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StarTek, Inc. Reports First Quarter 2011 Results

Stocks in this article: SRT

StarTek, Inc. (NYSE:SRT) today announced its financial results for the first quarter ended March 31, 2011. The Company reported first quarter 2011 revenue of $59.5 million and a net loss of $0.17 per share, both in line with the Company’s pre-release of financial results on April 18, 2011.

StarTek’s improved results in the first quarter of 2011 demonstrate that the Company’s site optimization strategy and offshore expansion efforts are effectively strengthening its financial profile. While revenue declined by $5.2 million compared to the fourth quarter of 2010, gross profit improved by $1.1 million to $7.4 million. As a percentage of revenue, gross profit grew in all three geographic segments and expanded to 12.4% compared to 9.7% in the prior quarter. At the same time, selling, general and administrative (SG&A) expense was $9.7 million, a decline of $2.1 million sequentially, and at the lowest level in eight quarters. The Company reported adjusted EBITDA of $2.1 million and ended the quarter with approximately $20.4 million in cash and cash equivalents and no debt. The Company also reported three new contract wins in the quarter worth $10.5 million in annual revenue, and in the second quarter the Company has already won an additional new deal worth approximately $8 million in annual revenue.

Financial Highlights

First quarter 2011 revenue of $59.5 million represented a decrease of 8.0% compared to the fourth quarter of 2010, and a decrease of 11.7% compared to the first quarter of 2010. The decline in revenue was attributable to the Company’s North American optimization and offshore migration strategy, which included the closure of two sites and the consolidation of two more in late 2010 and early 2011. The decline in revenue was partially offset by growth in the offshore segment of approximately $0.3 million compared to the fourth quarter of 2010 and growth of $7.4 million compared to the first quarter of 2010.

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