StarTek, Inc.

Good afternoon everyone and thank you for participating in today's conference call to discuss StarTech's financial results for the first quarter ended March 31, 2021. Joining us today are StarTech's Executive Chairman and Global CEO, Aparabh Sengupta, and the company's CFO, Vikash Surekha. Following their remarks, we'll open the call for your questions. Before we continue, we would like to remind all participants that the discussion today may contain certain statements which are forward-looking in nature pursuant to the safe harbor provisions of the federal securities laws. These statements are based on information currently available to us and are subject to various risks and uncertainties that could cause actual results to differ materially. StarTech advises all those listening to this call to review the latest 10Q and 10K posted on its website for a summary of these risks and uncertainties. StarTech does not undertake the responsibility to update any forward-looking statements. Further, the discussion today may include some non-GAAP measures in accordance with Regulation G. The company has reconciled the amounts back to the closest GAAP-based measurements. The reconciliations can be found in the earnings release on the Investors section of their website. I would like to remind everyone that a webcast replay of today's call will be available via the Investors section of the company's website at www.startech.com. Now, I would like to turn the call over to StarTech's Executive Chairman and Global CEO, Apartheid Sengupta. Sir, please go ahead.

Thank you, Chino. Good afternoon, everyone, and thank you all for joining. Before we discuss our first quarter performance, I'd like to share our deepest condolences to the families in India and around the world. They are still contending with the tragic consequences of the COVID-19 pandemic. These are difficult and heartbreaking times, and our thoughts are with everyone who's struggling with COVID-19 themselves or has lost a loved one to the virus, both over the past year and during the most recent outbreaks. With the pandemic resurging across certain geographies, we have focused on protecting the health and safety of our employees while flexibly addressing our clients' evolving needs. Access to the vaccine and the pace of broader recovery remains largely uneven worldwide, and the progress on both fronts is still very difficult to predict. About 65% of our global team is working remotely to date. We will continue making the necessary optimizations to our fully established StarTech cloud infrastructure and the proportions of a workforce remote or on campus to prioritize their safety and productivity. This focus on operational flexibility and efficiencies has underscored our work throughout 2021 so far. Even though the first quarter represents a seasonally soft period for our business, we had a record first quarter revenue since the culmination of StarTech and Aegis. We reported increased net revenues year over year and generated strong growth across gross profit, gross margin, and adjusted EBITDA. As we continue to prudently manage our costs and support our workforce and global client base, we are proud to have built a strong strategic and financial foundation from which to propel our progress through the remainder of the year. Tailwinds in our e-commerce verticals have remained strong, though they are not as elevated as they were during Q4 and the peak holiday seasons. As with this broader macroeconomic recovery I mentioned earlier, the recovery of brick-and-mortar retail, travel, and hospitality verticals are also uneven, and likely to remain so for the near future. The fact that we are still largely operating in an environment driven by remote and hybrid work has also properly demand strength in some of our key client verticals like healthcare, cable and media. Within healthcare in particular, we are especially honored to now be supporting the COVID-19 assistance programs throughout the United States. Our services have been instrumental in helping our clients and their end customers get across to the resources they need during these dynamic and difficult times. Over the coming months, we will continue working to ensure that this access becomes even more seamless and widespread. We are making strong progress with our strategic growth initiative so far in 2021, all while preserving the health, continuity, and productivity of our global workforce. Our team has demonstrated incredible resilience and adaptability since the onset of the pandemic both in servicing our customers and in how they have used and optimized our platform in support of our continued growth. I will have more to say on this a bit later in the call about some of our strategic and technological initiatives, including the progress we have made with our investment in CSS Corp. But before I discuss that further, I would like to turn the call to our CFO, Vikas Surekha, to walk you through the first quarter financial performance in greater detail. Vikas?

Thank you, Aproop, and good afternoon, everyone. I'm jumping right into our results. Net revenue in Q1 increased to $163.1 million compared to $164.9 million in the year-ago quarter. This year-over-year growth reflects continued client demand strength, particularly within our e-commerce, healthcare, cable, and media verticals. As Aproop just mentioned, Q4 represents a seasonally strong period for us while Q1 is one of our stop-step periods. On a constant currency basis, net revenue increased by 2.3% compared to the year-ago quarter. Gross profit for Q1 increased 23% to 24.7 million compared to 20.1 million in the year-ago quarter. Gross margin increased 250 basis points to 15.1% compared to 12.5% in the year-ago quarter. Similar to our top line, The year-over-year increase in gross profit and margin reflect strong growth within a client base and a greater revenue mix of higher margin verticals. Our Q1 gross profit includes benefits from government grants of about $2 million. SG&A, which is selling general and administrative expenses for Q1, was $14.2 million, representing a sequential and year-over-year decrease compared to $15.3 million in Q4, and 17.3 million in the year-ago quarter. As a percentage of revenue, SG&A improved to 8.7% compared to 10.7% in the year-ago quarter. This reflects the ongoing benefits of the cost reduction we have implemented over the last 12 months, and we expect SG&A to remain at current levels going forward. Net loss attributable to startup shareholders for Q1 improved to or a loss of 30 cents per share compared to a net loss attributable to Carthage shareholders of 26.6 million or a loss of 69 cents per share in the year-ago quarter. Our net loss this quarter reflects a one-time charge related to expenses associated with the debt refinancing we completed in Feb of this year. We also had a few one-off tax treatments in this quarter. In the year-ago quarter, net loss included an approximate 22.7 million goodwill impairments, primarily due to COVID-19-related forecasted declines in some of our geographies. Adjusted EBITDA in Q1 increased 72% to 18 million compared to 10.5 million in the year-ago quarter. As a percentage of revenue, adjusted EBITDA increased to 11.1%, which was up 460 basis points compared to 6.5% in the year-ago quarter. The increase was primarily driven by our year-over-year revenue growth, margin expansion, and cost reduction, as well as government grants that we received in certain regions. From a balance sheet perspective, at March 31, 2021, our cash and restricted cash increased to $64.6 million compared to $50.6 million at December 31, 2020 with the increase due to working capital improvements during the quarter. Total debt at March 31, 2021 was 172.8 million compared to 136 million at December 31, 2020. Net debt at March 31, 2021 was 108.1 million compared to 85.4 million at December 31, 2020. The increase primarily reflects the use of proceeds of a recent debt refinancing to repay our previous senior debt facility in full, as well as making the strategic investment in CSX. Even after an increased gross debt after the refinancing, our net leverage on a trailing 12-month basis continues to remain at well under 2x. We continue to remain comfortable with our liquidity positions, as it stands today and are focused on prudently managing non-essential expenses and other costs to preserve the optimal efficiency of our operations. This concludes my prepared remarks. I will now hand over the call back to Aproop. Aproop, over to you. Aproop?