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 November 3, 2015 |
99.2 | Financial Scorecard as of September 30, 2015 |
STARTEK, INC. | ||
November 3, 2015 | By: | /s/ Lisa A. Weaver |
Lisa A. Weaver Senior Vice President, Chief Financial Officer and Treasurer |
• | Total revenue increased 18% to $72.8 million versus the year-ago quarter |
• | Revenue from verticals excluding telecommunications/cable and media increased 272% to $20.5 million versus the year-ago quarter |
• | Signed four new clients, including two healthcare, and expanded one existing client program for a combined annual contract value of $20 million |
• | Continued integration of ACCENT resulted in approximately $7.5 million of annualized cost savings, exceeding the company’s original cost synergy target |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | $ | 72,756 | $ | 61,438 | $ | 199,874 | $ | 185,901 | ||||||||
Cost of services | 69,597 | 52,393 | 185,284 | 162,946 | ||||||||||||
Gross profit | 3,159 | 9,045 | 14,590 | 22,955 | ||||||||||||
Selling, general and administrative expenses | 9,335 | 7,503 | 25,981 | 23,052 | ||||||||||||
Restructuring charges | 889 | 1,262 | 3,231 | 3,504 | ||||||||||||
Operating loss | (7,065 | ) | 280 | (14,622 | ) | (3,601 | ) | |||||||||
Interest and other income (expense), net | (421 | ) | 362 | (758 | ) | 216 | ||||||||||
Loss before income taxes | (7,486 | ) | 642 | (15,380 | ) | (3,385 | ) | |||||||||
Income tax expense | 219 | 728 | 569 | 482 | ||||||||||||
Net loss | $ | (7,705 | ) | $ | (86 | ) | $ | (15,949 | ) | $ | (3,867 | ) | ||||
Net loss per common share - basic and diluted | (0.49 | ) | (0.01 | ) | (1.03 | ) | (0.25 | ) | ||||||||
Weighted average shares outstanding - basic and diluted | 15,569 | 15,400 | 15,504 | 15,389 |
September 30, 2015 | December 31, 2014 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 814 | $ | 5,306 | ||||
Trade accounts receivable, net | 51,537 | 46,103 | ||||||
Other current assets | 5,204 | 3,099 | ||||||
Total current assets | 57,555 | 54,508 | ||||||
Property, plant and equipment, net | 33,706 | 28,180 | ||||||
Other assets | 21,483 | 11,105 | ||||||
Total assets | $ | 112,744 | $ | 93,793 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | $ | 60,615 | $ | 31,672 | ||||
Other liabilities | 11,187 | 7,440 | ||||||
Total liabilities | 71,802 | 39,112 | ||||||
Total stockholders’ equity | 40,942 | 54,681 | ||||||
Total liabilities and stockholders' equity | $ | 112,744 | $ | 93,793 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Activities | ||||||||||||||||
Net loss | $ | (7,705 | ) | $ | (86 | ) | $ | (15,949 | ) | $ | (3,867 | ) | ||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 3,515 | 2,659 | 9,803 | 7,629 | ||||||||||||
Gains on disposal of assets | (2 | ) | (7 | ) | (509 | ) | (182 | ) | ||||||||
Gain on dissolution of subsidiary | — | (413 | ) | — | (413 | ) | ||||||||||
Share-based compensation expense | 463 | 343 | 1,376 | 1,207 | ||||||||||||
Amortization of deferred gain on sale leaseback transaction | (54 | ) | (85 | ) | (168 | ) | (214 | ) | ||||||||
Changes in operating assets & liabilities and other, net | 391 | (983 | ) | 2,077 | (1,205 | ) | ||||||||||
Net cash (used in) provided by operating activities | (3,392 | ) | 1,428 | (3,370 | ) | 2,955 | ||||||||||
Investing Activities | ||||||||||||||||
Proceeds from note receivable | — | 162 | — | 481 | ||||||||||||
Purchases of property, plant and equipment | (1,291 | ) | (2,737 | ) | (6,500 | ) | (9,562 | ) | ||||||||
Proceeds from sale of assets | — | 425 | 982 | 1,064 | ||||||||||||
Cash paid for acquisition of business | — | — | (18,326 | ) | — | |||||||||||
Cash paid for prior period acquisitions of businesses | (149 | ) | (203 | ) | (583 | ) | (603 | ) | ||||||||
Net cash used in investing activities | (1,440 | ) | (2,353 | ) | (24,427 | ) | (8,620 | ) | ||||||||
Financing Activities | ||||||||||||||||
Other financing, net | (1,006 | ) | 1,423 | 22,963 | 1,442 | |||||||||||
Net cash (used in) provided by financing activities | (1,006 | ) | 1,423 | 22,963 | 1,442 | |||||||||||
Effect of exchange rate changes on cash | 258 | 17 | 342 | (214 | ) | |||||||||||
Net (decrease) increase in cash and cash equivalents | (5,580 | ) | 515 | (4,492 | ) | (4,437 | ) | |||||||||
Cash and cash equivalents at beginning of period | $ | 6,394 | $ | 6,037 | $ | 5,306 | $ | 10,989 | ||||||||
Cash and cash equivalents at end of period | $ | 814 | $ | 6,552 | $ | 814 | $ | 6,552 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net loss | $ | (7,705 | ) | $ | (86 | ) | $ | (15,949 | ) | $ | (3,867 | ) | ||||
Income tax expense | 219 | 728 | 569 | 482 | ||||||||||||
Interest expense (income), net | 375 | 136 | 1,303 | 434 | ||||||||||||
Restructuring charges | 889 | 1,262 | 3,231 | 3,504 | ||||||||||||
Depreciation and amortization expense | 3,515 | 2,659 | 9,803 | 7,629 | ||||||||||||
Gains on disposal of assets | (2 | ) | (7 | ) | (509 | ) | (182 | ) | ||||||||
Share-based compensation expense | 463 | 343 | 1,376 | 1,207 | ||||||||||||
Adjusted EBITDA | $ | (2,246 | ) | $ | 5,035 | $ | (176 | ) | $ | 9,207 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating (loss) income | $ | (7,065 | ) | $ | 280 | $ | (14,622 | ) | $ | (3,601 | ) | |||||
Restructuring charges | 889 | 1,262 | 3,231 | 3,504 | ||||||||||||
Operating (loss) income before restructuring charges | $ | (6,176 | ) | $ | 1,542 | $ | (11,391 | ) | $ | (97 | ) |
Operating Results Scorecard | |||||||||||||||||||||||||||||
As of September 30, 2015 | |||||||||||||||||||||||||||||
Q1-14 | Q2-14 | Q3-14 | Q4-14 | 2014 | Q1-15 | Q2-15 | Q3-15 | 2015 | |||||||||||||||||||||
Revenue (millions) | |||||||||||||||||||||||||||||
Domestic | $ | 33.3 | $ | 30.9 | $ | 30.7 | $ | 35.6 | $ | 130.6 | $ | 35.6 | $ | 37.1 | $ | 44.6 | $ | 117.3 | |||||||||||
Offshore | $ | 21.1 | $ | 21.0 | $ | 22.5 | $ | 21.2 | $ | 85.8 | $ | 20.3 | $ | 18.1 | $ | 17.1 | $ | 55.6 | |||||||||||
Nearshore | $ | 8.8 | $ | 9.3 | $ | 8.3 | $ | 7.3 | $ | 33.7 | $ | 7.7 | $ | 8.2 | $ | 11.1 | $ | 27.0 | |||||||||||
Company Total | $ | 63.2 | $ | 61.3 | $ | 61.4 | $ | 64.2 | $ | 250.1 | $ | 63.7 | $ | 63.5 | $ | 72.8 | $ | 199.9 | |||||||||||
Revenue % | |||||||||||||||||||||||||||||
Domestic | 52.7 | % | 50.5 | % | 50.0 | % | 55.5 | % | 52.2 | % | 56.0 | % | 58.5 | % | 61.2 | % | 58.7 | % | |||||||||||
Offshore | 33.3 | % | 34.3 | % | 36.6 | % | 33.1 | % | 34.3 | % | 31.9 | % | 28.6 | % | 23.6 | % | 27.8 | % | |||||||||||
Nearshore | 14.0 | % | 15.2 | % | 13.5 | % | 11.4 | % | 13.5 | % | 12.1 | % | 13.0 | % | 15.2 | % | 13.5 | % | |||||||||||
Company Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Gross Profit (millions) | |||||||||||||||||||||||||||||
Domestic | $ | 4.5 | $ | 2.6 | $ | 3.0 | $ | 2.7 | $ | 12.9 | $ | 2.4 | $ | 2.2 | $ | 0.3 | $ | 4.9 | |||||||||||
Offshore | $ | 3.6 | $ | 2.6 | $ | 5.1 | $ | 3.9 | $ | 15.2 | $ | 2.5 | $ | 1.8 | $ | 1.2 | $ | 5.6 | |||||||||||
Nearshore | $ | 0.1 | $ | 0.4 | $ | 0.9 | $ | 0.9 | $ | 2.3 | $ | 1.2 | $ | 1.3 | $ | 1.6 | $ | 4.1 | |||||||||||
Company Total | $ | 8.2 | $ | 5.7 | $ | 9.0 | $ | 7.5 | $ | 30.5 | $ | 6.1 | $ | 5.3 | $ | 3.2 | $ | 14.6 | |||||||||||
Gross Profit % | |||||||||||||||||||||||||||||
Domestic | 13.6 | % | 8.5 | % | 9.9 | % | 7.6 | % | 9.9 | % | 6.8 | % | 6.0 | % | 0.7 | % | 4.2 | % | |||||||||||
Offshore | 17.1 | % | 12.5 | % | 22.6 | % | 18.3 | % | 17.7 | % | 12.4 | % | 10.0 | % | 7.2 | % | 10.0 | % | |||||||||||
Nearshore | 0.8 | % | 4.5 | % | 11.2 | % | 12.7 | % | 6.9 | % | 15.4 | % | 15.6 | % | 14.5 | % | 15.1 | % | |||||||||||
Company Total | 13.0 | % | 9.3 | % | 14.7 | % | 11.7 | % | 12.2 | % | 9.6 | % | 8.4 | % | 4.3 | % | 7.3 | % |
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