EAST WINDSOR, Conn., Jan. 21, 2014 (GLOBE NEWSWIRE) -- STR Holdings, Inc. (NYSE: STRI ) recently announced that it entered into a contract manufacturing agreement with FeiYu, a Chinese solar encapsulant manufacturer, and is now providing an update on the execution of its China strategy.
Strategic Manufacturing Arrangement
Due to increased demand for STR's products from top tier solar module manufacturers in China, on January 13, 2014, the Company's Hong Kong subsidiary entered into a Contract Manufacturing Agreement (the "Agreement") with ZheJiang FeiYu Photo-Electrical Science & Technology Co., Ltd. ("FeiYu") and ZheJiang Xiesheng Group Co., Ltd., the parent corporation of FeiYu ("Xiesheng").
Pursuant to the Agreement, the Company will purchase certain solar encapsulant products manufactured by FeiYu to the Company's specifications. The Company will supply FeiYu with all of the proprietary information and assistance necessary to manufacture the products, including having STR representatives on site. The Company has been, and will continue, working with FeiYu to implement STR production and quality procedures. STR will continue to maintain customer-facing relationships, including sales, customer service, technical service and R&D. FeiYu commenced manufacturing orders for STR's customers in early January and production is expected to increase steadily over the next several months.
Robert S. Yorgensen, STR's President and Chief Executive Officer, stated, "After evaluating several potential manufacturing partners in China, we selected FeiYu based on their integrity, their knowledge and experience in encapsulant manufacturing, their focus on quality, and their excellent facilities, which include ample production capacity and space for expansion. Having worked very closely with them during the due diligence and technology licensing process, I am very confident in their ability to make STR products to the same high standard we've always held ourselves to, and I look forward to partnering with them to deliver high-quality STR encapsulants with the rapid response our customers demand."
Mr. Xu Xuefei, Executive Director of FeiYu and Chairman Xiesheng, commented, "After meeting with STR during the past few months, we clearly understand STR's stringent requirements and we are confident in our ability to manufacture encapsulants to their specifications on a timely basis. We are very pleased to be aligned with STR, a pioneer in encapsulant technology, and will give our full support to deliver only the highest quality products to the expanding solar module industry in China."
China Strategy Update
STR is also in the process of enhancing its local manufacturing capability in China, including the renovation of its leased facility in Suzhou. The Company anticipates that this facility will be operational during the second quarter of 2014. Further, to accommodate anticipated demand, the Company is negotiating and may enter into additional strategic manufacturing arrangements with other third party manufacturers. These additional arrangements may differ materially from its primary manufacturing agreement with FeiYu.
About STR Holdings, Inc.
STR Holdings, Inc. is a provider of encapsulants to the photovoltaic module industry. Further information about STR Holdings, Inc. can be obtained via the Company's website at www.strsolar.com .
Forward-Looking Statements
This press release and any oral statement made in respect of the information in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to inherent risks and uncertainties. These forward-looking statements present the Company's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business and are based on assumptions that the Company has made in light of its industry experience and perceptions of historical trends, current conditions, expected future developments and other factors management believes are appropriate under the circumstances. However, these forward-looking statements are not guarantees of future performance or financial or operating results. In addition to the risks and uncertainties discussed in this press release, the Company faces risks and uncertainties that include, but are not limited to, the following: (1) the potential impact of pursuing strategic alternatives; (2) the potential impact of any merger or acquisition transactions or the dissolution and liquidation of our Company; (3) our potential inability to obtain satisfactory orders from Chinese module manufacturers for our new encapsulant products or to enter into satisfactory outsource arrangements with China-based encapsulant manufacturers on a timely basis or at all; (4) customer concentration in our business and our relationships with and dependence on key customers; (5) technological changes in the solar energy industry or our failure to develop and introduce or integrate new technologies could render our encapsulants uncompetitive or obsolete, particularly in China; (6) incurring losses for the foreseeable future; (7) our operations being subject to political and economic uncertainties in China; (8) limited legal recourse in China if disputes arise; (9) the potential inability to protect our intellectual property during the outsourcing of our products; (10) our ability to increase our market share; (11) product pricing pressures and other competitive factors; (12) excess capacity in the solar supply chain; (13) the extent to which we may be required to write off accounts receivable, inventory or other assets; (14) trade complaints and lawsuits diminishing the growth of the solar industry; (15) demand for solar energy in general and solar modules in particular; (16) the extent and duration of the current downturn in the global economy; (17) the impact negative credit markets may have on us or our customers or suppliers; (18) the timing and effects of the implementation of government incentives and policies for renewable energy, primarily in China and the United States; (19) the effects of the announced reductions to solar incentives in Germany and Italy; (20) operating new manufacturing facilities and increasing production capacity at existing facilities; (21) volatility in commodity costs, such as resin or paper used in our encapsulants, and our ability to successfully manage any increases in these commodity costs; (22) our dependence on a limited number of third-party suppliers for raw materials for our encapsulants and materials used in our processes; (23) our reliance on vendors and potential supply chain disruptions, including those resulting from bankruptcy filings by customers or vendors; (24) potential product performance matters and product liability; (25) our ability to protect our intellectual property; (26) the impact of changes in foreign currency exchange rates on financial results, and the geographic distribution of revenues and earnings; (27) maintaining sufficient liquidity in order to fund future profitable growth and long-term vitality; (28) outcomes of litigation and regulatory actions; and (29) the other risks and uncertainties described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in subsequent periodic reports on Forms 10-K, 10-Q and 8-K. You are urged to carefully review and consider the disclosure found in our filings which are available on http://www.sec.gov or http://www.strsolar.com . Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove to be incorrect, actual results may vary materially from those projected in these forward-looking statements. We undertake no obligation to publicly update any forward-looking statement contained in this release, whether as a result of new information, future developments or otherwise, except as may be required by law.
STR Holdings, Inc. Joseph C. Radziewicz Vice President and Chief Financial Officer (860) 763-7014, x7437
