ENFIELD, Conn.--(BUSINESS WIRE)--Jan. 22, 2013--
STR Holdings, Inc. (NYSE: STRI), believes that First Solar, Inc., a
long-standing customer, will terminate its relationship with the Company
in 2013. Though the exact timing remains uncertain, the Company expects
that First Solar will begin a transition away from STR in the first
quarter of 2013, completely cutting over to a new supplier during the
course of the next few months.
As previously disclosed, First Solar is STR’s largest customer and such
loss is likely to have a material adverse effect on the business and
financial results of the Company. Sales to First Solar during 2012 were
approximately $39 million.
Robert S. Yorgensen, President & Chief Executive Officer commented, “We
have enjoyed a very long and prosperous relationship with First Solar.
Their loyalty over the years is a testament to our value as a reliable
supplier of excellent quality products and service, for which First
Solar honored us with their Top Supplier Award just over a year ago.”
Yorgensen continued, “We have had no claim for defective product from
First Solar, nor have we had any returns, and the product we have been
supplying for years has been according to specification. Unfortunately,
I cannot elaborate on their decision to work with another supplier at
this time. On a more positive note, we have recently added three new
customers in China, two of which have qualified and ordered our
next-generation encapsulants. While this new work won’t make up for the
loss of First Solar’s business in the short-term, we believe it
represents very important progress toward increasing our share of the
burgeoning Chinese market.”
The Company will continue its comprehensive review of its cost
structure, and expects to cease manufacturing operations at its East
Windsor, Connecticut facility by the end of the first quarter of 2013,
and make significant headcount reductions throughout the organization.
The Company is assessing its long-lived assets for impairment and
expects to incur significant restructuring charges in 2013. The Company
will communicate its restructuring plan in more detail at a later date.
The Company plans to service its North American customer base from its
production facilities in Spain and Malaysia.
Joseph C. Radziewicz, Vice President & Chief Financial Officer, said,
“While the loss of First Solar as a customer is certainly an unfortunate
development for STR, we have already taken swift action to reduce our
costs, which will help to preserve our strong balance sheet as well as
our options going forward.”
Separately and unrelated to the loss of First Solar as a customer, the
Company engaged UBS Investment Bank as its financial advisor in December
2012 to assist the Board of Directors with a review of the Company’s
strategic alternatives.
As of December 31, 2012, the Company had $81.9 million of cash and no
debt.
About STR Holdings, Inc.
STR Holdings, Inc. is a global provider of high quality solar
encapsulants to the photovoltaic module industry. Further information
about STR Holdings, Inc. can be obtained via the Company's website at www.strholdings.com.
Forward-Looking Statements
This press release and any oral statement made in respect of the
information in this press release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are subject to inherent risks and uncertainties.
These forward-looking statements present the Company’s current
expectations and projections relating to its financial condition,
results of operations, plans, objectives, future performance and
business and are based on assumptions that the Company has made in light
of its industry experience and perceptions of historical trends, current
conditions, expected future developments and other factors management
believes are appropriate under the circumstances. However, these
forward-looking statements are not guarantees of future performance or
financial or operating results. In addition to the risks and
uncertainties discussed in this press release, the Company faces risks
and uncertainties that include, but are not limited to, the following:
(i) technological changes in the solar energy industry or the Company’s
failure to develop and introduce or integrate new technologies could
render its encapsulants uncompetitive or obsolete, particularly in
China; (ii) excess capacity in the solar supply chain; (iii) its ability
to increase its market share; (iv) demand for solar energy in general
and solar modules in particular; (v) the timing and effects of the
implementation of government incentives and policies for renewable
energy, primarily in China and the United States; (vi) the effects of
the announced reductions to solar incentives in Germany and Italy; (vii)
trade complaints and lawsuits diminishing the growth of the solar
industry; (viii) the extent to which it may be required to write-off
accounts receivable, inventory or intangible assets; (ix) product
pricing pressures and other competitive factors; (x) customer
concentration in its business and its relationships with key customers;
(xi) its ability to protect its intellectual property; (xii) volatility
in commodity costs, such as resin or paper used in its encapsulants, and
its ability to successfully manage any increases in these commodity
costs; (xiii) its dependence on a limited number of third-party
suppliers for raw materials for its encapsulants and materials used in
its processes; (xiv) operating new manufacturing facilities and
increasing production capacity at existing facilities; (xv) its reliance
on vendors and potential supply chain disruptions, including those
resulting from bankruptcy filings by customers or vendors; (xvi)
potential product performance matters and product liability; (xvii) the
extent and duration of the current downturn in the global economy;
(xviii) the impact negative credit markets may have on the Company or
its customers or suppliers; (xix) the impact of changes in foreign
currency exchange rates on financial results, and the geographic
distribution of revenues and earnings; (xx) maintaining sufficient
liquidity in order to fund future profitable growth and long-term
vitality; (xxi) outcomes of litigation and regulatory actions; and
(xxii) the other risks and uncertainties described under “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and in subsequent periodic reports on Forms 10-K,
10-Q and 8-K. You are urged to carefully review and consider the
disclosure found in the Company’s filings which are available on http://www.sec.gov
or http://www.strholdings.com.
Should one or more of these risks or uncertainties materialize, or
should any of these assumptions prove to be incorrect, actual results
may vary materially from those projected in these forward-looking
statements. The Company undertakes no obligation to publicly update any
forward-looking statement contained in this release, whether as a result
of new information, future developments or otherwise, except as may be
required by law.
Source: STR Holdings, Inc.
STR Holdings, Inc.
Joseph C. Radziewicz, 860-758-7325
Vice
President and Chief Financial Officer
