STR Holdings, Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2014. For the quarter, the company reported net loss from continuing operations for the third quarter of 2014 was $3.2 million, or $0.12 per diluted share. This compares to a net loss from continuing operations of $1.6 million or $0.06 per diluted share, for the second quarter of 2014 and net loss from continuing operations of $5.9 million, or $0.14 per diluted share, for the third quarter of 2013. The sequentially higher net loss was due to the absence of the second quarter 2014 reversal of $4.1 million non-cash, product performance accrual, as well as a $1.3 million loss on the reclassification of its Connecticut facility. The year-over-year improvement was due to the $4.1 million non-cash, product performance accrual reversal, $1.0 million in reduced professional fees, $0.5 million of lower restructuring, $0.4 million of decreased labor and benefits and other cost-reductions that more than offset the $1.3 million loss on reclassification, increased bad debt expense of $0.4 million and $0.5 million of higher raw material costs. Adjusted EBITDA for the third quarter of 2014 was $2.9 million compared to $4.0 million from the second quarter of 2014. This sequential improvement was primarily driven by lower professional fees associated with the assessment of strategic alternatives and other cost-reductions that more than offset lower net sales. This compares to Adjusted LBITDA from continuing operations of $4.6 million for the third quarter of 2013. The year-over-year improvement was driven by higher sales volume and benefits from cost-reduction actions that more than offset a 19% ASP decline and higher raw material costs. Non--GAAP net loss from continuing operations for the third quarter of 2014, was $3.0 million, or $0.11 per diluted share. This compares to non--GAAP net loss from continuing operations of $3.9 million, or $0.15 per diluted share, for the second quarter of 2014 and non--GAAP net loss from continuing operations of $5.1 million, or $0.12 per diluted share, for the third quarter of 2013. Net sales were $9.514 million against $6.219 million a year ago. Operating loss was $4.025 million against $5.956 million a year ago. Loss from continuing operations before income tax was $3.783 million compared with $6.202 million for the same period last year. The company had negative operating cash flow of $5.2 million during the third quarter of 2014. The use of cash was driven by negative EBITDA and increased working capital investment. Capital investments were $0.937 million compared with $0.402 million for the same period last year.

For the nine months, the company reported net sales of $30.072 million against $25.189 million a year ago. Operating loss was $11.813 million against $18.591 million a year ago. Loss from continuing operations before income tax was $9.330 million compared with $18.981 million for the same period last year. Loss from continuing operations was $9.506 million or $0.30 diluted per share compared with $14.635 million or $0.29 diluted per share for the same period last year. Net loss was $10.191 million or $0.32 diluted per share compared with $14.635 million or $0.29 diluted per share for the same period last year. Non--GAAP net loss from continuing operations was $10.037 million or $0.30 per diluted share compared with non--GAAP net loss from continuing operations was $11.942 million or $0.29 per diluted share for the same period last year. Capital investments were $2.657 million compared with $2.159 million for the same period last year. Total net cash used in operating activities was $10.339 million compared with $17.671 million for the same period last year.

The company expects to record an additional income tax receivable of approximately $4.4 million in the fourth quarter of 2014.

For full year of 2014, the company estimated annual effective tax rate benefit being increased to 34.8%. Projected 2014 annual effective tax benefit rate was higher than planned due to lower incentive stock option expense, which was not deductible for tax.