DELAWARE | 1-12793 | 84-1370538 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS 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 18, 2016 |
99.2 | Financial Scorecard as of December 31, 2015 |
STARTEK, INC. | ||
Date: February 18, 2016 | By: | /s/ Don Norsworthy |
Don Norsworthy Senior Vice President and Chief Financial Officer |
• | Total revenue increased 28% to $82.3 million versus the year-ago quarter |
• | Revenue from newer verticals such as healthcare, financial services, and retail increased 135% to $26.3 million versus the year-ago quarter, representing 32% of total revenue compared to 17% |
• | Adjusted EBITDA (a non-GAAP measure defined below) increased 106% to $4.8 million versus the year-ago quarter |
• | Net income up significantly to $0.3 million or $0.02 per share compared to net loss of $1.6 million or $(0.10) per share in the year-ago quarter |
• | Won $10 million of new business (annual contract value) by adding two new clients and expanding current client engagements |
• | Ended year with the most client and revenue diversification in STARTEK history |
• | Appointed Don Norsworthy as the company’s new Chief Financial Officer |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue | $ | 82,260 | $ | 64,178 | $ | 282,134 | $ | 250,080 | |||||||
Cost of services | 72,546 | 56,662 | 257,830 | 219,608 | |||||||||||
Gross profit | 9,714 | 7,516 | 24,304 | 30,472 | |||||||||||
Selling, general and administrative expenses | 8,447 | 8,345 | 34,427 | 31,397 | |||||||||||
Impairment losses and restructuring charges, net | 658 | 461 | 3,890 | 3,965 | |||||||||||
Operating income (loss) | 609 | (1,290 | ) | (14,013 | ) | (4,890 | ) | ||||||||
Interest and other income (expense), net | (381 | ) | (222 | ) | (1,139 | ) | (6 | ) | |||||||
Income (loss) before income taxes | 228 | (1,512 | ) | (15,152 | ) | (4,896 | ) | ||||||||
Income tax (benefit) expense | (105 | ) | 81 | 464 | 564 | ||||||||||
Net income (loss) | $ | 333 | $ | (1,593 | ) | $ | (15,616 | ) | $ | (5,460 | ) | ||||
Net income (loss) per common share - basic | 0.02 | (0.10 | ) | (1.01 | ) | (0.35 | ) | ||||||||
Net income (loss) per common share - diluted | 0.02 | (0.10 | ) | (1.01 | ) | (0.35 | ) | ||||||||
Weighted average shares outstanding - basic | 15,605 | 15,410 | 15,529 | 15,394 | |||||||||||
Weighted average shares outstanding - diluted | 15,835 | 15,410 | 15,529 | 15,394 |
As of | ||||||||
December 31, 2015 | December 31, 2014 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,626 | $ | 5,306 | ||||
Trade accounts receivable, net | 57,941 | 46,103 | ||||||
Other current assets | 3,451 | 3,099 | ||||||
Total current assets | 64,018 | 54,508 | ||||||
Property, plant and equipment, net | 30,364 | 28,180 | ||||||
Other assets | 21,292 | 11,105 | ||||||
Total assets | $ | 115,674 | $ | 93,793 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | $ | 63,698 | $ | 31,672 | ||||
Other liabilities | 10,051 | 7,440 | ||||||
Total liabilities | 73,749 | 39,112 | ||||||
Total stockholders’ equity | 41,925 | 54,681 | ||||||
Total liabilities and stockholders' equity | $ | 115,674 | $ | 93,793 |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income (loss) | $ | 333 | $ | (1,593 | ) | $ | (15,616 | ) | $ | (5,460 | ) | |||||
Adjustments to reconcile net loss to net | ||||||||||||||||
cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 3,458 | 2,750 | 13,261 | 10,379 | ||||||||||||
(Gains) losses on sales/impairments of assets | 323 | 45 | (186 | ) | (136 | ) | ||||||||||
(Gain) on dissolution of subsidiary | — | — | — | (413 | ) | |||||||||||
Non-cash compensation cost | 93 | 418 | 1,469 | 1,625 | ||||||||||||
Amortization of deferred gain on sale leaseback transaction | — | (62 | ) | (168 | ) | (276 | ) | |||||||||
Changes in operating assets & liabilities and other, net | (5,190 | ) | (132 | ) | (3,114 | ) | (1,339 | ) | ||||||||
Net cash provided by operating activities | (983 | ) | 1,426 | (4,354 | ) | 4,380 | ||||||||||
Investing Activities | ||||||||||||||||
Purchases of property, plant and equipment | (1,222 | ) | (2,100 | ) | (7,722 | ) | (11,661 | ) | ||||||||
Proceeds from sale of assets | — | 71 | 982 | 1,135 | ||||||||||||
Proceeds from note receivable | — | 164 | — | 645 | ||||||||||||
(Cash paid) received for acquisitions of businesses | 651 | (2,816 | ) | (18,258 | ) | (3,419 | ) | |||||||||
Net cash (used in) investing activities | (571 | ) | (4,681 | ) | (24,998 | ) | (13,300 | ) | ||||||||
Financing Activities | ||||||||||||||||
Other financing, net | 3,556 | 1,974 | 26,519 | 3,416 | ||||||||||||
Net cash provided by financing activities | 3,556 | 1,974 | 26,519 | 3,416 | ||||||||||||
Effect of exchange rate changes on cash | (190 | ) | 35 | 153 | (179 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | 1,812 | (1,246 | ) | (2,680 | ) | (5,683 | ) | |||||||||
Cash and cash equivalents at beginning of period | $ | 814 | $ | 6,552 | $ | 5,306 | $ | 10,989 | ||||||||
Cash and cash equivalents at end of period | $ | 2,626 | $ | 5,306 | $ | 2,626 | $ | 5,306 |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||||||
Net income (loss) | $ | 333 | $ | (1,593 | ) | $ | (15,616 | ) | $ | (5,460 | ) | |||||
Income tax (benefit) expense | (105 | ) | 81 | 464 | 564 | |||||||||||
Interest expense, net | 381 | 172 | 1,683 | 606 | ||||||||||||
Impairment losses and restructuring charges, net | 658 | 461 | 3,890 | 3,965 | ||||||||||||
Depreciation and amortization expense | 3,458 | 2,750 | 13,261 | 10,379 | ||||||||||||
(Gains) losses on disposal of assets | — | 45 | (509 | ) | (136 | ) | ||||||||||
Share-based compensation expense | 93 | 418 | 1,469 | 1,625 | ||||||||||||
Adjusted EBITDA | $ | 4,818 | $ | 2,334 | $ | 4,642 | $ | 11,543 |
Operating Results Scorecard | ||||||||||||||||||||||||||||||||
As of December 31, 2015 | ||||||||||||||||||||||||||||||||
Q1-14 | Q2-14 | Q3-14 | Q4-14 | 2014 | Q1-15 | Q2-15 | Q3-15 | Q4-15 | 2015 | |||||||||||||||||||||||
Revenue (millions) | ||||||||||||||||||||||||||||||||
Domestic | $ | 33.3 | $ | 30.9 | $ | 30.7 | $ | 35.6 | $ | 130.6 | $ | 35.6 | $ | 37.1 | $ | 44.6 | $ | 52.7 | $ | 169.9 | ||||||||||||
Offshore | $ | 21.1 | $ | 21.0 | $ | 22.5 | $ | 21.2 | $ | 85.8 | $ | 20.3 | $ | 18.1 | $ | 17.1 | $ | 17.3 | $ | 72.9 | ||||||||||||
Nearshore | $ | 8.8 | $ | 9.3 | $ | 8.3 | $ | 7.3 | $ | 33.7 | $ | 7.7 | $ | 8.2 | $ | 11.1 | $ | 12.3 | $ | 39.3 | ||||||||||||
Company Total | $ | 63.2 | $ | 61.3 | $ | 61.4 | $ | 64.2 | $ | 250.1 | $ | 63.7 | $ | 63.5 | $ | 72.8 | $ | 82.3 | $ | 282.1 | ||||||||||||
Revenue % | ||||||||||||||||||||||||||||||||
Domestic | 52.7 | % | 50.5 | % | 50.0 | % | 55.5 | % | 52.2 | % | 56.0 | % | 58.5 | % | 61.2 | % | 64.0 | % | 60.2 | % | ||||||||||||
Offshore | 33.3 | % | 34.3 | % | 36.6 | % | 33.1 | % | 34.3 | % | 31.9 | % | 28.6 | % | 23.6 | % | 21.0 | % | 25.8 | % | ||||||||||||
Nearshore | 14.0 | % | 15.2 | % | 13.5 | % | 11.4 | % | 13.5 | % | 12.1 | % | 13.0 | % | 15.2 | % | 14.9 | % | 13.9 | % | ||||||||||||
Company Total | 100.0 | % | 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 | $ | 6.7 | $ | 11.6 | ||||||||||||
Offshore | $ | 3.6 | $ | 2.6 | $ | 5.1 | $ | 3.9 | $ | 15.2 | $ | 2.5 | $ | 1.8 | $ | 1.2 | $ | 1.1 | $ | 6.7 | ||||||||||||
Nearshore | $ | 0.1 | $ | 0.4 | $ | 0.9 | $ | 0.9 | $ | 2.3 | $ | 1.2 | $ | 1.3 | $ | 1.6 | $ | 1.9 | $ | 6.0 | ||||||||||||
Company Total | $ | 8.2 | $ | 5.7 | $ | 9.0 | $ | 7.5 | $ | 30.5 | $ | 6.1 | $ | 5.3 | $ | 3.2 | $ | 9.7 | $ | 24.3 | ||||||||||||
Gross Profit % | ||||||||||||||||||||||||||||||||
Domestic | 13.6 | % | 8.5 | % | 9.9 | % | 7.6 | % | 9.9 | % | 6.8 | % | 6.0 | % | 0.7 | % | 12.7 | % | 6.8 | % | ||||||||||||
Offshore | 17.1 | % | 12.5 | % | 22.6 | % | 18.3 | % | 17.7 | % | 12.4 | % | 10.0 | % | 7.2 | % | 6.4 | % | 9.2 | % | ||||||||||||
Nearshore | 0.8 | % | 4.5 | % | 11.2 | % | 12.7 | % | 6.9 | % | 15.4 | % | 15.6 | % | 14.5 | % | 15.8 | % | 15.3 | % | ||||||||||||
Company Total | 13.0 | % | 9.3 | % | 14.7 | % | 11.7 | % | 12.2 | % | 9.6 | % | 8.4 | % | 4.3 | % | 11.8 | % | 8.6 | % |
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