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 |
STARTEK, INC. | ||
November 8, 2017 | By: | /s/ Don Norsworthy |
Don Norsworthy Senior Vice President, Chief Financial Officer and Treasurer |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue | $ | 69,372 | $ | 78,305 | $ | 221,004 | $ | 230,073 | ||||||||
Cost of services | 62,053 | 67,958 | 194,683 | 204,327 | ||||||||||||
Gross profit | 7,319 | 10,347 | 26,321 | 25,746 | ||||||||||||
Selling, general and administrative expenses | 8,062 | 8,767 | 24,115 | 24,668 | ||||||||||||
Impairment losses and restructuring charge, net | 14 | 187 | 427 | 356 | ||||||||||||
Operating income (loss) | (757 | ) | 1,393 | 1,779 | 722 | |||||||||||
Interest and other expense, net | (385 | ) | (374 | ) | (668 | ) | (1,185 | ) | ||||||||
Income (loss) before income taxes | (1,142 | ) | 1,019 | 1,111 | (463 | ) | ||||||||||
Income tax (benefit) expense | 30 | 163 | (64 | ) | 334 | |||||||||||
Net income (loss) | $ | (1,172 | ) | $ | 856 | $ | 1,175 | $ | (797 | ) | ||||||
Net income (loss) per common share - basic | (0.07 | ) | 0.05 | 0.07 | (0.05 | ) | ||||||||||
Weighted average shares outstanding - basic | 15,977 | 15,735 | 15,903 | 15,718 | ||||||||||||
Net income (loss) per common share - diluted | (0.07 | ) | 0.05 | 0.07 | (0.05 | ) | ||||||||||
Weighted average shares outstanding - diluted | 15,977 | 16,250 | 17,250 | 15,718 |
September 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,336 | $ | 1,039 | ||||
Trade accounts receivable, net | 54,717 | 60,179 | ||||||
Other current assets | 3,741 | 3,810 | ||||||
Total current assets | 59,794 | 65,028 | ||||||
Property, plant and equipment, net | 18,302 | 23,276 | ||||||
Other assets | 18,049 | 18,504 | ||||||
Total assets | $ | 96,145 | $ | 106,808 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | $ | 24,792 | $ | 54,364 | ||||
Other liabilities | 23,089 | 7,700 | ||||||
Total liabilities | 47,881 | 62,064 | ||||||
Total stockholders’ equity | 48,264 | 44,744 | ||||||
Total liabilities and stockholders' equity | $ | 96,145 | $ | 106,808 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Operating Activities | ||||||||||||||||
Net income (loss) | $ | (1,172 | ) | $ | 856 | $ | 1,175 | $ | (797 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 2,650 | 3,078 | 8,383 | 9,382 | ||||||||||||
Share-based compensation expense | 215 | 454 | 745 | 1,279 | ||||||||||||
Changes in operating assets & liabilities and other, net | 1,049 | (2,476 | ) | 3,623 | 1,632 | |||||||||||
Net cash provided by operating activities | $ | 2,742 | $ | 1,912 | $ | 13,926 | $ | 11,496 | ||||||||
Investing Activities | ||||||||||||||||
Purchases of property, plant and equipment | (1,985 | ) | (344 | ) | (4,039 | ) | (938 | ) | ||||||||
Proceeds from sale of assets | — | 11 | 342 | 24 | ||||||||||||
Cash paid for acquisition of businesses | — | (203 | ) | — | (617 | ) | ||||||||||
Net cash used in investing activities | $ | (1,985 | ) | $ | (536 | ) | $ | (3,697 | ) | $ | (1,531 | ) | ||||
Financing Activities | ||||||||||||||||
Other financing, net | (1,294 | ) | (1,972 | ) | (9,918 | ) | (12,021 | ) | ||||||||
Net cash used in financing activities | $ | (1,294 | ) | $ | (1,972 | ) | $ | (9,918 | ) | $ | (12,021 | ) | ||||
Effect of exchange rate changes on cash | (16 | ) | 133 | (14 | ) | 221 | ||||||||||
Net increase (decrease) in cash and cash equivalents | (553 | ) | (463 | ) | 297 | (1,835 | ) | |||||||||
Cash and cash equivalents at beginning of period | $ | 1,889 | $ | 1,254 | $ | 1,039 | $ | 2,626 | ||||||||
Cash and cash equivalents at end of period | $ | 1,336 | $ | 791 | $ | 1,336 | $ | 791 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income (loss) | $ | (1,172 | ) | $ | 856 | $ | 1,175 | $ | (797 | ) | ||||||
Income tax expense (benefit) | 30 | 163 | (64 | ) | 334 | |||||||||||
Interest expense | 403 | 315 | 1,235 | 1,044 | ||||||||||||
Impairment losses and restructuring charges, net | 14 | 187 | 427 | 356 | ||||||||||||
Depreciation and amortization expense | 2,650 | 3,078 | 8,383 | 9,382 | ||||||||||||
Gain (loss) on sales of assets | — | (12 | ) | 5 | (19 | ) | ||||||||||
Share-based compensation expense | 215 | 454 | 745 | 1,279 | ||||||||||||
Adjusted EBITDA | $ | 2,140 | $ | 5,041 | $ | 11,906 | $ | 11,579 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net cash provided by operating activities | $ | 2,742 | $ | 1,912 | $ | 13,926 | $ | 11,496 | ||||||||
Less: capital expenditures | (1,985 | ) | (344 | ) | (4,039 | ) | (938 | ) | ||||||||
Free cash flow | $ | 757 | $ | 1,568 | $ | 9,887 | $ | 10,558 |
Operating Results Scorecard | |||||||||||||||||||||||||||||
As of September 30, 2017 | |||||||||||||||||||||||||||||
Q1-16 | Q2-16 | Q3-16 | Q4-16 | 2016 | Q1-17 | Q2-17 | Q3-17 | 2017 | |||||||||||||||||||||
Revenue (millions) | |||||||||||||||||||||||||||||
Domestic | $ | 49.1 | $ | 46.3 | $ | 46.1 | $ | 44.5 | $ | 186.1 | $ | 44.4 | $ | 42.6 | $ | 41.1 | $ | 128.0 | |||||||||||
Offshore | $ | 17.6 | $ | 17.1 | $ | 20.8 | $ | 21.4 | $ | 76.9 | $ | 21.1 | $ | 19.4 | $ | 17.8 | $ | 58.3 | |||||||||||
Nearshore | $ | 11.3 | $ | 10.3 | $ | 11.4 | $ | 11.2 | $ | 44.3 | $ | 12.2 | $ | 12.1 | $ | 10.5 | $ | 34.7 | |||||||||||
Company Total | $ | 78.0 | $ | 73.7 | $ | 78.3 | $ | 77.1 | $ | 307.2 | $ | 77.7 | $ | 74.0 | $ | 69.4 | $ | 221.0 | |||||||||||
Revenue % | |||||||||||||||||||||||||||||
Domestic | 62.9 | % | 62.8 | % | 58.9 | % | 57.7 | % | 60.6 | % | 57.1 | % | 57.5 | % | 59.2 | % | 57.9 | % | |||||||||||
Offshore | 22.6 | % | 23.2 | % | 26.6 | % | 27.7 | % | 25.0 | % | 27.2 | % | 26.2 | % | 25.7 | % | 26.4 | % | |||||||||||
Nearshore | 14.5 | % | 14.0 | % | 14.6 | % | 14.5 | % | 14.4 | % | 15.7 | % | 16.3 | % | 15.1 | % | 15.7 | % | |||||||||||
Company Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Gross Profit (millions) | |||||||||||||||||||||||||||||
Domestic | $ | 4.8 | $ | 3.3 | $ | 2.8 | $ | 1.5 | $ | 12.4 | $ | 1.5 | $ | 2.6 | $ | 1.6 | $ | 5.7 | |||||||||||
Offshore | $ | 2.3 | $ | 2.5 | $ | 5.1 | $ | 6.7 | $ | 16.6 | $ | 6.2 | $ | 4.3 | $ | 4.1 | $ | 14.6 | |||||||||||
Nearshore | $ | 1.3 | $ | 1.2 | $ | 2.4 | $ | 2.5 | $ | 7.4 | $ | 2.3 | $ | 2.1 | $ | 1.6 | $ | 6.0 | |||||||||||
Company Total | $ | 8.4 | $ | 7.0 | $ | 10.3 | $ | 10.7 | $ | 36.4 | $ | 10.0 | $ | 9.0 | $ | 7.3 | $ | 26.3 | |||||||||||
Gross Profit % | |||||||||||||||||||||||||||||
Domestic | 9.8 | % | 7.0 | % | 6.1 | % | 3.4 | % | 6.7 | % | 3.4 | % | 6.0 | % | 4.0 | % | 4.5 | % | |||||||||||
Offshore | 13.0 | % | 14.9 | % | 24.5 | % | 31.2 | % | 21.6 | % | 29.2 | % | 22.2 | % | 23.1 | % | 25.0 | % | |||||||||||
Nearshore | 11.3 | % | 11.6 | % | 21.5 | % | 22.0 | % | 16.8 | % | 19.2 | % | 17.7 | % | 14.8 | % | 17.3 | % | |||||||||||
Company Total | 11.2 | % | 9.5 | % | 13.2 | % | 13.8 | % | 11.9 | % | 12.9 | % | 12.1 | % | 10.6 | % | 11.9 | % |
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