STR Holdings, Inc. announced unaudited consolidated financial results for the second quarter and six months ended June 30, 2014. Net loss from continuing operations for the second quarter of 2014 was $1.6 million, or $0.06 per diluted share. This compares to a net loss from continuing operations of $4.5 million, or $0.11 per diluted share, for the second quarter of 2013. The sequential lower net loss was driven by a $4.1 million non-cash product performance accrual reversal, $0.5 million of lower restructuring expense, offset by $0.5 million of higher income tax expense and a $1.3 million loss on the reclassification of Connecticut facility as held for sale. The year-over-year decrease was due to the $4.1 million non-cash product performance accrual reversal, reduced bad debt expense, lower restructuring expense and continued cost-reduction efforts that more than offset inefficiencies in the production ramp at FeiYu, lower profitability at Malaysia facility due to higher scrap and inefficiencies associated with winding down and then recommencing operations, increased income tax expense and the loss on reclassification on assets held for sale. Adjusted LBITDA for the second quarter of 2014 was $4.0 million compared to $2.9 million from the first quarter of 2014. This sequential decline was primarily driven by higher cost of goods sold and increased professional fees associated with the assessment of strategic alternatives. This compares to Adjusted LBITDA from continuing operations of $5.3 million for the second quarter of 2013. Non--GAAP net loss from continuing operations for the second quarter of 2014, which excludes certain tax-effected adjustments was $3.9 million, or $0.15 per diluted share. This compares to non--GAAP net loss from continuing operations of $3.9 million, or $0.09 per diluted share, for the second quarter of 2013. Net sales were $11,222,000, compared to $7,755,000 for the last year. Operating loss was $3,852,000, compared to $6,553,000 for the last year. Loss from continuing operations before income tax benefit was $1,044,000, compared to $6,725,000 for the last year. Net loss was $1,640,000 or $0.06 per diluted share, compared to $4,491,000 or $0.11 per diluted share for the last year. Total diluted non-GAAP net loss per share was $0.15 compared to $0.09 for the last year. Total net cash used in operating activities was $213,000, compared to $4,909,000 for the last year. Capital investments were $774,000, compared to $1,277,000 for the last year. Free cash outflow was $987,000, compared to $6,282,000 for the last year.

For the six months ended June 30, 2014, net sales were $20,558,000, compared to $18,970,000 for the last year. Operating loss was $7,788,000, compared to $12,635,000 for the last year. Loss from continuing operations before income tax benefit was $5,547,000, compared to $12,779,000 for the last year. Net loss from continuing operations was $6,282,000 or $0.17 per diluted share, compared to $8,701,000 or $0.21 per diluted share for the last year. Net loss was $6,282,000 or $0.17 per diluted share, compared to $8,701,000 or $0.21 per diluted share for the last year. Total diluted non-GAAP net loss per share was $0.19 compared to $0.16 for the last year. Total net cash used in operating activities was $5,120,000, compared to $7,832,000 for the last year. Capital investments were $1,720,000, compared to $1,757,000 for the last year. Non-GAAP net loss from continuing operations was $7,025,000 or $0.19 per diluted share, compared to $6,820,000 or $0.16 per diluted share for the last year. Free cash outflow was $6,840,000, compared to $10,423,000 for the last year. Adjusted LBITDA was $6,905,000, compared to $8,905,000 for the last year.