StarTek Falls in Q4: Fool by Numbers

On Feb. 28, StarTek (NYSE: SRT  ) released Q4 and full fiscal 2005 earnings for the period ended Dec. 31, 2005.

• Quarterly EPS comparability was a bit skewed by the sale of business units. Reported diluted earnings per share was even at $0.30; diluted earnings per share from continuing operations (net of discontinued/sold businesses) rose $0.01 to $0.30 from $0.29.
• Margins still took a hit in the fourth quarter, but management says that general and administrative expenses were cut from 14.5% of revenue in the first quarter to 12.1% by the fourth quarter. That's at least something. (Find out why.)
• StarTek is also taking steps to clean up its balance sheet. For example, debt fell by 30%.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Avg. Est.	Q4 2005	Q4 2004	% Change
Sales	N/A	$58,165	$58,045	+0.2%
Net Profit	--	$4,397	$4,415	-0.4%
EPS	N/A	$0.30	$0.30	0.0%

Get back to basics with a look at the income statement.

Margin Checkup

	Q4 2005	Q4 2004	Change
Gross Margin	21.64%	21.78%	-0.14%
Op. Margin	9.55%	10.53%	-0.98%
Net Margin	7.56%	7.61%	-0.05%

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q4 2005	Q4 2004	% Change
Cash+ ST Invest.	$45,593	$39,394	+15.7%
Inventory	$-	$-	N/A
Accounts Rec.	$40,612	$49,254	-17.5%

Liabilities
Long-Term Debt	$5,650	$8,113	-30.4%
Accounts Pay.	$4,744	$7,190	-34.0%

Cash Flow Highlights

	Q4 2005	Q4 2004	% Change
Cash From Ops	$45,459	$23,099	+96.8%
Capital Expend.	$15,365	$19,465	-21.1%
Free Cash Flow	$30,094	$3,634	+728.1%

Find out why Fools always follow the money.

Related companies:

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Related Foolishness:

• Avoid the dividend time bombs.
• Here's why StarTek's dividend is dangerous.
• There are four must-know secrets to income investing. Get to know them.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.