IDT CORP - FORM 8-K - November 3, 2011

Attached files

file filename
EX-99.1 - PRES RELEASE - IDT CORPf8k102811iiex99i_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): October 28, 2011
 
 
IDT CORPORATION
(Exact name of registrant as specified in its charter)
 
 
Delaware
  
1-16371
  
22-3415036
(State or other jurisdiction
of Incorporation)
  
(Commission File Number)
  
(IRS Employer
Identification No.)
 
520 Broad Street
Newark, New Jersey
  
07102
(Address of principal executive offices)
  
(Zip Code)
 
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):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 2.01.      Completion of Acquisition or Disposition of Assets.

On October 28, 2011 (the “distribution date”), IDT Corporation (“IDT”) completed the spin-off of Genie Energy Ltd. (“Genie”), a wholly-owned subsidiary of IDT, to IDT’s stockholders.  In the spinoff, IDT distributed its 100% interest in Genie to IDT’s stockholders. Upon completion of the spinoff, IDT’s businesses consist primarily of IDT Telecom, Innovative Communications Technologies, Inc., as well as other interests and smaller operations, including IDT’s interests in Zedge and Fabrix. Genie consists of IDT Energy, which operates its energy services company (ESCO), and Genie Oil and Gas, its unconventional energy operations.
 
The spin-off of Genie occurred by way of a pro rata distribution of Genie Class A common stock and Class B common stock to IDT’s stockholders. In the distribution, on the distribution date, each IDT stockholder received one share of Genie Class A common stock for every share of IDT Class A stock and one share of Genie Class B common stock for every share of IDT Class B common stock, held on or about 5:00 p.m., Eastern Time, on October 21, 2011, the record date for the spin-off.
 
Item 7.01.      Regulation FD Disclosure.
 
On October 31, 2011, the Registrant issued a press release announcing the consummation of the spinoff of Genie described in Item 2.01 above.  The press release is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of such section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01.      Financial Statements and Exhibits.
 
(b) Pro Forma Financial Information
 
(d) Exhibits
 
Exhibit No.
  
Document
99.1
  
Press Release issued by Registrant, dated October 31, 2011.
 
 
 
 
 

IDT CORPORATION
 INDEX TO (UNAUDITED) PRO FORMA INFORMATION
 

 
 
Page
Pro Forma Consolidated Financial Statements – Basis of Presentation
F-1
   
Pro Forma Consolidated Balance Sheet as of July 31, 2011
F-2
   
Pro Forma Consolidated Statement of Operations for the year ended July 31, 2011
F-3
   
Pro Forma Consolidated Statement of Operations for the year ended July 31, 2010
F-4
   
Pro Forma Consolidated Statement of Operations for the year ended July 31, 2009
F-5
   
Notes and Management’s Assumptions to Pro Forma Consolidated Financial Information
F-6
 

 
 
 

IDT CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
(unaudited)

 
The pro forma consolidated balance sheet as of July 31, 2011, and the pro forma consolidated statements of operations for the years ended July 31, 2011, 2010 and 2009, are based on the historical financial statements of the Registrant.
 
The pro forma condensed balance sheet as of July 31, 2011, is presented as if the disposition of Genie, as described in item 2.01 of this Form 8-K occurred in its entirety on July 31, 2011.  As set forth in Item 2.01 of this Form 8-K, as of October 28, 2011 such disposition has been consummated.
 
The pro forma consolidated statements of operations for the years ended July 31, 2011, 2010 and 2009, are presented as if the disposition of Genie occurred on August 1, 2008. The pro forma consolidated financial statements should be read in conjunction with the historical financial statements and notes related thereto appearing in the Registrant’s Form 10-K for the years ended July 31, 2011, 2010 and 2009 and in conjunction with the historical financial statements and notes related thereto appearing in Genie’s Information Statement on Form 10 for the years ended July 31, 2011, 2010 and 2009.
 
Preparation of the pro forma information was based on assumptions considered appropriate by the Registrant’s management. The pro forma financial information is unaudited and is not necessarily indicative of the results which would have occurred if the disposition described above had been consummated on August 1, 2008 for the pro forma consolidated statements of operations and on July 31, 2011 for the pro forma consolidated balance sheet, nor does it purport to represent the future financial position and the results of operations for future periods. In management’s opinion, all adjustments necessary to reflect the effects of the disposition of Genie have been made.
 

 
F-1
 
 
IDT CORPORATION
 PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JULY 31, 2011
(in thousands)
(unaudited)
  
   
Historical
    
Pro forma adjustments
      
Pro forma
  
ASSETS
                    
CURRENT ASSETS:
                    
Cash and cash equivalents
   $ 254,253     $ (106,000 )
(A)
   $ 148,253  
Restricted cash and cash equivalents
     6,581       (164 )
(B)
     6,417  
Certificates of deposit
     3,542                 3,542  
Trade accounts receivable, net
     126,270       (26,124 )
(B)
     100,146  
Prepaid expenses
     24,078       (2,157 )
(B)
     21,921  
Deferred income tax assets, net – current portion
     1,019       (1,019 )
(B)
     —  
Other current assets
     18,691       (3,001 )
(B)
     15,690  
                           
TOTAL CURRENT ASSETS
     434,434                 295,969  
Property, plant and equipment, net
     90,806       (335 )
(B)
     90,471  
Goodwill
     18,675       (3,663 )
(B)
     15,012  
Other intangibles, net
     2,661                 2,661  
Investments
     8,721                 8,721  
Deferred income tax assets, net – long-term portion
     1,795       (1,795 )
(B)
     —  
Other assets
     11,074       (1,006 )
(B)
     10,068  
                           
TOTAL ASSETS
   $ 568,166               $ 422,902  
                           
LIABILITIES AND EQUITY
                          
CURRENT LIABILITIES:
                          
Trade accounts payable
   $ 58,806     $ (16,537 )
(B)
   $ 42,269  
Accrued expenses
     174,092       (7,474 )
(B)
     166,618  
Deferred revenue
     78,852                 78,852  
Income taxes payable
     7,701       (1,663 )
(B)
     6,038  
Capital lease obligations–current portion
     1,701                 1,701  
Notes–current portion
     611                 611  
Other current liabilities
     3,378       (91 )
(B)
     3,287  
                           
TOTAL CURRENT LIABILITIES
     325,141                 299,376  
Notes payable—long-term portion
     29,564                 29,564  
Other liabilities
     9,671       (60 )
(B)
     9,611  
                           
TOTAL LIABILITIES
     364,376                 338,551  
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 outstanding
     33                 33  
Class B common stock, $.01 par value; authorized shares—200,000; 23,586 shares issued and 21,109 shares outstanding
     236                 236  
Additional paid-in capital
     520,732       (124,887 )
(B)
     395,845  
Treasury stock, at cost, consisting of 1,698 shares of Class A common stock and 2,477 shares of Class B common stock
     (94,941 )               (94,941 )
Accumulated other comprehensive income
     3,027       (357 )       2,670  
Accumulated deficit
     (219,992 )               (219,992 )
                           
   Total IDT Corporation stockholders’ equity
     209,095                 83,851  
   Noncontrolling interests:
                          
Noncontrolling interests
     (4,305 )     4,805  
(B)
     500  
Receivable for issuance of equity
     (1,000 )     1,000  
(B)
     —  
   Total noncontrolling interests
     (5,305 )               500  
TOTAL EQUITY
     203,790                 84,351  
                           
TOTAL LIABILITIES AND EQUITY
   $ 568,166               $ 422,902  
                           


 
F-2
 

IDT CORPORATION
 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2011
(in thousands, except per share data)
(unaudited)
 
   
Historical
    
Pro forma adjustments
      
Pro forma
  
                     
REVENUES
   $ 1,555,477     $ (203,561 )
(C)
   $ 1,351,916  
COSTS AND EXPENSES:
                          
Direct cost of revenues (exclusive of depreciation and amortization)
     1,269,380       (149,714 )
(C)
     1,119,666  
Selling, general and administrative
     237,847       (33,768 )
(C)
     204,079  
Depreciation and amortization
     20,976       (24 )
(C)
     20,952  
Research and development
     10,676       (7,843 )
(C)
     2,833  
Severance and other charges
     1,053                 1,053  
                           
TOTAL COSTS AND EXPENSES
     1,539,932                 1,348,583  
Other operating gains, net
     6,324                 6,324  
                           
Income from operations
     21,869                 9,657  
         Interest expense, net
     (5,679 )     1,974  
(C)
     (3,705 )
         Other expense (income), net
     (1,857 )     5,848  
(C)
     3,991  
                           
Income from continuing operations before income taxes
     14,333                 9,943  
         Benefit from income taxes
     5,538       (478 )
(D)
     5,060  
Income from continuing operations
     19,871                 15,003  
                           
Loss (income) from continuing operations attributable to noncontrolling interest
     3,441       (4,185 )
(C)
     (744 )
                           
INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO IDT CORPORATION
   $ $23,312               $ 14,259  
                           
Earnings per share attributable to IDT Corporation common stockholders:
                          
                           
  Basic:
   $ $1.13               $ 0.69  
  Diluted:
   $ $1.04               $ 0.63  
                           
Weighted-average number of shares used in calculation of earnings per share                          
  Basic:     20,565                 20,565  
  Diluted:     22,482                 22,482  
                           
 
 
F-3
 
 
IDT CORPORATION
 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2010
(in thousands, except per share data)
(unaudited)
 
   
Historical
    
Pro forma adjustments
      
Pro forma
  
                     
REVENUES
   $ 1,394,935     $ (201,358 )
(C)
   $ 1,193,577  
COSTS AND EXPENSES:
                          
Direct cost of revenues (exclusive of depreciation and amortization)
     1,110,723       (143,532 )
(C)
     967,191  
Selling, general and administrative
     215,858       (21,181 )
(C)
     194,677  
Depreciation and amortization
     33,426       (86 )
(C)
     33,340  
Research and development
     8,008       (5,226 )
(C)
     2,782  
Severance and other charges
     4,841                 4,841  
                           
TOTAL COSTS AND EXPENSES
     1,372,856                 1,202,831  
Other operating gains, net
     10,084                 10,084  
                           
Income from operations
     32,163                 830  
         Interest expense, net
     (6,262 )     1,723  
(C)
     (4,539 )
         Other income, net
     27       1,579  
(C)
     1,606  
                           
Income (loss) from continuing operations before income taxes
     25,928                 (2,103 )
         Provision for income taxes
     (5,275 )     3,265  
(D)
     (2,010 )
Income (loss) from continuing operations
     20,653                 (4,113 )
                           
Net income attributable to noncontrolling interest
     (84 )     (492 )
(C)
     (576 )
                           
INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO IDT CORPORATION
   $ 20,569               $ (4,689 )
                           
Earnings (loss) per share attributable to IDT Corporation common stockholders:
                          
                           
Basic:
   $ $1.00               $ (0.23 )
Diluted:
   $ $0.95               $ (0.23 )
                           
Weighted-average number of shares used in calculation of earnings (loss) per share                          
  Basic:    
20,451
                
20,451
  
  Diluted:    
21,546
                 20,451  
 
 
F-4
 


IDT CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2009
(in thousands, except per share data)
(unaudited)
 

   
Historical
    
Pro forma adjustments
      
Pro forma
  
                     
REVENUES
   $ 1,507,659     $ (264,709 )
(C)
   $ 1,242,950  
COSTS AND EXPENSES:
                          
Direct cost of revenues (exclusive of depreciation and amortization)
     1,160,121       (192,550 )
(C)
     967,571  
Selling, general and administrative
     281,896       (26,863 )
(C)
     255,033  
Depreciation and amortization
     47,698       (118 )
(C)
     47,580  
Bad debt
     7,122                 7,122  
Research and development
     9,035       (6,253 )
(C)
     2,782  
Impairments
     38,351                 38,351  
Severance and other charges
     9,332                 9,332  
                           
TOTAL COSTS AND EXPENSES
     1,553,555                 1,327,771  
Gain on sale of interest in AMSO, LLC
     2,598       (2,598 )
(C)
     —  
                           
Loss from operations
     (43,298 )               (84,821 )
         Interest expense, net
     (2,640 )     (67 )
(C)
     (2,707 )
         Other expense, net
     (32,459 )     614  
(C)
     (31,845 )
                           
Loss from continuing operations before income taxes
     (78,397 )               (119,373 )
         Benefit from income taxes
     4,633       3,478  
(D)
     8,111  
Loss from continuing operations
     (73,764 )               (111,262 )
                           
Net (income) loss attributable to noncontrolling interest
     (485 )     (20 )
(C)
     (505 )
                           
LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO IDT CORPORATION
   $ (74,249 )             $ (111,767 )
                           
Loss per share attributable to IDT Corporation common stockholders:
                          
Basic and diluted:
   $ $(3.30 )             $ (4.96 )
Weighted-average number of shares used in calculation of basic and diluted loss per share
     22,542                 22,542  
                           
 

 
F-5
 

IDT CORPORATION
NOTES AND MANAGEMENT’S ASSUMPTIONS
TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
1.
The following is a description of the pro forma adjustments to the historical consolidated financial statements:
 
 
(A)
Reflects the (i) the removal of $23.9 million of cash of Genie, (ii) The repayment by IDT of the $5.2 million due from IDT, and (iii) the transfer of $82.1 million in cash to Genie. These assumed transactions were such that Genie’s total pro forma cash balance was approximately $106 million as of July 31, 2011.
 
 
(B)
Reflects the removal of assets, liabilities, noncontrolling interests and accumulated other comprehensive income of Genie as if the spinoff was consummated on July 31, 2011.
     
  (C) Reflects the removal of the results of operations of Genie as if the spinoff was consummated on August 1, 2008. 
     
  (D) Reflects adjusted provision for income taxes as if the spinoff was consummated on August 1, 2008 and Genie was not part of the consolidated federal income tax returns.
 
 
 
F-6
 
 
 
SIGNATURES
 
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.
 
IDT CORPORATION
   
By:
/s/ Howard S. Jonas
 
Name: Howard S. Jonas
 
Title: Chairman and Chief Executive Officer
 
Dated: November 3, 2011
 

 
 
 
 
EXHIBITS INDEX
 

Exhibit Number
  
Document
99.1
  
Press Release issued by Registrant, dated October 31, 2011.
 

 

IDT CORP Reports