First Solar (FSLR) Terminates Relationship with STR Holdings (STRI)

January 22, 2013 4:20 PM EST
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STR Holdings, Inc. (NYSE: STRI), believes that First Solar, Inc. (Nasdaq: FSLR), 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.

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.

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.

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