Company Quick10K Filing
Startek
Price6.49 EPS-0
Shares38 P/E-13
MCap250 P/FCF23
Net Debt113 EBIT-14
TEV363 TEV/EBIT-27
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-10
10-K 2020-12-31 Filed 2021-03-16
10-Q 2020-09-30 Filed 2020-11-09
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-06-10
10-K 2019-12-31 Filed 2020-03-12
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-09
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-08
10-K 2017-12-31 Filed 2018-03-16
10-Q 2017-09-30 Filed 2017-11-08
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-10
10-K 2016-12-31 Filed 2017-02-22
10-Q 2016-09-30 Filed 2016-11-08
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-10
10-K 2015-12-31 Filed 2016-03-14
10-Q 2015-09-30 Filed 2015-11-09
10-Q 2015-06-30 Filed 2015-08-10
10-Q 2015-03-31 Filed 2015-05-11
10-K 2014-12-31 Filed 2015-03-06
10-Q 2014-09-30 Filed 2014-11-14
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-05-09
10-K 2013-12-31 Filed 2014-03-10
10-Q 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-13
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-08
10-Q 2012-09-30 Filed 2012-11-06
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-11
10-K 2011-12-31 Filed 2012-03-09
10-Q 2011-09-30 Filed 2011-11-02
10-Q 2011-06-30 Filed 2011-08-08
10-Q 2011-03-31 Filed 2011-05-03
10-K 2010-12-31 Filed 2011-03-04
10-Q 2010-09-30 Filed 2010-10-29
10-Q 2010-06-30 Filed 2010-07-30
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-02-25
8-K 2020-11-09
8-K 2020-10-22
8-K 2020-08-10
8-K 2020-07-30
8-K 2020-07-09
8-K 2020-07-01
8-K 2020-06-29
8-K 2020-06-10
8-K 2020-05-12
8-K 2020-05-05
8-K 2020-04-17
8-K 2020-03-25
8-K 2020-03-12
8-K 2020-02-04
8-K 2020-01-12
8-K 2019-12-11
8-K 2019-11-06
8-K 2019-07-22
8-K 2019-06-30
8-K 2019-05-17
8-K 2019-05-08
8-K 2019-03-22
8-K 2019-03-21
8-K 2019-03-14
8-K 2019-03-13
8-K 2019-03-01
8-K 2018-12-31
8-K 2018-12-13
8-K 2018-11-08
8-K 2018-09-18
8-K 2018-08-07
8-K 2018-08-07
8-K 2018-07-20
8-K 2018-07-05
8-K 2018-05-08
8-K 2018-03-16
8-K 2018-03-15
8-K 2018-03-15
8-K 2018-03-15
8-K 2018-01-23

SRT 10Q Quarterly Report

Item 1.  Financial Statements
EX-31.1 ex_241492.htm
EX-31.2 ex_241493.htm
EX-32.1 ex_241494.htm

Startek Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
68554841127413702012201420172020
Assets, Equity
165129935721-152012201420172020
Rev, G Profit, Net Income
20124-4-12-202012201420172020
Ops, Inv, Fin

srt20190630_10q.htm
0001031029 StarTek, Inc. false --12-31 Q1 2021 60,000,000 60,000,000 0.01 0.01 40,781,804 40,781,804 40,453,462 40,453,462 5 3 12 0 3 163,070 160,899 8,618 21,519 4.00 4.18 0.67 0.92 00010310292021-01-012021-03-31 xbrli:shares 00010310292021-04-30 thunderdome:item iso4217:USD 00010310292020-01-012020-03-31 iso4217:USDxbrli:shares 00010310292021-03-31 00010310292020-12-31 00010310292019-12-31 00010310292020-03-31 0001031029us-gaap:CommonStockMember2020-12-31 0001031029us-gaap:AdditionalPaidInCapitalMember2020-12-31 0001031029us-gaap:RetainedEarningsMember2020-12-31 0001031029us-gaap:AccumulatedTranslationAdjustmentMember2020-12-31 0001031029us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-12-31 0001031029us-gaap:ParentMember2020-12-31 0001031029us-gaap:NoncontrollingInterestMember2020-12-31 0001031029us-gaap:CommonStockMember2021-01-012021-03-31 0001031029us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-31 0001031029us-gaap:RetainedEarningsMember2021-01-012021-03-31 0001031029us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-31 0001031029us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-03-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-01-012021-03-31 0001031029us-gaap:ParentMember2021-01-012021-03-31 0001031029us-gaap:NoncontrollingInterestMember2021-01-012021-03-31 0001031029us-gaap:CommonStockMember2021-03-31 0001031029us-gaap:AdditionalPaidInCapitalMember2021-03-31 0001031029us-gaap:RetainedEarningsMember2021-03-31 0001031029us-gaap:AccumulatedTranslationAdjustmentMember2021-03-31 0001031029us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-03-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-03-31 0001031029us-gaap:ParentMember2021-03-31 0001031029us-gaap:NoncontrollingInterestMember2021-03-31 0001031029us-gaap:CommonStockMember2019-12-31 0001031029us-gaap:AdditionalPaidInCapitalMember2019-12-31 0001031029us-gaap:RetainedEarningsMember2019-12-31 0001031029us-gaap:AccumulatedTranslationAdjustmentMember2019-12-31 0001031029us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2019-12-31 0001031029us-gaap:ParentMember2019-12-31 0001031029us-gaap:NoncontrollingInterestMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommonStockMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccumulatedTranslationAdjustmentMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:ParentMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:NoncontrollingInterestMember2019-12-31 0001031029srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-31 0001031029us-gaap:CommonStockMember2020-01-012020-03-31 0001031029us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-31 0001031029us-gaap:RetainedEarningsMember2020-01-012020-03-31 0001031029us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-31 0001031029us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-01-012020-03-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-01-012020-03-31 0001031029us-gaap:ParentMember2020-01-012020-03-31 0001031029us-gaap:NoncontrollingInterestMember2020-01-012020-03-31 0001031029us-gaap:CommonStockMember2020-03-31 0001031029us-gaap:AdditionalPaidInCapitalMember2020-03-31 0001031029us-gaap:RetainedEarningsMember2020-03-31 0001031029us-gaap:AccumulatedTranslationAdjustmentMember2020-03-31 0001031029us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-03-31 0001031029us-gaap:ParentMember2020-03-31 0001031029us-gaap:NoncontrollingInterestMember2020-03-31 0001031029srt:AmericasMember2021-03-31 0001031029srt:AmericasMember2020-12-31 0001031029country:IN2021-03-31 0001031029country:IN2020-12-31 0001031029srtk:Malaysia1Member2021-03-31 0001031029srtk:Malaysia1Member2020-12-31 0001031029country:SA2021-03-31 0001031029country:SA2020-12-31 0001031029country:ZA2021-03-31 0001031029country:ZA2020-12-31 0001031029srtk:Argentina1Member2021-03-31 0001031029srtk:Argentina1Member2020-12-31 0001031029country:AU2021-03-31 0001031029country:AU2020-12-31 utr:Y 00010310292020-01-012020-12-31 0001031029us-gaap:CustomerRelationshipsMember2021-03-31 0001031029us-gaap:CustomerRelationshipsMember2021-01-012021-03-31 0001031029srtk:BrandMember2021-03-31 0001031029srtk:BrandMember2021-01-012021-03-31 0001031029us-gaap:TrademarksMember2021-03-31 0001031029us-gaap:TrademarksMember2021-01-012021-03-31 0001031029us-gaap:OtherIntangibleAssetsMember2021-03-31 0001031029us-gaap:OtherIntangibleAssetsMember2021-01-012021-03-31 0001031029us-gaap:CustomerRelationshipsMember2020-12-31 0001031029us-gaap:CustomerRelationshipsMember2020-01-012020-12-31 0001031029srtk:BrandMember2020-12-31 0001031029srtk:BrandMember2020-01-012020-12-31 0001031029us-gaap:TrademarksMember2020-12-31 0001031029us-gaap:TrademarksMember2020-01-012020-12-31 0001031029us-gaap:OtherIntangibleAssetsMember2020-12-31 0001031029us-gaap:OtherIntangibleAssetsMember2020-01-012020-12-31 0001031029srtk:CommunicationsMember2021-01-012021-03-31 0001031029srtk:CommunicationsMember2020-01-012020-03-31 0001031029srtk:ECommerceAndConsumerMember2021-01-012021-03-31 0001031029srtk:ECommerceAndConsumerMember2020-01-012020-03-31 0001031029srtk:MediaMember2021-01-012021-03-31 0001031029srtk:MediaMember2020-01-012020-03-31 0001031029srtk:HealthCareAndEducationMember2021-01-012021-03-31 0001031029srtk:HealthCareAndEducationMember2020-01-012020-03-31 0001031029srtk:FinancialAndBusinessServiceMember2021-01-012021-03-31 0001031029srtk:FinancialAndBusinessServiceMember2020-01-012020-03-31 0001031029srtk:TravelAndHospitalityMember2021-01-012021-03-31 0001031029srtk:TravelAndHospitalityMember2020-01-012020-03-31 0001031029srtk:TechnologyITAndRelatedServiceMember2021-01-012021-03-31 0001031029srtk:TechnologyITAndRelatedServiceMember2020-01-012020-03-31 0001031029srtk:OtherSectorMember2021-01-012021-03-31 0001031029srtk:OtherSectorMember2020-01-012020-03-31 0001031029us-gaap:EmployeeStockOptionMember2021-01-012021-03-31 0001031029us-gaap:EmployeeStockOptionMember2020-01-012020-03-31 0001031029srtk:RestrictedStockdeferredStockUnitsMember2021-01-012021-03-31 0001031029srtk:RestrictedStockdeferredStockUnitsMember2020-01-012020-03-31 0001031029us-gaap:EmployeeStockOptionMember2021-01-012021-03-31 0001031029us-gaap:EmployeeStockOptionMember2020-01-012020-03-31 0001031029us-gaap:EmployeeSeveranceMember2020-12-31 0001031029us-gaap:FacilityClosingMember2020-12-31 0001031029us-gaap:EmployeeSeveranceMember2021-01-012021-03-31 0001031029us-gaap:FacilityClosingMember2021-01-012021-03-31 0001031029us-gaap:EmployeeSeveranceMember2021-03-31 0001031029us-gaap:FacilityClosingMember2021-03-31 0001031029us-gaap:EmployeeSeveranceMember2019-12-31 0001031029us-gaap:FacilityClosingMember2019-12-31 0001031029us-gaap:EmployeeSeveranceMember2020-01-012020-12-31 0001031029us-gaap:FacilityClosingMember2020-01-012020-12-31 0001031029us-gaap:FacilityClosingMembersrtk:AegisTransactionAgreementMember2021-03-31 utr:M 0001031029us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMembersrt:MinimumMember2021-01-012021-03-31 0001031029us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMembersrt:MaximumMember2021-01-012021-03-31 0001031029us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-31 0001031029us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-03-31 0001031029us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-01-012020-03-31 0001031029us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMembersrt:MaximumMember2021-01-012021-03-31 0001031029us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-01-012021-03-31 0001031029us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2020-01-012020-03-31 0001031029us-gaap:InterestRateSwapMemberus-gaap:NondesignatedMember2021-01-012021-03-31 0001031029us-gaap:InterestRateSwapMemberus-gaap:NondesignatedMember2020-01-012020-03-31 0001031029srtk:WorkingCapitalFacilitiesMember2021-03-31 0001031029srtk:WorkingCapitalFacilitiesMember2020-12-31 0001031029us-gaap:LoansPayableMember2021-03-31 0001031029us-gaap:LoansPayableMember2020-12-31 0001031029us-gaap:SecuredDebtMember2021-03-31 0001031029us-gaap:SecuredDebtMember2020-12-31 0001031029srtk:FinanceLeaseObligationsMember2021-03-31 0001031029srtk:FinanceLeaseObligationsMember2020-12-31 0001031029us-gaap:LineOfCreditMember2021-03-31 xbrli:pure 0001031029srt:MinimumMemberus-gaap:LineOfCreditMember2021-01-012021-03-31 0001031029srt:MaximumMemberus-gaap:LineOfCreditMember2021-01-012021-03-31 0001031029srtk:SeniorDebtFacilityMember2021-02-18 0001031029srtk:SeniorDebtFacilityMemberus-gaap:LoansPayableMember2021-02-18 0001031029us-gaap:RevolvingCreditFacilityMembersrtk:SeniorDebtFacilityMember2021-02-18 0001031029srtk:SeniorDebtFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-02-182021-02-18 0001031029srtk:SeniorDebtFacilityMembersrtk:At21And24MonthsFromClosingMember2021-02-182021-02-18 0001031029srtk:SeniorDebtFacilityMembersrtk:At273033And36MonthsFromClosingMember2021-02-182021-02-18 0001031029srtk:SeniorDebtFacilityMembersrtk:At39424548And51MonthsFromClosingMember2021-02-182021-02-18 0001031029srtk:SeniorDebtFacilityMembersrtk:At54MonthsFromClosingMember2021-02-182021-02-18 0001031029srtk:SeniorDebtFacilityMembersrtk:At57MonthsFromClosingMember2021-02-182021-02-18 0001031029us-gaap:LoansPayableMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-03-31 0001031029us-gaap:LoansPayableMembersrt:MinimumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-03-31 0001031029us-gaap:LoansPayableMembersrt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-03-31 0001031029srtk:SeniorDebtFacilityMemberus-gaap:LoansPayableMember2021-02-182021-02-18 0001031029srtk:SeniorTermAgreementMemberus-gaap:LoansPayableMember2021-02-182021-02-18 0001031029srtk:SeniorDebtFacilityMember2020-12-31 0001031029srtk:SeniorDebtFacilityMember2019-12-31 0001031029srtk:SeniorDebtFacilityMember2021-01-012021-03-31 0001031029srtk:SeniorDebtFacilityMember2020-01-012020-12-31 0001031029srtk:SeniorDebtFacilityMember2021-03-31 0001031029srtk:NonrecourseFactoringMember2021-03-31 0001031029us-gaap:SecuredDebtMember2018-12-27 0001031029srtk:EquipmentLoanMemberus-gaap:SecuredDebtMember2020-11-02 0001031029srtk:AmazonTransactionAgreementMember2018-01-23 00010310292018-01-23 0001031029srtk:AegisStockholderMembersrtk:The2019EquityOfferingMember2019-05-172019-05-17 0001031029srtk:AegisStockholderMembersrtk:The2019EquityOfferingMember2019-05-17 0001031029srtk:AmazonTransactionAgreementMember2021-03-31 0001031029srtk:AmazonTransactionAgreementMember2019-05-17 0001031029srtk:CSPVictoryLimitedMember2020-06-292020-06-29 0001031029srtk:CSPVictoryLimitedMember2020-06-29 0001031029srtk:AmazonTransactionAgreementMember2019-12-31 0001031029srtk:AmazonTransactionAgreementMember2020-06-29 0001031029srtk:AmazonTransactionAgreementMember2018-01-232018-01-23 0001031029srtk:AmazonTransactionAgreementMember2019-05-312019-05-31 0001031029srtk:AmazonTransactionAgreementMember2020-02-292020-02-29 0001031029us-gaap:AccountingStandardsUpdate201908Membersrtk:AmazonTransactionAgreementMember2020-01-012020-01-01 0001031029srtk:AmazonTransactionAgreementMember2019-01-012019-12-31 0001031029srtk:AmazonTransactionAgreementMember2020-12-312020-12-31 0001031029srtk:AmazonTransactionAgreementMember2021-01-012021-03-31 0001031029srtk:The2008EquityIncentivePlanMembersrt:MinimumMember2020-01-012020-12-31 0001031029us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-31 0001031029us-gaap:EmployeeStockOptionMember2021-03-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-31 0001031029us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-31 0001031029us-gaap:AociAttributableToNoncontrollingInterestMember2020-12-31 0001031029us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-12-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-31 0001031029us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31 0001031029us-gaap:AociAttributableToNoncontrollingInterestMember2021-01-012021-03-31 0001031029us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-03-31 0001031029us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-31 0001031029us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-31 0001031029us-gaap:AociAttributableToNoncontrollingInterestMember2021-03-31 0001031029us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-03-31 0001031029us-gaap:OperatingSegmentsMembersrt:AmericasMember2021-01-012021-03-31 0001031029us-gaap:OperatingSegmentsMembersrt:AmericasMember2020-01-012020-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:IndiaAndSriLankaMember2021-01-012021-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:IndiaAndSriLankaMember2020-01-012020-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:Malaysia1Member2021-01-012021-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:Malaysia1Member2020-01-012020-03-31 0001031029us-gaap:OperatingSegmentsMemberus-gaap:MiddleEastMember2021-01-012021-03-31 0001031029us-gaap:OperatingSegmentsMemberus-gaap:MiddleEastMember2020-01-012020-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:ArgentinaAndPeruMember2021-01-012021-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:ArgentinaAndPeruMember2020-01-012020-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:RestOfWorldMember2021-01-012021-03-31 0001031029us-gaap:OperatingSegmentsMembersrtk:RestOfWorldMember2020-01-012020-03-31 0001031029us-gaap:OperatingSegmentsMember2021-01-012021-03-31 0001031029us-gaap:OperatingSegmentsMember2020-01-012020-03-31 0001031029us-gaap:MaterialReconcilingItemsMember2021-01-012021-03-31 0001031029us-gaap:MaterialReconcilingItemsMember2020-01-012020-03-31 0001031029us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMembersrtk:CustomerOneMember2021-01-012021-03-31 0001031029us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMembersrtk:CustomerOneMember2020-01-012020-03-31 0001031029srt:AmericasMember2021-03-31 0001031029srt:AmericasMember2020-12-31 0001031029srtk:IndiaAndSriLankaMember2021-03-31 0001031029srtk:IndiaAndSriLankaMember2020-12-31 0001031029srtk:Malaysia1Member2021-03-31 0001031029srtk:Malaysia1Member2020-12-31 0001031029us-gaap:MiddleEastMember2021-03-31 0001031029us-gaap:MiddleEastMember2020-12-31 0001031029srtk:ArgentinaAndPeruMember2021-03-31 0001031029srtk:ArgentinaAndPeruMember2020-12-31 0001031029srtk:RestOfWorldMember2021-03-31 0001031029srtk:RestOfWorldMember2020-12-31 0001031029srt:MinimumMember2021-01-012021-03-31 0001031029srt:MaximumMember2021-01-012021-03-31 0001031029srtk:CSSCorpLPMember2021-03-31 0001031029srtk:CSSCorpLPMember2020-12-31 0001031029srtk:ImmaterialAssociatesMember2021-03-31 0001031029srtk:ImmaterialAssociatesMember2020-12-31 0001031029srtk:CSSCorpMember2021-02-252021-02-25 0001031029srtk:CSSCorpMember2021-02-25 0001031029srtk:CSSCorpLPMember2021-02-252021-02-25 0001031029srtk:CSSCorpLPMember2021-02-25 0001031029srtk:CSPManagementLimitedMember2021-02-252021-02-25 0001031029srtk:CSSCorpLPMember2021-03-31 0001031029srtk:CSSCorpLPMember2020-12-31 0001031029srtk:CSSCorpLPMember2019-12-31 0001031029srtk:CSSCorpLPMember2021-01-012021-03-31 0001031029srtk:CSSCorpLPMember2020-01-012020-12-31 0001031029srtk:CSSCorpLPMembersrtk:CSSCorpLPMember2020-12-31 0001031029srtk:QueenslandPartnershipGroupPtyLtdMember2021-03-31 0001031029srtk:ServicesQueenslandPartnershipMember2021-03-31 0001031029srtk:ImmaterialAssociatesMember2021-01-012021-03-31 0001031029srtk:ImmaterialAssociatesMember2020-01-012020-12-31
 

 

Table of Contents



 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 


 

Form 10-Q

(Mark One) 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2021

or 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                to                

 

Commission file number 1-12793


 

StarTek, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

84-1370538

(State or other jurisdiction of

(I.R.S. employer

incorporation or organization)

Identification No.)

 

 

6200 South Syracuse Way, Suite 485

 

Greenwood Village, Colorado

80111

(Address of principal executive offices)

(Zip code)

 

(303) 262-4500

(Registrant’s telephone number, including area code)

 

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒  No ☐ 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No  ☐ 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer  ☐

Smaller reporting company  

 

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. ☐ 

 

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes   No ☒ 

 

As of  April 30, 2021, there were 40,784,673 shares of Common Stock outstanding.

 



 

 

 

 

STARTEK, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q

 

 

PART I - FINANCIAL INFORMATION

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

Page

 

Consolidated Statements of Income (Loss) and Other Comprehensive Income (Loss) for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

4

 

Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and December 31, 2020 

5

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

6

 

Consolidated Statement of Stockholders' Equity for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

7

 

Note 1 Overview and Basis of Preparation

8

  Note 2 Summary of Accounting Policies 9
  Note 3 Goodwill and Intangible Assets 12
  Note 4 Revenue 13
  Note 5 Net Gain / (Loss) Per Share 15
  Note 6 Impairment and Restructuring / Exit cost 15
  Note 7 Derivative Instruments 16
  Note 8 Fair Value Measurements 16
  Note 9 Debt 17
  Note 10 Share-Based Compensation 18
  Note 11 Accumulated Other Comprehensive Loss 20
  Note 12 Segment Reporting 21
  Note 13 Leases 22
  Note 14 Investment in Equity-Accounted Investees 25
  Note 15 Subsequent Events 26

ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

27

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

31

ITEM 4.

Controls and Procedures

31

 

 

 

PART II - OTHER INFORMATION

 

 

 

ITEM 1.

Legal proceeding

32

ITEM 1A.

Risk Factors

32

ITEM 2. Unregistered sales of equity securities and use of proceeds 32

ITEM 3.

Defaults upon senior securities 32
ITEM 4. Mine safety disclosure 32

ITEM 5. 

Other Information

32

ITEM 6.

Exhibits

33

SIGNATURES

 

34

 

 

 

NOTE ABOUT FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the following:

 

 

certain statements, including possible or assumed future results of operations, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

 

any statements regarding the prospects for our business or any of our services;

 

any statements preceded by, followed by or that include the words “may,” “will,” “should,” “seeks,” “believes,” “expects,” “anticipates,” “intends,” “continue,” “estimate,” “plans,” “future,” “targets,” “predicts,” “budgeted,” “projections,” “outlooks,” “attempts,” “is scheduled,” or similar expressions; and

 

other statements regarding matters that are not historical facts.

 

Our business and results of operations are subject to risks and uncertainties, many of which are beyond our ability to control or predict. Because of these risks and uncertainties, actual results may differ materially from those expressed or implied by forward-looking statements, and investors are cautioned not to place undue reliance on such statements, which speak only as of the date thereof. Important factors that could cause actual results to differ materially from our expectations and may adversely affect our business and results of operations, include, but are not limited to, those items described herein or set forth in the Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission ("SEC") on March 16, 2021 and this Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. Unless otherwise noted in this report, any description of "us," "we," or "our," refers to StarTek, Inc. ("Startek") and its subsidiaries.

 

 

CHANGE IN FILING STATUS

 

In accordance with the SEC's expanded definition of Smaller Reporting Companies effective September 10, 2018, Startek qualifies for Smaller Reporting Company status. As such, it has decided to take advantage of the relief provided from Part 1, Item 3.

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS

 

 

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

 

   

Three Months Ended March 31,

 
   

2021

   

2020

 

Revenue

    163,495       161,177  

Warrant contra revenue

    (425 )     (278 )

Net Revenue

  $ 163,070     $ 160,899  

Cost of services

    (138,383 )     (140,841 )

Gross profit

  $ 24,687     $ 20,058  
                 

Selling, general and administrative expenses

    (14,171 )     (17,255 )

Impairment losses and restructuring/exit cost

    (1,898 )     (24,322 )

Operating income / (loss)

  $ 8,618     $ (21,519 )
                 

Share of loss of equity-accounted investees

    (14 )     (8 )

Interest expense, net

    (13,769 )     (3,506 )

Exchange gain / (loss), net

    212       1,928  

Loss before income taxes

  $ (4,953 )   $ (23,105 )

Income tax expense

    (4,902 )     (2,876 )

Net loss

  $ (9,855 )   $ (25,981 )
                 

Net income / (loss)

               

Net income attributable to non-controlling interests

    2,300       576  

Net loss attributable to Startek shareholders

    (12,155 )     (26,557 )
                 
Net loss per common share - basic and diluted     (0.30 )     (0.69 )
                 

Weighted average common shares outstanding - basic and diluted

    40,592       38,528  

 

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

 

   

Three Months Ended March 31,

 
   

2021

   

2020

 

Net loss

  $ (9,855 )   $ (25,981 )

Net income attributable to non-controlling interests

    2,300       576  

Net loss attributable to Startek shareholders

    (12,155 )     (26,557 )
                 

Other comprehensive (loss) / income, net of taxes:

               

Foreign currency translation adjustments

    (1,092 )     (4,392 )

Change in fair value of derivative instruments

    8       (672 )

Pension amortization

    (384 )     396  

Other comprehensive loss

  $ (1,468 )   $ (4,668 )
                 

Other comprehensive (loss) / income, net of taxes

               

Other comprehensive (loss) / income attributable to non-controlling interests

    (69 )     163  

Other comprehensive loss attributable to Startek shareholders

    (1,399 )     (4,831 )
    $ (1,468 )   $ (4,668 )

Comprehensive (loss) / income

               

Comprehensive income attributable to non-controlling interests

    2,231       739  

Comprehensive loss attributable to Startek shareholders

    (13,554 )     (31,388 )
    $ (11,323 )   $ (30,649 )

 

See Notes to Consolidated Financial Statements.

 

 

 

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEET

(In thousands, except share data)

(Unaudited)

 

  

March 31,

  

December 31,

 
  

2021

  

2020

 

Assets

        

Current assets

        

Cash and cash equivalents

  57,665   44,507 

Restricted cash

  6,981   6,052 

Trade accounts receivable, net

  69,712   83,560 

Unbilled revenue

  57,530   49,779 

Prepaid and other current assets

  12,328   14,542 

Total current assets

 $204,216  $198,440 
         
Non-current assets        

Property, plant and equipment, net

  34,353   34,225 

Operating lease right-of-use assets

  65,396   69,376 

Intangible assets, net

  97,879   100,440 

Goodwill

  183,397   183,397 

Investment in equity-accounted investees

  25,096   111 

Deferred tax assets, net

  4,042   5,294 

Prepaid expenses and other non-current assets

  16,605   13,370 
Total non-current assets $426,768  $406,213 

Total assets

 $630,984  $604,653 
         

Liabilities and Shareholders' Equity

        

Current liabilities

        

Trade accounts payables

  14,457   20,074 

Accrued expenses

  58,026   57,118 

Short term debt

  5,230   15,505 

Current maturity of long term debt

  2,412   2,180 

Current maturity of operating lease obligation

  18,724   19,327 

Other current liabilities

  45,130   39,987 

Total current liabilities

 $143,979  $154,191 
         
Non-current liabilities        

Long term debt

  165,116   118,315 

Operating lease liabilities

  48,697   52,052 

Other non-current liabilities

  18,490   15,498 

Deferred tax liabilities, net

  17,194   17,715 

Total non-current liabilities

 $249,497  $203,580 

Total liabilities

 $393,476  $357,771 
         

Stockholders’ equity:

        

Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 40,781,804 and 40,453,462 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

  408   405 

Additional paid-in capital

  290,646   288,700 

Accumulated deficit

  (97,698)  (85,543)

Accumulated other comprehensive loss

  (8,685)  (7,286)

Equity attributable to Startek shareholders

 $184,671  $196,276 

Non-controlling interests

  52,837   50,606 

Total stockholders’ equity

 $237,508  $246,882 

Total liabilities and stockholders’ equity

 $630,984  $604,653 

 

See Notes to Consolidated Financial Statements.

 

 

 

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

 

   

Three Months Ended March 31,

 
   

2021

   

2020

 

Operating Activities

               

Net loss

    (9,855 )     (25,981 )
                 

Adjustments to reconcile net loss to net cash generated from operating activities:

               

Depreciation and amortization

    6,803       7,093  
Impairment of goodwill     -       22,708  

Profit on sale of property, plant and equipment

    (53 )     -  

Provision for doubtful accounts

    63       154  
Amortisation of debt issuance cost     2,670       378  

Warrant contra revenue

    425       278  

Share-based compensation expense

    280       291  

Deferred income taxes

    558       1,879  
Share of loss of equity-accounted investees     14       8  
                 

Changes in operating assets and liabilities:

               

Trade accounts receivable

    12,848       4,503  

Prepaid expenses and other assets

    (8,844 )     (7,658 )

Trade accounts payable

    (5,447 )     (4,722 )

Income taxes, net

    2,727       (672 )

Accrued expenses and other current liabilities

    4,908       12,287  

Net cash generated from operating activities

  $ 7,097     $ 10,546  
                 

Investing Activities

               

Purchases of property, plant and equipment

    (2,922 )     (2,884 )
Investment in equity-accounted investees     (25,000 )     -  

Net cash used in investing activities

  $ (27,922 )   $ (2,884 )
                 

Financing Activities

               

Proceeds from the issuance of common stock

    1,244       43  

Proceeds from (payments on) long term debt

    44,702       (4,200 )

Proceeds from (payments on) other debt, net

    (10,609 )     4,578  

Net cash generated from financing activities

  $ 35,337     $ 421  
                 

Net increase in cash and cash equivalents

  $ 14,512     $ 8,083  

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

    (425 )     (1,052 )

Cash and cash equivalents and restricted cash at beginning of period

    50,559       32,626  

Cash and cash equivalents and restricted cash at end of period

  $ 64,646     $ 39,657  
                 

Components of cash and cash equivalents and restricted cash

               

Balances with banks

    57,665       27,795  

Restricted cash

    6,981       11,862  

Total cash and cash equivalents and restricted cash

  $ 64,646     $ 39,657  
                 
Supplemental disclosure of Cash Flow Information                
Cash paid for Interest and other finance costs     14,443       1,988  
Cash paid for income taxes     1,652       963  
Non-cash warrant contra revenue     425       278  
Non-cash share-based compensation expenses     280       291  

 

See Notes to Consolidated Financial Statements.

 

 

 

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

 

   

Common Stock

                   

Other Items of OCI

                         
   

Shares

   

Amount

   

Additional paid-in

   

Accumulated

   

Foreign currency

   

Change in fair value of

   

Unrecognised

   

Equity attributable to Startek

   

Non-controlling

   

Total stockholders'

 
                   

capital

   

deficit

   

translation

   

derivative instruments

   

pension cost

   

shareholders

   

interest

   

equity

 

Three months ended

                                                                               

Balance at December 31, 2020

    40,453,462     $ 405     $ 288,700     $ (85,543 )   $ (4,529 )   $ (8 )   $ (2,749 )   $ 196,276     $ 50,606     $ 246,882  

Issuance of common stock

    328,342       3       1,241       -       -       -       -       1,244       -       1,244  

Share-based compensation expenses

    -       -       280       -       -       -       -       280       -       280  

Warrant expenses

    -       -       425       -       -       -       -       425       -       425  

Net income (loss)

    -       -       -       (12,155 )     -       -       -       (12,155 )     2,300       (9,855 )

Other comprehensive loss for the period

    -       -       -       -       (1,092 )     8       (315 )     (1,399 )     (69 )     (1,468 )

Balance at March 31, 2021

    40,781,804     $ 408     $ 290,646     $ (97,698 )   $ (5,621 )   $ 0     $ (3,064 )   $ 184,671     $ 52,837     $ 237,508  
                                                                                 

Balance at December 31, 2019

    38,525,636     $ 385     $ 276,827     $ (46,145 )   $ (4,568 )   $ 475     $ (1,929 )   $ 225,045     $ 46,739     $ 271,784  
Transition period adjustment pursuant to ASU 2019-08     -       -       413       (413 )     -       -       -       -       -       -  

Issuance of common stock

    16,088       0       43       -       -       -       -       43       -       43  

Share-based compensation expenses

    -       -       291       -       -       -       -       291       -       291  

Warrant expenses

    -       -       278       -       -       -       -       278       -       278  

Net income (loss)

    -       -       -       (26,557 )     -       -       -       (26,557 )     576       (25,981 )

Other comprehensive loss for the period

    -       -       -       -       (4,392 )     (672 )     233       (4,831 )     163       (4,668 )

Balance at March 31, 2020

    38,541,724     $ 385     $ 277,852     $ (73,115 )   $ (8,960 )   $ (197 )   $ (1,696 )   $ 194,269     $ 47,478     $ 241,747  

 

 

STARTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(In thousands, except share and per share data)

(Unaudited)

 

 

1. OVERVIEW AND BASIS OF PREPARATION

 

Unless otherwise noted in this report, any description of "us," "we," or "our," refers to StarTek, Inc. and its subsidiaries (the "Company"). Financial information in this report is presented in U.S. dollars.

 

Business

 

Startek is a leading global provider of technology-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 enablement across all touch points and channels. Startek has more than 42,000 CX experts globally spread across 46 delivery campuses in 13 countries. The Company services over 220 clients across various industries such as Banking and Financial Services, Insurance, Technology, Telecom, Healthcare, Travel and Hospitality, Consumer Goods, Retail, and Energy and Utilities.

 

The Company offers a repository of digital and omnichannel solutions based on decades of experience in driving growth by putting the customer at the center of our business. Because no one solution fits all, we have crafted solution delivery to suit a various industries. Startek has delivery campuses across India, United States, Malaysia, Philippines, Australia, South Africa, Canada, Honduras, Jamaica, Kingdom of Saudi Arabia, Argentina, Peru and Sri Lanka.

 

Basis of preparation

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US-GAAP") for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by US-GAAP for complete financial statements.

 

These consolidated financial statements reflect all adjustments (consisting only of normal recurring entries, except as noted) which, in the opinion of management, are necessary for fair presentation. The results of operations for interim periods are not necessarily indicative of full year results.

 

The consolidated financial statements reflect the financial results of all subsidiaries that are more than 50% owned and over which the Company exerts control. When the Company does not have majority ownership in an entity but exerts significant influence over that entity, the Company accounts for the entity under the equity method of accounting. All intercompany balances are eliminated on consolidation. Where our ownership of a subsidiary was less than 100%, the non-controlling interest is reported in our consolidated balance sheet. The non-controlling interest in our consolidated net income is reported as "Net income (loss) attributable to non-controlling interests" in our consolidated statement of income (loss).

 

As of December 31,2020, the consolidated balance sheet included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by US-GAAP. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended  December 31, 2020.

 

The figures for the corresponding previous year have been regrouped/reclassified wherever necessary, to make them comparable.

 

8

 
 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, intangibles, impairment of goodwill, valuation allowances for deferred tax assets, leases and provision for doubtful debts, and restructuring costs. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable, and management has made assumptions about the possible effects of the novel coronavirus (“COVID-19”) pandemic on critical and significant accounting estimates. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements.

 

Revenue

 

The Company utilizes a five-step process given in ASC 606, for revenue recognition that focuses on the transfer of control, rather than the transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs. Refer Note 4 on "Revenue from Contracts with Customers" for further information.

 

Leases

 

We determine if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, current maturity of operating lease liabilities, and operating lease liabilities in our consolidated balance sheet. Finance leases are included in property plant and equipment, long-term debt, accrued expenses and other current liabilities in our consolidated balance sheet.

  

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the balance lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the date of initial application on determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain to exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

 

The Company elected the practical expedient permitted under the transition guidance under Topic 842, which among other matters, allowed the Company (i) not to apply the recognition requirements to short-term leases (leases with a lease term of 12 months or less), (ii) not to reassess whether any expired or existing contracts are or contain leases, (iii) not to reassess the lease classification for any expired or existing leases, and (iv) not to reassess initial direct costs for any existing leases

 

We have lease agreements with lease and non-lease components, which are generally accounted for separately.

 

Rent discounts and deferment of rent which were received due to COVID-19 have been accounted for without lease modification using the practical expedient provided by the FASB. Refer to Note 13 "Leases" for information and related disclosures.

 

9

 

Business Combinations

 

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations, by recognizing identifiable tangible and intangible assets acquired, liabilities assumed, and non-controlling interests in the acquired business at their fair values. The excess of the cost of the acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed is recorded as goodwill. Acquisition related costs are expensed as incurred.

 

Goodwill and Intangible Assets

 

Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis on December 31, based on a number of factors, including operating results, business plans and future cash flows. The Company performs an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the assessment of events or circumstances, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, based on the quantitative impairment analysis, the carrying value of a reporting unit exceeds the fair value of reporting units, an impairment loss is recognized in an amount equal to the excess. In addition, the Company performs a quantitative assessment of goodwill impairment between annual tests if an event occurs or circumstances change that would be more likely than not reduce the fair value of a reporting unit below its carrying amount. Refer to Note 3 for information and related disclosures.


Intangible assets acquired in a business combination were recorded at fair value at acquisition date using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over the estimated useful lives and are reviewed for impairment at least annually, or more frequently if indicators of impairment arise. Refer Note 3 on "Goodwill and Intangible assets" for further information.

 

Foreign Currency Matters

 

The Company has operations in Argentina and its functional currency has historically been the Argentine Peso. The Company monitors inflation rates in countries where it operates as required by US GAAP. Under ASC 830-10-45-12, an economy must be classified as highly inflationary when the cumulative three-year rate exceeds 100%.  Considering the inflation data of Argentina, the Company has considered Argentina to be highly inflationary beginning on July 1, 2018. In accordance with ASC 830, the functional currency of the Argentina business has been changed to USD, which requires re-measurement of the local books to USD. Exchange gains and losses are recorded through net income instead of through other comprehensive income as had been done historically. Translation adjustments from periods prior to the change in functional currency were not removed from equity.

 

Investment in equity-accounted investees

 

Investment in equity-accounted investee is an entity over which the Company has significant influence and which is neither a subsidiary nor a joint arrangement. Significant influence is the power to participate in the investee's financial and operating policy decisions of the investee but is not control or joint control over those policies.

 

Investment in equity-accounted investee is accounted using equity method of accounting. Under the equity method, the investment in equity-accounted investee is initially recognized at cost and adjusted thereafter for the post acquisition changes in the Company’s share of net assets of the equity-accounted investees. Goodwill relating to investment in equity-accounted investees, if any, is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment.

 

The consolidated statement of income reflects the Company’s share of the results of operations of the equity-accounted investees. When there has been a change recognized directly in the equity of the equity-accounted investees, the Company recognizes its share of any changes and discloses this, when applicable, in the statement of stockholders' equity. Unrealized gains and losses resulting from transactions between the Company and the equity- accounted investment are eliminated to the extent of the interest in the equity-accounted investees. The Company’s share of profit/loss of equity-accounted investees is shown on the face of the consolidated statement of income/(loss).

 

The financial statements of the equity-accounted investee are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. After application of the equity method, the ompany determines at each reporting date whether there is any objective evidence that the investment in equity-accounted investees is impaired, if there has been an other than temporary decline in carrying value. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in the ‘share of profit/(loss) of equity-accounted investees in the consolidated statement of income (loss).

 

Stock-Based Compensation

 

We recognize expense related to all share-based payments to employees, including grants of employee stock options, based on the grant-date fair values amortized straight-line over the period during which the employees are required to provide services in exchange for the equity instruments. We include an estimate of forfeitures when calculating compensation expense. We use the Black-Scholes method for valuing stock-based awards. See Note 10, “Share-Based Compensation” for further information.

 

10

 

Common Stock Warrant Accounting

 

We account for common stock warrants as equity instruments, based on the specific terms of our warrant agreement. For more information refer to Note 10, "Share-Based Compensation."

 

Recent Accounting Pronouncements

 

In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13"), Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2022, and interim periods therein for smaller reporting companies. We do not expect the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements.

 

In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides temporary optional expedients and exceptions to the guidance in US GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is still in the process of assessing the impact of this ASU.

 

11

 
 

3. GOODWILL AND INTANGIBLE ASSETS

 

Goodwill

 

The carrying value of goodwill is allocated to reporting units as follows:

 

Reporting Units

 

March 31, 2021

  

December 31, 2020

 

Americas

  64,315   64,315 

India

  12,554   12,554 

Malaysia

  47,543   47,543 

Saudi Arabia

  54,840   54,840 

South Africa

  -   - 

Argentina

  -   - 

Australia

  4,145   4,145 

Total

 $183,397  $183,397 

 

We perform a goodwill impairment analysis at least annually (in the fourth quarter of each year) unless indicators of impairment exist in interim periods. The Goodwill was allocated to new reporting units using a relative fair value allocation approach. We performed a quantitative assessment to determine if the fair value of each of our reporting units with goodwill exceeded its carrying value.

 

The assumptions used in the analysis are based on the Company’s internal budget. The Company projected revenue, operating margins and cash flows for a period of five years and applied a perpetual long-term growth rate using discounted cash flows (DCF) method. These assumptions are reviewed annually as part of management’s budgeting and strategic planning cycles. These estimates may differ from actual results. In arriving at its forecasts, the Company considered past experience, economic trends and inflation, and industry and market trends, including the outbreak of COVID-19. The projections also took into account factors such as the expected impact from new client wins and expansion from existing clients businesses and efficiency initiatives, and the maturity of the markets in which each business operates.

 

As of March 31, 2021, based on the qualitative assessment, we concluded there is no impairment of goodwill.

 

The following table presents the changes in goodwill during the three months ended March 31, 2021 and year ended December 31, 2020:

 

  

March 31, 2021

  

December 31, 2020

 

Opening balance

  183,397   219,341 

Impairment

  -   (35,944)

Ending balance

 $183,397  $183,397 

 

Intangible Assets

 

The following table presents our intangible assets:

 

  As of March 31, 2021 
  

Gross Intangibles

  

Accumulated Amortization

  

Net Intangibles

  

Weighted Average Amortization Period (years)

 

Customer relationships

  66,220   17,675   48,545   6.5 

Brand

  49,500   12,312   37,188   7.1 

Trademarks

  13,210   2,375   10,835   7.5 

Other intangibles

  2,130   819   1,311   4.9 
  $131,060  $33,181  $97,879     
                 
  As of December 31, 2020 
  Gross Intangibles  Accumulated Amortization  Net Intangibles  Weighted Average Amortization Period (years) 
Customer relationships  66,220   16,289   49,931   6.5 
Brand  49,500   11,408   38,092   7.1 
Trademarks  13,210   2,155   11,055   7.5 
Other intangibles  2,130   768   1,362   4.9 
  $131,060  $30,621  $100,440     

 

As of March 31, 2021, based on the qualitative assessment, we concluded there is no impairment of the Company's intangible assets.

 

Expected future amortization of intangible as of March 31, 2021 is as follows:

 

Years Ending December 31,

 

Amount

 
Remainder of 2021  7,762 

2022

  10,350 

2023

  10,306 

2024

  10,252 

2025

  10,252 

Thereafter

  48,957 

 

12

 
 

4.  REVENUE

 

The Company follows a five-step process in accordance with ASC 606, for revenue recognition that focuses on transfer of control, rather than transfer of risks and rewards.

 

Contracts with Customers

 

All of the Company's revenues are derived from written contracts with our customers. Generally speaking, our contracts document our customers' intent to utilize our services and the relevant terms and conditions under which our services will be provided. Our contracts generally do not contain minimum purchase requirements nor do they include termination penalties. Our customers may generally cancel our contract, without cause, upon written notice (generally ninety days). While our contracts do have stated terms, because of the facts stated above, they are accounted for on a month-to-month basis.

 

Our contracts give us the right to bill for services rendered during the period, which for most of our customers is a calendar month, with a few customers specifying a fiscal month. Our payment terms vary by client and generally range from due upon receipt to 60-90 days.

 

Performance Obligations

 

We have identified one main performance obligation for which we invoice our customers, which is to stand ready to provide care services for our customers’ clients. A stand-ready obligation is a promise that a customer will have access to services as and when the customer decides to use them. Ours is considered a stand-ready obligation because the delivery of the underlying service (that is, receiving customer contact and performing the associated care services) is outside of our control or the control of our customer.

 

Our stand-ready obligation involves outsourcing of the entire customer care life cycle, including:

 

 

The identification, operation, management and maintenance of facilities, IT equipment, and IT and telecommunications infrastructure

 

Management of the entire human resources function, including recruiting, hiring, training, supervising, evaluating, coaching, retaining, compensating, providing employee benefits programs, and disciplinary activities

 

These activities are all considered an integral part of the production activities required in the service of standing ready to accept calls as and when they are directed to us by our clients.

 

13

 

Revenue Recognition Methods

 

Because our customers receive and consume the benefit of our services as they are performed and we have the contractual right to invoice for services performed to date, we have concluded that our performance obligation is satisfied over time. Accordingly, we recognize revenue for our services in the month they are performed.

 

We are generally entitled to invoice for our services on a monthly basis. We invoice according to the hourly and/or per transaction rates stated in each contract for the various activities we perform. Some contracts include opportunities to earn bonuses or include parameters under which we will incur penalties related to performance in any given month. Bonus or penalty amounts are based on the current month’s performance. Formulas are included in the contracts for calculation of any bonus or penalty. There is no other performance in future periods that will impact the bonus or penalty calculation in the current period. We estimate the amount of the bonus or penalty using the “most likely amount” method and we apply this method consistently. The bonus or penalty calculated is generally approved by the client prior to billing (and revenue being recognized).

 

Practical expedients and exemptions

 

Because the Company’s contracts are essentially month-to-month, we have elected the following practical expedients:

 

 

ASC 606-10-50-14 exempts companies from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less

 

ASC 340-40-25-4 allows companies to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

 

ASC 606-10-32-2A allows an entity to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer (for example, sales, use, value added, and some excise taxes)

 

ASC 606-10-55-18 allows an entity that has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided), the entity may recognize revenue in the amount to which the entity has a right to invoice.

 

Disaggregated Revenue

 

Revenues by our clients' industry verticals for the three months ended March 31, 2021 and 2020 respectively:

 

  

Three Months Ended March 31,

 

Vertical:

 

2021

  

2020

 

Telecom

  51,674   55,697 

E-commerce & Consumer

  26,102   25,958 

Media & Cable

  25,794   23,194 

Healthcare & Education

  17,687   13,448 

Financial & Business Services

  15,450   13,439 

Travel & Hospitality

  10,497   15,803 

Technology, IT & Related Services

  5,081   5,050 

All other segments

  11,210   8,588 

Gross Revenue

  163,495   161,177 

Less: Warrant Contra Revenue

  (425)  (278)

Net Revenue

 $163,070  $160,899 

 

14

 
 

5. NET GAIN / (LOSS) PER SHARE

 

Basic earnings per common share is computed based on our weighted average number of common shares outstanding. Diluted earnings per share is computed based on our weighted average number of common shares outstanding plus the effect of dilutive stock options, non-vested restricted stock, and deferred stock units, using the treasury stock method. 

 

When a net loss is reported, potentially issuable common shares are excluded from the computation of diluted earnings per share as their effect would be anti-dilutive.

 

For three months ended March 31, 2021 and 2020, following number of shares were used in the computation of basic/diluted earnings per share calculation (in thousands): 

 

  

Three months ended March 31,

 
  

2021

  

2020

 

Shares used in basic earnings per share calculation:

  40,592   38,528 

Effect of dilutive securities:

        

Stock options

  -   - 

Restricted stock/Deferred stock units

  -   - 

Total effects of dilutive securities

  -   - 

Shares used in dilutive earnings per share calculation:

  40,592   38,528 

 

The Company always maintained Startek's 2008 Equity Incentive Plan (see Note 10, "Share-based compensation and employee benefit plans" for more information).

 

  

Three Months Ended March 31,

 
  2021  2020 

Anti-dilutive securities:

        
Stock options  2,099   2,316 

 

 

6. IMPAIRMENT LOSSES & RESTRUCTURING/EXIT COST

 

Impairment Loss

 

As of March 31, 2021, based on the qualitative assessment, we concluded there is no impairment of goodwill.

 

Restructuring / Exit Cost

 

The table below summarizes the balance of accrued restructuring cost, voluntary/involuntary termination costs and other acquisition related costs, which are included in other accrued liabilities in our consolidated balance sheet. The changes during the three months ended March 31, 2021 and year ended December 31,2020.

 

 

  

Employee related

  

Facilities related

  

Total

 

Balance as of December 31, 2020

 $-  $25  $25 

Accruals/(reversals)

  1,870   28   1,898 

Payments

  (670)  (53)  (723)

Balance as of March 31, 2021

 $1,200  $-  $1,200 
             
  Employee related  Facilities related  Total 
Balance at December 31, 2019 $1,326  $514  $1,840 
Accruals/(reversals)  1,499   356   1,855 
Payments  (2,825)  (845)  (3,670)
Balance at December 31, 2020 $-  $25  $25 

 

Employee related

 

In 2021, the Company has closed one of its facilities in Canada, where we have terminated service of number of employees. We have also offered a voluntary retirement plan to certain employees in one other geography. We have recognized a provision for employee-related costs regarding the above voluntary / involuntary termination. We expect to pay the remaining termination costs of $1,200 by the end of the second quarter of 2021.

 

15

 
 

7.  DERIVATIVE INSTRUMENTS

 

Cash flow hedges

 

Our locations in Canada and the Philippines primarily serve US-based clients. The revenues from these clients are billed and collected in US Dollars, but the expenses related to these revenues are paid in Canadian Dollars and Philippine Pesos. We enter into derivative contracts, in the form of forward contracts and range forward contracts (a transaction where both a call option is purchased and a put option is sold) to mitigate this foreign currency exchange risk. The contracts cover periods commensurate with expected exposure, generally three to twelve months.  We have elected to designate our derivatives as cash flow hedges to associate the hedges' results with forecasted expenses.

 

The Company had terminated all cash flow hedges contracts early in April, 2020 due to a change in counterparty relationship, hence balance as on March 31, 2021 is nil.

 

 

  

Gain (Loss) Recognized in AOCI, net of tax

  

Gain (Loss) Recognized in AOCI, net of tax

  

Gain/ (Loss) Reclassified from AOCI into Income

  

Gain/ (Loss) Reclassified from AOCI into Income

 
  

Three Months Ended March 31, 2021

  

Three Months Ended March 31, 2020

  

Three Months Ended March 31, 2021

  

Three Months Ended March 31, 2020

 
                 

Cash flow hedges:

                

Foreign exchange contracts

  -   (860)  8   188 

 

Non-designated hedges

 

We have also entered into foreign currency range forward contracts and interest swap contract as required by our lenders. These hedges are not designated hedges under ASC 815, Derivatives and Hedging. These contracts generally do not exceed 3 years in duration.

 

Unrealized gains and losses and changes in fair value of these derivatives are recognized as incurred in Exchange gains (losses), net in the consolidated statement of income (loss). The following table presents these amounts for the three months ended March 31, 2021 and 2020:

 

Derivatives not designated under ASC 815

 

For the Three Months Ended March 31, 2021

  

For the Three Months Ended March 31, 2020

 

Foreign currency forward contracts

 $-  $1,771 

Interest rate swap

 $-  $(340)

 

The Company had terminated all derivative (non-designated hedge) contracts in November, 2020 and realized and accounted for gain and loss on settlement of contracts in consolidated statement of income (loss).

 

16

 
 

8.  FAIR VALUE MEASUREMENTS 

 

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The levels of the fair value hierarchy are described below:

 

Level 1 - Quoted prices for identical instruments traded in active markets.

 

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

 

Level 3 - Unobservable inputs that cannot be supported by market activity and significant to the fair value of the asset, liability, or equity such as the use of certain pricing models, discounted cash flow models, and similar techniques use significant assumptions. These unobservable inputs reflect our own estimates of assumptions that market participants would use in pricing the asset or liability:

 

Derivative Instruments

 

The values of our derivative instruments are derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such the derivatives are classified as Level 2 in the fair value hierarchy.

 

As on March 31,2021, the Company has settled all derivative contracts, hence there are no derivative assets and liabilities.

 

17

 
 

9. DEBT

 

The below table presents details of the Company's debt:

 

  

March 31, 2021

  

December 31, 2020

 

Short term debt

        

Working capital facilities

  5,230   15,506 
Current portion of long term debt        

Current maturity of long term loan

  -   - 
Current maturity of equipment loan  1,889   1,664 

Current maturity of finance lease obligations

  523   516 

Total

 $7,642  $17,686 
         

Long term debt

        

Term loan, net of debt issuance costs

  162,302   114,930 

Equipment loan

  2,521   2,955 

Finance lease obligations

  293   430 

Total

 $165,116  $118,315 

 

Working capital facilities

 

The Company has a number of working capital facilities in various countries in which it operates. These facilities provide for a combined borrowing capacity of approximately $30 million for a number of working capital products. These facilities bear interest at benchmark rate plus margins between 3.0% and 4.5% and are due on demand. These facilities are collateralized by various Company assets and have a total outstanding balance of $5.2 million as of March 31, 2021.

 

Term loan

 

On February 18, 2021, the Company completed a debt refinancing with a newly secured $185 million senior debt facility, comprising a $165 million term loan and a $20 million revolving credit facility. Under the new senior debt, borrowings will bear a tiered interest rate based on the Company’s consolidated net leverage ratio and is initially set at LIBOR plus 450 basis points.

 

The term loan facility amortizes 2.5% on the date that is 21, and 24 months from closing, 3.75% on the date that is 27, 30, 33 and 36 months from closing, 5.0% on the date that is 39, 42, 45, 48 and 51 months from closing, 10% on the date that is 54 months from closing and 15% on the date that is 57 months from closing and balance will be paid on closure of term loan.

 

On February 22, 2021, the Company used proceeds from the above facilities agreement to prepay and terminate the existing credit facility made available to it under that certain Amended and Restated Senior Term and Revolving Facilities Agreement, dated October 27, 2017.

 

Principal payments due on the term loan are as follows:

 

Years

 

Amount

 

Remainder of 2021

  - 

2022

  4,125 

2023

  22,688 
2024  30,938 
2025  57,750 
2026  49,500 
Total $165,000 

 

The Term loan has a floating interest rate of USD LIBOR plus 4.5% annually for the first year and thereafter the margin will range between 3.75% and 4.5% subject to certain financial ratios.

 

The Company incurred a debt issuance costs of $11.3 million in connection with the new term loan. As per ASC 470, accounting guidance on term loan extinguishment, the Company has expensed off the debt issuance cost of $8.5 million paid to the lenders towards the new term loan and $2.5 million remaining unamortised debt issuance cost of the old term loan in interest expenses, net in the consolidated statements of income (loss).

 

In connection with the new term loan, the unamortized debt issuance costs as of March 31, 2021 amount to $2.7 million paid to third parties are net against long term debt on the consolidated balance sheet.

 

Following table presents the changes in debt issuance cost during the three months ended March 31, 2021 and year ended December 31, 2020:

 

  

March 31, 2021

  

December 31, 2020

 

Opening balance

 $2,670  $4,125 

Add: Debt issuance cost (refinancing of term loan)

  11,269   - 

Less: Expensed out (ASC 470 - extinguishment or modification)

  (10,937)  - 

Less: Amortisation of debt issuance cost

  (304)  (1,455)

Closing balance

  $2,698   $2,670 

 

18

 

Non-recourse factoring

 

We have entered into factoring agreements with financial institutions to sell certain of our accounts receivable under non-recourse agreements. Under the arrangement, the Company sells the trade receivables on a non-recourse basis and accounts for the transactions as sales of receivables. The applicable receivables are removed from the Company's consolidated balance sheet when the Company receives the cash proceeds. We do not service any factored accounts after the factoring has occurred. We utilize factoring arrangements as part of our financing for working capital. The balance of funds received from factored receivables under these agreements was $26.4 million as of  March 31, 2021.

 

BMO Equipment Loan

 

On December 27, 2018, the Company executed an agreement to secure a loan against US and Canadian assets for $2.06 million at the interest of 7.57% per annum, to be repaid over 2.5 years. The loan was funded in January 2019. The amount outstanding as at March 31, 2021 is $0.4 million.

 

Equipment Loan

 

On November 02, 2020, the Company executed Master Equipment Finance Agreement to finance purchase of equipment for $4 million at the interest of 5.27% per annum with a maturity date 34 months after the date of first utilization of equipment loan. Amortization of the equipment loan starts from a date falling in April 2021 i.e. 4 months from the first utilization of the loan.

 

Finance lease obligations

 

From time to time and when management believes it to be advantageous, we may enter into other arrangements to finance the purchase or construction of capital assets.

 

19

 
 

10. SHARE-BASED COMPENSATION

 

Amazon Warrant

 

On January 23, 2018, Startek entered into the Amazon Transaction Agreement, pursuant to which we agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly owned subsidiary of Amazon (“NV Investment”), a warrant (the “Warrant”) to acquire up to 4,000,000 shares (the “Warrant Shares”) of our common stock, par value $0.01 per share (“Common Stock”), subject to certain vesting events. On May 17, 2019, the Company issued and sold 692,520 shares of Common Stock to certain investors at a price per share of $7.48.   The Warrant contains certain anti-dilution provisions and as a result of such offering, the total number of shares issuable to Amazon  was adjusted from 4,000,000 to 4,002,964 and the exercise price of the Warrant was adjusted from $9.96 per share to $9.95 per share. On June 29, 2020, the Company issued and sold 1,540,041 shares of Common Stock to CSP Victory Limited at a price per share of $4.87 per share.  As a result of such transaction, the  total number of shares issuable to Amazon has been adjusted from 4,002,964 to 4,006,051 and the exercise price of the Warrant was adjusted from $9.95 per share to $9.94 per share. We entered into the Amazon Transaction Agreement in connection with commercial arrangements between us and any of our affiliates and Amazon and/or any of its affiliates pursuant to which we and any of our affiliates provide and will continue to provide commercial services to Amazon and/or any of its affiliates. The vesting of the Warrant shares, described below, is linked to payments made by Amazon or its affiliates (directly or indirectly through third parties) pursuant to the commercial arrangements.

 

The first tranche of 425,532 Warrant Shares vested upon the execution of the Amazon Transaction Agreement. The remainder of the Warrant Shares will vest in various tranches based on Amazon’s payment of up to $600 million to us or any of our affiliates in connection with the receipt by Amazon or any of its affiliates of commercial services from us or any of our affiliates. The Warrant Shares are exercisable through January 23, 2026.

 

The second tranche of 212,766 Warrant Shares vested on May 31, 2019. The amount of contra revenue attributed to these Warrant Shares is $730.

 

The third tranche of 212,953 Warrant Shares vested on  Feb 29, 2020. The amount of contra revenue attributed to these Warrant Shares is $278 after adjusting the impact of $413 towards adoption of ASU 2019-08 on January 01, 2020 and $565 towards accrual till December 31, 2019, respectively using initial grant-date fair value.

 

The fourth tranche of 213,162 Warrant Shares vested on Dec 31, 2020. The amount of contra revenue attributed to these Warrant Shares is $1,257 using initial grant-date fair value.

 

As per ASC 606, the Company has accrued $ 425 till March 31, 2021 using initial grant-date fair value.

 

The contra-revenue and equity are estimated and recorded, using the Monte Carlo pricing model, when performance completion is probable, with adjustments in each reporting period until performance is complete in conformance with ASC 606 and ASC 718 requirements. 

 

The Warrant provides for net share settlement that will reduce the number of shares issued upon exercise to reflect net settlement of the exercise price if elected by the holders. The Warrant provides for certain adjustments that may be made to the exercise price and the number of shares of common stock issuable upon exercise due to customary anti-dilution provisions based on future events. Vested Warrant Shares are classified as equity instruments.

 

Share-based compensation

 

Our share-based compensation arrangements include grants of stock options, restricted stock units and deferred stock units under the StarTek, Inc. 2008 Equity Incentive Plan and our Employee Stock Purchase Plan. The compensation expense that has been charged against income for the three months ended March 31, 2021 was $280 and is included in selling, general and administrative expense. As of March 31, 2021, there was $1,451 of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.17 years.

 

20

 
 

11.  ACCUMULATED OTHER COMPREHENSIVE LOSS

 

Accumulated other comprehensive loss consists of the following items:

 

  Foreign Currency Translation Adjustment  Derivatives Accounted for as Cash Flow Hedges  Defined Benefit Plan  Equity attributable to Startek shareholders  Non-controlling interests  

Total

 

Balance at December 31, 2020

 $(4,529) $