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Str Holdings Inc Reports Operating Results (10-Q)

November 12, 2010 | About:
10qk

10qk

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Str Holdings Inc (STRI) filed Quarterly Report for the period ended 2010-09-30.

Str Holdings Inc has a market cap of $1.03 billion; its shares were traded at around $24.93 with a P/E ratio of 22.9 and P/S ratio of 3.8. STRI is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management.

Highlight of Business Operations:

Net sales increased $30.5 million, or 45%, to $97.8 million for the three months ended September 30, 2010 from $67.3 million for the corresponding 2009 period. Net sales increased $89.2 million, or 48%, to $274.2 million for the nine months ended September 30, 2010 from $185.0 million for the corresponding 2009 period. The increase in both periods was mainly driven by strong sales volume growth achieved in our Solar segment that more than offset a decline in service volume experienced by our Quality Assurance business.

Net sales in our Quality Assurance segment decreased $2.5 million, or 8%, to $29.5 million for the three months ended September 30, 2010 from $32.0 million in 2009. Net sales in our Quality Assurance segment decreased $1.7 million, or 2%, to $84.1 million for the nine months ended September 30, 2010 from $85.8 million in 2009. The net sales declines in both comparison periods were driven by a reduction in services procured from us by certain clients in North America and Europe as well as overall softness in the consumer product quality assurance industry as retailers continue to rationalize discretionary spending in the uncertain economic environment. The Quality Assurance leadership team is keenly focused on increasing sales to existing clients as well as aggressively targeting new business.

Cost of sales increased $18.1 million, or 43%, to $60.1 million for the three months ended September 30, 2010 from $42.0 million for the corresponding 2009 period. For the nine months ended September 30, 2010, cost of sales increased $47.9 million, or 40%, to $167.1 million from $119.2 million for the corresponding 2009 period. The increase in both periods was primarily driven by increased raw material and direct labor costs associated with the increase in our Solar net sales as discussed above.

Cost of sales in our Solar segment increased $19.0 million, or 87%, to $40.8 million for the three months ended September 30, 2010 from $21.8 million in the same period in 2009. The increase in our Solar segments cost of sales was mainly due to increased variable costs associated with the increase in sales volume, raw material inflation and higher labor and benefits of $1.3 million.

Cost of sales in our Solar segment increased $47.7 million, or 76%, to $110.6 million for the nine months ended September 30, 2010 from $62.9 million in the same period in 2009. The increase in our Solar segments cost of sales was mainly due to increased variable costs associated with the increase in sales volume, raw material inflation of $4.4 million and higher labor and benefits of $2.7 million. The expansion of our Malaysia facility, which became operational in August 2009, provided an incremental impact of $16.3 million for the nine months ended September 30, 2010 from the same period in 2009.

Cost of sales in our Quality Assurance segment decreased $0.9 million, or 4% to $19.3 million for the three months ended September 30, 2010 compared to $20.2 million for the same period in 2009. The decrease was mainly due to the decline in net sales. Cost of sales in our Quality Assurance segment of $56.5 million for the nine months ended September 30, 2010 was essentially flat compared to $56.3 million for the same period in 2009, consistent with relatively flat net sales over the same period.

Read the The complete Report

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