StarTek Ousts CEO Meade
Denver-based teleservices provider StarTek abruptly announced late last month that it had parted ways with its most recent CEO, Bill Meade, who had headed up the company since June 2001. Meade's departure was the latest in a string of CEO turnovers.
StarTek, which provides 100 percent inbound services, has been in business since 1989, and in recent years, had posted good news in the form of new call ceners opened and positive growth numbers, has admitted to "disappointing performance" in this most recent quarter due to a drop in earnings.
Acting CEO Steve Butler hosted a conference call for members of the press recently during which he stated that for the quarter ending December 31, 2004, revenues were essentially flat, and fully diluted earnings per share from continuing operations decreased 46 percent to $0.30 compared to $0.56 for the fourth quarter of 2003. Fully diluted earnings per share including discontinued operations decreased by 44 percent to $0.30, compared to $0.54 for the same period in 2003.
StarTek Abruptly Ousts CEO
Drop in stock price, poor financial results preceded resignation
By Roger Fillion, Rocky Mountain News
William Meade has been unexpectedly ousted as chief executive of StarTek Inc.
Its stock is down 29 percent over the past year, and it reported its first quarterly earnings drop since 2001.
In a statement, StarTek said Meade and the board "mutually agreed that a change in leadership is in the best interests of StarTek's stockholders."
The company, which made the announcement late Friday, didn't provide further explanation, saying only that Meade had "tendered his resignation to the board to pursue other interests."
StarTek - which has experienced some high-profile executive turnovers in recent years - named Chief Financial Officer Steven Butler as interim CEO. A permanent chief executive is being sought.
Meade joined StarTek as CEO in June 2001. StarTek provides outsourced services to Fortune 1000 companies. Those services include customer support as well as packaging and marketing support and logistics.
StarTek's last reported global employee count was nearly 6,000. About 1,200 work in Greeley.
Troy Mastin, an analyst for William Blair & Co., called StarTek's recent financial performance "disappointing."
In the third quarter of 2004, -StarTek reported its first drop in quarterly earnings on an annual basis since the fourth quarter of 2001.
The Greeley Tribune reported last week that StarTek has decided to close its supply-chain division in Greeley and move the operations to Clarksville, Tenn. The paper said the closure could affect up to 40 employees.
A StarTek spokesman declined to comment, citing a mandated "quiet period" ahead of the company's release of its fourth-quarter earnings.
Asked about Meade's sudden ouster, Mastin said, "It's difficult to say why (he left) now."
Former Colorado State University President Albert Yates, who is a StarTek board member, is heading a panel to find a new CEO.
Reached by telephone, Yates declined to comment about Meade and referred questions to StarTek's co-founder and chairman, Emmet Stephenson. Stephenson did not return a phone call.
Looking ahead, Cingular Wireless' recent purchase of AT&T Wireless Services has presented a question mark for StarTek. The carrier has been a major customer.
StarTek has been among the providers of customer-support services for AT&T, and Mastin of William Blair noted that Cingular has indicated it may make changes in that area.
"They identified AT&T's customer service as an area where there was opportunity for improvement," said Mastin.
Mastin said that Cingular's announcement did not necessarily mean StarTek was in danger of getting dropped.
In the nine months ended September 2004, AT&T Wireless accounted for 42 percent of StarTek's revenue.
The resignation comes as the Denver-based computer-services company is experiencing a financial rough spot.
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