IDT Reports Results for Fourth Quarter and Fiscal Year 2003.Business Editors NEWARK, N.J.--(BUSINESS WIRE)--Oct. 23, 2003 IDT IDT Integrated Device Technology, Inc. (Santa Clara, CA, USA) IDT I Don't Think IDT Identity Theft IDT Interrupt Descriptor Table IDT Integrated DNA Technologies IDT Inactive Duty Training IDT Instructional Design & Technology Corporation (NYSE NYSE See: New York Stock Exchange : IDT, IDT.C): -- Annual Consolidated Revenues Increase 16% -- IDT Telecom '03 Operating Profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. Double Those of '02 -- Strong Cost Controls Yield a $30 Million Year-over-Year Improvement in Consolidated SG&A Expenses -- Cash, Cash Equivalents & Marketable Securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has Remain Above $1 Billion IDT Corporation (NYSE: IDT, IDT.C) today reported record revenues of $485.7 million for the fourth quarter of its Fiscal Year 2003, the three months ended July 31, 2003. Revenues for the fourth quarter increased 6.8% from the third quarter, and 12.7% over the revenues recorded during the fourth quarter of Fiscal Year 2002. For Fiscal Year 2003, IDT recorded revenues of $1.8 billion, up 15.8% from Fiscal Year 2002. Net income for the fourth quarter of Fiscal Year 2003 was $8.3 million, or $0.10 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares with a net loss of $78.2 million, or ($0.99) per share, in Fiscal Year 2002's fourth quarter, and a net loss of $9.3 million, or ($0.12) per share, in Fiscal Year 2003's third quarter. For the Fiscal Year ended July 31, 2003, IDT recorded a net loss of $17.5 million or ($0.22) per share, compared with a net loss of $303.3 million or ($4.04) per share in Fiscal Year 2002. As of the close of the fourth quarter of Fiscal Year 2003, consolidated cash, restricted cash, cash equivalents and marketable securities stood at $1.0 billion, which includes $94.1 million held by Net2Phone. IDT recorded a loss from operations of $29.4 million for the fourth quarter of Fiscal Year 2003. This compares with a loss from operations of $158.6 million in Fiscal Year 2002's fourth quarter, and a loss from operations of $37.9 million in Fiscal Year 2003's third quarter. Excluding the $16.0 million loss from operations of Net2Phone (IDT's Internet Telephony Another term for IP telephony and VoIP. In the late 1990s, some people made a distinction between Internet Telephony and VoIP: Internet telephony referred to voice over the public Internet, while VoIP referred to voice over private IP networks. business segment)(1), the loss from operations would have been $13.3 million in the fourth quarter of Fiscal Year 2003. This compares with a loss from operations of $141.1 million in Q4 of Fiscal Year 2002, and a loss from operations of $28.1 million in the third quarter of Fiscal Year 2003, a 52.3% sequential quarterly improvement. For Fiscal Year 2003, consolidated SG&A expenses declined 6.6%, or $29.7 million from $451.5 million to $421.8 million, decreasing from 28.5% of Fiscal Year 2002 revenues to 23.0% of Fiscal Year 2003 revenues. SG&A expenses for Q4 of Fiscal Year 2003 were $14.7 million lower than in Q4 of Fiscal Year 2002, a 12.3% decline. Compared to the third quarter of Fiscal Year 2003, SG&A expenses were exactly even at $105.0 million. This amounted to 21.5% of Fiscal Q4 2003 revenues, versus 23.1% of Fiscal Q3 2003 revenues. The following table summarizes the operating performance of IDT's business segments(2):
Revenues
$ millions FY 2003 FY 2002 Q4 '03 Q3 '03 Q4 '02
------- -------- ------- ------- --------
IDT Retail Telecom $1,233.2 $1,121.7 $318.3 $299.8 $296.2
IDT Wholesale Telecom 405.5 289.3 117.3 109.2 82.7
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IDT Telecom Total 1,638.7 1,411.0 435.6 409.0 378.9
IDT Solutions 87.6 79.6 21.6 20.8 27.3
IDT Media 27.6 21.4 11.1 5.5 5.7
Internet Telephony 80.8 71.9 17.4 19.6 18.9
Corporate 0.0 0.0 0.0 0.0 0.0
------- -------- ------- ------- --------
Total IDT $1,834.5 $1,583.8 $485.7 $454.9 $430.9
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Income (Loss) from Operations
$ millions FY 2003 FY 2002 Q4 '03 Q3 '03 Q4 '02
------- -------- ------- ------- --------
IDT Retail Telecom $91.0 $61.3 $24.9 $21.8 $19.3
IDT Wholesale Telecom (27.6) (30.5) (4.9) (6.1) (5.1)
------- -------- ------- ------- --------
IDT Telecom Total 63.4 30.8 20.0 15.7 14.2
IDT Solutions (88.8) (96.6) (21.3) (19.6) (33.6)
IDT Media (9.1) (132.0) (2.7) (2.3) (114.8)
Internet Telephony 9.7 (216.1) (16.0) (9.8) (17.5)
Corporate (48.8) (26.5) (9.4) (21.8) (6.9)
------- -------- ------- ------- --------
Total IDT ($73.6) ($440.3) ($29.3) ($37.9) ($158.6)
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"In Fiscal 2003, we made progress on just about every front," said Jim Courter James Andrew "Jim" Courter (born October 14, 1941 in Montclair, New Jersey) is an American Republican Party politician, lawyer and businessman. He is a resident of Hackettstown, New Jersey. , Vice Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "The highlight is IDT Telecom's enormous strides in profitability, with strong prospects for more progress to come." "We entered the telecom industry twelve years ago with ground-breaking technology that provided millions of people more affordable international phone calls," Mr. Courter continued. "Lower pricing contributed to explosive growth in international calling, and we have become one of the world's largest carriers of international voice traffic. Today, IDT Media has that same strategy. Our innovative computer animation technology is challenging the established high-cost approach that has been standard in the industry up to now. We are expecting great things from our animation business within a few years." RESULTS OF OPERATIONS IDT Telecom Division IDT Telecom enjoyed the most successful quarter in its history in the fourth quarter of Fiscal Year 2003, and the most successful year in its history in Fiscal 2003. Revenues for the quarter increased 15% year over year, and 6.5% from the Fiscal Q3 2003 level. Income from operations increased 41% over the Fiscal 2002 figure, and 27% from the Fiscal Q3 2003 level. For Fiscal Year 2003, income from operations more than doubled from the prior year, on a 16% increase in revenues. The fourth quarter of Fiscal Year 2003 represented the eighth consecutive quarter of sequential revenue growth and positive operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . IDT Telecom experienced revenue growth in both of its retail telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. and its wholesale telecommunications services segments during Fiscal Year 2003. Management anticipates continued double-digit overall revenue growth in Fiscal Year 2004, with international revenues expected to account for an increasing percentage of total revenues. IDT Telecom minutes of use for the fourth quarter of Fiscal Year 2003 increased 26.6% year over year from 3.5 billion minutes to 4.5 billion minutes, and 6.6% from the Fiscal Q3 2003 level of 4.2 billion minutes. For Fiscal Year 2003, minutes of use increased 39.8% from 11.8 billion minutes to 16.5 billion minutes. "A year ago I was very pleased to be reporting a stunning turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. at IDT Telecom," remarked Motti Lichtenstein, CEO of IDT Telecom. "Today I am delighted that we have come so much farther, even as we deal with a challenging telecom industry environment. We will continue to respond to those challenges in Fiscal 2004, as we further establish IDT Telecom as one of the global telecom industry's mainstays."
IDT Telecom Line of Business Detail
Revenues
$ millions FY 2003 FY 2002 Q4 '03 Q3 '03 Q4 '02
--------- --------- ------- ------- -------
Prepaid Calling Card $1,080.0 $1,008.9 $279.9 $260.7 $263.4
Consumer Phone Services 152.0 110.5 38.1 39.0 32.3
Other Retail 1.2 2.4 0.3 0.2 0.5
--------- --------- ------- ------- -------
Total Retail 1,233.2 1,121.7 318.3 299.8 296.2
Wholesale 405.5 289.3 117.3 109.2 82.7
--------- --------- ------- ------- -------
Total Telecom $1,638.7 $1,411.0 $435.6 $409.0 $378.9
========= ========= ======= ======= =======
Gross Profit Margin
$ millions FY 2003 FY 2002 Q4 '03 Q3 '03 Q4 '02
--------- --------- ------- ------- -------
Prepaid Calling Card 22.2% 22.7% 22.7% 22.2% 24.1%
Consumer Phone Services 56.5% 54.5% 55.3% 55.6% 53.1%
Other Retail 59.3% 27.0% 36.0% 82.6% 51.8%
--------- --------- ------- ------- -------
Total Retail 26.5% 25.8% 26.6% 26.5% 27.3%
Wholesale 11.2% 11.9% 10.9% 12.2% 13.6%
--------- --------- ------- ------- -------
Total Telecom 22.7% 22.9% 22.4% 22.7% 24.3%
========= ========= ======= ======= =======
IDT Retail Telecom IDT Retail Telecom's revenues for the quarter increased 7.5% year over year, and 6.2% from the Fiscal Q3 2003 level. Income from operations for the quarter increased 29% year over year, and 14.4% from the Fiscal Q3 2003 level. For Fiscal Year 2003, income from operations increased 48.4% from the prior year, on a 9.9% increase in revenues. Key Points -- Calling card revenues increased 7.0% in the fourth quarter of Fiscal 2003 over those recorded in the third quarter of Fiscal 2003, and were 6.0% higher than during Fiscal Year 2002's fourth quarter. For Fiscal Year 2003, calling card gross profit margins narrowed slightly, to 22.2%, from 22.7% in Fiscal Year 2002. Calling card gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. fluctuated throughout Fiscal Year 2003, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the significant number of new, aggressively-priced calling cards launched during the year. These cards initially depressed overall calling card profit margins. However, as several of these cards have moved into the more mature, profitable stages of their lifecycles, overall calling card profit margins have improved on a sequential quarterly basis. Gross profit margins for the fourth quarter amounted to 22.7%, representing a 200 basis point increase from Fiscal Year 2003's quarterly low point of 20.7%, recorded in the second quarter. -- Looking to Fiscal 2004, management anticipates further revenue gains from both the U.S. and international calling card divisions. Private label calling cards, which are primarily sold through major retail chains, have quickly become one of IDT Telecom's fastest-growing products in Fiscal 2003. Private label calling cards are expected to contribute strongly to overall calling card growth in Fiscal 2004. -- For the fourth quarter of Fiscal Year 2003, consumer phone services (formerly known as consumer long distance) revenue was $38.1 million, up from $32.3 million in the year-ago period, but down from $39.0 million in the third quarter of Fiscal Year 2003. The sequential decline in revenue reflects the relatively high customer churn rates (1) The percentage of customers who cancel their online, cellphone or other subscription service during a certain time period. (2) The percentage of employees who leave the company during a certain time period. See churning. IDT Telecom is experiencing currently with respect to its long distance customer base. However, in September 2003, IDT Telecom launched "IDT America Unlimited," a new flat rate calling plan bundling local, regional toll and long distance service with popular calling features, for as low as $39.95 per month, plus applicable fees and taxes. The initial launch covered New York, New Jersey, Maryland and Pennsylvania. A service launch is imminent in Virginia, West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. , Maine, Delaware and New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). , with several more states expected to be added by the end of calendar 2004. -- IDT Telecom is currently shifting the majority of its advertising spending from nationally offered pure long distance service to this new regional product. IDT anticipates investing significant marketing dollars in this business in Fiscal 2004. Consequently, IDT expects to have fewer purely long distance customers and more "all-distance" customers in the coming months. IDT Wholesale Telecom IDT Wholesale Telecom enjoyed its best quarter in three years in the fourth quarter of Fiscal Year 2003, and its best year in three years in Fiscal 2003. Revenues for the quarter increased 41.8% year over year, and 7.5% from Q3 of Fiscal Year 2003. The loss from operations in Q4 decreased 3.9% from the Fiscal Year 2002 comparative quarter, and 19.7% from the previous quarter level. For Fiscal Year 2003, the loss from operations was reduced 9.5% from the prior year, on a 40.2% increase in revenues. Key Points: -- Growth (in dollar terms) was almost evenly divided between U.S. and internationally-originated wholesale business. Domestic and international growth was driven by increased business with established Tier 1 customers and an increase in the number of customer relationships. -- The expansion of the wholesale business, particularly in international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , is expected to continue to drive growth during Fiscal Year 2004, albeit at a somewhat slower pace than that experienced during Fiscal Year 2003. IDT Solutions Division IDT Solutions recorded revenues of $21.6 million in the fourth quarter of Fiscal Year 2003 compared to revenues of $20.8 million in the third quarter of Fiscal Year 2003, a 3.8% sequential increase. Fourth quarter Fiscal Year 2002 revenues were $27.3 million. The 20.9% decline from Q4 of Fiscal Year 2002 resulted primarily from exiting non-core businesses. Most significantly, gross profit dollars increased from $97,000 in Q3 of Fiscal Year 2003 to $1.4 million in Q4. Correspondingly, gross profit margins improved quarter-to-quarter from 0.5% to 6.7%. This margin expansion is due to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. revenue increase as well as the continued grooming Combining, consolidating and segregating network traffic using devices such as digital cross-connects, add/drop multiplexers and SONET switches. Grooming is a telephone term that typically refers to managing high-capacity lines between central offices, carriers, ISPs and very large of our connectivity and real estate networks. SG&A expenses in Q4 were reduced by $1.6 million from their level in the third quarter of Fiscal Year 2003. IDT Solutions' loss from operations was $21.3 million in Q4 of Fiscal Year 2003, an increase of 8.7% from a loss from operations of $19.6 million incurred in Q3, and a decrease of 37% from the comparable prior year period. The increase in operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in Q4 as compared to Q3 was due to a one-time impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $4.5 million recorded in Q4, to write down the asset value of certain optronics Optronics, or optoelectronics in its less abbreviated form, is the science and technology making use of optics and electronics. It is sometimes synonymous with photonics, however the latter has a lesser emphasis on electronics. equipment. If not for this charge, operating results would have improved by $2.9 million in Q4. For Fiscal Year 2003, IDT Solutions reported a loss from operations of $88.8 million on revenues of $87.6 million, versus a loss of $96.6 million on revenues of $79.6 million in Fiscal Year 2002. IDT acquired the Winstar assets during the second quarter of Fiscal 2002. "In June we announced a target of reducing IDT Solutions' cash burn rate to approximately $2.5 million per month by the end of calendar year 2003," said IDT Solutions CEO, Brian Finkelstein. "This remains our immediate goal, and we believe that we are on track to accomplish it. In recent months, our sales progress, which is vital to our long-term success, has improved." IDT Media Division IDT Media delivered record revenues of $11.1 million in the fourth quarter of Fiscal Year 2003. This compares to revenues of $5.7 million in Q4 of Fiscal Year 2002 and revenues of $5.5 million in the third quarter of Fiscal Year 2003. Most of the revenue increase came from the consolidation of Film Roman, acquired in May 2003. In the fourth quarter of Fiscal Year 2003, the IDT Media division reported a loss from operations of $2.7 million compared to a $114.8 million loss from operations (after an impairment charge of $111.1 million) in the fourth quarter of Fiscal Year 2002 and a $2.3 million loss from operations in the third quarter of Fiscal Year 2003. For Fiscal Year 2003, IDT Media posted a loss from operations of $9.1 million on revenues of $27.6 million, compared with a loss from operations of $132.0 million on revenues of $21.4 million in Fiscal Year 2002. Key Points: -- Digital Production Solutions (DPS Minicomputer series from Bull HN. 1. (language, text) DPS - Display PostScript. 2. (language) DPS - A real-time language with direct expression of timing requests. ["Language Constructs for Distributed Real-Time PRogramming", I. ), IDT Media's animation unit, recorded revenues of $5.0 million for Fiscal Year 2003, of which $4.4 million were in the fourth quarter. DPS reported an operating loss of $0.3 million for the fourth quarter, and $1.3 million for Fiscal Year 2003. -- In September 2003, DPS signed a binding Letter of Intent to acquire a controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail in Mainframe Entertainment, Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension . MFE MFE - maximal free expression ), a leading creator of computer animation for television and direct-to-video products. Mainframe Entertainment has partnered with Hasbro, Mattel and Sony to create television series based on characters and brands including Barbie Barbie in full Barbara Millicent Roberts A plastic doll, 11.5 in. (29 cm) tall, with the figure of an adult woman that was introduced in 1959 by Mattel, Inc., a southern California toy company. , Hot Wheels Hot Wheels is a brand of die cast toy car, introduced by American toymaker Mattel in 1968. It was the primary competitor of Johnny Lightning and Matchbox until 1996, when Mattel acquired rights to the Matchbox brand from Tyco. and Spider-Man. Its programming has aired on The Cartoon Network, ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. , and FOX networks in the U.S., and YTV YTV Pääkaupunkiseudun Yhteistyövaltuuskunta (Finnish: Helsinki Metropolitan Area Council) YTV Yorkshire Television YTV Youth Television and CBC (1) (Cell Broadcast Center) See cell broadcast. (2) (Cipher Block Chaining) In cryptography, a mode of operation that combines the ciphertext of one block with the plaintext of the next block. in Canada. -- In October 2003, IDT Media increased its ownership stake in Film Roman, Inc. to 77.3% from the 54.9% stake initially acquired by DPS in May 2003. DPS, through Film Roman, is one of the leading independent animation studios Animation studio can refer to:
in the world and develops, produces and distributes a broad range of television programming for the network, cable, first-run domestic syndication See syndication format. and international markets. Film Roman has produced and continues to produce some of the world's best-known animated series, including The Simpsons(TM), King of the Hill(TM), and X-Men(TM) -- Also in October, DPS announced a production services agreement with BAF BAF British Athletics Federation Berlin Animation Film under which DPS will act as the single source animation company for Happily N'Ever After(TM), a feature length 3-D Computer Graphic animation Graphic animation is a variation of stop motion (and possibly more conceptually associated with traditional flat cel animation and paper drawing animation, but still technically qualifying as stop motion) consisting of the animation of photographs (in whole or in parts) and other motion picture which is a humorous action/adventure reinterpretation re·in·ter·pret tr.v. re·in·ter·pret·ed, re·in·ter·pret·ing, re·in·ter·prets To interpret again or anew. re of classic Grimm Brothers Fairy Tales This is a list of fairy tales, the dates of their earliest known printed version, the author and, if known, the collection of tales in which it was published. It should be noted, however, that not all stories listed below would be categorized as fairy tales by a strict definition . -- In July 2003, DPS purchased a minority stake in Vanguard Vanguard Any of three unmanned U.S. experimental satellites. Vanguard I (1958), the second U.S. satellite placed in orbit around Earth (after Explorer 1), was a tiny 3.25-lb (1.47-kg) sphere with two radio transmitters. Animation, a producer of computer generated animated feature films. Vanguard Animation was founded in 2002 by John Williams This biographical article or section needs additional references for verification. Please help [ to improve this article] by adding additional sources. Unverifiable material about living persons must be removed immediately, especially if potentially libelous or harmful. , the originating producer of Shrek(TM), and Neil Braun, formerly of NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. , Viacom and HBO Hyperbaric oxygen therapy (HBO) A form of oxygen therapy in which the patient breathes oxygen in a pressurized chamber. Mentioned in: Ozone Therapy . Vanguard Animation has a three-picture deal with Disney and is currently in production on the first picture, Valiant VALIANT Valsartan in Acute Myocardial Infarction Trial Cardiology A series of multinational M&M trials to determine the effects of valsartan–Diovan® (TM). Under the terms of the investment, DPS will have the opportunity to provide production work on Vanguard Animation's films. DPS also entered into a joint venture agreement with Vanguard Animation to co-produce and co-own computer generated animated films, as well as computer generated animation projects for television exhibition or direct-to-video/DVD distribution. -- DPS is currently in production on two original full-length feature films, created and scripted in-house, and several proprietary direct-to-retail projects. -- CTM CTM Continuum (gaming) CTM Community Trade Mark (Europe) CTM Cisco Transport Manager CTM Confederacion de Trabajadores de Mexico (Spanish: Confederation of Mexican Workers) Brochure Display, IDT Media's brochure distribution business, hit its sales target of $15 million for the fiscal year, and delivered an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of over 20%. -- IDT Media has initiated a new line of radio programs to be marketed under the name "Liberty Broadcasting System The Liberty Broadcasting System was a U.S. radio network of the late 1940s and early 1950s founded by Gordon McLendon, which mainly broadcast live recreations of Major League baseball games, by following the action on the newswires. ." This programming will focus on intelligent, analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. Psychoanalytic. programming and will feature programs by William Kristol, Linda Chavez This article is about the conservative activist and former unionist. For the current unionist, see Linda Chavez-Thompson. Linda Chavez (born June 17, 1947 in Albuquerque, New Mexico) is a prominent Hispanic-American conservative author, commentator, and radio , and others. -- Also in September, IDT announced the creation of IDT Contact Services, a new business unit that will develop, manage and provide call center services to IDT and external clients. In connection with the establishment of this business unit, IDT Media has acquired two tele-services companies, Marketing Ally, based in Provo, Utah and Contact America, Inc, headquartered in La Jolla La Jolla (lə hoi`yə), on the Pacific Ocean, S Calif., an uninc. district within the confines of San Diego; founded 1869. The beautiful ocean beaches, in particular La Jolla shores and Black's Beach, and sea-washed caves attract visitors and , California. "To think that we could become a major player in the animation industry in little more than a year is mind-boggling. It is a validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. of the competitive advantages of our technology," said IDT Media CEO Mitch The name Mitch can mean:
Internet Telephony IDT's Internet Telephony business is conducted by Net2Phone, which is a separate public company whose common stock is quoted on the NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on National Market under the symbol NTOP NTOP Nt Option Pack . Net2Phone is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. On October 22, 2003, Net2Phone issued a press release with respect to its results for the fourth quarter and Fiscal Year 2003 ended July 31, 2003. Set forth below is a brief description of the Net2Phone results that are consolidated in IDT's results. For further information with respect to Net2Phone, reference may be made to the above-referenced press release and other Net2Phone press releases, Net2Phone's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , and prior and subsequent reports and other information filed by Net2Phone from time to time with the Securities and Exchange Commission. None of such releases, reports or information is incorporated into this release and such releases, reports and information do not form a part of this release. Net2Phone's loss from operations was $16.0 million on revenues of $17.4 million in the fourth quarter of Fiscal Year 2003, net of intercompany transactions Intercompany transaction Transaction carried out between two units of the same corporation. with IDT. This compares with a loss from operations of $17.5 million recorded in the fourth quarter of Fiscal Year 2002 and $9.8 million in the third quarter of Fiscal Year 2003. Key points: -- Nine consecutive quarters of gross margins above 40%; -- A recently signed agreement to deliver satellite VoIP services in Africa in conjunction with AFSAT AFSAT Air Force Security Assistance Training (squadron) AFSAT Air Force Satellite AFSAT Air Force Subscale Aerial Target and Hughes Network Systems; and -- An agreement with Liberty Cablevision of Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. to deliver managed VoIP cable telephony See cable telephone. services on an outsourced basis to its customers. "Our two business segments provide a healthy balance between an established international company that has already reached positive segment income and an exciting new venture with significant potential for growth," said Net2Phone CEO Stephen Greenberg. "With the signing of Liberty Cablevision of Puerto Rico, we have proven that our quality of service is equivalent to that of traditional telephone service, and that we can provide cable operators like Liberty Cablevision with a comprehensive telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. solution with a business model that suits their needs." IDT's net loss for Q4 includes only its 21.2% percent ownership stake in Net2Phone during the quarter. A "minority interest" adjustment (below the operating line) adds back Net2Phone's net losses attributable to the other shareholders of Net2Phone. IDT CONFERENCE CALL INFORMATION In connection with this release of quarterly and annual results, IDT will be hosting a conference call today for analysts, investors and the general public, at 4:45 PM Eastern Time. To access the call from the U.S., dial 1-866-594-2183. For international callers, the dial-in number is 1-973-935-8583. No passcode is required. A replay of the teleconference will be available for one week after the conference call at 1-877-519-4471, passcode #4245584 for domestic callers, or 1-973-935-8583, passcode #4245584 for international callers. Alternatively, interested participants may access a webcast of the conference call by visiting the IDT Website, at www.idt.net A direct link to the call will be placed on the website. Listening to the webcast of the call will require Windows Media Microsoft's audio and video framework for Windows, which embraces playback, encoding and streaming. Windows Media Player is the digital jukebox and media player that comes with every version of Windows. software. Please allow at least 15 minutes to download the necessary audio software prior to the call. An archived copy of the call will be available at the IDT Website in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section's Presentations for at least six months after the call. A copy of this press release and additional financial and statistical information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the fourth quarter and Fiscal Year 2003 presented during the conference call (including a reconciliation of non-GAAP financial measures that may be discussed during the conference to the most comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measure) will be available on IDT's website at www.idt.net in the Investor Relations section's News Library. IDT CORPORATION IDT Corporation, through its IDT Telecom subsidiary, is a multinational communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. serving retail and wholesale customers worldwide. Its primary offerings are prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. debit A monetary amount that is subtracted from an account balance. A debit from one account is a credit to another. See credit. and
rechargeable re·charge tr.v. re·charged, re·charg·ing, re·charg·es To charge again, especially to reenergize a storage battery. re calling cards, wholesale telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. carrier services and consumer phone services. In providing calling card and wholesale carrier services, IDT Telecom utilizes its network of switches in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Europe and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , as well as its owned and leased capacity on 14 undersea fiber-optic cables that connect its U.S. facilities with its international facilities and with third-party facilities in Europe, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Asia. IDT Telecom utilizes other carriers' networks in providing consumer long distance services. IDT, through its IDT Media subsidiary, also operates several media and entertainment-related businesses, including a digital animation production company, a talk radio network, a radio station in the Washington, D.C. metropolitan area, and a call center business. Through IDT Solutions (formerly Winstar), IDT provides broadband and telephony services to commercial and governmental customers through a fixed-wireless and fiber infrastructure. Net2Phone, Inc. is a leading provider of high-quality global retail Voice over IP services, either directly or via a partner and has recently begun offering cable telephony services. IDT Corporation Class B common shares trade on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors IDT and its common stock trades under the symbol IDT.C. Important Note: In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 are used. 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 Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial 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. Footnotes (1) Due to IDT's control, through an intermediate entity, of a majority of the outstanding voting equity of Net2Phone, IDT consolidates Net2Phone's financial results with its own. IDT's percentage ownership of Net2Phone's equity during Q4 of Fiscal Year 2003 was 21.2%. On IDT's statement of operations See Income statement. , through a minority interest adjustment, IDT's percentage interest in Net2Phone's results is reflected in IDT's net income/(loss) and earnings per share results. However, due to the consolidation of 100% of Net2Phone's operating results prior to the minority interest adjustment, the entire Net2Phone loss from operations is reflected in IDT's consolidated loss from operations. Accordingly, a presentation of the IDT's loss from operations without the effect of Net2Phone's operational results may be useful to investors. (2) Columns in tables may not add due to rounding.
IDT CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
----------------------------------------------------------------------
YEAR ENDED THREE MONTHS
JULY 31, ENDED JULY 31,
2003 2002 2003 2002
---- ---- ---- ----
(in thousands, except per share data)
STATEMENT OF OPERATIONS
DATA:
Revenues $1,834,547 $1,583,794 $485,739 $430,847
Costs and expenses:
Direct cost of revenues
(exclusive of items
shown below) 1,409,465 1,214,802 373,293 328,044
Selling, general and
administrative 421,829 451,476 104,966 119,690
Depreciation and
amortization 89,309 83,916 24,030 22,040
Settlement of litigation
by Net2Phone (58,034) - - -
Non-cash compensation 32,286 16,440 8,524 605
Restructuring, severance
and impairment charges 13,312 257,501 4,279 119,087
----------- ----------- --------- ---------
Total costs and expenses 1,908,167 2,024,135 515,092 589,466
----------- ----------- --------- ---------
Loss from operations (73,620) (440,341) (29,353) (158,619)
Interest income, net 26,095 24,174 4,750 6,981
Other income (expense):
Gain on sale of
subsidiary stock 22,422 - - -
Equity in income (loss)
of affiliates (4,425) (2,226) (614) 3,586
Investment and other
income (expense), net (15,327) (13,754) 38 (3,402)
----------- ----------- --------- ---------
Loss before minority
interests, income
taxes and cumulative
effect of accounting
change (44,855) (432,147) (25,179) (151,454)
Minority interests (43,035) 151,436 3,918 4,053
Benefit from income taxes 70,373 124,345 29,597 69,172
----------- ----------- --------- ---------
Income (loss) before
cumulative effect of
accounting change (17,517) (156,366) 8,336 (78,229)
Cumulative effect of
accounting change,
net of income taxes of
$3,525 - (146,983) - -
----------- ----------- --------- ---------
Net income (loss) ($17,517) ($303,349) $8,336 ($78,229)
=========== =========== ========= =========
Earnings per share:
Income (loss) before
cumulative effect
of accounting change:
Basic ($0.22) ($2.08) $0.10 ($0.99)
Diluted ($0.22) ($2.08) $0.10 ($0.99)
Cumulative effect of accounting
change, net of income taxes:
Basic - ($1.96) - -
Diluted - ($1.96) - -
Net income (loss):
Basic ($0.22) ($4.04) $0.10 ($0.99)
Diluted ($0.22) ($4.04) $0.10 ($0.99)
Weighted-average number of
shares used in calculation
of earnings per share:
Basic 80,176 75,108 81,278 78,704
Diluted 80,176 75,108 87,724 78,704
----------------------- -------------------
BALANCE SHEET DATA:
July 31, July 31,
2003 2002
----------- -----------
Cash and cash equivalents,
restricted cash, and
marketable securities $1,043,779 $1,099,966
Capital expenditures 287,127 279,410
Total assets 1,732,342 1,777,662
Total stockholders' equity 897,527 869,770
STATEMENT OF CASH FLOWS
DATA:
YEAR ENDED JULY 31,
2003 2002
---- ----
Net cash provided by (used
in) operating activities 40,846 (34,407)
Purchases of property,
plant and equipment (63,157) (49,026)
IDT CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
THREE MONTHS ENDED JULY 31, 2003
(Segment data is shown net of effect of inter-segment transactions)
----------------------------------------------------------------------
Total IDT
(In thousands) Corporation
-----------
STATEMENT OF OPERATIONS DATA
Revenues $485,739
Costs and expenses:
Direct cost of revenues (exclusive of items
shown below) 373,293
Selling, general and administrative 104,966
Depreciation and amortization 24,030
Non-cash compensation 8,524
Restructuring, severance and impairment charges 4,279
-----------
Total costs and expenses 515,092
-----------
Income (loss) from operations (29,353)
Interest income, net 4,750
Other income (expense):
Equity in loss of affiliates (614)
Investment and other income (expense), net 38
-----------
Loss before minority interests and income taxes (25,179)
Minority interests 3,918
Benefit from income taxes 29,597
-----------
Net income $8,336
===========
Wholesale Retail IDT IDT Corp-
(In thousands) Telecom Telecom Solutions Media Net2Phone orate
-------- --------- --------- ------- --------- -----
STATEMENT OF
OPERATIONS DATA
Revenues $117,296 $318,320 $21,620 $11,091 $17,412 -
Costs and
expenses:
Direct cost of
revenues
(exclusive
of items
shown below) 104,534 233,618 20,171 6,087 8,883 -
Selling,
general and
administrative 12,610 49,181 14,557 6,945 12,646 9,027
Depreciation
and
amortization 5,037 10,350 3,660 720 3,877 386
Non-cash
compensation - 271 - - 8,245 8
Restructuring,
severance and
impairment
charges - - 4,500 - (221) -
--------- --------- --------- -------- --------- ----
Total costs and
expenses 122,181 293,420 42,888 13,752 33,430 9,421
--------- --------- --------- -------- -------- -----
Income (loss)
from operations (4,885) 24,900 (21,268) (2,661) (16,018)(9,421)
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