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StarTek, Inc. Reports Fourth Quarter And Full Year 2012 Results

Stocks in this article: SRT

StarTek, Inc. (NYSE:SRT) today announced its fourth quarter and full year 2012 financial results.

2012 Highlights

  • Continued sales momentum, signing twelve new agreements year-to-date with an expected annual contract value of $69 million;
  • Improved revenue diversification with no single client representing more than 30% of our revenue as we exited the year;
  • Improved operational performance across entire footprint through execution and capacity utilization;
  • Improved gross margin to 11.6% from 7.4% in 2011;
  • Reduced ongoing SG&A expense by 12% versus prior year; and
  • First profitable quarter in three years.

Fourth Quarter 2012 Financial Results

Fourth quarter 2012 revenue increased 15.6% compared to the third quarter, a reflection of the new business signed during 2012. All geographic segments experienced sequential revenue growth during the fourth quarter. The Company had net income of $1.2 million, or $0.07 diluted earnings per share, during the fourth quarter of 2012 as compared to a net loss of $7.5 million, or $0.49 per share, in fourth quarter 2011.

Gross margin increased to 15.0% as compared to 7.7% in the fourth quarter of 2011. This improvement was driven by the Company's Domestic and Latin America segments. Domestic gross margin improved to 14.5% from 3.9% in the fourth quarter of 2011 due to continued improvements across several locations. Latin America gross margin improved to a negative 2.8% from a negative 44.6% in the fourth quarter of 2011 as a result of ramping our new Honduras location.

Fourth quarter 2012 Adjusted EBITDA of $4.5 million compares to a third quarter 2012 Adjusted EBITDA of $2.5 million.

2012 Financial Results

In 2012, revenue decreased 9.7% from $219 million to $198 million. Gross margin improved to 11.6% from 7.4% in 2011 and SG&A expense declined from $37.3 million in 2011 to $29.6 million in 2012. Operating loss before impairment and restructuring charges was $6.6 million compared to 2011 operating loss before impairment and restructuring charges of $21.1 million. Net loss for the full year 2012 was $0.69 per share compared to a net loss of $1.75 per share in 2011.

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