DELAWARE | 1-12793 | 84-1370538 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
£ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
£ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
£ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
£ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Exhibit Description |
99.1 | Press Release dated February 27, 2013 |
99.2 | Financial Scorecard as of December 31, 2012 |
STARTEK, INC. | ||
Date: February 27, 2013 | By: | /s/ Lisa A. Weaver |
Lisa A. Weaver Senior Vice President and Chief Financial Officer |
• | Continued sales momentum, signing twelve new agreements year-to-date with an expected annual contract value of $69 million; |
• | Improved revenue diversification with no single client representing more than 30% of our revenue as we exited the year; |
• | Improved operational performance across entire footprint through execution and capacity utilization; |
• | Improved gross margin to 11.6% from 7.4% in 2011; |
• | Reduced ongoing SG&A expense by 12% versus prior year; and |
• | First profitable quarter in three years. |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenue | $ | 55,137 | $ | 51,143 | $ | 198,092 | $ | 219,493 | ||||||||
Cost of services | 46,849 | 47,229 | 175,095 | 203,284 | ||||||||||||
Gross profit | 8,288 | 3,914 | 22,997 | 16,209 | ||||||||||||
Selling, general and administrative expenses | 7,067 | 9,327 | 29,645 | 37,334 | ||||||||||||
Impairment losses and restructuring charges | (20 | ) | 1,933 | 4,066 | 5,496 | |||||||||||
Operating income (loss) | 1,241 | (7,346 | ) | (10,714 | ) | (26,621 | ) | |||||||||
Net interest and other income (expense) | 47 | 22 | 342 | 33 | ||||||||||||
Income (loss) before income taxes | 1,288 | (7,324 | ) | (10,372 | ) | (26,588 | ) | |||||||||
Income tax expense (benefit) | 137 | 137 | 116 | (126 | ) | |||||||||||
Net income (loss) | $ | 1,151 | $ | (7,461 | ) | $ | (10,488 | ) | $ | (26,462 | ) | |||||
Net income (loss) per common share - basic | 0.08 | (0.49 | ) | (0.69 | ) | (1.75 | ) | |||||||||
Net income (loss) per common share - diluted | 0.07 | (0.49 | ) | (0.69 | ) | (1.75 | ) | |||||||||
Weighted average shares outstanding - basic | 15,273 | 15,139 | 15,241 | 15,084 | ||||||||||||
Weighted average shares outstanding - diluted | 15,491 | 15,139 | 15,241 | 15,084 |
As of | ||||||||
December 31, 2012 | December 31, 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,183 | $ | 9,719 | ||||
Trade accounts receivable, net | 41,070 | 37,736 | ||||||
Other current assets | 10,027 | 8,872 | ||||||
Total current assets | 60,280 | 56,327 | ||||||
Property, plant and equipment, net | 26,310 | 38,475 | ||||||
Other assets | 6,542 | 6,631 | ||||||
Total assets | $ | 93,132 | $ | 101,433 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | $ | 23,879 | $ | 23,485 | ||||
Other liabilities | 2,974 | 3,586 | ||||||
Total liabilities | 26,853 | 27,071 | ||||||
Total stockholders’ equity | 66,279 | 74,362 | ||||||
Total liabilities and stockholders' equity | $ | 93,132 | $ | 101,433 |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Operating Activities | ||||||||||||||||
Net income (loss) | $ | 1,151 | $ | (7,461 | ) | $ | (10,488 | ) | $ | (26,462 | ) | |||||
Adjustments to reconcile net income (loss) to net | ||||||||||||||||
cash (used in) provided by operating activities: | ||||||||||||||||
Depreciation | 2,949 | 3,802 | 12,957 | 15,750 | ||||||||||||
Impairment losses | — | 1,356 | 3,086 | 2,381 | ||||||||||||
Non-cash compensation cost | 279 | 408 | 1,275 | 1,602 | ||||||||||||
Amortization of deferred gain on sale leaseback transaction | (47 | ) | — | (47 | ) | — | ||||||||||
Changes in operating assets & liabilities | ||||||||||||||||
and other, net | (5,744 | ) | — | (3,872 | ) | 5,461 | ||||||||||
Net cash (used in) provided by operating activities | (1,412 | ) | (1,895 | ) | 2,911 | (1,268 | ) | |||||||||
Investing Activities | ||||||||||||||||
Purchases of property, plant and equipment | (2,625 | ) | (1,541 | ) | (7,305 | ) | (8,958 | ) | ||||||||
Proceeds from sale leaseback transaction | 3,884 | — | 3,884 | — | ||||||||||||
Proceeds from note receivable | 165 | 165 | 660 | 660 | ||||||||||||
Net cash provided by (used in) investing activities | 1,424 | (1,376 | ) | (2,761 | ) | (8,298 | ) | |||||||||
Financing Activities | ||||||||||||||||
Other financing, net | 3 | 9 | 7 | 149 | ||||||||||||
Net cash provided by financing activities | 3 | 9 | 7 | 149 | ||||||||||||
Effect of exchange rate changes on cash | (31 | ) | 32 | (693 | ) | 396 | ||||||||||
Net decrease in cash and cash equivalents | (16 | ) | (3,230 | ) | (536 | ) | (9,021 | ) | ||||||||
Cash and cash equivalents at beginning of period | 9,199 | 11,516 | 9,719 | 18,740 | ||||||||||||
Cash and cash equivalents at end of period | $ | 9,183 | $ | 8,286 | $ | 9,183 | $ | 9,719 |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2012 | September 30, 2012 | December 31, 2012 | December 30, 2011 | |||||||||||||
Net income (loss) | $ | 1,151 | $ | (1,229 | ) | $ | (10,488 | ) | $ | (26,462 | ) | |||||
Income tax expense (benefit) | 137 | (20 | ) | 116 | (126 | ) | ||||||||||
Interest expense (income) | 7 | 2 | (8 | ) | (25 | ) | ||||||||||
Impairment losses & restructuring charges | (20 | ) | 533 | 4,066 | 5,496 | |||||||||||
Depreciation expense | 2,949 | 2,948 | 12,957 | 15,750 | ||||||||||||
Stock compensation expense | 279 | 301 | 1,275 | 1,602 | ||||||||||||
Adjusted EBITDA | $ | 4,503 | $ | 2,535 | $ | 7,918 | $ | (3,765 | ) |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2012 | September 30, 2012 | December 31, 2012 | December 30, 2011 | |||||||||||||
Operating income (loss) | $ | 1,241 | $ | (1,357 | ) | $ | (10,714 | ) | $ | (26,621 | ) | |||||
Impairment losses & restructuring charges | (20 | ) | 533 | 4,066 | 5,496 | |||||||||||
Operating income (loss) before impairment and restructuring charges | $ | 1,221 | $ | (824 | ) | $ | (6,648 | ) | $ | (21,125 | ) |
Operating Results Scorecard |
As of December 31, 2012 |
Q1-11 | Q2-11 | Q3-11 | Q4-11 | 2011 | Q1-12 | Q2-12 | Q3-12 | Q4-12 | 2012 | |||||||||||||||||||||||
Revenue (millions) | ||||||||||||||||||||||||||||||||
Domestic | $ | 47.5 | $ | 43.1 | $ | 35.2 | $ | 31.2 | $ | 157.0 | $ | 27.4 | $ | 21.6 | $ | 23.1 | $ | 27.7 | $ | 99.8 | ||||||||||||
Asia Pacific | 10.9 | 12.1 | 14.3 | 17.4 | $ | 54.6 | $ | 19.6 | $ | 18.7 | 19.8 | 21.6 | $ | 79.7 | ||||||||||||||||||
Latin America | 1.1 | 1.9 | 2.2 | 2.6 | $ | 7.8 | $ | 4.0 | $ | 4.1 | 4.8 | 5.8 | $ | 18.6 | ||||||||||||||||||
Company Total | $ | 59.5 | $ | 57.1 | $ | 51.7 | $ | 51.1 | $ | 219.5 | $ | 50.9 | $ | 44.4 | $ | 47.7 | $ | 55.1 | $ | 198.1 | ||||||||||||
Revenue % | ||||||||||||||||||||||||||||||||
Domestic | 79.8 | % | 75.5 | % | 68 | % | 61 | % | 71.5 | % | 53.8 | % | 48.6 | % | 48.5 | % | 50.3 | % | 50.4 | % | ||||||||||||
Asia Pacific | 18.3 | % | 21.1 | % | 27.7 | % | 34 | % | 20.2 | % | 38.5 | % | 42.1 | % | 41.6 | % | 39.2 | % | 20.2 | % | ||||||||||||
Latin America | 1.9 | % | 3.4 | % | 4.3 | % | 5 | % | 28.5 | % | 7.8 | % | 9.2 | % | 10 | % | 10.5 | % | 28.5 | % | ||||||||||||
Company Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||
Gross Profit (millions)* | ||||||||||||||||||||||||||||||||
Domestic | $ | 5.0 | $ | 3.9 | $ | 1.0 | $ | 1.2 | $ | 11.1 | $ | 0.8 | $ | 0.4 | $ | 1.9 | $ | 4.0 | $ | 7.2 | ||||||||||||
Asia Pacific | 1.4 | 1.0 | 1.9 | 3.9 | $ | 8.1 | $ | 4.8 | $ | 3.2 | 4.2 | 4.4 | $ | 16.7 | ||||||||||||||||||
Latin America | (0.7 | ) | (0.4 | ) | (0.7 | ) | (1.2 | ) | $ | (2.9 | ) | $ | (0.4 | ) | $ | (0.3 | ) | — | (0.2 | ) | $ | (0.9 | ) | |||||||||
Company Total | $ | 5.7 | $ | 4.5 | $ | 2.1 | $ | 3.9 | $ | 16.2 | $ | 5.3 | $ | 3.3 | $ | 6.1 | $ | 8.3 | $ | 23.0 | ||||||||||||
Gross Profit % | ||||||||||||||||||||||||||||||||
Domestic | 10.6 | % | 9 | % | 2.7 | % | 3.9 | % | 7.1 | % | 3.1 | % | 2 | % | 8.2 | % | 14.5 | % | 7.2 | % | ||||||||||||
Asia Pacific | 12.6 | % | 8 | % | 13 | % | 22.3 | % | 14.8 | % | 24.8 | % | 17 | % | 21.4 | % | 20.5 | % | 21 | % | ||||||||||||
Latin America | (61.1 | )% | (19.3 | )% | (32 | )% | (45.3 | )% | (37.4 | )% | (8.9 | )% | (8.1 | )% | (0.7 | )% | (2.8 | )% | (4.7 | )% | ||||||||||||
Company Total | 9.6 | % | 7.9 | % | 4.1 | % | 7.7 | % | 7.4 | % | 10.5 | % | 7.4 | % | 12.8 | % | 15 | % | 11.6 | % |