This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

StarTek, Inc. Reports Third Quarter 2011 Results

Stocks in this article: SRT

Financial Summary

Third quarter 2011 revenue of $52.0 million represented a decrease of 9.0% compared to $57.1 million in the second quarter of 2011, and a decrease of 20.7% compared to $65.6 million in the third quarter of 2010. The decline was driven by the North American site closure and downsizings mentioned above, which accounted for $6.7 million of the decline compared to the second quarter of 2011. Revenue also declined due to the transition to a greater mix of offshore revenue which generates lower revenue but higher gross margins. These declines to revenue were partially offset by offshore revenue growth of $2.8 million.

Gross margin declined to 7.8% in the third quarter of 2011 compared to 11.0% in the second quarter of 2011 and 10.1% in the third quarter of 2010. The decrease was driven by lower U.S. and Canadian margins, which fell to 6.5% and 3.8%, respectively, due to site closures, as well as lower volumes and lower profitability in the sites that remain open. Offshore gross margin increased to 12.2% from 7.3% last quarter. Compared to last quarter, offshore gross profit dollars increased by $1.1 million on a $2.8 million revenue increase, representing incremental gross margin contribution of 36.6%.

SG&A expense for the quarter totaled $10.0 million, compared to $13.2 million in the second quarter of 2011 and $10.3 million in the third quarter of 2010. The decrease compared to the second quarter of 2011 was primarily due to the absence of $2.9 million in severance expense that impacted the second quarter.

The Company reported third quarter 2011 negative adjusted EBITDA (adjusted for severance expense, impairment and restructuring charges and stock compensation expense) of $1.5 million compared to adjusted EBITDA of $0.5 million in the second quarter of 2011. The Company reported a net loss of $6.2 million, or $0.41 per share, during the third quarter of 2011, compared to $9.7 million, or $0.64 per share, during the second quarter of 2011.

2 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,765.60 +304.28 1.85%
S&P 500 1,959.62 +32.51 1.69%
NASDAQ 4,470.2480 +87.4010 1.99%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs