f8k060809_idt.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 8, 2009
IDT
CORPORATION
(Exact
name of registrant as specified in its charter)
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Delaware
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1-16371
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22-3415036
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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520
Broad Street Newark, New Jersey
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07102
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (973) 438-1000
Not
Applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 2.02.
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Results
of Operations and Financial
Condition
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On June
8, 2009, IDT Corporation (the “Registrant”) posted an earnings release to the
investor relations page of its website (www.idt.net)
announcing its results of operations for its fiscal quarter ended April 30,
2009. A copy of the earnings release concerning the foregoing results is
furnished herewith as Exhibit 99.1 and is incorporated herein by
reference.
The
Registrant is furnishing the information contained in this Report, including
Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the
Securities and Exchange Commission (the “SEC”). This information shall not be
deemed to be “filed” with the SEC or incorporated by reference into any other
filing with the SEC unless otherwise expressly stated in such filing. In
addition, this Report and the earnings release contain statements intended as
“forward-looking statements” that are subject to the cautionary statements about
forward-looking statements set forth in the earnings release.
Non-GAAP
Financial Measures
The
Registrant’s earnings release includes financial information prepared in
conformity with generally accepted accounting principles in the United States of
America (“GAAP”), as well as Adjusted EBITDA, which is a non-GAAP measure that
contains certain adjustments to net loss or (loss) income from operations to
eliminate the impact of certain items that management believes do not truly
reflect the Registrant’s performance. The earnings release furnished
herewith reconciles Adjusted EBITDA to net loss on a Registrant consolidated
basis, and to (loss) income from operations in accordance with
GAAP.
Generally,
a non-GAAP financial measure is a numerical measure of a company’s performance,
financial position, or cash flows that either excludes or includes amounts that
are not normally excluded or included in the most directly comparable measure
calculated and presented in accordance with GAAP. The Registrant’s measure of
Adjusted EBITDA consists of gross profit less selling, general and
administrative expense, research and development expense and bad debt
expense. Another way of calculating Adjusted EBITDA is to start with
loss from operations and add (1) depreciation and amortization, (2)
restructuring charges, and (3) impairments, and deduct (1) the gain
on the sale of an interest in AMSO, LLC in the third quarter of
fiscal 2009 and (2) the arbitration award income in the first quarter of fiscal
2008. These additions and deductions are non-cash and/or
non-recurring items in the relevant fiscal 2009 and fiscal 2008
periods.
Management
believes that the Registrant’s Adjusted EBITDA measure provides useful
information to both management and investors by excluding certain expenses and
non-recurring gains or losses that may not be indicative of the Registrant’s or
the relevant segment’s core operating results. Management uses
Adjusted EBITDA, among other measures, as a relevant indicator of core
operational strengths in its financial and operational decision
making. In addition, management uses Adjusted EBITDA to evaluate
operating performance in relation to the Registrant’s competitors. Disclosure of
this financial measure may be useful to investors in evaluating performance and
allows for greater transparency to the underlying supplemental information used
by management in its financial and operational decision-making. Adjusted EBITDA
may also be an indicator of the strength and performance of the Registrant’s and
the segment’s ongoing business operations, including the ability to fund capital
expenditures, and meet working capital needs from current operations (as opposed
to cash resources), and to incur and service debt. In addition, the Registrant
has historically reported similar financial measures and believes such measures
are commonly used by readers of financial information in assessing performance,
therefore the inclusion of comparative numbers provides consistency in financial
reporting at this time.
Management
refers to Adjusted EBITDA, as well as the GAAP measures gross profit, loss from
operations and net loss, on a segment and/or Registrant consolidated level to
facilitate internal and external comparisons to the segments’ and the
Registrant's historical operating results, in making operating decisions, for
budget and planning purposes, and to form the basis upon which management is
compensated.
While
depreciation and amortization are considered operating costs under GAAP, these
expenses primarily represent the non-cash current period allocation of costs
associated with long-lived assets acquired or constructed in prior periods.
While the Registrant’s business may be capital intensive, the Registrant has
significantly reduced its capital expenditures to date and going forward intends
to continue to reduce its levels of capital expenditures. Accordingly, the
Registrant’s telecommunications network is less costly than in the past,
therefore exclusion of depreciation and amortization charges from the
Registrant’s operating results is a useful indicator of its current
performance.
The
restructuring and impairment charges are also excluded in the calculation of
Adjusted EBITDA. Restructuring charges are substantially
non-recurring and are reflective of decisions made by management in each period
regarding the aspects of the Registrant’s and its segments’ businesses to be
focused on in light of changing market realities and other factors. Management
believes the restructuring charges will decline in the future. Impairments are
primarily dictated by events and circumstances outside the control of management
that trigger an impairment analysis. While there may be similar charges in other
periods, the nature and magnitude of these charges can fluctuate markedly and do
not reflect the performance of the Registrant’s core and continuing
operations.
Finally,
the gain on the sale of an interest in AMSO, LLC in the first quarter of fiscal
2009 and arbitration award income in the first quarter of fiscal 2008, which are
components of loss from operations, are excluded from the calculation of
Adjusted EBITDA. Although the Registrant sells or disposes of
businesses and sells interests in businesses from time-to-time and has a number
of matters under litigation, such sales, disposals and/or legal awards or
settlements do not occur each quarter nor are they part of the Registrant’s or
the relevant segment’s core operating results.
The other
calculation of the Registrant’s Adjusted EBITDA consists of gross profit less
selling, general and administrative expense, research and development expense
and bad debt expense. As the other excluded items are not reflected
in this calculation, they are excluded automatically and there is no need to
make additional adjustments. This calculation results in the same
Adjusted EBITDA amount and its utility and significance is as explained
above.
Adjusted
EBITDA should be considered in addition to, not as a substitute for, or superior
to, gross profit, loss from operations, cash flow from operating activities, net
loss or other measures of liquidity and financial performance prepared in
accordance with GAAP. In addition, the Registrant’s measurement of Adjusted
EBITDA may not be comparable to similarly titled measures reported by other
companies.
The
information contained in Item 2.02 of this Report is hereby incorporated by
reference.
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Item 9.01.
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Financial
Statements and Exhibits
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Exhibit No.
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Document
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99.1
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Earnings
Release, dated June 8, 2009, reporting the results of operations for IDT
Corporation’s fiscal quarter ended April 30,
2009.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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IDT
CORPORATION
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By:
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/s/
James A. Courter
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Name:
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James
A. Courter
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Title:
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Chief
Executive Officer
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| Dated:
June 8,
2009 |
EXHIBIT
INDEX
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Exhibit No.
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Document
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99.1
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Earnings
Release, dated June 8, 2009, reporting the results of operations for IDT
Corporation’s fiscal quarter ended April 30,
2009.
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