Welcome!

News Feed Item

StarTek, Inc. Reports Second Quarter 2013 Results

StarTek, Inc. (NYSE:SRT) today announced its second quarter 2013 financial results.

Second Quarter Highlights

  • Adjusted EBITDA of $1.9 million in the second quarter of 2013 compared to $(0.4) million in the prior year period;
  • Launched new Philippines provincial location;
  • Significant portion of IT Platform initiative moving to implementation;
  • $12.0 million of new business signed in the second quarter, including one new logo; $18.0 million signed year to date;
  • Revenue growth of 66% on all clients excluding largest two, with no one client representing more than 28% of total revenue;
  • Year to date SG&A reduction of 7.7% versus 2012; and
  • Cash balance of $10.0 million at the end of the quarter.

Second Quarter 2013 Financial Results

Second quarter 2013 revenue increased 25.1% compared to the second quarter of 2012, the result of solid growth with existing clients and new business signed in 2012. All segments showed year over year revenue growth and, while Asia Pacific margins declined versus 2012, both the Domestic and Latin America segments improved significantly. The Company had a net loss of $1.3 million, or $0.08 per share, during the second quarter of 2013 as compared to a net loss of $4.3 million, or $0.28 per share, in the second quarter of 2012.

Gross margin increased from 7.4% in the second quarter of 2012 to 10.1% in the second quarter of 2013. This improvement was due to improved Domestic margins of 12.3% in the second quarter of 2013 and the ongoing ramp of the Honduras location in Latin America. Latin America margins improved to (1.2%) in the second quarter of 2013 from (8.1%) in the second quarter of 2012.

SG&A expenses decreased 1.8% from $7.3 million during the second quarter of 2012 to $7.2 million during the second quarter of 2013, decreasing from 16.5% to 13.0% of revenue, due to the continued focus on cost management.

Subsequent to the end of the quarter, we completed an acquisition totaling $1.5 million, which will be used as a platform for us to accelerate our growth within the healthcare services vertical.

Liquidity and Capital Resources

As of June 30, 2013, the Company's cash position was approximately $10.0 million compared to $9.2 million as of December 31, 2012. The Company had approximately $0.3 million and $0.5 million in capital expenditures during the quarters ended June 30, 2013 and 2012, respectively. The acquisition of Ideal Dialogue Company, LLC resulted in a use of $0.8 million of cash during the second quarter of 2013.

"I am pleased with our year over year revenue growth across all regions," said Chad Carlson, President and Chief Executive Officer. "This is continued evidence that clients trust the execution of our team and are pleased with the solutions offered via the StarTek Advantage System. Gross margin improved in 2 of our 3 regions and Asia Pacific was held down by ramp and training costs. The challenges with operational performance in Asia Pacific, which I discussed last quarter, are largely behind us and we are off to a great start in our new provincial site in the Philippines."

For additional information on revenue and margin, please refer to the Financial Scorecard attached as Exhibit 99.2 to the Current Report on Form 8-K, which includes this press release.

Conference Call and Webcast Details

The Company will host a conference call today, August 12, 2013, at 3:00 p.m. MDT (5:00 p.m. EDT) to discuss second quarter 2013 financial results. To participate in the teleconference, please call toll-free 866.271.5140 (or 617.213.8893 for international callers) and enter “76399809”. You may also listen to the teleconference live via the Company’s website at www.startek.com. For those that cannot access the live broadcast, a replay will be available on the Company’s website at www.startek.com.

About StarTek

StarTek, Inc. is a global provider of business process outsourcing services with approximately 10,200 employees, whom we refer to as Brand Warriors, that have been committed to making a positive impact on our clients’ business results for over 25 years. Our mission is to enable and empower our Brand Warriors to promote our clients’ brands every day to bring value to our stakeholders. We accomplish this by aligning with our clients’ business objectives, resulting in a trusted partnership. The StarTek Advantage System is the sum total of our culture, customized solutions and processes that enhance our clients’ customer experience. The StarTek Advantage System is focused on improving customer experience and reducing total cost of ownership for our clients. StarTek has proven results for the multiple services we provide, including sales, order management and provisioning, customer care, technical support, receivables management, and retention programs. We manage programs using a variety of multi-channel customer interaction capabilities, including voice, chat, email, IVR and back-office support. StarTek has delivery centers in the U.S., Philippines, Canada, Costa Rica, Honduras and through its [email protected] workforce. For more information, go to www.startek.com or call +1303.262.4500.

Forward-Looking Statements

The matters regarding the future discussed in this news release include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be identified in this document by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should” and similar expressions. As described below, such statements are subject to a number of risks and uncertainties that could cause StarTek's actual results to differ materially from those expressed or implied by any such forward-looking statements. These factors include, but are not limited to, risks relating to our reliance on significant customers, consolidation by our clients, the concentration of our business in the telecommunications industry, pricing pressure, maximization of capacity utilization, lack of success of our clients’ products and services, consolidation of vendors by our clients, interruptions to the Company’s business due to geopolitical conditions and/or natural disasters, foreign currency exchange risk, lack of minimum purchase requirements in our contracts, ability to hire and retain qualified employees, the timely development of new products or services, failure to implement new technological advancements, increases in labor costs, lack of wide geographic diversity, continuing unfavorable economic conditions, our ability to effectively manage growth, increases in the cost of telephone and data services, unauthorized disclosure of confidential client or client customer information, risks inherent in the operation of business outside of North America, ability of our largest stockholder to affect decisions, stock price volatility, variation in quarterly operating results and inability to renew or replace sources of capital funding. Readers are encouraged to review Item 1A. - Risk Factors and all other disclosures appearing in the Company's Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission, for further information on risks and uncertainties that could affect StarTek’s business, financial condition and results of operation.

   

STARTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

 
Three Months

Ended June 30,

Six Months

Ended June 30,

2013   2012 2013   2012
Revenue $ 55,576 $ 44,421 $ 109,386 $ 95,280
Cost of services 49,955   41,150   99,037   86,672  
Gross profit 5,621 3,271 10,349 8,608
Selling, general and administrative expenses 7,198 7,329 14,448 15,653
Impairment losses and restructuring charges, net (437 ) 467   (437 ) 3,553  
Operating loss (1,140 ) (4,525 ) (3,662 ) (10,598 )
Net interest and other income 31   (84 ) (66 ) (187 )
Loss before income taxes (1,171 ) (4,441 ) (3,596 ) (10,411 )
Income tax expense (benefit) 101   (163 ) 4   (2 )
Net loss $ (1,272 ) $ (4,278 ) $ (3,600 ) $ (10,409 )
 
Net loss per common share - basic and diluted $ (0.08 ) $ (0.28 ) $ (0.24 ) $ (0.68 )
 
Weighted average shares outstanding - basic and diluted 15,335 15,239 15,319 15,214
 

STARTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

   

  June 30, 2013  

December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents $ 9,995 $ 9,183
Trade accounts receivable, net 40,659 41,070
Other current assets 8,708   10,027
Total current assets 59,362 60,280
Property, plant and equipment, net 21,832 26,310
Other assets 7,719   6,542
Total assets $ 88,913   $ 93,132
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 26,440 $ 23,879
Other liabilities 2,185   2,974
Total liabilities 28,625 26,853
Total stockholders’ equity 60,288   66,279
Total liabilities and stockholders' equity $ 88,913   $ 93,132
 

STARTEK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

   
Three Months Ended June 30, Six Months Ended June 30,
2013   2012 2013   2012
Operating Activities
Net loss $ (1,272 ) $ (4,278 ) $ (3,600 ) $ (10,409 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation 3,115 3,250 6,184 7,060
Impairment losses 3,086
Non-cash compensation cost 391 362 857 696
Amortization of deferred gain on sale leaseback transaction (68 ) (138 )
Changes in operating assets & liabilities and other, net 1,297   2,141   (68 ) 2,830  
Net cash provided by operating activities 3,463   1,475   3,235   3,263  
Investing Activities
Purchases of property, plant and equipment (330 ) (455 ) (1,454 ) (1,617 )
Proceeds from note receivable 165 165 330 330
Cash paid for acquisition of business (750 )   (1,500 )  
Net cash used in investing activities (915 ) (290 ) (2,624 ) (1,287 )
Financing Activities
Other financing, net 27   2   140   6  
Net cash provided by financing activities 27 2 140 6
Effect of exchange rate changes on cash 81   (290 ) 61   (333 )
Net increase in cash and cash equivalents 2,656 897 812 1,649
Cash and cash equivalents at beginning of period $ 7,339   $ 10,471   $ 9,183   $ 9,719  
Cash and cash equivalents at end of period $ 9,995   $ 11,368   $ 9,995   $ 11,368  
 

STARTEK, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(In thousands)

(Unaudited)

The information presented in this press release may report 1) adjusted EBITDA, which the Company defines as net income (loss) plus income tax expense (benefit), interest expense (income), impairment losses and restructuring charges, depreciation expense and stock compensation expense and 2) operating loss before impairment losses and restructuring charges. The following tables provide reconciliation of 1) adjusted EBITDA to net loss calculated in accordance with generally accepted accounting principles in the United States (GAAP) and 2) operating loss before impairment losses and restructuring charges to operating loss calculated in accordance with GAAP. This non-GAAP information should not be construed as an alternative to the reported results determined in accordance with GAAP. It is provided solely to assist in an investor’s understanding of these items on the comparability of the Company’s operations. A reconciliation of the GAAP amounts to the non-GAAP amounts is shown below.

 

Adjusted EBITDA:

  Three Months Ended   Six Months Ended
June 30, 2013   June 30, 2012 June 30, 2013   June 30, 2012
Net loss $ (1,272 ) $ (4,278 ) $ (3,600 ) $ (10,409 )
Income tax expense (benefit) 101 (163 ) 4 (2 )
Interest expense (income) 6 1 9 (17 )
Impairment losses and restructuring charges, net (437 ) 467 (437 ) 3,553
Depreciation expense 3,115 3,250 6,184 7,060
Stock compensation expense 391   362   857   696  
Adjusted EBITDA $ 1,904   $ (361 ) $ 3,017   $ 881  
 

Operating Loss before Impairment Losses and Restructuring Charges:

  Three Months Ended   Six Months Ended
June 30, 2013   June 30, 2012 June 30, 2013   June 30, 2012
Operating loss $ (1,140 ) $ (4,525 ) $ (3,662 ) $ (10,598 )
Impairment losses and restructuring charges, net (437 ) 467   (437 ) 3,553  
Operating loss before impairment losses and restructuring charges, net $ (1,577 ) $ (4,058 ) $ (4,099 ) $ (7,045 )

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In his session at 21st Cloud Expo, James Henry, Co-CEO/CTO of Calgary Scientific Inc., introduced you to the challenges, solutions and benefits of training AI systems to solve visual problems with an emphasis on improving AIs with continuous training in the field. He explored applications in several industries and discussed technologies that allow the deployment of advanced visualization solutions to the cloud.
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
"We're developing a software that is based on the cloud environment and we are providing those services to corporations and the general public," explained Seungmin Kim, CEO/CTO of SM Systems Inc., in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are moving to the cloud faster than most of us in security expected. CIOs are going from 0 to 100 in cloud adoption and leaving security teams in the dust. Once cloud is part of an enterprise stack, it’s unclear who has responsibility for the protection of applications, services, and data. When cloud breaches occur, whether active compromise or a publicly accessible database, the blame must fall on both service providers and users. In his session at 21st Cloud Expo, Ben Johnson, C...
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
"CA has been doing a lot of things in the area of DevOps. Now we have a complete set of tool sets in order to enable customers to go all the way from planning to development to testing down to release into the operations," explained Aruna Ravichandran, Vice President of Global Marketing and Strategy at CA Technologies, in this SYS-CON.tv interview at DevOps Summit at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...
Agile has finally jumped the technology shark, expanding outside the software world. Enterprises are now increasingly adopting Agile practices across their organizations in order to successfully navigate the disruptive waters that threaten to drown them. In our quest for establishing change as a core competency in our organizations, this business-centric notion of Agile is an essential component of Agile Digital Transformation. In the years since the publication of the Agile Manifesto, the conn...
"Codigm is based on the cloud and we are here to explore marketing opportunities in America. Our mission is to make an ecosystem of the SW environment that anyone can understand, learn, teach, and develop the SW on the cloud," explained Sung Tae Ryu, CEO of Codigm, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"MobiDev is a software development company and we do complex, custom software development for everybody from entrepreneurs to large enterprises," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
"There's plenty of bandwidth out there but it's never in the right place. So what Cedexis does is uses data to work out the best pathways to get data from the origin to the person who wants to get it," explained Simon Jones, Evangelist and Head of Marketing at Cedexis, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.