8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 8, 2005

IDT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-16371	22-3415036
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

520 Broad Street Newark, New Jersey	07102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (973) 438-1000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On December 8, 2005, the Registrant issued a press release announcing its results of operations for its fiscal quarter ended October 31, 2005. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01 EXHIBITS

Exhibit 99.1 Press Release, dated December 8, 2005, reporting the results of operations for IDT Corporation’s fiscal quarter ended October 31, 2005.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	IDT CORPORATION
Dated: December 8, 2005	By:	/s/    JAMES A. COURTER
		James A. Courter
		Chief Executive Officer

EXHIBIT INDEX

Exhibit     Number	Description
99.1	Press Release, dated December 8, 2005, reporting the results of operations for the Registrant’s fiscal quarter ended October 31, 2005.

EX-99.1

Exhibit 99.1

IDT Reports Results for First Quarter Fiscal 2006

NEWARK, N.J. — December 8, 2005 — IDT Corporation (NYSE: IDT, IDT.C) announces operating results for the first quarter of fiscal 2006, the three months ended October 31, 2005.

• Revenues decreased 1.1% to $623.1 million from $629.7 million in the first quarter of fiscal 2005.

• The net loss for the first quarter of fiscal 2006 was $27.9 million, or ($0.28) per share, compared to a net loss of $11.7 million, or ($0.12) per share, in the first quarter of fiscal 2005.

• As of October 31, 2005, cash, cash equivalents, and restricted cash and marketable securities stood at $863.4 million, including $88.8 million held by Net2Phone.

The following table summarizes the operating performance of IDT’s business segments¹:

	Revenues						Income (Loss) from Operations
$ millions	Q1 ‘06		Q4 ‘05		Q1 ‘05		Q1 ‘06			Q4 ‘05			Q1 ‘05
IDT Retail Telecom		383.2	$	402.4	$	411.0	$	12.3		$	12.9		$	20.6
IDT Wholesale Telecom		137.3		143.8		129.2		(6.2	)		(4.5	)		(4.9	)
IDT Telecom Total		520.5		546.2		540.2		6.2			8.4			15.7
IDT Entertainment		48.1		39.8		60.4		0.7			(2.2	)		4.6
Voice over IP		21.6		20.3		18.1		(8.1	)		(25.4	)		(7.8	)
IDT Capital		31.4		14.8		6.6		(3.6	)		(4.5	)		(2.9	)
IDT Solutions		1.4		2.2		4.4		(6.2	)		(5.4	)		(9.3	)
Corporate		—		—		—		(16.8	)		(26.5	)		(12.2	)
Total IDT	$	623.1	$	623.3	$	629.7		($27.8	)		($55.6	)		($11.9	)

“Fiscal year 2006 promises to be exciting for IDT,” said Jim Courter, CEO. “We continue to build our core operations while investing in new complementary products and businesses and engaging in several major transactions in order to deliver value to our stockholders. In this quarter, we have announced the sale of Corbina, our Russian telecom operations, realizing a substantial return on our investment, and we have progressed towards the initial public offering of IDT Spectrum. I believe that fiscal 2006 will see more major developments and announcements and I am looking forward to bringing you more news over the course of the year.”

DEVELOPMENTS

• We have agreed to sell Corbina Telecom, our Russian telecom business, for $146 million in cash. We are moving towards a prompt closing of the transaction, from which we should realize a substantial net profit, on a business that we acquired in November 2000.

• In the first quarter of fiscal 2006, we repurchased 2.1 million shares of IDT stock for $26.6 million. We have Board authorization to acquire another 16.7 million shares.

• We are progressing apace with the IPO of IDT Spectrum. The company’s latest filing with the SEC may be found on their website at http://www.sec.gov/.

• On November 10, we formally launched a tender offer for the Net2Phone shares that we do not already own.

• In the first quarter of fiscal 2006, our retail energy business, part of IDT Capital, generated approximately $22 million in revenues, compared to $9.4 million in the fourth quarter of fiscal 2005. We expect significant growth in this business during fiscal 2006.

RESULTS OF OPERATIONS

IDT Telecom Line of Business Detail¹

	Revenues						Gross Profit Margin
$ millions	Q1 ‘06		Q4 ‘05		Q1 ‘05		Q1 ‘06		Q4 ‘05		Q1 ‘05
Calling Cards	$	315.2	$	327.5	$	326.3	24.0	%	23.6	%	22.7	%
Consumer Phone Services		68.0		74.8		84.8	46.7	%	46.5	%	51.8	%
Total Retail		383.2		402.4	$	411.0	28.0	%	27.9	%	28.7	%
Wholesale		137.3		143.8		129.2	9.0	%	9.2	%	10.2	%
Total Telecom	$	520.5	$	546.2	$	540.2	23.0	%	22.9	%	24.2	%

Retail Telecom

• Calling card revenues decreased 3.4% versus the first quarter of fiscal 2005 and fell 3.8% versus the fourth quarter of fiscal 2005. The decrease was mostly the result of softer sales volume in our U.S. calling card business, as we focused our efforts on gross profits generation and improved our revenue-per-minute pricing at the expense of market share. As a result, our calling cards gross margins have increased 130 basis points, to 24.0%, as compared to Q1 of fiscal 2005.

• Calling card revenues in the U.S. increased in California and in the Northwest and Midwest regions during the first quarter of fiscal 2006 versus the fourth quarter of fiscal 2005, while declining in other regions.

• In October, 7-Eleven began carrying co-branded IDT/7-Eleven calling cards in its 5,300 stores.

• Consumer phone services revenues in the first quarter of fiscal 2006 were 19.7% lower than those recorded in the year-ago period and down 9.1% from the fourth quarter of fiscal 2005.

• The customer base for bundled unlimited local and long distance calling within the United States was approximately 202,000 as of October 31, 2005, compared to 220,000 customers as of July 31, 2005 and 302,000 customers as of October 31, 2004. The declines in revenues and subscribers is a direct result of our decision to stop marketing our bundled service early in FY2005 in response to the FCC’s ruling that incumbent carriers are no longer required to lease elements of their local networks to competing carriers, such as IDT. In August, our replacement agreement with Verizon Communications became effective, and we have since resumed our marketing efforts, which didn’t ramp up until the first quarter was well underway.

• In the United Kingdom, under the Toucan brand name, we provide residential bundled phone services as well as Internet and mobile telecommunications services. We launched the Toucan service in November 2003 and now provide services to more than 150,000 customers.

• We launched our Toucan phone services in the Netherlands during the first quarter of fiscal 2006, and expect to launch Internet access services in that market during the second half of Fiscal 2006.

• Operating profit for our Retail Telecom business, while essentially flat on a sequential basis, declined $8.2 million, as compared to the year-ago period. Most of this decline in profitability is due to incremental SG&A spending during the first quarter of fiscal 2006, to prepare for the launch of Telecom’s new product offerings, such as TúYo Mobile prepaid wireless and our English as a Second Language product, both of which were introduced to the marketplace last month.

Wholesale Telecom

• Wholesale Telecom revenues increased 6.3% to $137.3 million from the year-ago’s $129.2 million, and decreased 4.5% from the revenues recorded during the fourth quarter of fiscal 2005.

• The year-over-year revenue increase was driven by a 28.6% increase in minute volume, which was partially offset by a 17.3% decline in per-minute pricing.

IDT Entertainment

• IDT Entertainment generated revenues of $48.1 million in the first quarter of fiscal 2006, compared to $39.8 million of revenues recorded in the fourth quarter of fiscal 2005 and $60.4 million of revenues generated in the first quarter of fiscal 2005.

• The revenue decrease versus the year-ago period is solely due to a de-emphasis of our third-party production services business in favor of directing more resources into the development and production of our proprietary properties.

• Income from operations was $0.7 million in the first quarter of fiscal 2006, compared to a $2.2 million loss from operations in the fourth quarter of fiscal 2005 and income from operations of $4.6 million in the year-ago period. The decrease in income from operations versus the prior year is due to significantly higher marketing expenditures, particularly in our home video distribution business, which released 69 new titles into the marketplace during Q1, a 47% increase over the first quarter of last year.

• On December 2nd, IDT Entertainment closed a Credit Agreement with a bank group led by J.P. Morgan Chase Bank. The Agreement provides for a $125 million secured revolving credit facility to fund production and marketing costs of IDT Entertainment’s first six CG (computer-generated) animated feature films. The loans under the facility will be secured by the slate of feature films to be produced by IDT Entertainment, and will be non-recourse to IDT Corporation’s parent company.

• IDT Entertainment has secured distribution agreements in over twenty-five foreign territories for its feature length CG animated movie Yankee Irving, to be distributed in the United States by Fox Entertainment. Yankee Irving is slated for a summer 2006 release.

• The acquisition of Australian independent home entertainment distributor Imagine Entertainment closed November 30 and gave the company a home entertainment distribution vehicle in Australia and New Zealand. IDT Entertainment now has home entertainment distribution covering all major markets of the English-speaking world.

• The Happy Elf by Harry Connick, Jr., which was animated by IDT Entertainment, aired on television on December 2, and is now being distributed by Anchor Bay Entertainment. The company has also recently acquired the rights to animate the popular comic book character Hellboy.

IDT CONFERENCE CALL INFORMATION

Conference call today, December 8, 2005, at 5:15 PM Eastern Time.

• From the U.S., 1-866-594-2183. No pass code required.

• International callers, 1-973-935-8583

• Replay available for one week at

• 1-877-519-4471, passcode #6788361 for domestic callers,

• or 1-973-341-3080, passcode #6788361 for international callers.

• Webcast of the conference call at www.idt.net. A direct link to the call on the website. An archived copy of the call will be available at the IDT Website in the Investor Relations section’s Presentations for at least six months after the call.

• Financial and statistical information available on IDT’s website at www.idt.net in the “About IDT” Press Releases, and “About IDT” Investor Relations Presentations and Financial sections.

ABOUT IDT CORPORATION

IDT Corporation is a multinational telecommunications, entertainment and technology company. IDT conducts its business primarily through the following operating divisions: IDT Telecom, our largest division, offers retail and wholesale telecommunications services including calling cards, consumer local, long distance, and wireless services; IDT Entertainment operates our animation and entertainment distribution businesses; IDT Capital develops and operates new business ventures; and Voice over IP consists primarily of IDT’s interest in Net2Phone, a provider of VoIP PacketCable, SIP and wireless solutions around the world. Net2Phone is a separate publicly held corporation whose common stock is traded on the NASDAQ National Market under the symbol “NTOP.”

In this press release, all statements that are not purely about historical facts, including, but not limited to, those with the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent IDT’s current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. These risks and uncertainties include, but are certainly not limited to: the sensitivity of our telecommunications businesses, to declining prices; our reliance on success in the pre-paid calling card market; our ability to obtain cost effective termination capacity world wide; our reliance on the financial health of other telecommunication companies that are our customers; the impact of changes to U.S. and foreign regulations; increasing competition in the consumer phone service market; our ability to integrate and manage acquisitions; our ability to effectively develop and produce animated films; our ability to protect our proprietary rights; general economic conditions in the global telecommunications market; the general condition of the economy of the United States and internationally; and any of the other specific risks and uncertainties discussed in our reports filed with the SEC. All forward-looking statements and risk factors included in this document are made as of the date hereof, based on information available to the Company as of the date thereof, and the Company assumes no obligation to update any forward-looking statements or risk factors.

Footnotes

¹ Columns in tables may not add due to rounding.

Investor Contacts	Media Contact
John Swierk COO, IDT Venture Capital 973-438-4171 Mary Jennings Director, Investor Relations 973-438-3124	Gil Nielsen VP, IDT Corporate Communications 973-438-3553

IDT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended October 31,
	2005			2004
	(In thousands, except per share data)
Revenues	$	623,099		$	629,719
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		467,757			469,937
Selling, general and administrative (includes $7,086 in 2005 and $4,833 in 2004 of stock-based compensation)		154,404			144,684
Depreciation and amortization		27,967			24,379
Restructuring and impairment charges		814			2,635
Total costs and expenses		650,942			641,635
Loss from operations		(27,843	)		(11,916	)
Interest income, net		3,081			5,488
Investment and other income, net		1,096			1,344
Loss before minority interests and income taxes		(23,666	)		(5,084	)
Minority interests		(1,396	)		(2,683	)
Provision for income taxes		(2,862	)		(3,966	)
Net loss	$	(27,924	)	$	(11,733	)
Earnings per share:
Net loss:
Basic	$	(0.28	)	$	(0.12	)
Diluted	$	(0.28	)	$	(0.12	)
Weighted-average number of shares used in calculation of earnings per share:
Basic		98,161			95,208
Diluted		98,161			95,208

IDT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	October 31, 2005			July 31, 2005
	(in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	169,868		$	171,959
Marketable securities		693,543			780,263
Trade accounts receivable, net		223,103			194,707
Other current assets		137,970			135,799
Total current assets		1,224,484			1,282,728
Property, plant and equipment, net		363,798			370,157
Goodwill		111,188			110,966
Licenses and other intangibles, net		31,070			32,591
Investments		54,050			50,941
Other assets		164,284			130,207
Total assets	$	1,948,874		$	1,977,590
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	98,862		$	115,999
Accrued expenses		255,445			231,416
Deferred revenue		145,034			144,248
Capital lease obligations—current portion		33,585			32,728
Other current liabilities		46,587			44,817
Total current liabilities		579,513			569,208
Deferred tax liabilities, net		108,232			108,237
Capital lease obligations—long-term portion		37,824			42,370
Notes payable—long-term portion		146,137			121,470
Other liabilities		8,948			8,217
Total liabilities		880,654			849,502
Minority interests		81,961			89,891
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000,000; no shares issued		—			—
Common stock, $.01 par value; authorized shares—100,000,000; 25,074,860 shares issued at October 31, 2005 and July 31, 2005; 16,642,573 and 18,014,723 shares outstanding at October 31, 2005 and July 31, 2005, respectively		251			251
Class A common stock, $.01 par value; authorized shares—35,000,000; 9,816,988 shares issued and outstanding at October 31, 2005 and July 31, 2005		98			98
Class B common stock, $.01 par value; authorized shares—100,000,000; 75,935,289 and 75,917,516 shares issued at October 31, 2005 and July 31, 2005, respectively; 72,808,776 and 73,550,857 shares outstanding at October 31, 2005 and July 31, 2005, respectively		759			759
Additional paid-in capital		895,125			907,223
Treasury stock, at cost, consisting of 8,432,287 and 7,060,137 shares of common stock and 3,126,513 and 2,366,659 shares of Class B common stock at: October 31,2005 and July 31, 2005, respectively		(174,331	)		(147,690	)
Deferred compensation		—			(19,043	)
Accumulated other comprehensive loss		(6,214	)		(1,896	)
Retained earnings		270,571			298,495
Total stockholders’ equity		986,259			1,038,197
Total liabilities and stockholders’ equity	$	1,948,874		$	1,977,590

IDT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended October 31,
	2005			2004
	(In thousands)
Net cash used in operating activities	$	(47,803	)	$	(5,956	)
Investing activities
Capital expenditures		(20,699	)		(23,194	)
Issuance of notes receivable, net		(1,933	)		(3,499	)
Investments and acquisitions, net of cash acquired		(3,784	)		(27,834	)
Proceeds from sales and maturities of marketable securities, net		83,278			72,047
Net cash provided by investing activities		56,862			17,520
Financing activities
Proceeds from exercise of stock options		199			156
Proceeds from sale lease back transactions on capital leases		—			778
Proceeds from borrowings		27,447			—
Repayments of capital lease obligations		(3,689	)		(6,470	)
Repayments of borrowings		(633	)		—
Repurchases of common stock and Class B common stock		(26,657	)		—
Cash and marketable securities restricted against letters of credit		—			2,568
Distributions to minority shareholders of subsidiaries		(7,797	)		(9,175	)
Net cash used in financing activities		(11,130	)		(12,143	)
Effect of exchange rate changes on cash and cash equivalents		(20	)		2,835
Net (decrease) increase in cash and cash equivalents		(2,091	)		2,256
Cash and cash equivalents, beginning of period		171,959			142,177
Cash and cash equivalents, end of period	$	169,868		$	144,433
Supplemental schedule of non-cash investing and financing activities
Purchases of property, plant and equipment through capital lease obligations	$	—		$	1,499

IDT CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

THREE MONTHS ENDED OCTOBER 31, 2005

(Segment data is shown net of effect of inter-segment transactions)

(In thousands)	Total IDT Corporation		Retail Telecom		Wholesale Telecom			IDT Entertainment		Voice Over IP			IDT Capital			IDT Solutions			Corporate
STATEMENT OF OPERATIONS DATA
Revenues	623,099		$	383,181	$	137,359		$	48,142	$	21,585		$	31,437		$	1,395		$	—
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)	467,757			275,949		124,966			29,057		12,196			23,324			2,264			—
Selling, general and administrative (includes stock-based compensation of $7.1 million)	154,403			79,372		13,275			15,796		15,663			10,069			4,002			16,226
Depreciation and amortization	27,967			15,515		5,313			2,581		2,360			1,654			6			539
Restructuring and impairment charges	814			—		—			—		(556	)		—			1,370			—
Total costs and expenses	650,942			370,836		143,553			47,435		29,664			35,047			7,643			16,764
Income (loss) from operations	(27,843	)	$	12,346	$	(6,195	)	$	707	$	(8,079	)	$	(3,610	)	$	(6,247	)	$	(16,764	)
Interest income, net	3,081
Investment and other income, net	1,096
Loss before minority interests and income taxes	(23,666	)
Minority interests	(1,396	)
Provision for income taxes	(2,862	)
Net loss	(27,924	)