.8 | 2.1 | 7.5 | |||||||||||||||
| GROSS PROFIT | |||||||||||||||||||||||||
| TOTAL | 107.7 | 86.2 | 80.6 | 75.1 | 349.6 | 86.9 | 84.8 | 78.7 | 89.1 | 339.5 | |||||||||||||||
| Prepaid Products | 50.4 | 34.4 | 37.3 | 32.2 | 154.3 | 38.5 | 38.2 | 33.4 | 45.7 | 155.8 | |||||||||||||||
| Wholesale | 36.3 | 36.5 | 30.6 | 27.6 | 130.9 | 35.7 | 36.0 | 31.8 | 34.0 | 137.5 | |||||||||||||||
| Consumer Phone Services | 21.0 | 15.3 | 12.8 | 15.4 | 64.5 | 12.7 | 10.6 | 13.6 | 9.4 | 46.2 | |||||||||||||||
| GROSS MARGIN | |||||||||||||||||||||||||
| TOTAL | 22.8% | 19.3% | 19.4% | 17.4% | 19.8% | 21.6% | 22.0% | 21.8% | 23.5% | 22.2% | |||||||||||||||
| Prepaid Products | 19.3% | 13.7% | 16.2% | 14.1% | 15.9% | 18.4% | 18.8% | 18.3% | 24.9% | 20.0% | |||||||||||||||
| Wholesale | 11.5% | 11.6% | 10.6% | 9.1% | 10.7% | 12.8% | 13.6% | 12.8% | 12.6% | 12.9% | |||||||||||||||
| Consumer Phone Services | 39.0% | 44.8% | 41.6% | 51.3% | 43.3% | 50.2% | 46.2% | 65.2% | 49.6% | 52.6% | |||||||||||||||
| SG&A including bad debt expense | |||||||||||||||||||||||||
| TOTAL | 83.8 | 81.3 | 80.5 | 113.0 | 358.5 | 78.4 | 78.0 | 77.1 | 75.0 | 308.5 | |||||||||||||||
| Prepaid Products | 41.2 | 45.5 | 45.8 | 86.2 | 218.8 | 46.8 | 46.0 | 42.4 | 44.4 | 179.7 | |||||||||||||||
| Wholesale | 24.1 | 26.4 | 26.4 | 22.4 | 99.3 | 24.6 | 25.8 | 29.8 | 24.9 | 105.1 | |||||||||||||||
| Consumer Phone Services | 18.4 | 9.3 | 8.3 | 4.4 | 40.4 | 7.0 | 6.2 | 4.9 | 5.7 | 23.7 | |||||||||||||||
| United States | 8.3 | 7.7 | 6.5 | 2.8 | 25.3 | 5.6 | 4.7 | 3.4 | 4.3 | 18.0 | |||||||||||||||
| Europe | 8.8 | – | – | – | 8.8 | – | – | – | – | – | |||||||||||||||
| Other | 1.3 | 1.7 | 1.8 | 1.6 | 6.3 | 1.4 | 1.5 | 1.4 | 1.4 | 5.7 | |||||||||||||||
IDT Telecom carried 23.1 billion minutes of traffic for third-party
customers in fiscal 2008, a decrease of 1.1% compared with fiscal 2007.
Wholesale segment minutes increased 19.4%, and wholesale minutes carried
for third-party customers set company records both for the year and for
the fourth quarter. However, this increase was offset by a 23.1% decline
in retail minutes. For fiscal 2008, IDT Telecom‘s
traffic mix of minutes carried was 62.6% wholesale minutes and 37.4%
retail minutes. For the fourth quarter of fiscal 2008, IDT Telecom
carried 5.88 billion minutes for third-party customers, a 5.8%
sequential increase, but a decrease of 0.3% versus the year-ago quarter.
For the year, IDT Telecom revenues declined 13.4%. Overall revenue per
minute declined 9.9%. Revenue per minute from our Prepaid Products
segment increased 3.5%, while revenue per minute from external customers
in our Wholesale segment declined 14.0%. Revenues from our Consumer
Phone Services segment declined 40.9%. In the fourth quarter of fiscal
2008, IDT Telecom revenues declined 12.4% compared to the year-ago
result, and increased 4.9% sequentially. Overall revenue per minute in
Q4 2008 declined 9.5% versus the fiscal 2007 fourth quarter, and
declined 0.1% sequentially. Consumer phone services revenue in Q4 2008
declined 37.0% compared with the year-ago period, and 9.0% sequentially.
For IDT Telecom overall, fiscal 2008 gross profit dollars were 2.9%
lower than in fiscal 2007. This decrease is due primarily to the
continuing revenue decline in our Consumer Phone Services segment, which
we have been strategically harvesting. Gross profit dollars for fiscal
2008 increased 5% in our Wholesale segment, primarily as a result of the
decrease in direct cost of revenues due to continued reductions in
connectivity costs. In our Prepaid Products segment, we delivered a
slight increase in gross profit dollars for the year, due primarily to a
$16.7 million reversal in fiscal 2008 of accrued regulatory fees as a
result of the completion of an audit by USAC of our U.S. calling card
business for calendar years 2005 and 2006, of which $10.9 million was
reversed in Q4 2008. Without such reversal, gross profit dollars for
fiscal 2008 would have decreased 9.8%, due primarily to the revenue
decline in our U.S. calling card operations.
Selling, general and administrative (“SG&A“)
expenses including bad debt expense for fiscal 2008 were 13.9% lower
than those of fiscal 2007 as a result of reductions in compensation
costs, sales and marketing expenses, consulting fees, and facilities
costs. Most of the decrease occurred in our Prepaid Products segment, in
which we had an accrual in Q4 2007 of $24.0 million relating to our
previously announced settlement of litigation with Aerotel, as well as a
$3.1 million reversal of a previously recorded legal accrual which was
adjusted for in Q4 2008, partially offset by an additional $6 million
accrual for the Aerotel matter that we recorded in Q4 2008. As a
percentage of revenue, SG&A expenses including bad debt expense were
basically flat year-over-year at 20.2% in fiscal 2008 and 20.3% in
fiscal 2007. For the fourth quarter, SG&A expenses including bad debt
expense decreased 33.6% versus the year-ago period, and 2.7%
sequentially.
Depreciation and amortization expense for IDT Telecom fell from $71.2
million in fiscal 2007 to $57.3 million in fiscal 2008 due to assets
becoming fully depreciated with limited new capital spending in the last
two years. In Q4 2008, depreciation and amortization expense was $13.0
million, versus $17.2 million in the year-ago quarter.
Wholesale Telecommunications Services
In fiscal 2008, revenues from third-party customers increased 2.6%.
Blended gross profit margins (including margins on minutes for internal
customers) were 12.9% in fiscal 2008, compared with 10.7% in fiscal
2007. SG&A expenses including bad debt expense increased 5.8%, mostly
due to compensation costs associated with the $40 million Altice One
arbitration award, which was recognized in Q1. Operating income for
fiscal 2008, which includes the arbitration award, increased by $46.5
million, to $26.7 million.
During the fourth quarter of fiscal 2008, we carried a record number of
minutes for third-party customers. Revenues from third-party customers
in Q4 2008 increased 1.5% year-over-year and 11.6% sequentially and also
set company records. Gross profit dollars of $34.0 million in Q4 2008
represented an increase of 23.4% year-over-year and 7.0% sequentially.
Gross profit margins were 12.6% in Q4 2008, compared with 12.8% in the
previous quarter.
Prepaid Products
In fiscal 2008, our Prepaid Products segment terminated 8.65 billion
minutes of traffic, compared with 11.24 billion minutes in fiscal 2007.
Revenues declined 19.9% compared with fiscal 2007, mostly due to
weakness in our U.S. and European calling card sales, partially offset
by slight increases in Asia. In the fourth quarter of fiscal 2008, our
Prepaid Products segment terminated 2.05 billion minutes of traffic, an
18.2% decrease from the year-ago amount and a 0.8% increase
sequentially. A sequential increase was expected because our fourth
quarter had 2.2% more days than our third quarter, and one of them was
Mother‘s Day, the heaviest calling day of the
year. Revenues decreased 19.6% versus the year-ago quarter, and
increased 0.6% sequentially.
|
RESULTS OF IDT ENERGY OPERATIONS |
||||||||||||||||||||||||||||||||||||||||
| $ millions, except % | Q1 07 | Q2 07 | Q3 07 | Q4 07 | FY 2007 | Q1 08 | Q2 08 | Q3 08 | Q4 08 | FY 2008 | ||||||||||||||||||||||||||||||
| REVENUES | $ | 36.2 | $ | 51.9 | $57.3 | $45.3 | $ | 190.7 | $ | 42.1 | $65.1 | $ | 66.3 | $ | 75.5 | $ | 248.9 | |||||||||||||||||||||||
| GROSS PROFIT | 8.4 | 7.1 | 6.4 | 4.6 | 26.5 | 5.4 | 6.8 | 6.4 | 9.2 | 27.8 | ||||||||||||||||||||||||||||||
| GROSS MARGIN % | 23.2 | % | 13.7 | % | 11.2 | % | 10.1 | % | 13.9 | % | 12.9 | % | 10.4 | % | 9.7 | % | 12.2 | % | 11.2 | % | ||||||||||||||||||||
| SG&A, including bad debt | 3.5 | 3.5 | 4.0 | 4.0 | 14.9 | 3.8 | 4.7 | 5.5 | 7.6 | 21.6 | ||||||||||||||||||||||||||||||
| ENDING METERS SERVED (000) | 258 | 271 | 284 | 300 | 300 | 312 | 318 | 343 | 376 | 376 | ||||||||||||||||||||||||||||||
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 also regularly monitors other deregulated
markets to determine if they are ripe for entry, and will initiate the
licensing process in any selected location, should deregulated
conditions develop favorably.
In fiscal 2008, IDT Energy‘s base of meters
served increased 25.3% compared to year-end fiscal 2007. Three quarters
of the net meter additions occurred in the second half of our fiscal
year when public utility energy prices were increasing sharply. Revenue
increased 30.5% in fiscal 2008 to $248.9 million, due to both increased
consumption generated by the larger customer base and to increases in
both electricity and gas rates. Gross profit dollars increased 5.0% in
fiscal 2008, although gross margins fell from 13.9% in fiscal 2007 to
11.2% in fiscal 2008. SG&A expenses including bad debt expense increased
44.6%, from 7.8% of IDT Energy‘s revenues to
8.7%, mostly due to the incremental customer acquisition costs in the
second half of the year.
In the fourth quarter of fiscal 2008 IDT Energy added 33,000 net meters,
the greatest quarterly increase in net meters in its history. Revenues
in Q4 2008 increased 66.4% year-over-year and 13.8% sequentially. Gross
profit dollars increased 102.3% year-over-year and 43.6% sequentially.
Gross margins increased 210 basis points year-over-year and 250 basis
points sequentially. SG&A expenses including bad debt expense in Q4 2008
increased 90.9% year-over-year and 37.1% sequentially, mostly due to the
expenses of adding new customers, but also due to increases in utility
fees associated with the increased customer base.
| RESULTS OF IDT CAPITAL OPERATIONS | ||||||||||||||||||||||||||||||
| $ millions, except % | Q1 07 | Q2 07 | Q3 07 | Q4 07 | FY 2007 | Q1 08 | Q2 08 | Q3 08 | Q4 08 | FY 2008 | ||||||||||||||||||||
| REVENUES | ||||||||||||||||||||||||||||||
| TOTAL | $13.0 | $12.8 | $11.5 | $13.6 | $50.9 | $13.6 | $13.0 | $13.5 | $14.8 | $55.0 | ||||||||||||||||||||
| Local Media | 6.0 | 5.4 | 4.9 | 6.7 | 23.0 | 6.0 | 5.2 | 5.4 | 7.5 | 24.2 | ||||||||||||||||||||
| Internet Mobile Group | – | 0.1 | 0.1 | 1.5 | 1.7 | 2.3 | 2.4 | 2.6 | 3.4 | 10.7 | ||||||||||||||||||||
| Alternative Energy | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||
| All Other | 7.0 | 7.3 | 6.5 | 5.4 | 26.2 | 5.4 | 5.4 | 5.4 | 3.9 | 20.1 | ||||||||||||||||||||
| GROSS PROFIT | ||||||||||||||||||||||||||||||
| TOTAL | 6.8 | 8.7 | 5.0 | 7.4 | 27.9 | 6.0 | 5.8 | 5.1 | 9.3 | 26.2 | ||||||||||||||||||||
| Local Media | 4.3 | 3.9 | 3.1 | 4.9 | 16.2 | 4.4 | 3.4 | 3.7 | 5.3 | 16.8 | ||||||||||||||||||||
| Internet Mobile Group | 0.0 | 0.1 | 0.1 | 0.6 | 0.8 | 0.9 | 1.0 | 1.1 | 1.9 | 4.9 | ||||||||||||||||||||
| Alternative Energy | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||
| All Other | 2.5 | 4.7 | 1.8 | 1.9 | 10.9 | 0.7 | 1.4 | 0.3 | 2.2 | 4.6 | ||||||||||||||||||||
| GROSS MARGIN % | ||||||||||||||||||||||||||||||
| TOTAL | 53.0 | % | 68.1 | % | 43.1 | % | 54.2 | % | 54.9 | % | 43.9 | % | 44.7 | % | 37.5 | % | 62.9 | % | 47.7 | % | ||||||||||
| Local Media | 72.6 | % | 72.6 | % | 62.6 | % | 73.3 | % | 70.7 | % | 72.7 | % | 66.2 | % | 67.6 | % | 70.2 | % | 69.4 | % | ||||||||||
| Internet Mobile Group | – | 100.0 | % | 83.5 | % | 37.9 | % | 43.2 | % | 39.5 | % | 42.1 | % | 41.3 | % | 55.6 | % | 45.7 | % | |||||||||||
| Alternative Energy | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||
| All Other, | 36.2 | % | 64.5 | % | 27.7 | % | 34.7 | % | 41.6 | % | 13.4 | % | 25.3 | % | 5.4 | % | 57.3 | % | 23.1 | % | ||||||||||
| SG&A, including bad debt | ||||||||||||||||||||||||||||||
| TOTAL | 8.9 | 10.5 | 11.8 | 14.3 | 45.5 | 14.3 | 17.6 | 13.6 | 13.0 | 58.4 | ||||||||||||||||||||
| Local Media | 3.6 | 4.3 | 4.1 | 5.0 | 17.0 | 4.6 | 5.2 | 4.7 | 5.2 | 19.6 | ||||||||||||||||||||
| Internet Mobile Group | 0.3 | 1.0 | 0.6 | 1.5 | 3.4 | 1.9 | 2.6 | 2.4 | 1.9 | 8.8 | ||||||||||||||||||||
| Alternative Energy | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||
| All Other | 5.0 | 5.3 | 7.1 | 7.8 | 25.2 | 7.8 | 9.8 | 6.4 | 5.9 | 29.9 | ||||||||||||||||||||
IDT Capital consists of the IDT Local Media businesses (principally the
CTM brochure distribution operation and other advertising-based new
product initiatives focused on small to medium sized businesses, plus
our WMET Washington, D.C. based AM radio station), the Internet Mobile
Group (Zedge—a web based, worldwide
destination for free, user-generated mobile content distribution and
sharing—and our majority holding in IDW
Publishing, an established leader in the publication of comic books and
graphic novels, and its newly formed children‘s
book imprint), and Alternative Energy which consists of AMSO, our U.S.
oil shale initiative 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, which are
summarized in the table above and in our discussions as “All
Other.“
In fiscal 2008, IDT Capital reported revenue of $55.0 million, an 8.1%
gain versus the fiscal 2007 amount. The businesses in IDT Capital with
the largest revenue in fiscal 2008 were IDT Local Media, at $24.2
million, and the All Other lines of business, at $20.1 million. The
Internet Mobile Group (IMG) accounted for the largest revenue gain in
fiscal 2008, an increase of $9.1 million to $10.7 million.
Loss from operations was ($63.8) million in fiscal 2008 compared to
($26.6) million in fiscal 2007. Alternative Energy accounted for $7.0
million of the additional loss from operations, primarily due to its
research and development expense. Also contributing to the loss from
operations increase in fiscal 2008 were losses on the disposal of
businesses of ($8.8) million and ($0.8) million from our Israel call
center and our aviation related toys and collectibles business,
respectively, both of which were transferred to their respective
managements in Q4 2008. The exclusion of the operating results from
these two businesses would have eliminated $20.8 million from IDT Capital‘s
loss from operations in fiscal 2008.
Local Media
For fiscal 2008 Local Media reported a revenue increase of 4.7%. Fourth
quarter revenue increases were 11.9% and 38.1% versus the year-ago
quarter and sequentially, respectively. Local Media‘s
operating loss of ($8.0) million for fiscal 2008 represented a 258.2%
increase versus fiscal 2007. In the fourth quarter of fiscal 2008, WMET
recorded an impairment charge of $3.5 million related to certain of its
fixed assets. The majority of the remainder of the loss ($3.8 million of
the $4.5 million total) occurred in the second and third quarters of the
year, and was primarily attributable to lower revenue in these quarters
and increased spending on SG&A devoted to the Local Media New Products
Group.
CTM Brochure Display, which accounts for the majority of the Local Media
revenues, was profitable on an operating basis. It has been successfully
upselling other relevant products to its existing customers, such as
printing services and advertising in its owned tourism guides. In
addition, various restructurings have resulted in a reduction in selling
costs 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
For fiscal 2008, the Internet Mobile Group‘s
revenue increased from $1.7 million to $10.7 million, principally
because of the December 2006 acquisition of Zedge and the June 2007
acquisition of IDW Publishing. Because of the timing of these
acquisitions, year-over-year comparisons are not meaningful for fiscal
2008. Revenue growth was particularly strong (30.3% sequentially) in the
fourth quarter of fiscal 2008. For the fiscal year the Group‘s
operating loss was ($5.5) million, primarily due to expenditures to
develop Zedge. In the fourth quarter of fiscal 2008 the Group‘s
operating loss was reduced 39.0% sequentially to ($0.9) million.
Zedge (http://www.zedge.net),
a destination for free mobile content, released its 3.0 web site design
in April 2008. This upgrade to the 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 over 11 million registered
users, mostly male in the 18 to 35 year old age bracket. Members upload
over 6,000 items of content per day. The content library, which exceeds
2.1 million items, consists of ringtones, wallpaper, videos, games and
themes. Zedge, which has a truly global following, has become one of the
most popular sites for mobile content in the U.K. In the fourth quarter,
OpenZedge was launched on the mobile phone and on the website. OpenZedge
reduced the requirement for registration, expanding the audience
available to download Zedge‘s content. Zedge
also initiated a number of content partnerships designed to drive
additional traffic to the site and build the content library. Currently,
close to 2 million downloads are performed on a daily basis. There are
close to 6 million unique users per month visiting Zedge on the web and
mobile, and over 13 million page views per day. The first phase of a
localization project, which uses algorithms to match the content
displayed to the country from which the user is logging on, was
implemented for many of our major countries. Zedge‘s
revenues are derived from advertising and it will continue to build
advertising revenue by introducing direct revenue streams on the site
through its sales force. The group expects to be break-even by the end
of fiscal 2009.
IDW Publishing (http://www.idwpublishing.com),
which currently accounts for the majority of the revenue in the IDT
Internet Mobile Group, operated at a modest profit throughout fiscal
2008. IDW publishes 35 to 40 graphic novel titles a month and licenses
properties for use by film entertainment. The company plans to maintain
its publishing pace in fiscal 2009, and to set up some properties for TV
or feature development. Some IDW highlights in fiscal 2008 were:
-
The first major movie based on an IDW property was released in October
2007. 30 Days of Night was the #1 movie in its opening weekend. -
IDW was again named ‘Publisher of the Year’ in 2008, and was also
named one of the Top 100 Global Licensees by License Magazine. - IDW launched its children’s book division, Worthwhile Books.
-
Major comic book titles in 2008 included Angel, Transformers, Igor,
Mummy, Doctor Who, Ghost Whisperer, and Speed Racer. -
IDW sold the entertainment rights for Locke & Key to
Dimension Films. -
IDW secured the comic book rights to GI Joe and Terminator 2,
both of which have major movies scheduled for 2009.
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. Our Q4 2008 funding was $0.7
million.
| RESULTS OF IDT CARMEL OPERATIONS | ||||||||||||||||||||||||||||||||||||
| $ millions, except % | Q1 07 | Q2 07 | Q3 07 | Q4 07 |
FY2007 |
Q1 08 | Q2 08 | Q3 08 | Q4 08 |
FY2008 |
||||||||||||||||||||||||||
| REVENUES |
|
$1.9 |
|
$0.8 |
|
$1.0 |
$1.8 | $5.5 |
|
$9.7 |
|
$12.4 |
$12.5 | $ | 11.1 | $ | 45.6 | |||||||||||||||||||
| GROSS PROFIT | 0.5 | (0.9 | ) | (2.3 | ) | (3.6 | ) | (6.3 | ) | 3.3 | 5.7 | 3.8 | 2.9 | 15.6 | ||||||||||||||||||||||
| GROSS MARGIN % | 26.9 | % | -113.7 | % | -241.3 | % | -202.9 | % | -116.7 | % | 34.2 | % | 46.0 | % | 30.4 | % | 26.0 | % | 34.3 | % | ||||||||||||||||
| SG&A | 0.7 | 1.0 | 1.0 | 1.5 | 4.2 | 1.2 | 1.7 | 1.8 | 1.5 | 6.1 | ||||||||||||||||||||||||||
| BAD DEBT EXPENSE | – | – | – | – | – | – | 16.1 | – | 15.6 | 31.7 | ||||||||||||||||||||||||||
| RECEIVABLES UNDER MANAGEMENT | 3.7 | 14.3 | 34.3 | 51.1 | 51.1 | 81.1 | 90.3 | 82.0 | 63.1 | 63.1 | ||||||||||||||||||||||||||
| NET EXPENDITURES TO PURCHASE RECEIVABLES | 6.0 | 13.0 | 28.0 | 31.0 | 79.0 | 37.0 | 30.0 | 0.0 | 0.0 | 67.0 | ||||||||||||||||||||||||||
In fiscal 2008 IDT Carmel‘s reported results
were impacted by two major factors:
-
A change in 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 cash flow expectations for each
portfolio. Under Cost Recovery, no revenue is recognized until the
cost of the portfolio is completely recovered or sold. We implemented
the change effective Q1 2008, and it was the primary reason for the
increase in revenues from $5.5 million in fiscal 2007 to $45.6 million
in fiscal 2008. -
Bad debt expense of $31.7 million recorded in Q2 and Q4 2008, due to
actual cash collections that were below expectations and decreases in
estimates of future cash collections. This bad debt expense reflects
in part the particularly challenging collection environment as a
result of factors in the U.S. economy that IDT Carmel cannot control,
which are likely to impact consumers‘
willingness and ability to repay their debts to IDT Carmel.
We are undertaking steps to improve cash flow, including:
| (1) |
recruiting an extremely experienced management team, headed by President and COO Mark Meisenbacher, announced on September 4th, |
| (2) |
the consolidation of all collection activities to two centers based in Minnesota, |
| (3) |
technology implementations, including a dialer, to improve the effectiveness of in-house collectors, |
| (4) | sales of underperforming portfolios which are being investigated, and |
| (5) |
implementation of advanced skip tracing and location services to increase collections which are in process. |
IDT Carmel‘s loss from operations increased
from ($10.7) million to ($25.3) million in the year to year comparison.
Q4 2008 loss from operations was ($16.9) million, down from income from
operations of $1.9 million in Q3 2008.
|
IDT CONFERENCE CALL INFORMATION |
|
Conference call today, October 6, 2008, at 5:00 PM Eastern Time. |
|
About IDT Corporation:
IDT
Corporation (www.idt.net)
is a multinational holding company with subsidiaries spanning several
industries including: IDT Telecom,
which provides telecommunications services to consumers and businesses,
including prepaid and rechargeable calling cards, a range of voice over
Internet protocol (VoIP) communications services, wholesale carrier
services and local, long distance and wireless phone services; IDT
Energy (www.idtenergy.com),
which operates an Energy Services Company (ESCO) in New York State; IDT
Carmel, which manages receivables portfolios and performs debt
collection services; Zedge (www.zedge.net),
which provides a web-based, worldwide destination for free,
user-generated mobile content distribution and sharing; American
Shale Oil Corporation (AMSO) (www.amso.net),
which manages IDT’s U.S. oil shale initiative, and IDT
Capital, whose portfolio of companies includes IDT
Spectrum (www.idtspectrum.com),
CTM Media Group (www.ctmmediagroup.com),
and IDW Publishing (www.idwpublishing.com).
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.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 |
||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
|
Year ended July 31 (in thousands, except per share data) |
Unaudited
2008 |
2007 | 2006 | |||||||||
| REVENUES | $ | 1,877,990 | $ | 2,012,739 | $ | 2,226,422 | ||||||
| COSTS AND EXPENSES: | ||||||||||||
| Direct cost of revenues (exclusive of depreciation and amortization) | 1,468,784 | 1,615,047 | 1,779,980 | |||||||||
| Selling, general and administrative (i) | 445,979 | 483,483 | 525,823 | |||||||||
| Depreciation and amortization | 68,747 | 80,011 | 87,422 | |||||||||
| Bad debt | 45,503 | 12,943 | 18,521 | |||||||||
| Research and development | 11,567 | 5,232 | 11,817 | |||||||||
| Restructuring and impairment charges | 66,187 | 33,404 | 23,646 | |||||||||
| TOTAL COSTS AND EXPENSES | 2,106,767 | 2,230,120 | 2,447,209 | |||||||||
| Arbitration award | 40,000 | — | — | |||||||||
| (Loss) gain on sale of businesses |
(9,569 |
) |
44,671 | — | ||||||||
| Loss from operations |
(198,346 |
) |
(172,710 |
) |
(220,787 |
) |
||||||
| Interest income, net | 4,766 | 18,069 | 9,416 | |||||||||
| Other (expense) income, net |
(17,309 |
) |
28,980 | 7,284 | ||||||||
|
Loss from continuing operations before minority interests and income taxes |
(210,889 |
) |
(125,661 |
) |
(204,087 |
) |
||||||
| Minority interests | 1,370 |
(10,180 |
) |
(16,177 |
) |
|||||||
| Provision for income taxes |
(9,923 |
) |
(3,605 |
) |
(2,576 |
) |
||||||
| Loss from continuing operations |
(219,442 |
) |
(139,446 |
) |
(222,840 |
) |
||||||
| Discontinued operations, net of tax: | ||||||||||||
| Loss from discontinued operations | — |
(7,165 |
) |
(35,883 |
) |
|||||||
| (Loss) gain on sale of discontinued operations |
(4,888 |
) |
205,235 | 80,069 | ||||||||
| Total discontinued operations |
(4,888 |
) |
198,070 | 44,186 | ||||||||
| NET (LOSS) INCOME |
$ |
(224,330 |
) |
$ |
58,624 |
$ |
(178,654 |
) |
||||
| Earnings per share: |
|
|||||||||||
| Basic and diluted: | ||||||||||||
| Loss from continuing operations |
$ |
(2.88 |
) |
$ |
(1.70 |
) |
$ |
(2.32 |
) |
|||
| Total discontinued operations |
(0.07 |
) |
2.41 | 0.46 | ||||||||
| Net (loss) income |
$ |
(2.95 |
) |
$ | 0.71 |
$ |
(1.86 |
) |
||||
|
Weighted-average number of shares used in calculation of basic and diluted earnings per share: |
76,171 | 82,165 | 96,028 | |||||||||
|
(i) Stock based compensation included in selling, general and administrative expense |
$ | 4,407 | $ | 7,726 | $ | 21,521 | ||||||
|
IDT CORPORATION |
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
July 31 (in thousands) |
Unaudited
2008 |
2007 | ||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 169,019 | $ | 153,845 | ||||
| Marketable securities | 111,462 | 388,140 | ||||||
|
Trade accounts receivable, net of allowance for doubtful accounts of $21,589 and $19,654 at July 31, 2008 and 2007, respectively |
178,642 | 164,802 | ||||||
| Prepaid expenses | 23,881 | 28,920 | ||||||
| Short-term investments | 22,563 | — | ||||||
| Other current assets | 70,416 | 60,452 | ||||||
| TOTAL CURRENT ASSETS | 575,983 | 796,159 | ||||||
| Property, plant and equipment, net | 229,931 | 251,318 | ||||||
| Goodwill | 74,509 | 101,515 | ||||||
| Licenses and other intangibles, net | 9,437 | 13,824 | ||||||
| Investments—long-term | 40,295 | 119,052 | ||||||
| Deferred income tax assets, net | 2,300 | — | ||||||
| Other assets | 70,520 | 78,465 | ||||||
| TOTAL ASSETS | $ | 1,002,975 | $ | 1,360,333 | ||||
| LIABILITIES AND STOCKHOLDERS‘ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade accounts payable | $ | 82,976 | $ | 47,467 | ||||
| Accrued expenses | 203,487 | 288,017 | ||||||
| Deferred revenue | 88,618 | 112,757 | ||||||
| Income taxes payable | 123,000 | — | ||||||
| Capital lease obligations—current portion | 9,316 | 21,049 | ||||||
| Notes payable—current portion | 2,115 | 8,095 | ||||||
| Other current liabilities | 15,021 | 17,598 | ||||||
| TOTAL CURRENT LIABILITIES | 524,533 | 494,983 | ||||||
| Deferred income tax liabilities, net | — | 105,049 | ||||||
|
Capital lease obligations—long-term portion |
11,148 | 23,401 | ||||||
| Notes payable—long-term portion | 100,150 | 82,847 | ||||||
| Other liabilities | 18,957 | 12,928 | ||||||
| TOTAL LIABILITIES | 654,788 | 719,208 | ||||||
| Minority interests | 5,850 | 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 July 31, 2008 and 2007, respectively |
251 | 251 | ||||||
|
Class A common stock, $.01 par value; authorized shares—35,000; 9,817 shares issued and outstanding at July 31, 2008 and 2007 |
98 | 98 | ||||||
|
Class B common stock, $.01 par value; authorized shares—200,000; 63,904 and 63,261 shares issued and 51,249 and 56,043 shares outstanding at July 31, 2008 and 2007, respectively |
639 | 633 | ||||||
| Additional paid-in capital | 716,598 | 711,103 | ||||||
|
Treasury stock, at cost, consisting of 10,533 and 10,079 shares of common stock and 12,655 and 7,218 shares of Class B common stock at July 31, 2008 and 2007, respectively |
(285,536 | ) | (240,355 | ) | ||||
| Accumulated other comprehensive income | 6,754 | 10,750 | ||||||
| Retained earnings (deficit) | (96,467 | ) | 147,682 | |||||
| TOTAL STOCKHOLDERS‘ EQUITY | 342,337 | 630,162 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS‘ EQUITY |
$ | 1,002,975 | $ | 1,360,333 | ||||
|
IDT CORPORATION |
||||||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||
| Year ended July 31
(in thousands) |
Unaudited
2008 |
2007 | 2006 | |||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net (loss) income |
$ |
(224,330 |
) |
$ | 58,624 |
$ |
(178,654 |
) |
||||
|
Adjustments to reconcile net (loss) income to net cash used in operating activities: |
||||||||||||
| Net loss (income) from discontinued operations | 4,888 |
(198,070 |
) |
(44,186 |
) |
|||||||
| Depreciation and amortization | 68,747 | 80,011 | 87,422 | |||||||||
| Restructuring and impairment charges | 39,140 | 10,933 | 13,121 | |||||||||
| Minority interests |
(1,370 |
) |
10,180 | 16,177 | ||||||||
| Deferred income taxes | 5,832 |
(1,991 |
) |
(5,648 |
) |
|||||||
| Write-off of acquired research and development assets | 6,672 | — | — | |||||||||
| Provision for doubtful accounts receivable | 13,996 | 13,307 | 18,544 | |||||||||
| Provision for losses on purchased debt portfolios | 31,652 | — | — | |||||||||
|
Net realized losses (gains) from sales of marketable securities and investments |
17,365 | (4,909 | ) | (845 | ) | |||||||
| Gain on sale of building |
(4,146 |
) |
— | — | ||||||||
| Loss (gain) on sale of businesses | 9,569 | (44,671 | ) | — | ||||||||
| Interest in the equity of investments | 6,078 | (22,416 | ) | — | ||||||||
| Stock-based compensation | 4,407 | 7,726 | 21,521 | |||||||||
|
Change in assets and liabilities, net of effects from acquisitions/dispositions of businesses: |
||||||||||||
| Trade accounts receivable |
(35,730 |
) |
3,090 |
(47,295 |
) |
|||||||
| Other current assets and other assets | 7,832 | 2,487 |
(2,950 |
) |
||||||||
|
Trade accounts payable, accrued expenses, other current liabilities and other liabilities |
(59,673 |
) |
4,142 | 17,489 | ||||||||
| Income taxes payable |
(10,000 |
) |
— | — | ||||||||
| Deferred revenue |
(24,139 |
) |
(20,548 |
) |
(7,400 |
) |
||||||
| Net cash used in operating activities |
(143,210 |
) |
(102,105 |
) |
(112,704 |
) |
||||||
| INVESTING ACTIVITIES | ||||||||||||
| Capital expenditures |
(20,286 |
) |
(36,290 |
) |
(53,523 |
) |
||||||
| Purchase of building |
(24,778 |
) |
— | — | ||||||||
| Collection (issuance) of notes receivable, net | 15,003 |
(64 |
) |
836 | ||||||||
| Investments and acquisitions, net of cash acquired |
(21,862 |
) |
(49,159 |
) |
(103,351 |
) |
||||||
| Proceeds from sales of investments | 70,105 | — | — | |||||||||
| Proceeds from sales of building | 4,872 | — | — | |||||||||
|
Proceeds from sales of discontinued operations, net of cash sold and transaction costs |
— | 260,591 | 129,308 | |||||||||
|
Proceeds from sale of U.K.-based Toucan business, net of transaction costs |
— | 38,379 | — | |||||||||
| Purchase of debt portfolios |
(67,332 |
) |
(78,443 |
) |
— | |||||||
| Principal collections and proceeds on resale of debt portfolios | 23,733 | 28,070 | — | |||||||||
| Proceeds from sales and maturities of marketable securities | 695,714 | 1,684,344 | 1,760,705 | |||||||||
| Purchases of marketable securities |
(442,945 |
) |
(1,671,510 |
) |
(1,446,237 |
) |
||||||
| Net cash provided by investing activities | 232,224 | 175,918 | 287,738 | |||||||||
| FINANCING ACTIVITIES | ||||||||||||
| Dividends paid | — |
(30,783 |
) |
— | ||||||||
| Distributions to minority shareholders of subsidiaries |
(4,087 |
) |
(11,367 |
) |
(25,420 |
) |
||||||
| Proceeds from exercise of stock options | 94 | 5,761 | 2,894 | |||||||||
| Proceeds from employee stock purchase plan | 1,173 | 2,284 | 2,347 | |||||||||
| Proceeds from borrowings | — | — | 11,000 | |||||||||
| Proceeds from sale lease back transactions on capital leases | — | 13,319 | — | |||||||||
| Repayments of capital lease obligations |
(25,296 |
) |
(20,586 |
) |
(21,580 |
) |
||||||
| Repayments of borrowings |
(3,922 |
) |
(3,588 |
) |
(21,751 |
) |
||||||
| Repurchase of stock options in tender offer | — | — |
(15,829 |
) |
||||||||
| Repurchases of common stock and Class B common stock |
(45,354 |
) |
(22,522 |
) |
(73,514 |
) |
||||||
| Net cash used in financing activities |
(77,392 |
) |
(67,482 |
) |
(141,853 |
) |
||||||
| DISCONTINUED OPERATIONS | ||||||||||||
| Net cash used in operating activities | — |
(20,261 |
) |
(130,339 |
) |
|||||||
| Net cash provided by investing activities | — | 3,847 | 12,078 | |||||||||
| Net cash provided by financing activities | — | 7,536 | 59,152 | |||||||||
| Net cash used in discontinued operations | — |
(8,878 |
) |
(59,109 |
) |
|||||||
| Effect of exchange rate changes on cash and cash equivalents | 3,552 | 5,200 | 5,161 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 15,174 | 2,653 |
(20,767 |
) |
||||||||
|
Cash and cash equivalents (including discontinued operations) at beginning of year |
153,845 | 151,192 | 171,959 | |||||||||
|
Cash and cash equivalents (including discontinued operations) at end of year |
169,019 | 153,845 | 151,192 | |||||||||
|
Less cash and cash equivalents of discontinued operations at end of year |
— | — |
(32,083 |
) |
||||||||
| Cash and cash equivalents (excluding discontinued operations) at end of year |
$ | 169,019 | $ | 153,845 | $ | 119,109 | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||||||
| Cash payments made for interest | $ | 9,711 | $ | 9,512 | $ | 10,148 | ||||||
| Cash payments made for income taxes | $ | 13,090 | $ | 1,507 | $ | 6,729 | ||||||
| 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 Toucan |
$ | — | $ | 7,851 | $ | — | ||||||
|
Purchases of property, plant and equipment through capital lease obligations |
$ | 398 | $ | 293 | $ | 3,856 | ||||||
| Issuance of liabilities for acquisitions | $ | — | $ | 1,300 | $ | — | ||||||
|
SELECTED CONSOLIDATED FINANCIAL DATA |
||||||||||||||||||||||||||||||||||
|
THREE MONTHS ENDED JULY 31, 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 | $ | 479,951 | $ |
(94,311 |
) | $ | 270,026 | $ | 183,911 | $ | 18,912 | $ | 11,109 | $ | 75,456 | $ | 14,849 | $ | – | |||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||||||||
| Direct cost of revenues (exclusive of | ||||||||||||||||||||||||||||||||||
| depreciation and amortization) | 369,396 | (94,311 | ) | 236,019 | 138,186 | 9,540 | 8,219 | 66,239 | 5,504 | – | ||||||||||||||||||||||||
| Selling, general and administrative | 95,208 | – | 23,921 | 42,188 | 4,512 | 1,451 | 7,152 | 12,298 | 3,687 | |||||||||||||||||||||||||
| Research and development | 1,759 | – | – | 1,063 | – | – | – | 696 | – | |||||||||||||||||||||||||
| Bad debt | 21,131 | – | 990 | 2,214 | 1,192 | 15,600 | 440 | 693 | – | |||||||||||||||||||||||||
| Depreciation and amortization | 16,720 | – | 6,965 | 5,699 | 367 | 141 | 30 | 2,764 | 754 | |||||||||||||||||||||||||
| Restructuring and impairment charges | 45,468 | – | 8,951 | 25,240 | 781 | 2,631 | 8 | 5,987 | 1,870 | |||||||||||||||||||||||||
| Total costs and expenses | 549,682 | (94,311 | ) | 276,846 | 214,590 | 16,392 | 28,042 | 73,869 | 27,942 | 6,311 | ||||||||||||||||||||||||
| Loss on sale of businesses | (9,569 | ) | – | – | – | – | – | – | (9,569 | ) | – | |||||||||||||||||||||||
| (Loss) income from operations | (79,300 | ) | $ | – | $ | (6,820 | ) | $ | (30,678 | ) | $ | 2,520 | $ | (16,934 | ) | $ | 1,587 | $ | (22,663 | ) | $ | (6,311 | ) | |||||||||||
| Interest expense, net | (534 | ) | ||||||||||||||||||||||||||||||||
| Other expense, net | (7,676 | ) | ||||||||||||||||||||||||||||||||
| Loss from continuing operations before | ||||||||||||||||||||||||||||||||||
| minority interests and income taxes | (87,510 | ) | ||||||||||||||||||||||||||||||||
| Minority interests | 2,351 | |||||||||||||||||||||||||||||||||
| Provision for income taxes | ( 912 | ) | ||||||||||||||||||||||||||||||||
| Loss from continuing operations | (86,071 | ) | ||||||||||||||||||||||||||||||||
| Loss on sale of discontinued operations | (359 | ) | ||||||||||||||||||||||||||||||||
| Net loss | $ | (86,430 | ) | |||||||||||||||||||||||||||||||
Investor Relations:
IDT Corporation
Bill
Ulrey, 973-438-3838
