STR Holdings encapsulant sales precarious in Q1



PV module encapsulant material supplier, STR Holdings continues to struggle transitioning its business and product portfolio after loosing its major customer, First Solar earlier in 2013.

STR reported first quarter 2014 sales of US$9.3 million, an increase of 40% over the previous quarter but a decline of 17% from the same period a year ago.

However, STR benefited from non-recurring sales of encapsulant material from First Solar totalling US$5.1 million in the quarter. Excluding the one-off First Solar revenue, sales would have declined to only US$4 million in the quarter, compared to US$6.7 million in the fourth quarter of 2013. STR had said in its recently released Annual Report that it did not expect any sales from First Solar in 2014.

According to SEC filings, First Solar accounted for US$39.2 million sales (41% of total) of 2012 sales and US$5.7 million (18% of total) of 2013 sales.

STR also noted that it experienced production ramp delays for its revised encapsulant material product portfolio at its contract manufacturer, ZheJiang FeiYu Photo-Electrical Science & Technology Co, in China.

The company increased sales volume by approximately 10% year-on-year but experienced an ASP decline of approximately 24% in the same period. In the first quarter STR increased sales that led by approximately 50% higher volume but experienced a 7% ASP decline. Losses in the quarter increased to US$4.6 million, mainly due to costs associated with volume production increase.

STR ended the first quarter with US$26.5 million of cash and no debt.

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