Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Oct. 31, 2017 | Dec. 07, 2017 | |
Entity Registrant Name | IDT CORP | |
Entity Central Index Key | 1,005,731 | |
Amendment Flag | false | |
Trading Symbol | IDT | |
Current Fiscal Year End Date | --07-31 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Accelerated Filer | |
Class A Common Stock | ||
Entity Common Stock Shares Outstanding | 1,574,326 | |
Class B Common Stock | ||
Entity Common Stock Shares Outstanding | 23,266,555 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 52,755 | $ 90,344 |
Marketable securities | 54,291 | 58,272 |
Trade accounts receivable, net of allowance for doubtful accounts of $2,408 at October 31, 2017 and $2,657 at July 31, 2017 | 78,949 | 64,979 |
Prepaid expenses | 15,796 | 14,506 |
Other current assets | 29,961 | 18,749 |
Assets held for sale | 110,666 | 124,267 |
Total current assets | 342,418 | 371,117 |
Property, plant and equipment, net | 88,617 | 88,994 |
Goodwill | 11,303 | 11,326 |
Investments | 26,390 | 26,894 |
Deferred income tax assets, net | 10,524 | 11,841 |
Other assets | 3,774 | 3,657 |
Assets held for sale | 5,146 | 5,134 |
Total assets | 488,172 | 518,963 |
Current liabilities: | ||
Trade accounts payable | 47,220 | 40,989 |
Accrued expenses | 109,155 | 125,359 |
Deferred revenue | 74,849 | 76,451 |
Other current liabilities | 5,272 | 4,659 |
Liabilities held for sale | 101,943 | 115,318 |
Total current liabilities | 338,439 | 362,776 |
Other liabilities | 1,169 | 1,080 |
Liabilities held for sale | 515 | 550 |
Total liabilities | 340,123 | 364,406 |
Commitments and contingencies | ||
IDT Corporation stockholders' equity: | ||
Preferred stock, $.01 par value; authorized shares-10,000; no shares issued | ||
Additional paid-in capital | 395,272 | 394,462 |
Treasury stock, at cost, consisting of 1,698 and 1,698 shares of Class A common stock and 2,299 and 2,297 shares of Class B common stock at October 31, 2017 and July 31, 2017, respectively | (83,327) | (83,304) |
Accumulated other comprehensive loss | (2,741) | (2,343) |
Accumulated deficit | (170,182) | (163,370) |
Total IDT Corporation stockholders' equity | 139,311 | 145,734 |
Noncontrolling interests | 8,738 | 8,823 |
Total equity | 148,049 | 154,557 |
Total liabilities and equity | 488,172 | 518,963 |
Class A Common Stock | ||
IDT Corporation stockholders' equity: | ||
Common stock, value | 33 | 33 |
Class B Common Stock | ||
IDT Corporation stockholders' equity: | ||
Common stock, value | $ 256 | $ 256 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 |
Allowance for doubtful accounts | $ 2,408 | $ 2,657 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 10,000 | 10,000 |
Preferred stock, shares issued | ||
Class A Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 35,000 | 35,000 |
Common stock, shares issued | 3,272 | 3,272 |
Common stock, shares outstanding | 1,574 | 1,574 |
Treasury stock, common stock shares | 1,698 | 1,698 |
Class B Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 25,566 | 25,561 |
Common stock, shares outstanding | 23,267 | 23,264 |
Treasury stock, common stock shares | 2,299 | 2,297 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | ||
Consolidated Statements of Operations [Abstract] | |||
Revenues | $ 393,555 | $ 369,151 | |
Costs and expenses: | |||
Direct cost of revenues (exclusive of depreciation and amortization) | 336,510 | 313,029 | |
Selling, general and administrative | [1] | 50,071 | 45,438 |
Depreciation and amortization | 5,673 | 5,299 | |
Severance | 439 | ||
Total costs and expenses | 392,693 | 363,766 | |
Other operating expense | (779) | (199) | |
Income from operations | 83 | 5,186 | |
Interest income, net | 362 | 301 | |
Other (expense) income, net | (826) | 2,392 | |
(Loss) income before income taxes | (381) | 7,879 | |
(Provision for) benefit from income taxes | (1,416) | 14,415 | |
Net (loss) income | (1,797) | 22,294 | |
Net income attributable to noncontrolling interests | (295) | (376) | |
Net (loss) income attributable to IDT Corporation | $ (2,092) | $ 21,918 | |
(Loss) earnings per share attributable to IDT Corporation common stockholders: | |||
Basic | $ (0.08) | $ 0.97 | |
Diluted | $ (0.08) | $ 0.96 | |
Weighted-average number of shares used in calculation of (loss) earnings per share: | |||
Basic | 24,628 | 22,712 | |
Diluted | 24,628 | 22,899 | |
Dividends declared per common share | $ 0.19 | $ 0.19 | |
(i) Stock-based compensation included in selling, general and administrative expenses | $ 810 | $ 702 | |
[1] | Stock-based compensation included in selling, general and administrative expenses |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Consolidated Statements of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (1,797) | $ 22,294 |
Other comprehensive loss: | ||
Change in unrealized gain on available-for-sale securities | (30) | (23) |
Foreign currency translation adjustments | (368) | (2,862) |
Other comprehensive loss | (398) | (2,885) |
Comprehensive (loss) income | (2,195) | 19,409 |
Comprehensive income attributable to noncontrolling interests | (295) | (376) |
Comprehensive (loss) income attributable to IDT Corporation | $ (2,490) | $ 19,033 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Operating activities | ||
Net (loss) income | $ (1,797) | $ 22,294 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 5,673 | 5,299 |
Deferred income taxes | 1,317 | (14,483) |
Provision for doubtful accounts receivable | 566 | 260 |
Realized gain on marketable securities | (7) | |
Interest in the equity of investments | 104 | (263) |
Stock-based compensation | 810 | 702 |
Change in assets and liabilities: | ||
Restricted cash and cash equivalents | 14,742 | 9,939 |
Trade accounts receivable | (13,952) | (13,132) |
Prepaid expenses, other current assets and other assets | (12,832) | (10) |
Trade accounts payable, accrued expenses, other current liabilities and other liabilities | (9,359) | 6,125 |
Customer deposits | (14,226) | (9,127) |
Deferred revenue | (1,556) | (2,114) |
Net cash (used in) provided by operating activities | (30,517) | 5,490 |
Investing activities | ||
Capital expenditures | (5,324) | (5,515) |
Proceeds from sale of interest in Straight Path IP Group Holding, Inc. | 6,000 | |
Purchase of IP Interest from Straight Path Communications Inc. | (6,000) | |
Cash used for investments | (8,008) | |
Proceeds from sale and redemption of investments | 2 | |
Purchases of marketable securities | (15,671) | (10,969) |
Proceeds from maturities and sales of marketable securities | 19,560 | 6,001 |
Net cash used in investing activities | (1,435) | (18,489) |
Financing activities | ||
Dividends paid | (4,720) | (4,379) |
Distributions to noncontrolling interests | (380) | (389) |
Proceeds from exercise of stock options | 407 | |
Proceeds from sale of member interests in CS Pharma Holdings, LLC | 1,250 | |
Repurchases of Class B common stock | (23) | (23) |
Net cash used in financing activities | (5,123) | (3,134) |
Effect of exchange rate changes on cash and cash equivalents | (173) | (1,476) |
Net decrease in cash and cash equivalents | (37,248) | (17,609) |
Cash and cash equivalents at beginning of period, including $5,716 held for sale at July 31, 2017 | 96,060 | 109,537 |
Cash and cash equivalents at end of period, including $6,057 held for sale at October 31, 2017 | 58,812 | 91,928 |
Supplemental schedule of non-cash financing activities | ||
Reclassification of liability for member interests in CS Pharma Holdings, LLC | $ 8,750 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 |
Consolidated Statements of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 6,057 | $ 5,716 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Oct. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1—Basis of Presentation The accompanying unaudited consolidated financial statements of IDT Corporation and its subsidiaries (the “Company” or “IDT”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2018. The balance sheet at July 31, 2017 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2017, as filed with the U.S. Securities and Exchange Commission (“SEC”). The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2018 refers to the fiscal year ending July 31, 2018). |
IDT Financial Services Holding
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale | 3 Months Ended |
Oct. 31, 2017 | |
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale [Abstract] | |
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale | Note 2— IDT Financial Services Holding Limited Assets and Liabilities Held for Sale On June 22, 2017, the Company’s wholly-owned subsidiary IDT Telecom, Inc. (“IDT Telecom”) entered into a Share Purchase Agreement with JAR Fintech Limited (“JAR Fintech”) and JAR Capital Limited to sell the capital stock of IDT Financial Services Holding Limited, a company incorporated under the laws of Gibraltar and a wholly-owned subsidiary of IDT Telecom, to JAR Fintech. IDT Financial Services Holding Limited is the sole shareholder of IDT Financial Services Limited, a Gibraltar-based bank and e-money issuer, providing prepaid card solutions across the European Economic Area. The Share Purchase Agreement provides for an aggregate purchase price for the outstanding equity interests of IDT Financial Services Holding Limited of approximately $3.8 million plus an amount equal to the value of IDT Financial Services Holding Limited’s net assets, to be paid at closing, subject to adjustments relating to customer assets of IDT Financial Services Holding Limited. The net asset value of IDT Financial Services Holding Limited was $13.9 million at October 31, 2017. A portion of the purchase price will be placed in escrow and released to IDT Telecom once all of the conditions have been met under the Share Purchase Agreement. The sale is expected to close in the first quarter of calendar 2018, subject to regulatory approval and other customary conditions set forth in the Share Purchase Agreement. The remaining closing conditions are outside of the Company’s control and there can be no assurance that the sale will be completed. The pending disposition of IDT Financial Services Holding Limited did not meet the criteria to be reported as a discontinued operation and accordingly, its results of operations and cash flows have not been reclassified. The IDT Financial Services Holding Limited assets and liabilities held for sale included the following: October 31, July 31, (in thousands) Current assets held for sale: Cash and cash equivalents $ 6,057 $ 5,716 Restricted cash and cash equivalents 101,614 115,609 Trade accounts receivable, net of allowance for doubtful accounts of $2,977 and $2,550 at October 31, 2017 and July 31, 2017, respectively 1,681 1,844 Prepaid expenses 866 758 Other current assets 448 340 Total current assets held for sale $ 110,666 $ 124,267 Noncurrent assets held for sale: Property, plant and equipment, net $ 21 $ 24 Other intangibles, net 159 165 Other assets 4,966 4,945 Total noncurrent assets held for sale $ 5,146 $ 5,134 Current liabilities held for sale: Trade accounts payable $ 718 $ 372 Accrued expenses 272 226 Customer deposits 100,873 114,689 Other current liabilities 80 31 Total current liabilities held for sale $ 101,943 $ 115,318 Noncurrent liabilities held for sale: Other liabilities $ 515 $ 550 Total noncurrent liabilities held for sale $ 515 $ 550 IDT Financial Services Holding Limited is included in the Telecom Platform Services segment. IDT Financial Services Holding Limited’s (loss) income before income taxes and (loss) income before income taxes attributable to the Company, which is included in the accompanying consolidated statements of operations, were as follows: Three Months Ended 2017 2016 (in thousands) (Loss) income before income taxes $ (450 ) $ 595 (Loss) income before income taxes attributable to IDT Corporation $ (450 ) $ 595 |
Proposed Spin-Off of Rafael Hol
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. | 3 Months Ended |
Oct. 31, 2017 | |
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. [Abstract] | |
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. | Note 3—Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. On October 31, 2017, the Company’s subsidiary, Rafael Holdings, Inc. (“RHI”), filed a registration statement on Form 10 (containing a preliminary Information Statement for the Company’s stockholders) with the SEC. The Company intends to spin-off RHI to the Company’s stockholders, so that RHI will be a separate publicly traded company. RHI intends to apply to have its Class B common stock listed for trading on the NYSE American under the symbol “RFL”. Approval of the spin-off by the Company’s stockholders is not required. The Company’s Board of Directors believes that the spin-off will allow RHI to better focus on its strategic mission and that its potential can be better realized as an independent entity. The spin-off of RHI will occur by way of a pro rata distribution of RHI’s capital stock to the Company’s stockholders. On the distribution date, the Company currently expects that each of the Company’s stockholders as of the record date for the distribution will receive one share of RHI Class A common stock for every two shares of the Company’s Class A common stock and one share of RHI Class B common stock for every two shares of the Company’s Class B common stock. Completion of the RHI spin-off is subject to final approval by the Company’s Board of Directors, receipt of a favorable opinion as to the spin-off’s tax-free status, as well as effectiveness of the Form 10 registration statement filed with the SEC. The Company’s Board of Directors reserves the right to amend, modify or abandon the RHI spin-off and the related transactions at any time prior to the distribution date. RHI will own certain commercial real estate assets and interests in clinical and early stage pharmaceutical companies that are currently owned by the Company. The commercial real estate holdings consist of the Company’s headquarters building and its associated public garage in Newark, New Jersey, an office/data center building in Piscataway, New Jersey and an office condominium in Israel that hosts offices for the Company and certain affiliates. The pharmaceutical holdings include interests in Rafael Pharmaceuticals, Inc. (“Rafael Pharma”), which is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells, and an equity interest in Lipomedix Pharmaceuticals Ltd., an early stage pharmaceutical development company based in Israel. In addition, prior to the spin-off, the Company intends to contribute cash to RHI so that it holds $50 million to $60 million in cash. RHI’s interests in Rafael Pharma, which are held through a 90%-owned non-operating subsidiary, IDT-Rafael Holdings, LLC (“IDT-Rafael Holdings”), include convertible notes issued by Rafael Pharma, and a warrant held by the Company and certain minority holders to purchase up to a majority equity stake in Rafael Pharma at the Company’s discretion in accordance with the terms of the convertible note and the warrant. IDT-Rafael Holdings had the contractual right to receive additional shares of Rafael Pharma representing 10% of the outstanding capital stock of Rafael Pharma that will be issued upon the occurrence of any of the following: (i) Food and Drug Administration approval of a Rafael Pharma drug application, (ii) an initial public offering of Rafael Pharma at a valuation of over $500 million, or (iii) a sale of Rafael Pharma above certain valuations. Currently, none of the conditions have been satisfied and the right remains contingent. On September 14, 2017, IDT-Rafael Holdings distributed this right to its members on a pro rata basis such that the Company received the right to 9% of the outstanding capital stock of Rafael Pharma and Howard S. Jonas, the Company’s Chairman of the Board, and Chairman of the Board of Rafael Pharma, received the right to 1% of the outstanding capital stock of Rafael Pharma. In addition, as compensation for assuming the role of Chairman of the Board of Rafael Pharma, and to create additional incentive to contribute to the success of Rafael Pharma, on September 19, 2017, the Company transferred its right to receive 9% of the outstanding capital stock of Rafael Pharma to Mr. Jonas. The right is further transferable at the discretion of Mr. Jonas. Howard Jonas and his wife Deborah Jonas jointly own $525,000 of Series C Convertible Notes of Rafael Pharma, and The Howard S. and Deborah Jonas Foundation own an additional $525,000 of Series C Convertible Notes of Rafael Pharma. The Company’s controlled 50%-owned subsidiary, CS Pharma Holdings, LLC (“CS Pharma”), holds Rafael Pharma’s Series D convertible promissory note with a principal amount of $10 million (the “Series D Note”). The Series D Note earns interest at 3.5% per annum, with principal and accrued interest due and payable on September 16, 2018. The Series D Note is convertible at the holder’s option into shares of Rafael Pharma’s Series D Preferred Stock. The Series D Note also includes a mandatory conversion into Rafael Pharma common stock upon a qualified initial public offering, and conversion at the holder’s option upon an unqualified financing event. In all cases, the Series D Note conversion price is based on the applicable financing purchase price. The Company and CS Pharma hold warrants to purchase shares of capital stock of Rafael Pharma representing in the aggregate up to 56% of the then issued and outstanding capital stock of Rafael Pharma, on an as-converted and fully diluted basis. The right to exercise warrants as to the first $10 million thereof is held by CS Pharma. The exercise price of the warrant is the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments. The minimum initial and subsequent exercises of the warrant shall be for such number of shares that will result in at least $5 million of gross proceeds to Rafael Pharma, or such lesser amount as represents 5% of the outstanding capital stock of Rafael Pharma, or such lesser amount as may then remain unexercised. The warrant will expire upon the earlier of December 31, 2020 or a qualified initial public offering or liquidation event. The Company’s investment in Rafael Pharma, which was included in “Investments” in the accompanying consolidated balance sheets, consists of the following: October 31, July 31, (in thousands) Series D Note (at fair value) $ 6,300 $ 6,300 Warrants (at cost) 5,400 5,400 Right to receive additional shares (at cost) — 400 Total investment in Rafael Pharma $ 11,700 $ 12,100 Rafael Pharma is a variable interest entity, however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of Rafael Pharma that most significantly impact Rafael Pharma’s economic performance. At October 31, 2017, the Company’s maximum exposure to loss as a result of its involvement with Rafael Pharma was its $11.7 million investment, since there were no other arrangements, events or circumstances that could expose the Company to additional loss. |
Marketable Securities
Marketable Securities | 3 Months Ended |
Oct. 31, 2017 | |
Marketable Securities [Abstract] | |
Marketable Securities | Note 4—Marketable Securities The following is a summary of marketable securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Available-for-sale securities: October 31, 2017: Certificates of deposit* $ 31,908 $ 2 $ (2 ) $ 31,908 Federal Government Sponsored Enterprise notes 3,217 — (17 ) 3,200 International agency notes 402 — (3 ) 399 Mutual funds 5,391 56 — 5,447 Corporate bonds 3,379 — (4 ) 3,375 Equity 75 — (6 ) 69 U.S. Treasury notes 5,396 — (22 ) 5,374 Municipal bonds 4,519 3 (3 ) 4,519 Total $ 54,287 $ 61 $ (57 ) $ 54,291 July 31, 2017: Certificates of deposit* $ 29,011 $ 1 $ (7 ) $ 29,005 Federal Government Sponsored Enterprise notes 3,992 — (14 ) 3,978 International agency notes 291 — — 291 Mutual funds 5,353 77 — 5,430 Corporate bonds 4,643 — — 4,643 Equity 74 — (26 ) 48 U.S. Treasury notes 6,673 — — 6,673 Municipal bonds 8,201 4 (1 ) 8,204 Total $ 58,238 $ 82 $ (48 ) $ 58,272 * Each of the Company’s certificates of deposit has a CUSIP, was purchased in the secondary market through a broker, and may be sold in the secondary market. At October 31, 2017 and July 31, 2017, the Company owned 23,741 and 23,227 shares, respectively, of Zedge, Inc. Class B common stock that had a fair value of $69,000 and $48,000, respectively. Proceeds from maturities and sales of available-for-sale securities were $19.6 million and $6.0 million in the three months ended October 31, 2017 and 2016, respectively. The gross realized gains that were included in earnings as a result of sales were $7,000 in the three months ended October 31, 2017 and nil in the three months ended October 31, 2016. There were no gross realized losses that were included in earnings as a result of sales in the three months ended October 31, 2017 and 2016. The Company uses the specific identification method in computing the gross realized gains and gross realized losses on the sales of marketable securities. The contractual maturities of the Company’s available-for-sale debt securities at October 31, 2017 were as follows: Fair Value (in thousands) Within one year $ 31,586 After one year through five years 17,189 After five years through ten years — After ten years — Total $ 48,775 The following available-for-sale securities were in an unrealized loss position for which other-than-temporary impairments have not been recognized: Unrealized Losses Fair Value (in thousands) October 31, 2017: Certificates of deposit $ 2 $ 7,040 Federal Government Sponsored Enterprise notes 17 3,200 International agency notes 3 399 Corporate bonds 4 2,737 Equity 6 69 U.S. Treasury notes 22 5,374 Municipal bonds 3 3,998 Total $ 57 $ 22,817 July 31, 2017: Certificates of deposit $ 7 $ 12,155 Federal Government Sponsored Enterprise notes 14 3,529 Equity 26 48 Municipal bonds 1 3,349 Total $ 48 $ 19,081 At July 31, 2017, there were no securities in a continuous unrealized loss position for 12 months or longer. At October 31, 2017, the following available-for-sale securities included in the table above were in a continuous unrealized loss position for 12 months or longer: Unrealized Fair Value (in thousands) Federal Government Sponsored Enterprise notes $ 8 $ 1,362 At October 31, 2017, the Company did not intend to sell the securities that were in a continuous unrealized loss position for 12 months or longer, and it is not more likely than not that the Company will be required to sell the securities before recovery of their amortized cost bases, which may be at maturity. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Oct. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 5—Fair Value Measurements The following tables present the balance of assets measured at fair value on a recurring basis: Level 1 (1) Level 2 (2) Level 3 (3) Total (in thousands) October 31, 2017 Available-for-sale securities: Marketable securities $ 10,891 $ 43,400 $ — $ 54,291 Rafael Pharma Series D Note — — 6,300 6,300 Total $ 10,891 $ 43,400 $ 6,300 $ 60,591 July 31, 2017 Available-for-sale securities: Marketable securities $ 12,151 $ 46,121 $ — $ 58,272 Rafael Pharma Series D Note — — 6,300 6,300 Total $ 12,151 $ 46,121 $ 6,300 $ 64,572 (1) – quoted prices in active markets for identical assets or liabilities (2) – observable inputs other than quoted prices in active markets for identical assets and liabilities (3) – no observable pricing inputs in the market At October 31, 2017 and July 31, 2017, the Company did not have any liabilities measured at fair value on a recurring basis. At October 31, 2017 and July 31, 2017, the fair value of the Rafael Pharma Series D Note, which was classified as Level 3, was estimated based on a valuation of Rafael Pharma and other factors that could not be corroborated by the market. The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3). There were no liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) in the three months ended October 31, 2017 and 2016. Three Months Ended 2017 2016 (in thousands) Balance, beginning of period $ 6,300 $ 2,000 Purchases — 2,200 Balance, end of period $ 6,300 $ 4,200 Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period $ — $ — At both October 31, 2017 and July 31, 2017, the Company had $8.6 million in investments in hedge funds, which were included in “Investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds are accounted for using the equity method or the cost method, therefore investments in hedge funds are not measured at fair value. Fair Value of Other Financial Instruments The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. Cash and cash equivalents, restricted cash and cash equivalents, other current assets, customer deposits and other current liabilities. Other assets and other liabilities. The Company’s investments at October 31, 2017 and July 31, 2017 included investments in the equity of certain privately held entities and other investments that are accounted for at cost. It is not practicable to estimate the fair value of these investments because of the lack of a quoted market price for the shares of these entities, and the inability to estimate their fair value without incurring excessive cost. The carrying value of these investments was $10.4 million and $10.8 million at October 31, 2017 and July 31, 2017, respectively, which the Company believes was not impaired. |
Equity
Equity | 3 Months Ended |
Oct. 31, 2017 | |
Equity [Abstract] | |
Equity | Note 6— Equity Changes in the components of equity were as follows: Three Months Ended Attributable to IDT Corporation Noncontrolling Interests Total (in thousands) Balance, July 31, 2017 $ 145,734 $ 8,823 $ 154,557 Dividends declared ($0.19 per share) (4,720 ) — (4,720 ) Restricted Class B common stock purchased from employees (23 ) — (23 ) Distributions to noncontrolling interests — (380 ) (380 ) Stock-based compensation 810 — 810 Comprehensive income: Net loss (2,092 ) 295 (1,797 ) Other comprehensive loss (398 ) — (398 ) Comprehensive income (2,490 ) 295 (2,195 ) Balance, October 31, 2017 $ 139,311 $ 8,738 $ 148,049 Dividend Payments In the three months ended October 31, 2017, the Company paid cash dividends of $0.19 per share on its Class A common stock and Class B common stock, or $4.7 million in total. In the three months ended October 31, 2016, the Company paid cash dividends of $0.19 per share on its Class A common stock and Class B common stock, or $4.4 million in total. On December 4, 2017, the Company’s Board of Directors declared a dividend of $0.19 per share for the first quarter of fiscal 2018 to holders of the Company’s Class A common stock and Class B common stock. The dividend will be paid on or about December 29, 2017 to stockholders of record as of the close of business on December 18, 2017. Stock Repurchases The Company has a stock repurchase program for the repurchase of up to an aggregate of 8.0 million shares of the Company’s Class B common stock. There were no repurchases under the program in the three months ended October 31, 2017 or 2016. At October 31, 2017, 8.0 million shares remained available for repurchase under the stock repurchase program. In each of the three months ended October 31, 2017 and 2016, the Company paid $23,000 to repurchase 1,668 and 1,542 shares, respectively, of Class B common stock that were tendered by employees of the Company to satisfy the employees’ tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by the Company based on their fair market value on the trading day immediately prior to the vesting date. 2015 Stock Option and Incentive Plan On September 28, 2017, the Company’s Board of Directors amended the Company’s 2015 Stock Option and Incentive Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 0.3 million shares. The amendment is subject to ratification by the Company’s stockholders at its annual meeting of stockholders on December 14, 2017. |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 3 Months Ended |
Oct. 31, 2017 | |
(Loss) Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share | Note 7—(Loss) Earnings Per Share Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive. The weighted-average number of shares used in the calculation of basic and diluted (loss) earnings per share attributable to the Company’s common stockholders consists of the following: Three Months Ended 2017 2016 (in thousands) Basic weighted-average number of shares 24,628 22,712 Effect of dilutive securities: Stock options — 38 Non-vested restricted Class B common stock — 149 Diluted weighted-average number of shares 24,628 22,899 The following shares were excluded from the diluted earnings per share computation: Three Months Ended 2017 2016 (in thousands) Stock options 1,273 32 Non-vested restricted Class B common stock 223 — Shares excluded from the calculation of diluted earnings per share 1,496 32 In the three months ended October 31, 2017, the diluted loss per share computation equals basic loss per share because the Company had a net loss and the impact of the assumed exercise of stock options and the vesting of restricted stock would have been anti-dilutive. In the three months ended October 31, 2016, stock options with an exercise price that was greater than the average market price of the Company’s stock during the period were excluded from the diluted earnings per share computation. |
Revolving Credit Loan Payable
Revolving Credit Loan Payable | 3 Months Ended |
Oct. 31, 2017 | |
Revolving Credit Loan Payable [Abstract] | |
Revolving Credit Loan Payable | Note 8—Revolving Credit Loan Payable The Company’s subsidiary, IDT Telecom, entered into a credit agreement, dated July 12, 2012, with TD Bank, N.A. for a line of credit facility for up to a maximum principal amount of $25.0 million. IDT Telecom may use the proceeds to finance working capital requirements, acquisitions and for other general corporate purposes. The line of credit facility is secured by primarily all of IDT Telecom’s assets. The principal outstanding bears interest per annum, at the option of IDT Telecom, at either (a) the U.S. Prime Rate less 125 basis points, or (b) the LIBOR rate adjusted by the Regulation D maximum reserve requirement plus 150 basis points. Interest is payable monthly and all outstanding principal and any accrued and unpaid interest is due on the maturity date of April 30, 2018. At October 31, 2017 and July 31, 2017, there were no amounts outstanding under the facility. The Company intends to borrow under the facility from time to time. IDT Telecom pays a quarterly unused commitment fee of 0.375% per annum on the average daily balance of the unused portion of the $25.0 million commitment. IDT Telecom is required to comply with various affirmative and negative covenants as well as maintain certain financial targets and ratios during the term of the line of credit, including IDT Telecom may not pay any dividend on its capital stock and IDT Telecom’s aggregate loans and advances to affiliates or subsidiaries may not exceed $110.0 million. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Oct. 31, 2017 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | Note 9—Accumulated Other Comprehensive Loss The accumulated balances for each classification of other comprehensive loss were as follows: Unrealized Foreign Accumulated Location (in thousands) Balance, July 31, 2017 $ 2,134 $ (4,477 ) $ (2,343 ) Other comprehensive loss attributable to IDT Corporation before reclassifications (23 ) (368 ) (391 ) Less: reclassification for gain included in net loss (7 ) — (7 ) Other (expense) income, net Net other comprehensive loss attributable to IDT Corporation (30 ) (368 ) (398 ) Balance, October 31, 2017 $ 2,104 $ (4,845 ) $ (2,741 ) At both October 31, 2017 and July 31, 2017, unrealized gain on available-for-sale securities included unrealized gain of $2.1 million on the Rafael Pharma Series D Note. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Oct. 31, 2017 | |
Business Segment Information [Abstract] | |
Business Segment Information | Note 10—Business Segment Information The Company has two reportable business segments, Telecom Platform Services and net2phone-Unified Communications as a Service (“net2phone-UCaaS”) (formerly known as UCaaS). The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. Telecom Platform Services and net2phone-UCaaS comprise the IDT Telecom division. The Telecom Platform Services segment provides retail telecommunications and payment offerings as well as wholesale international long distance traffic termination. The net2phone-UCaaS segment is comprised of (1) cable telephony, (2) cloud-based private branch exchange, or PBX, services offered to enterprise customers exclusively through value-added resellers, service providers, telecom agents and managed service providers, (3) Session Initiation Protocol, or SIP, trunking, which supports inbound and outbound domestic and international calling from an IP PBX, and (4) PicuP, a highly-automated business phone service that answers, routes and manages voice calls. Beginning in the first quarter of fiscal 2018, the Telecom Platform Services segment includes Consumer Phone Services, which was previously reported as a separate segment. Consumer Phone Services provides consumer local and long distance services in certain U.S. states. Comparative results have been reclassified and restated as if Consumer Phone Services was included in Telecom Platform Services in all periods presented. Operating segments not reportable individually are included in All Other. All Other includes the Company’s real estate holdings and other smaller businesses. Corporate costs include certain services, such as compensation, consulting fees, treasury and accounts payable, tax and accounting services, human resources and payroll, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, business development, and other corporate-related general and administrative expenses including, among others, facilities costs, charitable contributions and travel, as well as depreciation expense on corporate assets. Corporate does not generate any revenues, nor does it incur any direct cost of revenues. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on income (loss) from operations. IDT Telecom depreciation and amortization are allocated to Telecom Platform Services and net2phone-UCaaS because the related assets are not tracked separately by segment. There are no other significant asymmetrical allocations to segments. Operating results for the business segments of the Company are as follows: (in thousands) Telecom net2phone-UCaaS All Other Corporate Total Three Months Ended October 31, 2017 Revenues $ 385,063 $ 7,788 $ 704 $ — $ 393,555 Income (loss) from operations 4,561 (674 ) (631 ) (3,173 ) 83 Severance 409 — — 30 439 Other operating expense — — — (779 ) (779 ) Three Months Ended October 31, 2016 Revenues $ 361,511 $ 7,136 $ 504 $ — $ 369,151 Income (loss) from operations 6,544 (174 ) 90 (1,274 ) 5,186 Other operating expense — — — (199 ) (199 ) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Oct. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 11—Commitments and Contingencies Legal Proceedings On July 31, 2013, the Company completed a pro rata distribution of the common stock of the Company’s subsidiary Straight Path Communications Inc. (“Straight Path”) to the Company’s stockholders of record as of the close of business on July 25, 2013 (the “Straight Path Spin-Off”). On July 5, 2017, plaintiff JDS1, LLC, on behalf of itself and all other similarly situated stockholders of Straight Path, and derivatively on behalf of Straight Path as nominal defendant, filed a putative class action and derivative complaint in the Court of Chancery of the State of Delaware against the Company, The Patrick Henry Trust (a trust formed by Howard S. Jonas that holds record and beneficial ownership of certain of his shares of Straight Path), Howard S. Jonas, and each of Straight Path’s directors. The complaint alleges that the Company aided and abetted Straight Path Chairman of the Board and Chief Executive Officer Davidi Jonas, and Howard S. Jonas in his capacity as controlling stockholder of Straight Path, in breaching their fiduciary duties to Straight Path in connection with the settlement of claims between Straight Path and the Company related to potential indemnification claims concerning Straight Path’s obligations under the Consent Decree it entered into with the Federal Communications Commission (“FCC”), as well as the proposed sale of Straight Path’s subsidiary Straight Path IP Group, Inc. (“SPIP”) to the Company in connection with that settlement. That action was consolidated with a similar action that was initiated by The Arbitrage Fund. The Plaintiffs are seeking, among other things, (i) a declaration that the action may be maintained as a class action or in the alternative, that demand on the Straight Path Board is excused; (ii) that the term sheet is invalid; (iii) awarding damages for the unfair price stockholders are receiving in the merger between Straight Path and Verizon Communications Inc. for their shares of Straight Path’s Class B common stock; and (iv) ordering Howard S. Jonas, Davidi Jonas, and the Company to disgorge any profits for the benefit of the class Plaintiffs. On August 28, 2017, the Plaintiffs filed an amended complaint. On September 24, 2017, the Company filed a motion to dismiss the amended complaint. The Company intends to vigorously defend the action. On November 20, 2017, the Delaware Chancery Court issued an order staying the case pending the closing of the transaction between Verizon and Straight Path on the grounds that the claims are not ripe. In the three months ended October 31, 2017, the Company incurred legal fees of $0.8 million related to this putative class action, which is included in “Other operating expense” in the accompanying consolidated statement of operations. On May 5, 2004, the Company filed a complaint in the Supreme Court of the State of New York, County of New York, seeking injunctive relief and damages against Tyco Group, S.A.R.L., Tyco Telecommunications (US) Inc. (f/k/a TyCom (US) Inc.), Tyco International, Ltd., Tyco International (US) Inc., and TyCom Ltd. (collectively “Tyco”). The Company alleged that Tyco breached a settlement agreement that it had entered into with the Company to resolve certain disputes and civil actions among the parties. The Company alleged that Tyco did not provide the Company, as required under the settlement agreement, free of charge and for the Company’s exclusive use, a 15-year indefeasible right to use four Wavelengths in Ring Configuration (as defined in the settlement agreement) on a global undersea fiber optic network that Tyco was deploying at that time. After extensive proceedings, including several decisions and appeals, the New York Court of Appeals affirmed a lower court decision to dismiss the Company’s claim and denied the Company’s motion for re-argument of that decision. On June 23, 2015, the Company filed a new summons and complaint against Tyco in the Supreme Court of the State of New York, County of New York alleging that Tyco breached the settlement agreement. In September 2015, Tyco filed a motion to dismiss the complaint, which the Company opposed. Oral argument was held on March 9, 2016. On October 17, 2016, the judge granted Tyco’s motion and dismissed the complaint. In August 2017, the Company filed an appeal, which Tyco opposed. On November 22, 2017, oral argument was held on the appeal. The Company awaits the court’s decision. In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, the Company believes that none of the other legal proceedings to which the Company is a party will have a material adverse effect on the Company’s results of operations, cash flows or financial condition. Universal Service Fund Audit The Company’s FCC Form 499-A filings for calendar years 2000 through 2006 related to payments to the Universal Service Fund have been audited by the Internal Audit Division (“IAD”) of the Universal Service Administrative Company (“USAC”), which concluded that the Company incorrectly reported certain revenues on Forms 499-A. USAC’s revisions to the Company’s filing methodology resulted in additional regulatory payments for the years covered by the audits. While the Company believes in the accuracy of its filing methodology and the Company’s Request for Review remains pending, the Company has implemented some of the revisions set forth in the IAD’s filings beginning with the Company’s calendar year 2010 Form 499-A. The Company has accrued for all regulatory fees that the Company believes may be incurred under IAD’s methodology from 2002 through the present, in the event the Company’s Request for Review is denied and/or its methodology is not upheld on appeal, and the Company has made certain payments on amounts that have been invoiced to it by USAC and/or other agencies. The Company’s 2017 FCC Form 499-A, which reports its calendar year 2016 revenue, is currently under audit by the IAD. At October 31, 2017 and July 31, 2017, the Company’s accrued expenses included $39.9 million and $43.5 million, respectively, for these regulatory fees for the years covered by the audit and subsequent years. Until a final decision is reached in the Company’s disputes, the Company will continue to accrue in accordance with IAD’s methodology. If the Company does not properly calculate, or has not properly calculated, the amount payable by the Company to the Universal Service Fund, the Company may be subject to interest and penalties. Purchase Commitments The Company had purchase commitments of $60.9 million at October 31, 2017, including the aggregate commitment under the Reciprocal Services Agreement described below. Reciprocal Services Agreement In August 2017, the Company entered into a Reciprocal Services Agreement with a telecom operator in Central America for a full range of services, including, but not limited to, termination of inbound and outbound international long-distance voice calls. The Company has committed to pay such telecom operator monthly committed amounts during the term of the agreement. In addition, under certain limited circumstances, the parties may renegotiate the amount of the monthly payments. In the event the parties do not agree on re-pricing terms after good faith negotiations, then either party has the right to terminate the agreement. Pursuant to the agreement, in September 2017, the Company deposited $11.75 million into an escrow account as security for the benefit of the telecom operator, which is included in “Other current assets” in the accompanying consolidated balance sheet. Performance Bonds IDT Payment Services and IDT Telecom have performance bonds issued through third parties for the benefit of various states in order to comply with the states’ financial requirements for money remittance licenses and telecommunications resellers, respectively. At October 31, 2017, the Company had aggregate performance bonds of $15.1 million outstanding. Substantially Restricted Cash and Cash Equivalents The Company treats unrestricted cash and cash equivalents held by IDT Payment Services, which provides the Company’s international money transfer services in the United States, as substantially restricted and unavailable for other purposes. At October 31, 2017 and July 31, 2017, “Cash and cash equivalents” in the Company’s consolidated balance sheets included an aggregate of $8.6 million and $10.8 million, respectively, held by IDT Payment Services that was unavailable for other purposes. Straight Path Communications Inc. Settlement Agreement and Mutual Release The Company entered into various agreements with Straight Path prior to the Straight Path Spin-Off including a Separation and Distribution Agreement to effect the separation and provide a framework for the Company’s relationship with Straight Path after the spin-off. On September 20, 2016, the Company received a letter of inquiry from the Enforcement Bureau of the FCC requesting certain information and materials related to an investigation of potential violations by Straight Path Spectrum LLC (formerly a subsidiary of the Company and currently a subsidiary of Straight Path) in connection with licenses to operate on the 28 GHz and 39 GHz bands of the Fixed Microwave Services. The Company has cooperated with the FCC in this matter and has responded to the letter of inquiry. If the FCC were to pursue separate action against the Company, the FCC could seek to fine or impose regulatory penalties or civil liability on the Company related to activities during the period of ownership by the Company. The Separation and Distribution Agreement provides for the Company and Straight Path to indemnify each other for certain liabilities. The Company and Straight Path each communicated that it was entitled to indemnification from the other in connection with the inquiry described above and related matters. On October 24, 2017, the Company, Straight Path, SPIP and PR-SP IP Holdings LLC (“PR-SP”), an entity owned by Howard Jonas, entered into a Settlement Agreement and Release that provides for, among other things, the settlement and mutual release of potential liabilities and claims that may exist or arise under the Separation and Distribution Agreement between the Company and Straight Path. Consistent with the previously announced term sheet dated April 9, 2017, in exchange for the mutual release, the Company paid Straight Path an aggregate of $16 million in cash, Straight Path transferred to the Company its majority ownership interest in Straight Path IP Group Holding, Inc. (“New SPIP”), which holds the equity of SPIP, the entity that holds intellectual property primarily related to communications over computer networks, subject to the right to receive 22% of the net proceeds, if any, received by SPIP from licenses, settlements, awards or judgments involving any of the patent rights and certain transfers of the patents or related rights, that will be retained by Straight Path’s stockholders (such equity interest, subject to the retained interest right, the “IP Interest”), and the Company undertook certain funding and other obligations related to SPIP. The Settlement Agreement and Release allocates (i) $10 million of the payment and the retained interest right to the settlement of claims and the mutual release and (ii) $6 million to the transfer of the IP Interest. Consistent with the contemplated arrangement that was previously disclosed, on October 24, 2017, the Company sold its entire majority interests in New SPIP to PR-SP in exchange for $6 million and the assumption by PR-SP of the funding and other obligations undertaken by the Company. |
Other (Expense) Income, Net
Other (Expense) Income, Net | 3 Months Ended |
Oct. 31, 2017 | |
Other (Expense) Income, Net [Abstract] | |
Other (Expense) Income, Net | Note 12—Other (Expense) Income, Net Other (expense) income, net consists of the following: Three Months Ended 2017 2016 (in thousands) Foreign currency transaction (losses) gains $ (728 ) $ 2,059 (Loss) gain on investments (119 ) 263 Gain on marketable securities 7 — Other 14 70 Total other (expense) income, net $ (826 ) $ 2,392 |
Income Tax and New Jersey Corpo
Income Tax and New Jersey Corporation Business Tax | 3 Months Ended |
Oct. 31, 2017 | |
Income Tax and New Jersey Corporation Business Tax [Abstract] | |
Income Tax and New Jersey Corporation Business Tax | Note 13—Income Tax and New Jersey Corporation Business Tax In the three months ended October 31, 2016, the Company determined that its valuation allowance on the losses of Elmion Netherlands B.V., a Netherlands subsidiary, was no longer required due to an internal reorganization that generated income and a projection of income in future periods. The Company recorded a benefit from income taxes of $16.6 million in the three months ended October 31, 2016 from the full recognition of the Elmion Netherlands B.V. deferred tax assets. In September 2017, the Company, IDT Domestic Telecom, Inc. (a subsidiary of the Company) and certain other affiliates, were certified by the New Jersey Economic Development Authority as having met all of the requirements of the Grow New Jersey Assistance Act Tax Credit Program. The corporation business tax credits to be received are a maximum of $21.1 million. The Company may claim a tax credit each tax year for ten years beginning in 2017. The tax credit can be applied to 100% of the Company’s New Jersey tax liability each year, and the unused amount of the annual credit can be carried forward. In addition, the Company may apply for a tax credit transfer certificate to sell unused tax credits to another business. The tax credits must be sold for no less than 75% of the value of the tax credits. The tax credits are subject to reduction, forfeiture and recapture if, among other things, the number of full-time employees declines below the program or statewide minimum. |
Recently Issued Accounting Stan
Recently Issued Accounting Standard Not Yet Adopted | 3 Months Ended |
Oct. 31, 2017 | |
Recently Issued Accounting Standard Not Yet Adopted [Abstract] | |
Recently Issued Accounting Standard Not Yet Adopted | Note 14—Recently Issued Accounting Standard Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board jointly issued a comprehensive new revenue recognition standard that will supersede most of the current revenue recognition guidance under U.S. GAAP and International Financial Reporting Standards (“IFRS”). The goals of the revenue recognition project were to clarify and converge the revenue recognition principles under U.S. GAAP and IFRS and to develop guidance that would streamline and enhance revenue recognition requirements. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. The Company expects to adopt this standard on August 1, 2018 using the modified retrospective approach. The Company has identified its main revenue streams, which include Boss Revolution PIN-less international calling revenue, wholesale carrier services revenue, and domestic and international airtime top-up revenue. The Company is currently reviewing contracts and other relevant documents related to its wholesale carrier services revenue to determine how to apply the new standard to this revenue stream. The Company expects to continue its review and evaluation for its other revenue streams in fiscal 2018. Currently, the Company cannot reasonably estimate the impact that the adoption of the standard will have on its consolidated financial statements. In January 2016, the FASB issued an ASU to provide more information about recognition, measurement, presentation and disclosure of financial instruments. The amendments in the ASU include, among other changes, the following: (1) equity investments (except those accounted for under the equity method or that result in consolidation) will be measured at fair value with changes in fair value recognized in net income, (2) a qualitative assessment each reporting period to identify impairment of equity investments without readily determinable fair values, (3) financial assets and financial liabilities will be presented separately by measurement category and form of financial asset on the balance sheet or the notes to the financial statements, and (4) an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified as available-for-sale in other comprehensive income. In addition, a practicability exception will be available for equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient. These investments may be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Entities will have to reassess at each reporting period whether an investment qualifies for this practicability exception. The Company will adopt the amendments in this ASU on August 1, 2018. The Company is evaluating the impact that the ASU will have on its consolidated financial statements. In February 2016, the FASB issued an ASU related to the accounting for leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company will adopt the new standard on August 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. In June 2016, the FASB issued an ASU that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. The Company will adopt the new standard on August 1, 2020. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. In November 2016, the FASB issued an ASU that includes specific guidance on the classification and presentation of changes in restricted cash and cash equivalents in the statement of cash flows. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash or restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning of the period and end of the period total amounts shown on the statement of cash flows. The ASU will be applied using a retrospective transition method to each period presented. The Company will adopt the amendments in this ASU on August 1, 2018. The adoption will impact the Company’s beginning of the period and end of the period cash and cash equivalents balance in its statement of cash flows, as well as its net cash provided by operating activities. In January 2017, the FASB issued an ASU to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current guidance, there are three elements of a business—inputs, processes, and outputs. While an integrated set of assets and activities (collectively referred to as a “set”) that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs, for example, by integrating the acquired set with their own inputs and processes. The amendments in this ASU provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business; therefore, the FASB has developed more stringent criteria for sets without outputs. Lastly, the ASU narrows the definition of the term output. The Company will adopt the amendments in this ASU on August 1, 2018. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. In May 2017, the FASB issued an ASU to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Pursuant to this ASU, an entity should account for the effects of a modification unless all the following are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified (if the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification); (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The Company will adopt the amendments in this ASU prospectively to an award modified on or after on August 1, 2018. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. In August 2017, the FASB issued an ASU intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the ASU includes certain targeted improvements to simplify the application of hedge accounting guidance in U.S. GAAP. The amendments in this ASU are effective for the Company on August 1, 2019. Early application is permitted. Entities will apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. The Company is evaluating the impact that this ASU will have on its consolidated financial statements. |
IDT Financial Services Holdin22
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale [Abstract] | |
Schedule of assets and liabilities held for sale | October 31, July 31, (in thousands) Current assets held for sale: Cash and cash equivalents $ 6,057 $ 5,716 Restricted cash and cash equivalents 101,614 115,609 Trade accounts receivable, net of allowance for doubtful accounts of $2,977 and $2,550 at October 31, 2017 and July 31, 2017, respectively 1,681 1,844 Prepaid expenses 866 758 Other current assets 448 340 Total current assets held for sale $ 110,666 $ 124,267 Noncurrent assets held for sale: Property, plant and equipment, net $ 21 $ 24 Other intangibles, net 159 165 Other assets 4,966 4,945 Total noncurrent assets held for sale $ 5,146 $ 5,134 Current liabilities held for sale: Trade accounts payable $ 718 $ 372 Accrued expenses 272 226 Customer deposits 100,873 114,689 Other current liabilities 80 31 Total current liabilities held for sale $ 101,943 $ 115,318 Noncurrent liabilities held for sale: Other liabilities $ 515 $ 550 Total noncurrent liabilities held for sale $ 515 $ 550 |
Schedule of consolidated statements of operations | Three Months Ended 2017 2016 (in thousands) (Loss) income before income taxes $ (450 ) $ 595 (Loss) income before income taxes attributable to IDT Corporation $ (450 ) $ 595 |
Proposed Spin-Off of Rafael H23
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. [Abstract] | |
Schedule of consolidated balance sheets | October 31, July 31, (in thousands) Series D Note (at fair value) $ 6,300 $ 6,300 Warrants (at cost) 5,400 5,400 Right to receive additional shares (at cost) — 400 Total investment in Rafael Pharma $ 11,700 $ 12,100 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
Marketable Securities [Abstract] | |
Summary of marketable securities | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Available-for-sale securities: October 31, 2017: Certificates of deposit* $ 31,908 $ 2 $ (2 ) $ 31,908 Federal Government Sponsored Enterprise notes 3,217 — (17 ) 3,200 International agency notes 402 — (3 ) 399 Mutual funds 5,391 56 — 5,447 Corporate bonds 3,379 — (4 ) 3,375 Equity 75 — (6 ) 69 U.S. Treasury notes 5,396 — (22 ) 5,374 Municipal bonds 4,519 3 (3 ) 4,519 Total $ 54,287 $ 61 $ (57 ) $ 54,291 July 31, 2017: Certificates of deposit* $ 29,011 $ 1 $ (7 ) $ 29,005 Federal Government Sponsored Enterprise notes 3,992 — (14 ) 3,978 International agency notes 291 — — 291 Mutual funds 5,353 77 — 5,430 Corporate bonds 4,643 — — 4,643 Equity 74 — (26 ) 48 U.S. Treasury notes 6,673 — — 6,673 Municipal bonds 8,201 4 (1 ) 8,204 Total $ 58,238 $ 82 $ (48 ) $ 58,272 * Each of the Company’s certificates of deposit has a CUSIP, was purchased in the secondary market through a broker, and may be sold in the secondary market. |
Summary of available-for-sale debt securities | Fair Value (in thousands) Within one year $ 31,586 After one year through five years 17,189 After five years through ten years — After ten years — Total $ 48,775 |
Summary of available-for-sale securities, unrealized loss position | Unrealized Losses Fair Value (in thousands) October 31, 2017: Certificates of deposit $ 2 $ 7,040 Federal Government Sponsored Enterprise notes 17 3,200 International agency notes 3 399 Corporate bonds 4 2,737 Equity 6 69 U.S. Treasury notes 22 5,374 Municipal bonds 3 3,998 Total $ 57 $ 22,817 July 31, 2017: Certificates of deposit $ 7 $ 12,155 Federal Government Sponsored Enterprise notes 14 3,529 Equity 26 48 Municipal bonds 1 3,349 Total $ 48 $ 19,081 |
Summary of available-for-sale securities, continuous unrealized loss position | Unrealized Fair Value (in thousands) Federal Government Sponsored Enterprise notes $ 8 $ 1,362 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Summary of balance of assets measured at fair value on a recurring basis | Level 1 (1) Level 2 (2) Level 3 (3) Total (in thousands) October 31, 2017 Available-for-sale securities: Marketable securities $ 10,891 $ 43,400 $ — $ 54,291 Rafael Pharma Series D Note — — 6,300 6,300 Total $ 10,891 $ 43,400 $ 6,300 $ 60,591 July 31, 2017 Available-for-sale securities: Marketable securities $ 12,151 $ 46,121 $ — $ 58,272 Rafael Pharma Series D Note — — 6,300 6,300 Total $ 12,151 $ 46,121 $ 6,300 $ 64,572 (1) – quoted prices in active markets for identical assets or liabilities (2) – observable inputs other than quoted prices in active markets for identical assets and liabilities (3) – no observable pricing inputs in the market |
Summary of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | Three Months Ended 2017 2016 (in thousands) Balance, beginning of period $ 6,300 $ 2,000 Purchases — 2,200 Balance, end of period $ 6,300 $ 4,200 Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period $ — $ — |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
Equity [Abstract] | |
Summary of changes in the components of equity | Three Months Ended Attributable to IDT Corporation Noncontrolling Interests Total (in thousands) Balance, July 31, 2017 $ 145,734 $ 8,823 $ 154,557 Dividends declared ($0.19 per share) (4,720 ) — (4,720 ) Restricted Class B common stock purchased from employees (23 ) — (23 ) Distributions to noncontrolling interests — (380 ) (380 ) Stock-based compensation 810 — 810 Comprehensive income: Net loss (2,092 ) 295 (1,797 ) Other comprehensive loss (398 ) — (398 ) Comprehensive income (2,490 ) 295 (2,195 ) Balance, October 31, 2017 $ 139,311 $ 8,738 $ 148,049 |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
(Loss) Earnings Per Share [Abstract] | |
Summary of weighted-average number of shares used in the calculation of basic and diluted (loss) earnings per share | Three Months Ended 2017 2016 (in thousands) Basic weighted-average number of shares 24,628 22,712 Effect of dilutive securities: Stock options — 38 Non-vested restricted Class B common stock — 149 Diluted weighted-average number of shares 24,628 22,899 |
Summary of shares excluded from the diluted earnings per share | Three Months Ended 2017 2016 (in thousands) Stock options 1,273 32 Non-vested restricted Class B common stock 223 — Shares excluded from the calculation of diluted earnings per share 1,496 32 |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Schedule of accumulated balances for each classification of other comprehensive loss | Unrealized Foreign Accumulated Location (in thousands) Balance, July 31, 2017 $ 2,134 $ (4,477 ) $ (2,343 ) Other comprehensive loss attributable to IDT Corporation before reclassifications (23 ) (368 ) (391 ) Less: reclassification for gain included in net loss (7 ) — (7 ) Other (expense) income, net Net other comprehensive loss attributable to IDT Corporation (30 ) (368 ) (398 ) Balance, October 31, 2017 $ 2,104 $ (4,845 ) $ (2,741 ) |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
Business Segment Information [Abstract] | |
Summary of operating results of business segments | (in thousands) Telecom net2phone-UCaaS All Other Corporate Total Three Months Ended October 31, 2017 Revenues $ 385,063 $ 7,788 $ 704 $ — $ 393,555 Income (loss) from operations 4,561 (674 ) (631 ) (3,173 ) 83 Severance 409 — — 30 439 Other operating expense — — — (779 ) (779 ) Three Months Ended October 31, 2016 Revenues $ 361,511 $ 7,136 $ 504 $ — $ 369,151 Income (loss) from operations 6,544 (174 ) 90 (1,274 ) 5,186 Other operating expense — — — (199 ) (199 ) |
Other (Expense) Income, Net (Ta
Other (Expense) Income, Net (Tables) | 3 Months Ended |
Oct. 31, 2017 | |
Other (Expense) Income, Net [Abstract] | |
Schedule of other (expense) income, net | Three Months Ended 2017 2016 (in thousands) Foreign currency transaction (losses) gains $ (728 ) $ 2,059 (Loss) gain on investments (119 ) 263 Gain on marketable securities 7 — Other 14 70 Total other (expense) income, net $ (826 ) $ 2,392 |
IDT Financial Services Holdin31
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 |
Current assets held for sale: | ||
Cash and cash equivalents | $ 6,057 | $ 5,716 |
Total current assets held for sale | 110,666 | 124,267 |
Noncurrent assets held for sale: | ||
Other assets | 5,146 | 5,134 |
Current liabilities held for sale: | ||
Total current liabilities held for sale | 101,943 | 115,318 |
Noncurrent liabilities held for sale: | ||
Total noncurrent liabilities held for sale | 515 | 550 |
IDT Financial Services Holding Limited [Member] | ||
Current assets held for sale: | ||
Cash and cash equivalents | 6,057 | 5,716 |
Restricted cash and cash equivalents | 101,614 | 115,609 |
Trade accounts receivable, net of allowance for doubtful accounts of $2,977 and $2,550 at October 31, 2017 and July 31, 2017, respectively | 1,681 | 1,844 |
Prepaid expenses | 866 | 758 |
Other current assets | 448 | 340 |
Total current assets held for sale | 110,666 | 124,267 |
Noncurrent assets held for sale: | ||
Property, plant and equipment, net | 21 | 24 |
Other intangibles, net | 159 | 165 |
Other assets | 4,966 | 4,945 |
Total noncurrent assets held for sale | 5,146 | 5,134 |
Current liabilities held for sale: | ||
Trade accounts payable | 718 | 372 |
Accrued expenses | 272 | 226 |
Customer deposits | 100,873 | 114,689 |
Other current liabilities | 80 | 31 |
Total current liabilities held for sale | 101,943 | 115,318 |
Noncurrent liabilities held for sale: | ||
Other liabilities | 515 | 550 |
Total noncurrent liabilities held for sale | $ 515 | $ 550 |
IDT Financial Services Holdin32
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
(Loss) income before income taxes | $ (381) | $ 7,879 |
IDT Financial Services Holding Limited [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
(Loss) income before income taxes | (450) | 595 |
(Loss) income before income taxes attributable to IDT Corporation | $ (450) | $ 595 |
IDT Financial Services Holdin33
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Jul. 31, 2017 | |
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale (Textual) | ||
Allowance for doubtful accounts | $ 2,977 | $ 2,550 |
Net asset value | 13,900 | |
IDT Financial Services Holding Limited [Member] | ||
IDT Financial Services Holding Limited Assets and Liabilities Held for Sale (Textual) | ||
Outstanding equity interests | $ 3,800 |
Proposed Spin-Off of Rafael H34
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Details) - Rafael Pharma [Member] - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 |
Schedule of consolidated balance sheets | ||
Series D Note (at fair value) | $ 6,300 | $ 6,300 |
Warrants (at cost) | 5,400 | 5,400 |
Right to receive additional shares (at cost) | 400 | |
Total investment in Rafael Pharma | $ 11,700 | $ 12,100 |
Proposed Spin-Off of Rafael H35
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |||
Oct. 31, 2017 | Sep. 19, 2017 | Sep. 14, 2017 | Jul. 31, 2017 | |
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Series C convertible notes | $ 26,390 | $ 26,894 | ||
Howard S. Jonas [Member] | IDT Corporation [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Percentage of contractual right to receive additional shares | 9.00% | |||
Rafael Pharmaceuticals, Inc. [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Maximum exposure to loss | 11,700 | |||
Rafael Pharmaceuticals, Inc. [Member] | Convertible promissory note [Member] | Howard and Deborah Jonas [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Series C convertible notes | 525 | |||
Rafael Pharmaceuticals, Inc. [Member] | Convertible promissory note [Member] | The Howard S. and Deborah Jonas Foundation [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Series C convertible notes | $ 525 | |||
CS Pharma Holdings, LLC [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Holds percentages of interest | 50.00% | |||
CS Pharma Holdings, LLC [Member] | Convertible promissory note ("Series D Note") [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Purchase shares of capital stock percentage | 56.00% | |||
Exercise warrants value | $ 10,000 | |||
Warrant, description | The exercise price of the warrant is the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments. The minimum initial and subsequent exercises of the warrant shall be for such number of shares that will result in at least $5 million of gross proceeds to Rafael Pharma, or such lesser amount as represents 5% of the outstanding capital stock of Rafael Pharma, or such lesser amount as may then remain unexercised. The warrant will expire upon the earlier of December 31, 2020 or a qualified initial public offering or liquidation event. | |||
Warrants expiry date | Dec. 31, 2020 | |||
Convertible promissory note, principal amount | $ 10,000 | |||
Convertible promissory note, rate of interest | 3.50% | |||
Convertible promissory note, maturity date | Sep. 16, 2018 | |||
Initial amount of investment amounts paid | $ 5,000 | |||
Convertible notes conversion features, description | The Series D Note also includes a mandatory conversion into Rafael Pharma common stock upon a qualified initial public offering, and conversion at the holder's option upon an unqualified financing event. In all cases, the Series D Note conversion price is based on the applicable financing purchase price. | |||
IDT-Rafael Holdings, LLC [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Contractual right to receive additional shares, description | (i) Food and Drug Administration approval of a Rafael Pharma drug application, (ii) an initial public offering of Rafael Pharma at a valuation of over $500 million, or (iii) a sale of Rafael Pharma above certain valuations. Currently, none of the conditions have been satisfied and the right remains contingent. On September 14, 2017, IDT-Rafael Holdings distributed this right to its members on a pro rata basis such that the Company received the right to 9% of the outstanding capital stock of Rafael Pharma and Howard S. Jonas, the Company's Chairman of the Board, and Chairman of the Board of Rafael Pharma, received the right to 1% of the outstanding capital stock of Rafael Pharma. In addition, as compensation for assuming the role of Chairman of the Board of Rafael Pharma, and to create additional incentive to contribute to the success of Rafael Pharma, on September 19, 2017, the Company transferred its right to receive 9% of the outstanding capital stock of Rafael Pharma to Mr. Jonas. The right is further transferable at the discretion of Mr. Jonas. | |||
Percentage of contractual right to receive additional shares | 10.00% | |||
Holds percentages of interest | 90.00% | |||
IDT-Rafael Holdings, LLC [Member] | Maximum [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Contribute cash | $ 60,000 | |||
IDT-Rafael Holdings, LLC [Member] | Minimum [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Contribute cash | $ 50,000 | |||
IDT-Rafael Holdings, LLC [Member] | IDT Corporation [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Percentage of contractual right to receive additional shares | 9.00% | |||
IDT-Rafael Holdings, LLC [Member] | Howard S. Jonas [Member] | ||||
Proposed Spin-Off of Rafael Holdings, Inc. and Investment in Rafael Pharmaceuticals, Inc. (Textual) | ||||
Percentage of contractual right to receive additional shares | 1.00% |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 | |
Available-for-sale securities: | |||
Amortized Cost | $ 54,287 | $ 58,238 | |
Gross Unrealized Gains, Total | 61 | 82 | |
Gross Unrealized Losses, Total | (57) | (48) | |
Fair Value | 54,291 | 58,272 | |
Certificates of deposit [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | [1] | 31,908 | 29,011 |
Gross Unrealized Gains | [1] | 2 | 1 |
Unrealized Losses | [1] | (2) | (7) |
Fair Value | [1] | 31,908 | 29,005 |
Federal Government Sponsored Enterprise notes [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | 3,217 | 3,992 | |
Gross Unrealized Gains | |||
Unrealized Losses | (17) | (14) | |
Fair Value | 3,200 | 3,978 | |
International agency notes [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | 402 | 291 | |
Gross Unrealized Gains | |||
Unrealized Losses | (3) | ||
Fair Value | 399 | 291 | |
Mutual funds [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | 5,391 | 5,353 | |
Gross Unrealized Gains | 56 | 77 | |
Gross Unrealized Losses | |||
Fair Value | 5,447 | 5,430 | |
Corporate bonds [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | 3,379 | 4,643 | |
Gross Unrealized Gains | |||
Unrealized Losses | (4) | ||
Fair Value | 3,375 | 4,643 | |
Equity [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | 75 | 74 | |
Gross Unrealized Gains | |||
Gross Unrealized Losses | (6) | (26) | |
Fair Value | 69 | 48 | |
U.S. Treasury notes [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | 5,396 | 6,673 | |
Gross Unrealized Gains | |||
Unrealized Losses | (22) | ||
Fair Value | 5,374 | 6,673 | |
Municipal bonds [Member] | |||
Available-for-sale securities: | |||
Amortized Cost | 4,519 | 8,201 | |
Gross Unrealized Gains | 3 | 4 | |
Unrealized Losses | (3) | (1) | |
Fair Value | $ 4,519 | $ 8,204 | |
[1] | Each of the Company's certificates of deposit has a CUSIP, was purchased in the secondary market through a broker, and may be sold in the secondary market. |
Marketable Securities (Details
Marketable Securities (Details 1) $ in Thousands | Oct. 31, 2017USD ($) |
Marketable Securities [Abstract] | |
Within one year | $ 31,586 |
After one year through five years | 17,189 |
After five years through ten years | |
After ten years | |
Total | $ 48,775 |
Marketable Securities (Detail38
Marketable Securities (Details 2) - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | $ 57 | $ 48 |
Fair Value | 22,817 | 19,081 |
Certificates of deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | 2 | 7 |
Fair Value | 7,040 | 12,155 |
Federal Government Sponsored Enterprise notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | 17 | 14 |
Fair Value | 3,200 | 3,529 |
International agency notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | 3 | |
Fair Value | 399 | |
Corporate bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | 4 | |
Fair Value | 2,737 | |
Equity [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | 6 | 26 |
Fair Value | 69 | 48 |
U.S. Treasury notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | 22 | |
Fair Value | 5,374 | |
Municipal bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Losses | 3 | 1 |
Fair Value | $ 3,998 | $ 3,349 |
Marketable Securities (Detail39
Marketable Securities (Details 3) - Federal Government Sponsored Enterprise notes [Member] $ in Thousands | Oct. 31, 2017USD ($) |
Available-for-sale securities: | |
Unrealized Losses | $ 8 |
Fair Value | $ 1,362 |
Marketable Securities (Detail40
Marketable Securities (Details Textual) - USD ($) | 3 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2017 | |
Marketable Securities (Textual) | |||
Proceeds from maturities and sales of available-for-sale securities | $ 19,600,000 | $ 6,000,000 | |
Gross realized gains | $ 7,000 | ||
Zedge [Member] | |||
Marketable Securities (Textual) | |||
Shares | 23,741 | 23,227 | |
Shares owned fair value | $ 69,000 | $ 48,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 31, 2017 | |
Available-for-sale securities: | |||
Marketable securities | $ 54,291 | $ 58,272 | |
Rafael Pharma Series D Note | 6,300 | 6,300 | |
Total | 60,591 | 64,572 | |
Fair Value Measurements, Recurring basis [Member] | Level 1 [Member] | |||
Available-for-sale securities: | |||
Marketable securities | [1] | 10,891 | 12,151 |
Rafael Pharma Series D Note | [1] | ||
Total | [1] | 10,891 | 12,151 |
Fair Value Measurements, Recurring basis [Member] | Level 2 [Member] | |||
Available-for-sale securities: | |||
Marketable securities | [2] | 43,400 | 46,121 |
Rafael Pharma Series D Note | [2] | ||
Total | [2] | 43,400 | 46,121 |
Fair Value Measurements, Recurring basis [Member] | Level 3 [Member] | |||
Available-for-sale securities: | |||
Marketable securities | [3] | ||
Rafael Pharma Series D Note | [3] | 6,300 | 6,300 |
Total | [3] | $ 6,300 | $ 6,300 |
[1] | quoted prices in active markets for identical assets or liabilities | ||
[2] | observable inputs other than quoted prices in active markets for identical assets and liabilities | ||
[3] | no observable pricing inputs in the market |
Fair Value Measurements (Deta42
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Fair Value Measurements [Abstract] | ||
Balance, beginning of period | $ 6,300 | $ 2,000 |
Purchases | 2,200 | |
Balance, end of period | 6,300 | 4,200 |
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period |
Fair Value Measurements (Deta43
Fair Value Measurements (Details Textual) - USD ($) $ in Millions | Oct. 31, 2017 | Jul. 31, 2017 |
Fair Value Measurements (Textual) | ||
Fair value of investments in hedge funds | $ 8.6 | $ 8.6 |
Carrying value of investments | $ 10.4 | $ 10.8 |
Equity (Details)
Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | $ 154,557 | |
Dividends declared ($0.19 per share) | (4,720) | |
Restricted Class B common stock purchased from employees | (23) | |
Distributions to noncontrolling interests | (380) | |
Stock-based compensation | 810 | |
Comprehensive income: | ||
Net loss | (1,797) | $ 22,294 |
Other comprehensive loss | (398) | (2,885) |
Comprehensive income | (2,195) | $ 19,409 |
Ending Balance | 148,049 | |
Attributable to IDT Corporation [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 145,734 | |
Dividends declared ($0.19 per share) | (4,720) | |
Restricted Class B common stock purchased from employees | (23) | |
Distributions to noncontrolling interests | ||
Stock-based compensation | 810 | |
Comprehensive income: | ||
Net loss | (2,092) | |
Other comprehensive loss | (398) | |
Comprehensive income | (2,490) | |
Ending Balance | 139,311 | |
Noncontrolling Interests [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 8,823 | |
Dividends declared ($0.19 per share) | ||
Restricted Class B common stock purchased from employees | ||
Distributions to noncontrolling interests | (380) | |
Stock-based compensation | ||
Comprehensive income: | ||
Net loss | 295 | |
Other comprehensive loss | ||
Comprehensive income | 295 | |
Ending Balance | $ 8,738 |
Equity (Details Textual)
Equity (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Dec. 04, 2017 | Sep. 28, 2017 | Oct. 31, 2017 | Oct. 31, 2016 | |
Common Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Aggregate dividends paid on common stock including Class A and Class B. | $ 4,700,000 | $ 4,400,000 | ||
Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Dividends paid per share in cash | $ 0.19 | $ 0.19 | ||
Common Class A [Member] | Subsequent Event [Member] | ||||
Class of Stock [Line Items] | ||||
Dividends paid per share in cash | $ 0.19 | |||
Paid date of declared dividend | Dec. 29, 2017 | |||
Record date of declared dividend | Dec. 18, 2017 | |||
Common Class B [Member] | ||||
Class of Stock [Line Items] | ||||
Dividends paid per share in cash | $ 0.19 | $ 0.19 | ||
Class B common stock shares purchased options | 8,000,000 | |||
Stock repurchase program, remaining number of shares authorized to be repurchased | 8,000,000 | |||
Common Class B [Member] | Subsequent Event [Member] | ||||
Class of Stock [Line Items] | ||||
Dividends paid per share in cash | $ 0.19 | |||
Paid date of declared dividend | Dec. 29, 2017 | |||
Record date of declared dividend | Dec. 18, 2017 | |||
Common Class B [Member] | Employee [Member] | ||||
Class of Stock [Line Items] | ||||
Aggregate purchase price of shares repurchased | $ 23,000 | $ 23,000 | ||
Class B common stock shares repurchased | 1,668 | 1,542 | ||
Common Class B [Member] | 2015 Stock Option and Incentive Plan [Member] | ||||
Class of Stock [Line Items] | ||||
Additional shares available stock option incentive plan for grants | 300,000 |
(Loss) Earnings Per Share (Deta
(Loss) Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Weighted-average number of shares used in the calculation of basic and diluted earnings per share | ||
Basic weighted-average number of shares | 24,628 | 22,712 |
Effect of dilutive securities: | ||
Stock options | 38 | |
Non-vested restricted Class B common stock | 149 | |
Diluted weighted-average number of shares | 24,628 | 22,899 |
(Loss) Earnings Per Share (De47
(Loss) Earnings Per Share (Details 1) - shares shares in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Stock options excluded from the diluted earnings per share computations | ||
Shares excluded from the calculation of diluted earnings per share | 1,496 | 32 |
Non-vested restricted Class B common stock [Member] | ||
Stock options excluded from the diluted earnings per share computations | ||
Shares excluded from the calculation of diluted earnings per share | 223 | |
Stock options [Member] | ||
Stock options excluded from the diluted earnings per share computations | ||
Shares excluded from the calculation of diluted earnings per share | 1,273 | 32 |
Revolving Credit Loan Payable (
Revolving Credit Loan Payable (Details) $ in Millions | Jul. 12, 2012USD ($)BasisPoint | Oct. 31, 2017USD ($) | Jul. 31, 2017USD ($) |
Revolving Credit Loan Payable (Textual) | |||
Maximum principal amount of credit agreement | $ 25 | ||
Unused outstanding amount | $ 25 | ||
Line of credit maturity date | Apr. 30, 2018 | ||
Average percentage of commitment fee per annum | 0.375% | ||
Maximum amount of investments in and advances to affiliates at fair value | $ 110 | ||
Line of credit [Member] | |||
Revolving Credit Loan Payable (Textual) | |||
Line of credit facility, outstanding | |||
July 12, 2012 [Member] | |||
Revolving Credit Loan Payable (Textual) | |||
Interest rate description | The principal outstanding bears interest per annum, at the option of IDT Telecom, at either (a) the U.S. Prime Rate less 125 basis points, or (b) the LIBOR rate adjusted by the Regulation D maximum reserve requirement plus 150 basis points. | ||
Prime Rate [Member] | |||
Revolving Credit Loan Payable (Textual) | |||
U.S. Prime rate basis points | BasisPoint | 125 |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Schedule of accumulated balances for each classification of other comprehensive income (loss) | ||
Beginning balance | $ (2,343) | |
Other comprehensive loss attributable to IDT Corporation before reclassifications | (398) | $ (2,885) |
Net other comprehensive loss attributable to IDT Corporation | (398) | $ (2,885) |
Ending balance | (2,741) | |
Unrealized Gain (Loss) on Available-for-Sale Securities [Member] | ||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | ||
Beginning balance | 2,134 | |
Other comprehensive loss attributable to IDT Corporation before reclassifications | (23) | |
Net other comprehensive loss attributable to IDT Corporation | (30) | |
Ending balance | 2,104 | |
Unrealized Gain (Loss) on Available-for-Sale Securities [Member] | Other (expense) income, net [Member] | ||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | ||
Less: reclassification for gain included in net loss | (7) | |
Foreign Currency Translation [Member] | ||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | ||
Beginning balance | (4,477) | |
Other comprehensive loss attributable to IDT Corporation before reclassifications | (368) | |
Net other comprehensive loss attributable to IDT Corporation | (368) | |
Ending balance | (4,845) | |
Foreign Currency Translation [Member] | Other (expense) income, net [Member] | ||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | ||
Less: reclassification for gain included in net loss | ||
Accumulated Other Comprehensive Loss [Member] | ||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | ||
Beginning balance | (2,343) | |
Other comprehensive loss attributable to IDT Corporation before reclassifications | (391) | |
Net other comprehensive loss attributable to IDT Corporation | (398) | |
Ending balance | (2,741) | |
Accumulated Other Comprehensive Loss [Member] | Other (expense) income, net [Member] | ||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | ||
Less: reclassification for gain included in net loss | $ (7) |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive Loss (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2017 | |
Schedule of accumulated balances for each classification of other comprehensive income (loss) | |||
Net other comprehensive income (loss) attributable to IDT Corporation | $ (398) | $ (2,885) | |
Unrealized gain (loss) on available-for-sale securities [Member] | |||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | |||
Net other comprehensive income (loss) attributable to IDT Corporation | (30) | ||
Unrealized gain (loss) on available-for-sale securities [Member] | Rafael Pharmaceuticals, Inc. [Member] | |||
Schedule of accumulated balances for each classification of other comprehensive income (loss) | |||
Net other comprehensive income (loss) attributable to IDT Corporation | $ 2,100 | $ 2,100 |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 393,555 | $ 369,151 |
Income (loss) from operations | 83 | 5,186 |
Severance | 439 | |
Other operating expense | (779) | (199) |
Operating Segments [Member] | Telecom Platform Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 385,063 | 361,511 |
Income (loss) from operations | 4,561 | 6,544 |
Severance | 409 | |
Other operating expense | ||
Operating Segments [Member] | net2phone-UCaaS [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 7,788 | 7,136 |
Income (loss) from operations | (674) | (174) |
Severance | ||
Other operating expense | ||
Operating Segments [Member] | All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 704 | 504 |
Income (loss) from operations | (631) | 90 |
Severance | ||
Other operating expense | ||
Operating Segments [Member] | Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | ||
Income (loss) from operations | (3,173) | (1,274) |
Severance | 30 | |
Other operating expense | $ (779) | $ (199) |
Business Segment Information 52
Business Segment Information (Details Textual) | 3 Months Ended |
Oct. 31, 2017Segment | |
Business Segment Information (Textual) | |
Number of reportable segments | 2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Oct. 24, 2017 | Oct. 31, 2017 | Oct. 31, 2016 | Sep. 30, 2017 | Jul. 31, 2017 |
Commitments and Contingencies (Textual) | |||||
Accrued expenses | $ 39,900 | $ 43,500 | |||
Purchase commitment of company | 60,900 | ||||
Performance bonds outstanding | 15,100 | ||||
Escrow deposit | $ 11,750 | ||||
Cash and cash equivalents | 8,600 | $ 10,800 | |||
Payment for transfer of the IP Interest | 6,000 | ||||
Payment for settlement of claims and mutual release | $ 10,000 | ||||
Stockholders, ownership percentage | 22.00% | ||||
Net proceeds from sale of majority interests in New SPIP | $ 6,000 | 6,000 | |||
Company paid Straight Path an aggregate of cash | $ 16,000 | ||||
Legal fees | $ 779 | $ 199 |
Other (Expense) Income, Net (De
Other (Expense) Income, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Schedule of other (expense) income, net | ||
Foreign currency transaction (losses) gains | $ (728) | $ 2,059 |
(Loss) gain on investments | (119) | 263 |
Gain on marketable securities | 7 | |
Other | 14 | 70 |
Total other (expense) income, net | $ (826) | $ 2,392 |
Income Tax and New Jersey Cor55
Income Tax and New Jersey Corporation Business Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Sep. 30, 2017 | |
Income Tax and New Jersey Corporation Business Tax (Textual) | |||
Benefit from income taxes | $ 1,416 | $ (14,415) | |
Tax credits to be received | $ 21,100 | ||
Tax credit, description | In September 2017, the Company, IDT Domestic Telecom, Inc. (a subsidiary of the Company) and certain other affiliates, were certified by the New Jersey Economic Development Authority as having met all of the requirements of the Grow New Jersey Assistance Act Tax Credit Program. The corporation business tax credits to be received are a maximum of $21.1 million. The Company may claim a tax credit each tax year for ten years beginning in 2017. The tax credit can be applied to 100% of the Company's New Jersey tax liability each year, and the unused amount of the annual credit can be carried forward. In addition, the Company may apply for a tax credit transfer certificate to sell unused tax credits to another business. The tax credits must be sold for no less than 75% of the value of the tax credits. The tax credits are subject to reduction, forfeiture and recapture if, among other things, the number of full-time employees declines below the program or statewide minimum. | ||
Elmion Netherlands B.V. [Member] | |||
Income Tax and New Jersey Corporation Business Tax (Textual) | |||
Benefit from income taxes | $ 16,600 |