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StarTek, Inc. Reports Fourth Quarter And Full Year 2010 Results

Stocks in this article: SRT

StarTek, Inc. (NYSE:SRT) today announced its financial results for the fourth quarter and full year ended December 31, 2010. The Company reported fourth quarter 2010 revenue of $64.7 million and annual revenue of $265.4 million. Net loss was $0.44 per share in the fourth quarter of 2010 and $1.30 per share for the year ended December 31, 2010.

The Company continued to execute on its three point strategy: expanding offshore, rationalizing U.S. operations, and reducing its Canadian exposure. Fourth quarter revenue from offshore facilities grew 22% vs. the third quarter of 2010 and 155% vs. the fourth quarter of 2009. The offshore operations also returned to profitability with a gross margin of 6% in the fourth quarter of 2010. During the quarter, the Company consolidated two U.S. sites in Greeley and Grand Junction, Colorado, and announced the ramp-down of its Alexandria, Louisiana facility, which will result in future utilization and margin improvements. Also in the quarter, the Company completed the closure of its Sarnia, Ontario site announced earlier in 2010 leaving only three sites in its Canadian operation. All three of these initiatives are intended to increase offshore delivery capacity and restore profitability through utilization and margin improvements.

Financial Highlights

Fourth quarter 2010 revenue decreased 1.4% compared to the third quarter of 2010, and 10.8% compared to the fourth quarter of 2009. For the full year, revenue decreased 8.2% from $289 million in 2009. The decline from 2009 was due to six North American site closures during 2010, the ramp-down of another site that closed in early 2011, and lower North American wireless and wireline volumes. Revenue was down slightly from third quarter 2010, due to site closures and consolidations, partially offset by offshore segment growth, which expanded by $2.1 million, or 21%, compared to the third quarter of 2010.

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