StarTek, Inc. (SRT) has reported a 257.96 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $1.19 million, or $0.07 a share in the quarter, compared with $0.33 million, or $0.02 a share for the same period last year.
Revenue during the quarter dropped 6.24 percent to $77.13 million from $82.26 million in the previous year period. Gross margin for the quarter expanded 203 basis points over the previous year period to 13.84 percent. Total expenses were 97.23 percent of quarterly revenues, down from 99.26 percent for the same period last year. This has led to an improvement of 203 basis points in operating margin to 2.77 percent.
Operating income for the quarter was $2.14 million, compared with $0.61 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $5.44 million compared with $4.82 million in the prior year period. At the same time, adjusted EBITDA margin improved 120 basis points in the quarter to 7.05 percent from 5.86 percent in the last year period.
"In 2016, we increased gross profit by 50% on 9% revenue growth by high-grading contracted revenue, which means we removed or improved less than acceptable margin business, and improving operating efficiency," said Chad Carlson, chief executive officer of STARTEK. “We also reduced overhead by $1.2 million, which ended the year at 10.8% of revenue. In the fourth quarter alone, we were more profitable on even less revenue for the same reasons. "In 2017, we will continue to focus on growing revenue and upgrading client contracts to deliver another year of top and bottom-line growth, while also continuing to provide value for all of our clients."
Operating cash flow turns positive
StarTek, Inc. has generated cash of $10.94 million from operating activities during the year as against cash outgo of $4.64 million in the last year.
The company has spent $4.58 million cash to meet investing activities during the year as against cash outgo of $25 million in the last year. It has incurred net capital expenditure of $3.76 million on net basis during the year, down 44.26 percent or $2.98 million from year ago.
The company has spent $8.84 million cash to carry out financing activities during the year as against cash inflow of $26.52 million in the last year period.
Cash and cash equivalents stood at $1.04 million as on Dec. 31, 2016, down 60.43 percent or $1.59 million from $2.63 million on Dec. 31, 2015.
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