CRAiLAR Technologies, Inc. Reports Fourth Quarter Results

          CRAiLAR Technologies, Inc. Reports Fourth Quarter Results

PR Newswire

VICTORIA, BC and PORTLAND, OR, March 14, 2013

Fourth Quarter Highlights:

  * Adjusted EBITDA for Q4 was a loss $1.8 million.
  * Commissions Pamlico production facility.
  * Completes name change to CRAiLAR Technologies, Inc.

VICTORIA, BC and PORTLAND, OR, March 14, 2013 /PRNewswire/ - CRAiLAR
Technologies Inc. ("CL" or the "Company") (TSXV: CL) (OTCBB: CRLRF), which
produces and markets CRAiLAR® Flax fiber The Friendliest Fiber On The Planet™,
today reported a net loss for the fourth quarter ended December 31, 2012 of
$3.1 million or $0.07 per share compared with a net loss of $2.6 million or
$0.05 per share for Q4 2011. This quarter's loss included a $0.6 million
write-off of the Company's pilot scale decortication facility that was deemed
not commercially viable. The Company's Adjusted EBITDA for the quarter was a
loss of $1.8 million slightly above last year's $1.6 million fourth quarter
Adjusted EBITDA loss resulting from increased compensation spending in
preparation for commissioning the first large scale CRAiLAR Flax Fiber
production facility. For further information regarding Adjusted EBITDA,
including a reconciliation of Adjusted EBITDA to net loss, see "Non-GAAP
Financial Measures" below.

For the year ended December 31, 2012, the Company reported a net loss of $9.3
million or $0.22 per share compared with last year's net loss of $7.0 million
or $0.18 per share. This year's loss included a $0.6 million non-cash
write-down of decortication equipment not commercially viable at a pilot
research facility. The Company's Adjusted EBITDA for the year was a loss of
$5.9 million compared with an Adjusted EBITDA loss of $4.3 million last year.
The Adjusted EBITDA loss increase from the prior year was largely due to
increased spending on salaries and benefits due in part to additional hiring
as the company prepared for commercialization. In addition, the Company spent
$0.8 million on professional fees this year reflecting costs incurred in
financing activities, applying for listing on a senior exchange, name change
and reorganization costs.

"During 2012 we financed and built the first large scale production facility
for CRAiLAR Flax fiber and expanded our partner relationships with many
leading companies in the textile industry," stated Kenneth C. Barker, Chief
Executive Officer. "We are now at an inflection point where we transform from
a developmental company to an operating company in 2013 as we scale-up
production of CRAiLAR Flax fiber."

Cash and cash equivalents and investments at December 31, 2012 were $2.9
million down from $6.3 million at December 31, 2011. The decrease in cash
equivalents of $3.5 million resulted from $5.7 million of cash used in
operations and $10.7 million of cash invested in property and equipment
partially offset by $12.9 million of cash from financing activities through
the issuance of $10 million of convertible debentures (net $9.0 million after
expenses) and $3.9 million of common stock.

Non-GAAP Financial Measures
Regulation G, "Conditions for Use of Non-GAAP Financial Measures," and other
provisions of the Securities Exchange Act of 1934, as amended, define and
prescribe the conditions for use of certain non-GAAP financial information. We
provide "Adjusted EBITDA," which is a non-GAAP financial measure. Adjusted
EBITDA consists of net income before (a) interest income (expense), (b) income
tax provision (benefit), (c) amortization of intangibles and impairment loss,
(d) depreciation and amortization, (e) share-based compensation expense, and
(f) non-cash write-downs of equipment and inventory.

The Company believes that this non-GAAP financial measure provides important
supplemental information to management and investors. This non-GAAP financial
measure reflects an additional way of viewing aspects of the Company's
operations that, when viewed with the GAAP results and the accompanying
reconciliation to corresponding GAAP financial measures, provides a more
complete understanding of factors and trends affecting the Company's business
and results of operations.

Management uses Adjusted EBITDA as a measure of the Company's operating
performance because it assists in comparing the Company's operating
performance on a consistent basis by removing the impact of items not directly
resulting from core operations. Internally, this non-GAAP measure is also used
by management for planning purposes, including the preparation of internal
budgets; for allocating resources to enhance financial performance; for
evaluating the effectiveness of operational strategies; and for evaluating the
Company's capacity to fund capital expenditures and expand its business. The
Company also believes that analysts and investors use Adjusted EBITDA as a
supplemental measure to evaluate the overall operating performance of
developemental companies. Additionally, lenders or potential lenders use
Adjusted EBITDA to evaluate the Company's ability to repay loans.

This non-GAAP financial measure is used in addition to and in conjunction with
results presented in accordance with GAAP and should not be relied upon to the
exclusion of GAAP financial measures. Management strongly encourages investors
to review the Company's consolidated financial statements in their entirety
and to not rely on any single financial measure. Because non-GAAP financial
measures are not standardized, it may not be possible to compare these
financial measures with other companies' non-GAAP financial measures having
the same or similar names. In addition, the Company expects to continue to
incur expenses similar to the non-GAAP adjustments described above, and
exclusion of these items from the Company's non-GAAP measures should not be
construed as an inference that these costs are unusual, infrequent or
non-recurring.

The table below reconciles net loss to Adjusted EBITDA for the periods
presented (in thousands):

                                     Three Months            Twelve Months
                                         Ended                   Ended
                                     December 31,            December 31,
                                   2012         2011       2012         2011
Net loss                         $(3,051)     $(2,614)   $(9,315)     $(6,999)
Interest expense, net                  58           10        100           97
Income tax (benefit)                    -            -          -            -
provision
Depreciation and                      114           24        279           62
amortization
EBITDA                            (2,879)      (2,581)    (8,937)      (6,840)
Share-based                           453          929      2,398        2,561
compensation
Impairment loss on                    594            3        594            3
equipment
Adjusted EBITDA                  $(1,831)      (1,649)   $(5,945)     $(4,276)
                                                                       

Conference Call
A conference call to discuss the Company's fourth quarter and year ended
December 31, 2012 results, as well as an update on the Company's financing
activities, production schedule and ramp up, partner activities, and
agricultural activities, is scheduled to begin at 2:00 pm Pacific Daylight
Time (5:00 pm Eastern Daylight Time) on Thursday, March 14, 2013. Participants
may access the call by dialing 888-481-2877(North America) or 719-325-2329
(international), 5 to 10 minutes before the call, and use conference ID number
8477532. In addition, the call will be broadcast live over the Internet and
accessible through the investor section of the CRAiLAR website:
www.crailar.com/company/investors If you are unable to participate during the
live call, an audio replay will be available until midnight on March 28, 2013
by dialing 877-870-5176 or 858-384-5517 for international callers, and
entering pin number 8477532. A transcript will be available approximately 24
hours after the call on CRAiLAR's investor page.

About CRAiLAR Technologies Inc.
CRAiLAR(R) Technologies Inc. offers cost-effective and environmentally
sustainable natural fiber in the form of flax, hemp and other bast fibers for
use in textile, industrial, energy, medical and composite material
applications. Produced using a fraction of water and chemical inputs compared
with other natural fibers, CRAiLAR Flax is the newest natural fiber
introduction to the market in decades. The Company supplies its CRAiLAR Flax
to HanesBrands, Georgia-Pacific, Brilliant Global Knitwear, Tuscarora Yarns,
Target Corp. and Kowa Company for commercial use, and to Levi Strauss & Co.,
Cintas, Carhartt, Ashland, PVH Corp., Cotswold Industries, Cone Mills and
Lenzing for evaluation and development. The Company was founded in 1998 as a
provider of environmentally friendly, socially responsible clothing. For more
information, visit www.crailar.com.

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.

Safe Harbor Statement
This news release includes certain statements that may be deemed
"forward-looking statements". All statements in this news release, other than
statements of historical facts, are forward-looking statements.
Forward-looking statements or information are subject to a variety of risks
and uncertainties which could cause actual events or results to differ
materially from those reflected in the forward-looking statements or
information and including, without limitation, risks and uncertainties
relating to: any market interruptions that may delay the trading of the
Company's shares, technological and operational challenges, needs for
additional capital, changes in consumer preferences, market acceptance and
technological changes, dependence on manufacturing and material supplies
providers, international operations, competition, regulatory restrictions and
the loss of key employees. In addition, the Company's business and operations
are subject to the risks set forth in the Company's most recent Form 10-K,
Form 10-Q and other SEC filings which are available through EDGAR at
www.sec.gov. These are among the primary risks we foresee at the present time.
The Company assumes no obligation to update the forward-looking statements.

                          Crailar Technologies Inc.
                          Consolidated Balance Sheet
              (in thousands, except share and per share amounts)
                                                                              
                                                   December 31,   December 31,
                                                       2012           2011
ASSETS                                                                        
Current assets:                                                               
  Cash and cash equivalents                              $2,877         $6,341
  Accounts receivable                                        72            151
  Inventory                                               2,905          1,036
  Prepaid expenses and other                                107             47
       Total current assets                               6,206          7,575
Deferred Debt Issuance Costs                              1,024              -
Property and Equipment, net                              13,249          3,203
Intangible Assets, net                                       95            107
       Total assets                                     $20,329        $10,884
LIABILITIES AND STOCKHOLDER'S EQUITY                                          
Current liabilities:                                                          
  Accounts payable                                       $1,406           $236
  Accrued liabilities                                     1,481            352
  Derivative liability                                      488          1,053
       Total current liabilities                          3,375          1,642
Long Term Debt                                           10,051              -
       Total liabilities                                 13,426          1,642
Stockholders' equity:                                                         
  Common stock, authorized: 100,000,000 common                                
  shares without par value
  Issued and outstanding : 44,239,198 common             32,617         27,429
  shares
  (December 31, 2011 - 41,701,604)                                            
Subscription receivable                                    (64)              -
Additional Paid-in Capital                                7,061          5,175
Accumulated Other Comprehensive Loss                      (459)          (423)
Deficit                                                (11,731)       (11,485)
Deficit accumulated in the development stage           (20,522)       (11,452)
       Total stockholders' equity                         7,148          9,243
                Total liabilities and                   $20,329        $10,884
  stockholders' equity
                                                                   

                          Crailar Technologies Inc.
                        Consolidated Income Statement
               (in thousands, except share and per share data)
                                                                              
                             Three Months                Twelve Months
                                Ended                        Ended
                             December 31,                 December 31,
                           2012        2011          2012           2011
Operating                                                                     
expenses:
     Advertising                $64         $58          $407             $236
and promotion
     Amortization               114          24           279               62
and depreciation
     Consulting                 172         406           763            1,305
and contract
labour
     General and                215         344           887              606
Administrative
     Interest                    58          10           100               97
     Professional               303         104           798              401
Fees
     Research and                15         130           660              757
development
     Salaries and             1,302       1,345         4,426            2,965
benefits
Loss from                     2,244       2,420         8,320            6,430
operations
Other (income)                                                                
expense:
     Write down of              594           3           594                3
equipment
     Write down of              304           -           304                 
inventory                                                                    -
     Fair Value                (91)         191            98              566
adjustment
derivative
liabilities
            Total               561         194           750              569
other expense, net
Net loss                   $(3,051)    $(2,614)      $(9,315)         $(6,999)
Loss per share                                                         $(0.18)
(basic and                  $(0.07)     $(0.05)       $(0.22)
diluted)
Shares used in           44,174,814                                 38,582,587
computation of                       49,226,961    43,009,226
basic and diluted
net loss per share
                                                               

                          Crailar Technologies Inc.
                     Consolidated Statement of Cash Flows
                                (in thousands)
 
                                                           Twelve Months Ended
                                                              December 31,
                                                             2012      2011
Operating activities                                                          
Net loss                                                    $(9,315)  $(6,999)
Adjustments to reconcile net loss to net cash                                 
from operating activities
   Amortization and depreciation                                 279        62
   Interest                                                       90         -
   Rent                                                          120         -
   Stock based compensation                                    2,398     2,561
   Write down of equipment                                       594         3
   Write down of inventory                                       304         -
   Fair value adjustment of derivative                            98       566
liability
Changes in working capital assets and                                         
liabilities
  (Increase) decrease in accounts receivable                      79     (120)
  (Increase) decrease in inventory                           (2,172)   (1,036)
  (Decrease) increase in prepaid expenses                       (60)        28
  Increase in accounts payable                                 1,171     (291)
  Increase in customer deposits                                    -     (125)
  Increase (decrease) in  accrued liabilities                    731        28
  Net cash used in operating activities of                   (5,685)   (5,324)
continuing operations
  Net cash provided  by discontinued                               -         2
operations
  Net cash flows used in operating activities                (5,685)   (5,321)
Investing activities                                                          
  Purchase of property and equipment                        (10,629)   (3,180)
  Acquisition of intangible assets                              (30)      (62)
Net cash flows used in investing activities                 (10,659)   (3,242)
Financing activities                                                          
  Issuance of capital stock and warrants                       3,949    16,340
  Notes payable                                                    -     (200)
  Convertible Debenture                                       10,051         -
  Deferred issuance costs for convertible                    (1,084)         -
debenture
  Related parties payments                                         -     (957)
Net cash flows from financing activities                      12,916    15,183
Effect of exchange rate changes on cash and                     (36)     (298)
cash equivalents
Increase (decrease) in cash and cash                         (3,463)     6,322
equivalents
Cash and cash equivalents, beginning                           6,341        18
Cash and cash equivalents, ending                             $2,877    $6,341
Supplemental disclosures of cash flow                                         
information:
  Cash paid for interest                                           9       290
  Capital stock issued as share issue costs                        -       563

 

SOURCE Crailar Technologies Inc.

Contact:

Corporate Officer
Ted Sanders
CFO
(503) 387-3941
ir@crailar.com

Investor Contact:
Mark McPartland
MZ Group
(646) 593-7140
markmcp@mzgroup.us

Media Contact:
Ryan Leverenz
Director, Corporate Communications
(415) 999-1418
ryan.leverenz@crailar.com