srt20220210_8k.htm
false 0001031029 0001031029 2022-03-10 2022-03-10
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
 Current Report
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
 
 Date of Report (Date of earliest event reported): March 10, 2022
STARTEK, INC.
(Exact name of registrant as specified in its charter)
 
 
Delaware
1-12793
84-1370538
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(IRS Employer Identification No.)
 
6200 South Syracuse Way, Suite 485, Greenwood Village Colorado 80111
(Address of principal executive offices; zip code)
 
Registrant’s telephone number, including area code: (303) 262-4500
 
(Former name, former address and former fiscal year, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
SRT
New York Stock Exchange, Inc.
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 
 
 
 

 
 
Item 2.02 Results of Operations and Financial Condition.
 
On March 10, 2022, Startek, Inc. (the “Company”) issued a press release reporting its earnings for its quarter and full year ended December 31, 2021. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. This press release shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933.
 
Item 9.01 Financial Statements and Exhibits
 
Exhibit Number
Exhibit Description
99.1
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
STARTEK, INC.
 
 
 
 
 
 
Date: March 10, 2022
By:
/s/ Nishit Shah
 
 
NISHIT SHAH
 
 
Chief Financial Officer
 
 
ex_334287.htm

Exhibit 99.1

 

https://cdn.kscope.io/92bf0ca6c233200bd82fd12028f6fb76-ex_167630img001.jpg

 

Startek Reports Record Fourth Quarter and Full Year 2021 Financial Results

 

- Revenue Growth for the Fourth Quarter and Full Year Driven by Continued Strength Across Core Verticals -

 

- Ongoing Investments in Sales Ecosystem, Technological Capabilities, and Digital Partnerships Aim to Bolster the Companys Operational Foundation to Support Long-Term Growth -

 

GREENWOOD VILLAGE, CO March 10, 2022 - 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, 2021.

 

Fourth Quarter 2021 Financial Summary ($ in millions, excl. margin items)

 

   

Q4 2021

   

Q4 2020

   

Change

 

Net Revenue

 

$

 178.7

   

$

 174.5

     

 2

%

Gross Profit

 

$

 26.8

   

$

 30.2

     

 (11)

%

Gross Margin

   

 15.0

%

   

 17.3

%

 

-230 

bps

SG&A Expenses

 

$

 15.1

   

$

 14.7

     

 3

%

Net Income/(Loss)[1]

 

$

 6.7

   

$

 (7.6)

     

 188

%

EPS[1]

 

$

 0.2

   

$

 (0.2)

     

 184

%

Adjusted Net Income/(Loss)[2], [3]

 

$

 12.9

   

$

 8.8

     

 47

%

Adjusted EPS[2], [3]

 

$

 0.3

   

$

 0.2

     

 45

%

Adjusted EBITDA[3]

 

$

 18.9

   

$

 23.3

     

 (19)

%

 

Full Year 2021 Financial Summary ($ in millions, excl. margin items)

 

   

2021

   

2020

   

Change

 

Net Revenue

 

$

 703.6

   

$

 640.2

     

 10

%

Gross Profit

 

$

 97.6

   

$

 87.2

     

 12

%

Gross Margin

   

 13.9

%

   

 13.6

%

 

 30 

bps

SG&A Expenses

 

$

 54.6

   

$

 59.7

     

 (9)

%

Net Income/(Loss)[1]

 

$

 1.5

   

$

 (39.0)

     

 104

%

EPS[1]

 

$

 0.0

   

$

 (1.0)

     

 104

%

Adjusted Net Income/(Loss)[2], [3]

 

$

 27.3

   

$

 8.5

     

 221

%

Adjusted EPS[2], [3]

 

$

 0.7

   

$

 0.2

     

 205

%

Adjusted EBITDA[3]

 

$

 72.4

   

$

 58.2

     

 24

%


[1] Reflects net income (loss) attributable to Startek shareholders.

[2] Reflects Adjusted net income (loss) attributed to Startek shareholders.

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

 


 

Management Commentary  

 

“During the fourth quarter, we continued to support our growth across core verticals and meaningfully enhance our operational foundation,” said Bharat Rao, Global CEO of Startek. “We generated year-over-year revenue growth for both the fourth quarter and full year, while maintaining our disciplined approach to cost management across the business. Since assuming the helm of our executive leadership team in October 2021, I’ve spent a considerable amount of time meeting with our management teams across the globe, along with many of our client accounts and stakeholders, to evaluate how we are performing relative to expectations.

 

“Throughout this initial evaluation period, we have already made significant changes across the organization. On an operational level, we continued to invest in our technological capabilities, especially in cybersecurity, to ensure that we remain protected against future threats and fully optimize the dexterity of our services. We also greatly bolstered our leadership team, adding five new executives, including myself, since October 2021 to round out our C-suite. With a strong focus on accelerating profitable growth, while providing our clients a best-in-class, digital-first customer experience, we now have an executive team that is fully aligned on the mission at-hand going forward.

 

“As we progress through 2022, we’re going to continue making meaningful investments to drive growth. We’ve already started building out a revamped sales infrastructure with a reorganized lead generation team, and we anticipate adding additional senior sales leaders over the next few months. To further support our sales process, our marketing team has been at work better defining our overall value proposition to customers and implementing more effective go-to-market strategies. We will also continue to have a disciplined approach with our cost structure. In fact, through a detailed analysis, we have been identifying centers with sub-optimal performance to evaluate the necessary consolidation or right-sizing actions to improve the overall utilization of our footprint.    

 

“Our work to optimize our cost structure, build out our leadership team, and refine our sales and marketing focus has positioned us to further enhance our omni-channel capabilities and execute on our growth initiatives in 2022. I am incredibly proud of our team’s sustained commitment to providing best-in-class service to our customers during this time of evaluation and transition. I have the utmost confidence in our bolstered organizational structure to begin accelerating on our growth trajectory.”

 

 

 

 

Fourth Quarter 2021 Financial Results

 

Net revenue in the fourth quarter increased slightly to $178.7 million compared to $174.5 million in the year-ago quarter. The increase was attributable to continued solid performance within the Company’s core verticals and geographies. On a constant currency basis, net revenue increased 2.2% compared to the prior year period.

 

Gross profit in the fourth quarter was $26.8 million compared to $30.2 million in the year-ago quarter. Gross margin was 15% compared to 17.3% in the year-ago quarter. The decrease was primarily due to the impact of a one-off performance bonus declared in December 2021 and continued growth in the telecom and government verticals that are delivered onshore, partially offset by the Company’s sustained commitment to prudent cost management across the organization.

 

Selling, general and administrative (SG&A) expenses in the fourth quarter were $15.1 million compared to $14.7 million in the year-ago quarter. As a percentage of revenue, SG&A was the same at 8.4% compared to the year ago quarter. The increase was driven by the investments in sales, marketing and digital teams where the Company added new positions to strengthen its go-to-market efforts.

 

Net income attributable to Startek shareholders in the fourth quarter increased significantly $6.7 million or $0.16 per share, compared to a net loss of $7.6 million or $(0.19) per share in the year-ago quarter. The net income in the current period included a $6.7 million impact of fair value gains from the investment in CSS Corp. that was partially offset by an approximate $4.5 million impairment charge on right-of-use assets related to operating leases in select geographies where the Company’s client service delivery is pivoting towards a work from home delivery model.

 

Adjusted net income* in the fourth quarter was $12.9 million or $0.32 per diluted share, compared to adjusted net income* of $8.8 million or $0.22 per diluted share in the year-ago quarter.

 

Adjusted EBITDA* in the fourth quarter was $18.9 million compared to $23.3 million in the year-ago quarter. The decrease was primarily driven by the aforementioned lower levels of gross profit and incremental investments in SG&A during the quarter.

 

At December 31, 2021, cash and restricted cash were $55.4 million[1] compared to $63.5 million at September 30, 2021. The decrease was due to the lower level of working capital generated during the fourth quarter relative to the third quarter of 2021. Total debt at December 31, 2021 was $170.0 million compared to $170.4 million at September 30, 2021, and net debt at December 31, 2021 was $114.6 million[2] compared to $106.9 million at September 30, 2021.

 

During the three months ended December 31, 2021, the Company repurchased an aggregate of 353,810 shares of common stock under its repurchase plan, at an average cost of $4.44 per share.

 

Full Year 2021 Financial Results

 

Net revenue in 2021 increased 9.6% to $703.6 million compared to $640.2 million in 2020. This increase was primarily due to strong performance and recovery trends across core verticals, including the additional revenue generated from the U.S. COVID-19 assistance government contract in the second quarter of 2021. On a constant currency basis, net revenue increased 10.6% compared to the prior year.

 

Gross profit in 2021 increased 11.9% to $97.6 million compared to $87.2 million in 2020. Gross margin increased 30 basis points to 13.9% compared to 13.6% in 2020. The increase was primarily due to the recovery and growth trends across several core verticals, including the increased revenue from the healthcare and education vertical as a result of the aforementioned vaccine program in the second quarter. The increase was also supported by lower rental costs in 2021 relative to 2020 due to favorable renegotiations during lease contract renewals.

 

Selling, general and administrative (SG&A) expenses in 2021 decreased to $54.6 million compared to $59.7 million in 2020. As a percentage of revenue, SG&A improved 150 basis points to 7.8% compared to 9.3% in 2020 as a result of the Company’s higher revenue base and lower communication and maintenance expenses.

 

Net income attributable to Startek shareholders in 2021 improved to $1.5 million or $0.04 per share, compared to a net loss of $(39.0) million or $(0.99) per share in 2020. Net income in 2021 included a one-time charge related to expenses associated with the debt refinancing the Company completed in February 2021, as well as the aforementioned approximate $4.5 million in impairment charges recorded in the fourth quarter of 2021. Net loss in 2020 included an approximate $35.9 million goodwill impairment charge accounted in the first quarter and in the fourth quarter due to COVID-19 related forecasted declines in the Company’s business in India, South Africa, Australia and Argentina, owing primarily to the devaluation of the local currency.

 

Adjusted net income* in 2021 increased significantly to $27.3 million or $0.67 per diluted share, compared to adjusted net income* of $8.5 million or $0.22 per diluted share in 2020.

 

Adjusted EBITDA* in 2021 increased 24% to $72.4 million compared to $58.2 million in 2020. The increase is due to the aforementioned revenue growth and cost reductions driven during the year.

 

During the year ended December 31, 2021, the Company repurchased an aggregate of 412,769 shares of its common stock under its repurchase plan, at an average cost of $4.61 per share.

 

*A non-GAAP measure defined below.


 

[1] Cash balance excluding restricted cash at December 31, 2021 amounted to $47.9 million as compared to $56.8 million at September 30, 2021.

 

[2] Net debt excluding restricted cash balance at December 31, 2021 was $122.1 million compared to $113.6 million at September 30, 2021.

 

 

 

Conference Call and Webcast Details

 

Startek management will hold a conference call today at 5:00 p.m. Eastern time to discuss its financial results. The conference call will be followed by a question and answer period.

 

 Date: Thursday, March 10, 2022

Time: 5:00 p.m. Eastern Time

Toll-free dial-in number: (844) 239-5283

International dial-in number: (574) 990-1022

Conference ID: 5348066

 

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 at (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 8:00 p.m. Eastern time on the same day through March 17, 2022.

 

 Toll-free replay number: (855) 859-2056

International replay number: (404) 537-3406

Replay ID: 5348066

 

About Startek

 

Startek is a global provider of tech-enabled business process management solutions. The company provides omni-channel customer experience, digital transformation, and technology services to some of the finest brands globally. Startek is committed to impacting clients’ business outcomes by focusing on enhancing customer experience and digital & AI enablement across all touch points and channels. Startek has more than 45,000 CX experts spread across 45 delivery campuses in 13 countries. The company services over 200 clients across a range of industries such as banking and financial services, insurance, technology, telecom, healthcare, travel & hospitality, ecommerce, consumer goods, retail, and energy & utilities. To learn more about Startek’s global solutions, please 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 as well as other filings with the Securities and Exchange Commission (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.

 

Investor Relations

Giuseppe Montefinese
Startek
+1 732-890-8929
giuseppe.montefinese@startek.com

 

Cody Cree
Gateway Group, Inc.
+1 949-574-3860
SRT@gatewayir.com

 

Media Relations

 

Zainab Boxwala

Startek

zainab.boxwala@startek.com

 

 

 

 

 

STARTEK, INC. AND SUBSIDIARIES

Consolidated Statements of Income (loss)

(Unaudited)

(In thousands, except per share data)

 

   

Three Months Ended December 31,

   

Year Ended December 31,

 
   

2021

   

2020

   

2021

   

2020

 
                                 

Revenue

    177,667       174,918       703,546       641,844  

Warrant adjustment

    1,078       (449 )     87       (1,622 )

Net revenue

    178,745       174,469       703,633       640,222  

Cost of services

    (151,907 )     (144,227 )     (606,031 )     (552,973 )

Gross profit

    26,838       30,242       97,602       87,249  
                                 

Selling, general and administrative expenses

    (15,075 )     (14,712 )     (54,643 )     (59,744 )

Impairment losses and restructuring/exit cost

    (6,262 )     (13,254 )     (8,226 )     (37,799 )

Operating income (loss)

    5,501       2,276       34,733       (10,294 )
                                 

Share of income (loss) of equity-accounted investees

    6,682       (6 )     6,681       (31 )

Interest expense, net

    (684 )     (2,692 )     (19,173 )     (13,376 )

Foreign exchange gains (losses), net

    (691 )     (1,853 )     (649 )     (2,183 )

Income (loss) before income tax expense

    10,808       (2,275 )     21,592       (25,884 )

Tax expense

    (2,469 )     (1,951 )     (11,866 )     (7,760 )

Net income (loss)

    8,339       (4,226 )     9,726       (33,644 )
                                 

Net income (loss)

                               

Net income attributable to noncontrolling interests

    1,645       3,351       8,226       5,341  

Net income (loss) attributable to Startek shareholders

    6,694       (7,577 )     1,500       (38,985 )
      8,339       (4,226 )     9,726       (33,644 )
                                 

Net income (loss) per common share

                               

Basic net income (loss) attributable to Startek shareholders

    0.16       (0.19 )     0.04       (0.99 )

Diluted net income (loss) attributable to Startek shareholders

    0.16       (0.19 )     0.04       (0.99 )
                                 

Weighted average common shares outstanding

                               

Basic

    40,707       40,333       40,719       39,442  

Diluted

    40,865       40,333       41,086       39,442  

 

 

 

 

STARTEK, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

 

   

December 31, 2021

   

December 31, 2020

 

Assets

               

Current assets

               

Cash and cash equivalents

    47,940       44,507  

Restricted cash

    7,456       6,052  

Trade accounts receivables, net

    106,937       83,560  

Unbilled revenue

    50,074       49,779  

Prepaid and other current assets

    12,611       14,542  

Total current assets

    225,018       198,440  
                 

Non-current assets

               

Property, plant and equipment, net

    34,168       34,225  

Operating lease right-of-use assets

    63,012       69,376  

Intangible assets, net

    90,092       100,440  

Goodwill

    183,397       183,397  

Investment in equity-accounted investees

    31,688       111  

Deferred tax assets, net

    3,664       5,294  

Prepaid expenses and other non-current assets

    11,436       13,370  

Total non-current assets

    417,457       406,213  

Total assets

    642,475       604,653  
                 

Liabilities and Stockholders’ Equity

               

Current liabilities

               

Trade accounts payables

    11,916       20,074  

Accrued expenses

    53,203       57,118  

Short term debt

    3,611       15,505  

Current maturity of long term debt

    6,241       2,180  

Current maturity of operating lease obligation

    24,393       19,327  

Other current liabilities

    48,265       39,987  

Total current liabilities

    147,629       154,191  
                 

Non-current liabilities

               

Long term debt

    160,175       118,315  

Operating lease liabilities

    44,263       52,052  

Other non-current liabilities

    19,562       15,498  

Deferred tax liabilities, net

    17,526       17,715  

Total non-current liabilities

    241,526       203,580  

Total liabilities

    389,155       357,771  
                 

Stockholders’ equity

               

Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 40,893,396 and 40,453,462 shares issued as of December 31, 2021, and December 31, 2020, respectively

    409       405  

Additional paid-in capital

    291,537       288,700  

Accumulated deficit

    (84,043 )     (85,543 )

Treasury stock, 412,769 and nil shares as of December 31, 2021, and December 31, 2020, respectively, at cost

    (1,912 )     -  

Accumulated other comprehensive loss

    (10,687 )     (7,286 )

Equity attributable to Startek shareholders

    195,304       196,276  

Non-controlling interest

    58,016       50,606  

Total stockholders’ equity

    253,320       246,882  

Total liabilities and stockholders’ equity

    642,475       604,653  

 

 

 

 

STARTEK, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

   

Year Ended December 31,

 
   

2021

   

2020

 

Operating activities

               

Net income (loss)

    9,726       (33,644 )
                 

Adjustments to reconcile net income (loss) to net cash generated from operating activities:

               

Depreciation and amortization

    28,137       28,201  

Impairment of goodwill

    -       35,944  

Impairment of right-of-use assets

    4,514       -  

Profit on sale of property, plant and equipment

    (106 )     167  

Provision for doubtful accounts

    370       2,662  

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

    11,607       1,454  

Amortization of call option premium

    1,200       -  

Warrant adjustment

    (87 )     1,622  

Share-based compensation expense

    1,418       832  

Deferred income taxes

    1,389       (276 )

Share of (income) loss of equity-accounted investees

    (6,681 )     31  
                 

Changes in operating assets and liabilities:

               

Trade accounts receivables

    (26,207 )     19,971  

Prepaid expenses and other assets

    1,104       (11,376 )

Trade accounts payable

    (7,739 )     (4,635 )

Income taxes, net

    3,049       2,668  

Accrued expenses and other liabilities

    7,434       22,432  

Net cash generated from operating activities

    29,128       66,053  
                 

Investing activities

               

Purchase of property, plant and equipment, net

    (17,570 )     (17,414 )

Investment in equity-accounted investees

    (25,000 )     -  

Payments for call option premium

    (3,000 )     -  

Proceeds from equity-accounted investees

    104       395  

Net cash used in investing activities

    (45,466 )     (17,019 )
                 

Financing activities

               

Proceeds from the issuance of common stock

    1,510       9,026  

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

    156,525       -  

Payments of long term debt

    (117,600 )     (8,400 )

Payments for loan fees related to long term debt

    (2,794 )     -  

Payments on a line of credit, net

    -       (24,529 )

Payments on other debts, net

    (13,656 )     (7,304 )

Common stock repurchases

    (1,912 )     -  

Net cash (used in) generated from financing activities

    22,073       (31,207 )
                 

Net increase in cash and cash equivalents

    5,735       17,827  

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

    (898 )     106  

Cash and cash equivalents and restricted cash at the beginning of period

    50,559       32,626  

Cash and cash equivalents and restricted cash at the end of period

    55,396       50,559  
                 

Components of cash and cash equivalents and restricted cash

               

Balances with banks

    47,940       44,507  

Restricted cash

    7,456       6,052  

Total cash and cash equivalents and restricted cash

    55,396       50,559  
                 

Supplemental disclosure of cash flow information

               

Cash paid for interest and other finance cost

    22,359       13,080  

Cash paid for income taxes

    7,081       4,795  

Noncash warrant adjustment

    (87 )     1,622  

Noncash share-based compensation expenses

    1,418       832  

 

 

 

 

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,  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,

 
   

2021

   

2020

   

2021

   

2020

 

Net income (loss)

    8,339       (4,226 )     9,726       (33,644 )

Income tax expense

    2,469       1,951       11,866       7,760  
Share of income (loss) of equity-accounted investees     (6,682 )     6       (6,681)       31  

Interest expense, net

    684       2,693       19,173       13,376  

Foreign exchange gains (losses), net

    691       1,853       649       2,183  

Depreciation and amortization expense

    7,739       6,922       28,137       28,201  

Impairment losses and restructuring cost

    6,262       13,254       8,226       37,799  

Share-based compensation expense

    486       385       1,418       832  

Warrant adjustment

    (1,078 )     449       (87 )     1,622  

Adjusted EBITDA

    18,910       23,287       72,427       58,160  
                                 

 

Adjusted EPS:

                               
   

Three Months Ended December 31,

   

Year Ended December 31,

 
   

2021

   

2020

   

2021

   

2020

 

Income (loss) attributable to Startek shareholders

    6,694       (7,577 )     1,500       (38,985 )

Add: Share based compensation expense

    486       385       1,418       832  

Add: Amortization of intangible assets, net of tax

    2,277       2,277       9,062       9,078  

Add: Warrant adjustment

    (1,078 )     449       (87 )     1,622  

Add: Impairment of right-of-use assets

    4,514       -       4,514       -  

Add: Goodwill impairment loss

    -       13,236       -       35,944  

Add: Debt issuance cost expensed out

    -       -       10,937       -  

Adjusted net income (loss)

    12,893       8,770       27,343       8,491  
                                 

Weighted average common shares outstanding - Basic

    40,707       40,333       40,719       39,442  

Weighted average common shares outstanding - Diluted

    40,865       40,333       41,086       39,442  
                                 

Adjusted EPS - Basic

    0.32       0.22       0.67       0.22  

Adjusted EPS - Diluted

    0.32       0.22       0.67       0.22