|IDT Entertainment to Acquire Anchor Bay Entertainment Purchase Provides IDT Entertainment with International Video/DVD Distribution|
|Newark, N.J., December 3, 2003 – IDT Entertainment today announced that it has entered into a definitive agreement to purchase the Anchor Bay Entertainment Group, from Handleman Company (NYSE: HDL). Anchor Bay is an independent home video company that licenses, markets and distributes a vast collection of films, television shows and direct-to-video programming for home entertainment through mass merchants and specialty stores. Anchor Bay will become an operating unit of IDT Entertainment, a subsidiary of IDT Corporation (NYSE: IDT, IDT. C), a multinational carrier, telephone and technology company.
Anchor Bay has many established long-term arrangements and utilizes a library of more than 3,500 owned or licensed titles. The company is known for its popular assortment of video collections and titles in a variety of genres, including: children’s (the Thomas The Tank Engine series), fitness, (where the company’s leading industry position includes titles such as the Crunch series and the For Dummies series); horror (films and series such as Halloween, The Evil Dead, Hellraiser and Dawn Of The Dead); television, (Highlander, Xena, Hercules, and Three’s Company); and theatrical.
“IDT Entertainment is now a vertically integrated company with the ability to control its direct-to-consumer projects from concept to delivery,” said Jim Courter, IDT’s CEO. “With the acquisition of Anchor Bay, IDT Entertainment’s strategic plan moves into high gear. Just as IDT Corporation succeeded by providing consumers with superior global telecom products and services, so too will IDT Entertainment succeed by providing the public with the best in world class animation programming.”
The direct-to-consumer market is one of the fastest growing segments in the entertainment industry. The U.S. market for video and DVD sales reached $13.6 billion in 2002. Of that total, independent labels, like Anchor Bay, achieved a 13.5% market share in 2002 and saw their revenue increase from $1.12 billion in 2001 to $1.86 billion in 2002, a 64% increase.
“IDT Entertainment now has all the elements in place to build an entertainment industry powerhouse,” said Morris Berger, CEO of IDT Entertainment. “We have content we’ve acquired and created, a production capability to bring it to life, and now, with the acquisition of Anchor Bay, the distribution channel to deliver it to the public. The addition of Anchor Bay brings other opportunities as well. We intend to promote the titles currently in Anchor Bay’s catalog, enlarge its library and use its distribution channels to enhance our merchandising efforts.”
Closing of the Anchor Bay Entertainment transaction is expected to take place mid-December 2003. The transaction is subject to antitrust clearance and other closing conditions.
In March 2003, Digital Production Solutions (DPS), now a unit of IDT Entertainment, acquired rights to Starpoint Academy and Char, both Gene Roddenberry creations. Starpoint Academy is presently in production. In May 2003, IDT Entertainment acquired a controlling interest in Film Roman, Inc., the animation company well known for its production work on The Simpsons, King of the Hill, and other popular broadcast television programs. In July 2003, IDT Entertainment acquired a minority equity interest in Vanguard Animation, LLC. Under the terms of the Vanguard Animation investment, IDT Entertainment was granted a first look right to provide production services on future Vanguard Animation projects. IDT and Vanguard Animation also entered into a joint venture agreement to jointly develop, produce, finance and arrange distribution of computer generated (CG) animation entertainment. In December 2003, IDT Entertainment acquired a controlling interest in Mainframe Entertainment Inc., a Vancouver, Canada based entertainment company well known for producing CG animation for films, television, videogames and the direct-to-consumer market.
IDT Corp, through its IDT Telecom subsidiary, is a facilities-based, multinational carrier that provides a broad range of telecommunications services to its retail and wholesale customers worldwide. IDT Telecom, by means of its own national telecom backbone and fiber optic network infrastructure, provides its customers with integrated and competitively priced international and domestic long distance telephony and prepaid calling cards. IDT and Liberty Media Corp own 95% and 5% of IDT Telecom, respectively. Liberty Media Corp also owns 5.6% stakes in IDT Media and IDT Entertainment. IDT Media is the IDT subsidiary principally responsible for the Company's initiatives in radio broadcasting, new video technologies and print media. IDT Entertainment, Inc. is the IDT subsidiary focused on developing, acquiring, producing and (with the Anchor Bay acquisition) distributing computer-generated and traditionally animated productions and other productions for the film, broadcast and direct-to-consumer markets. Winstar Holdings, LLC, which provides service under the IDT Solutions brand, is the IDT subsidiary through which we provide broadband and telephony services to commercial and governmental customers through a fixed-wireless and fiber infrastructure. Net2Phone, Inc., a subsidiary of IDT Corp, is a leading provider of high-quality global retail Voice over IP services, either directly or via a partner.
IDT Corp shares trade on the NYSE as IDT and IDT.C.
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, our ability to successfully integrate the operations of Anchor Bay Entertainment into the existing operations of IDT Entertainment, our ability to successfully operate a video distribution business, which is a line of business that we have not previously operated, as well as other factors affecting IDT Corp’s business generally, including those described in our most recent report on SEC Form 10-K (under the heading "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; competitiveness of our Winstar subsidiary; 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 othewise.