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StarTek, Inc. Reports Fourth Quarter And Full Year 2011 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, 2011. The Company reported fourth quarter 2011 revenue of $51.1 million and annual revenue of $219.5 million. Net loss was $0.49 per share in the fourth quarter of 2011 and $1.75 per share for the year ended December 31, 2011.

Fourth Quarter 2011 Financial Results

Fourth quarter 2011 revenue decreased 1.1% compared to the third quarter of 2011. Revenue was down slightly from third quarter due to lower volumes in North America and the closure of the Company’s Kingston, Ontario facility in September 2011. The North American decline was partially offset by Offshore revenue growth, which increased by $3.4 million, or 20.5%, compared to the third quarter of 2011 as the Company continued to ramp new business in these locations.

Gross margin grew to 10.8% in the fourth quarter of 2011 from 7.3% in the third quarter of 2011. The improvement was due to continued growth in Offshore gross margin, which improved from 10.6% in the third quarter to 16.9% in the fourth quarter driven by better utilization as the Company added nearly 900 full-time equivalent agents in this segment compared to the third quarter of 2011. In the fourth quarter of 2011, Offshore gross profit represented 61% of the Company’s total gross profit compared to 47% in the third quarter and 11% in the fourth quarter of 2010.

SG&A expense for the quarter totaled $11.0 million, compared to $10.0 million in the third quarter of 2011. The increase was due mostly to $0.7 million of severance costs in the fourth quarter primarily for the Company’s former Chief Financial Officer.

The Company reported a fourth quarter 2011 operating loss before impairment and restructuring charges of $5.4 million and adjusted EBITDA of negative $1.2 million, compared to a third quarter 2011 operating loss before impairment and restructuring of $6.5 million and adjusted EBITDA of negative $2.3 million. The Company had a net loss of $7.5 million, or $0.49 per share, during the fourth quarter of 2011. The fourth quarter 2011 net loss compares to a net loss of $6.8 million, or $0.45 per share, in the third quarter of 2011.

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