STR: Largest Customer To Depart
ENFIELD, Conn. (AP) -- STR Holdings Inc. said Tuesday that it may cut jobs and close a manufacturing site based on the anticipated loss of its largest customer this year.
The solar products company said after the market closed that it believes its long-standing customer First Solar Inc. will terminate its relationship with STR in 2013. Though the exact timing isn't clear, the company anticipates the move will begin in the first quarter and that First Solar will completely switch to a new supplier during the course of the next few months.
STR said it expects to cease manufacturing at its East Windsor, Conn., facility by the end of the first quarter. It also expects to reduce the number of employees significantly throughout the organization, although it did not specify a number. The company said it is reviewing its cost structure and will detail its restructuring plan in the future.
The company has about 500 employees in total, according to FactSet.
First Solar was STR's largest customer with sales of roughly $39 million during 2012. The company's President and CEO Robert Yorgensen said that the company enjoyed a "long and prosperous relationship" with First Solar but he could not elaborate at this time on its decision to work with another supplier.
The company also noted that it has recently added three new customers in China. The new work won't make up for the loss of First Solar's business in the short term but is expected to give it an edge in the key global market.
STR also said that it hired UBS Investment Bank as its financial adviser in December to help the company's board with review of strategic alternatives. The company says the move was unrelated to the loss of First Solar as a customer.
STR Holdings, based in Enfield, Conn., had $81.9 million of cash and no debt as of the end of 2012.
Its shares sank nearly 24 percent to $2.36 in after-hours trading on the news. Shares had gained 8 cents, nearly 3 percent, to close regular trading at $3.10.