Startek (SRT) 10-Q 10 May 16 2016 Q1 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
	Mar. 31, 2016	May. 03, 2016
Document and Entity Information Abstract
Entity Registrant Name	StarTek, Inc.
Entity Central Index Key	1,031,029
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		15,717,179
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue	$ 78,035	$ 63,653
Cost of services	69,647	57,536
Gross profit	8,388	6,117
Selling, general and administrative expenses	7,781	8,061
Restructuring charges	12	806
Operating income (loss)	595	(2,750)
Interest and other income (expense), net	(439)	(238)
Income (loss) before income taxes	156	(2,988)
Income tax expense	125	187
Net income (loss)	31	(3,175)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	21	(67)
Change in fair value of derivative instruments	258	8
Comprehensive income (loss)	$ 310	$ (3,234)
Net income (loss) per common share - basic	$ 0	$ (0.21)
Weighted average common shares outstanding - basic	15,699	15,417
Net income (loss) per common share - diluted	$ 0	$ (0.21)
Weighted average common shares outstanding - diluted	15,956	15,417

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 830	$ 2,626
Trade accounts receivable, net	53,879	57,940
Prepaid expenses	2,410	2,019
Other current assets	1,488	1,433
Total current assets	58,607	64,018
Property, plant and equipment, net	27,751	30,364
Long-term deferred income tax assets	378	479
Intangible assets, net	7,551	7,847
Goodwill	9,077	9,148
Other long-term assets	2,468	2,948
Total assets	105,832	114,804
Current liabilities:
Accounts payable	8,897	9,470
Accrued liabilities:
Accrued employee compensation and benefits	9,530	12,066
Other accrued liabilities	3,103	3,103
Line of credit	26,855	32,214
Derivative liability	113	524
Other current debt	3,604	3,497
Other current liabilities	1,297	1,560
Total current liabilities	53,399	62,434
Deferred rent	1,569	1,629
Deferred income tax liabilities	317	393
Other debt	7,548	8,189
Other liabilities	235	234
Total liabilities	$ 63,068	$ 72,879
Commitments and contingencies
Stockholders' equity:
Common stock, 32,000,000 non-convertible shares, $0.01 par value, authorized; 15,586,936 and 15,414,803 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	$ 157	$ 157
Additional paid-in capital	78,967	78,439
Accumulated other comprehensive loss	(71)	(351)
Accumulated deficit	(36,289)	(36,320)
Total stockholders' equity	42,764	41,925
Total liabilities and stockholders' equity	$ 105,832	$ 114,804

CONSOLIDATED BALANCE SHEETS _Pa

CONSOLIDATED BALANCE SHEETS [Parenthetical] (Unaudited) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, non-convertible shares authorized	32,000,000	32,000,000
Common stock, shares issued	15,712,719	15,699,398
Common stock, shares outstanding	15,712,719	15,699,398

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Activities
Net income (loss)	$ 31	$ (3,175)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	3,230	3,036
Share-based compensation expense	489	496
Amortization of deferred gain on sale leaseback transaction	0	(57)
Deferred income taxes	51	26
Income tax benefit related to other comprehensive income	(166)	0
Changes in operating assets and liabilities:
Trade accounts receivable, net	4,078	270
Prepaid expenses and other assets	362	(1,561)
Accounts payable	(268)	1,441
Accrued and other liabilities	(2,943)	46
Net cash provided by operating activities	4,864	522
Investing Activities
Purchases of property, plant and equipment	(411)	(3,509)
Cash paid for acquisition of business	(217)	(234)
Net cash used in investing activities	(628)	(3,743)
Financing Activities
Proceeds from the issuance of common stock	39	52
Proceeds from line of credit	76,400	66,082
Principal payments on line of credit	(81,759)	(61,436)
Principal payments on other debt	(700)	(291)
Net cash (used in) provided by financing activities	(6,020)	4,407
Effect of exchange rate changes on cash	(12)	(27)
Net (decrease) increase in cash and cash equivalents	(1,796)	1,159
Cash and cash equivalents at beginning of period	2,626	5,306
Cash and cash equivalents at end of period	$ 830	$ 6,465

BASIS OF PRESENTATION AND SUMMA

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited 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. Operating results for the three months ended March 31, 2016 , are not necessarily indicative of operating results that may be expected during any other interim period of 2016 or the year ending December 31, 2016. The consolidated balance sheet as of December 31, 2015, 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-K for the fiscal year ended December 31, 2015. Unless otherwise noted in this report, any description of "us," "we," or "our," refers to StarTek, Inc. and its subsidiaries. Financial information in this report is presented in U.S. dollars. Reclassification Certain amounts for 2015 have been reclassified in the consolidated balance sheets to conform to the 2016 presentation. Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they are determined to be necessary. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718) ("ASU 2016-09"), Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 address multiple aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liability, and classification on the statements of cash flows. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted in any interim or annual period. An entity that elects early adoption must adopt all of the amendments in the same period, and any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. We are currently evaluating the impact that the adoption of ASU 2016-09 will have on our financial condition, results of operations and cash flows. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our financial condition, results of operations and cash flows. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740) ("ASU No. 2015-17"). ASU No. 2015-17 requires deferred tax liabilities and assets to be classified as noncurrent in the consolidated balance sheets and is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. It may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We early adopted this ASU for the first quarter of 2016, and we applied it retrospectively to 2015 for comparability. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016; however, in July 2015, the FASB agreed to delay the effective date by one year. The proposed deferral may permit early adoption, but would not allow adoption any earlier than the original effective date of the standard. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of ASU 2014-09, including possible transition alternatives, will have on our consolidated financial statements.

ACQUISITION

ACQUISITION	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
ACQUISITIONS	ACQUISITION On June 1, 2015, we acquired 100% of the membership interests of Accent Marketing Services, L.L.C. ("ACCENT") for $17,492 . During the first quarter of 2016, we finalized the valuation of the identifiable assets acquired and liabilities assumed as of the acquisition date, resulting in an immaterial adjustment to Accounts payable and Goodwill. Final asset and liability amounts are shown below: Amount Accounts receivable $ 9,441 Fixed assets 2,649 Prepaid expenses and other assets 201 Customer relationships 5,240 Trade name 850 Goodwill 4,941 Accounts payable (5,503 ) Other accrued expenses and current liabilities (327 ) Total preliminary purchase price allocation $ 17,492 The customer relationships and trade name have useful lives of eight and six years, respectively. The goodwill recognized was attributable to, among other things, the acquired workforce, increased utilization of our global delivery platform and expected synergies. Goodwill of $4,941 was assigned to our Domestic segment. The following table presents the unaudited pro forma information assuming the acquisition of ACCENT occurred on January 1, 2014. The unaudited pro forma information is not necessarily indicative of the results of operations that would have been achieved if the acquisition and related borrowings had taken place on January 1, 2014: Three Months Ended March 31, 2015 Revenues $ 79,216 Net loss $ (5,120 ) Net loss per common share - basic and diluted (0.33 ) Weighted average common shares outstanding - basic and diluted 15,417 These amounts have been calculated to reflect the additional amortization and interest expense that would have been incurred assuming the borrowings occurred on January 1, 2014, together with the consequential tax effects.

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND INTANGIBLE ASSETS	GOODWILL AND INTANGIBLE ASSETS Goodwill Total goodwill of $ 9,077 is assigned to our Domestic segment. We perform a goodwill impairment analysis at least annually (in the fourth quarter of each year) unless indicators of impairment exist in interim periods. In 2015, we concluded that goodwill was not impaired. No indicators of impairment exist as of March 31, 2016. Intangible Assets The following table presents our intangible assets as of March 31, 2016 : Gross Intangibles Accumulated Amortization Net Intangibles Weighted Average Amortization Period (years) Developed technology $ 390 $ 146 $ 244 3.00 Customer relationships 7,550 1,112 6,438 4.02 Trade names 1,050 181 869 3.07 $ 8,990 $ 1,439 $ 7,551 3.88 Expected future amortization of intangible assets as of March 31, 2016 is as follows: Year Ending December 31, Amount Remainder of 2016 $ 855 2017 1,140 2018 1,139 2019 1,131 2020 1,128 Thereafter 2,158

RESTRUCTURING CHARGES

RESTRUCTURING CHARGES	3 Months Ended
	Mar. 31, 2016
Restructuring and Related Activities [Abstract]
RESTRUCTURING CHARGES	RESTRUCTURING CHARGES Restructuring Charges The table below summarizes the balance of accrued restructuring costs, which is included in other accrued liabilities in our consolidated balance sheets, and the changes during the three months ended March 31, 2016 : Facility-Related and Employee-Related Costs Domestic Nearshore Total Balance as of December 31, 2015 $ 802 $ 112 $ 914 Expense (reversal) (110 ) — (110 ) Payments (376 ) (23 ) (399 ) Balance as of March 31, 2016 $ 316 $ 89 $ 405 Domestic Segment In 2015, we made the decision to close the Kansas City, Missouri site and ACCENT's former headquarters office in Jeffersonville, Indiana. In conjunction with the ACCENT acquisition, we also eliminated a number of positions that were considered redundant. We established restructuring reserves for employee related costs of $1,289 at the time the decisions were made, and facility related costs of $272 at the time the facilities were vacated. We expect to pay the remaining costs by the end of the third quarter of 2016. Nearshore Segment During 2015, we pursued opening additional capacity in our nearshore segment. When it became evident that this additional capacity was not necessary, we decided to abandon the plan and establish a restructuring reserve of $112 for the remaining facility costs. We expect the remaining costs to be paid during 2016.

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
NET LOSS PER SHARE	NET INCOME (LOSS) PER SHARE Basic net income (loss) per common share is computed on the basis of our weighted average number of common shares outstanding. Diluted net income per share is computed on the basis of our weighted average number of common shares outstanding plus the effect of dilutive stock options and non-vested restricted stock using the treasury stock method. Securities totaling 2,630,774 and 2,493,720 for the three months ended March 31, 2016 and 2015 , respectively, have been excluded from our calculation because their effect would have been anti-dilutive.

PRINCIPAL CLIENTS

PRINCIPAL CLIENTS	3 Months Ended
	Mar. 31, 2016
Risks and Uncertainties [Abstract]
PRINCIPAL CLIENTS	PRINCIPAL CLIENTS The following table represents revenue concentration of our principal clients: Three Months Ended March 31, 2016 2015 Revenue Percentage Revenue Percentage T-Mobile USA, Inc. $ 16,017 20.5 % $ 18,089 28.4 % Sprint / United Management Co. $ 10,871 13.9 % $ — — % AT&T Services, Inc. and AT&T Mobility, LLC $ 10,487 13.4 % $ 10,740 16.9 % Comcast Cable Communications Management, LLC $ 7,216 9.2 % $ 8,878 13.9 % We enter into contracts and perform services with our major clients that fall under the scope of master service agreements (MSAs) with statements of work (SOWs) specific to each line of business. These MSAs and SOWs may automatically renew or be extended by mutual agreement and are generally terminable by the customer or us with prior written notice. Effective July 1, 2011, we entered into a MSA with T-Mobile. It has an initial term of five years and will automatically renew for additional one -year periods thereafter. It may be terminated by T-Mobile upon 90 days written notice. Effective July 1, 2011, ACCENT, a business we acquired in 2015, entered into a MSA with Sprint. It has an initial term of three years and automatically renews for additional one -month periods thereafter. It may be terminated by Sprint upon 30 days written notice. On January 25, 2013, we entered into a MSA with AT&T Services, Inc., that expires June 30, 2016, but may be terminated by AT&T with written notice. Currently there are a number of SOWs for several different lines of AT&T business. These SOWs expire prior to 2018. Effective June 22, 2013, we entered into a MSA with Comcast. The agreement has an initial term of one year and will automatically renew for additional one -year periods unless either party gives 90 days written notice of cancellation. The contract was renewed for the year ending June 22, 2016. To limit credit risk, management performs periodic credit analyses and maintains allowances for uncollectible accounts as deemed necessary. Under certain circumstances, management has required clients to pre-pay for services. As of March 31, 2016, management does not believe that any significant credit risk exists.

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS	3 Months Ended
	Mar. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
DERIVATIVE INSTRUMENTS	DERIVATIVE INSTRUMENTS We use derivatives to partially offset our business exposure to foreign currency exchange risk. We enter into foreign currency forward contracts to hedge our anticipated operating commitments that are denominated in foreign currencies. The contracts cover periods commensurate with expected exposure, generally three to twelve months. The market risk exposure is essentially limited to risk related to currency rate movements. We operate in Canada, Jamaica, and the Philippines, where the functional currencies are the Canadian dollar, the Jamaican dollar, and the Philippine peso, respectively, which are used to pay labor and other operating costs in those countries. We provide funds for these operating costs as our client contracts generate revenues, which are paid in U.S. dollars. In Honduras, our functional currency is the U.S. dollar and the majority of our costs are denominated in U.S. dollars. 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, 2016 and 2015 , 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, 2016 : Local Currency Notional Amount U.S. Dollar Notional Amount Canadian Dollar 1,050 $ 851 Philippine Peso 141,000 3,105 $ 3,956 Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note 8, "Fair Value Measurements," and are reflected as separate line items in our consolidated balance sheets.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2016
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 or liability, 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. As of March 31, 2016 Level 1 Level 2 Level 3 Total Derivative liabilities: Foreign exchange contracts $ — $ 113 $ — $ 113 As of December 31, 2015 Level 1 Level 2 Level 3 Total Derivative liabilities: Foreign exchange contracts $ — $ 524 $ — $ 524

DEBT

DEBT	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
DEBT	DEBT Secured Revolving Credit Facility On April 29, 2015, we entered into a secured revolving credit facility ("Credit Agreement") with BMO Harris Bank N.A. ("Administrative Agent" or "Lender"). The Credit Agreement is effective through April 2020 and we may borrow the lesser of the borrowing base calculation and $ 50,000 . As long as no default has occurred and with the Administrative Agent’s consent, we may increase the maximum availability to $ 70,000 in $ 5,000 increments. We may request letters of credit under the Credit Agreement in an aggregate amount equal to the lesser of the borrowing base calculation (minus outstanding advances) and $5,000 . The borrowing base is generally defined as 85% of our eligible accounts receivable less certain reserves as defined in the Credit Agreement. Our borrowings bear interest at one-month LIBOR plus 1.75% to 2.50% , depending on current availability. We will pay letter of credit fees equal to the applicable margin times the daily maximum amount available to be drawn under all letters of credit outstanding and a monthly unused fee at a rate per annum of 0.25% on the aggregate unused commitment. The Credit Agreement contains standard affirmative and negative covenants that may limit or restrict our ability to sell assets, incur additional indebtedness and engage in mergers and acquisitions, and includes the following financial covenants: • During fiscal year 2016, maintaining certain EBITDA thresholds if a reporting trigger period commences, • Beginning in 2017, maintaining a minimum consolidated fixed charge coverage ratio of 1.10 to 1.00 if a reporting trigger period commences, and • Limiting non-financed capital expenditures to $5,000 for fiscal years 2016 and thereafter. We were in compliance with all such covenants as of March 31, 2016 . As of March 31, 2016 , we had $ 26,855 of outstanding borrowings and our remaining borrowing capacity was $15,322 . Other debt 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. These obligations are included on our consolidated balance sheets in Other current debt and Other debt, as applicable.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
SHARE-BASED COMPENSATION	SHARE-BASED COMPENSATION Our share-based compensation arrangements include grants of stock options, restricted stock awards 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 such awards for the three months ended March 31, 2016 was $489 , and for the three months ended March 31, 2015 was $ 496 , and is included in Selling, general and administrative expenses. As of March 31, 2016 , there was $1,308 of total unrecognized compensation expense related to nonvested awards, which is expected to be recognized over a weighted-average period of 2.01 years.

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE LOSS	3 Months Ended
	Mar. 31, 2016
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 Total Balance at December 31, 2015 $ 1,533 $ (1,884 ) $ (351 ) Foreign currency translation 34 34 Reclassification to operations 305 305 Unrealized gains (losses) 107 107 Tax provision (benefit) (13 ) (153 ) (166 ) Balance at March 31, 2016 $ 1,554 $ (1,625 ) $ (71 ) Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2016 and 2015 were as follows: Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statements of Operations and Comprehensive Loss Three Months Ended March 31, 2016 2015 Losses on cash flow hedges Foreign exchange contracts $ 295 $ 576 Cost of services Foreign exchange contracts 10 46 Selling, general and administrative expenses Total reclassifications for the period $ 305 $ 622

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
SEGMENT INFORMATION	SEGMENT INFORMATION We operate our business within three reportable segments based on the geographic regions in which our services are rendered. As of March 31, 2016, our Domestic segment included the operations of thirteen facilities in the U.S. and one facility in Canada. Our Offshore segment included the operations of four facilities in the Philippines and our Nearshore segment included two facilities in Honduras and one facility in Jamaica. We primarily evaluate segment operating performance in each reporting segment based on revenue and gross profit. Certain operating expenses are not allocated to each reporting segment; therefore, we do not present income statement information by reporting segment below the gross profit level. Information about our reportable segments for the three months ended March 31, 2016 and 2015 is as follows: For the Three Months Ended March 31, 2016 2015 Revenue: Domestic $ 49,145 $ 35,624 Offshore 17,581 20,331 Nearshore 11,309 7,698 Total $ 78,035 $ 63,653 Gross profit: Domestic $ 4,824 $ 2,406 Offshore 2,286 2,523 Nearshore 1,278 1,188 Total $ 8,388 $ 6,117

BASIS OF PRESENTATION AND SUM18

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they are determined to be necessary.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718) ("ASU 2016-09"), Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 address multiple aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liability, and classification on the statements of cash flows. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted in any interim or annual period. An entity that elects early adoption must adopt all of the amendments in the same period, and any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. We are currently evaluating the impact that the adoption of ASU 2016-09 will have on our financial condition, results of operations and cash flows. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases”. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our financial condition, results of operations and cash flows. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740) ("ASU No. 2015-17"). ASU No. 2015-17 requires deferred tax liabilities and assets to be classified as noncurrent in the consolidated balance sheets and is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. It may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We early adopted this ASU for the first quarter of 2016, and we applied it retrospectively to 2015 for comparability. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016; however, in July 2015, the FASB agreed to delay the effective date by one year. The proposed deferral may permit early adoption, but would not allow adoption any earlier than the original effective date of the standard. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of ASU 2014-09, including possible transition alternatives, will have on our consolidated financial statements.

ACQUISITION (Tables)

ACQUISITION (Tables)	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed	Final asset and liability amounts are shown below: Amount Accounts receivable $ 9,441 Fixed assets 2,649 Prepaid expenses and other assets 201 Customer relationships 5,240 Trade name 850 Goodwill 4,941 Accounts payable (5,503 ) Other accrued expenses and current liabilities (327 ) Total preliminary purchase price allocation $ 17,492
Business Acquisition, Pro Forma Information	The following table presents the unaudited pro forma information assuming the acquisition of ACCENT occurred on January 1, 2014. The unaudited pro forma information is not necessarily indicative of the results of operations that would have been achieved if the acquisition and related borrowings had taken place on January 1, 2014: Three Months Ended March 31, 2015 Revenues $ 79,216 Net loss $ (5,120 ) Net loss per common share - basic and diluted (0.33 ) Weighted average common shares outstanding - basic and diluted 15,417

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets	The following table presents our intangible assets as of March 31, 2016 : Gross Intangibles Accumulated Amortization Net Intangibles Weighted Average Amortization Period (years) Developed technology $ 390 $ 146 $ 244 3.00 Customer relationships 7,550 1,112 6,438 4.02 Trade names 1,050 181 869 3.07 $ 8,990 $ 1,439 $ 7,551 3.88
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense	Expected future amortization of intangible assets as of March 31, 2016 is as follows: Year Ending December 31, Amount Remainder of 2016 $ 855 2017 1,140 2018 1,139 2019 1,131 2020 1,128 Thereafter 2,158

RESTRUCTURING CHARGES (Tables)

RESTRUCTURING CHARGES (Tables)	3 Months Ended
	Mar. 31, 2016
Restructuring and Related Activities [Abstract]
Schedule of Restructuring and Related Costs	The table below summarizes the balance of accrued restructuring costs, which is included in other accrued liabilities in our consolidated balance sheets, and the changes during the three months ended March 31, 2016 : Facility-Related and Employee-Related Costs Domestic Nearshore Total Balance as of December 31, 2015 $ 802 $ 112 $ 914 Expense (reversal) (110 ) — (110 ) Payments (376 ) (23 ) (399 ) Balance as of March 31, 2016 $ 316 $ 89 $ 405

PRINCIPAL CLIENTS (Tables)

PRINCIPAL CLIENTS (Tables)	3 Months Ended
	Mar. 31, 2016
Risks and Uncertainties [Abstract]
Schedule of Revenue by Major Customers	The following table represents revenue concentration of our principal clients: Three Months Ended March 31, 2016 2015 Revenue Percentage Revenue Percentage T-Mobile USA, Inc. $ 16,017 20.5 % $ 18,089 28.4 % Sprint / United Management Co. $ 10,871 13.9 % $ — — % AT&T Services, Inc. and AT&T Mobility, LLC $ 10,487 13.4 % $ 10,740 16.9 % Comcast Cable Communications Management, LLC $ 7,216 9.2 % $ 8,878 13.9 %

DERIVATIVE INSTRUMENTS (Tables)

DERIVATIVE INSTRUMENTS (Tables)	3 Months Ended
	Mar. 31, 2016
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, 2016 : Local Currency Notional Amount U.S. Dollar Notional Amount Canadian Dollar 1,050 $ 851 Philippine Peso 141,000 3,105 $ 3,956

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2016
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. As of March 31, 2016 Level 1 Level 2 Level 3 Total Derivative liabilities: Foreign exchange contracts $ — $ 113 $ — $ 113 As of December 31, 2015 Level 1 Level 2 Level 3 Total Derivative liabilities: Foreign exchange contracts $ — $ 524 $ — $ 524

ACCUMULATED OTHER COMPREHENSI25

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)	3 Months Ended
	Mar. 31, 2016
Stockholders' Equity Note [Abstract]
Schedule of Comprehensive Income (Loss)	Accumulated other comprehensive loss consisted of the following items: Foreign Currency Translation Adjustment Derivatives Accounted for as Cash Flow Hedges Total Balance at December 31, 2015 $ 1,533 $ (1,884 ) $ (351 ) Foreign currency translation 34 34 Reclassification to operations 305 305 Unrealized gains (losses) 107 107 Tax provision (benefit) (13 ) (153 ) (166 ) Balance at March 31, 2016 $ 1,554 $ (1,625 ) $ (71 )
Reclassification out of Accumulated Other Comprehensive Loss	Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2016 and 2015 were as follows: Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statements of Operations and Comprehensive Loss Three Months Ended March 31, 2016 2015 Losses on cash flow hedges Foreign exchange contracts $ 295 $ 576 Cost of services Foreign exchange contracts 10 46 Selling, general and administrative expenses Total reclassifications for the period $ 305 $ 622

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment	Information about our reportable segments for the three months ended March 31, 2016 and 2015 is as follows: For the Three Months Ended March 31, 2016 2015 Revenue: Domestic $ 49,145 $ 35,624 Offshore 17,581 20,331 Nearshore 11,309 7,698 Total $ 78,035 $ 63,653 Gross profit: Domestic $ 4,824 $ 2,406 Offshore 2,286 2,523 Nearshore 1,278 1,188 Total $ 8,388 $ 6,117

ACQUISITION (Details)

ACQUISITION (Details) - USD ($) $ in Thousands	1 Months Ended
	Jun. 30, 2015	Mar. 31, 2016	Dec. 31, 2015	Jun. 01, 2015
Business Acquisition [Line Items]
Goodwill		$ 9,077	$ 9,148
Accent Marketing Services, L.L.C. [Member]
Business Acquisition [Line Items]
Membership interest acquired (percent)				100.00%
Accounts receivable				$ 9,441
Fixed assets				2,649
Prepaid expenses and other assets				201
Accounts payable				(5,503)
Other accrued expenses and current liabilities				(327)
Total preliminary purchase price allocation				17,492
Goodwill				4,941
Customer relationships | Accent Marketing Services, L.L.C. [Member]
Business Acquisition [Line Items]
Intangible assets				5,240
Intangible assets, useful life	8 years
Trade name | Accent Marketing Services, L.L.C. [Member]
Business Acquisition [Line Items]
Intangible assets				$ 850
Intangible assets, useful life	6 years

ACQUISITION Pro Forma Informati

ACQUISITION Pro Forma Information (Details) - Accent Marketing Services, L.L.C. [Member] $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2015USD ($)$ / sharesshares
Business Acquisition [Line Items]
Revenues	$ 79,216
Net loss	$ (5,120)
Net loss per common share - basic and diluted (in dollars per share) | $ / shares	$ (0.3321009275)
Weighted average common shares outstanding - basic and diluted (in shares) | shares	15,417

GOODWILL AND INTANGIBLE ASSET29

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 9,077	$ 9,148
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	8,990
Accumulated Amortization	1,439
Net Intangibles	$ 7,551	$ 7,847
Weighted Average Amortization Period (years)	3 years 10 months 17 days
Remainder of 2016	$ 855
2,017	1,140
2,018	1,139
2,019	1,131
2,020	1,128
Thereafter	2,158
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	390
Accumulated Amortization	146
Net Intangibles	$ 244
Weighted Average Amortization Period (years)	3 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 7,550
Accumulated Amortization	1,112
Net Intangibles	$ 6,438
Weighted Average Amortization Period (years)	4 years 7 days
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 1,050
Accumulated Amortization	181
Net Intangibles	$ 869
Weighted Average Amortization Period (years)	3 years 25 days

RESTRUCTURING CHARGES (Textuals

RESTRUCTURING CHARGES (Textuals) (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2015USD ($)
Employee Severance [Member] | Domestic
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 1,289
Facility Closing Costs | Domestic
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	272
Facility Closing Costs | Nearshore [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 112

RESTRUCTURING CHARGES (Summary

RESTRUCTURING CHARGES (Summary of Activity, Restructuring Plans) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2015	$ 914
Expense	(110)
Payments	(399)
Balance as of March 31, 2016	405
Domestic
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2015	802
Expense	(110)
Payments	(376)
Balance as of March 31, 2016	316
Nearshore
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2015	112
Expense	0
Payments	(23)
Balance as of March 31, 2016	$ 89

NET LOSS PER SHARE (Details)

NET LOSS PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Abstract]
Anti-dilutive securities excluded from computation of earnings per share (in shares)	2,630,774	2,493,720

PRINCIPAL CLIENTS (Details)

PRINCIPAL CLIENTS (Details) - USD ($) $ in Thousands	Jun. 22, 2013	Jul. 02, 2011	Mar. 31, 2016	Mar. 31, 2015
T-Mobile USA, Inc.
Revenue, Major Customers [Line Items]
Revenue			$ 16,017	$ 18,089
Revenue concentration, percentage			20.50%	28.40%
Initial term of the master service agreement		5 years
Master services agreement, renewal term		1 year
Notice of termination option of the initial term		90 days
Sprint / United Management Co. [Member]
Revenue, Major Customers [Line Items]
Revenue			$ 10,871	$ 0
Revenue concentration, percentage			13.90%	0.00%
Initial term of the master service agreement		3 years
Master services agreement, renewal term		1 month
Notice of termination option of the initial term		30 days
AT&T Services, Inc. and AT&T Mobility, LLC
Revenue, Major Customers [Line Items]
Revenue			$ 10,487	$ 10,740
Revenue concentration, percentage			13.40%	16.90%
Comcast Cable Communications Management LLC
Revenue, Major Customers [Line Items]
Revenue			$ 7,216	$ 8,878
Revenue concentration, percentage			9.20%	13.90%
Initial term of the master service agreement	1 year
Master services agreement, renewal term	1 year
Notice of termination option of the initial term	90 days

DERIVATIVE INSTRUMENTS (Details

DERIVATIVE INSTRUMENTS (Details) - 3 months ended Mar. 31, 2016 - Foreign exchange contracts PHP in Thousands, CAD in Thousands, $ in Thousands	USD ($)	PHP	CAD
Derivative [Line Items]
Derivatives, notional amount	$ 3,956
Minimum
Derivative [Line Items]
Derivatives, contract period	3 months
Maximum
Derivative [Line Items]
Derivatives, contract period	12 months
Canadian Dollar
Derivative [Line Items]
Derivatives, notional amount	$ 851		CAD 1,050
Philippine Peso
Derivative [Line Items]
Derivatives, notional amount	$ 3,105	PHP 141,000

FAIR VALUE MEASUREMENTS (Recurr

FAIR VALUE MEASUREMENTS (Recurring and Nonrecurring) (Details) - Foreign exchange contracts - Recurring - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets and Liabilities at Fair Value Measured on Recurring Basis
Total fair value of liabilities measured on a recurring basis	$ 113	$ 524
Level 2
Assets and Liabilities at Fair Value Measured on Recurring Basis
Total fair value of liabilities measured on a recurring basis	$ 113	$ 524

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Apr. 30, 2015	Mar. 31, 2016	Dec. 31, 2015	Apr. 29, 2015
Line of Credit Facility [Line Items]
Line of credit		$ 26,855	$ 32,214
BMO Harris Bank | Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity				$ 70,000
Line of credit		26,855
Line of credit facility, current borrowing capacity		$ 15,322		50,000
Increments for additional borrowing				5,000
Letters of credit, maximum allowed				5,000
Borrowing base, as percentage of eligible accounts receivables less reserves	85.00%
Description of variable rate basis	one-month LIBOR
Monthly unused fee, rate per annum	0.25%
Fixed charge coverage ratio	1.10
Maximum limit for non-financed capital expenditures during 2015				$ 5,000
Minimum | BMO Harris Bank | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.75%
Maximum | BMO Harris Bank | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.50%

SHARE-BASED COMPENSATION (Textu

SHARE-BASED COMPENSATION (Textuals (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock Awards Activity [Line Items]
Total compensation cost	$ 489	$ 496
Stock Options
Stock Awards Activity [Line Items]
Total unrecognized compensation cost	$ 1,308
Weighted-average period that cost is expected to be recognized	2 years 3 days

ACCUMULATED OTHER COMPREHENSI38

ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Accumulated Other Comprehensive Loss [Roll Forward]
Foreign Currency Translation Adjustment - Beginning balance	$ 1,533
Derivatives Accounted for as Cash Flow Hedges - Beginning balance	(1,884)
Total - Beginning balance	(351)
Foreign currency translation	34
Reclassification to operations, derivatives	305
Unrealized gains (losses)	107
Foreign Currency Translation Adjustment, Tax	(13)
Derivatives Qualifying as Hedges, Tax	(153)
Total - Tax	(166)
Foreign Currency Translation Adjustment - Ending balance	1,554
Derivatives Accounted for as Cash Flow Hedges - Ending balance	(1,625)
Total - Ending balance	$ (71)

ACCUMULATED OTHER COMPREHENSI39

ACCUMULATED OTHER COMPREHENSIVE LOSS Reclassification (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of services	$ 69,647	$ 57,536
Selling, general and administrative expenses	7,781	8,061
Reclassification to operations	305	622
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Foreign exchange contracts | Amount Reclassified from Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of services	295	576
Selling, general and administrative expenses	$ 10	$ 46

SEGMENT INFORMATION (Textual) (

SEGMENT INFORMATION (Textual) (Details)	3 Months Ended
	Mar. 31, 2016facility
U.S.
Segment Reporting Information [Line Items]
Number of operating facilities	13
Canada
Segment Reporting Information [Line Items]
Number of operating facilities	1
Philippines
Segment Reporting Information [Line Items]
Number of operating facilities	4
Honduras
Segment Reporting Information [Line Items]
Number of operating facilities	2
Jamaica
Segment Reporting Information [Line Items]
Number of operating facilities	1

SEGMENT INFORMATION (Segment Re

SEGMENT INFORMATION (Segment Reporting) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Revenue	$ 78,035	$ 63,653
Gross profit	8,388	6,117
Domestic
Segment Reporting Information [Line Items]
Revenue	49,145	35,624
Gross profit	4,824	2,406
Offshore
Segment Reporting Information [Line Items]
Revenue	17,581	20,331
Gross profit	2,286	2,523
Nearshore
Segment Reporting Information [Line Items]
Revenue	11,309	7,698
Gross profit	$ 1,278	$ 1,188