UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Form 10-K/A
(Mark One)
| þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the fiscal year ended December 31, 2003 |
or
| o | 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.
| Delaware (State or other jurisdiction of incorporation or organization) |
84-1370538 (I.R.S. employer Identification No.) |
|
| 100 Garfield Street Denver, Colorado (Address of principal executive offices) |
80206 (Zip code) |
(303) 399-2400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class |
Name of Each Exchange on Which Registered |
|
Common Stock, $.01 par value
|
New York Stock Exchange, Inc. |
Securities registered pursuant to Section 12(g) of the Act:
None
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 þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes þ No o
As of March 5, 2004, 14,359,051 shares of common stock were outstanding. The aggregate market value of common stock held by non-affiliates of the registrant on June 30, 2003 was approximately $118 million, based upon the closing price of the registrant’s common stock as quoted on the New York Stock Exchange composite tape on such date. Shares of common stock held by each executive officer and director and by each person who owned 5% or more of the outstanding common stock as of such date have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
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Explanatory Note
The purpose of this amendment is to make corrections to the Selected Financial Data and Summary Compensation Table. There was a typographical error in the Selected Financial Data in the original filing of the registrant’s Annual Report on Form 10-K. Selling, general and administrative expenses for fiscal 2000 should have read $20,950, and instead read $29,950.
In addition, bonuses in the aggregate amount of $145,000 paid to the registrant’s chief executive officer, chief financial officer and chief operating officer for fiscal 2003, which were paid in 2004 following approval by the compensation and option committee of the registrant’s board of directors, were inadvertently omitted from the original filing of the registrant’s Annual Report on Form 10-K.
PART II
Item 6. Selected Financial Data
The following selected financial data should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-K. Additionally, the following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Form 10-K.
| Year Ended December 31, |
||||||||||||||||||||
| 1999 |
2000 |
2001 |
2002 |
2003 |
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| (Dollars in thousands, except per share data) | ||||||||||||||||||||
Statement of Operations
Data: |
||||||||||||||||||||
Revenue |
$ | 205,227 | $ | 200,750 | $ | 182,576 | $ | 207,864 | $ | 231,189 | ||||||||||
Cost of services |
166,880 | 153,629 | 137,622 | 157,005 | 171,401 | |||||||||||||||
Gross profit |
38,347 | 47,121 | 44,954 | 50,859 | 59,788 | |||||||||||||||
Selling, general and administrative expenses |
20,338 | 20,950 | 25,938 | 22,562 | 28,489 | |||||||||||||||
Operating profit |
18,009 | 26,171 | 19,016 | 28,297 | 31,299 | |||||||||||||||
Net interest income and other |
2,814 | 4,655 | 4,318 | 1,986 | 4,048 | |||||||||||||||
Loss on impaired investments |
— | — | (15,452 | ) | (6,210 | ) | — | |||||||||||||
Income before income taxes |
20,823 | 30,826 | 7,882 | 24,073 | 35,347 | |||||||||||||||
Income tax expense |
7,800 | 11,406 | 3,011 | 8,907 | 13,149 | |||||||||||||||
Net income |
$ | 13,023 | $ | 19,420 | $ | 4,871 | $ | 15,166 | $ | 22,198 | ||||||||||
Earnings per share: |
||||||||||||||||||||
Basic |
$ | 0.94 | $ | 1.39 | $ | 0.35 | $ | 1.07 | $ | 1.56 | ||||||||||
Diluted |
$ | 0.92 | $ | 1.36 | $ | 0.34 | $ | 1.05 | $ | 1.52 | ||||||||||
Weighted average shares outstanding |
||||||||||||||||||||
Basic |
13,874,556 | 14,016,851 | 14,053,484 | 14,140,765 | 14,243,273 | |||||||||||||||
Diluted |
14,139,149 | 14,279,409 | 14,168,044 | 14,385,389 | 14,623,066 | |||||||||||||||
Selected Operating
Data: |
||||||||||||||||||||
Capital expenditures, net of proceeds |
$ | 12,591 | $ | 8,625 | $ | 19,008 | $ | 5,839 | $ | 23,736 | ||||||||||
Depreciation and amortization |
$ | 4,715 | $ | 5,482 | $ | 6,898 | $ | 9,220 | $ | 10,045 | ||||||||||
Balance Sheet Data
(December 31): |
||||||||||||||||||||
Working capital |
$ | 40,214 | $ | 56,146 | $ | 59,129 | $ | 80,379 | $ | 77,226 | ||||||||||
Total assets |
101,435 | 122,283 | 129,153 | 140,421 | 153,607 | |||||||||||||||
Total debt |
7,424 | 11,497 | 11,806 | 6,482 | 104 | |||||||||||||||
Total stockholders’ equity |
$ | 71,046 | $ | 91,964 | $ | 95,609 | $ | 114,594 | $ | 133,000 | ||||||||||
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PART III
Item 11. Executive Compensation
The following table sets forth certain information concerning 2001, 2002, and 2003 compensation of our Chief Executive Officer and executive officers who, in addition to the Chief Executive Officer, received the highest compensation during 2001, 2002, and 2003.
Summary Compensation Table
| Long-Term | ||||||||||||||||||||
| Compensation | ||||||||||||||||||||
| Awards |
||||||||||||||||||||
| Annual Compensation(a) |
Securities | |||||||||||||||||||
| Underlying | All Other | |||||||||||||||||||
| Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Option (#) |
Compensation ($) |
|||||||||||||||
William E. Meade, Jr. |
2003 | 411,539 | 60,000 | — | 2,396 | (f) | ||||||||||||||
President, CEO and Director |
2002 | 400,000 | — | — | 73,702 | (b) | ||||||||||||||
| 2001 | 238,462 | — | 200,000 | — | ||||||||||||||||
A. Emmet Stephenson, Jr. |
2003 | — | — | — | 245,000 | (c) | ||||||||||||||
Chairman of the Board |
2002 | — | — | — | 245,000 | (c) | ||||||||||||||
| 2001 | — | — | — | 245,000 | (c) | |||||||||||||||
Eugene L. McKenzie, Jr.(d) |
2003 | 139,287 | 25,000 | 35,000 | — | |||||||||||||||
Executive VP, CFO, Secretary and Treasurer |
||||||||||||||||||||
Michael W. Morgan |
2003 | 270,800 | — | — | — | |||||||||||||||
Vice Chairman of the Board |
2002 | 270,800 | — | — | — | |||||||||||||||
| 2001 | 324,965 | — | 100,000 | — | ||||||||||||||||
Lawrence Zingale |
2003 | 317,500 | 60,000 | — | 21,710 | (e) | ||||||||||||||
Executive VP and COO |
2002 | 166,923 | 25,000 | 100,000 | 2,232 | (b) | ||||||||||||||
| 2001 | — | — | — | — | ||||||||||||||||
David I. Rosenthal |
2003 | 179,495 | — | — | — | |||||||||||||||
Former Executive VP, CFO, |
2002 | 179,615 | — | — | — | |||||||||||||||
Secretary and Treasurer |
2001 | 57,212 | — | 45,000 | — | |||||||||||||||
| (a) | We did not provide perquisites or other personal benefits, securities, or property to the named executive officers which exceeded $50,000 or 10% of such officer’s total salary, bonus or other compensation for 2001, 2002, and 2003. | |
| (b) | Reimbursement of relocation expenses. | |
| (c) | Effective January 1, 1997, we began paying an annual advisory fee of $245,000 to A. Emmet Stephenson, Jr., Inc. | |
| (d) | Mr. McKenzie was our Controller from June 2002 to November 2003, when he was named Executive VP, CFO, Secretary and Treasurer. | |
| (e) | Reimbursement of relocation expenses of $5,260 and payment of disability insurance premiums of $16,450. | |
| (f) | Payment of life insurance premiums. |
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Document List
1. An Index of Exhibits follows the signature pages of this Form 10-K/A.
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SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-K/A to be signed on its behalf by the undersigned thereunto duly authorized.
| STARTEK, INC. (REGISTRANT) |
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| By: | /s/ EUGENE L. MCKENZIE, JR. | |||
| Eugene L. McKenzie, Jr. | ||||
| Date: May 17, 2004 | Executive Vice President, Chief Financial Officer, Secretary, and Treasurer | |||
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