IDT: A Company in Transition

"IDT is a company in transition," says IDT Corp. CEO Jim Courter. No kidding. Basically, IDT is harvesting the cash flow from its declining U.S. calling card business and consumer phone services division and investing in a somewhat bewildering collection of other businesses.

In fact, IDT Corporation now describes itself multinational holding company. IDT Telecom, the original company business, represents most of IDT's revenue. IDT Telecom sells prepaid and rechargeable calling cards, offers consumer local and long distance service, prepaid wireless phone services and wholesale carrier services.

IDT Energy, which operates an energy services company in New York State. IDT Carmel is a receivables portfolio management and collection businesses.

American Shale Oil Corporation is in the U.S. oil shale business.

IDT Local Media includes CTM Brochure Display, a brochure distribution company and the WMET-AM radio station in the Washington D.C. metropolitan area.

IDT Internet Mobile Group is a new media content distribution company. It includes Zedge, a Web site and platform to produce and distribute mobile content. IDW is a comics, graphic novel, and children's book publisher.

IDT Spectrum holds a significant number of Federal Communications Commission licenses for commercial fixed wireless spectrum in the United States. IDT Global Israel is a call center operation.

"IDT is in a metamorphic stage de-emphasizing some of our historical operations and investing in new businesses that if successful can greatly enhance long-term shareholder value," adds CFO Steve Brown.

At the moment, IDT is harvesting cash from its declining communications business by slashing costs at a faster rate than revenue is dropping. Compared to a year ago, costs are coming down faster than revenue is dropping.

"Gross costs per minute were down 13.7 percent in the second quarter compared with the year ago, while revenue per minute fell only 8.5 percent, a spread of over five percent, says Brown.

In its most-recent quarter, IDT Corp. revenues were $476.7 million, down seven percent year-over-year. The quarterly loss of $62.5 million was significantly higher than the net loss of $27 million one year ago.

About $386 million was generated from IDT's wholesale, prepaid and retail calling businesses.