10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE 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.)
8200 E. Maplewood Ave., Suite 100
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 x Noo

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).  Yesx  No o

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 filero	Accelerated filerx
Non-accelerated filero	Smaller reporting companyx
	Emerging growth companyo

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. o

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yeso  Nox

As of April 26, 2019, there were 37,663,239 shares of Common Stock outstanding.

STARTEK, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q

	PART I - FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	Page
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2019 and 2018 (Unaudited)	2
	Condensed Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and December 31, 2018	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 (Unaudited)	4
	Condensed Consolidated Statement of Stockholders' equity for the Three Months Ended March 31, 2019 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	24
ITEM 4.	Controls and Procedures	24
	PART II - OTHER INFORMATION
ITEM 1A.	Risk Factors	25
ITEM 5.	Other Information	25
ITEM 6.	Exhibits	26
SIGNATURES		27

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-KT for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission ("SEC") on March 14, 2019, and this Quarterly Report on Form 10-Q for the quarter ended March 31, 2019. 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 now 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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2019			2018
Revenue	$	161,142		$	115,095
Cost of services	133,928			93,938
Gross profit	27,214			21,157
Selling, general and administrative expenses	24,079			14,405
Restructuring and other merger related cost	1,093			6,257
Operating income	2,042			495
Share of profit of affiliates	342			64
Interest expense, net	(4,465		)	(4,129		)
Exchange losses, net	(691		)	(1,278		)
Loss before income taxes	(2,772		)	(4,848		)
Income tax expense	385			332
Net loss	$	(3,157	)	$	(5,180	)
Net income attributable to non-controlling interests	189			972
Net loss attributable to Startek shareholders	(3,346		)	(6,152		)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	567			(961		)
Change in fair value of derivative instruments	(65		)	—
Pension amortization	176			(297		)
Comprehensive loss	$	(2,479	)	$	(6,438	)
Comprehensive income attributable to non-controlling interests	276			833
Comprehensive loss attributable to Startek shareholders	(2,755		)	(7,271		)
Net loss per common share - basic and diluted	$	(0.09	)	$	(0.30	)
Weighted average common shares outstanding - basic and diluted	37,522			20,600

See Notes to Consolidated Financial Statements.

2

STARTEK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	As of March 31,			As of December 31,
	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	14,595		$	16,617
Restricted cash	11,093			7,952
Trade accounts receivable, net	102,548			107,836
Unbilled Revenue	50,499			42,135
Prepaid and other current assets	17,454			18,850
Total current assets	$	196,189		$	193,390
Property, plant and equipment, net	41,638			42,242
Right-of-use assets	76,983			—
Intangible assets, net	118,726			121,336
Goodwill	226,505			225,450
Investment in affiliates	2,440			2,097
Deferred tax assets, net	4,075			5,048
Prepaid expenses and other non-current assets	17,562			15,076
Total assets	$	684,118		$	604,639
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	26,757		$	26,886
Accrued expenses and other current liabilities	82,796			84,881
Short term debt	26,522			21,975
Current maturity of long term debt	12,600			9,800
Current maturity of operating lease liabilities	23,204			—
Current maturity of capital lease liabilities	1,394			1,816
Total current liabilities	$	173,273		$	145,358
Long term debt	149,582			152,100
Operating lease liabilities	55,016			—
Other non-current liabilities	14,286			11,907
Deferred tax liabilities, net	17,127			18,901
Total liabilities	$	409,284		$	328,266
Commitments and contingencies	—			—
Stockholders’ equity:
Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 37,561,744 and 37,446,323 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	$	375		$	374
Additional paid-in capital	268,256			267,317
Accumulated other comprehensive loss	(4,955		)	(5,547		)
Accumulated deficit	(34,473		)	(31,127		)
Equity attributable to Startek shareholders	$	229,203		$	231,017
Non-controlling interest	45,631			45,356
Total stockholders’ equity	$	274,834		$	276,373
Total liabilities and stockholders’ equity	$	684,118		$	604,639

See Notes to Consolidated Financial Statements.

3

STARTEK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2019			2018
Operating Activities
Net loss	$	(3,157	)	$	(5,180	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	7,304			6,025
Profit on sale of property, plant and equipment	(251		)	—
Provision for doubtful accounts	630			374
Share-based compensation expense	425			—
Deferred income taxes	(659		)	(918		)
Share of profit of affiliates	(342		)	(64		)
Changes in operating assets and liabilities:
Trade accounts receivable	4,384			4,992
Prepaid expenses and other assets	(8,789		)	8,801
Accounts payable	(79		)	1,486
Income taxes, net	(948		)	(1,735		)
Accrued and other liabilities	1,105			(10,023		)
Net cash (used in) provided by operating activities	$	(377	)	$	3,758
Investing Activities
Purchases of property, plant and equipment	(3,495		)	(2,919		)
Distributions received from affiliates	—			22
Net cash used in investing activities	$	(3,495	)	$	(2,897	)
Financing Activities
Proceeds from the issuance of common stock	515			—
Payments on long term debt	(1,400		)	—
Proceeds from other debts, net	6,102			488
Net cash provided by financing activities	$	5,217		$	488
Net (decrease) increase in cash and cash equivalents	1,345			1,349
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(226		)	(31		)
Cash and cash equivalents and restricted cash at beginning of period	24,569			21,601
Cash and cash equivalents and restricted cash at end of period	$	25,688		$	22,919
Components of cash and cash equivalents and restricted cash
Balances with banks	14,595			17,693
Restricted cash	11,093			5,226
Total cash and cash equivalents and restricted cash	$	25,688		$	22,919

See Notes to Consolidated Financial Statements.

4

STARTEK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Common Stock			Additional paid-in capital		Accumulated other comprehensive loss			Accumulated deficit			Equity attributable to Startek shareholders			Non-controlling interest		Total stockholders' equity
	Shares	Amount
Balance, December 31, 2018	37,446,323	$	374	$	267,317	$	(5,547	)	$	(31,127	)	$	231,017		$	45,356	$	276,373
Common stock issued	115,421	1		514		—			—			515			—		515
Share-based compensation	—	—		425		—			—			425			—		425
Changes to other comprehensive loss	—	—		—		592			—			592			86		678
Net (loss) income	—	—		—		—			(3,346		)	(3,346		)	189		(3,157		)
Balance, March 31, 2019	37,561,744	$	375	$	268,256	$	(4,955	)	$	(34,473	)	$	229,203		$	45,631	$	274,834

5

STARTEK, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2019

(In thousands, except 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 business process outsourcing company operating in thirteen countries and employing over 45,000 employees worldwide, serving over 250 clients in a variety of industries.

On July 20, 2018, Company completed the acquisition of all of the issued and outstanding shares of capital stock of CSP Alpha Midco Pte Ltd, a Singapore private limited company (“Aegis”), from CSP Alpha Holdings Parent Pte Ltd, a Singapore private limited company (the “Aegis Stockholder”), in exchange for the issuance of 20,600,000 shares of common stock of the Company, par value $.01 per share (the “Common Stock”). Concurrently, the Aegis Stockholder purchased 166,667 newly issued shares of Common Stock at a price of $12 per share for a total cash payment of $2,000. As a result of the consummation of such transactions (the “Aegis Transactions”), the Aegis Stockholder became the holder of 20,766,667 shares of Common Stock, representing approximately 55% of the outstanding Common Stock. For accounting purposes, the Aegis Transactions are treated as a reverse acquisition and Aegis is considered the accounting acquirer. Accordingly, Aegis’ historical financial statements replace the Company’s historical financial statements following the completion of the Aegis Transactions, and the results of operations of both companies will be included in the Company’s financial statements for all periods following the completion of the Aegis Transactions.

In addition, on July 20, 2018, in connection with the consummation of the Aegis Transactions, the Company and the Aegis Stockholder entered into a Stockholders Agreement, pursuant to which the Company and the Aegis Stockholder agreed to, among other things: (i) certain rights, duties and obligations of the Aegis Stockholder and the Company as a result of the transactions contemplated by the Transaction Agreement and (ii) certain aspects of the management, operation and governance of the Company after consummation of the Aegis Transactions.

On December 13, 2018, the Company, and Aegis Stockholder, entered into a Securities Purchase Agreement, pursuant to which Aegis Stockholder purchased, and the Company issued and sold, 368,098 shares of Common Stock, par value $0.01 per share, at a purchase price of $6.52 per share, or a total purchase price of $2,400, taking its holding approximately 56% of outstanding common stock. The Company used the proceeds for general corporate purposes.

Please see Note 3, "Business Acquisitions," for further information.

Basis of preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("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 GAAP for complete financial statements.

These 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 balance sheet as of December 31, 2018, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by 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-KT for the nine months period ended December 31, 2018.

6

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

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 Condensed Consolidated Balance Sheets. The non-controlling interest in our consolidated net income is reported as "Net income (loss) attributable to non-controlling interests" in our Condensed Consolidated Statements of Comprehensive Income (Loss). These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in our Form 10-KT for the nine months period ended December 31, 2018 filed with the SEC on March 14, 2019.

Use of Estimates

The preparation of condensed 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, purchase price allocations, provision for doubtful receivables, valuation allowances for deferred tax assets, the valuation of derivative financial instruments, measurements of stock-based compensation, assets and obligations related to employee benefits, lease termination liabilities, restructuring costs, and income tax uncertainties and other contingencies. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable. 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

On April 1, 2018, the Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers, (Topic 606) using the modified retrospective method. Topic 606 utilizes a five-step process, for revenue recognition that focuses on transfer of control, rather than transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs. Refer Note 5 on "Revenue from Contracts with Customers" for further information.

Consistent with the modified retrospective method of adoption, the Company has not adjusted prior period amounts which continue to be reported in accordance with the Company’s historic revenue accounting policy and principles.

Leases

On January 1, 2019, the Company adopted Accounting Standards Codification 842, Leases, (Topic 842)withthe transition approach. However, the Company has accounted the lease for the comparable periods as per the Accounting Standards Codification 840.

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 sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets.

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 that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

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

7

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 was recorded at fair value at acquisition date and not amortized but is reviewed for impairment at least annually or more frequently if impairment indicators arise. Our goodwill is allocated by reporting unit and is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit is "more likely than not" less than the carrying amount or if significant changes related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required. The Company can elect to forgo the qualitative assessment and perform the quantitative test.

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.

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 in which 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%.

In May 2018, a discussion document prepared by the Center for Audit Quality SEC Regulations Committee and its International Practices Task Force describes inflation data for Argentina through April 2018. Considering this data and more recent data for May 2018, all of the three-year cumulative inflation rates commonly used to evaluate Argentina’s inflation currently exceed 100%.

Therefore, 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 remeasurement of the local books to USD. Exchange gains and losses is recorded through net income as opposed to through other comprehensive income as had been done historically. Translation adjustments from prior periods will not be removed from equity.

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 11, “Share-Based Compensation” for further information.

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 11, "Share-Based Compensation."

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”).  The amendment makes minor changes to the disclosure requirements for employers that sponsor defined benefit pension and/or other post retirement benefit plans. The new guidance eliminates requirements for certain disclosures that are no longer considered cost beneficial and requires new ones that the FASB considers pertinent. ASU No. 2018-14 is effective for fiscal years ending after December 15, 2020. The Company is evaluating the impact of the adoption of ASU No. 2018-14 on its financial statement disclosures.

8

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, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We do not expect the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement.” The ASU modifies the disclosure requirements with respect to fair value measurements. The ASU is effective for the Company beginning January 1, 2020, including interim periods in fiscal year 2020. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated results of operations, cash flows, financial position and disclosures.

3. BUSINESS ACQUISITIONS

Aegis Transactions

On July 20, 2018, the Company completed the acquisition of all of the issued and outstanding shares of capital stock of Aegis from the Aegis Stockholder in exchange for the issuance of 20,600,000 shares of the Common Stock in the Aegis Transactions. Concurrently, the Aegis Stockholder purchased 166,667 newly issued shares of the Common Stock at a price of $12 per share for a total cash payment of $2,000. As a result of the consummation of the Aegis Transactions, the Aegis Stockholder now holds 20,766,667 shares of the Common Stock, which is equivalent to approximately 55% of the total outstanding Common Stock.

In accordance with ASC 805, Business Combinations, the transaction was accounted for as a reverse acquisition. As such, Aegis is considered to be the accounting acquirer. Therefore, Aegis’ historical financial statements replace the Company’s historical financial statements following the completion of the Aegis Transactions, and the results of operations of both companies will be included in the Company’s financial statements for all periods subsequent to July 20, 2018.

The estimated fair value of the purchase consideration is calculated based on the Company's stock price as it is considered to be more reliably determinable than the fair value of Aegis' private stock. Consideration is calculated based on the Company's closing stock price of $6.81 on July 20, 2018.

The following table presents the purchase price and the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. These estimates are preliminary, pending final evaluation of certain assets, and therefore are subject to revisions that may result in adjustments to the values presented below:

9

	Amount
Stock consideration (number of shares outstanding immediately prior the closing date)	16,226,392
Closing share price on July 20, 2018	$	6.81
Total allocable purchase price	$	110,502
	Amount
Cash and cash equivalents	$	1,496
Other current assets	46,094
Property, plant and equipment, net	15,930
Identifiable intangible assets	28,960
Goodwill	64,337
Other non-current assets	3,204
Current liabilities	(22,540		)
Non-current liabilities	(26,979		)
Preliminary purchase price	$	110,502

The goodwill recognized was attributable primarily to the acquired workforce, increased utilization of our global delivery platform and other synergistic benefits. Goodwill from this acquisition is not expected to be deductible for tax purposes.

4. GOODWILL AND INTANGIBLE ASSETS

Goodwill

As of March 31, 2019, the carrying value of goodwill relating to business acquisitions is $226,505. The carrying value of goodwill is allocated to reporting units is as follows:

Reporting Units	Amount
Aegis	162,168
StarTek	64,337
Ending balance, March 31, 2019	$	226,505

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 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 thereafter. These assumptions are reviewed annually as part of management’s budgeting and strategic planning cycles. These estimates may differ from actual results. The values assigned to each of the key assumptions reflect the management’s past experience as their assessment of future trends, and are consistent with external/internal sources of information.

As of March 31, 2019, based on the qualitative assessment, we concluded that goodwill was not impaired.

The following table presents the changes in goodwill during the period:

	Amount
Opening balance, December 31, 2018	$	225,450
Measurement period adjustments	1,055
Ending balance, March 31, 2019	$	226,505

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Intangible Assets

The following table presents our intangible assets as of March 31, 2019:

	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships	$	65,050	$	6,367	$	58,683	6.5
Brand	49,500		4,971		44,529		7.2
Trademarks	14,410		670		13,740		7.6
Other intangibles	2,100		326		1,774		4.9
	$	131,060	$	12,334	$	118,726

Expected future amortization of intangible assets as of March 31, 2019 is as follows:

Years Ending December 31,	Amount
Remainder of 2019	$	7,816
2020	10,277
2021	10,277
2022	10,277
2023	10,236
Thereafter	69,843

5.  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 the majority 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

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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.

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. This is consistent with our prior revenue recognition model.

We are 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 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 vertical for the three months ended March 31, 2019 and 2018, respectively:

	Three Months Ended March 31,
Vertical:	2019		2018
Telecom	65,824		66,323
E-commerce & Consumer	24,344		8,113
Financial & Business Services	13,320		15,264
Media & Cable	21,757		3,317
Travel & Hospitality	16,514		13,641
Healthcare & Education	10,529		2,630
Energy, Power & utility	2,485		3,016
All other segments	6,369		2,791
Total	$	161,142	$	115,095

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6. NET LOSS PER SHARE

Basic net loss 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.

In connection with the Aegis Transactions, the Company maintained Startek's 2008 Equity Incentive Plan (see Note 11, "Share-based compensation and employee benefit plans" for more information). For the three months ended March 31, 2019, the following shares were not included in the computation of diluted earnings per share because we reported a net loss and the effect would have been anti-dilutive (in thousands):

	Three Months Ended March 31, 2019	Three Months Ended March 31, 2018
Anti-dilutive securities:
Stock options	2,782	—

7. RESTRUCTURING AND OTHER MERGER RELATED COST

The table below summarizes the balance of accrued restructuring and other merger related cost, which is included in other accrued liabilities in our consolidated balance sheets, and the changes during the three months ended March 31, 2019: 

	Employee related			Facilities related			Total
Balance as of December 31, 2018	$	760		$	2,356		$	3,116
Accruals/(reversals)	1,362			(269		)	1,093
Payments	(735		)	(614		)	(1,349		)
Balance as of March 31, 2019	$	1,387		$	1,473		$	2,860

Employee related

In 2018, in conjunction with the closing of the Aegis Transactions, we eliminated a number of positions which were considered redundant, under a company-wide restructuring plan. We recognized provision for employee related costs across a number of geographies and we expect to pay the remaining costs of $446 by the end of third quarter 2019.

In March 2019, the Company has closed one of its sites in Argentina. Upon closure, the Company eliminated a number of positions which were considered redundant and recognized provision for employee related costs and we expect to pay the remaining costs of $941 by the end of fourth quarter 2019.

Facilities related

In 2018, in conjunction with the closing of the Aegis Transactions, we terminated various leases in the United States and the Philippines. We recognized provision for the remaining costs associated with the leases. We expect to pay the remaining costs of $832 by the end of the first quarter of 2021.

Upon closure of site in Argentina, the Company recognized provision for facility related costs and we expect to pay the remaining costs of $162 by the end of the fourth quarter of 2019.

The Company has ceased operations in the United Kingdom on January 12, 2018. Upon closure, the Company recognized provision for the remaining costs associated with the lease of $1,868 as of March 31, 2018. We expect to pay the remaining costs of $479 by the end of the second quarter 2019.

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8.  DERIVATIVE INSTRUMENTS

Cash flow hedges

Our locations in Canada and the Philippines primarily serve US-based clients. The revenues from these clients is 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 in order to associate the results of the hedges with forecasted expenses.

Unrealized gains and losses are recorded in accumulated other comprehensive income (“AOCI”) and will be re-classified to

operations as the forecasted expenses are incurred, typically within one year. During the three months ended March 31, 2019

and 2018, our cash flow hedges were highly effective and hedge ineffectiveness was not material.

The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of March 31, 2019:

	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	1,600	$	1,254
Philippine Peso	2,736,000	51,642
		$	52,896

Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note 9, "Fair Value Measurements," and are included in prepaid expense and other current assets and accrued expenses and other current liabilities in our condensed consolidated balance sheets, respectively.

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 Statements of Comprehensive Income (Loss). The following table presents these amounts for the three months ended March 31, 2019:

Derivatives not designated under ASC 815	For the Three Months Ended March 31, 2019
Foreign currency forward contracts	$	26
Interest rate swap	$	228

9.  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 that are 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

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that 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.

The following tables set forth our assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. These balances are included in Other current assets and Other current liabilities, respectively, on our balance sheet.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Foreign exchange contracts	$	—	$	1,311	$	—	$	1,311
Total fair value of assets measured on a recurring basis	$	—	$	1,311	$	—	$	1,311
Liabilities:
Interest rate swap	$	—	$	259	$	—	$	259
Foreign exchange contracts	$	—	$	292	$	—	$	292
Total fair value of liabilities measured on a recurring basis	$	—	$	551	$	—	$	551

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Foreign exchange contracts	$	—	$	1,388	$	—	$	1,388
Total fair value of assets measured on a recurring basis	$	—	$	1,388	$	—	$	1,388
Liabilities:
Interest rate swap	$	—	$	31	$	—	$	31
Foreign exchange contracts	$	—	$	276	$	—	$	276
Total fair value of liabilities measured on a recurring basis	$	—	$	307	$	—	$	307

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10. DEBT

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

	March 31, 2019		December 31, 2018
Short term debt and current portion of long term debt
Working capital facilities	$	26,522	$	21,975
Term loan	12,600		9,800
Capital lease obligations	1,394		1,816
Total	$	40,516	$	33,591
Long term debt
Term loan, net of debt issuance costs	$	116,631	$	120,462
Equipment loan	1,551		—
Secured revolving credit facility	31,215		31,152
Capital lease obligations	185		486
Total	$	149,582	$	152,100

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 $33.6 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 $26.5 million as of March 31, 2019.

Term loan

On October 27, 2017, the Company entered into a Senior Term Agreement ("Term loan") to provide funding for the acquisition of ESM Holdings Limited and its subsidiaries in the amount of $140 million for a five year term. The Term loan was fully funded on November 22, 2017 and is to be repaid based on a quarterly repayment schedule beginning six months after the first utilization date.

Principal payments due on the term loan are as follows:

Years	Amount
2019	8,400
2020	16,800
2021	21,000
2022	88,200
	$	134,400

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.

In connection with the Term loan, the Company incurred issuance costs of $7.3 million which are net against the Term loan on the balance sheet. Unamortized debt issuance costs as of March 31, 2019 amount to $5.2 million.

Secured revolving credit facility

The Company has a secured revolving credit facility which is effective through March 2022. Under this agreement, we may borrow the lesser of the borrowing base calculation and $50 million. As long as no default has occurred and with lender consent, we may increase the maximum availability to $70 million in $5 million increments, and we may request letters of credit in an aggregate amount equal to the lesser of the borrowing base calculation (minus outstanding advances) and $5 million. The borrowing base is generally defined as 95% of our eligible accounts receivable less certain reserves.

As of March 31, 2019, we had $31.22 million of outstanding borrowings and our remaining borrowing capacity was $8.82 million. Our borrowings bear interest at one-month LIBOR plus 1.50% to 1.75%, depending on current availability.

We have entered into factoring agreements with financial institutions to sell certain of our accounts receivable under non-recourse agreements. These transactions are accounted for as a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. 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 aggregate gross amount factored under these agreements was $1.55 million for three months ended March 31, 2019.

BMO Equipment Loan

On December 27, 2018, the Company executed an agreement to secure a loan against US and Canadian assets in the amount of $1.65 million at the interest of 7.568% per annum, to be repaid over 2.5 years. The loan was funded in January 2019.

Capital 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.

11. 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. 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 exercise price for all Warrant Shares will be $9.96 per share. The Warrant Shares are exercisable through January 23, 2026. As of March 31, 2019, no additional Warrant Shares have vested.

The Warrant provides for net share settlement that, if elected by the holders, will reduce the number of shares issued upon exercise to reflect net settlement of the exercise price. 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.

Because the Warrant contains performance criteria (i.e. aggregate purchase levels) which Amazon and/or any of its affiliates must achieve for the Warrant Shares to vest, as detailed above, the final measurement date for each tranche of the Warrant Shares is the date on which performance is completed. Prior to the final measurement date, when achievement of the performance criteria has been deemed probable, a reduction in revenue equal to the percentage of completion to date will be recognized. The fair value of the Warrant Shares will be adjusted at each reporting period until they are earned.

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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, 2019 was $425, and is included in selling, general and administrative expense. As of March 31, 2019, there was $1,730 of total unrecognized compensation expense related to nonvested stock options, which is expected to be recognized over a weighted-average period of 2.29 years.

12.  ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss consisted 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, 2018	$	(3,989	)	$	(15	)	$	(1,543	)	$	(5,547	)	$	(1,243	)	$	(6,790	)
Foreign currency translation	567			—			—			567			—			567
Unrealized losses	—			(65		)	—			(65		)	—			(65		)
Pension remeasurement	—			—			90			90			86			176
Balance at March 31, 2019	$	(3,422	)	$	(80	)	$	(1,453	)	$	(4,955	)	$	(1,157	)	$	(6,112	)

13.  SEGMENT AND GEOGRAPHICAL INFORMATION

The Company provides business process outsourcing services (“BPO”) to clients in a variety of industries and geographical locations. Our approach is focused on providing our clients with the best possible combination of services and delivery locations to meet our clients' needs in the best and most efficient manner. Our Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"), reviews financial information mainly on a consolidated basis.

Based on our evaluation of the facts and circumstances, the Company has concluded that it has a single operating and reportable segment (BPO), and two reporting units (Aegis and Startek).

The Group prepares its geographical information in conformity with the accounting policies adopted for preparing and presenting the consolidated financial statements of the Group as a whole.

Revenues by geography, based on the location of the Company's delivery centers, is presented below:

	For the Three Months Ended March 31,
	2019		2018
Revenue:
India	27,346		32,934
Middle East	31,118		32,248
Malaysia	17,079		14,490
Argentina	11,111		16,344
United States	29,744		—
Australia	7,356		9,809
Philippines	12,809		—
Rest of World	24,579		9,270
Total	$	161,142	$	115,095

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Property, plant and equipment, net by geography based on the location of the assets is presented below:

	As on March 31, 2019		As on December 31, 2018
Property, plant and equipment, net:
India	12,442		13,287
Middle East	5,983		6,507
Malaysia	5,093		5,058
Argentina	1,277		1,341
United States	5,341		5,349
Australia	311		345
Philippines	2,376		2,835
Rest of World	8,815		7,520
Total	$	41,638	$	42,242

14.  LEASES

We have operating and finance leases for service centers, corporate offices and certain equipment. Our leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 3-5 years, and some of which include

options to terminate the leases within 1 year.

The components of lease expense were as follows:

	Three months ended March 31, 2019
Operating lease cost	$	7,540
Finance lease cost:
Amortization of right-of-use assets	484
Interest on lease liabilities	28
Total finance lease cost	$	512

Supplemental cash flow information related to leases was as follows:

	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	7,563
Operating cash flow from finance leases	28
Financing cash flows from finance leases	653
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	76,983
Finance lease	—

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Supplemental balance sheet information related to leases was as follows:

	As of March 31, 2019
Operating Leases
Operating lease right-of-use assets	$	76,983
Other current liabilities	23,204
Operating lease liabilities	55,016
Total operating lease liabilities	$	78,220
Finance Leases
Property and equipment, at cost	10,899
Accumulated depreciation	(8,679		)
Property and equipment, at net	$	2,220
Other current liabilities	1,394
Other long-term liabilities	184
Total finance lease liabilities	$	1,578

	As of March 31, 2019
Weighted average remaining lease term
Operating leases	5 years
Finance leases	1 year
Weighted average discount rate
Operating leases	7.48	%
Finance leases	4.38	%

Maturities of lease liabilities were as follows:

	Operating leases			Finance leases
Year ending December, 31
Remaining of 2019	$	28,054		$	1,295
2020	20,525			312
2021	13,316			14
2022	10,132			—
2023	6,636			—
Thereafter	13,202			—
Total lease payments	$	91,865		$	1,621
Less imputed interest	(13,645		)	(43		)
Total	$	78,220		$	1,578

15.  SUBSEQUENT EVENT

The Company evaluated subsequent events through May 07, 2019, the date of these financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in these financial statements.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this report. All dollar amounts are presented in thousands other than per share data.

BUSINESS DESCRIPTION AND OVERVIEW

Startek is a global business process outsourcing company that provides omnichannel customer interactions, technology and back-office support solutions for some of the world’s most iconic brands in a variety of markets vertical. Operating under the Startek and Aegis brands, we help these large global companies connect emotionally with their customers, solve issues, and improve net promoter scores and other customer-facing performance metrics. Through consulting and analytics services, technology-led innovation, and engagement solutions powered by the science of dialogue, we deliver personalized experiences at the point of conversation between our clients and their customers across every interaction channel and phase of the customer journey.

Startek has proven results for the multiple services we provide, including sales, order management and provisioning, customer care, technical support, receivables management, and retention programs. We manage programs using a variety of multi-channel customer interactions, including voice, chat, email, social media and back-office support. Startek has facilities in India, United States, Malaysia, Philippines, Australia, South Africa, Canada, Honduras, Jamaica, Kingdom of Saudi Arabia, Argentina, Peru and Sri Lanka.

We operate in a single operating segment providing business outsourcing solutions in the customer experience management space.

SIGNIFICANT DEVELOPMENTS

None

RESULTS OF OPERATIONS — THREE MONTHS ENDED MARCH 31, 2019 AND 2018

Pursuant to the completion of the Aegis acquisition on July 20, 2018, the Aegis Stockholder became the holder of 20,766,667 shares of Common Stock, representing approximately 55% of the outstanding Common Stock. For accounting purposes, the Aegis acquisition is treated as a reverse acquisition and Aegis is considered the accounting acquirer. Accordingly, Aegis’ historical financial statements replace the Company’s historical financial statements following the completion of the Aegis Transactions, and the results of operations of both companies will be included in the Company’s financial statements for all periods following the completion of the Aegis Transactions. The historical financial information presented for the periods and dates prior to July 20, 2018 is that of Aegis, and for periods subsequent to July 20, 2018 is that of the combined company.

As a result, the financials discussed below are not strictly comparable as the financials for the three-month period ended March 31, 2018 represent legacy Aegis operations and the three-month period ended March 31, 2019 represents the combined operations of Aegis and Startek.

Revenue

Our revenues for the quarter ended March 31, 2019 increased by 40.0% to $161,142 as compared to $115,095 for the three-month period ended March 31, 2018. The increase in revenues is largely due to the consolidation of Startek with Aegis.

The three-month period ended March 31, 2018 includes only Aegis while the current three-month period ended March 31, 2019 includes both Startek and Aegis. In order to promote a better understanding of the overall results of the combined business, we are providing below pro forma revenues for the three-month period ended March 31, 2018 combining the revenues for Aegis and Startek. The financial information presented below is presented for illustrative purposes only and does not purport to represent what the results of operations of operations would actually have been had the combination of Aegis and Startek occurred on January 1, 2018, or to project the combined results of operations for any future periods.

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	For Three Months Ended March 31, 2019		Pro Forma For Three Months Ended March 31, 2018
Revenues	$	161,142	$	184,209
Warrant Contra Revenue	—		(2,500		)
Net Revenue	161,142		181,709

Our net revenues for the three-month period ended March 31, 2019 was $161,142 compared to $181,709 for the three-month period ended March 31, 2018 on a pro forma basis. The breakdown of our revenues from various industry verticals for three-month period ended March 31, 2019 and three-month period ended March 31, 2018 on a pro forma basis is as follows:

	For Three Months Ended March 31, 2019		Pro Forma For Three Months Ended March 31, 2018
Verticals:
Telecom	$	65,824	$	96,862
E-commerce & Consumer	24,344		16,370
Financial & Business Services	13,320		17,078
Media & Cable	21,757		17,630
Travel & Hospitality	16,514		14,015
Healthcare & Education	10,529		8,489
Energy, Power & utility	2,485		3,225
All other segments	6,369		8,041
Total	$	161,142	$	181,709

Excluding Warrant Contra Revenue, the $23,067 decrease in revenue was driven by lower telecom revenues in the Americas, India and other countries as well as due to foreign exchange impact mainly in Argentina and India.

We continued to experience lower volumes from our clients in the telecommunications industry, especially in certain Asian geographies including India. There has been an increasingly competitive environment in India where telecom companies are increasing their focus on improving profitability and reducing customer care expenditures. We continue to focus on providing value added services to these telecoms and shifting our business mix towards the premium market rather than the mass market.

We have been growing steadily in the e-commerce and consumer industry with our existing customers continue to increase their business with us. We continue to grow new business lines from our large clients in the media and cable industry vertical.

Our revenue growth in the current three-month period ended March 31, 2019 as compared to the three-month period ended March 31, 2018 was also impacted negatively by fluctuations in foreign exchange particularly that of Argentine peso and Indian rupee relative to the US dollar.

Cost of services

Overall, Cost of services as a percentage of revenue increased to 83.1% for the three-month period ended March 31, 2019 as compared to 81.6% for the three-month period ended March 31, 2018. Employee wages and benefit expense, rent expense and depreciation and amortization are the most significant costs for the Company, representing 75.3%, 5.8% and 4.1% of total Cost of services, respectively. The breakdown of Cost of services is listed in the table below:

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	Three Months Ended March 31,				As percentage of Revenue
	2019		2018		2019		2018
Wages and benefits	$	100,865	$	71,230	62.6	%	61.9	%
Rent expense	7,798		4,399		4.8	%	3.8	%
Depreciation and amortization	5,430		5,521		3.4	%	4.8	%
Other	19,835		12,788		12.3	%	11.1	%
Total	$	133,928	$	93,938	83.1	%	81.6	%

Wages and benefits: Our business heavily relies on our employees to provide professional services to our clients. Thus, our most significant costs are payments made to agents, supervisors, and trainers who are directly involved in delivering services to the clients.

For the three-month period ended March 31, 2019, wages and benefits as a percentage of revenues increased to 62.6%, compared to 61.9% for the quarter ended March 31, 2018. While we saw an increase in minimum wages across several geographies, this was partly offset by our strategy to diversify outside of the telecommunications vertical into other industry verticals.

Rent expense: Rent expense as a percentage of revenue increased to 4.8% for the three-month period ended March 31, 2019, compared to 3.8% for three-month period ended March 31, 2018. The increase was largely due to the combination of Startek with Aegis since the rent cost as a percentage of sales is higher for the legacy Startek business taking the consolidated rent costs as a percentage of sales higher. The increase is also attributable to lower revenues in the current period as compared to the previous period for the legacy Aegis business.

Depreciation and amortization: Depreciation and amortization expense as a percentage of revenue for the three-month period ended March 31, 2019 decreased to 3.4% as compared 4.8% for the three-month period ended March 31, 2018. The decrease was primarily driven by higher amortization of intangibles during the three-month period ended March 31, 2018.

Other expense includes technology, utility, travel and outsourcing costs. As a percentage of revenue, these costs increased from 11.1% to 12.3%. The increase was largely due to the combination of Startek with Aegis since these costs as a percentage of sales is higher for the legacy Startek business.

In aggregate, gross profit as a percentage of revenue for the three-month period ended March 31, 2019 decreased to 16.9% as compared to 18.4% for the three-month period ended March 31, 2018.

Selling, general and administrative expenses

Selling, general and administrative expenses (SG&A) as a percentage of revenue increased from 12.5% in the three-month period ended March 31, 2018 to 14.9% in the three-month period ended March 31, 2019. The increase is largely driven by the Aegis Transaction and the related costs of employees in the United States, which, as a percentage of sales for legacy Startek, is higher relative to legacy Aegis. As part of the Company-wide restructuring exercise, we have taken steps to rationalize costs.

Restructuring and other merger related costs

Restructuring and other merger related costs totaled $1,093 for the three-month period ended March 31, 2019. This primarily relates to the restructuring of our Latin America operations where we closed one delivery center. The cost of $6,257 for the three-month period ended March 31, 2018 relates primarily to the acquisition of Aegis by Capital Square Partners.

Interest expense, net

Interest and other cost totaled $4,465 for the three-month period ended March 31, 2019, compared to $4,129 for the three-month period ended March 31, 2018. The interest expense is on our term debt and revolving line of credit facilities.

Income tax expense

Income tax expense for the three-month period ended March 31, 2019 was $385, compared to $332 for the three-month period ended March 31, 2018.

22

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash flows generated by operating activities, our working capital facilities, and term debt.  We have historically utilized these resources to finance our operations and make capital expenditures associated with capacity expansion, upgrades of information technologies and service offerings, and business acquisitions. Due to the timing of our collections of receivables due from our major customers, we have historically needed to draw on our working capital facilities periodically for ongoing working capital needs.

Cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash held by the Company and all its foreign subsidiaries was $25,688 and $22,919 as at March 31, 2019 and December 31, 2018, respectively. Under current tax laws and regulations, if cash and cash equivalents held outside the United States are distributed to the United States in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes.

Cash flows from operating activities

For the three-month period ended March 31, 2019 and 2018 we reported net cash flows generated from operating activities of $(377) and $3,758 respectively. The decrease was driven primarily by a decrease in cash flows related to net changes in operating assets and liabilities.

Cash flows used in investing activities

For the three-month period ended March 31, 2019 and 2018 we reported net cash used in investing activities of $3,495 and $2,897 respectively. Net cash used in investing activities during the three-month period ended 2019 primarily consisted of capital expenditures.

Cash flows generated from financing activities

For the three-month period ended March 31, 2019 and 2018 we reported net cash flows generated from financing activities of $5,217 and $488 respectively. During the three-month period ended March 31, 2019 our net borrowings increased by $4,702 across our various borrowing arrangements.

Debt

For more information, refer to Note 10, "Debt," to our unaudited condensed consolidated financial statements included in Item 1, "Financial Statements."

23

CONTRACTUAL OBLIGATIONS

There were no material changes in our contractual obligations during the three months ended March 31, 2019.

OFF-BALANCE SHEET ARRANGEMENTS

We have no material off-balance sheet transactions, unconditional purchase obligations or similar instruments, and we are not a guarantor of any other entities’ debt or other financial obligations.

VARIABILITY OF OPERATING RESULTS

We have experienced and expect to continue to experience some quarterly variations in revenue and operating results due to a variety of factors, many of which are outside our control, including: (i) timing and amount of costs incurred to expand capacity in order to provide for volume growth from existing and future clients; (ii) changes in the volume of services provided to clients; (iii) expiration or termination of client projects or contracts; (iv) timing of existing and future client product launches or service offerings; (v) seasonal nature of certain clients’ businesses; and (vi) variability in demand for our services by our clients depending on demand for their products or services, and/or depending on our performance.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing our consolidated financial statements in conformity with GAAP, management must undertake decisions that impact the reported amounts and related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and assumptions upon which accounting estimates are based. Management applies its best judgment based on its understanding and analysis of the relevant circumstances to reach these decisions. By their nature, these judgments are subject to an inherent degree of uncertainty. Accordingly, actual results may vary significantly from the estimates we have applied.

Please refer to Note 1 of the Notes to the Consolidated Financial Statements in our Form 10-KT for the year ended December 31, 2018 for a complete description of our critical accounting policies and estimates.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As Startek has now qualified for Smaller Reporting Company status, this disclosure is not required.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.As of March 31, 2019, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2019, our disclosure controls and procedures were effective and were designed to ensure that all information required to be disclosed by us in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in internal controls over financial reporting.On July 20, 2018, we completed Aegis transaction. In connection with this, our internal controls over financial reporting are being integrated to incorporate the internal controls over financial reporting framework of Aegis. Such integration has resulted in changes in our financial reporting (as described in Rule 13a - 15(f) under the Exchange Act) that have materially affected our internal controls over financial reporting specifically in relation to accounting period end closure process and consolidation process. As a result of the remediation plan to address the material weakness raised by Plante Moran, PLCC in relation to SEC Financial Reporting process, accounting for significant and unusual transactions and the consolidation process,  there are changes in our internal controls over financial reporting.

Other than the remediation plan to mitigate the material weaknesses identified by Plante Moran, PLLC, additions and modifications to policies and controls over implementation of new lease standard, there has been no change in our internal controls over financial reporting (as described in Rule 13a - 15(f) under the Exchange Act) during the quarter ended March 31, 2019 that has materially affected or is reasonably likely to have material affect our internal controls.

24

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDING

None.

ITEM 1A.  RISK FACTORS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOURE

Not applicable.

ITEM 5. OTHER INFORMATION

Submission of Matters to a Vote of Security Holders.

On May 8, 2019, we held our 2019 Annual Meeting of Stockholders. At the Annual Meeting, the stockholders elected eight nominees to serve on the Board of Directors, ratified the appointment of BDO India LLP as our independent registered public accounting firm for 2019, approved by non-binding vote the compensation of our named executive officers, approved the amendment of our 2008 Equity Incentive Plan, and approved the amendment of our Employee Stock Purchase Plan. The final voting results for each of these matters are set forth below:

1. Election of Directors

Name	Number of Shares Voted For	Number of Shares Voted Against	Abstain
Aparup Sengupta	27,285,082	2,156,425	1,547
Sanjay Chakrabarty	27,306,748	2,134,766	1,540
Mukesh Sharda	27,285,082	2,156,425	1,547
Bharat Rao	27,909,237	1,532,270	1,547
Lance Rosenzweig	27,917,405	1,524,448	1,201
Albert Aboody	29,316,010	125,497	1,547
Julie Schoenfeld	29,313,302	128,544	1,208
Jerry Schafer	29,317,656	124,197	1,201

There were 5,359,087 broker non-votes on the proposal for election of directors.

2. Ratification of Appointment Independent Registered Public Accounting Firm

Number of Shares Voted For	Number of Shares Voted Against	Abstain
34,773,350	25,868	2,923

25

There were no broker non-votes on this matter.

3. Approval by Non-binding Vote, the Compensation of our Named Executive Officers

Number of Shares Voted For	Number of Shares Voted Against	Abstain
29,356,204	45,285	41,565

There were 5,359,087 broker non-votes on this matter.

4. Approval of the Amendment of our 2008 Equity Incentive Plan

Number of Shares Voted For	Number of Shares Voted Against	Abstain
29,290,434	104,527	48,093

There were 5,359,087 broker non-votes on this matter.

5. Approval of the Amendment of our Employee Stock Purchase Plan

Number of Shares Voted For	Number of Shares Voted Against	Abstain
29,371,691	23,157	48,206

There were 5,359,087 broker non-votes on this matter.

ITEM 6.  EXHIBITS

INDEX OF EXHIBITS

Exhibit		Incorporated Herein by Reference
No.	Exhibit Description	Form	Exhibit	Filing Date
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Written Statement of the Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials are formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2019 and 2018 (Unaudited), (ii) Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and March 31, 2018, (iii) Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 (Unaudited) and (iv) Notes to Consolidated Financial Statements

* Filed with this Form 10-Q.

26

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

STARTEK, INC.
By:	/s/ Lance Rosenzweig	Date: May 9, 2019
	Lance Rosenzweig
	President and Global CEO
	(principal executive officer)
By:	/s/ Ramesh Kamath	Date: May 9, 2019
	Ramesh Kamath
	Chief Financial Officer
	(principal financial and accounting officer)

27

EX-31.1

EXHIBIT 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Lance Rosenzweig, certify that:

1. I have reviewed this quarterly report on Form 10-Q of StarTek, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2019	/s/ Lance Rosenzweig
	Lance Rosenzweig
	President and Global CEO

EX-31.2

EXHIBIT 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Ramesh Kamath, certify that:

1. I have reviewed this quarterly report on Form 10-Q of StarTek, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2019	/s/ Ramesh Kamath
	Ramesh Kamath
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS

In connection with the Quarterly Report of StarTek, Inc. on Form 10-Q for the quarterly period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned individuals, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.

Date: May 9, 2019	/s/ Lance Rosenzweig
	Lance Rosenzweig
	President and Chief Executive Officer
Date: May 9, 2019	/s/ Ramesh Kamath
	Ramesh Kamath
	Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
	Mar. 31, 2019	Apr. 26, 2019
Document and Entity Information Abstract
Entity Registrant Name	StarTek, Inc.
Entity Central Index Key	0001031029
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding (in shares)		37,663,239
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Revenue	$ 161,142	$ 115,095
Cost of services	133,928	93,938
Gross profit	27,214	21,157
Selling, general and administrative expenses	24,079	14,405
Restructuring and other merger related cost	1,093	6,257
Operating income	2,042	495
Share of profit of affiliates	342	64
Interest expense, net	(4,465)	(4,129)
Exchange losses, net	(691)	(1,278)
Loss before income taxes	(2,772)	(4,848)
Income tax expense	385	332
Net loss	(3,157)	(5,180)
Net income attributable to non-controlling interests	189	972
Net loss attributable to Startek shareholders	(3,346)	(6,152)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	567	(961)
Change in fair value of derivative instruments	(65)	0
Pension amortization	176	(297)
Comprehensive loss	(2,479)	(6,438)
Comprehensive income attributable to non-controlling interests	276	833
Comprehensive loss attributable to Startek shareholders	$ (2,755)	$ (7,271)
Net income (loss) per common share - basic (in dollars per share)	$ (0.09)	$ (0.30)
Weighted average common shares outstanding - basic (in shares)	37,522,499	20,600,000

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 14,595	$ 16,617
Restricted cash	11,093	7,952
Trade accounts receivable, net	102,548	107,836
Unbilled Revenue	50,499	42,135
Prepaid expenses and other current assets	17,454	18,850
Total current assets	196,189	193,390
Property, plant and equipment, net	41,638	42,242
Right-of-use assets	76,983
Intangible assets, net	118,726	121,336
Goodwill	226,505	225,450
Investment in affiliates	2,440	2,097
Deferred tax assets, net	4,075	5,048
Prepaid expenses and other non-current assets	17,562	15,076
Total assets	684,118	604,639
Current liabilities:
Accounts payable	26,757	26,886
Accrued expenses and other current liabilities	82,796	84,881
Short term debt	26,522	21,975
Current maturity of long term debt	12,600	9,800
Current maturity of operating lease liabilities	23,204
Current maturity of capital lease liabilities	1,394	1,816
Total current liabilities	173,273	145,358
Long term debt	149,582	152,100
Operating lease liabilities	55,016
Other non-current liabilities	14,286	11,907
Deferred tax liabilities, net	17,127	18,901
Total liabilities	409,284	328,266
Commitments and contingencies	0	0
Stockholders’ equity:
Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 37,561,744 and 37,446,323 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	375	374
Additional paid-in capital	268,256	267,317
Accumulated other comprehensive loss	(4,955)	(5,547)
Accumulated deficit	(34,473)	(31,127)
Equity attributable to Startek shareholders	229,203	231,017
Non-controlling interest	45,631	45,356
Total stockholders’ equity	274,834	276,373
Total liabilities and stockholders’ equity	$ 684,118	$ 604,639

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, non-convertible shares authorized (in shares)	60,000,000	60,000,000
Common stock, shares issued (in shares)	37,561,744	37,446,323
Common stock, shares outstanding (in shares)	37,561,744	37,446,323

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Cash Flows [Abstract]
Net loss	$ (3,157)	$ (5,180)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	7,304	6,025
Profit on sale of property, plant and equipment	(251)	0
Provision for doubtful accounts	630	374
Share-based compensation expense	425	0
Deferred income taxes	(659)	(918)
Share of profit of affiliates	(342)	(64)
Changes in operating assets and liabilities:
Trade accounts receivable	4,384	4,992
Prepaid expenses and other assets	(8,789)	8,801
Accounts payable	(79)	1,486
Income taxes, net	(948)	(1,735)
Accrued and other liabilities	1,105	(10,023)
Net cash (used in) provided by operating activities	(377)	3,758
Investing Activities
Purchases of property, plant and equipment	(3,495)	(2,919)
Distributions received from affiliates	0	22
Net cash used in investing activities	(3,495)	(2,897)
Financing Activities
Proceeds from the issuance of common stock	515	0
Payments on long term debt	(1,400)	0
Proceeds from other debts, net	6,102	488
Net cash provided by financing activities	5,217	488
Net (decrease) increase in cash and cash equivalents	1,345	1,349
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(226)	(31)
Cash and cash equivalents and restricted cash at beginning of period	24,569	21,601
Total cash and cash equivalents and restricted cash	25,688	22,919
Components of cash and cash equivalents and restricted cash
Balances with banks	14,595	17,693
Restricted cash	11,093	5,226
Total cash and cash equivalents and restricted cash	$ 25,688	$ 22,919

XML

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 3 months ended Mar. 31, 2019 - USD ($) $ in Thousands	Total	Common Stock	Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Equity attributable to Startek shareholders	Non-controlling interest
Beginning balance at Dec. 31, 2018	$ 276,373	$ 374	$ 267,317	$ (5,547)	$ (31,127)	$ 231,017	$ 45,356
Beginning balance (in shares) at Dec. 31, 2018	37,446,323	37,446,323
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued	$ 515	$ 1	514			515
Common stock issued (in shares)		115,421
Share-based compensation	425		425			425
Changes to other comprehensive loss	678			592		592	86
Net (loss) income	(3,157)				(3,346)	(3,346)	189
Ending balance at Mar. 31, 2019	$ 274,834	$ 375	$ 268,256	$ (4,955)	$ (34,473)	$ 229,203	$ 45,631
Ending balance (in shares) at Mar. 31, 2019	37,561,744	37,561,744

XML

OVERVIEW AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

OVERVIEW AND BASIS OF PRESENTATION

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 business process outsourcing company operating in thirteen countries and employing over 45,000 employees worldwide, serving over 250 clients in a variety of industries.

On July 20, 2018, Company completed the acquisition of all of the issued and outstanding shares of capital stock of CSP Alpha Midco Pte Ltd, a Singapore private limited company (“Aegis”), from CSP Alpha Holdings Parent Pte Ltd, a Singapore private limited company (the “Aegis Stockholder”), in exchange for the issuance of 20,600,000 shares of common stock of the Company, par value $.01 per share (the “Common Stock”). Concurrently, the Aegis Stockholder purchased 166,667 newly issued shares of Common Stock at a price of $12 per share for a total cash payment of $2,000. As a result of the consummation of such transactions (the “Aegis Transactions”), the Aegis Stockholder became the holder of 20,766,667 shares of Common Stock, representing approximately 55% of the outstanding Common Stock. For accounting purposes, the Aegis Transactions are treated as a reverse acquisition and Aegis is considered the accounting acquirer. Accordingly, Aegis’ historical financial statements replace the Company’s historical financial statements following the completion of the Aegis Transactions, and the results of operations of both companies will be included in the Company’s financial statements for all periods following the completion of the Aegis Transactions.

In addition, on July 20, 2018, in connection with the consummation of the Aegis Transactions, the Company and the Aegis Stockholder entered into a Stockholders Agreement, pursuant to which the Company and the Aegis Stockholder agreed to, among other things: (i) certain rights, duties and obligations of the Aegis Stockholder and the Company as a result of the transactions contemplated by the Transaction Agreement and (ii) certain aspects of the management, operation and governance of the Company after consummation of the Aegis Transactions.

On December 13, 2018, the Company, and Aegis Stockholder, entered into a Securities Purchase Agreement, pursuant to which Aegis Stockholder purchased, and the Company issued and sold, 368,098 shares of Common Stock, par value $0.01 per share, at a purchase price of $6.52 per share, or a total purchase price of $2,400, taking its holding approximately 56% of outstanding common stock. The Company used the proceeds for general corporate purposes.

Please see Note 3, "Business Acquisitions," for further information.

Basis of preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("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 GAAP for complete financial statements.

These 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 balance sheet as of December 31, 2018, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by 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-KT for the nine months period ended December 31, 2018.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

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 Condensed Consolidated Balance Sheets. The non-controlling interest in our consolidated net income is reported as "Net income (loss) attributable to non-controlling interests" in our Condensed Consolidated Statements of Comprehensive Income (Loss). These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in our Form 10-KT for the nine months period ended December 31, 2018 filed with the SEC on March 14, 2019.

Use of Estimates

The preparation of condensed 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, purchase price allocations, provision for doubtful receivables, valuation allowances for deferred tax assets, the valuation of derivative financial instruments, measurements of stock-based compensation, assets and obligations related to employee benefits, lease termination liabilities, restructuring costs, and income tax uncertainties and other contingencies. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable. 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

On April 1, 2018, the Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers, (Topic 606) using the modified retrospective method. Topic 606 utilizes a five-step process, for revenue recognition that focuses on transfer of control, rather than transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs. Refer Note 5 on "Revenue from Contracts with Customers" for further information.

Consistent with the modified retrospective method of adoption, the Company has not adjusted prior period amounts which continue to be reported in accordance with the Company’s historic revenue accounting policy and principles.

Leases

On January 1, 2019, the Company adopted Accounting Standards Codification 842, Leases, (Topic 842)withthe transition approach. However, the Company has accounted the lease for the comparable periods as per the Accounting Standards Codification 840.

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 sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets.

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 that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

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

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 was recorded at fair value at acquisition date and not amortized but is reviewed for impairment at least annually or more frequently if impairment indicators arise. Our goodwill is allocated by reporting unit and is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit is "more likely than not" less than the carrying amount or if significant changes related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required. The Company can elect to forgo the qualitative assessment and perform the quantitative test.

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.

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 in which 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%.

In May 2018, a discussion document prepared by the Center for Audit Quality SEC Regulations Committee and its International Practices Task Force describes inflation data for Argentina through April 2018. Considering this data and more recent data for May 2018, all of the three-year cumulative inflation rates commonly used to evaluate Argentina’s inflation currently exceed 100%.

Therefore, 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 remeasurement of the local books to USD. Exchange gains and losses is recorded through net income as opposed to through other comprehensive income as had been done historically. Translation adjustments from prior periods will not be removed from equity.

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 11, “Share-Based Compensation” for further information.

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 11, "Share-Based Compensation."

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”).  The amendment makes minor changes to the disclosure requirements for employers that sponsor defined benefit pension and/or other post retirement benefit plans. The new guidance eliminates requirements for certain disclosures that are no longer considered cost beneficial and requires new ones that the FASB considers pertinent. ASU No. 2018-14 is effective for fiscal years ending after December 15, 2020. The Company is evaluating the impact of the adoption of ASU No. 2018-14 on its financial statement disclosures.

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, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We do not expect the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement.” The ASU modifies the disclosure requirements with respect to fair value measurements. The ASU is effective for the Company beginning January 1, 2020, including interim periods in fiscal year 2020. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated results of operations, cash flows, financial position and disclosures.

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BUSINESS ACQUISITIONS

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

BUSINESS ACQUISITIONS

BUSINESS ACQUISITIONS

Aegis Transactions

On July 20, 2018, the Company completed the acquisition of all of the issued and outstanding shares of capital stock of Aegis from the Aegis Stockholder in exchange for the issuance of 20,600,000 shares of the Common Stock in the Aegis Transactions. Concurrently, the Aegis Stockholder purchased 166,667 newly issued shares of the Common Stock at a price of $12 per share for a total cash payment of $2,000. As a result of the consummation of the Aegis Transactions, the Aegis Stockholder now holds 20,766,667 shares of the Common Stock, which is equivalent to approximately 55% of the total outstanding Common Stock.

In accordance with ASC 805, Business Combinations, the transaction was accounted for as a reverse acquisition. As such, Aegis is considered to be the accounting acquirer. Therefore, Aegis’ historical financial statements replace the Company’s historical financial statements following the completion of the Aegis Transactions, and the results of operations of both companies will be included in the Company’s financial statements for all periods subsequent to July 20, 2018.

The estimated fair value of the purchase consideration is calculated based on the Company's stock price as it is considered to be more reliably determinable than the fair value of Aegis' private stock. Consideration is calculated based on the Company's closing stock price of $6.81 on July 20, 2018.

The following table presents the purchase price and the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. These estimates are preliminary, pending final evaluation of certain assets, and therefore are subject to revisions that may result in adjustments to the values presented below:

	Amount
Stock consideration (number of shares outstanding immediately prior the closing date)	16,226,392
Closing share price on July 20, 2018	$	6.81
Total allocable purchase price	$	110,502
	Amount
Cash and cash equivalents	$	1,496
Other current assets	46,094
Property, plant and equipment, net	15,930
Identifiable intangible assets	28,960
Goodwill	64,337
Other non-current assets	3,204
Current liabilities	(22,540		)
Non-current liabilities	(26,979		)
Preliminary purchase price	$	110,502

The goodwill recognized was attributable primarily to the acquired workforce, increased utilization of our global delivery platform and other synergistic benefits. Goodwill from this acquisition is not expected to be deductible for tax purposes.

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GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Goodwill

As of March 31, 2019, the carrying value of goodwill relating to business acquisitions is $226,505. The carrying value of goodwill is allocated to reporting units is as follows:

Reporting Units	Amount
Aegis	162,168
StarTek	64,337
Ending balance, March 31, 2019	$	226,505

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 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 thereafter. These assumptions are reviewed annually as part of management’s budgeting and strategic planning cycles. These estimates may differ from actual results. The values assigned to each of the key assumptions reflect the management’s past experience as their assessment of future trends, and are consistent with external/internal sources of information.

As of March 31, 2019, based on the qualitative assessment, we concluded that goodwill was not impaired.

The following table presents the changes in goodwill during the period:

	Amount
Opening balance, December 31, 2018	$	225,450
Measurement period adjustments	1,055
Ending balance, March 31, 2019	$	226,505

Intangible Assets

The following table presents our intangible assets as of March 31, 2019:

	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships	$	65,050	$	6,367	$	58,683	6.5
Brand	49,500		4,971		44,529		7.2
Trademarks	14,410		670		13,740		7.6
Other intangibles	2,100		326		1,774		4.9
	$	131,060	$	12,334	$	118,726

Expected future amortization of intangible assets as of March 31, 2019 is as follows:

Years Ending December 31,	Amount
Remainder of 2019	$	7,816
2020	10,277
2021	10,277
2022	10,277
2023	10,236
Thereafter	69,843

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REVENUE

3 Months Ended

Mar. 31, 2019

Revenue Recognition [Abstract]

REVENUE

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 the majority 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.

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. This is consistent with our prior revenue recognition model.

We are 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 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 vertical for the three months ended March 31, 2019 and 2018, respectively:

	Three Months Ended March 31,
Vertical:	2019		2018
Telecom	65,824		66,323
E-commerce & Consumer	24,344		8,113
Financial & Business Services	13,320		15,264
Media & Cable	21,757		3,317
Travel & Hospitality	16,514		13,641
Healthcare & Education	10,529		2,630
Energy, Power & utility	2,485		3,016
All other segments	6,369		2,791
Total	$	161,142	$	115,095

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NET LOSS PER SHARE

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

NET LOSS PER SHARE

NET LOSS PER SHARE

Basic net loss 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.

In connection with the Aegis Transactions, the Company maintained Startek's 2008 Equity Incentive Plan (see Note 11, "Share-based compensation and employee benefit plans" for more information). For the three months ended March 31, 2019, the following shares were not included in the computation of diluted earnings per share because we reported a net loss and the effect would have been anti-dilutive (in thousands):

	Three Months Ended March 31, 2019	Three Months Ended March 31, 2018
Anti-dilutive securities:
Stock options	2,782	—

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RESTRUCTURING AND OTHER MERGER RELATED COST

3 Months Ended

Mar. 31, 2019

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND OTHER MERGER RELATED COST

RESTRUCTURING AND OTHER MERGER RELATED COST

The table below summarizes the balance of accrued restructuring and other merger related cost, which is included in other accrued liabilities in our consolidated balance sheets, and the changes during the three months ended March 31, 2019: 

	Employee related			Facilities related			Total
Balance as of December 31, 2018	$	760		$	2,356		$	3,116
Accruals/(reversals)	1,362			(269		)	1,093
Payments	(735		)	(614		)	(1,349		)
Balance as of March 31, 2019	$	1,387		$	1,473		$	2,860

Employee related

In 2018, in conjunction with the closing of the Aegis Transactions, we eliminated a number of positions which were considered redundant, under a company-wide restructuring plan. We recognized provision for employee related costs across a number of geographies and we expect to pay the remaining costs of $446 by the end of third quarter 2019.

In March 2019, the Company has closed one of its sites in Argentina. Upon closure, the Company eliminated a number of positions which were considered redundant and recognized provision for employee related costs and we expect to pay the remaining costs of $941 by the end of fourth quarter 2019.

Facilities related

In 2018, in conjunction with the closing of the Aegis Transactions, we terminated various leases in the United States and the Philippines. We recognized provision for the remaining costs associated with the leases. We expect to pay the remaining costs of $832 by the end of the first quarter of 2021.

Upon closure of site in Argentina, the Company recognized provision for facility related costs and we expect to pay the remaining costs of $162 by the end of the fourth quarter of 2019.

The Company has ceased operations in the United Kingdom on January 12, 2018. Upon closure, the Company recognized provision for the remaining costs associated with the lease of $1,868 as of March 31, 2018. We expect to pay the remaining costs of $479 by the end of the second quarter 2019.

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DERIVATIVE INSTRUMENTS

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Cash flow hedges

Our locations in Canada and the Philippines primarily serve US-based clients. The revenues from these clients is 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 in order to associate the results of the hedges with forecasted expenses.

Unrealized gains and losses are recorded in accumulated other comprehensive income (“AOCI”) and will be re-classified to

operations as the forecasted expenses are incurred, typically within one year. During the three months ended March 31, 2019

and 2018, our cash flow hedges were highly effective and hedge ineffectiveness was not material.

The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of March 31, 2019:

	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	1,600	$	1,254
Philippine Peso	2,736,000	51,642
		$	52,896

Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note 9, "Fair Value Measurements," and are included in prepaid expense and other current assets and accrued expenses and other current liabilities in our condensed consolidated balance sheets, respectively.

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 Statements of Comprehensive Income (Loss). The following table presents these amounts for the three months ended March 31, 2019:

Derivatives not designated under ASC 815	For the Three Months Ended March 31, 2019
Foreign currency forward contracts	$	26
Interest rate swap	$	228

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

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 that are 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 that 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.

The following tables set forth our assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. These balances are included in Other current assets and Other current liabilities, respectively, on our balance sheet.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Foreign exchange contracts	$	—	$	1,311	$	—	$	1,311
Total fair value of assets measured on a recurring basis	$	—	$	1,311	$	—	$	1,311
Liabilities:
Interest rate swap	$	—	$	259	$	—	$	259
Foreign exchange contracts	$	—	$	292	$	—	$	292
Total fair value of liabilities measured on a recurring basis	$	—	$	551	$	—	$	551

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Foreign exchange contracts	$	—	$	1,388	$	—	$	1,388
Total fair value of assets measured on a recurring basis	$	—	$	1,388	$	—	$	1,388
Liabilities:
Interest rate swap	$	—	$	31	$	—	$	31
Foreign exchange contracts	$	—	$	276	$	—	$	276
Total fair value of liabilities measured on a recurring basis	$	—	$	307	$	—	$	307

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DEBT

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

DEBT

DEBT

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

	March 31, 2019		December 31, 2018
Short term debt and current portion of long term debt
Working capital facilities	$	26,522	$	21,975
Term loan	12,600		9,800
Capital lease obligations	1,394		1,816
Total	$	40,516	$	33,591
Long term debt
Term loan, net of debt issuance costs	$	116,631	$	120,462
Equipment loan	1,551		—
Secured revolving credit facility	31,215		31,152
Capital lease obligations	185		486
Total	$	149,582	$	152,100

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 $33.6 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 $26.5 million as of March 31, 2019.

Term loan

On October 27, 2017, the Company entered into a Senior Term Agreement ("Term loan") to provide funding for the acquisition of ESM Holdings Limited and its subsidiaries in the amount of $140 million for a five year term. The Term loan was fully funded on November 22, 2017 and is to be repaid based on a quarterly repayment schedule beginning six months after the first utilization date.

Principal payments due on the term loan are as follows:

Years	Amount
2019	8,400
2020	16,800
2021	21,000
2022	88,200
	$	134,400

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.

In connection with the Term loan, the Company incurred issuance costs of $7.3 million which are net against the Term loan on the balance sheet. Unamortized debt issuance costs as of March 31, 2019 amount to $5.2 million.

Secured revolving credit facility

The Company has a secured revolving credit facility which is effective through March 2022. Under this agreement, we may borrow the lesser of the borrowing base calculation and $50 million. As long as no default has occurred and with lender consent, we may increase the maximum availability to $70 million in $5 million increments, and we may request letters of credit in an aggregate amount equal to the lesser of the borrowing base calculation (minus outstanding advances) and $5 million. The borrowing base is generally defined as 95% of our eligible accounts receivable less certain reserves.

As of March 31, 2019, we had $31.22 million of outstanding borrowings and our remaining borrowing capacity was $8.82 million. Our borrowings bear interest at one-month LIBOR plus 1.50% to 1.75%, depending on current availability.

We have entered into factoring agreements with financial institutions to sell certain of our accounts receivable under non-recourse agreements. These transactions are accounted for as a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. 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 aggregate gross amount factored under these agreements was $1.55 million for three months ended March 31, 2019.

BMO Equipment Loan

On December 27, 2018, the Company executed an agreement to secure a loan against US and Canadian assets in the amount of $1.65 million at the interest of 7.568% per annum, to be repaid over 2.5 years. The loan was funded in January 2019.

Capital 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.

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SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION

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. 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 exercise price for all Warrant Shares will be $9.96 per share. The Warrant Shares are exercisable through January 23, 2026. As of March 31, 2019, no additional Warrant Shares have vested.

The Warrant provides for net share settlement that, if elected by the holders, will reduce the number of shares issued upon exercise to reflect net settlement of the exercise price. 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.

Because the Warrant contains performance criteria (i.e. aggregate purchase levels) which Amazon and/or any of its affiliates must achieve for the Warrant Shares to vest, as detailed above, the final measurement date for each tranche of the Warrant Shares is the date on which performance is completed. Prior to the final measurement date, when achievement of the performance criteria has been deemed probable, a reduction in revenue equal to the percentage of completion to date will be recognized. The fair value of the Warrant Shares will be adjusted at each reporting period until they are earned.

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, 2019 was $425, and is included in selling, general and administrative expense. As of March 31, 2019, there was $1,730 of total unrecognized compensation expense related to nonvested stock options, which is expected to be recognized over a weighted-average period of 2.29 years.

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ACCUMULATED OTHER COMPREHENSIVE LOSS

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss consisted 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, 2018	$	(3,989	)	$	(15	)	$	(1,543	)	$	(5,547	)	$	(1,243	)	$	(6,790	)
Foreign currency translation	567			—			—			567			—			567
Unrealized losses	—			(65		)	—			(65		)	—			(65		)
Pension remeasurement	—			—			90			90			86			176
Balance at March 31, 2019	$	(3,422	)	$	(80	)	$	(1,453	)	$	(4,955	)	$	(1,157	)	$	(6,112	)

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SEGMENT AND GEOGRAPHICAL INFORMATION

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHICAL INFORMATION

SEGMENT AND GEOGRAPHICAL INFORMATION

The Company provides business process outsourcing services (“BPO”) to clients in a variety of industries and geographical locations. Our approach is focused on providing our clients with the best possible combination of services and delivery locations to meet our clients' needs in the best and most efficient manner. Our Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"), reviews financial information mainly on a consolidated basis.

Based on our evaluation of the facts and circumstances, the Company has concluded that it has a single operating and reportable segment (BPO), and two reporting units (Aegis and Startek).

The Group prepares its geographical information in conformity with the accounting policies adopted for preparing and presenting the consolidated financial statements of the Group as a whole.

Revenues by geography, based on the location of the Company's delivery centers, is presented below:

	For the Three Months Ended March 31,
	2019		2018
Revenue:
India	27,346		32,934
Middle East	31,118		32,248
Malaysia	17,079		14,490
Argentina	11,111		16,344
United States	29,744		—
Australia	7,356		9,809
Philippines	12,809		—
Rest of World	24,579		9,270
Total	$	161,142	$	115,095

Property, plant and equipment, net by geography based on the location of the assets is presented below:

	As on March 31, 2019		As on December 31, 2018
Property, plant and equipment, net:
India	12,442		13,287
Middle East	5,983		6,507
Malaysia	5,093		5,058
Argentina	1,277		1,341
United States	5,341		5,349
Australia	311		345
Philippines	2,376		2,835
Rest of World	8,815		7,520
Total	$	41,638	$	42,242

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LEASES

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

LEASES

LEASES

We have operating and finance leases for service centers, corporate offices and certain equipment. Our leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 3-5 years, and some of which include

options to terminate the leases within 1 year.

The components of lease expense were as follows:

	Three months ended March 31, 2019
Operating lease cost	$	7,540
Finance lease cost:
Amortization of right-of-use assets	484
Interest on lease liabilities	28
Total finance lease cost	$	512

Supplemental cash flow information related to leases was as follows:

	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	7,563
Operating cash flow from finance leases	28
Financing cash flows from finance leases	653
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	76,983
Finance lease	—

Supplemental balance sheet information related to leases was as follows:

	As of March 31, 2019
Operating Leases
Operating lease right-of-use assets	$	76,983
Other current liabilities	23,204
Operating lease liabilities	55,016
Total operating lease liabilities	$	78,220
Finance Leases
Property and equipment, at cost	10,899
Accumulated depreciation	(8,679		)
Property and equipment, at net	$	2,220
Other current liabilities	1,394
Other long-term liabilities	184
Total finance lease liabilities	$	1,578

	As of March 31, 2019
Weighted average remaining lease term
Operating leases	5 years
Finance leases	1 year
Weighted average discount rate
Operating leases	7.48	%
Finance leases	4.38	%

Maturities of lease liabilities were as follows:

	Operating leases			Finance leases
Year ending December, 31
Remaining of 2019	$	28,054		$	1,295
2020	20,525			312
2021	13,316			14
2022	10,132			—
2023	6,636			—
Thereafter	13,202			—
Total lease payments	$	91,865		$	1,621
Less imputed interest	(13,645		)	(43		)
Total	$	78,220		$	1,578

LEASES

LEASES

We have operating and finance leases for service centers, corporate offices and certain equipment. Our leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 3-5 years, and some of which include

options to terminate the leases within 1 year.

The components of lease expense were as follows:

	Three months ended March 31, 2019
Operating lease cost	$	7,540
Finance lease cost:
Amortization of right-of-use assets	484
Interest on lease liabilities	28
Total finance lease cost	$	512

Supplemental cash flow information related to leases was as follows:

	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	7,563
Operating cash flow from finance leases	28
Financing cash flows from finance leases	653
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	76,983
Finance lease	—

Supplemental balance sheet information related to leases was as follows:

	As of March 31, 2019
Operating Leases
Operating lease right-of-use assets	$	76,983
Other current liabilities	23,204
Operating lease liabilities	55,016
Total operating lease liabilities	$	78,220
Finance Leases
Property and equipment, at cost	10,899
Accumulated depreciation	(8,679		)
Property and equipment, at net	$	2,220
Other current liabilities	1,394
Other long-term liabilities	184
Total finance lease liabilities	$	1,578

	As of March 31, 2019
Weighted average remaining lease term
Operating leases	5 years
Finance leases	1 year
Weighted average discount rate
Operating leases	7.48	%
Finance leases	4.38	%

Maturities of lease liabilities were as follows:

	Operating leases			Finance leases
Year ending December, 31
Remaining of 2019	$	28,054		$	1,295
2020	20,525			312
2021	13,316			14
2022	10,132			—
2023	6,636			—
Thereafter	13,202			—
Total lease payments	$	91,865		$	1,621
Less imputed interest	(13,645		)	(43		)
Total	$	78,220		$	1,578

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SUBSEQUENT EVENT

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

SUBSEQUENT EVENT

SUBSEQUENT EVENT

The Company evaluated subsequent events through May 07, 2019, the date of these financial statements were issued. There were no material subsequent events that required recognition or additional disclosure in these financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Principles of consolidation

Principles of consolidation

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 Condensed Consolidated Balance Sheets. The non-controlling interest in our consolidated net income is reported as "Net income (loss) attributable to non-controlling interests" in our Condensed Consolidated Statements of Comprehensive Income (Loss). These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in our Form 10-KT for the nine months period ended December 31, 2018 filed with the SEC on March 14, 2019.

Use of Estimates

Use of Estimates

The preparation of condensed 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, purchase price allocations, provision for doubtful receivables, valuation allowances for deferred tax assets, the valuation of derivative financial instruments, measurements of stock-based compensation, assets and obligations related to employee benefits, lease termination liabilities, restructuring costs, and income tax uncertainties and other contingencies. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable. 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

Revenue

On April 1, 2018, the Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers, (Topic 606) using the modified retrospective method. Topic 606 utilizes a five-step process, for revenue recognition that focuses on transfer of control, rather than transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs.

Leases

Leases

On January 1, 2019, the Company adopted Accounting Standards Codification 842, Leases, (Topic 842)withthe transition approach. However, the Company has accounted the lease for the comparable periods as per the Accounting Standards Codification 840.

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 sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets.

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 that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

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

Business Combinations

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 and Intangible Assets

Goodwill was recorded at fair value at acquisition date and not amortized but is reviewed for impairment at least annually or more frequently if impairment indicators arise. Our goodwill is allocated by reporting unit and is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit is "more likely than not" less than the carrying amount or if significant changes related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required. The Company can elect to forgo the qualitative assessment and perform the quantitative test.

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.

Foreign Currency Matters

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 in which 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%.

In May 2018, a discussion document prepared by the Center for Audit Quality SEC Regulations Committee and its International Practices Task Force describes inflation data for Argentina through April 2018. Considering this data and more recent data for May 2018, all of the three-year cumulative inflation rates commonly used to evaluate Argentina’s inflation currently exceed 100%.

Therefore, 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 remeasurement of the local books to USD. Exchange gains and losses is recorded through net income as opposed to through other comprehensive income as had been done historically. Translation adjustments from prior periods will not be removed from equity.

Stock Base Compensation

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.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”).  The amendment makes minor changes to the disclosure requirements for employers that sponsor defined benefit pension and/or other post retirement benefit plans. The new guidance eliminates requirements for certain disclosures that are no longer considered cost beneficial and requires new ones that the FASB considers pertinent. ASU No. 2018-14 is effective for fiscal years ending after December 15, 2020. The Company is evaluating the impact of the adoption of ASU No. 2018-14 on its financial statement disclosures.

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, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We do not expect the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement.” The ASU modifies the disclosure requirements with respect to fair value measurements. The ASU is effective for the Company beginning January 1, 2020, including interim periods in fiscal year 2020. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated results of operations, cash flows, financial position and disclosures.

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BUSINESS ACQUISITIONS (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Schedule of Business Acquisition

The following table presents the purchase price and the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. These estimates are preliminary, pending final evaluation of certain assets, and therefore are subject to revisions that may result in adjustments to the values presented below:

	Amount
Stock consideration (number of shares outstanding immediately prior the closing date)	16,226,392
Closing share price on July 20, 2018	$	6.81
Total allocable purchase price	$	110,502
	Amount
Cash and cash equivalents	$	1,496
Other current assets	46,094
Property, plant and equipment, net	15,930
Identifiable intangible assets	28,960
Goodwill	64,337
Other non-current assets	3,204
Current liabilities	(22,540		)
Non-current liabilities	(26,979		)
Preliminary purchase price	$	110,502

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table presents the changes in goodwill during the period:

	Amount
Opening balance, December 31, 2018	$	225,450
Measurement period adjustments	1,055
Ending balance, March 31, 2019	$	226,505

As of March 31, 2019, the carrying value of goodwill relating to business acquisitions is $226,505. The carrying value of goodwill is allocated to reporting units is as follows:

Reporting Units	Amount
Aegis	162,168
StarTek	64,337
Ending balance, March 31, 2019	$	226,505

Schedule of Finite-Lived Intangible Assets

The following table presents our intangible assets as of March 31, 2019:

	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships	$	65,050	$	6,367	$	58,683	6.5
Brand	49,500		4,971		44,529		7.2
Trademarks	14,410		670		13,740		7.6
Other intangibles	2,100		326		1,774		4.9
	$	131,060	$	12,334	$	118,726

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Expected future amortization of intangible assets as of March 31, 2019 is as follows:

Years Ending December 31,	Amount
Remainder of 2019	$	7,816
2020	10,277
2021	10,277
2022	10,277
2023	10,236
Thereafter	69,843

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REVENUE (Tables)

3 Months Ended

Mar. 31, 2019

Revenue Recognition [Abstract]

Schedule of Revenue Recognition - Disaggregated Revenue

Revenues by our clients' industry vertical for the three months ended March 31, 2019 and 2018, respectively:

	Three Months Ended March 31,
Vertical:	2019		2018
Telecom	65,824		66,323
E-commerce & Consumer	24,344		8,113
Financial & Business Services	13,320		15,264
Media & Cable	21,757		3,317
Travel & Hospitality	16,514		13,641
Healthcare & Education	10,529		2,630
Energy, Power & utility	2,485		3,016
All other segments	6,369		2,791
Total	$	161,142	$	115,095

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NET LOSS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities

For the three months ended March 31, 2019, the following shares were not included in the computation of diluted earnings per share because we reported a net loss and the effect would have been anti-dilutive (in thousands):

	Three Months Ended March 31, 2019	Three Months Ended March 31, 2018
Anti-dilutive securities:
Stock options	2,782	—

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RESTRUCTURING AND OTHER MERGER RELATED COST (Tables)

3 Months Ended

Mar. 31, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

The table below summarizes the balance of accrued restructuring and other merger related cost, which is included in other accrued liabilities in our consolidated balance sheets, and the changes during the three months ended March 31, 2019: 

	Employee related			Facilities related			Total
Balance as of December 31, 2018	$	760		$	2,356		$	3,116
Accruals/(reversals)	1,362			(269		)	1,093
Payments	(735		)	(614		)	(1,349		)
Balance as of March 31, 2019	$	1,387		$	1,473		$	2,860

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DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of March 31, 2019:

	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	1,600	$	1,254
Philippine Peso	2,736,000	51,642
		$	52,896

Schedule of Derivative Instruments

The following table presents these amounts for the three months ended March 31, 2019:

Derivatives not designated under ASC 815	For the Three Months Ended March 31, 2019
Foreign currency forward contracts	$	26
Interest rate swap	$	228

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following tables set forth our assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. These balances are included in Other current assets and Other current liabilities, respectively, on our balance sheet.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Foreign exchange contracts	$	—	$	1,311	$	—	$	1,311
Total fair value of assets measured on a recurring basis	$	—	$	1,311	$	—	$	1,311
Liabilities:
Interest rate swap	$	—	$	259	$	—	$	259
Foreign exchange contracts	$	—	$	292	$	—	$	292
Total fair value of liabilities measured on a recurring basis	$	—	$	551	$	—	$	551

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Foreign exchange contracts	$	—	$	1,388	$	—	$	1,388
Total fair value of assets measured on a recurring basis	$	—	$	1,388	$	—	$	1,388
Liabilities:
Interest rate swap	$	—	$	31	$	—	$	31
Foreign exchange contracts	$	—	$	276	$	—	$	276
Total fair value of liabilities measured on a recurring basis	$	—	$	307	$	—	$	307

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DEBT (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Debt

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

	March 31, 2019		December 31, 2018
Short term debt and current portion of long term debt
Working capital facilities	$	26,522	$	21,975
Term loan	12,600		9,800
Capital lease obligations	1,394		1,816
Total	$	40,516	$	33,591
Long term debt
Term loan, net of debt issuance costs	$	116,631	$	120,462
Equipment loan	1,551		—
Secured revolving credit facility	31,215		31,152
Capital lease obligations	185		486
Total	$	149,582	$	152,100

Term Loan

Principal payments due on the term loan are as follows:

Years	Amount
2019	8,400
2020	16,800
2021	21,000
2022	88,200
	$	134,400

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Comprehensive Loss

Accumulated other comprehensive loss consisted 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, 2018	$	(3,989	)	$	(15	)	$	(1,543	)	$	(5,547	)	$	(1,243	)	$	(6,790	)
Foreign currency translation	567			—			—			567			—			567
Unrealized losses	—			(65		)	—			(65		)	—			(65		)
Pension remeasurement	—			—			90			90			86			176
Balance at March 31, 2019	$	(3,422	)	$	(80	)	$	(1,453	)	$	(4,955	)	$	(1,157	)	$	(6,112	)

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SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Revenues by geography, based on the location of the Company's delivery centers, is presented below:

	For the Three Months Ended March 31,
	2019		2018
Revenue:
India	27,346		32,934
Middle East	31,118		32,248
Malaysia	17,079		14,490
Argentina	11,111		16,344
United States	29,744		—
Australia	7,356		9,809
Philippines	12,809		—
Rest of World	24,579		9,270
Total	$	161,142	$	115,095

Property, plant and equipment, net by geography based on the location of the assets is presented below:

	As on March 31, 2019		As on December 31, 2018
Property, plant and equipment, net:
India	12,442		13,287
Middle East	5,983		6,507
Malaysia	5,093		5,058
Argentina	1,277		1,341
United States	5,341		5,349
Australia	311		345
Philippines	2,376		2,835
Rest of World	8,815		7,520
Total	$	41,638	$	42,242

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LEASES (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Components of Lease Expense

The components of lease expense were as follows:

	Three months ended March 31, 2019
Operating lease cost	$	7,540
Finance lease cost:
Amortization of right-of-use assets	484
Interest on lease liabilities	28
Total finance lease cost	$	512

Supplemental cash flow information related to leases was as follows:

	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	7,563
Operating cash flow from finance leases	28
Financing cash flows from finance leases	653
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	76,983
Finance lease	—

Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows:

	As of March 31, 2019
Operating Leases
Operating lease right-of-use assets	$	76,983
Other current liabilities	23,204
Operating lease liabilities	55,016
Total operating lease liabilities	$	78,220
Finance Leases
Property and equipment, at cost	10,899
Accumulated depreciation	(8,679		)
Property and equipment, at net	$	2,220
Other current liabilities	1,394
Other long-term liabilities	184
Total finance lease liabilities	$	1,578

	As of March 31, 2019
Weighted average remaining lease term
Operating leases	5 years
Finance leases	1 year
Weighted average discount rate
Operating leases	7.48	%
Finance leases	4.38	%

Maturities of Operating Lease Liabilities

Maturities of lease liabilities were as follows:

	Operating leases			Finance leases
Year ending December, 31
Remaining of 2019	$	28,054		$	1,295
2020	20,525			312
2021	13,316			14
2022	10,132			—
2023	6,636			—
Thereafter	13,202			—
Total lease payments	$	91,865		$	1,621
Less imputed interest	(13,645		)	(43		)
Total	$	78,220		$	1,578

Maturities of Financing Lease Liabilities

Maturities of lease liabilities were as follows:

	Operating leases			Finance leases
Year ending December, 31
Remaining of 2019	$	28,054		$	1,295
2020	20,525			312
2021	13,316			14
2022	10,132			—
2023	6,636			—
Thereafter	13,202			—
Total lease payments	$	91,865		$	1,621
Less imputed interest	(13,645		)	(43		)
Total	$	78,220		$	1,578

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OVERVIEW AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Thousands	Dec. 13, 2018 USD ($) $ / shares shares	Jul. 20, 2018 USD ($) $ / shares shares	Mar. 31, 2019 employee customer country $ / shares	Dec. 31, 2018 $ / shares	Jan. 23, 2018 $ / shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of countries in which company operates | country			13
Number of employees (over) | employee			45,000
Number of customers (over) | customer			250
Business Acquisition [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.01	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Aegis Stockholder
Business Acquisition [Line Items]
Ownership by Aegis Stockholder, percentage	56.00%
Number of shares issued and sold (in shares)	368,098
Share price (in dollars per share) | $ / shares	$ 6.52
Total purchase price | $	$ 2,400
Aegis
Business Acquisition [Line Items]
Stock consideration (number of shares outstanding immediately prior the closing date)		16,226,392
Closing share price on July 20, 2018 | $ / shares		$ 6.81
Aegis | Common Stock
Business Acquisition [Line Items]
Closing share price on July 20, 2018 | $ / shares		$ 12
Closing share price on July 20, 2018 | $		$ 2,000
Aegis | Common Stock | Aegis Stockholder
Business Acquisition [Line Items]
Stock consideration (number of shares outstanding immediately prior the closing date)		20,600,000
Business acquisition, number of additional shares (in shares)		166,667
Ownership by Aegis Stockholder, shares		20,766,667
Ownership by Aegis Stockholder, percentage		55.00%

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BUSINESS ACQUISITIONS (Textuals) (Details) - USD ($) $ / shares in Units, $ in Thousands	Jul. 20, 2018	Dec. 13, 2018
Business Acquisition [Line Items]
Share price (in dollars per share)	$ 6.81
Aegis
Business Acquisition [Line Items]
Stock consideration (number of shares outstanding immediately prior the closing date)	16,226,392
Closing share price on July 20, 2018	$ 6.81
Aegis | Common Stock
Business Acquisition [Line Items]
Closing share price on July 20, 2018	$ 12
Closing share price on July 20, 2018	$ 2,000
Aegis Stockholder
Business Acquisition [Line Items]
Ownership by Aegis Stockholder, percentage		56.00%
Aegis Stockholder | Aegis | Common Stock
Business Acquisition [Line Items]
Stock consideration (number of shares outstanding immediately prior the closing date)	20,600,000
Business acquisition, number of additional shares (in shares)	166,667
Ownership by Aegis Stockholder, shares	20,766,667
Ownership by Aegis Stockholder, percentage	55.00%

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BUSINESS ACQUISITIONS (Fair Value of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ / shares in Units, $ in Thousands	Jul. 20, 2018	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Business Acquisition [Line Items]
Goodwill		$ 226,505	$ 225,450	$ 225,450
Aegis
Business Acquisition [Line Items]
Stock consideration (number of shares outstanding immediately prior the closing date)	16,226,392
Closing share price on July 20, 2018	$ 6.81
Total allocable purchase price	$ 110,502
Cash and cash equivalents	1,496
Other current assets	46,094
Property, plant and equipment, net	15,930
Identifiable intangible assets	28,960
Goodwill	64,337
Other non-current assets	3,204
Current liabilities	(22,540)
Non-current liabilities	(26,979)
Preliminary purchase price	$ 110,502

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GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Goodwill [Roll Forward]
Goodwill	$ 225,450
Measurement period adjustments	1,055
Goodwill	226,505
Aegis
Goodwill [Roll Forward]
Goodwill	162,168
Startek [Member]
Goodwill [Roll Forward]
Goodwill	$ 64,337

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GOODWILL AND INTANGIBLE ASSETS (Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 131,060
Accumulated Amortization	12,334
Net Intangibles	118,726	$ 121,336
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	65,050
Accumulated Amortization	6,367
Net Intangibles	$ 58,683
Weighted Average Amortization Period (years)	6 years 6 months
Brand
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 49,500
Accumulated Amortization	4,971
Net Intangibles	$ 44,529
Weighted Average Amortization Period (years)	7 years 2 months 12 days
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 14,410
Accumulated Amortization	670
Net Intangibles	$ 13,740
Weighted Average Amortization Period (years)	7 years 7 months 6 days
Other intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 2,100
Accumulated Amortization	326
Net Intangibles	$ 1,774
Weighted Average Amortization Period (years)	4 years 10 months 24 days

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GOODWILL AND INTANGIBLE ASSETS (Future Amortization Expense) (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2019	$ 7,816
2020	10,277
2021	10,277
2022	10,277
2023	10,236
Thereafter	$ 69,843

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REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregated Revenue [Line Items]
Revenue	$ 161,142	$ 115,095
Telecom
Disaggregated Revenue [Line Items]
Revenue	65,824	66,323
E-commerce & Consumer
Disaggregated Revenue [Line Items]
Revenue	24,344	8,113
Financial & Business Services
Disaggregated Revenue [Line Items]
Revenue	13,320	15,264
Media & Cable
Disaggregated Revenue [Line Items]
Revenue	21,757	3,317
Travel & Hospitality
Disaggregated Revenue [Line Items]
Revenue	16,514	13,641
Healthcare & Education
Disaggregated Revenue [Line Items]
Revenue	10,529	2,630
Energy, Power & utility
Disaggregated Revenue [Line Items]
Revenue	2,485	3,016
All other segments
Disaggregated Revenue [Line Items]
Revenue	$ 6,369	$ 2,791

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NET LOSS PER SHARE (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	2,782	0

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RESTRUCTURING AND OTHER MERGER RELATED COST (Restructuring Charges) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Restructuring Reserve [Roll Forward]
Accruals/(reversals)	$ 1,093
Payments	(1,349)
Ending balance	2,860
Employee related
Restructuring Reserve [Roll Forward]
Accruals/(reversals)	1,362
Payments	(735)
Ending balance	1,387
Facilities related
Restructuring Reserve [Roll Forward]
Accruals/(reversals)	(269)
Payments	(614)
Ending balance	$ 1,473

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RESTRUCTURING AND OTHER MERGER RELATED COST (Textuals) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 2,860	$ 3,116
Employee related
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	1,387	760
Employee related | Aegis Transaction
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	446
Employee related | Argentina
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	941
Facilities related
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	1,473	2,356
Facilities related | Aegis Transaction
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	832
Facilities related | Argentina
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	162
Facilities related | United Kingdom
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 479	$ 1,868

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DERIVATIVE INSTRUMENTS (Textuals) (Details)	3 Months Ended
	Mar. 31, 2019
Foreign exchange contracts | Minimum | Cash Flow Hedging
Derivative [Line Items]
Contract period	3 months
Foreign exchange contracts | Maximum | Cash Flow Hedging
Derivative [Line Items]
Contract period	12 months
Foreign Exchange Forward | Maximum | Not Designated as Hedging Instrument
Derivative [Line Items]
Contract period	3 years

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DERIVATIVE INSTRUMENTS (Notional Amount of Hedging Instruments) (Details) - Mar. 31, 2019 - Designated as Hedging Instrument - Cash Flow Hedging ₱ in Thousands, $ in Thousands, $ in Thousands	USD ($)	PHP (₱)	CAD ($)
Forward Contracts
Derivative [Line Items]
Derivative, Notional Amount	$ 52,896
Canadian Foreign Exchange Contract
Derivative [Line Items]
Derivative, Notional Amount	1,254		$ 1,600
Philippine Foreign Exchange Contract
Derivative [Line Items]
Derivative, Notional Amount	$ 51,642	₱ 2,736,000

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DERIVATIVE INSTRUMENTS (Realized Gains and Losses) (Details) - Not Designated as Hedging Instrument $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Foreign currency forward contracts
Derivative [Line Items]
Realized gains and losses	$ 26
Interest rate swap
Derivative [Line Items]
Realized gains and losses	$ 228

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FAIR VALUE MEASUREMENTS (Recurring and Nonrecurring) (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets and Liabilities at Fair Value Measured on Recurring Basis
Total fair value of assets measured on a recurring basis	$ 1,311	$ 1,388
Total fair value of liabilities measured on a recurring basis	551	307
Level 1
Assets and Liabilities at Fair Value Measured on Recurring Basis
Total fair value of assets measured on a recurring basis	0	0
Total fair value of liabilities measured on a recurring basis	0	0
Level 2
Assets and Liabilities at Fair Value Measured on Recurring Basis
Total fair value of assets measured on a recurring basis	1,311	1,388
Total fair value of liabilities measured on a recurring basis	551	307
Level 3
Assets and Liabilities at Fair Value Measured on Recurring Basis
Total fair value of assets measured on a recurring basis	0	0
Total fair value of liabilities measured on a recurring basis	0	0
Interest rate swap
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative liability	259	31
Interest rate swap | Level 1
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative liability	0	0
Interest rate swap | Level 2
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative liability	259	31
Interest rate swap | Level 3
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative liability	0	0
Foreign exchange contracts
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative asset	1,311	1,388
Derivative liability	292	276
Foreign exchange contracts | Level 1
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative asset	0	0
Derivative liability	0	0
Foreign exchange contracts | Level 2
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative asset	1,311	1,388
Derivative liability	292	276
Foreign exchange contracts | Level 3
Assets and Liabilities at Fair Value Measured on Recurring Basis
Derivative asset	0	0
Derivative liability	$ 0	$ 0

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DEBT (Schedule of Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2018
Schedule of Debt Instruments [Table] [Line Items]
Total short term debt	$ 40,516	$ 33,591
Total long term debt	149,582	152,100
Term loan
Schedule of Debt Instruments [Table] [Line Items]
Total long term debt	116,631	120,462
Equipment loan
Schedule of Debt Instruments [Table] [Line Items]
Total long term debt	1,551	0
Capital lease obligations
Schedule of Debt Instruments [Table] [Line Items]
Total long term debt	185	486
Line of Credit
Schedule of Debt Instruments [Table] [Line Items]
Total short term debt	26,522	21,975
Term loan
Schedule of Debt Instruments [Table] [Line Items]
Total short term debt	12,600	9,800
Capital lease obligations
Schedule of Debt Instruments [Table] [Line Items]
Total short term debt	1,394	1,816
Revolving Credit Facility | Line of Credit
Schedule of Debt Instruments [Table] [Line Items]
Total long term debt	$ 31,215	$ 31,152

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DEBT (Textuals) (Details) - USD ($)			3 Months Ended
	Dec. 27, 2018	Oct. 27, 2017	Mar. 31, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Short-term debt, outstanding balance			$ 26,522,000	$ 21,975,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			50,000,000
Remaining borrowing capacity			8,820,000
Additional borrowing capacity			70,000,000
Incremental borrowing amount			$ 5,000,000
Borrowing base, as percentage of eligible accounts receivables less reserves			95.00%
Line of credit outstanding			$ 5,000,000
Gross amount factored			1,550,000
Letter of Credit
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			31,220,000
Term loan
Line of Credit Facility [Line Items]
Face amount of debt		$ 140,000,000
Debt term		5 years
Debt issuance costs, net			7,300,000
Unamortized debt issuance costs			$ 5,200,000
Term loan | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Basis spread on variable rate (as percent)		4.50%
Term loan | London Interbank Offered Rate (LIBOR) | Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as percent)		3.75%	1.50%
Term loan | London Interbank Offered Rate (LIBOR) | Maximum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as percent)		4.50%	1.75%
Secured Debt
Line of Credit Facility [Line Items]
Face amount of debt	$ 1,650,000.00
Stated percentage	7.568%
Amortization period	2 years 6 months
Line of Credit
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 33,600,000
Short-term debt, outstanding balance			$ 26,500,000
Line of Credit | Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as percent)			3.00%
Line of Credit | Maximum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as percent)			4.50%

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DEBT (Term Loan) (Details) - Term loan $ in Thousands	Mar. 31, 2019 USD ($)
Debt Instrument [Line Items]
2019	$ 8,400
2020	16,800
2021	21,000
2022	88,200
Long-term Debt	$ 134,400

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SHARE-BASED COMPENSATION (Textuals) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	8 Months Ended
	Jan. 23, 2018	Mar. 31, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 13, 2018	Jul. 20, 2018
Stock Awards Activity [Line Items]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01		$ 0.01	$ 0.01	$ 0.01
Amazon Transaction Agreement
Stock Awards Activity [Line Items]
Number of shares to be issued with warrant (in shares)	4,000,000
Number of vested shares (in shares)			425,532
Payment expected for vesting of remaining warrant shares	$ 600,000
Exercise price of warrant shares (in dollars per share)	$ 9.96
Selling, general and administrative expenses
Stock Awards Activity [Line Items]
Total compensation cost		$ 425
Stock options
Stock Awards Activity [Line Items]
Total unrecognized compensation cost		$ 1,730
Weighted-average period that cost is expected to be recognized		2 years 3 months 15 days

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	$ 276,373
Foreign currency translation	567
Unrealized losses	(65)
Pension remeasurement	176
Ending balance	274,834
Total
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(6,790)
Ending balance	(6,112)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(3,989)
Foreign currency translation	567
Ending balance	(3,422)
Derivatives Accounted for as Cash Flow Hedges
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(15)
Unrealized losses	(65)
Ending balance	(80)
Defined Benefit Plan
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(1,543)
Pension remeasurement	90
Ending balance	(1,453)
Equity attributable to Startek shareholders
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(5,547)
Foreign currency translation	567
Unrealized losses	(65)
Pension remeasurement	90
Ending balance	(4,955)
Non-controlling interests
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(1,243)
Pension remeasurement	86
Ending balance	$ (1,157)

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SEGMENT AND GEOGRAPHICAL INFORMATION (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) segment	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments | segment	1
Number of reportable segments | segment	1
Number of reporting units | segment	2
Revenue	$ 161,142	$ 115,095
Property, plant and equipment, net	41,638		$ 42,242
India
Segment Reporting Information [Line Items]
Revenue	27,346	32,934
Property, plant and equipment, net	12,442		13,287
Middle East
Segment Reporting Information [Line Items]
Revenue	31,118	32,248
Property, plant and equipment, net	5,983		6,507
Malaysia
Segment Reporting Information [Line Items]
Revenue	17,079	14,490
Property, plant and equipment, net	5,093		5,058
Argentina
Segment Reporting Information [Line Items]
Revenue	11,111	16,344
Property, plant and equipment, net	1,277		1,341
United States
Segment Reporting Information [Line Items]
Revenue	29,744	0
Property, plant and equipment, net	5,341		5,349
Australia
Segment Reporting Information [Line Items]
Revenue	7,356	9,809
Property, plant and equipment, net	311		345
Philippines
Segment Reporting Information [Line Items]
Revenue	12,809	0
Property, plant and equipment, net	2,376		2,835
Rest of World
Segment Reporting Information [Line Items]
Revenue	24,579	$ 9,270
Property, plant and equipment, net	$ 8,815		$ 7,520

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LEASES (Textuals) (Details)	3 Months Ended
	Mar. 31, 2019
Lessee, Lease, Description [Line Items]
Termination period	1 year
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Renewal term	3 years
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	10 years
Renewal term	5 years

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LEASES (Components of Lease Expense) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Operating lease cost	$ 7,540
Amortization of right-of-use assets	484
Interest on lease liabilities	28
Total finance lease cost	512
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	7,563
Operating cash flow from finance leases	28
Financing cash flows from finance leases	653
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	76,983
Finance lease	$ 0

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LEASES (Supplemental Balance Sheet Information) (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Operating Leases
Operating lease right-of-use assets	$ 76,983
Other current liabilities	23,204
Operating lease liabilities	55,016
Total operating lease liabilities	78,220
Finance Leases
Property and equipment, at cost	10,899
Accumulated depreciation	(8,679)
Property and equipment, at net	2,220
Other current liabilities	1,394
Other long-term liabilities	184
Total finance lease liabilities	$ 1,578
Weighted average remaining lease term
Operating leases	5 years
Finance leases	1 year
Weighted average discount rate
Operating leases	7.48%
Finance leases	4.38%

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LEASES (Maturities of Operating and Finance Lease Liabilities) (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Operating leases
Remaining of 2019	$ 28,054
2020	20,525
2021	13,316
2022	10,132
2023	6,636
Thereafter	13,202
Total lease payments	91,865
Less imputed interest	(13,645)
Total	78,220
Finance leases
Remaining of 2019	1,295
2020	312
2021	14
2022	0
2023	0
Thereafter	0
Total lease payments	1,621
Less imputed interest	(43)
Total	$ 1,578