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 August 9, 2017 |
99.2 | Financial Scorecard as of June 30, 2017 |
STARTEK, INC. | ||
August 9, 2017 | By: | /s/ Don Norsworthy |
Don Norsworthy Senior Vice President, Chief Financial Officer and Treasurer |
• | Total revenue was $74.0 million compared to $73.7 million. |
• | Gross profit increased 28% to $9.0 million, with gross margin up 260 basis points to 12.1%. |
• | Net income increased significantly to $0.6 million or $0.03 per diluted share, compared to $(1.7) million or $(0.11) per share. |
• | Adjusted EBITDA* increased 91% to $4.4 million. |
• | Won $62.3 million of new business (annual contract value), including a new entertainment client and several expanded client engagements including a healthcare client. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue | $ | 73,979 | $ | 73,733 | $ | 151,631 | $ | 151,769 | ||||||||
Cost of services | 64,992 | 66,722 | 132,630 | 136,369 | ||||||||||||
Gross profit | 8,987 | 7,011 | 19,001 | 15,400 | ||||||||||||
Selling, general and administrative expenses | 8,171 | 8,120 | 16,053 | 15,901 | ||||||||||||
Impairment losses and restructuring charge, net | 412 | 158 | 412 | 170 | ||||||||||||
Operating income (loss) | 404 | (1,267 | ) | 2,536 | (671 | ) | ||||||||||
Interest and other (expense), net | 84 | (371 | ) | (283 | ) | (811 | ) | |||||||||
Income (loss) before income taxes | 488 | (1,638 | ) | 2,253 | (1,482 | ) | ||||||||||
Income tax (benefit) expense | (66 | ) | 46 | (94 | ) | 171 | ||||||||||
Net income (loss) | $ | 554 | $ | (1,684 | ) | $ | 2,347 | $ | (1,653 | ) | ||||||
Net income (loss) per common share - basic | 0.03 | (0.11 | ) | 0.15 | (0.11 | ) | ||||||||||
Weighted average shares outstanding - basic | 15,916 | 15,719 | 15,866 | 15,709 | ||||||||||||
Net income (loss) per common share - diluted | 0.03 | (0.11 | ) | 0.14 | (0.11 | ) | ||||||||||
Weighted average shares outstanding - diluted | 17,247 | 15,719 | 17,127 | 15,709 |
June 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,889 | $ | 1,039 | ||||
Trade accounts receivable, net | 56,685 | 60,179 | ||||||
Other current assets | 4,218 | 3,810 | ||||||
Total current assets | 62,792 | 65,028 | ||||||
Property, plant and equipment, net | 19,092 | 23,276 | ||||||
Other assets | 18,414 | 18,504 | ||||||
Total assets | $ | 100,298 | $ | 106,808 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | $ | 26,908 | $ | 54,364 | ||||
Other liabilities | 25,191 | 7,700 | ||||||
Total liabilities | 52,099 | 62,064 | ||||||
Total stockholders’ equity | 48,199 | 44,744 | ||||||
Total liabilities and stockholders' equity | $ | 100,298 | $ | 106,808 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Operating Activities | ||||||||||||||||
Net income (loss) | $ | 554 | $ | (1,684 | ) | $ | 2,347 | $ | (1,653 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | $ | 2,771 | 3,074 | 5,733 | 6,304 | |||||||||||
Share-based compensation expense | $ | 301 | 336 | 530 | 825 | |||||||||||
Changes in operating assets & liabilities and other, net | $ | 375 | $ | 2,994 | $ | 2,574 | $ | 4,108 | ||||||||
Net cash provided by operating activities | $ | 4,001 | 4,720 | 11,184 | 9,584 | |||||||||||
Investing Activities | ||||||||||||||||
Purchases of property, plant and equipment | $ | (941 | ) | (183 | ) | (2,054 | ) | (594 | ) | |||||||
Proceeds from sale of assets | $ | — | 13 | 342 | 13 | |||||||||||
Cash paid for acquisition of businesses | $ | — | (197 | ) | — | (414 | ) | |||||||||
Net cash used in investing activities | $ | (941 | ) | (367 | ) | (1,712 | ) | (995 | ) | |||||||
Financing Activities | ||||||||||||||||
Other financing, net | $ | (2,549 | ) | (4,029 | ) | (8,624 | ) | (10,049 | ) | |||||||
Net cash used in financing activities | (2,549 | ) | (4,029 | ) | (8,624 | ) | (10,049 | ) | ||||||||
Effect of exchange rate changes on cash | $ | 14 | 100 | 2 | 88 | |||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 525 | 424 | 850 | (1,372 | ) | ||||||||||
Cash and cash equivalents at beginning of period | $ | 1,364 | $ | 830 | $ | 1,039 | $ | 2,626 | ||||||||
Cash and cash equivalents at end of period | $ | 1,889 | $ | 1,254 | $ | 1,889 | $ | 1,254 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income | $ | 554 | $ | (1,684 | ) | $ | 2,347 | $ | (1,653 | ) | ||||||
Income tax expense (benefit) | (66 | ) | 46 | (94 | ) | 171 | ||||||||||
Interest expense | 414 | 371 | 832 | 729 | ||||||||||||
Impairment losses and restructuring charges, net | 412 | 158 | 412 | 166 | ||||||||||||
Depreciation and amortization expense | 2,771 | 3,067 | 5,733 | 6,297 | ||||||||||||
Share-based compensation expense | 301 | 336 | 530 | 825 | ||||||||||||
Adjusted EBITDA | $ | 4,386 | $ | 2,294 | $ | 9,760 | $ | 6,535 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net cash provided by operating activities | 4,001 | 4,720 | 11,184 | 9,584 | ||||||||||||
Less: capital expenditures | (941 | ) | (183 | ) | (2,054 | ) | (594 | ) | ||||||||
Free cash flow | $ | 3,060 | $ | 4,537 | $ | 9,130 | $ | 8,990 |
Operating Results Scorecard | ||||||||||||||||||||||||||
As of June 30, 2017 | ||||||||||||||||||||||||||
Q1-16 | Q2-16 | Q3-16 | Q4-16 | 2016 | Q1-17 | Q2-17 | 2017 | |||||||||||||||||||
Revenue (millions) | ||||||||||||||||||||||||||
Domestic | $ | 49.1 | $ | 46.3 | $ | 46.1 | $ | 44.5 | $ | 186.1 | $ | 44.4 | $ | 42.6 | $ | 86.9 | ||||||||||
Offshore | $ | 17.6 | $ | 17.1 | $ | 20.8 | $ | 21.4 | $ | 76.9 | $ | 21.1 | $ | 19.4 | $ | 40.5 | ||||||||||
Nearshore | $ | 11.3 | $ | 10.3 | $ | 11.4 | $ | 11.2 | $ | 44.3 | $ | 12.2 | $ | 12.1 | $ | 24.2 | ||||||||||
Company Total | $ | 78.0 | $ | 73.7 | $ | 78.3 | $ | 77.1 | $ | 307.2 | $ | 77.7 | $ | 74.0 | $ | 151.6 | ||||||||||
Revenue % | ||||||||||||||||||||||||||
Domestic | 62.9 | % | 62.8 | % | 58.9 | % | 57.7 | % | 60.6 | % | 57.1 | % | 57.5 | % | 57.3 | % | ||||||||||
Offshore | 22.6 | % | 23.2 | % | 26.6 | % | 27.7 | % | 25.0 | % | 27.2 | % | 26.2 | % | 26.7 | % | ||||||||||
Nearshore | 14.5 | % | 14.0 | % | 14.6 | % | 14.5 | % | 14.4 | % | 15.7 | % | 16.3 | % | 16.0 | % | ||||||||||
Company Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
Gross Profit (millions) | ||||||||||||||||||||||||||
Domestic | $ | 4.8 | $ | 3.3 | $ | 2.8 | $ | 1.5 | $ | 12.4 | $ | 1.5 | $ | 2.6 | $ | 4.1 | ||||||||||
Offshore | $ | 2.3 | $ | 2.5 | $ | 5.1 | $ | 6.7 | $ | 16.6 | $ | 6.2 | $ | 4.3 | $ | 10.5 | ||||||||||
Nearshore | $ | 1.3 | $ | 1.2 | $ | 2.4 | $ | 2.5 | $ | 7.4 | $ | 2.3 | $ | 2.1 | $ | 4.4 | ||||||||||
Company Total | $ | 8.4 | $ | 7.0 | $ | 10.3 | $ | 10.7 | $ | 36.4 | $ | 10.0 | $ | 9.0 | $ | 19.0 | ||||||||||
Gross Profit % | ||||||||||||||||||||||||||
Domestic | 9.8 | % | 7.0 | % | 6.1 | % | 3.4 | % | 6.7 | % | 3.4 | % | 6.0 | % | 4.7 | % | ||||||||||
Offshore | 13.0 | % | 14.9 | % | 24.5 | % | 31.2 | % | 21.6 | % | 29.2 | % | 22.2 | % | 25.9 | % | ||||||||||
Nearshore | 11.3 | % | 11.6 | % | 21.5 | % | 22.0 | % | 16.8 | % | 19.2 | % | 17.7 | % | 18.5 | % | ||||||||||
Company Total | 11.2 | % | 9.5 | % | 13.3 | % | 13.8 | % | 11.9 | % | 12.9 | % | 12.1 | % | 12.5 | % |
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