Gross profit for the fourth quarter of 2011 was $4.2 million or 11.6% as a percentage of sales. This is compared to $14.6 million or 25.9% as a percentage of sales from the previous sequential quarter. This gross profit decline was driven mostly by the decrease in volume, lower ASP and unfavorable mix.
Selling, general and administrative expenses (SG&A) were $8.7 million in the fourth quarter, a $1.9 million increase sequentially. The increase was mostly due to several discrete items including the unfavorable resolution of a sales tax audit, additional environmental remediation efforts and costs associated with the Company’s Asia expansion.
Lower gross profit and a non-cash goodwill impairment of $63.9 million drove an operating loss of $68.3 million, compared to a profit of $6.4 million in the third quarter of 2011 and $22.1 in the fourth quarter of 2010. The non-cash goodwill impairment was attributable to the decline in solar market conditions and the market capitalization of the Company’s common stock.
Net loss from continuing operations for the fourth quarter of 2011 was $68.5 million or $1.67 on a diluted EPS basis. This is compared with net earnings from continuing operations of $3.8 million, or $0.09 per diluted share for the third quarter of 2011 and $14.7 million or $0.35 per diluted share for the fourth quarter of 2010.Non-GAAP net loss from continuing operations, which excludes certain tax-effected adjustments ( as disclosed after the non-GAAP reconciliation table at the end of this press release) was $1.9 million, or $0.05 per share. This is compared to non-GAAP EPS of $0.21 in the third quarter of 2011, and $0.36 in the fourth quarter of 2010. Additionally, during February 2012, the Company settled its legal dispute over the misappropriation of STR’s trade secrets. The Company has received a related payment of $7.2 million, all federal and state court actions have been dismissed and the defendants are permanently barred from using STR’s trade secret technology.
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