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StarTek, Inc. (NYSE:SRT) ("STARTEK") today announced its third quarter 2013 financial results.
Third Quarter Highlights
Won $43.6 million of new business, including one new logo; $61.6 million year to date;
Launched STARTEK Health Services, including the acquisition of a health care BPO company;
Invested in 1,500 seats of new capacity that will be ramping over the next two quarters; and
Implemented key element of IT platform initiative.
Third Quarter 2013 Financial Results
Third quarter 2013 revenue increased 22.6% compared to the third quarter of 2012, the result of continued growth with existing clients and new business. All segments showed year over year revenue growth.
Gross margin decreased from 12.8% in the third quarter of 2012 to 11.2% in the third quarter of 2013. This decline was primarily due to investments in facility expansions in the Philippines and IT transformation related costs. Latin America margins improved to 11.2% in the third quarter of 2013 from (0.7)% in the third quarter of 2012 as a result of capacity utilization improvements.
SG&A expenses as a percentage of revenue was 12.2% for the third quarter of 2013 compared to 14.5% for the third quarter of 2012.
Excluding non-recurring IT transformation expenses and a depreciation charge for the reclassification of the Company's Enid, Oklahoma facility, the Company generated net income of $0.1 million. Including the above charges, the Company reported a net loss of $1.8 million, or $0.12 per share, during the third quarter of 2013 as compared to a net loss of $1.2 million, or $0.08 per share, in the third quarter of 2012.
Liquidity and Capital Resources
As of September 30, 2013, the Company's cash position was approximately $6.0 million compared to $9.2 million as of December 31, 2012. The Company had approximately $2.6 million and $3.1 million of capital expenditures during the quarters ended September 30, 2013 and 2012, respectively. The acquisition of a health care BPO resulted in the use of $0.4 million of cash during the third quarter of 2013.