IDT Reports Second Quarter FY 99 Results; Company Posts Record $160.7 Million in Revenues, EBITDA of $10.4 Million, and EPS of $0.06
HACKENSACK, N.J.--(BUSINESS WIRE)--March 3, 1999--IDT Corporation
(NASDAQ:IDTC) today reported revenues of $160.7 million for the second quarter ended January
31, 1999, a 126% increase over the same period year-ago revenues of $71.0 million. EBITDA for
the second quarter was $10.4 million, or $0.29 per diluted share, an 85% increase on a gross basis
over same quarter year-ago EBITDA of $5.6 million or $0.21 per diluted share. Net income for the
quarter was $2.1 million or $0.06 per diluted share as compared with the same quarter year-ago net
income of $3.2 million or $0.12 per diluted share.
A quarter to quarter comparison shows a 21% revenue increase to $160.7 million from $133.3
million in the prior quarter. EBITDA in the second quarter decreased 26% sequentially to $10.4
million or $0.29 per diluted share as compared to $15.1 million or $0.42 per diluted share in the prior
quarter. Net income for the quarter was $2.1 million or $0.06 per diluted share as compared to the
prior quarter's net income of $4.9 million or $0.14 per share.
As announced in January, the Company has strengthened its management team with the addition of
several key personnel to focus exclusively on international network expansion and infrastructure
development.
"This was a record quarter for the Company with regard to top line results, and we are continuing
to focus our efforts and resources on further expanding our international network infrastructure to
support the overwhelming demand for our services," said Howard Jonas, CEO of IDT. "Our ability
to terminate more traffic on net should only increase our profitability and competitive positioning. We
believe we are well on our way to achieving these goals."
TELECOMMUNICATIONS
IDT's telecommunications operations continued its rapid pace of growth. Telecom revenues for the
quarter increased to $149.2 million, up 137% over same period year-ago revenues of $63.0 million
and a 21% sequential increase over revenues of $123.7 million for the prior quarter. Telecom gross
margins in this quarter were 19.9% as compared to 23.2% for the prior quarter. Telecom minutes of
use grew to approximately 685 million minutes for the quarter, a 325% increase over 161 million
minutes of use in the same quarter year ago, and a 38% increase over the prior quarter's 496 million
minutes.
The Company has seen significant growth in its wholesale carrier services division, which reported
revenues of $54.8 million, up 13% over the prior quarter's revenues of $48.4 million, and a 43% year
over year improvement.
This quarter, the Company announced that it has signed agreements to establish fiber-optic
connections with France Telecom (NYSE: FTE), Deutsche Telekom (NYSE: DT), and Telefonica
(NYSE: TEF). This will enable the Company to provide better access and lower termination rates for
its international long distance to a number of countries throughout Europe. The Company is obtaining
licenses and building facilities in markets in Europe, Asia, Latin America, and North America.
Revenues from IDT's retail division saw strong growth over the past quarter. In particular,
pre-paid calling card revenues for the second quarter increased to $86 million, up 375% from $18.1
in the same quarter year ago, and up 28% sequentially from $67.3 million in revenues for the prior
quarter.
The Company recently announced two deals with "M&M's"O Chocolate Candies and Wells
Fargo to provide specially-branded pre-paid phone cards. The Company expects to have the
"M&M's"O Chocolate Candies cards on the market by the end of the month, and has already begun
offering pre-paid phone card and long distance services to Wells Fargo's business and credit card
customers.
INTERNET TELEPHONY
Revenues for IDT's Internet telephony division in the second quarter were $7.2 million, up 167%
over same-period year-ago revenues of $2.7 million, and a 36% sequential increase over revenues of
$5.3 million for the prior quarter. Total Net2Phone minutes of use grew to 53 million minutes for the
quarter, a 54% increase over the prior quarter's 34.5 million minutes.
INTERNET
IDT's Internet division reported revenues to $4.3 million, which were equal to prior quarter's
revenues of $4.3 million, and a 17% decrease from $5.2 million in the same quarter year-ago.
FINANCIAL DETAILS
Gross margins for the second quarter were 21.2% as compared to 24.2% for the prior quarter.
SG&A for the quarter was $23.8 million as compared to the same quarter year-ago SG&A of $13.9
million, and $17.1 million last quarter. SG&A, as a percentage of revenues, was 14.8% for the
quarter, as compared to 19.6% in the same quarter year-ago, and 12.8% for the prior quarter. The
increase in SG&A was due to increased spending and marketing for the Company's retail services.
EBITDA margins for the second quarter were 6.5% as compared to 11.4% in the prior quarter.
Operating margins were 2.6%, as compared to 7.3% in the prior quarter. Depreciation for the
quarter was $6.3 million as compared to $2.0 million in the same quarter year-ago, reflecting
increased spending on domestic and international network expansion. As a percentage of revenues,
depreciation was 3.9% of revenues for the quarter as compared to 2.9% in the same quarter
year-ago, and 4.1% for the prior quarter.
The Company finished the quarter with $140 million in cash, which it believes is sufficient to fund
ongoing capital expenditures. Shares used to calculate earnings per share for the second quarter were
35.5 million.
IDT CORPORATION
IDT is a leading emerging multinational carrier that combines its position as an international
telecommunications operator, its experience as an Internet service provider and its leading position in
Internet telephony to provide a broad range of telecommunications services to its wholesale and retail
customers worldwide. The company provides its customers with integrated and competitively priced
international and domestic long distance, pre-paid calling cards, Internet access and, through its
Net2Phone product offerings, Internet telephony services including Net2Phone Direct, Net2Fax, and
Click2Talk.
Except for historical information, all of the expectations and assumptions contained in the foregoing
are forward-looking statements involving risks and uncertainties. Important factors that could cause
actual results to differ materially from such forward-looking statements, include, but are not limited to,
the competitive environment for Internet telephony, changes of rates of all related telco rates and
services, legislation that may affect the Internet Telephony industry, IDT's ability to operate the
services described on a large scale commercial level. For additional information regarding these and
other risks associated with the Company's business refer to the Company's reports filed with the
SEC.
IDT CORPORATION
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
SIX MONTHS ENDED
01-31-99 01-31-98
STATEMENT OF OPERATIONS DATA
REVENUES 294,018,907 125,703,766
COST OF SALES 227,665,779 92,309,811
SG&A 40,806,086 23,706,415
MINORITY INTEREST 2,185,159 0
DEPRECIATION & AMORTIZATION 11,735,189 3,787,573
----------- -----------
TOTAL EXPENSES 282,392,213 119,803,799
INCOME (LOSS) FROM
OPERATIONS 11,626,694 5,899,967
OTHER (NET) 143,501 (783,393)
----------- -----------
NET INCOME (LOSS) BEFORE
INCOME TAXES 11,770,195 5,116,574
INCOME TAXES 4,825,780 0
=========== ===========
NET INCOME 6,944,415 5,116,574
EBITDA 25,547,042 9,687,540
NET INCOME (LOSS) PER SHARE
- WEIGHTED AVE. $0.20 $ 0.20
WEIGHTED AVE. NO. OF SHARES
USED IN CALCULATION OF
EPS - DILUTED 35,476,587 26,087,362
NET INCOME (LOSS) PER SHARE
- WEIGHTED AVE. $0.21 $ 0.23
WEIGHTED AVE. NO. OF SHARES
USED IN CALCULATION OF
EPS - BASIC 33,265,965 22,638,022
THREE MONTHS ENDED
01-31-99 01-31-98
STATEMENT OF OPERATIONS DATA
REVENUES 160,741,076 70,952,788
COST OF SALES 126,591,672 51,448,794
SG&A 23,750,522 13,871,468
MINORITY INTEREST 561,747 0
DEPRECIATION & AMORTIZATION 6,295,720 2,042,439
----------- ----------
TOTAL EXPENSES 157,199,661 67,362,701
INCOME (LOSS) FROM OPERATIONS 3,541,415 3,590,087
OTHER (NET) (62,154) (436,458)
----------- ----------
NET INCOME (LOSS) BEFORE INCOME
TAXES 3,479,261 3,153,629
INCOME TAXES 1,426,497 0
----------- ----------
NET INCOME 2,052,764 3,153,629
=========== ==========
EBITDA 10,398,882 5,632,526
NET INCOME (LOSS) PER SHARE
- WEIGHTED AVE. $ 0.06 $ 0.12
WEIGHTED AVE. NO. OF SHARES
USED IN CALCULATION OF
EPS - DILUTED 35,343,627 27,053,511
NET INCOME (LOSS) PER SHARE
- WEIGHTED AVE. $ 0.06 $ 0.14
WEIGHTED AVE. NO. OF SHARES
USED IN CALCULATION OF
EPS - BASIC 33,332,371 23,330,274
BALANCE SHEET DATA:
01-31-99 07-31-98
CASH, CASH EQUIVALENTS &
S/T INVEST. 139,906,666 175,592,286
FIXED ASSETS (NET) 100,059,173 75,332,476
TOTAL ASSETS 450,591,001 417,196,204
TOTAL STOCKHOLDERS EQUITY 247,730,515 238,748,072
--30--sdg/ny* sgs
CONTACT: IDT Corporation, Hackensack
IDT Public Relations
Sarah Hofstetter
201-928-2882
or
IDT Investor Relations
Janine Kutliroff
201-928-4391
KEYWORD: NEW JERSEY
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS TELECOMMUNICATIONS
INTERACTIVE/MULTIMEDIA/INTERNET EARNINGS |
