- Ongoing Investments in Sales Ecosystem,
Technological Capabilities, and Digital Partnerships Aim to Bolster
the Company’s Operational Foundation to Support Long-Term Growth
-
Startek, Inc. (NYSE:SRT) ("Startek" or the "Company"), a global
customer experience (CX) solutions provider, is reporting financial
results for the fourth quarter and full year ended December 31,
2022. As a result of current and planned divestitures, the Company
has classified Middle East and Argentina operations as 'Held for
Sale and Discontinued Operations'. Accordingly net revenue, gross
profit, gross margin, SG&A expenses and adjusted EBITDA are
reported for the continuing operations and net income, EPS,
adjusted net income/(loss) and adjusted EPS are reported after
consolidating continuing and discontinued operations.
Fourth Quarter 2022 Financial Summary ($ in millions,
excl. margin items)
Q4 2022
Q4 2021
Change
Net Revenue
$
92.96
$
113.67
(18.22)
%
Gross Profit
$
16.80
$
17.43
(3.61)
%
Gross Margin
18.07
%
15.33
%
274
bps
SG&A Expenses
$
12.27
$
10.15
20.89
%
Adjusted EBITDA [3]
$
12.12
$
12.81
(5.39)
%
Net Income/(Loss)[1]
$
(3.13)
$
6.69
(146.79)
%
EPS
$
(0.08)
$
0.16
(150)
%
Adjusted Net Income/(Loss)[2], [3]
$
14.15
$
12.89
9.78
%
Adjusted EPS [3]
$
0.35
$
0.32
9.38
%
Full Year 2022 Financial Summary ($ in millions, excl.
margin items)
2022
2021
Change
Net Revenue
$
385.07
$
470.33
(18.13)
%
Gross Profit
$
57.80
$
64.80
(10.80)
%
Gross Margin
15.01
%
13.78
%
123
bps
SG&A Expenses
$
48.68
$
42.45
14.68
%
Adjusted EBITDA[3]
$
38.46
$
47.28
(18.65)
%
Net Income/(Loss)[1]
$
(2.26)
$
1.50
(250.67)
%
EPS
$
(0.06)
$
0.04
(250)
%
Adjusted Net Income/(Loss)[2], [3]
$
26.69
$
27.34
(2.38)
%
Adjusted EPS [3]
$
0.66
$
0.67
(1.49)
%
[1] Reflects net
income (loss) attributable to Startek shareholders. [2] Reflects Adjusted net income (loss) attributed
to Startek shareholders. [3] Refer to
the reconciliation of GAAP to Non-GAAP financial measures.
___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Management Commentary
“The fourth quarter closed out a year in which we made
significant progress expanding our footprint, enhancing our
capabilities and service offerings, strengthening our balance
sheet, and building a significant sales pipeline,” said Bharat Rao,
Global CEO of Startek. “Throughout 2022, we were hyper-focused on
making strategic investments that we believed were necessary to
optimize our platform and ensure we were in position to accelerate
top-line growth and margin expansion. Our sales teams have been
consistently working towards strengthening our sales pipeline, with
a particular focus on near-shore and off-shore delivery
opportunities. As we discussed last quarter, these efforts are
beginning to bear fruit with record levels of new logos being won,
and we believe we are in a strong position to capitalize on these
new contracts in 2023.
“During the fourth quarter, we were able to secure two new key
clients with significant annual contract values that we believe
will be a meaningful portion of our revenue going forward. Also
highlighting the quarter was the stabilization of our gross margins
as wage inflation pressures continued to lessen and we recaptured
costs associated with onboarding new agents in prior quarters.
While prioritizing innovation and best-in-class service for our
clients, we are continually applauded for the outstanding values
and standards held at Startek. During the quarter, we were
recognized by ISG Provider Lens, a practitioner-led service
provider comparison, as a leader in social media, AI and analytics
and work from home services within the U.S. and Globally.
Additionally, we received the Best Customer Experience award in the
Managed Digital Transformation Providers Category at the Future
Enterprise Awards 2022. Leveraging our leading customer experience
capabilities to deliver disruptive innovation in ways that excite
and serve our clients is always a pleasure, and we look forward to
sustaining this track-record over the long-term.
“As part of our operational enhancements, we made significant
decisions with the redemption of our interest in CSS Corp.,
pursuing the potential sale of Aegis Argentina, and beginning the
process of divesting our indirect ownership in Contact Center
Company ("CCC"). The redemption of our interest in CSS Corp.
provided us with net proceeds of $45.6 million, which we used to
prepay a portion of our debt subsequent to the end of the year, and
we anticipate the divesture of Contact Center Company, which we
expect to close in Q2 2023, will provide us with net proceeds of
$55.0 million that are expected to be utilized for further debt
prepayment. As a result of these corporate actions, we have
reconciled our financial statements, shifting income from these
specific operations (CCC and Argentina) into a discontinued
operations segment and removing the revenue contributions from the
top-line. Although these have been successful partnerships, we
believe that these divestures will allow our organization to focus
on growing our core business and further deleverage our balance
sheet.
“Overall, we believe that Startek is well-positioned as we move
forward in 2023. Our core business is focused on accelerating our
organic growth by providing best-in-class service for our current
clients, while continuing to expand our sales pipeline across
high-growth verticals. Additionally, we will look to further
implement value-add services from our existing digital partnerships
and transition pilot programs to become integral elements of our
ongoing operations. Our priority is sustainably growing our Company
to return value back to our shareholders, and we look forward to
executing our strategic growth roadmap in 2023 and beyond.”
Fourth Quarter 2022 Financial Results
Net revenue in the fourth quarter was $92.96 million compared to
$113.67 million in the year-ago quarter. The decrease was primarily
due to the higher revenue base in 2021 which included revenue from
a cable client that subsequently insourced all operations. The
decline in net revenue was offset by strong performance from the
Company’s telecom, financial and business services and travel and
hospitality verticals. On a constant currency basis, net revenue
decreased 14.90% compared to the year-ago quarter.
Gross profit in the fourth quarter was $16.80 million compared
to $17.43 million in the year-ago quarter. Gross margin improved by
274 basis points to 18.07% compared to 15.33% in the year-ago
quarter. The increase in gross margin is primarily attributable to
change in employee mix with higher proportion of offshore employees
relative to those in high-cost geographies. Higher margins are also
reflective of the various cost optimization measures that the
Company adopted earlier in 2022.
Selling, general and administrative (SG&A) expenses in the
fourth quarter was $12.27 million compared to $10.15 million in the
year-ago quarter. As a percentage of revenue, SG&A increased to
13.2% compared to 8.93% in the year-ago quarter. The SG&A costs
in the current period includes certain one-time costs such as take
private costs, amortization of premium for the CSS Corp and costs
related to the ongoing divestiture of the Company's stake in CCC.
Adjusting for these the SG&A expenses for the quarter increased
to $10.72 million. The increase was reflective of investments made
in sales, digital and marketing initiatives.
Adjusted EBITDA* in the fourth quarter was $12.12 million
compared to $12.81 million in the year-ago quarter. The decrease in
EBITDA is not significant.
Net income (loss) attributable to Startek shareholders in the
fourth quarter decreased by 146.79% to $(3.13) million or $(0.08)
per share, compared to a net income of $6.69 million or $0.16 per
share in the year-ago quarter. This represents income (loss)
attributable to Startek shareholders from continuing operations of
$(1.94) million in Q4 2022 and $4.92 million in Q4 2021, along with
income (loss) attributable to Startek shareholders from
discontinued operations of $(1.19) million in Q4 2022 and $1.77
million in Q4 2021.
Adjusted net income* in the fourth quarter was $14.15 million or
$0.35 per diluted share, compared to an adjusted net income* of
$12.89 million or $0.32 per diluted share in the year-ago quarter.
This represents adjusted net income (loss) from continuing
operations of $12.61 million in Q4 2022 and $11.1 million in Q4
2021, along with adjusted net income (loss) from discontinued
operations of $1.54 million in Q4 2022 and $1.78 million in Q4
2021.
On December 31, 2022, cash and restricted cash increased to
$72.41 million[1] compared to $27.98
million as at September 30, 2022. The increase in cash balance as
at year end was driven by the receipt of proceeds from the
redemption of our investment in CSS Corp. Total debt as at December
31, 2022, was $175.91 million compared to $169.04 million as at
September 30, 2022, and net debt as at December 31, 2022, decreased
to $103.50 million[2] compared to
$141.06 million as at September 30, 2022.
Full Year 2022 Financial Results
Net revenue in 2022 was $385.07 million compared to $470.33
million in 2021. On a constant currency basis, net revenue
decreased 14.86% compared to the prior year. The decrease was
largely attributable to a short-term government program relating to
COVID vaccination in the second quarter of 2021 and the termination
of operation with an e-commerce and a cable & media client in
the America’s region. The decline in net revenue was offset by
strong performance from the Company’s telecom, financial and
business services and travel and hospitality verticals.
Gross profit in 2022 was $57.80 million compared to $64.80
million in 2021. Gross margin increased 123 basis points to 15.01%
compared to 13.78% in 2021. The increase in gross margin was
primarily due to the continued shift towards higher margins
delivered off-shore and near-shore, lower rent costs due to the
consolidation of brick-and-mortar sites and softer wage inflation
pressures in the fourth quarter. The increase was offset by wage
inflation pressures in the first half of the year, investments made
to ramp services within the ecommerce vertical and investments made
to upgrade the Company’s technology and cybersecurity
infrastructure.
Selling, general and administrative (SG&A) expenses in 2022
were $48.68 million compared to $42.45 million in 2021. As a
percentage of revenue, SG&A was 12.64% compared to 9.03% in
2021. The increase was largely driven by the Company’s continued
investments made to bolster sales, digital and marketing
initiatives and to upgrade the security and cybersecurity
technology infrastructure. Additionally, the increase was also
fueled by costs associated with the rejected take private
transaction in the third quarter of 2022, certain non-recurring
expenses such as amortization of premium of the call option to
acquire CSS Corp and transaction costs related to CCC
divestiture.
Adjusted EBITDA* in 2022 was $38.46 million compared to $47.28
million in 2021. The decrease in EBITDA is due to higher revenue
base in 2021 that included EBITDA from the COVID support program
and from clients in the e-Commerce and cable vertical that
terminated in 2021.
Net income (loss) to Startek shareholders in 2022 decreased to
$(2.26) million or $(0.06) per share, compared to a net income of
$1.5 million or $0.04 per share in 2021. This represents income
(loss) attributable to Startek shareholders from continuing
operations of $(0.29) million in 2022 and $(1.09) million in 2021,
along with income (loss) attributable to Startek shareholders from
discontinued operations of $(1.97) million in 2022 and $2.59
million in 2021.
Adjusted net income* in 2022 was $26.69 million or $0.66 per
diluted share, compared to adjusted net income* of $27.34 million
or $0.67 per diluted share in 2021. This represents adjusted net
income (loss) from continuing operations of $25.94 million in 2022
and $24.75 million in 2021, along with adjusted net income (loss)
from discontinued operations of $0.75 million in 2022 and $2.59
million in 2021.
During the year ended December 31, 2022, the Company repurchased
an aggregate of 426,445 shares of its common stock under its
repurchase plan, at an average cost of $4.29 per share.
*A non-GAAP measure defined below.
___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
[1] Cash balance excluding
restricted cash as at December 31, 2022 amounted to $22.46 million
as compared to $22.27 million as at September 30, 2022. Restricted
cash of $49.95 million include $41 million which was received from
the net proceeds of CSS Redemption that was utilized to prepay debt
in January 2023.
[2] Net debt excluding restricted cash balance as at December
31, 2022 was $153.45 million compared to $146.77 million as at
September 30, 2022.
Conference Call and Webcast Details
Startek management will host the call, followed by a
question-and-answer period.
Date: Monday, March 27, 2023 Time: 5 p.m. ET Toll-free dial-in
number: 1-844-826-3035 International dial-in number: 1-412-317-5195
Conference ID: 10175986
Please call the conference telephone number 10-15 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Group at
1-949-574-3860.
The conference call will be broadcast live and available for
replay here.
A telephonic replay of the conference call will also be
available after 8 p.m. ET on the same day through April 3,
2023.
Toll-free replay number: 1-844-512-2921 International replay
number: 1-412-317-6671 Replay ID: 10175986
About Startek
Startek is a leading global provider of technology-enabled
customer experience (CX) solutions. The Company provides
omnichannel CX, digital transformation, and technology services to
some of the world’s leading brands. Startek is committed to
impacting clients’ business outcomes by focusing on enhancing CX
and digital enablement across all touch points and channels.
Startek has more than 33,000 employees delivering services in 11
countries. The Company services over 140 clients across a range of
industries such as banking and financial services, insurance,
technology, telecoms, healthcare, travel and hospitality, consumer
goods, retail and energy and utilities. To learn more, visit
www.startek.com.
Forward-Looking Statements
The matters regarding the future discussed in this news release
include forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are intended to be identified in this document by the
words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“may,” “objective,” “outlook,” “plan,” “project,” “possible,”
“potential,” “should” and similar expressions. As described below,
such statements are subject to a number of risks and uncertainties
that could cause Startek's actual results to differ materially from
those expressed or implied by any such forward-looking statements.
Readers are encouraged to review risk factors and all other
disclosures appearing in the Company's Form 10-K for the fiscal
year ended December 31, 2022, as well as other filings with the
SEC, for further information on risks and uncertainties that could
affect Startek's business, financial condition and results of
operation. Copies of these filings are available from the SEC, the
Company’s website or the Company’s investor relations department.
Startek assumes no obligation to update or revise any
forward-looking statements as a result of new information, future
events or otherwise. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of
the date herein.
STARTEK, INC. AND
SUBSIDIARIES
Consolidated Statements of
Income (loss)
(Unaudited)
(In thousands, except per share
data)
Three Months Ended
December
Year Ended December
2022
2021
2022
2021
Revenue
92,957
112,594
385,074
470,242
Warrant adjustment
-
1,078
-
87
Net revenue
92,957
113,672
385,074
470,329
Cost of services
(76,156
)
(96,235
)
(327,277
)
(405,531
)
Gross profit
16,801
17,437
57,797
64,798
Selling, general and administrative
expenses
(12,267
)
(10,153
)
(48,680
)
(42,454
)
Impairment losses and restructuring/exit
cost
(9,714
)
(5,046
)
(9,824
)
(6,456
)
Operating income (loss)
(5,180
)
2,238
(707
)
15,888
Share of income of equity accounted
investee (includes gain on disposal of $8,499 in Q4 2022)
9,873
6,682
13,995
6,681
Interest expense and other income
(expense), net
(4,790
)
(1,394
)
(9,834
)
(17,218
)
Foreign exchange gains (losses), net
(611
)
(149
)
348
490
Income from continuing operations
before income tax expense
(708
)
7,377
3,802
5,841
Tax expense
(1,233
)
(2,454
)
(4,087
)
(6,934
)
Income (loss) from continuing
operations, net of tax (A)
(1,941
)
4,923
(285
)
(1,093
)
Income from discontinued operations before
income tax expense
1,842
3,431
7,866
15,751
Tax expenses of discontinued
Operations
(850
)
(15
)
(3,350
)
(4,932
)
Income from discontinued operations,
net of tax (B)
992
3,416
4,516
10,819
Net income (A+B)
(949
)
8,339
4,231
9,726
Income (loss) from continuing
operations (A)
Income (loss) attributable to
noncontrolling interests
-
-
-
-
Income (loss) attributable to Startek
shareholders
(1,941
)
4,923
(285
)
(1,093
)
(1,941
)
4,923
(285
)
(1,093
)
Income (loss) from discontinued
operations (B)
Income (loss) attributable to
noncontrolling interests
2,179
1,645
6,490
8,226
Income (loss) attributable to Startek
shareholders
(1,187
)
1,771
(1,974
)
2,593
992
3,416
4,516
10,819
Net income (loss) (A+B)
Net income attributable to noncontrolling
interests
2,179
1,645
6,490
8,226
Net income (loss) attributable to Startek
shareholders
(3,128
)
6,694
(2,259
)
1,500
(949
)
8,339
4,231
9,726
Net income (loss) per common share from
continuing operations
Basic net income (loss) attributable to
Startek shareholders
(0.05
)
0.12
(0.01
)
(0.02
)
Diluted net income (loss) attributable to
Startek shareholders
(0.05
)
0.12
(0.01
)
(0.02
)
Net income (loss) per common share from
discontinued operations
Basic net income (loss) attributable to
Startek shareholders
(0.03
)
0.04
(0.05
)
0.06
Diluted net income (loss) attributable to
Startek shareholders
(0.03
)
0.04
(0.05
)
0.06
Net income (loss) per common share from
continuing and discontinued operations
Basic net income (loss) attributable to
Startek shareholders
(0.08
)
0.16
(0.06
)
0.04
Diluted net income (loss) attributable to
Startek shareholders
(0.08
)
0.16
(0.06
)
0.04
Weighted average common shares
outstanding
Basic
40,271
40,707
40,305
40,719
Diluted
40,271
40,865
40,305
41,086
STARTEK, INC. AND
SUBSIDIARIES
Consolidated Balance
Sheets
(Unaudited)
(In thousands, except share and
per share data)
December 31, 2022
December 31, 2021
Assets
Current assets
Cash and cash equivalents
22,457
32,068
Restricted cash
49,946
2,015
Trade accounts receivables, net
47,138
46,634
Unbilled revenue
24,207
26,955
Prepaid expenses and other current
assets
9,159
7,016
Current assets classified as held for
sale
202,831
110,330
Total current assets
355,738
225,018
Non-current assets
Property, plant and equipment, net
22,945
25,428
Operating lease right-of-use assets
36,450
55,354
Intangible assets, net
79,745
90,092
Goodwill
120,505
128,557
Investment in equity-accounted
investees
-
31,688
Deferred tax assets, net
2,771
560
Prepaid expenses and other non-current
assets
7,889
10,304
Non-current assets classified as held for
sale
-
75,474
Total non-current assets
270,305
417,457
Total assets
626,043
642,475
Liabilities and Stockholders’
Equity
Current liabilities
Trade accounts payables
2,428
5,074
Accrued expenses
31,676
30,797
Short term debt
14,267
3,450
Current maturity of long term debt
120,466
6,230
Current maturity of operating lease
liabilities
14,492
19,566
Other current liabilities
15,646
21,454
Current liabilities classified as held for
sale
89,486
61,696
Total current liabilities
288,461
148,267
Non-current liabilities
Long term debt
41,175
160,175
Operating lease liabilities
26,651
42,004
Other non-current liabilities
2,682
3,300
Deferred tax liabilities, net
15,508
16,309
Non - current liabilities classified as
held for sale
-
19,100
Total non-current liabilities
86,016
240,888
Total liabilities
374,477
389,155
Stockholders’ equity
Common stock, 60,000,000 non-convertible
shares, $0.01 par value, authorized; 41,098,456 and 40,893,396
shares issued as of December 31, 2022, and December 31, 2021,
respectively
411
409
Additional paid-in capital
293,472
291,537
Accumulated deficit
(86,302
)
(84,043
)
Treasury stock, 839,214 and 412,769 shares
as of December 31, 2022, and December 31, 2021, respectively, at
cost
(3,749
)
(1,912
)
Accumulated other comprehensive loss
(16,058
)
(10,687
)
Equity attributable to Startek
shareholders
187,774
195,304
Non-controlling interest
63,792
58,016
Total stockholders’ equity
251,566
253,320
Total liabilities and stockholders’
equity
626,043
642,475
STARTEK, INC. AND
SUBSIDIARIES
Consolidated Statements of
Cash Flows
(Unaudited)
(In thousands)
Year Ended December
31,
2022
2021
Operating activities
Income from continuing and discontinued
operations
4,231
9,726
less: Income (loss) from discontinued
operations, net of tax
(4,516
)
(10,819
)
Income (loss) from continuing
operations, net of tax
(285
)
(1,093
)
Adjustments to reconcile net income
(loss) to net cash generated from operating activities:
Depreciation and amortization
22,593
23,601
Impairment of goodwill
8,052
-
Profit on sale of property, plant and
equipment
59
(106
)
Provision/(reversal) for doubtful
accounts
(49
)
24
Amortization of debt issuance costs
(including loss on extinguishment of debt)
1,825
11,607
Amortization of call option premium
1,800
1,200
Mark to market loss on derivative
instrument
113
-
Warrant contra revenue
-
(87
)
Share-based compensation expense
1,551
1,418
Impairment of right-of-use assets
1,110
4,514
Deferred income taxes
(3,207
)
138
Share of income of equity accounted
investee (includes gain on disposal of $8,499 in Q4 2022)
(13,995
)
(6,681
)
Changes in operating assets and
liabilities:
Trade accounts receivables
(4,418
)
(9,347
)
Prepaid expenses and other assets
(1,380
)
1,261
Trade accounts payable
(2,356
)
(5,231
)
Income taxes, net
1,501
2,528
Accrued expenses and other liabilities
(4,702
)
(5,595
)
Net cash generated from by operating
activities from continuing operations
8,212
18,151
Net cash generated from/used in
operating activities from discontinued operations
16,642
10,033
Net cash generated from operating
activities
24,854
28,184
Investing activities
Purchase of property, plant and equipment
and intangible assets, net
(12,028
)
(9,927
)
Investment in equity-accounted
investees
-
(25,000
)
Payments for call option premium
-
(3,000
)
Proceeds from redemption of
equity-accounted investees
45,683
104
Net cash generated from/used in
investing activities from continuing operations
33,655
(37,823
)
Net cash generated from/used in
investing activities from discontinued operations
(173
)
(6,699
)
Net cash generated from/used in
investing activities
33,482
(44,522
)
Financing activities
Proceeds from the issuance of common
stock
386
1,510
Proceeds from long term debt (net of debt
issuance cost paid to lenders)
-
156,525
Payments of long term debt
(4,124
)
(117,600
)
Payments for loan fees related to long
term debt
-
(2,794
)
Proceeds from a line of credit, net
10,943
-
Payments of other borrowings, net
(2,466
)
(13,726
)
Common stock repurchases
(1,837
)
(1,912
)
Net cash generated from/used in
financing activities from continuing operations
2,902
22,003
Net cash generated from/used in
financing activities from discontinued operations
303
70
Net cash generated from/used in
financing activities
3,205
22,073
Net increase in cash and cash
equivalents
61,541
5,735
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
(1,791
)
(898
)
Cash and cash equivalents and restricted
cash at beginning of year
55,396
50,559
Cash and cash equivalents and
restricted cash at end of year
115,146
55,396
Less: Cash and cash equivalents from
discontinued operations
(42,743
)
(21,313
)
Cash and cash equivalents and
restricted cash of continuing operations at end of year
72,403
34,083
Components of cash and cash equivalents
and restricted cash
Balances with banks
22,457
32,068
Restricted cash
49,946
2,015
Total cash and cash equivalents and
restricted cash
72,403
34,083
Supplemental disclosure of cash flow
information
Cash paid for interest and other finance
cost
11,109
21,077
Cash paid for income taxes
4,832
3,954
Supplemental disclosure of non-cash
activities
Non-cash warrant contra revenue
-
(87
)
Non-cash share-based compensation
expenses
1,551
1,418
STARTEK, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (In thousands,
except per share data) (Unaudited)
___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
This press release contains references to the non-GAAP financial
measure of Adjusted EBITDA and Adjusted EPS. Reconciliation of this
non-GAAP measure to its comparable GAAP measure is included below.
This non-GAAP information should not be construed as an alternative
to the reported results determined in accordance with GAAP. It is
provided solely to assist in an investor’s understanding of these
items on the comparability of the Company’s operations.
Adjusted EBITDA:
The Company defines non-GAAP Adjusted EBITDA as Net income
(loss) plus Income tax expense, Share of income (loss) of
equity-accounted investees, Interest expense, net, Depreciation and
amortization expense, Impairment losses and restructuring cost,
Share-based compensation expense, Foreign exchange gains (losses),
net, Private offer transaction costs, Transaction related costs,
CSS option amortization and Warrant adjustment (if applicable).
Management uses Adjusted EBITDA as a performance measure to analyze
the performance of our business. Management believes that excluding
these non-cash and other non-recurring items permits a more
meaningful comparison and understanding of our strength and
performance of our ongoing operations for our investors and
analysts.
Adjusted EPS:
Adjusted EPS is a non-GAAP financial measure presenting the
earnings generated by our ongoing operations that we believe is
useful to investors in making meaningful comparisons to other
companies, although our measure of Adjusted EPS may not be directly
comparable to similar measures used by other companies, and
period-over-period comparisons. Adjusted EPS is defined as our
diluted earnings per common share attributable to Startek
shareholders adjusted to exclude the effects of the amortization of
acquisition-related intangible assets, investments that investors
may want to evaluate separately (such as based on fair value) and
the impact of certain events, gains, losses or other charges that
affect period-over-period comparisons. Acquisition-related
intangible assets are recognized as a result of the application of
Accounting Standards Codification Topic (“ASC”) 805, Business
Combinations (such as customer relationships and Brand), and their
amortization is significantly affected by the size and timing of
our acquisitions.
Adjusted EBITDA:
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Continuing Operations
Net income (loss)
(1,941
)
4,923
(285
)
(1,093
)
Income tax expense
1,233
2,454
4,087
6,934
Share of income of equity accounted
investee (includes gain on disposal of $8,499 in Q4 2022)
(9,873
)
(6,682
)
(13,995
)
(6,681
)
Interest expense and other income
(expense), net
4,790
1,394
9,834
17,218
Foreign exchange gains (losses), net
611
149
(348
)
(490
)
Depreciation and amortization expense
5,738
6,116
22,593
23,601
Private offer transaction cost
264
-
2,867
-
Impairment losses and restructuring
cost
9,714
5,046
9,824
6,456
Share-based compensation expense
338
485
1,551
1,418
Warrant contra revenue
-
(1,078
)
-
(87
)
Other non recurring costs
526
-
526
-
CSS option amortisation
720
-
1,800
-
Adjusted EBITDA from Continuing
Operations
12,121
12,807
38,455
47,276
Discontinued Operations
Net income (loss)
992
3,416
4,516
10,819
Income tax expense
850
15
3,350
4,932
Interest expense and other income
(expense), net
1,369
(709
)
2,168
1,955
Foreign exchange gains (losses), net
333
542
642
1,139
Depreciation and amortization expense
1,510
1,623
6,794
4,536
Impairment losses and restructuring
cost
1,428
1,216
4,468
1,770
Other non recurring costs
2,724
-
2,724
-
Adjusted EBITDA from Discontinued
Operations
9,206
6,103
24,662
25,151
Adjusted EBITDA from Continuing and
Discontinued Operations
21,327
18,910
63,117
72,427
Adjusted EPS:
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Continuing Operations
Income (loss) attributable to Startek
shareholders
(1,941
)
4,923
(285
)
(1,093
)
Share based compensation expense
338
486
1,551
1,418
Amortization of intangible assets, net of
tax
2,279
2,277
9,062
9,062
Warrant contra revenue
-
(1,078
)
-
(87
)
Private offer transaction cost
264
-
2,867
-
Impairment of right-of-use assets
1,110
4,514
1,110
4,514
Impairment of goodwill
8,052
-
8,052
-
Debt issuance cost expensed out
1,260
-
1,260
10,937
Other non recurring costs
526
-
526
-
CSS option amortisation
720
-
1,800
-
Adjusted net income from Continuing
Operations
12,608
11,122
25,943
24,751
Discontinued Operations
Income (loss) attributable to Startek
shareholders
(1,187
)
1,771
(1,974
)
2,593
Other non recurring costs
2,724
-
2,724
-
Adjusted net income (loss) from
Discontinued Operations
1,537
1,771
750
2,593
Adjusted Net Income from Continuing and
Discontinued Operations
14,145
12,893
26,693
27,344
Weighted average common shares outstanding
- Basic
40,271
40,707
40,305
40,719
Weighted average common shares outstanding
- Diluted
40,271
40,865
40,305
41,086
Adjusted EPS from Continuing Operations
- Basic
0.31
0.27
0.64
0.61
Adjusted EPS from Continuing Operations
- Diluted
0.31
0.27
0.64
0.61
Adjusted EPS from Discontinued
Operations - Basic
0.04
0.05
0.02
0.06
Adjusted EPS from Discontinued
Operations - Diluted
0.04
0.05
0.02
0.06
Adjusted EPS from Continuing and
Discontinued Operations - Basic
0.35
0.32
0.66
0.67
Adjusted EPS from Continuing and
Discontinued Operations - Diluted
0.35
0.32
0.66
0.67
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230327005515/en/
Investor Relations Cody Cree Gateway Group, Inc. (949)
574-3860 SRT@gatewayir.com Media Relations Rebecca Gautrey
Startek Rebecca.Gautrey@startek.com
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