STR Holdings Looks to Light Up Investors with IPO

STR Holdings (STRI), a provider of solar module encapsulants and quality assurance services for consumer products, is planning to float its IPO this week. The company originally filed for this IPO back in August of 2008.

Business Overview (from prospectus)

We are a global leader in each of our businesses: solar power module encapsulant manufacturing and consumer product quality assurance. Our solar business is a leading global provider of encapsulants, which are specialty extruded sheets and film that hold a solar module together and protect the embedded semiconductor circuit. Encapsulants are a critical component used in solar modules.

We supply solar module encapsulants to many of the major solar module manufacturers, including BP Solar (BP), First Solar, Inc. (FSLR), Solarwatt AG, SunPower Corporation (SPWRA) and United Solar Ovonic LLC. We believe we were the primary supplier of encapsulants to each of our top 10 customers in the first six months of 2009, which we believe is due to our superior product performance and customer service. Our encapsulants are used in both crystalline and thin-film solar modules.

Offering: 12.3 million shares at $13 - $15 per share. Net proceeds of approximately $25.4 million will be used to repay debt.

Lead Underwriters: Credit Suisse (CS), Goldman Sachs (GS), Cowen & Company

Financial Highlights:

Net sales decreased $19.1 million, or 13.9%, to $117.7 million for the six months ended June 30, 2009 from $136.7 million for the six months ended June 30, 2008 as a result of a decrease in our solar sales, partially offset by increased sales in our quality assurance business... Cost of sales decreased $1.0 million, or 1.2%, to $77.2 million for the six months ended June 30, 2009 from $78.1 million for the six months ended June 30, 2008... Gross profit decreased $18.1 million, or 30.9%, to $40.5 million for the six months ended June 30, 2009 from $58.6 million for the six months ended June 30, 2008 primarily due to the sales decline in our solar segment. Selling, general and administrative and the provision for bad debt expenses decreased $0.6 million, or 2.8%, to $21.6 million for the six months ended June 30, 2009 from $22.2 million for the six months ended June 30, 2008.

Competition:

We compete with a number of encapsulant manufacturers, including Bridgestone, Etimex and Mitsui (MITSY). We also face limited competition from suppliers of non-EVA encapsulants. Over the years, various encapsulant materials have been used in solar modules, including PVB and silicone rubber. Some of our competitors are large, global companies with substantial financial, manufacturing and logistics resources and strong customer relationships. Also, low-cost solar module manufacturers are emerging in Asia, primarily in China, which compete with our customers. As the China solar market matures, other encapsulant providers from China and the greater Asian markets will compete with us.

Additional Resources:

• Company website
• Online road show
• Mass High Tech Business News: 'Solar tech firm STR aims at $300M IPO'

Comments

[Milou:]

Soo, what's your comment, as you post this here?? (I have already an opinion, as I talked to one broker and actually did follow the NetRoadshow), just checking on you...

Nov 05 04:38 AM