Media operations being spun off by IDT


What was once planned to be a nationwide network and chain of stations never got beyond one station for IDT Corporation. Now the company is spinning off its tourism/comic book/radio division into a separate company.

The spin-off was effective Monday (9/14) and the stock of CTM Media Holdings is supposed to trade on the over-the-counter pink sheets as CTMM for the Class A shares and CTMX for the Class B shares. IDT shareholders were to have received one share of CTM for each three shares of IDT that they held.

The lone radio station, time-brokered Talker WMET-AM Washington, DC has been a miniscule part of IDT, which is primarily in the telecommunications and energy businesses. But even in the spun-off CTM Media Holdings it won’t be a very large part of the company. It is being reported as “other,” with the main segments being CTM, a distributor of travel and entertainment information in print and online, and IDW, a comic book and graphic novel publisher.

According to information for the spin-off filed with the SEC, WMET had $1.1 million in revenues for the fiscal year ended June 31, 2008, down from $1.3 million the previous year. Revenues for the first nine months of the current fiscal year, through April 30, 2009 were $900K, unchanged from a year earlier.

The entire CTM Media Holdings is listed as having assets of $15.8 million, including $636K attributed to licenses and other intangibles, which is how FCC licenses and related assets are usually listed. It has liabilities of $29.6 million, including $24 million owed to IDT. Pro forma for the year ended June 31, 2008 it had revenues of $32.6 million and a net loss of $5.3 million. For the first six months of the current fiscal year revenues were $23.4 million. The net loss of $33.4 million included a write-down of $33.3 million for impairment of assets.

“IDT’s Board of Directors believes that the spin-off will separate certain business units whose performance and financial results of the business units to be separated are more predictable and have different growth characteristics than the remaining operations.  Management believes that separating the two groups of operating units will allow management of each of IDT and Holdings to design and implement corporate strategies and policies that are based primarily on the business characteristics of that company and its business units, maintain a sharper focus on core business and growth opportunities, and concentrate their financial resources wholly on their own operations. Moreover, the separation of Holdings will provide investors with greater transparency regarding the value of Holdings’ business units. In addition, the spin-off will separate business units with different risk profiles and performance characteristics from one another. Accordingly, we believe the spin-off will build long-term stockholder value,” IDT said in an SEC filing related to the spin-off.

Here’s how it described the assets of the spun-off company:

CTM is a distributor of travel and entertainment information to visitors who desire to maximize their experience in a particular region. CTM has five divisions: Brochure Distribution, Design & Print, Publishing, RightCardTM, and Digital Distribution.  Through these divisions, CTM offers clients a comprehensive media marketing approach.  In fiscal 2008, CTM serviced over 3,000 clients and maintained more than 11,000 display stations, in over 30 states and provinces. CTM’s display stations are located in travel and entertainment venues, including hotels, resorts, interstate highway rest areas, airports and local attractions. CTM generated revenues which represented 60.8% of consolidated revenues in the nine months ended April 30, 2009, 66.2% in fiscal 2008 and 88.4% in fiscal 2007.
IDW is a comic book and graphic novel publisher that creates and licenses original intellectual property. IDW generated revenues which represented 35.3% of consolidated revenues in the nine months ended April 30, 2009, 30.2% in fiscal 2008 and 5.9% in fiscal 2007.
WMET 1160 AM is a radio station serving the Washington, D.C. metropolitan area. WMET generated revenues which represented 3.7% of consolidated revenues in the six months ended January 31, 2009, 3.6% in fiscal 2008 and 5.7% in fiscal 2007.