Dear StarTek Stockholders:
The past year was a rebuilding year for StarTek, and we’re pleased to inform you that our strategic decisions and continued focus on quality customer care are having positive impacts throughout the business. We addressed company challenges head-on in early 2007, and, as a result, we experienced improvements on many fronts throughout the year.
Our mission for 2007 was to restore profitability and position StarTek for growth. We’ve accomplished core milestones in this effort through a series of strategic and focused changes. A few key accomplishments include strengthening our executive team, growing revenues from new and existing clients, addressing site performance, and renegotiating contract terms. We foresee that in 2008, StarTek will continue to build positive momentum as a result of the investments made in 2007.
Certainly one of the biggest changes in 2007 was the arrival of our new management team including David G. Durham as executive vice president, treasurer and chief financial officer; Sue Morse as senior vice president of human resources; Mary Beth Loesch as senior vice president of business development, and Michael Clayton as general counsel. These talented leaders are proven professionals who have the experience and knowledge to effectively execute our strategic growth plans.
Having the right management team in place was just the beginning of our transition. As a team, we next turned our attention toward increasing profitability and growth. We continued to focus all of our marketing efforts on the communications industry. We invigorated the company’s strategic sales endeavors, optimized our service delivery and technology platforms to better meet the needs of this industry, and energized our training to provide clients with talented employees committed to excellence. Because of the rapidly changing nature of the communications business, our focus on this industry positions StarTek for top-line revenue expansion year over year. In 2007, while we only experienced a three percent improvement in full year revenue over 2006, we exited the year with an 11 percent quarterly growth rate. This was primarily driven by our ability to close a number of new add-on programs with existing clients.
Growing top-line revenue was, and still is, a critical component of our strategic plan. However, we also worked diligently to improve profitability through site optimization, expense controls, and renegotiated contract terms with several clients. While difficult, these actions were necessary and beneficial steps in improving our margins.
We focused on site optimization and made the tough decision to close our Hawkesbury, Ontario contact center. To facilitate future growth, we invested in a new facility in Texas and reopened another center in Virginia. In 2008, we have plans to continue building new sites as customer demand requires.
Overall, we are pleased with StarTek’s performance in 2007. We delivered on our commitments to build a strong foundation for the future. However, we have much more to do to meet our commitment to you, our shareholders. Our objectives in the months ahead are to grow StarTek through higher gross margin expansion, top-line revenue growth, and strategic investments in facilities around the world.
Sincerely,
Larry Jones Ed Zschau
President & CEO Chairman of the Board