NEWARK, N.J., March 4, 2021 /PRNewswire/ -- IDT
Corporation (NYSE: IDT) reported net income per diluted share of
$0.51 and Non-GAAP earnings per
diluted share* of $0.49 on revenue of
$340 million for the second quarter
of FY 2021, the three months ended January
31, 2021.
2Q21 HIGHLIGHTS
(Results are for 2Q21 and are
compared to 2Q20)
- Consolidated revenue increased 5% to $340 million from $324
million.
- Consolidated revenue-less-direct-cost-of-revenue increased 15%
to $71 million from $61 million, the sixth consecutive quarter of
year-over-year increases.
- National Retail Solutions (NRS), BOSS Revolution Money
Transfer, and net2phone-UCaaS subscription revenues increased by
151%, 73% and 36%, respectively.
- The Fintech and net2phone-UCaaS segments contributed 30% of the
consolidated revenue-less-direct-cost-of-revenue, compared to 19%
in the year ago quarter.
- Consolidated income from operations increased to $12.9 million from $1.3
million.
- Adjusted EBITDA* increased to $16.3
million from $7.4 million, and
Adjusted EBITDA* less capital expenditures** increased to
$12.0 million from $3.6 million.
- Earnings per diluted share increased to $0.51 from $0.04.
Non-GAAP earnings per diluted share* was $0.49 compared to $0.11.
REMARKS BY SHMUEL JONAS,
CEO
"IDT delivered another strong quarter, including significant
year-over-year increases in consolidated revenue, income from
operations and EPS.
"The quarter's results were highlighted by year-over-year
revenue expansion from our three higher margin businesses: National
Retail Solutions (NRS), BOSS Revolution Money Transfer and
net2phone-UCaaS. NRS increased revenue year-over-year by over
150% powered by sales of its payment processing services and
digital out-of-home advertising offerings. Money Transfer
revenue posted a 73% year-over-year increase, and subscription
revenue for net2phone-UCaaS' service climbed 36% with solid growth
across all regions."
CONSOLIDATED RESULTS
Results
(in millions,
except EPS)
|
2Q21
|
1Q21
|
2Q20
|
|
2Q21 - 2Q20
change (%/$)
|
Revenue
|
$340
|
$343
|
$324
|
|
+4.9%
|
Direct cost of
revenue
|
$269
|
$273
|
$263
|
|
+2.5%
|
Revenue-less-direct-cost-of-revenue
|
$71
|
$70
|
$61
|
|
+15.4%
|
Revenue-less-direct-cost-of-revenue as a percentage
of revenue**
|
20.8%
|
20.5%
|
18.9%
|
|
+190 BP
|
SG&A
expense
|
$54
|
$52
|
$54
|
|
+0.9%
|
Depreciation and
amortization
|
$4.5
|
$4.5
|
$5.2
|
|
$(0.7)
|
Severance
expense
|
$0.1
|
$0.1
|
$0.5
|
|
$(0.4)
|
Other operating gain
(expense), net
|
$1.2
|
$(0.3)
|
$(0.4)
|
|
+$1.6
|
Income from
operations
|
$12.9
|
$13.3
|
$1.3
|
|
+$11.6
|
Adjusted
EBITDA*
|
$16.3
|
$18.1
|
$7.4
|
|
+$8.9
|
Adjusted EBTIDA* less
CAPEX**
|
$12.0
|
$13.5
|
$3.6
|
|
+$8.5
|
Net income
attributable to IDT
|
$13.1
|
$8.3
|
$0.9
|
|
+$12.2
|
Diluted earnings per
share
|
$0.51
|
$0.32
|
$0.04
|
|
+$0.47
|
Non-GAAP net
income*
|
$12.7
|
$9.0
|
$2.9
|
|
+$9.8
|
Non-GAAP earnings per
diluted share*
|
$0.49
|
$0.35
|
$0.11
|
|
+$0.38
|
|
* Throughout this
release, Adjusted EBITDA, Non-GAAP net income and Non-GAAP earnings
per diluted share are Non-GAAP measures intended to provide useful
information that supplements IDT's or the relevant segment's
results in accordance with GAAP. Please refer to the
Reconciliation of Non-GAAP Financial Measures at the end of this
release for an explanation of these terms and their respective
reconciliations to the most directly comparable GAAP
measure.
|
|
**
Revenue-less-direct-cost-of-revenue as a percentage of revenue and
Adjusted EBITDA less CAPEX are key performance metrics.
Please refer to the Explanation of Key Performance Metrics at the
end of this release for an explanation of these
metrics.
|
RESULTS BY SEGMENT
(Results are for 2Q21 and are
compared to 2Q20 except where otherwise noted)
(in
millions)
|
Fintech
|
net2phone-UCaaS
|
Traditional
Communications
|
2Q21
|
1Q21
|
2Q20
|
2Q21
|
1Q21
|
2Q20
|
2Q21
|
1Q21
|
2Q20
|
Revenue
|
$18.5
|
$20.1
|
$9.7
|
$10.7
|
$9.6
|
$7.9
|
$310.5
|
$313.7
|
$306.2
|
Revenue-less-direct-cost-of-revenue
|
$12.0
|
$13.9
|
$5.3
|
$8.8
|
$7.6
|
$6.3
|
$49.7
|
$48.7
|
$49.5
|
SG&A
|
$11.8
|
$10.4
|
$8.2
|
$10.8
|
$10.4
|
$9.0
|
$29.7
|
$29.3
|
$34.2
|
(Loss) income from
operations
|
$(0.2)
|
$3.1
|
$(3.2)
|
$(3.2)
|
$(3.8)
|
$(3.8)
|
$18.7
|
$15.8
|
$10.8
|
Adjusted
EBITDA*
|
$0.2
|
$3.5
|
$(2.9)
|
$(2.0)
|
$(2.7)
|
$(2.7)
|
$20.1
|
$19.5
|
$15.3
|
Adjusted EBITDA* less
CAPEX**
|
$(1.0)
|
$2.3
|
$(3.4)
|
$(3.2)
|
$(4.4)
|
$(4.1)
|
$18.2
|
$17.8
|
$13.6
|
Fintech
Fintech comprises BOSS Revolution Money Transfer, a provider
of international money remittances and National Retail Solutions
(NRS), an operator of a nationwide point-of-sale retail network
providing payment processing, digital advertising, transaction data
and ancillary services.
The Fintech segment accounted for 5.4% and 3.0% of IDT's
consolidated revenue and 17.0% and 8.7% of IDT's consolidated
revenue-less-direct-cost-of-revenue in 2Q21 and 2Q20,
respectively.
Fintech Takeaways:
- National Retail Solutions (NRS) revenue increased 151% to
$5.2 million from $2.1 million, driven by increased sales of
payment processing services and digital-out-of-home (DOOH)
advertising offerings.
- NRS deployed 1,300 billable POS terminals during the quarter,
increasing its network to 13,700 terminals, and had 3,800 active
payment processing merchant accounts at January 31, 2021.
- BOSS Revolution Money Transfer revenue increased 73% to
$13.3 million from $7.7 million, driven primarily by increased
transaction volume. Money Transfer's top and bottom-line results
also reflect a diminished benefit from the transient FX market
conditions that positively impacted results over the past four
quarters but by and large dissipated at the end of 2Q21.
- Money Transfer transactions increased 46% to 1.8 million from
1.3 million in 2Q20.
net2phone-UCaaS
The net2phone-UCaaS segment accounted for 3.2% and 2.4% of IDT's
consolidated revenue and 12.5% and 10.3% of IDT's consolidated
revenue-less-direct-cost-of-revenue in 2Q21 and 2Q20,
respectively.
net2phone-UCaaS Takeaway:
- Subscription revenue increased 36% to $10.1 million from $7.4
million, led by growth in the U.S. market. Sequentially, the
rate of revenue growth was strongest in net2phone's South American
markets as sales in that region continued to recover from a
COVID-19-related slow down.
Traditional Communications
The Traditional Communications segment accounted for 91.4% and
94.6% of IDT's consolidated revenue and 70.5% and 81.0% of IDT's
consolidated revenue-less-direct-cost-of-revenue in 2Q21 and 2Q20,
respectively.
Traditional Communications Takeaways:
- BOSS Revolution Calling revenue was substantially unchanged at
$114 million. Minutes of use
decreased by 6% offset by a corresponding increase in revenue per
minute.
- Mobile Top-Up revenue increased 27% to $97 million from $76
million. The increase was driven by the addition of new
mobile partners and increasing demand for data-centric top-up
bundles.
- Carrier Services revenue decreased 14% to $87 million from $102
million. The decrease reflects the continued, industry-wide
decline of international voice calling, accelerated by the rise of
over the top and video conferencing particularly among corporate
users who have transitioned to work from home.
- Other revenue decreased 13% to $13
million from $15 million. Many
of the offerings within this vertical are in harvest mode.
NOTES ON FINANCIAL STATEMENTS
Consolidated results for all periods presented include corporate
overhead. Corporate G&A expense decreased to $2.0 million in 2Q21 from $2.3 million in 2Q20.
As of January 31, 2021, IDT held
$125.3 million in unrestricted cash,
cash equivalents, debt securities and current equity investments,
with no debt. Current assets totaled $341.4 million and current liabilities totaled
$326.3 million.
Net cash provided by operating activities during 2Q21 was
$6.8 million, compared to net cash
used in operating activities of $18.3
million in the year ago quarter. Exclusive of changes
in customer deposit balances at our Gibraltar-based bank, net cash provided by
operating activities during 2Q21 was $17.4
million, compared to $4.1
million in 2Q20.
Capital expenditures were $4.3
million in 2Q21 compared to $3.8
million in 2Q20.
IDT EARNINGS ANNOUNCEMENT & SUPPLEMENTAL
INFORMATION
This release is available for download in the "Investors &
Media" section of the IDT Corporation website
(https://www.idt.net/investors-and-media) and has been filed on a
current report (Form 8-K) with the SEC.
IDT will host an earnings conference call beginning at
5:30 PM Eastern today with
management's discussion of results, outlook and strategy followed
by Q&A with investors.
To listen to the call and participate in the Q&A, dial
toll-free 1-888-348-8417 (from U.S.) or 1-412-902-4243
(international) and request the IDT Corporation call.
A replay of the conference call will be available approximately
three hours after the call concludes through March 11, 2021. To access the call replay, dial
toll free 1-844-512-2921 (from U.S.) or 1-412-317-6671
(international) and provide this replay number: 10151915. A
replay will also be accessible via streaming audio at the IDT
investor relations website.
ABOUT IDT:
IDT Corporation (NYSE: IDT) is a global provider of fintech,
cloud communications and traditional communications services.
We make it easier for families to connect, support and share across
international borders. We also enable businesses to transact and
communicate with their customers with enhanced intelligence and
insight.
Our BOSS Revolution branded money transfer and international
calling services make sending money and speaking with friends and
family around the world convenient and reliable. National
Retail Solutions' (NRS) point-of-sale retail network enables
independent retailers to operate and process transactions more
effectively while providing advertisers and consumer marketers with
unprecedented reach into underserved consumer markets.
net2phone's unified communications as a service solution provides
businesses with intelligently integrated cloud communications and
collaboration solutions across channels and devices. Our IDT
Carrier Services and IDT Express wholesale offerings enable
communications companies to provision and manage international
voice and SMS services.
All statements above that are not purely about historical
facts, including, but not limited to, those in which we use the
words "believe," "anticipate," "expect," "plan," "intend,"
"estimate," "target" and similar expressions, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. While these forward-looking statements
represent our 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. Our filings with the SEC provide detailed
information on such statements and risks, and should be consulted
along with this release. To the extent permitted under applicable
law, IDT assumes no obligation to update any forward-looking
statements.
IDT
CORPORATION
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
January 31,
2021
|
July 31,
2020
|
|
(Unaudited)
|
|
|
(in
thousands)
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
79,481
|
$
84,860
|
Restricted cash and
cash equivalents
|
109,858
|
116,362
|
Debt
securities
|
21,501
|
18,363
|
Equity
investments
|
24,346
|
5,964
|
Trade accounts
receivable, net of allowance for doubtful accounts of $6,909 at
January 31, 2021 and $6,085 at July 31, 2020
|
51,616
|
44,166
|
Prepaid
expenses
|
34,671
|
33,115
|
Other current
assets
|
19,926
|
19,302
|
|
|
|
Total current
assets
|
341,399
|
322,132
|
Property, plant and
equipment, net
|
30,641
|
30,061
|
Goodwill
|
14,843
|
12,858
|
Other intangibles,
net
|
6,289
|
3,959
|
Equity
investments
|
10,441
|
8,833
|
Operating lease
right-of-use assets
|
8,794
|
9,490
|
Deferred income tax
assets, net
|
2,832
|
8,512
|
Other
assets
|
9,332
|
8,905
|
|
|
|
Total
assets
|
$
424,571
|
$
404,750
|
|
|
|
Liabilities and
equity
|
|
|
Current
liabilities:
|
|
|
Trade accounts
payable
|
$
36,368
|
$
31,147
|
Accrued
expenses
|
126,425
|
125,544
|
Deferred
revenue
|
39,189
|
40,114
|
Customer
deposits
|
109,673
|
115,992
|
Other current
liabilities
|
14,646
|
12,073
|
|
|
|
Total current
liabilities
|
326,301
|
324,870
|
Operating lease
liabilities
|
6,514
|
7,353
|
Other
liabilities
|
1,340
|
1,388
|
|
|
|
Total
liabilities
|
334,155
|
333,611
|
Commitments and
contingencies
|
|
|
Equity:
|
|
|
IDT Corporation
stockholders' equity:
|
|
|
Preferred stock, $.01
par value; authorized shares—10,000; no shares issued
|
—
|
—
|
Class A common
stock, $.01 par value; authorized shares—35,000; 3,272 shares
issued and 1,574 shares outstanding at January 31, 2021 and July
31, 2020
|
33
|
33
|
Class B common stock,
$.01 par value; authorized shares—200,000; 26,343 and 25,961 shares
issued and 24,151 and 24,345 shares outstanding at January 31, 2021
and July 31, 2020, respectively
|
263
|
260
|
Additional paid-in
capital
|
276,871
|
277,443
|
Treasury stock, at
cost, consisting of 1,698 and 1,698 shares of Class A common stock
and 2,192 and 1,616 shares of Class B common stock at January 31,
2021 and July 31, 2020, respectively
|
(60,413)
|
(56,221)
|
Accumulated other
comprehensive loss
|
(8,957)
|
(7,410)
|
Accumulated
deficit
|
(117,937)
|
(139,333)
|
|
|
|
Total IDT Corporation
stockholders' equity
|
89,860
|
74,772
|
Noncontrolling
interests
|
556
|
(3,633)
|
|
|
|
Total
equity
|
90,416
|
71,139
|
|
|
|
Total liabilities and
equity
|
$
424,571
|
$
404,750
|
IDT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months
Ended
January 31,
|
Six Months
Ended
January 31,
|
|
2021
|
2020
|
2021
|
2020
|
|
(in thousands,
except per share data)
|
|
|
Revenues
|
$
339,766
|
$
323,890
|
$
683,191
|
$
664,089
|
Costs and
expenses:
|
|
|
|
|
Direct cost of
revenues (exclusive of depreciation and amortization)
|
269,145
|
262,716
|
542,319
|
542,177
|
Selling, general and
administrative (i)
|
54,298
|
53,789
|
106,442
|
107,223
|
Depreciation and
amortization
|
4,464
|
5,184
|
8,956
|
10,479
|
Severance
|
143
|
486
|
255
|
1,112
|
|
|
|
|
|
Total costs and
expenses
|
328,050
|
322,175
|
657,972
|
660,991
|
Other operating gain
(expense), net
|
1,207
|
(392)
|
955
|
(3,168)
|
|
|
|
|
|
Income (loss) from
operations
|
12,923
|
1,323
|
26,174
|
(70)
|
Interest income,
net
|
139
|
195
|
98
|
467
|
Other income,
net
|
3,170
|
550
|
1,792
|
785
|
|
|
|
|
|
Income before income
taxes
|
16,232
|
2,068
|
28,064
|
1,182
|
Provision for income
taxes
|
(3,027)
|
(1,164)
|
(6,444)
|
(1,700)
|
|
|
|
|
|
Net income
(loss)
|
13,205
|
904
|
21,620
|
(518)
|
Net (income) loss
attributable to noncontrolling interests
|
(97)
|
28
|
(224)
|
(63)
|
|
|
|
|
|
Net income (loss)
attributable to IDT Corporation
|
$
13,108
|
$
932
|
$
21,396
|
$
(581)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to IDT Corporation common
stockholders:
|
|
|
|
|
Basic
|
$
0.52
|
$
0.04
|
$
0.84
|
$
(0.02)
|
|
|
|
|
|
Diluted
|
$
0.51
|
$
0.04
|
$
0.83
|
$
(0.02)
|
|
|
|
|
|
Weighted-average
number of shares used in calculation of earnings (loss) per
share:
|
|
|
|
|
Basic
|
25,362
|
26,320
|
25,448
|
26,300
|
|
|
|
|
|
Diluted
|
25,713
|
26,451
|
25,787
|
26,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Stock-based
compensation included in selling, general and administrative
expenses
|
$
434
|
$
1,167
|
$
940
|
$
2,531
|
|
|
|
|
|
IDT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
Six Months
Ended
January
31,
|
|
2021
|
2020
|
|
(in
thousands)
|
Operating
activities
|
|
|
Net income
(loss)
|
$
21,620
|
$
(518)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
Depreciation and
amortization
|
8,956
|
10,479
|
Deferred income
taxes
|
5,881
|
1,587
|
Provision for doubtful
accounts receivable
|
1,069
|
1,466
|
Stock-based
compensation
|
940
|
2,531
|
Other
|
(17)
|
(412)
|
Change in assets and
liabilities:
|
|
|
Trade accounts
receivable
|
(7,330)
|
6,253
|
Prepaid expenses,
other current assets and other assets
|
4,965
|
(9,315)
|
Trade accounts
payable, accrued expenses, other current liabilities, and other
liabilities
|
1,631
|
(11,488)
|
Customer deposits at
IDT Financial Services Limited (Gibraltar-based bank)
|
(11,136)
|
(20,613)
|
Deferred
revenue
|
(968)
|
(3,260)
|
|
|
|
Net cash provided by
(used in) operating activities
|
25,611
|
(23,290)
|
Investing
activities
|
|
|
Capital
expenditures
|
(8,825 )
|
(7,656)
|
Payments for
acquisitions, net of cash acquired
|
(2,388)
|
(450)
|
Purchase of Rafael
Holdings, Inc. Class B common stock and warrant
|
(5,000)
|
—
|
Purchases of debt
securities and equity investments
|
(34,436)
|
(8,994)
|
Proceeds from
maturities and sales of debt securities and redemptions of equity
investments
|
11,575
|
2,672
|
|
|
|
Net cash used in
investing activities
|
(39,074)
|
(14,428)
|
Financing
activities
|
|
|
Distributions to
noncontrolling interests
|
(418 )
|
(470)
|
Repayment of other
liabilities
|
(56)
|
(79)
|
Repayments of
borrowings under revolving credit facility
|
—
|
(273)
|
Proceeds from
borrowings under revolving credit facility
|
—
|
273
|
Proceeds from exercise
of stock options
|
686
|
276
|
Repurchases of Class B
common stock
|
(4,192 )
|
(266)
|
|
|
|
Net cash used in
financing activities
|
(3,980)
|
(539)
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted cash and
cash equivalents
|
5,560
|
14,152
|
|
|
|
Net decrease in cash,
cash equivalents, and restricted cash and cash
equivalents
|
(11,883)
|
(24,105)
|
Cash, cash
equivalents, and restricted cash and cash equivalents at beginning
of period
|
201,222
|
257,199
|
|
|
|
Cash, cash
equivalents, and restricted cash and cash equivalents at end of
period
|
$
189,339
|
$
233,094
|
|
|
|
|
|
|
Supplemental
schedule of non-cash investing and financing
activities
|
|
|
Liabilities incurred
for acquisition
|
$
393
|
$
375
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
for the
Second Quarter Fiscal 2021 and 2020
In addition to disclosing financial results that are determined
in accordance with generally accepted accounting principles in
the United States of America
(GAAP), IDT also disclosed, for 2Q21, 1Q21, and 2Q20, Adjusted
EBITDA, non-GAAP net income, and non-GAAP earnings per diluted
share, all of which are non-GAAP measures. 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.
IDT's measure of Adjusted EBITDA consists of revenue less direct
cost of revenues and selling, general and administrative expense.
Another way of calculating Adjusted EBITDA is to start with income
(loss) from operations, add depreciation and amortization,
severance expense, and other operating expense, and deduct other
operating gains.
IDT's measure of non-GAAP net income starts with net income
(loss) in accordance with GAAP and adds severance expense,
stock-based compensation, and other operating expense, and deducts
other operating gains.
IDT's measure of non-GAAP earnings per diluted share is
calculated by dividing non-GAAP net income by the diluted
weighted-average shares.
These additions and subtractions are non-cash and/or non-routine
items in the relevant fiscal 2021 and fiscal 2020 periods.
Management believes that IDT's Adjusted EBITDA, non-GAAP net
income, and non-GAAP earnings per diluted share are measures which
provide useful information to both management and investors by
excluding certain expenses and non-routine gains and losses that
may not be indicative of IDT'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, non-GAAP net
income, and non-GAAP earnings per diluted share to evaluate
operating performance in relation to IDT's competitors. Disclosure
of these financial measures 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. In addition, IDT 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.
Management refers to Adjusted EBITDA, as well as the GAAP
measures income (loss) from operations and net income (loss), on a
segment and/or consolidated level to facilitate internal and
external comparisons to the segments' and IDT'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 capitalized in prior periods. IDT's Adjusted
EBITDA, which is exclusive of depreciation and amortization, is a
useful indicator of its current performance.
Severance expense is excluded from the calculation of Adjusted
EBITDA, non-GAAP net income, and non-GAAP earnings per diluted
share. Severance expense is reflective of decisions made by
management in each period regarding the aspects of IDT's and its
segments' businesses to be focused on in light of changing market
realities and other factors. 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 IDT's core
and continuing operations.
Other operating gain (expense), net, which is a component of
income (loss) from operations, is excluded from the calculation of
Adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per
diluted share. Other operating gain (expense), net includes a gain
from the sale of IDT's rights under a class action lawsuit, expense
for the indemnification of a net2phone cable telephony customer
related to patent infringement claims brought against the customer,
legal fees related to Straight Path Communications Inc.'s
stockholders' putative class action and derivative complaint,
expense for other legal matters, and the write-off of certain
assets. From time-to-time, IDT may have gains or incur costs
related to non-routine legal and tax matters, and write-off assets,
however, these various items generally do not occur each quarter.
IDT believes the gain and losses from these non-routine matters are
not components of IDT's or the relevant segment's core operating
results.
The other calculation of Adjusted EBITDA consists of revenue
less direct cost of revenues and selling, general and
administrative 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.
Stock-based compensation recognized by IDT and other companies
may not be comparable because of the variety of types of awards as
well as the various valuation methodologies and subjective
assumptions that are permitted under GAAP. Stock-based compensation
is excluded from IDT's calculation of non-GAAP net income and
non-GAAP earnings per diluted share because management believes
this allows investors to make more meaningful comparisons of the
operating results per share of IDT's core business with the results
of other companies. However, stock-based compensation will continue
to be a significant expense for IDT for the foreseeable future and
an important part of employees' compensation that impacts their
performance.
Adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per
diluted share should be considered in addition to, not as a
substitute for, or superior to, income (loss) from operations, cash
flow from operating activities, net income (loss), basic and
diluted earnings per share or other measures of liquidity and
financial performance prepared in accordance with GAAP. In
addition, IDT's measurements of Adjusted EBITDA, non-GAAP net
income, and non-GAAP earnings per diluted share may not be
comparable to similarly titled measures reported by other
companies.
Following are reconciliations of Adjusted EBITDA, non-GAAP net
income, and non-GAAP earnings per diluted share to the most
directly comparable GAAP measure, which are, (a) for Adjusted
EBITDA, income (loss) from operations for IDT's reportable segments
and net income (loss) for IDT on a consolidated basis, (b) for
non-GAAP net income, net income (loss), and (c) for non-GAAP
earnings per diluted share, diluted earnings per share.
IDT
Corporation
Reconciliation of
Adjusted EBITDA to Net Income
(unaudited) in
millions. Figures may not foot or cross-foot due to rounding
to millions
|
|
|
Total IDT
Corporation
|
|
Traditional
Communications
|
net2phone-
UCaaS
|
Fintech
|
Corporate
|
Three Months Ended
January 31, 2021
(2Q21)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
16.3
|
|
$
20.1
|
$
(2.0)
|
$
0.2
|
$
(2.0)
|
Subtract
(Add):
|
|
|
|
|
|
|
Depreciation and
amortization
|
4.5
|
|
2.8
|
1.2
|
0.4
|
-
|
Severance
expense
|
0.1
|
|
0.1
|
-
|
-
|
-
|
Other operating
(gain) expense, net
|
(1.2)
|
|
(1.6)
|
-
|
-
|
0.3
|
Income (loss) from
operations
|
12.9
|
|
$
18.7
|
$
(3.2)
|
$
(0.2)
|
$
(2.3)
|
Interest
income, net
|
0.1
|
|
|
|
|
|
Other
income, net
|
3.2
|
|
|
|
|
|
Income before income
taxes
|
16.2
|
|
|
|
|
|
Provision for income taxes
|
(3.0)
|
|
|
|
|
|
Net income
|
13.2
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
(0.1)
|
|
|
|
|
|
Net income
attributable to IDT Corporation
|
$
13.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total IDT
Corporation
|
|
Traditional
Communications
|
net2phone-
UCaaS
|
Fintech
|
Corporate
|
Three Months Ended
October 31, 2020
(1Q21)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
18.1
|
|
$
19.5
|
$
(2.7)
|
$
3.5
|
$
(2.1)
|
Subtract
(Add):
|
|
|
|
|
|
|
Depreciation and
amortization
|
4.5
|
|
3.0
|
1.1
|
0.4
|
-
|
Severance
expense
|
0.1
|
|
0.1
|
-
|
-
|
-
|
Other operating
expense (income), net
|
0.3
|
|
0.6
|
-
|
-
|
(0.3)
|
Income (loss) from
operations
|
13.3
|
|
$
15.8
|
$
(3.8)
|
$
3.1
|
$
(1.9)
|
Interest
expense, net
|
-
|
|
|
|
|
|
Other
expense, net
|
(1.4)
|
|
|
|
|
|
Income before income
taxes
|
11.8
|
|
|
|
|
|
Provision for income taxes
|
(3.8)
|
|
|
|
|
|
Net income
|
8.0
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
(0.1)
|
|
|
|
|
|
Net income
attributable to IDT Corporation
|
$
7.9
|
|
|
|
|
|
|
|
|
|
|
|
|
IDT
Corporation
|
|
Reconciliation of
Adjusted EBITDA to Net Income
|
|
(unaudited) in
millions. Figures may not foot or cross-foot due to rounding
to millions.
|
|
|
|
|
Total IDT
Corporation
|
|
Traditional
Communications
|
net2phone-
UCaaS
|
Fintech
|
Corporate
|
Three Months Ended
January 31, 2020
(2Q20)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
7.4
|
|
$
15.3
|
$
(2.7)
|
$
(2.9)
|
$
(2.3)
|
Subtract:
|
|
|
|
|
|
|
Depreciation
and amortization
|
5.2
|
|
3.9
|
1.0
|
0.3
|
-
|
Severance
expense
|
0.5
|
|
0.5
|
-
|
-
|
-
|
Other operating
expense, net
|
0.4
|
|
0.2
|
0.1
|
-
|
0.2
|
Income (loss) from
operations
|
1.3
|
|
$
10.8
|
$
(3.8)
|
$
(3.2)
|
$
(2.5)
|
Interest
income, net
|
0.2
|
|
|
|
Other
income, net
|
0.6
|
|
|
|
Income before income
taxes
|
2.1
|
|
|
|
Provision for income
taxes
|
(1.2)
|
|
|
|
Net income
|
0.9
|
|
|
|
Net loss attributable
to noncontrolling interests
|
-
|
|
|
|
Net income
attributable to IDT Corporation
|
$
0.9
|
|
|
|
|
|
|
|
|
|
|
|
IDT
Corporation
|
Reconciliations of
Net Income to Non-GAAP Net Income and Earnings per
share to Non-GAAP Earnings per diluted
share
|
(unaudited) in
millions, except per share data. Figures may not foot due to
rounding to millions.
|
|
|
2Q21
|
1Q21
|
2Q20
|
|
|
|
|
Net income
|
$
13.2
|
$
8.4
|
$
0.9
|
Adjustments (add)
subtract:
|
|
|
|
Stock-based
compensation
|
(0.4)
|
(0.5)
|
(1.2)
|
Severance
expense
|
(0.1)
|
(0.1)
|
(0.5)
|
Other operating gain
(expense), net
|
1.2
|
(0.3)
|
(0.4)
|
Total
adjustments
|
0.7
|
(0.9)
|
(2.0)
|
Income tax effect of
total adjustments
|
(0.2)
|
0.3
|
-
|
|
(0.5)
|
0.6
|
2.0
|
Non-GAAP net
income
|
$
12.7
|
$
9.0
|
$
2.9
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
$
0.52
|
$
0.32
|
$
0.04
|
Total
adjustments
|
(0.02)
|
0.03
|
0.07
|
Non-GAAP -
basic
|
$
0.50
|
$
0.35
|
$
0.11
|
|
|
|
|
Weighted-average
number of shares used in calculation of basic earnings per
share
|
25.4
|
25.5
|
26.3
|
|
|
|
|
Diluted
|
$
0.51
|
$
0.32
|
$
0.04
|
Total
adjustments
|
(0.02)
|
0.03
|
0.07
|
Non-GAAP -
diluted
|
$
0.49
|
$
0.35
|
$
0.11
|
|
|
|
|
Weighted-average
number of shares used in calculation of diluted earnings per
share
|
25.7
|
25.9
|
26.5
|
|
|
|
|
Explanation of Key Performance Metrics
Revenue less direct cost of revenue as a percentage of revenue
is a financial metric that measures changes in our revenue relative
to changes in direct cost of revenue during the same period.
Revenue and direct cost of revenue in this metric are from IDT's
consolidated statements of operations in accordance with GAAP.
Revenue less direct cost of revenue as a percentage of revenue is a
ratio in which revenue less direct cost of revenue is the numerator
and revenue are the denominator. It is useful for monitoring trends
in the generation of revenue as well as for evaluating the net
contribution of IDT's revenue.
Adjusted EBITDA less CAPEX is also a financial metric, which is
calculated by deriving Adjusted EBITDA as described above and
subtracting capital expenditures in accordance with GAAP as
reported in the consolidated statements of cash flows. Management
uses Adjusted EBITDA less CAPEX to evaluate the level of capital
investment needed to support operations, and as a reasonable proxy
for the cash generated by IDT's businesses. Because IDT's capital
expenditures reflect an allocation of capital for longer term
growth, IDT seeks to strike an appropriate balance between
near-term and long-term financial performance as reflected in
Adjusted EBITDA less CAPEX. IDT's measurement of Adjusted EBITDA
less CAPEX may not be comparable to similarly titled measures
reported by other companies.
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SOURCE IDT Corporation