IDT CORPORATION (NYSE:IDT) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05 Costs Associated with Exit or Disposal Activities.
In the current fiscal quarter, and after completion of the spin-off of Rafael Holdings to the Company’s stockholders (the “Spin-Off”), IDT Corporation (the “Company”) commenced implementation of an internal restructuring that is expected to result in a reduction of the Company’s global employee base by approximately 11% from the level at January 31, 2018 (the end of the Company’s second fiscal quarter of 2018). Reductions will be mainly in the core Telecom division and at the corporate level, and will span across the Registrant’s geographic locations.
As of April 11, 2018, a majority of the impacted employees had been notified of termination or resigned, and the remaining impacted individuals are expected to be notified by the end of April 2018.
In connection with the above changes, the Company anticipates incurring severance and restructuring charges for cash expenditures in an aggregate amount of approximately $4 million in the third fiscal quarter of 2018. The Company anticipates that cost savings resulting directly from the restructuring will be in the range of approximately $9 to $11 million per year.
While management of the Company sought to make the necessary headcount reductions with a view toward ensuring that the Company continues to maintain the necessary personnel to operate its businesses at current and planned levels, the Company cannot ensure that such reductions will not have a material negative impact on the Company’s operations, revenues, profitability, or its ability to continue to pay dividends at current levels. The Company anticipates to continue reinvesting a significant portion of cash flows, if any, it realizes from its core Telecom businesses in growth initiatives.
About IDT CORPORATION (NYSE:IDT)
IDT Corporation is a holding company with operations primarily in the telecommunications and payment industries. The Company’s segments include Telecom Platform Services, Consumer Phone Services and All Other. The Company’s Telecom Platform Services segment provides retail telecommunications and payment offerings, as well as wholesale international long distance traffic termination. The Telecom Platform Services segment markets and distributes multiple communications and payment services across four businesses: Retail Communications, Wholesale Carrier Services, Payment Services and Hosted Platform Solutions. The Company’s Consumer Phone Services segment provides consumer local and long distance services in certain states of the United States. The Telecom Platform Services and Consumer Phone Services segments comprise the Company’s IDT Telecom division. The All Other segment includes its real estate holdings and other smaller businesses.