Startek Inc (SRT) 2006 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the second quarter 2006 StarTek earnings conference call.

[OPERATOR INSTRUCTIONS]

I would now like to turn the presentation over to Ms. Jennifer Martin, Director of SEC Reporting and Compliance. Please proceed.

Thank you. Good morning. Thank you for joining us today. With me on the call today is Steve Butler, our President and Chief Executive Officer, and Rodd Granger, our Chief Financial Officer. Steve will begin our remarks today with an overview of our business and Rod will follow with a review of our financial results. At the conclusion of our prepared remarks, we will conduct a question-and-answer session with instructions following at that time. This call will conclude no later than 9:30 a.m. eastern time.

For those of you who have not yet received a copy of our press release from this morning, please go to www.startek.com where you can download a copy from the Investor Relations section of our website. Please note that the discussion may contain certain statements which are forward-looking in nature pursuant to the Safe Harbor provisions of the Federal Securities law. These statements are subject to various risks and uncertainties and actual results may vary materially from these projections.. StarTek advises all those listening to this call to review our 2005 form 10-K posted on our website for a summary of these risks and uncertainties. StarTek does not undertake the responsibility to update these projections.

I'll now turn the call over to Steve Butler, StarTek's President and CEO.

Thank you, Jennifer. Good morning and welcome and thank you for this opportunity to speak with you today.

In the second quarter, we continue to make significant strides on our strategic initiatives. We launched two new business solutions with a third scheduled to release in September, aimed at allowing us to enter new market verticals that expand our suite of service offerings. In addition, we signed an agreement with a joint venture partner that we believe will generate new business opportunities for StarTek. The new call centers have added more capacity and are currently generating revenue and the new business solutions will allow us to penetrate into markets where we haven't had a strong presence in the past. Although our financial results were heavily impacted by the continued ramp of our new call centers, the progress towards achievement of our goals and our long-term growth plan was significant.

Let me get into some specifics around our second quarter financial results. I indicated to you on our last call that the second quarter story would continue to revolve around the ramp of our three new call centers and the continued revenue growth from our new clients. These new clients generated an additional $9.4 of million revenue during the quarter versus $6.6 million in the first quarter, a 42% increase. During the first quarter we incurred significant costs related to the ramp and hire process for our Petersburg, Virginia site which went live at the beginning of the year. In the first quarter we also had some costs associated with the early stages of ramping and buildout of our two new Canadian sites. During the second quarter, we experience greater increases in ramp costs associated with our two new Canadian sites as well as an increased expense associated with employee turnover in certain of our U.S. sites. At the beginning of the quarter, both of our new Canadian call centers went live. As call volume began to increase, we were required to staff hundreds of people at these sites most of whom were recruited, hired and trained during the second quarter which also contribute to revenue growth. Combined, these factors resulted in compression of our margins during the second quarter. We believe the business model to be proven as we are generating revenue growth of 17% over the second quarter last year and we anticipate that margin trends should reverse as we continue to fill to capacity. Growth and expansion take investment and we are underway with executing against our strategic initiatives to diversify our clients, expand our product offerings, and broaden our geographical presence.

As I mentioned before, we announced two business offerings during the quarter, Intelligent Enterprise, a comprehensive suite of complex process management services for the communications, financial services, and health care industries, as well as a contact call center solution aimed at bridging the support between health care organizations, financial institutions, and employers who offer consumer-driven health care plans, most notably health savings accounts. We are an outsourcing pioneer in this industry and will provide compelling products and services to ease the pain in this emerging market. Since the introduction of these solutions, our sales team has experienced increased traction on new client leads which I believe will lead to some announcements on new contracts in the very near future.

In addition, we also signed a partnership agreement which we believe will provide us a second entry point into key new market vertical financial services. The partnership agreement is with Global Vantage Partners, a company that is in the collections telemarketing care business that serves financial services and telecom clients from their offshore facilities in places such as Costa Rica and India. The partnership agreement we have with GVI does not include an equity stake but will allow StarTek to leverage the relationship to broaden our services to new and existing clients through joint marketing, lead generation and the like. GVI can also leverage their relationship with StarTek for the same purpose. We are excited about the partnership as it gives us a relationship with a company that serves many Fortune 500 financial services clients and combined with our Intelligent Enterprise solution could provide us with the traction we need to develop client opportunities in this new market vertical. We are working diligently to deliver on the gross strategy initiatives that will provide value to our shareholders. We intend to continue to diversify our revenue concentration by increasing the top line just as we have done in the second quarter. We will continue to pursue opportunities to expand the business into new market verticals, as well as pursue opportunities for geographical diversification.

A couple of other areas I had mentioned previously in the call last quarter, which continue to impact our results are indeed employee turnover. Our earnings have reflected the impact of high employee turnover this year due in large part to the new site ramps. Employee turnover on the whole is currently trending a bit higher in 2006 than in 2005, also due in part to wage pressure and increased competition in some of our markets. We are addressing this problem with a great sense of urgency and focus and have implemented a program that we believe will be successful in lowering these turnover rates at our call center sites. This program includes a site by site analysis of issues contributing to the turnover rate and addresses the problems directly. Among other things, we are in the process of implementing programs to help our agents map their career paths and realize their long-term potential at StarTek. Many of the leaders in our organization today began as agents and have continued to be promoted within the organization. It's a priority of this Company as we continue to grow to offer greater opportunities for our employees.

Also, another thing that had a big impact on our financial results was training. As with the first quarter, we continued to experience a greater number of agents in training, particularly at Cingular where we continue to transition agents from blue to orange service, as I mentioned earlier, in the ramping of our new sites in Canada. Due to the complexity of some of our client's products, training can have a significant impact on our operations and financial performance because of the length of time it takes to train a customer care agent and in many cases we are required to pay for that training. As a result, the more people we have going through various types of training, the greater the effect on our earnings. We expected to see a number of agents in transition training decline during the quarter but in fact they increased slightly; however, we believe that they will decline over the remainder of the year. This does not indicate that we will expense an over all decline in training, as new products, clients, call centers, and employee turnover will continue to have an effect on this level of expense.

Moving on to a client update, I know that Cingular -- the Cingular contract renewal negotiations are of great importance to you as shareholders. As you are aware, we began the progress of negotiating our contract renewal with Cingular late in the first quarter of this year and I had hoped to have it completed by this call. Although the negotiations are progressing very well and I believe near to conclusion, I am unable to disclose anything about the details of the contract, including potential pricing structures at this time. However, we remain confident that we will be successful in concluding these negotiations in the near term, as both parties remain very committed to the successful relationship. Please keep in mind that this contract does not expire until December of this year and as soon as the new contract is signed, we will make a formal announcement and provide as many details as contractually allowed.

I will now turn the call over to Rodd Granger, our CFO who will give you a more detailed overview of our financial results for the quarter. Rodd?

Thank you, Steve. Good morning, everyone. I'd like to start out my discussion by reminding you that all comparative information relates to comparable periods in 2005 and 2006 unless otherwise noted.

We're pleased to report revenue for the second quarter of 2006 was 17% or $8.5 million higher compared to the second quarter of 2005. As Steve previously mentioned, revenue from clients new to StarTek since the first half of 2005 contributed $9.4 million to our top line. Additionally, revenue from one of our larger clients increased $1.5 million in the second quarter of 2006 as we were able to gain incremental lines of business. Offsets to these increases were a decline in Cingular revenue and the impact of lost revenue from the former utility client. As in the first quarter, the decline in Cingular revenue was due to decreased production volume combined with having more agents in training related to the transition from blue to orange service. While these agents generate revenue during training, it is at a lower rate than generated in production.

We're also pleased to announce that our revenue concentration continues to trend in the right direction. Our concentration on a few key clients continues to diminish with the addition of new revenue. Revenue concentration during the second quarter of 2006 was as follows. Cingular came in at 45%; T-Mobile, 20.7%; AT&T, 9.6%; and all others combined represented 24.7% of our revenue. This compares to the second quarter of 2005 where Cingular was 54.8%; T-Mobile, 23.5%; AT&T, 11.7%, leaving all others at 10%. As you can see, we continue to make headway, decreasing our revenue concentration. We're hopeful this trend will continue as we sell new clients and expand our existing customer base.

Gross profit for Q2 '06 was $8.2 million, down $3.1 million from Q2 of '05. Gross margin was 14% in Q2 of '06 compared with 22% in Q2 of '05. As Steve mentioned earlier, we incurred significant costs in ramp-related training at our three new facilities. This was roughly double of what we experienced in Q1 of 2006. The continued strengthening of the Canadian dollar versus the U.S. dollar in Q2 of '06 compared to Q2 of '05 had a negative impact of $1.3 million. We do have an active hedging strategy aimed at reducing our currency exposure. We also had a -- we also had decreased production volume in more agents in training related to the transition from blue to orange service for Cingular. This did put pressure on margins during the second quarter as agent time was billed at lower rates. We also experienced higher turnover in 2006 than we did in 2005, which caused increased hiring, recruiting and training expense and as mentioned earlier, initiatives are underway to help mitigate these costs.

Q2 '06, selling, general, and administrative expenses were up $900,000 from Q2 '05. As a percent of revenue, Q2 '06 SG&A expense were 12.4% which is down from 12.8% during the period in 2005. On a dollar basis, the increase in selling, general, and administrative expenses was driven by additional administrative costs related to the three new sites, increased legal fees, and FAS 123R compensation costs. Operating profit for the quarter was $815,000, down approximate $4 million from the comparable period last year. This decline was almost entirely margin driven and is a reflection of a period of heavy investment in future growth. Net interest and other income increased $900,000 year-over-year. During 2005, we did reposition our investment portfolio to conform to our current investment policy. This resulted in a net loss of $407,000 in the second quarter of 2005, compared to $533,000 of net earnings in the second quarter of 2006. Sequentially, second quarter of 2006 is in line with portfolio earnings during the first quarter of this year. Income tax expense was $1.2 million lower in the second quarter of 2006 versus the same period in 2005 due to the lower earnings before income taxes. Our quarterly effective tax rate year-over-year was comparable at roughly 39%.

Net income in the quarter was down $1.8 million from the prior year and fully diluted earnings per share for the second quarter was $0.06 in 2006 down from $0.18 in 2005. Our basic and diluted shares for the second quarter were $14,691,000, $14,748,000 respectively. Year-to-date basic and diluted shares outstanding for 2006 were $14,663,000, and $14,744,000 respectively. Our cash, cash equivalents, and investments ended the quarter at $30.5 million, which is $15 million down from year-end. As you can see from our cash flow statement included with the press release, the majority of this decline is due to $13.3 million in capital expenditures during the first half of the year. This is primarily related to the buildout of these three new call centers. Working capital was $60 million, down from $72 million at year-end which again was driven almost entirely by a decline in our cash and investments resulting from the ramping of our new sites. Our day sales outstanding improved to 66 days in Q2, 68 days at Q1 2006.

I'd now like to hand the call back over to Steve for a discussion of our dividend and his closing remarks.

Thank you, Rodd.

As most of you know, we announced a dividend today of $0.25 per share which will be payable on August 24th to stock holders of record as of August 14th. As with all other quarters, the board along with the senior management group reviewed our cash position in conjunction with what we see as being the best return for our stock holders in determining the dividend for the quarter. The board and management has always maintained that we would utilize our cash reserves in such a manner that it would provide the greatest returns to our stock holders while giving the Company the flexibility it needs to compete and implement its strategic initiatives. During the first half of this year, we have made significant capital investments in expanding our operations and continue to evaluate the cash requirements necessary to fund our growth opportunities, implement our strategic initiatives and maintain a strong balance sheet for financial flexibility. As I've stated before, we'll assess the dividend every quarter and will adjust it as needed in determining our best use of cash as well as the best return for our stock holders.

In July, the board appointed Larry Jones to our Board of Directors to fill the spot left vacant by Emmet Stephenson's retirement at the end of May. Larry brings to us a great deal of business expertise including experience in M&A deals, buy, and build strategies and new business initiatives. I am confident Larry's experience will be a great asset to our board and to our business.

Also with the Board of Directors, Ed Zschau has taken the role of chairman. Ed's nine years of service on our board and knowledge of our business made him the perfect candidate and we're excited to have him in this leadership role on the board of StarTek.

In summary, things are happening that are very good for StarTek at this point in its lifecycle. I'm very encouraged by the progress we've made in expanding our suite of service offerings through new bundled solutions and partnership agreements. The opportunities that these strategic moves are beginning to provide by opening doors to different market verticals and giving us access to companies outside the realm of telecom are furthering our strategy of diversification. The capacity added by the new sites will also allow us to leverage to expand our top line and as these sites ramp closer to capacity lend itself to the bottom line as well. We're excited to announce to shareholders that we're making progress on the implementation of our strategy, that is growing the top line and diversifying our revenue stream. We're confident that these strategic moves are a validation to all our shareholders that we're staying the course and continuing to work toward our long-term strategic goals.

We'll now open up the call for questions and answers. Please stand by. Will call operator provide you with instruction.

[OPERATOR INSTRUCTIONS]

Your first question comes from the line of Arnie Ursaner with CJS Securities. Please proceed.

Hi. Good morning. Just as a starting point, I think in your prepared remarks, you indicated the training expenses or start-up expenses were double the level of Q1 which I believe you had given out at $1.3 million, is that the correct map?

Yes, it is. And there was also in Q1 a discussion a little bit about some ramp costs in the SG&A line, which I think were about $300,000.

Okay. Second question I have is, you obviously have a lot of new initiatives underway. In the new initiatives you have, can you comment whether you currently have any revenues or clients in the new initiatives and perhaps expand a little bit on the sales force strategy you have to get these new clients?

Nothing to announce today, Arnie. But anticipate something in the near future here with respect to some clients and some of these new verticals. The strategy is to use these new business solutions and the partnership agreement with Global Advantage to open up some doors and indeed when we announce the two new solutions, the calls actually started coming into us. So it's a dual approach in that we're using the partnership to open some doors into clients that they already have as well as the announcement of the two new solutions, which quite honestly has brought traction in the door from people contacting us about possibly servicing them. So we're working both sides of the fence there and I think it's progressing well. Again, we just announced them during the quarter so it's kind of early days. However, I will tell you we do expect to make some announcements hopefully fairly quickly.

Perhaps just to clarify a little bit, Steve. If you could, without naming the specific name of a client, pick a type of client and walk through the process on how you and Global would work together -- who goes into the client and which way, and how do you go at the client? Perhaps you could give us a little better feel for that?

The partnership of course is new, so it's just getting underway and maybe there's a little feeling out the process to some degree. But typically how it would work is of course they have a list of Fortune 500 clients, mainly in the financial services sector that they do business for today on the collections side. They would introduce us, probably from a customer care standpoint, and visa versa, we would introduce them maybe into some of our clients from a collection standpoint. So there would be a mutual marketing of our respective services.

Okay. I'll jump back in queue. Thank you.

Your next question comes from the line of Tobey Sommer with SunTrust Robinson Humphrey

Good morning, this is Mike for Tobey this morning. Couple of questions. On the turnover side, I know you mentioned competition as being one of the drivers. Are you seeing anything happening to wages? Are those creeping up and then the (indiscernible) getting a little bit tighter?

Yes, absolutely. In certain areas that we operate, the wage pressures are increasing, either because of growth in the community and new businesses coming in or in one of our communities recently, we announced a wage increase to quite honestly catch up with where the market had already moved. The oil and gas stuff that's going on in Canada is certainly driving up wage pressures in some of our Canadian areas. But we are looking at site-by-site, and if we need to make some adjustments, we will. There is some wage pressure, but competition has also moved in, maybe in the form of another call center, or just in the form of another business that's paying a higher wage rate.

Okay. On the selling side, I've heard some rumblings in the market that maybe sales cycles have been shortening a bit. Can you comment on that and then maybe discuss what the pipeline looks like a little bit?

I think the sales cycles are shortening to some degree. I think it does depend on the size of the clients and the levels of bureaucracy that you have to go through to get a deal done. And also probably depends a little bit on the vertical you're getting into. If we're getting into a brand new vertical then negotiation may take a little bit longer from that standpoint. But within the context of what we service today, primarily the telecom verticals, I do think that cycle is shortening and certainly with our level of expertise in that vertical, we can help move that process a little bit quicker as well because we can help our client understand what their needs are to some degree better and help them focus on where they need to focus to get the deal done.

As far as the pipeline, the pipeline is the pipeline. It can be $100 million, it can be $1 billion, but until I sign a client, it really doesn't matter. And I've always said, as soon as we sign someone, as much as I can give you informationally, I will do so. We haven't signed anyone this quarter but again I'm looking for some results here fairly soon.

So it's fair to say there's a decent amount of opportunities on the horizon?

Yes.

Maybe if I could just ask one more question. How should we think of the ramping process? Do you think that we should kind of see that starting to taper off more toward the fourth quarter or what are your expectations with the two new call centers in Canada specifically as far as past utilization.

Good question. I think what I have always indicated to you, and last quarter I know that we touched on this briefly, is the first half of the year would be definitely hampered by the ramp from a cost perspective. The ramp has gone pretty much according to plan, although I will tell you it's lagging a little bit in the two new centers to some degree. There will be some spillover I believe into this quarter. But for the most part, the first six months of the year were the hard months of the year as we certainly ramped all three of them up to a large extent in the first six months. So I think I mentioned last time the second half of the year should be a stronger part of the year than the first half.

Thank you very much. I'll hop back in the queue.

[OPERATOR INSTRUCTIONS] Your next question is a follow-up from the line of Tobey Sommer with SunTrust Robinson Humphrey. Please proceed.

Hello. Mike again. I guess nobody else was going to take me up on that. Just a couple of housekeeping questions. What are your CapEx expectations for the full-year '06 if you have any you want to share? And then maybe to follow-up on that, looks like the exchange rates had quite an impact and if you had any expectations for exchange rates going forward.

Yeah, Mike, CapEx in the first quarter, we talked about a range of maybe $20 to $25 million of expectation. I think that's probably still ringing true today. We do have about $13 to $13.3 million for the first half of the year and I guess I wouldn't change that range much from the $20 to $25 for the year. As far as the exchange rate, we did see a continuing strengthening of the Canadian dollar versus the U.S. dollar. I'll tell you, I think last year the rates were 9% higher than they are today. So there is a continual pressure on our exchange rate. We do have quite a bit of our cost exposed to Canadian dollars; however, as I did mention in the prepared remarks, we are instituting a continued hedging strategy to try to mitigate that to the extent that we can.

Great. Thanks very much.

Your next question is a follow-up from the line of Arnie Ursaner with CJS Securities. Please proceed.

Hi. Can you comment a little bit more -- obviously the incremental revenue from new clients is one of the real positives in your press release. 42% gate quarter over quarter, you shared very little information about the new clients you've had and perhaps now that they are contributing a little bit more to revenue, you can share some additional information either by name of client, if you're now able to disclose that? A little bit more about sector? In other words, you have not disclosed your exposure to the telecom space. So if you can give us more information on the incremental revenue and perhaps even a view of where that may be going over the next two quarters, that would be helpful.

Sure. I think what we did announce in the press release is that they were both telecom clients. They're both large North American telecom clients. So from a telecom concentration point of view, there is more telecom business there. And certainly the revenue they're generating is associated with more telecom. So as the centers continue to ramp, I would guess that hopefully revenues will continue to slightly increase. It's hard to estimate a little bit, Arnie, because it does depend a little bit on the continuing volume delivery on their side and what's going on in their business as well as our own. We're certainly pleased with the results to date. And we're hopeful that trend will continue. Now whether we'll continue to see 42% increases quarter over quarter, I can't say that. But right now things are trending in the right direction and the ramp process has moved along, like I said before, fairly on plan except for the two Canadian sites which are a little bit behind. But they are telecom clients.

Okay. And again can you perhaps give us a little better feel or walk us through -- I know you've been starting up plants now for three different quarters. It's one of the largest expansion you've had in the Company's history. Perhaps kind of walk back? The facilities you began the process on in Q4 of last year, have they reached your normalized margin goal? I guess I'm trying to get a feel for the ramp-up process for you. And also if you could specifically comment on what kind of training costs or incremental training costs you expect to incur in Q3?

Taking your last question first, that's a little bit hard to pinpoint because training costs are sometimes dependent on what your attrition rates are. If attrition rates stay the same or increase, then your training costs can go up. If they start to decline, they go down. Certainly when you're in early stages of ramp, your attrition rates seemingly are a little bit higher because you're bringing new people into a new business area and you're not always sure how long those agents will stay in the fold. And indeed, the call center we did ramp -- start to ramp in the fourth quarter of last year had quite a bit of attrition during the first quarter of this year as well as a bit in the second quarter, too. Because it is finding the right kind of agent, first and foremost and trying to retain that agent and taking those kind of calls is not something people like to do all the time. So in respect to the question with the call centers that have launched, are we to the margins we'd like to see in those centers, I believe is what you were saying? No, we're not at this point in time because they are not full to capacity yet either. We're still working from that standpoint and that quite honestly depends a bit on the clients we serve as much as it does our ability to recruit and retain agents. We don't control all of the outcome there.

Okay. Can you focus a little bit -- you've got this other business that's now 24.7% and again I know there's a lot of math involved, your margins are getting crushed. Even the 22% last year was at the lower end of where you've been historically. Part of the strategy has always been as you add additional clients, you would increase your margin by being less dependent on certain clients. I guess my question would be, as you look out over the next year as these new clients do kick in, what's your best view of where you think your gross margin ought to settle out over perhaps the next three, four quarters?

On the telecom side, which is primarily what we've signed to fill those new centers, the pricing mechanism there has been fairly aggressive. However, you're still bringing dollars to the bottom line, so you're not going to not sign a potential new contract that's going to still contribute to your earnings and possibly give you better business opportunities with that client being the size that they are. What I guess we have not yet delivered on to the shareholders is some clients in other verticals that we believe will provide a better margin with the exception of one that we actually signed earlier this year, the first part of this year in the broadband satellite arena, which their margins have been a little bit better than what we had in the telecom arena. So we are still searching out those clients that will give us those margins that will increase our overall profitability going forward in these different verticals, which is why we've done the partnership, which is why we've announced the two business solutions during this past quarter, hoping that will continue to provide us with the traction we need to find those clients to provide us with greater margins going forward.

Also, it's finding new ways of doing business. It's not just doing customer care business, it's doing other forms of business whether it be more receivables management, more back office type of stuff that in and of themselves can offer you greater margins and looking to do those kind of opportunities with the clients that we currently have and with possible new clients. So that is the sales focus certainly for the second half of this year. There could be other telecom clients that come around, clients in other verticals as well, if they're contributing the kind of margins we're looking for then we're not going to not sign them because they're in a specific industry. But certainly our focus is to increase the margins. And yes, we've been hit harder I think in the first six months of this year than obviously in last year. I think again launching the three centers and ramping up four clients at one time had a fairly significant impact in those margins.

One comment and then two more questions if I can. Just if I could offer a comment, if it's possible that you can stick your fully diluted or share count in your press release, it's pretty unusual not to. I don't know if there's a reason you don't, but if you could it would probably make it a little easier.

Sure.

And two more questions if I can. Emmet Stevenson and Tony's shares, now that he's off the board, can you remind us of what restrictions, if any, he has on selling his shares?

I'm not aware of any restrictions at this point in time. I'm just not aware of any. There could be some. I know he has filed, I think, a 144A, Tony has. But not that I'm aware of.

So you've had no discussions with him, perhaps the discussion orderly disposal, if that's what he wanted to do?

No, I have not. And I'm very much confident that Emmet is going to do what's right by the Company obviously. I think he will approach it with a lot of care and caution when he starts to do that.

Okay. And then just a final fundamental question, you obviously have talked about the churn where you're having training or start-up, can you comment on churn at the longer term or existing facilities, and in fact are you seeing an increased churn or turnover at the facilities you've had for quite awhile relative to your cash trend?

No. Actually the trend at the facilities that have been operational for more than two years is actually trending downward to some degree. It's been positive at those that have been in operation for two years or greater. It's primarily in the new ones that have been brought on board in the last two years.

And I assume your HR department does exit interviews when people leave relatively quickly. What are they coming back as the single two or three most important reasons why people are leaving?

I think for the most part, it's not the job for them. It's primarily the response. And again it is a tough job to take calls with people that may not be the most friendly on a phone. So primarily, that's the number one reason is they get in and they get into the training and they just decide this isn't what I want to do. We have implemented a better up front screening process on our agents as well so that we can better discern the type of agent that we need to bring into that environment and certainly with the kind of client they're dealing with, a specific line of business that they're dealing with, so maybe we can certainly start to trend the attrition down even better by getting more of an assessment of the agent's qualities and likely to succeed in the role capabilities before they do get on board.

Okay. Thank you.

Thank you, Arnie. Good questions.

[OPERATOR INSTRUCTIONS] At this time, there are no further questions in queue. I would now like to turn the presentation over to Mr. Steve Butler for closing remarks.

Thank you, operator. Thank you, everyone, for joining this morning. Good questions and we will certainly keep you informed as things progress here at StarTek. Any good announcements that come along will be made as quickly as we can do them and I thank you for your continued support as we stay the course to implement our strategic initiatives to grow this Company. Bye-bye.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect, and have a great day.