Other Operating Expense, Net

6 Months Ended

Jan. 31, 2020

Other Operating Expense [Abstract]

Other Operating Expense, Net

Note 9—Other Operating Expense, Net

The following table summarizes the other operating expense, net by business segment:

	Three Months Ended January 31,						Six Months Ended January 31,
	2020			2019			2020			2019
	(in thousands)
Corporate—Straight Path Communications Inc. class action legal fees net of insurance proceeds	$	(160	)	$	(330	)	$	(421	)	$	(525	)
net2phone—indemnification claim		(169	)		—			(534	)		—
net2phone—other, net		(63	)		25			(63	)		25
Telecom & Payment Services—accrual for non-income related taxes related to a foreign subsidiary		—			(2,000	)		(2,150	)		(3,100	)
Telecom & Payment Services—gain on sale of calling card business in Asia		—			215			—			215
Total other operating expense, net	$	(392	)	$	(2,090	)	$	(3,168	)	$	(3,385	)

Straight Path Communications Inc. Class Action

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. As discussed in Note 15, a putative class action on behalf of Straight Path's stockholders and derivative complaint was filed naming the Company, among others. The Company incurred legal fees of $0.6 million and $0.3 million in the three months ended January 31, 2020 and 2019, respectively, and $1.2 million and $0.5 million in the six months ended January 31, 2020 and 2019, respectively, related to this action. Also, in the three and six months ended January 31, 2020, the Company recorded insurance proceeds for this matter of $0.4 million and $0.8 million, respectively.

Indemnification Claim

In June 2019, as part of a commercial resolution, the Company indemnified a net2phone cable telephony customer related to patent infringement claims brought against the customer.

Accrual for Non-Income Related Taxes

In the fourth quarter of fiscal 2019, the Company recorded an $8.0 million accrual for non-income related taxes related to one of its foreign subsidiaries. A portion of the accrual related to each of the fiscal quarters in fiscal 2019. Accordingly, the Company corrected its consolidated financial statements for the three months ended October 31, 2018, January 31, 2019, and April 30, 2019 to include the accrued expense and the related income tax benefit. The Company has determined that the adjustments were not material to its previously issued quarterly financial statements. The impact of the correction on the Company's previously issued consolidated financial statements for the three and six months ended January 31, 2019 was as follows:

	Three Months Ended January 31, 2019
	Previously Reported			Error Correction			As Adjusted
	(in thousands, except per share data)
Consolidated Statement of Operations:
Other operating expense, net	$	(90	)	$	(2,000	)	$	(2,090	)
Provision for income taxes	$	(1,736	)	$	500		$	(1,236	)
Net income (loss)	$	489		$	(1,500	)	$	(1,011	)
Net income (loss) attributable to IDT Corporation	$	189		$	(1,500	)	$	(1,311	)
Earnings (loss) per share attributable to IDT Corporation common stockholders:
Basic	$	0.01		$	(0.06	)	$	(0.05	)
Diluted	$	0.01		$	(0.06	)	$	(0.05	)

	Six Months Ended January 31, 2019
	Previously Reported			Error Correction			As Adjusted
	(in thousands, except per share data)
Consolidated Statement of Operations:
Other operating expense, net	$	(285	)	$	(3,100	)	$	(3,385	)
Provision for income taxes	$	(2,926	)	$	750		$	(2,176	)
Net loss	$	(659	)	$	(2,350	)	$	(3,009	)
Net loss attributable to IDT Corporation	$	(1,260	)	$	(2,350	)	$	(3,610	)
Loss per share attributable to IDT Corporation common stockholders:
Basic	$	(0.05	)	$	(0.10	)	$	(0.15	)
Diluted	$	(0.05	)	$	(0.10	)	$	(0.15	)