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Startek Reports Quarterly Financial ResultsStartek, Inc. (NYSE:SRT), a global provider of customer experience management solutions, is reporting financial results for the quarter ended June 30, 2019. Financial Results The results presented for the quarter ended June 30, 2019 and March 31, 2019 include both Startek and Aegis financial results. As a result of the reverse acquisition accounting for the Startek and Aegis business combination on July 20, 2018, the results presented for the quarter ended June 30, 2018 include only Aegis financial results. Total revenue for the quarter was $160.6 million compared to $161.1 million in the quarter ended March 31, 2019, and was up 45% compared to $110.2 million in the quarter ended June 30, 2018. Gross profit for the quarter increased to $27.6 million compared to $27.2 million in the quarter ended March 31, 2019, and was up 63% compared to $16.9 million in the quarter ended June 30, 2018. Gross margin increased 30 basis points to 17.2% during the quarter compared to 16.9% in the quarter ended March 31, 2019, and increased 190 basis points compared to 15.3% in the quarter ended June 30, 2018. Selling, general and administrative (SG&A) expenses were $24.9 million compared to $24.1 million in the quarter ended March 31, 2019, and $15.3 million in the year-ago quarter. As a percentage of revenue, SG&A was 15.5% compared to 14.9% in the quarter ended March 31, 2019 and 13.8% in the year-ago quarter. Net loss attributable to Startek shareholders for the quarter was $3.6 million or $(0.10) per share, compared to a net loss of $3.3 million or $(0.09) per share in the quarter ended March 31, 2019, and a net loss of $3.7 million or $(0.18) per share in the year-ago quarter. Adjusted EBITDA* for the quarter increased to $11.0 million compared to $10.9 million in the quarter ended March 31, 2019. Adjusted EBITDA for the year-ago quarter was $6.4 million. *A non-GAAP measure defined below. Management Commentary "We generated better than expected results during the second quarter as we continued to drive growth within our current client base, while ramping several new clients across multiple geographies," said Lance Rosenzweig, president & global CEO of Startek. "We also maintained our track record of expanding gross margins every quarter since the business combination with Aegis in July 2018. The second quarter was especially impressive given the seasonality in our business, which typically calls for a sequential step back from Q1. "Further, at the end of the quarter, Startek was added to the Russell 2000® Index as part of the Russell Indexes' annual reconstitution, which we expect to provide increased awareness to the broader investment community going forward. "As I reflect on the completion of our first year as a combined company with Aegis, I am very proud of the work our team has accomplished to integrate the businesses and drive both cost and revenue synergies. We have executed on our client diversification strategy by consistently targeting high-growth verticals, while implementing a new client-centric management model that has been very well-received by our clients. Today, Startek is positioned as a premium provider in customer experience management. "Subsequent to the quarter, we announced an exciting new addition to our global leadership team as we appointed Rajiv Ahuja to Global Chief Operating Officer. Rajiv is a proven leader with decades of experience in delivering best-in-class customer solutions for some of the largest and most recognizable companies in the world, and we look forward to leveraging his insights as we continue to instill a tech-enabled and collaborative culture at Startek." Conference Call and Webcast Details Startek management will hold a conference call today at 5:00 p.m. Eastern time to discuss its quarterly financial results. The conference call will be followed by a question and answer period.
Date: Wednesday, August 7, 2019
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860. The conference call will also be broadcast live and available for replay here. A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through August 14, 2019.
Toll-free replay number: (855) 859-2056
About Startek Startek is a leading global provider of business process outsourcing solutions. The company provides customer experience management, back office and technology services to corporations around the world across a range of industries. Operating under the Startek and Aegis brands, the company has more than 45,000 outsourcing experts across 54 delivery campuses worldwide that are committed to enhancing the customer experience for clients. Services include omnichannel customer care, customer acquisition, order processing, technical support, receivables management and analytics through automation, voice, chat, email, social media and IVR, resulting in superior business results for its clients. To learn more about Startek's global solutions, please visit www.startek.com. Forward-Looking Statements The matters regarding the future discussed in this news release include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "intend," "may," "objective," "outlook," "plan," "project," "possible," "potential," "should" and similar expressions. As described below, such statements are subject to a number of risks and uncertainties that could cause Startek's actual results to differ materially from those expressed or implied by any such forward-looking statements. Readers are encouraged to review risk factors and all other disclosures appearing in the Company's Form 10-KT for the fiscal year ended December 31, 2018, as filed with the SEC on March 14, 2019, as well as other filings with the SEC, for further information on risks and uncertainties that could affect Startek's business, financial condition and results of operation. Copies of these filings are available from the Securities and Exchange Commission, the Company's website or the Company's investor relations department. Startek assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date herein.
STARTEK, INC. AND SUBSIDIARIES
This press release contains references to the non-GAAP financial measure of Adjusted EBITDA. Reconciliation of this non-GAAP measure to its comparable GAAP measure is included below. This non-GAAP information should not be construed as an alternative to the reported results determined in accordance with GAAP. It is provided solely to assist in an investor's understanding of these items on the comparability of the Company's operations. Adjusted EBITDA: The Company defines non-GAAP Adjusted EBITDA as Net loss plus Income tax expense, Interest and other expense, net, Depreciation and amortization expense, Restructuring and other merger related cost, Share-based compensation expense and Warrant contra revenue (if applicable). Management uses Adjusted EBITDA as a performance measure to analyze the performance of our business. Management believes that excluding these non-cash and other non-recurring items permits a more meaningful comparison and understanding of our strength and performance of our ongoing operations for our investors and analysts.
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