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): June 8, 2009

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 June 8, 2009, IDT Corporation (the “Registrant”) posted an earnings release to the investor relations page of its website (www.idt.net) announcing its results of operations for its fiscal quarter ended April 30, 2009. A copy of the earnings release concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The Registrant is furnishing the information contained in this Report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC unless otherwise expressly stated in such filing. In addition, this Report and the earnings release contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in the earnings release.

Non-GAAP Financial Measures

The Registrant’s earnings release includes financial information prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), as well as Adjusted EBITDA, which is a non-GAAP measure that contains certain adjustments to net loss or (loss) income from operations to eliminate the impact of certain items that management believes do not truly reflect the Registrant’s performance.  The earnings release furnished herewith reconciles Adjusted EBITDA to net loss on a Registrant consolidated basis, and to (loss) income from operations in accordance with GAAP.

Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The Registrant’s measure of Adjusted EBITDA consists of gross profit less selling, general and administrative expense, research and development expense and bad debt expense.  Another way of calculating Adjusted EBITDA is to start with loss from operations and add (1) depreciation and amortization, (2) restructuring charges, and (3) impairments, and deduct (1) the gain on  the sale of an interest in AMSO, LLC in the third quarter of fiscal 2009 and (2) the arbitration award income in the first quarter of fiscal 2008.  These additions and deductions are non-cash and/or non-recurring items in the relevant fiscal 2009 and fiscal 2008 periods.

Management believes that the Registrant’s Adjusted EBITDA measure provides useful information to both management and investors by excluding certain expenses and non-recurring gains or losses that may not be indicative of the Registrant’s or the relevant segment’s core operating results.  Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making.  In addition, management uses Adjusted EBITDA to evaluate operating performance in relation to the Registrant’s competitors. Disclosure of this financial measure may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. Adjusted EBITDA may also be an indicator of the strength and performance of the Registrant’s and the segment’s ongoing business operations, including the ability to fund capital expenditures, and meet working capital needs from current operations (as opposed to cash resources), and to incur and service debt. In addition, the Registrant has historically reported similar financial measures and believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting at this time.

Management refers to Adjusted EBITDA, as well as the GAAP measures gross profit, loss from operations and net loss, on a segment and/or Registrant consolidated level to facilitate internal and external comparisons to the segments’ and the Registrant's historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.

While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. While the Registrant’s business may be capital intensive, the Registrant has significantly reduced its capital expenditures to date and going forward intends to continue to reduce its levels of capital expenditures. Accordingly, the Registrant’s telecommunications network is less costly than in the past, therefore exclusion of depreciation and amortization charges from the Registrant’s operating results is a useful indicator of its current performance.

The restructuring and impairment charges are also excluded in the calculation of Adjusted EBITDA.  Restructuring charges are substantially non-recurring and are reflective of decisions made by management in each period regarding the aspects of the Registrant’s and its segments’ businesses to be focused on in light of changing market realities and other factors. Management believes the restructuring charges will decline in the future. Impairments are primarily dictated by events and circumstances outside the control of management that trigger an impairment analysis. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of the Registrant’s core and continuing operations.

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Finally, the gain on the sale of an interest in AMSO, LLC in the first quarter of fiscal 2009 and arbitration award income in the first quarter of fiscal 2008, which are components of loss from operations, are excluded from the calculation of Adjusted EBITDA.  Although the Registrant sells or disposes of businesses and sells interests in businesses from time-to-time and has a number of matters under litigation, such sales, disposals and/or legal awards or settlements do not occur each quarter nor are they part of the Registrant’s or the relevant segment’s core operating results.

The other calculation of the Registrant’s Adjusted EBITDA consists of gross profit less selling, general and administrative expense, research and development expense and bad debt expense.  As the other excluded items are not reflected in this calculation, they are excluded automatically and there is no need to make additional adjustments.  This calculation results in the same Adjusted EBITDA amount and its utility and significance is as explained above.

Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, gross profit, loss from operations, cash flow from operating activities, net loss or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, the Registrant’s measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Item 7.01. Regulation FD

The information contained in Item 2.02 of this Report is hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits

(d)     Exhibits.

Exhibit No.	Document
99.1	Earnings Release, dated June 8, 2009, reporting the results of operations for IDT Corporation’s fiscal quarter ended April 30, 2009.

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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
By:	/s/ James A. Courter
Name:	James A. Courter
Title:	Chief Executive Officer
Dated: June 8, 2009

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EXHIBIT INDEX

Exhibit No.	Document
99.1	Earnings Release, dated June 8, 2009, reporting the results of operations for IDT Corporation’s fiscal quarter ended April 30, 2009.

EX-99.1

Exhibit 99.1

EARNINGS RELEASE

IDT Reports Results for Third Quarter Fiscal 2009

NEWARK, NJ — June 8, 2009:  IDT Corporation (NYSE: IDT; IDT.C) today announced financial results for its fiscal 2009 third quarter ended April 30, 2009.  The Company has scheduled a webcast to discuss its financial and operational results for 5:00 PM Eastern today.  In a change from prior practice, in lieu of taking questions during the webcast, IDT management will accept questions relating to the Company that are e-mailed to invest@corp.idt.net before 5:00 PM on Tuesday, June 9th.  If management can constructively answer questions, it will do so by posting the question along with its answers on the IDT Corporation website’s (www.idt.net) Investor Relations page as early as Friday, June 12th, after the market close, and through filing the material on a Form 8-K.

OVERALL RESULTS

§   Adjusted EBITDA for Q3 2009 was $14.7 million, compared to negative Adjusted EBITDA of ($38.5) million for Q3 2008, and to Adjusted EBITDA of $21.2 million for Q2 2009.

§   Revenues fell 11.7% year over year (Q3 2009 compared to Q3 2008) and 11.0% sequentially (Q3 2009 compared to Q2 2009), to $389.0 million.

§   Gross margin percentage increased 350 basis points year over year and 80 basis points sequentially, to 24.0%, on gross profit of $93.3 million.

§   Selling, General and Administrative (“SG&A”) expenses declined by 36.5% (a $42.6 million reduction from Q3 2008), to $74.2 million.

§   Impairment charges, consisting of write-offs of goodwill and a write-down of real estate, of $62.1 million were recorded in the current quarter.  Goodwill impairments are preliminary and subject to adjustment (see below).

§   Loss from operations for Q3 2009 was ($57.3) million including the $62.1 million impairment charge and restructuring charges of $0.6 million, compared to an operating loss of ($72.4) million during Q3 2008 (when impairment and restructuring charges totaled $16.5 million), and to an operating loss of ($8.8) million in Q2 2009 (when impairment and restructuring charges totaled $16.8 million).

§   Cash, cash equivalents and marketable securities increased to $201.5 million at the end of the quarter from $195.6 million at January 31, 2009. Included in these balances were restricted cash, cash equivalents and marketable securities of $63.9 million at April 30, 2009 compared to $58.5 million at January 31, 2009 and cash and cash equivalents of discontinued operations of $0.2 million at April 30, 2009 compared to $2.8 million at January 31, 2009.

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§   Cash flow from operating activities in Q3 2009 was a negative $3.9 million, due in part to $25.0 million in payments to the IRS during the quarter for outstanding federal income tax related to fiscal years 2001-2004.

§   Capital expenditures, primarily at IDT Telecom, were $5.0 million in Q3 2009, and the Company also expended $1.5 million in repurchases of its Class B common stock and common stock during the quarter.

Adjusted EBITDA for all periods presented is a non-GAAP measure representing operating income exclusive of depreciation and amortization, restructuring and impairment charges, and, in the current quarter, gain on sale of an interest in AMSO, LLC  It is one of several key metrics used by management to evaluate the Company’s and its segments’ operating performance.  The accompanying schedule reconciles Adjusted EBITDA to the corresponding GAAP measure loss from operations.

IDT revenues for the third quarter of fiscal 2009 were $389.0 million compared to $440.7 million for the third quarter of fiscal 2008 – a drop of 11.7% – reflecting continued declines in IDT Telecom revenues.  Total direct cost of revenues in Q3 2009 fell to $295.7 million, down 15.6% from the year ago quarter. Total SG&A fell by 36.5% (a $42.6 million reduction from Q3 2008), to $74.2 million as a result of the Company’s cost cutting and ongoing restructuring program.  SG&A in Q3 2008 included a $10.5 million accrual for a pre-tax litigation charge. 

IDT reported an operating loss of ($57.3) million for Q3 2009, including $62.1 million in impairment charges.  In the comparable period a year ago, the Company reported an operating loss of ($72.4) million, including $16.5 million in restructuring charges.  IDT recorded estimated goodwill impairment in the second and third quarters of fiscal 2009 based on preliminary results of its goodwill impairment tests under GAAP.  The impairment recorded in fiscal 2009 is subject to adjustment as the analysis is completed.  As of April 30, 2009, IDT reported total goodwill of $12.4 million.

IDT’s net loss was ($63.4) million, or ($2.88) per diluted share, in the third quarter of fiscal 2009 compared to a net loss of ($82.2) million, or ($3.29) per diluted share, in the third quarter of fiscal 2008. The weighted-average number of shares used to calculate basic and diluted earnings per share was 22.1 million and 25.0 million in Q3 2009 and Q3 2008, respectively – which reflects the Company’s 1-for-3 reverse stock split that took place in February 2009 as well as the impact of the Company’s stock buyback program.  Net loss in Q3 2009 includes losses from discontinued operations, related to IDT Carmel, of ($3.0) million, and net loss in Q3 2008 is net of income from discontinued operations of $1.4 million.

“During the past year, we narrowed IDT’s strategic focus and streamlined operations.  Consequently, the Company’s operational performance during the third quarter improved significantly compared to a year ago,” said CEO Jim Courter.  “IDT Energy led with another strong quarter.  Aggressive cost cutting at IDT Telecom and at corporate also contributed to very strong year-over-year Adjusted EBITDA improvement.  All in all, we have made tremendous progress in the past year and now have a solid foundation on which to build.

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“Looking ahead, by the end of Q1 2010, we expect to have worked through most of the restructuring and other non-operational legacy costs that have so adversely impacted our bottom line in recent quarters. This should bring commensurate improvement in our bottom line performance and stability to our balance sheet in fiscal 2010, although we cannot predict the impact of further deterioration in the broader economy.  Nevertheless, challenging competitive environments in our key telecommunications markets and less favorable market conditions for IDT Energy will likely constrain further Adjusted EBITDA growth over the next several quarters,” Courter concluded.

RESULTS BY SEGMENT

IDT TELECOM

Adjusted EBITDA at IDT Telecom jumped to $10.0 million in Q3 2009, compared to a loss of ($0.9) million in the same period a year ago. Declines in revenue year-over-year were more than offset by aggressive reductions in SG&A spending and network connectivity costs.

Revenues declined to $312.2 million in Q3 2009, down $49.2 million (13.6%) year-over-year.  Gross margin percentage for IDT Telecom was 21.3% in the third quarter of fiscal 2009, compared to 21.9% in Q3 2008.

SG&A expenses declined $21.4 million (28.7%), to $53.2 million in Q3 2009, primarily as a result of lower compensation and employee benefit costs, resulting from previously announced headcount, salary and benefit reductions.

IDT Telecom recorded restructuring and impairment charges of $29.3 million during Q3 2009, almost all of it stemming from the write-off of goodwill pertaining to our rechargeable US calling card unit, a line of business within our Telecom Platform Services segment.  These charges tipped IDT Telecom to a loss from operations of ($29.4) million in the third quarter of fiscal 2009, compared to a loss of ($27.2) million during Q3 2008, when IDT Telecom also reported $12.0 million in restructuring related charges.

Telecom Platform Services (Wholesale and Retail Services)

The Telecom Platform Services segment carried 5.270 billion minutes of traffic in the third quarter of fiscal 2009, a decrease of 5.2% year-over-year.  The average revenue per minute declined by 8.6%.

Revenues during the quarter fell to $299.6 million, down $42.8 million (12.5%) compared to Q3 2008.  The revenue decline is due to both the softness in minute volume as well as the contraction in average revenue per minute, as a result of the ongoing challenging business conditions in the global economy, fierce competition in both our retail and wholesale channels, and in line with recent declines in international wholesale industry traffic levels.

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Gross margin improved to 19.9% during the quarter, up from 19.3% in the year ago quarter, as aggressive reductions to network connectivity costs, combined with improvements to average termination cost per minute, more than offset the negative margin impact of top line volume and pricing declines. Our global calling card retail businesses maintained stable gross profit performance, holding well against the continued impact of the global economic downturn on the primary immigrant communities that we serve.

SG&A spending was substantially reduced year over year, from $71.6 million in Q3 2008 to $50.5 million in Q3 2009, primarily as a result of lower compensation and employee benefit costs resulting from previously announced headcount reductions. Aggressive cost cuts were also made in other areas of SG&A spending, such as legal and other professional fees, office and network facilities, and equipment/software maintenance costs.

As a result of the aggressive reductions to Telecom Platform Services cost structure, both in terms of network connectivity and SG&A, Adjusted EBITDA improved to $6.4 million during Q3 2009, compared to an Adjusted EBITDA loss of ($10.3) million a year earlier.

Consumer Phone Services (CPS)

Consumer Phone Services, which includes both bundled (unlimited local and long distance) services customers as well as long distance-only customers, has been in “harvest mode” since fiscal 2006.   During Q3 2009, subscriber attrition continued at rates consistent with historical experience, with notably higher depletion rates for bundled phone service customers.

The customer base for bundled phone services was approximately 32,000 as of April 30, 2009, compared to approximately 54,000 as of April 30, 2008.  The customer base for long distance-only services was approximately 108,000 as of April 30, 2009 compared to approximately 142,000 as of April 30, 2008.

Revenues declined to $12.6 million in the quarter, down 33.7% from the same period a year ago, and down 11.1% sequentially.

Gross margin for this segment was 53.2% in the third quarter of fiscal 2009, in line with our run-rate expectations.  In Q3 2008, gross margin for CPS was 67.7%, due to a reversal of certain service connectivity accruals, resulting from a positive settlement of a billing dispute that raised the margin in Q3 2008 above historic and subsequent levels. Similarly, in Q2 2009, gross margin was again elevated – at 66.5%, due to a reversal in Q2 2009 of certain direct costs previously accrued.

SG&A declined to $2.7 million for the quarter, an 8.3% reduction year-over-year, helping CPS contribute $3.6 million in Adjusted EBITDA during the third quarter of fiscal 2009, compared to $9.4 million in Adjusted EBITDA in the same period a year ago.

IDT ENERGY

IDT Energy reported another strong quarter.  Adjusted EBITDA climbed to $12.8 million in Q3 2009 from $0.9 million during Q3 2008.  Favorable market conditions and customer base acquisition growth again helped IDT Energy improve gross profit and margins year over year even as revenues remained relatively flat. 

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The total number of meters as of April 30, 2009 was approximately 414,000, comprised of 178,000 gas and 236,000 electric meters.  Total meters were up 20.9% year over year from 343,000 on April 30, 2008.  The pace of sequential meter growth slowed to 6.1% during Q3 2009 compared to 16.2% in Q2 2009 as the level of sales and marketing efforts decreased, and IDT Energy attempted to sharpen the focus of its customer acquisition program to concentrate on acquiring meters with higher consumption per meter.  Churn during the quarter averaged 4.54% per month, on par with the per month average churn during the same period a year ago, and slightly better than the 5.01% recorded for the previous quarter.

Revenues for the quarter held at $66.7 million, virtually unchanged compared to $66.3 million during the same period a year ago.  Revenues generated by the larger customer base and slightly higher per meter consumption were nearly offset by declining prices.

Declining costs for both electricity and gas drove direct costs down by 21.7% compared to the same period a year ago to $46.9 million. As a result, the gross margin percentage tripled from 9.7% in the third quarter a year ago to 29.7% in Q3 2009.

SG&A rose to $6.9 million in Q3 2009, a 29.5% year over year increase.  SG&A costs were driven primarily by higher variable fees charged by the utilities, as well as by Keyspan’s introduction of a purchase of receivables (POR) program.  These increases were offset somewhat by lower commission costs - reflecting the slower pace of customer acquisitions - and lower compensation costs.

IDT Energy reported $12.8 million in income from operations during the quarter, compared to $0.9 million in the year ago quarter.

IDT CAPITAL

IDT Capital reported revenues of $10.1 million in Q3 2009 compared to $13.1 million in Q3 2008.  The revenue decline primarily reflects the ongoing effort by the Company to shut down or dispose of non-core business initiatives.  Within IDT Capital, revenues of the Local Media Group - comprised of CTM Media Group, WMET, and our interest in IDW Publishing - fell slightly to $7.1 million, down 4.6% from a year ago. American Shale Oil, LLC (AMSO) and Israel Energy Initiatives (IEI) comprise the Alternative Energy Group.  These early stage ventures did not generate revenue.

Cost cutting as well as business closings and dispositions helped to drive down direct costs, nearly doubling the gross margin percentage from 36.6% in Q3 2008 to 69.4% a year later.

SG&A for IDT Capital was also reduced sharply over the same period, falling 38.8% to $8.3 million in Q3 2009 compared to the same period a year ago.

Research and development costs incurred by our Alternative Energy Group, which were $6.2 million in Q3 2008, declined by 88% to just $0.7 million, reflecting the impact of our initial investment in AMSO, which was charged to research and development costs in Q3 2008.  

Following the sale of a stake in AMSO to Total, effective March 2009 we no longer consolidate AMSO. Instead, we account for our 50% ownership interest in AMSO using the equity method since we have the ability to exercise significant influence over its operating and financial matters, although we no longer control AMSO.

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In addition, as a result of the Total transaction, we recorded a $2.6 million gain, which is reported within IDT Capital’s loss from operations.

On an Adjusted EBITDA basis, IDT Capital lost ($2.3) million in Q3 2009, a significant (84.8%) improvement over the ($15.1) million Adjusted EBITDA loss during the third quarter of 2008.  The Adjusted EBITDA loss generated by the Local Media Group was reduced nearly 50% to ($0.5) million from ($1.0) million in Q3 2008.

IDT Capital impairments totaled $33.1 million in Q3 2009, primarily related to write-offs of the goodwill of CTM Media and the WMET radio station, and the write-down of certain real estate.

IDT Capital reported an operating loss of ($34.3) million in the third quarter of 2009 compared to an operating loss of ($17.7) million in the comparable period last year, mainly as a result of the CTM goodwill impairment charge of $29.7 million recorded in Q3 2009.

Zedge (http://www.zedge.net), the destination for free mobile content, continues to grow. The site is visited by just over 14 million monthly unique visitors. The combined web and mobile traffic averages just over 16 million daily page views. Zedge’s advertising revenue has been negatively impacted by weakness in the broader advertising market and Zedge is looking at ways to diversify its sources of revenue.

During Q4 2008, IEI was granted a license to explore certain public lands in Israel for the potential production of shale oil.  IEI has begun resource characterization activities.

On May 12, 2009, IDT’s Board of Directors approved a spin-off to its stockholders of the IDT Capital businesses in the Local Media Group.  The proposed spin-off is discussed in greater detail in “Other Recent Developments” below.

OTHER RECENT DEVELOPMENTS

On January 27, 2009, IDT entered into a modified installment agreement with the IRS, whereby it agreed to pay remaining amounts owed to the IRS for fiscal years 2001 – 2004.  During Q3 2009, IDT paid $25 million to the IRS on its outstanding balance.  By June 15, 2009, IDT will have paid up to an additional $13.4 million to fully satisfy its obligation under the modified agreement. The final payment may be reduced if the IRS waives the penalties.  

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On September 30, 2008 and October 8, 2008, IDT received notices from the New York Stock Exchange (NYSE) that it was no longer in compliance with the NYSE’s $100 million market capitalization threshold and the $1.00 average closing price over a consecutive 30-day trading period requirement, respectively, required for continued listing. IDT submitted a plan to the NYSE to regain compliance, and that plan was accepted. The NYSE monitors compliance with the plan and may commence delisting procedures if IDT fails to meet the milestones set forth in its plan. On February 25, 2009, IDT implemented a one-for-three reverse stock split for each class of its outstanding shares effective with the start of trading. On April 8, 2009, the NYSE notified IDT that the Company’s listed equity securities (IDT and IDT.C) had regained compliance with the NYSE’s minimum share price continued listing requirement.  IDT has until March 2010 to regain compliance with the $100 million market capitalization standard. In addition, according to the rules of the NYSE, the NYSE will promptly initiate suspension and delisting procedures with respect to a listed company that is determined to have average global market capitalization over a consecutive 30 trading-day period of less than $25 million. The NYSE has reduced this $25 million threshold to $15 million until June 30, 2009.  As of the close of trading on June 10, 2009, IDT’s global market capitalization exceeded the $25 million threshold.

During Q3 2009, IDT purchased an aggregate of 1.4 million shares of its Class B Common Stock and Common Stock for $1.5 million under an existing stock buyback program.  As of June 8, 2009, 7.0 million shares (of either class) remained authorized for repurchase under the current stock buyback plan.

On May 18, 2009, IDT was served with notice of a complaint filed on May 15, 2009 by T-Mobile USA, Inc. (T-Mobile) in the Superior Court of the State of Washington, King County.  The complaint alleges that IDT Domestic Telecom breached a wholesale supply agreement with T-Mobile entered into on February 2005 by failing to purchase at least $75 million in services from T-Mobile.  T-Mobile claims that IDT Domestic Telecom purchased only approximately $31 million of services under the agreement.  T-Mobile is seeking monetary damages, including interest and costs, in an amount to be determined at trial.  IDT intends to conduct a vigorous legal defense.

On May 12, 2009, IDT’s Board of Directors approved a spin-off to its stockholders of the equity of CTM Media Holdings, Inc. (CTM), a newly-formed subsidiary of the Company.  Prior to effecting the spin-off, the following subsidiaries of the Company would be transferred through a company restructuring: CTM Media Group, Inc.; Beltway Acquisition Corporation (which holds the broadcast license of the WMET-AM radio station); IDT Local Media, Inc. (which is an indirect subsidiary of IDT that conducted certain operations related to CTM Media Group, which business lines are no longer active) and IDT Internet Mobile Group, Inc. (which owns approximately 53% of the equity interests in Idea and Design Works, LLC (known as IDW Publishing)).   Approval of the spin-off by IDT’s stockholders is not required.  The planned spin-off will be accomplished through a pro rata distribution of CTM’s common stock to IDT stockholders of record as of the close of business on the record date, which has yet to be determined. Under the current plan, each IDT stockholder will receive one share of CTM’s Class A common stock for every three shares of the IDT common stock and Class B common stock; and one share of CTM’s Class B common stock for every three shares of IDT Class A common stock held on the record date.  IDT stockholders will receive cash in lieu of fractional shares of CTM common stock.  On May 13, 2009, CTM filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission including detailed information such as results of operations for the entities to be included in the spin-off.   IDT’s Board of Directors may, amend, modify or abandon the spin-off or the transactions related thereto at any time prior to the distribution of CTM’s common stock to IDT stockholders.

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On March 3, 2009, IDT announced that it had closed on the sale to Total, the fifth largest integrated oil and gas company in the world, of a fifty percent interest in IDT’s AMSO subsidiary.  Total and IDT will jointly develop a research and demonstration program to produce and commercialize shale oil utilizing a new in-situ technology on AMSO’s federal leasehold in western Colorado. Total will provide a majority of the funding during the research, development and demonstration (RD&D) phase of the project, and technical assistance throughout the life of the project.  AMSO will continue to manage operations during the RD&D phase of the project.  Total will assume management responsibilities during the subsequent commercial phase.

On February 23, 2009, IDT announced that, as part of its ongoing effort to reduce overhead and operating costs, it will consolidate operations in newly leased offices located at 550 Broad Street in Newark, NJ on an interim basis, while evaluating other long term relocation options.  IDT is currently in the process of completing necessary work on the new space and moving equipment and personnel into the new building.  The Company is assessing its options with regard to the 520 Broad Street building.  The property is owned by a subsidiary of IDT and the outstanding mortgage on this property is $26.1 million as of April 30, 2009.

On January 30, 2009, IDT sold substantially all of the consumer debt portfolios held by its IDT Carmel division, for $18.0 million, and reclassified the segment as a discontinued operation. The Company subsequently exited the debt portfolio management and collections business during Q3 2009.   As a result, IDT incurred additional close down costs in the third quarter, including severance and lease termination costs, of approximately $1.4 million. IDT Carmel’s loss from operations in Q3 2009 was ($3.1) million.

IDT EARNINGS WEBCAST INFORMATION & SUPPLEMENTAL INFORMATION

§   The earnings webcast is scheduled for today, June 8, 2009, at 5:00 PM Eastern time.

§   The webcast may be accessed by visiting the IDT Corporation website at www.idt.net, or by using the following hyperlink: http://www.investorcalendar.com/IC/CEPage.asp?ID=141724.

§   Windows Media software is required to listen to the streaming feed. Please allow at least 15 minutes to download any necessary audio software prior to the webcast.

§   An archived copy of the webcast will be available on the Investor Relations page of the IDT website, at http://www.idt.net/about/ir/overview.asp under the “Presentations” heading, for at least one year after the webcast.

§   A reconciliation of the Non-GAAP financial measures discussed during the webcast is available below and on the Investor Relations portion of IDT’s website, at http://www.idt.net/about/ir/overview.asp.

§   In a change from prior practice, the webcast will not include a Q&A session.  In lieu of asking questions during the webcast, investors and others interested in the Company are invited to e-mail questions to invest@corp.idt.net.  The company will accept questions received through close of business on Tuesday, June 9th.  Questioners must identify themselves by name and (if applicable) firm. When management can constructively answer the question, the initial question, the questioner’s name and firm’s name, and management’s response will be posted in a document available on the IDT Corporation’s website and in an 8-K filing as early as Friday, June 12th following the market close.

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ABOUT IDT CORPORATION

IDT Corporation (www.idt.net) is a multinational holding company focused on the telecommunications and energy industries.  IDT Corporation's Class B Common Stock and Common Stock trade on the New York Stock Exchange under the ticker symbols IDT and IDT.C, respectively.

In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate, “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.  These factors include, but are not limited to, the following: potential declines in prices for our products and services; our ability to maintain and grow our retail telecommunications services, particularly our prepaid calling card business; availability of termination capacity; financial stability of our customers; our ability to maintain carrier agreements with foreign carriers; effectiveness of our marketing and distribution efforts; increased competition, particularly from regional bell operating companies; our ability to manage our growth; impact of government regulation; our ability to obtain telecommunications products or services required for our products and services; and general economic conditions, particularly in the telecommunications markets.  We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.

Contact:

IDT Corporation Investor Relations

Bill Ulrey

973-438-3838

william.ulrey@idt.net

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IDT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	April 30, 2009			July 31, 2008
	(Unaudited)
	(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	126,095		$	163,152
Restricted cash and cash equivalents		58,671			4,133
Marketable securities		16,553			111,462
Trade accounts receivable, net of allowance for doubtful accounts of $20,641 at April 30, 2009 and $21,589 at July 31, 2008		138,075			178,594
Prepaid expenses		16,351			22,572
Investments—short-term		5,464			22,563
Other current assets		32,510			55,761
Assets of discontinued operations		354			68,202
Total current assets		394,073			626,439
Property, plant and equipment, net		197,530			227,944
Goodwill		12,355			74,509
Licenses and other intangibles, net		2,182			9,394
Investments—long-term		10,481			40,295
Deferred income tax assets, net		—			2,300
Other assets		19,281			22,094
Total assets	$	635,902		$	1,002,975
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	54,816		$	82,974
Accrued expenses		159,824			202,534
Deferred revenue		69,305			88,618
Income taxes payable		33,599			123,000
Capital lease obligations—current portion		7,682			9,316
Notes payable—current portion		2,185			2,115
Other current liabilities		14,534			15,021
Liabilities of discontinued operations		1,732			1,472
Total current liabilities		343,677			525,050
Capital lease obligations—long-term portion		6,831			11,148
Notes payable—long-term portion		98,494			100,150
Other liabilities		17,474			18,441
Total liabilities		466,476			654,789
Minority interests		3,353			5,849
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued		—			—
Common stock, $.01 par value; authorized shares—100,000; 9,242 and 8,358 shares issued and 4,295 and 4,847 shares outstanding at April 30, 2009 and July 31, 2008, respectively		92			84
Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and outstanding at April 30, 2009 and July 31, 2008		33			33
Class B common stock, $.01 par value; authorized shares—200,000; 22,913 and 21,301 shares issued and 16,309 and 17,083 shares outstanding at April 30, 2009 and July 31, 2008, respectively		229			213
Additional paid-in capital		720,188			717,256
Treasury stock, at cost, consisting of 4,947 and 3,511 shares of common stock and 6,604 and 4,218 shares of Class B common stock at April 30, 2009 and July 31, 2008, respectively		(292,104	)		(285,536	)
Accumulated other comprehensive (loss) income		(3,218	)		6,754
Accumulated deficit		(259,147	)		(96,467	)
Total stockholders’ equity		166,073			342,337
Total liabilities and stockholders’ equity	$	635,902		$	1,002,975

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IDT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended April 30,						Nine Months Ended April 30,
	2009			2008			2009			2008
	(In thousands, except per share data)
Revenues	$	388,989		$	440,735		$	1,258,781		$	1,363,497
Costs and expenses:
Direct cost of revenues (exclusive of depreciation and amortization)		295,706			350,550			963,865			1,077,620
Selling, general and administrative (i)		74,169			116,768			239,732			346,065
Depreciation and amortization		11,894			17,345			38,869			51,717
Bad debt		2,820			3,078			7,623			8,321
Research and development		1,548			8,885			7,932			9,808
Impairments		62,120			54			72,761			262
Restructuring charges		609			16,453			8,438			20,427
Total costs and expenses		448,866			513,133			1,339,220			1,514,220
Gain on sale of interest in AMSO, LLC		2,606			—			2,606			—
Arbitration award income		—			—			—			40,000
Loss from operations		(57,271	)		(72,398	)		(77,833	)		(110,723	)
Interest (expense) income, net		(2,092	)		(299	)		(4,796	)		5,308
Other income (expense), net		1,141			(8,348	)		(30,637	)		(9,633	)
Loss from continuing operations before minority interests and income taxes		(58,222	)		(81,045	)		(113,266	)		(115,048	)
Minority interests		(822	)		(317	)		(36	)		(976	)
Provision for income taxes		(1,353	)		(2,208	)		(10,511	)		(8,707	)
Loss from continuing operations		(60,397	)		(83,570	)		(123,813	)		(124,731	)
Discontinued operations, net of tax:
(Loss) income from discontinued operations		(3,039	)		1,844			(38,867	)		(8,640	)
Loss on sale of discontinued operations		—			(485	)		—			(4,529	)
Total discontinued operations		(3,039	)		1,359			(38,867	)		(13,169	)
Net loss	$	(63,436	)	$	(82,211	)	$	(162,680	)	$	(137,900	)
Earnings per share:
Basic and diluted:
Loss from continuing operations	$	(2.74	)	$	(3.34	)	$	(5.36	)	$	(4.89	)
Total discontinued operations		(0.14	)		0.05			(1.69	)		(0.51	)
Net loss	$	(2.88	)	$	(3.29	)	$	(7.05	)	$	(5.40	)
Weighted-average number of shares used in calculation of basic and diluted earnings per share		22,052			25,005			23,081			25,518
(i)Stock-based compensation included in selling, general and administrative expenses	$	760		$	—		$	2,720		$	3,169

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IDT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended April 30,
	2009			2008
	(in thousands)
Net cash used in operating activities	$	(96,729	)	$	(115,303	)
Investing activities
Capital expenditures		(10,703	)		(13,937	)
Purchase of building		—			(24,778	)
Repayment of notes receivable, net		168			14,789
Investments and acquisitions		(2,504	)		(21,749	)
Proceeds from sale and redemption of investments		26,351			10,945
Restricted cash and cash equivalents		(54,538	)		791
Proceeds from sale of interest in AMSO, LLC		3,198			—
Proceeds from sale of building		—			4,872
Proceeds from sales and maturities of marketable securities		145,316			633,242
Purchases of marketable securities		(56,035	)		(402,058	)
Net cash provided by investing activities		51,253			202,117
Financing activities
Distributions to minority shareholders of subsidiaries		(2,285	)		(3,897	)
Proceeds from sales of stock of subsidiaries		1,187			—
Proceeds from exercise of stock options		—			94
Proceeds from employee stock purchase plan		36			808
Repayments of capital lease obligations		(5,984	)		(22,722	)
Repayments of borrowings		(1,585	)		(3,032	)
Repurchases of common stock and Class B common stock		(6,568	)		(45,279	)
Net cash used in financing activities		(15,199	)		(74,028	)
Discontinued operations
Net cash (used in) provided by operating activities		(2,808	)		6,966
Net cash provided by (used in) investing activities		29,687			(48,224	)
Net cash (used in) provided by financing activities		(43	)		382
Net cash provided by (used in) discontinued operations		26,836			(40,876	)
Effect of exchange rate changes on cash and cash equivalents		(4,728	)		3,913
Net decrease in cash and cash equivalents		(38,567	)		(24,177	)
Cash and cash equivalents (including discontinued operations) at beginning of period		164,886			151,404
Cash and cash equivalents (including discontinued operations) at end of period		126,319			127,227
Less cash and cash equivalents of discontinued operations at end of period		(224	)		(2,379	)
Cash and cash equivalents (excluding discontinued operations) at end of period	$	126,095		$	124,848
Supplemental schedule of non-cash investing activities
Purchases of property, plant and equipment through capital lease obligations	$	95		$	234
Assumption of mortgage payable in connection with the purchase of building	$	—		$	26,851

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IDT CORPORATION SELECTED CONSOLIDATED FINANCIAL DATA

THREE MONTHS ENDED APRIL 30, 2009

Figures may not foot or cross-foot due to rounding

(In thousands)	Total IDT Corporation			Telecom Platform Services			Consumer Phone Services		IDT Energy		IDT Capital			Corporate
Revenues	$	388,989		$	299,595		$	12,577	$	66,669	$	10,148		$	—
Costs and expenses:
Direct cost of revenues  (exclusive of depreciation and amortization)		295,706			239,839			5,889		46,874		3,104			—
Selling, general and administrative		74,169			50,475			2,698		6,912		8,276			5,808
Depreciation and amortization		11,894			10,039			50		30		1,463			310
Bad debt		2,820			2,113			351		35		320			—
Research and development		1,548			801			—		—		747			—
Restructuring and impairment charges		62,729			29,340			—		—		33,121			268
Total costs and expenses		448,866			332,607			8,988		53,851		47,032			6,388
Gain on sale of business		2,606			—			—		—		2,606			—
(Loss) income from operations		(57,271	)	$	(33,012	)	$	3,588	$	12,819	$	(34,278	)	$	(6,388	)
Interest expense, net		(2,092	)
Other income, net		1,141
Loss from continuing operations before minority interests and income taxes		(58,222	)
Minority interests		(822	)
Provision for income taxes		(1,353	)
Loss from continuing operations		(60,397	)
Loss from discontinued operations		(3,039	)
Net loss	$	(63,436	)

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IDT Corporation Reconciliation of Adjusted EBITDA to Net Loss
Figures may not foot or cross-foot due to rounding to millions.
$ in millions	Total IDT Corporation			Telecom Platform Services			Consumer Phone Services		IDT Energy		IDT Capital			Corporate
Three Months Ended April 30, 2009 (Q3 2009)
Adjusted EBITDA	$	14.7		$	6.4		$	3.6	$	12.8	$	(2.3	)	$	(5.8	)
Add:
Gain on sale of interest in AMSO, LLC		2.6			-			-		-		2.6			-
Subtract:
Depreciation and amortization		11.9			10.0			-		-		1.5			0.3
Restructuring and impairment charges		62.7			29.3			-		-		33.1			0.3
(Loss) income from operations		(57.3	)	$	(33.0	)	$	3.6	$	12.8	$	(34.3	)	$	(6.4	)
Interest expense, net		(2.1	)
Other income, net		1.1
Loss from continuing operations before minority interests and income taxes		(58.2	)
Minority interests		(0.8	)
Provision for income taxes		(1.4	)
Loss from continuing operations		(60.4	)
Loss from discontinued operations		(3.0	)
Net loss	$	(63.4	)
	Total IDT Corporation			Telecom Platform Services			Consumer Phone Services		IDT Energy		IDT Capital			Corporate
Three Months Ended January 31, 2009 (Q2 2009)
Adjusted EBITDA	$	21.2		$	8.7		$	6.1	$	16.5	$	(4.1	)	$	(6.0	)
Subtract:
Depreciation and amortization		13.1			10.8			-		0.1		1.9			0.3
Restructuring and impairment charges		16.8			4.7			-		-		11.1			1.0
(Loss) income from operations		(8.8	)	$	(6.9	)	$	6.1	$	16.4	$	(17.1	)	$	(7.3	)
Interest expense, net		(1.8	)
Other expense, net		(10.6	)
Loss from continuing operations before minority interests and income taxes		(21.1	)
Minority interests		0.6
Provision for income taxes		(6.2	)
Loss from continuing operations		(26.7	)
Loss from discontinued operations		(35.3	)
Net loss	$	(62.0	)
	Total IDT Corporation			Telecom Platform Services			Consumer Phone Services		IDT Energy		IDT Capital			Corporate
Three Months Ended April 30, 2008 (Q3 2008)
Adjusted EBITDA	$	(38.5	)	$	(10.3	)	$	9.4	$	0.9	$	(15.1	)	$	(23.4	)
Subtract:
Depreciation and amortization		17.3			13.6			0.7		-		2.6			0.4
Restructuring and impairment charges		16.5			11.5			0.5		-		-			4.5
(Loss) income from operations		(72.4	)	$	(35.4	)	$	8.2	$	0.9	$	(17.7	)	$	(28.3	)
Interest expense, net		(0.3	)
Other expense, net		(8.3	)
Loss from continuing operations before minority interests and income taxes		(81.0	)
Minority interests		(0.3	)
Provision for income taxes		(2.2	)
Loss from continuing operations		(83.6	)
Income from discontinued operations		1.4
Net loss	$	(82.2	)

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IDT Corporation Reconciliation of Adjusted EBITDA to Net Loss
Figures may not foot or cross-foot due to rounding to millions.
$ in millions	Total IDT Corporation			Telecom Platform Services			Consumer Phone Services		IDT Energy		IDT Capital			Corporate
Nine Months Ended April 30, 2009
Adjusted EBITDA	$	39.6		$	15.7		$	15.8	$	40.5	$	(9.5	)	$	(22.9	)
Add:
Gain on sale of interest in AMSO, LLC		2.6			-			-		-		2.6			-
Subtract:
Depreciation and amortization		38.9			32.1			0.4		0.1		5.3			1.0
Restructuring and impairment charges		81.2			33.2			-		-		45.3			2.6
(Loss) income from operations		(77.8	)	$	(49.6	)	$	15.3	$	40.4	$	(57.5	)	$	(26.4	)
Interest expense, net		(4.8	)
Other expense, net		(30.6	)
Loss from continuing operations before minority interests and income taxes		(113.3	)
Minority interests		-
Provision for income taxes		(10.5	)
Loss from continuing operations		(123.8	)
Loss from discontinued operations		(38.9	)
Net loss	$	(162.7	)
	Total IDT Corporation			Telecom Platform Services			Consumer Phone Services		IDT Energy		IDT Capital			Corporate
Nine Months Ended April 30, 2008
Adjusted EBITDA	$	(78.3	)	$	(7.6	)	$	21.2	$	4.6	$	(38.6	)	$	(57.8	)
Add:
Arbitration award income		40.0			40.0			-		-		-			-
Subtract:
Depreciation and amortization		51.7			42.1			2.2		-		6.1			1.3
Restructuring and impairment charges		20.7			13.7			0.5		0.1		0.9			5.5
(Loss) income from operations		(110.7	)	$	(23.4	)	$	18.5	$	4.5	$	(45.6	)	$	(64.6	)
Interest income, net		5.3
Other expense, net		(9.6	)
Loss from continuing operations before minority interests and income taxes		(115.0	)
Minority interests		(0.9	)
Provision for income taxes		(8.7	)
Loss from continuing operations		(124.7	)
Loss from discontinued operations		(13.2	)
Net loss	$	(137.9	)

 -15-