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Fourth quarter revenue increases 11.1% over prior year; Margin improvement continues
DENVER – February 28, 2008 - StarTek, Inc. (NYSE:SRT) today announced results for the fourth quarter and year ended December 31, 2007.
Fourth Quarter Highlights
- Revenue of $65.7 million, an 11.1% increase compared to the fourth quarter of 2006, and the highest since the third quarter of 2004.
- Gross profit as a percentage of revenue improved to 17.4%, the highest in seven quarters despite continued decline in Canadian currency exchange rates.
- Positive net income and earnings per share for the second consecutive quarter, despite higher investments in selling, general & administrative (“SG&A”) expense.
- Opening of a new site in Victoria, Texas, and announcement of plans for continued site expansion in Mansfield, Ohio.
Financial Results
Revenue for the fourth quarter of 2007 improved to $65.7 million, an increase of $6.5 million or 11.1% compared to the $59.1 million reported in the fourth quarter of 2006. Compared to the third quarter of 2007, revenue increased $2.5 million or 3.9%. Gross margin for the fourth quarter of 2007 was 17.4%, a 310 basis point improvement compared to 14.3% in the fourth quarter of 2006, and a 110 basis point improvement compared to the third quarter of 2007. The revenue and gross margin improvements reflect better contract terms, and the Company’s ongoing efforts to optimize site capacity and performance. Operating income in the fourth quarter totaled $0.3 million, a decrease of $0.4 million compared to the fourth quarter of 2006. The decrease in operating income is the result of higher SG&A, due to investments in people, technology and process, in support of our long-term growth plans. Net income for the fourth quarter totaled $0.4 million, or $.03 per diluted share.
