SRT
$4.19
Startek
($.01)
(.24%)
Earnings Details
3rd Quarter September 2022
Tuesday, November 8, 2022 4:05:00 PM
Tweet Share Watch
Summary

Startek (SRT) Recent Earnings

Startek (SRT) reported 3rd Quarter September 2022 earnings of $0.09 per share on revenue of $163.1 million. The consensus earnings estimate was $0.10 per share on revenue of $173.0 million. Revenue fell 5.6% compared to the same quarter a year ago.

StarTek Inc is a provider of business process outsourcing services. Its services include customer care, sales support, inbound sales, complex order processing, accounts receivable management, technical and product support, up-sell and cross-sell.

Results
Reported Earnings
$0.09
Earnings Whisper
-
Consensus Estimate
$0.10
Reported Revenue
$163.1 Mil
Revenue Estimate
$173.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Startek Reports Third Quarter 2022 Financial Results

- Continued Progress in Commercial Development Resulted in Seven New Logos Under Contract -

- Conference Call and Webcast Scheduled for Tomorrow at 5 p.m. ET -

DENVER--(BUSINESS WIRE)--Startek, Inc. (NYSE:SRT) ("Startek" or the "Company"), a global customer experience (CX) solutions provider, is reporting financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Financial Summary ($ in millions, excl. margin items)

 

 

Q3 2022

 

 

Q3 2021

 

 

Change

 

Net Revenue

 

163.1

 

 

172.8

 

 

(5.6)%

 

Gross Profit

 

23.1

 

 

21.5

 

 

7.4%

 

Gross Margin

 

14.2%

 

 

12.5%

 

 

170bps

 

SG&A Expenses

 

16.5

 

 

13.1

 

 

26%

 

Net Income (Loss) [1]

 

0.03

 

 

0.08

 

 

(62.5)%

 

EPS[1]

 

0.00

 

 

0.00

 

 

-

 

Adjusted Net Income [2], [3]

 

4.1

 

 

2.9

 

 

41.4%

 

Adjusted EPS[2], [3]

 

0.10

 

 

0.07

 

 

42.9%

 

Adjusted EBITDA[3]

 

16.0

 

 

15.9

 

 

0.6%

 

 

[1] Reflects net income attributable to Startek shareholders.

[2] Reflects Adjusted net income attributable to Startek shareholders.

[3] Refer to the note below about Non-GAAP financial measures.

Management Commentary

“In the third quarter we continued to make solid progress expanding Startek’s footprint across our core verticals and regions,” said Bharat Rao, Global CEO of Startek. “Due to our global operations and the relative strength of the U.S. dollar, we faced foreign exchange-related headwinds that negatively impacted our top-line results. Despite this, we made substantial progress positioning our platform for future growth through our sales ecosystem, where our team generated 10 new logo wins and capitalized on the momentum we gained earlier in the year. We expect our margins will begin to improve in the coming months as we start to ramp up services and recapture some of the loss that came with the onboarding of additional agents.

“Year-to-date, our new customer wins have outpaced where we were in the same period for both 2020 and 2021. With 28 total new customer wins, we expect our expanded client portfolio to provide a meaningful uplift to our top-line performance beginning next year. Additionally, we are catering ‘near-shore’ and ‘off-shore’ delivery to several of our new customers as part of our overall shift to drive margins through a more cost-efficient labor approach. Throughout the quarter, we secured several new partnerships and initiated pilot programs, which we believe will elevate our quality of delivered services. Our recently announced partnership with Avaya will allow Startek to leverage the OneCloud platform to deliver a combined technology and CX service solution to customers globally. Combined with our Startek Agent AI system, we are ensuring that our platform is best-in-class for both our customers and our service agents. Through the harmonization of our sales and digital partner ecosystems, we successfully executed on several growth initiatives to position Startek for long-term success through our leading platform.

“As we look forward to the end of the year and 2023, we expect the strategic investments we’ve made in our sales pipeline and marketing initiatives to pave the way for top-line growth and margin expansion. We are beginning to see the return on our investments and look forward to leveraging our expanded capacity to provide world-class service to our new customers. Combined with our focus on executing our shift towards servicing a higher mix of customers via ‘near-shore’ or ‘off-shore’ delivery, we believe we will capture incremental increases in our margin beginning next year. We will continue to leverage our technology to drive operational efficiencies and value-add capabilities to ultimately drive sustainable, long-term value for our shareholders.”

Third Quarter 2022 Financial Summary

Net revenue in the third quarter was $163.1 million compared to $172.8 million in the year-ago quarter. The decrease was driven by several factors, including foreign exchange headwinds, the termination of a media client in the America’s region, and the normalization of outsized revenue from a one-off COVID vaccination support program that the Company delivered in the previous period. The decline was offset by continued strength in the Company’s telecom, financial and business services and travel and hospitality verticals. On a constant currency basis, net revenue decreased 5.7% compared to the year-ago quarter.

Gross profit in the third quarter increased by 7.4% to $23.1 million compared to $21.5 million in the year-ago quarter. Gross margin improved 170 basis points to 14.2% compared to 12.5% in the year-ago quarter. The increase is primarily attributable to the decrease in employee expenses driven by the shift of higher revenues delivered off-shore and near-shore, as well as lowered rent costs due to the consolidation of brick-and-mortar sites.

Selling, general and administrative (SG&A) expenses in the third quarter increased to $16.5 million compared to $13.1 million in the year-ago quarter. As a percentage of revenue, SG&A increased to 10.1% compared to 7.6% in the year-ago quarter. The increase is primarily due to the Company’s ongoing investments in sales and marketing initiatives, as well as costs related to the proposed take-private transaction, which was rejected by the Company’s Special Committee of the Board of Directors on September 9, 2022.

Net income attributable to Startek shareholders in the third quarter was $0.03 million or $0.00 per share, compared to a net income of $0.08 million or $0.00 per share in the year-ago quarter.

Adjusted net income* in the third quarter increased by 41.4% to $4.1 million or $0.10 per diluted share, compared to an adjusted net income* of $2.9 million or $0.07 per diluted share in the year-ago quarter.

Adjusted EBITDA* in the third quarter was $16.0 million compared to $15.9 million in the year-ago quarter.

On September 30, 2022, cash and restricted cash increased to $61.3 million[1] compared to $55.8 million at June 30, 2022. Total debt at September 30, 2022, declined to $169.6 million compared to $170.7 million at June 30, 2022, and net debt at September 30, 2022 was $108.3 million[2] compared to $114.9 million at June 30, 2022.

[1] Cash balance excluding restricted cash as at September 30, 2022 amounted to $54.0 million as compared to $47.2 million as at June 30, 2022.

[2] Net debt excluding restricted cash balance at September 30, 2022 was $115.6 million compared to $123.5 million at June 30, 2022.

*A non-GAAP measure defined below.

Conference Call and Webcast Details

Startek management will hold a conference call tomorrow at 5 p.m. ET to discuss its financial results. The conference call will be followed by a question and answer period.

Date: Wednesday, November 9, 2022
Time: 5 p.m. ET
Toll-free dial-in number: 1-844-826-3035
International dial-in number: 1-412-317-5195
Conference ID: 10172250

Please call the conference telephone number 5-10 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, Inc. at 1-949-574-3860.

The conference call will be broadcast live and available for replay here, as well as in the investor relations section of the company’s website at www.startek.com. A telephonic replay of the conference call will also be available after 8 p.m. ET on the same day through November 16, 2022.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10172250

About Startek

Startek is a global provider of tech-enabled customer experience (CX) management solutions, digital transformation, and technology services to leading brands. Startek is committed to impacting clients’ business outcomes by enhancing customer experience and digital and AI enablement across all touch points and channels. Startek has more than 44,000 employees spread across 36 delivery campuses in 13 countries. The company services over 170 clients across a range of industries, including banking and financial services, insurance, technology, telecom, healthcare, travel and hospitality, e-commerce, consumer goods, retail, media & cable 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, 2021, as filed with the Securities and Exchange Commission (SEC) on March 14, 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)

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

 

163,135

 

 

 

172,948

 

 

 

498,093

 

 

 

525,879

 

Warrant adjustment

 

 

-

 

 

 

(161

)

 

 

-

 

 

 

(991

)

Net revenue

 

$

163,135

 

 

$

172,787

 

 

$

498,093

 

 

$

524,888

 

Cost of services

 

 

(140,018

)

 

 

(151,264

)

 

 

(437,192

)

 

 

(454,124

)

Gross profit

 

$

23,117

 

 

$

21,523

 

 

$

60,901

 

 

$

70,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(16,523

)

 

 

(13,099

)

 

 

(46,147

)

 

 

(39,568

)

Impairment losses and restructuring/exit cost

 

 

(998

)

 

 

(85

)

 

 

(3,150

)

 

 

(1,964

)

Operating income

 

$

5,596

 

 

$

8,339

 

 

$

11,604

 

 

$

29,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of income (loss) of equity accounted investee

 

 

297

 

 

 

(46

)

 

 

4,122

 

 

 

(1

)

Interest expense, net and other income

 

 

(2,767

)

 

 

(2,236

)

 

 

(5,844

)

 

 

(18,489

)

Foreign exchange gains (losses), net

 

 

976

 

 

 

(533

)

 

 

650

 

 

 

42

 

Income before tax expense

 

$

4,102

 

 

$

5,524

 

 

$

10,532

 

 

$

10,784

 

Tax expense

 

 

(2,047

)

 

 

(2,402

)

 

 

(5,563

)

 

 

(9,397

)

Net income

 

$

2,055

 

 

$

3,122

 

 

$

4,969

 

 

$

1,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

2,021

 

 

 

3,046

 

 

 

4,311

 

 

 

6,581

 

Net income (loss) attributable to Startek shareholders

 

 

34

 

 

 

76

 

 

 

658

 

 

 

(5,194

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) attributable to Startek shareholders

 

$

0.00

 

 

$

0.00

 

 

$

0.02

 

 

$

(0.13

)

Diluted net income (loss) attributable to Startek shareholders

 

$

0.00

 

 

$

0.00

 

 

$

0.02

 

 

$

(0.13

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

40,326

 

 

 

40,788

 

 

 

40,316

 

 

 

40,723

 

Diluted

 

 

40,333

 

 

 

41,094

 

 

 

40,354

 

 

 

40,723

 

STARTEK, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income

 

$

2,055

 

 

$

3,122

 

 

$

4,969

 

 

$

1,387

 

Net income attributable to non-controlling interests

 

 

2,021

 

 

 

3,046

 

 

 

4,311

 

 

 

6,581

 

Net income (loss) attributable to Startek shareholders

 

 

34

 

 

 

76

 

 

 

658

 

 

 

(5,194

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(3,701

)

 

 

(179

)

 

 

(7,090

)

 

 

(2,147

)

Change in fair value of derivative instruments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8

 

Pension amortization

 

 

143

 

 

 

(669

)

 

 

(543

)

 

 

(1,090

)

Other comprehensive loss

 

$

(3,558

)

 

$

(848

)

 

$

(7,633

)

 

$

(3,229

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss attributable to noncontrolling interest

 

 

(23

)

 

 

(374

)

 

 

(397

)

 

 

(443

)

Other comprehensive loss attributable to Startek shareholders

 

 

(3,535

)

 

 

(474

)

 

 

(7,236

)

 

 

(2,786

)

 

 

$

(3,558

)

 

$

(848

)

 

$

(7,633

)

 

$

(3,229

)

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income attributable to noncontrolling interests

 

 

1,998

 

 

 

2,672

 

 

 

3,914

 

 

 

6,138

 

Comprehensive loss attributable to Startek shareholders

 

 

(3,501

)

 

 

(398

)

 

 

(6,578

)

 

 

(7,980

)

 

 

$

(1,503

)

 

$

2,274

 

 

$

(2,664

)

 

$

(1,842

)

STARTEK, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

53,993

 

 

 

47,940

 

Restricted cash

 

 

7,338

 

 

 

7,456

 

Trade accounts receivables, net

 

 

69,955

 

 

 

106,937

 

Unbilled revenue

 

 

76,699

 

 

 

50,074

 

Prepaid and other current assets

 

 

15,714

 

 

 

12,611

 

Total current assets

 

$

223,699

 

 

$

225,018

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

28,895

 

 

 

34,168

 

Operating lease right-of-use assets

 

 

44,841

 

 

 

63,012

 

Intangible assets, net

 

 

82,347

 

 

 

90,092

 

Goodwill

 

 

183,397

 

 

 

183,397

 

Investment in equity-accounted investees

 

 

35,810

 

 

 

31,688

 

Deferred tax assets, net

 

 

4,465

 

 

 

3,664

 

Prepaid expenses and other non-current assets

 

 

8,208

 

 

 

11,436

 

Total non-current assets

 

$

387,963

 

 

$

417,457

 

Total assets

 

$

611,662

 

 

$

642,475

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Trade accounts payables

 

 

11,820

 

 

 

11,916

 

Accrued expenses

 

 

51,223

 

 

 

53,203

 

Short term debt

 

 

4,721

 

 

 

3,611

 

Current maturity of long term debt

 

 

22,353

 

 

 

6,241

 

Current maturity of operating lease liabilities

 

 

20,496

 

 

 

24,393

 

Other current liabilities

 

 

41,844

 

 

 

48,265

 

Total current liabilities

 

$

152,457

 

 

$

147,629

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

Long term debt

 

 

142,515

 

 

 

160,175

 

Operating lease liabilities

 

 

28,176

 

 

 

44,263

 

Other non-current liabilities

 

 

20,553

 

 

 

19,562

 

Deferred tax liabilities, net

 

 

17,380

 

 

 

17,526

 

Total non-current liabilities

 

$

208,624

 

 

$

241,526

 

Total liabilities

 

$

361,081

 

 

$

389,155

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 41,065,522 and 40,893,396 shares issued as of September 30, 2022, and December 31, 2021, respectively

 

 

411

 

 

 

409

 

Additional paid-in capital

 

 

293,096

 

 

 

291,537

 

Accumulated deficit

 

 

(83,385

)

 

 

(84,043

)

Treasury stock, 782,902 and 412,769 shares as of September 30, 2022, and December 31, 2021, respectively, at cost

 

 

(3,548

)

 

 

(1,912

)

Accumulated other comprehensive loss

 

 

(17,923

)

 

 

(10,687

)

Equity attributable to Startek shareholders

 

$

188,651

 

 

$

195,304

 

Non-controlling interest

 

 

61,930

 

 

 

58,016

 

Total stockholders’ equity

 

$

250,581

 

 

$

253,320

 

Total liabilities and stockholders’ equity

 

$

611,662

 

 

$

642,475

 

STARTEK, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

Operating activities

 

 

 

 

 

 

 

 

Net income

 

$

4,969

 

 

$

1,387

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

22,139

 

 

 

20,398

 

Profit on sale of property, plant and equipment

 

 

(221

)

 

 

(37

)

Provision for doubtful accounts

 

 

(115

)

 

 

23

 

Amortization of debt issuance costs (including loss on extinguishment of debt)

 

 

426

 

 

 

11,455

 

Amortization of call option premium

 

 

1,080

 

 

 

360

 

Warrant contra revenue

 

 

-

 

 

 

991

 

Share-based compensation expense

 

 

1,213

 

 

 

932

 

Deferred income taxes

 

 

(1,539

)

 

 

1,838

 

Share of (income) loss of equity-accounted investees

 

 

(4,122

)

 

 

1

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Trade accounts receivables

 

 

30,534

 

 

 

13,120

 

Prepaid expenses and other assets

 

 

(32,243

)

 

 

(11,968

)

Trade accounts payable

 

 

669

 

 

 

(13,409

)

Income taxes, net

 

 

(868

)

 

 

(602

)

Accrued expenses and other liabilities

 

 

(598

)

 

 

6,543

 

Net cash provided by operating activities

 

$

21,324

 

 

$

31,032

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment, net

 

 

(10,994

)

 

 

(13,358

)

Investment in equity-accounted investees

 

 

-

 

 

 

(25,000

)

Payments for call option premium

 

 

-

 

 

 

(3,000

)

Proceeds from equity-accounted investees

 

 

-

 

 

 

102

 

Net cash used in investing activities

 

$

(10,994

)

 

$

(41,256

)

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

Proceeds from the issuance of common stock

 

 

348

 

 

 

1,434

 

Proceeds from long term debt (net of debt issuance cost paid to lenders)

 

 

-

 

 

 

156,525

 

Payments of long term debt

 

 

-

 

 

 

(117,600

)

Payments for loan fees related to long term debt

 

 

-

 

 

 

(2,794

)

Proceeds from a line of credit, net

 

 

1,110

 

 

 

-

 

Payments of other borrowings, net

 

 

(1,784

)

 

 

(13,145

)

Common stock repurchases

 

 

(1,636

)

 

 

(329

)

Net cash (used in) / provided by financing activities

 

$

(1,962

)

 

$

24,091

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

8,368

 

 

 

13,867

 

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

 

(2,433

)

 

 

(952

)

Cash and cash equivalents and restricted cash at beginning of period

 

 

55,396

 

 

 

50,559

 

Cash and cash equivalents and restricted cash at end of period

 

$

61,331

 

 

$

63,474

 

 

 

 

 

 

 

 

 

 

Components of cash and cash equivalents and restricted cash

 

 

 

 

 

 

 

 

Balances with banks

 

 

53,993

 

 

 

56,840

 

Restricted cash

 

 

7,338

 

 

 

6,634

 

Total cash and cash equivalents and restricted cash

 

$

61,331

 

 

$

63,474

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

Cash paid for interest and other finance cost

 

 

7,775

 

 

 

19,985

 

Cash paid for income taxes

 

 

7,699

 

 

 

7,884

 

Supplemental disclosure of non-cash activities

 

 

 

 

 

 

 

 

Non-cash warrant contra revenue

 

 

-

 

 

 

991

 

Non-cash share-based compensation expenses

 

 

1,213

 

 

 

932

 

STARTEK, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURE
(In thousands)
(Unaudited)

This press release contains references to the non-GAAP financial measure of Adjusted EBITDA. 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, Interest and other expense, net, Exchange gain / (loss), net, Depreciation and amortization expense, Restructuring and other acquisition-related costs, Share-based compensation expense, investments that investors may want to evaluate separately (such as based on fair value) and Warrant contra revenue (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 the 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 the ongoing operations that we believe are 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, 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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

 

2,055

 

 

 

3,122

 

 

 

4,969

 

 

 

1,387

 

Tax expense

 

 

2,047

 

 

 

2,402

 

 

 

5,563

 

 

 

9,397

 

Share of income of equity-accounted investees

 

 

(297

)

 

 

46

 

 

 

(4,122

)

 

 

1

 

Interest expense, net, and other income

 

 

2,767

 

 

 

2,236

 

 

 

5,844

 

 

 

18,489

 

Foreign exchange gains (losses), net

 

 

(976

)

 

 

533

 

 

 

(650

)

 

 

(42

)

Depreciation and amortization expense

 

 

7,582

 

 

 

6,927

 

 

 

22,139

 

 

 

20,398

 

Private offer transaction cost

 

 

1,411

 

 

 

-

 

 

 

2,603

 

 

 

-

 

Impairment losses and restructuring cost

 

 

998

 

 

 

85

 

 

 

3,150

 

 

 

1,964

 

Share-based compensation expense

 

 

380

 

 

 

341

 

 

 

1,213

 

 

 

932

 

Warrant contra revenue

 

 

-

 

 

 

161

 

 

 

-

 

 

 

991

 

Adjusted EBITDA

 

$

15,967

 

 

$

15,853

 

 

$

40,709

 

 

$

53,517

 

Adjusted EPS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Income (loss) attributable to Startek shareholders

 

 

34

 

 

 

76

 

 

 

658

 

 

 

(5,194

)

Add: Share based compensation expense

 

 

380

 

 

 

341

 

 

 

1,213

 

 

 

932

 

Add: Amortization of intangible assets, net of tax

 

 

2,279

 

 

 

2,279

 

 

 

6,783

 

 

 

6,785

 

Add: Warrant contra revenue

 

 

-

 

 

 

161

 

 

 

-

 

 

 

991

 

Add: Private offer transaction cost

 

 

1,411

 

 

 

-

 

 

 

2,603

 

 

 

-

 

Add: Debt issuance cost expensed out

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10,937

 

Adjusted net income

 

$

4,104

 

 

$

2,856

 

 

$

11,257

 

 

$

14,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

 

40,326

 

 

 

40,788

 

 

 

40,316

 

 

 

40,723

 

Weighted average common shares outstanding - diluted

 

 

40,333

 

 

 

41,094

 

 

 

40,354

 

 

 

40,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS - basic

 

$

0.10

 

 

$

0.07

 

 

$

0.28

 

 

$

0.35

 

Adjusted EPS - diluted

 

$

0.10

 

 

$

0.07

 

 

$

0.28

 

 

$

0.35

 

 

Investor Relations
Cody Cree
Gateway Group, Inc.
(949) 574-3860
SRT@gatewayir.com

Media Relations
Zainab Boxwala
Startek
zainab.boxwala@startek.com

Source: Startek, Inc.