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Str Holdings Inc Reports Operating Results (10-Q)

May 12, 2010 | About:
10qk

10qk

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Str Holdings Inc (STRI) filed Quarterly Report for the period ended 2010-03-31.

Str Holdings Inc has a market cap of $901.4 million; its shares were traded at around $21.8 with and P/S ratio of 3.4.

Highlight of Business Operations:

Cost of sales increased $11.7 million, or 31%, to $49.7 million for the three months ended March 31, 2010 from $38.0 million for the corresponding 2009 period, mainly as a result of the increase in our Solar net sales as noted above and increased raw material and direct labor costs.

Cost of sales in our Solar segment increased $10.7 million, or 51%, to $31.5 million for the three months ended March 31, 2010 from $20.8 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.

Cost of sales in our Quality Assurance segment increased $1.0 million, or 6%, to $18.2 million for the three months ended March 31, 2010 from $17.2 million for the same period in 2009. This increase was the result of increased labor expense, which provided unfavorable cost absorption due to the first quarter being historically the seasonally slowest for Quality Assurance sales generation and lower volume than anticipated from certain clients.

Gross profit increased $10.0 million, or 50%, to $30.1 million for the three months ended March 31, 2010 from $20.1 million for the same period in 2009 primarily due to the sales increase in our Solar segment. As a percentage of sales, gross profit increased 310 basis points from 34.6% for the three months ended March 31, 2009 to 37.7% for the same period in 2010.

During the three months ended March 31, 2010, we recognized a $1.2 million unrealized gain on our interest rate swap entered into during 2007 as a requirement under our credit facilities compared to a $0.6 million gain in the corresponding 2009 period. Foreign currency transaction losses decreased $0.3 million during the three months ended March 31, 2010 to a loss of approximately $0.1 million from a loss of $0.4 million in the corresponding 2009 period.

Income tax expense increased $1.3 million to $3.2 million for the three months ended March 31, 2010 from $1.9 million in the 2009 period. Our effective tax rate for the three months ended March 31, 2010 was 29.5% compared to the federal statutory rate of 35% and our effective tax rate for the three months ended March 31, 2009 was 38.2%. Included in our first quarter 2010 effective rate is a $829 Advanced Energy Project tax credit that we received in January 2010 under the American Recovery and Reinvestment Act of 2009. The tax credit was partially offset by its related deferred tax liability, with a net impact of $539 being accounted for as a discrete item during the first quarter of 2010, providing a one-time 4.9% benefit to our effective tax rate.

Read the The complete Report

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