CRAiLAR Reports Second Quarter Results

                    CRAiLAR Reports Second Quarter Results

PR Newswire

PORTLAND, OR, Aug. 8, 2013

Second Quarter Highlights:

  *Revenues $0.2 million, the Company's first revenue quarter.
  *Adjusted EBITDA for Q2 was a loss $1.3 million.

PORTLAND, OR, Aug. 8, 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 sales of $0.2
million and a net loss of $3.0 million or $0.07 per share for the second
quarter ended June 29, 2013. This compares with no sales and a net loss of
$1.4 million or $0.03 per share for Q2 2012. This quarter's loss includes
expenses not present last year, such as interest of $0.5 million, depreciation
of $0.3 million and an impairment loss of $0.5 million. Absent these
expenses, the Company's net loss would have been $1.7 million. The Company's
Adjusted EBITDA for the quarter was a loss of $1.3 million compared with a
loss of $0.7 million for Q2 2012. For further information regarding Adjusted
EBITDA, including a reconcilition of Adjusted EBITDA to net loss, see
"Non-GAAP Financial Measures" below.

"Q2 2013 was another important milestone for the Company as we transitioned
from a pre-revenue company to a revenue generating company," stated Ken
Barker, CEO of CRAiLAR. "We started shipping CRAiLAR Flax as our customers
began integrating our fibers into their supply chain and we expect customer
orders to accelerate in the coming quarters." Barker continued, "While we are
pleased that revenues are starting to flow, we remain focused on improving our
efficiency internally and managing third party resources effectively so that
we can drive down production costs until we commission a fully integrated
production facility."

Cash and cash equivalents at June 29, 2013 were $0.6 million, down from $2.9
million at December 31, 2012. The changes in cash equivalents resulted from
$4.4 million of cash used in operations and $2.5 million of cash invested in
property and equipment partially offset by $3.9 million of cash from financing
activities through the issuance of $4.2 million of convertible debentures (net
$3.7 million after expenses) and $0.2 million of common stock and exchange
gains of $0.7 million.

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
developmental 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):

                                         Thirteen Weeks
                                       2013       2012
Net loss                               (3,032)    (1,442)
Interest expense, net                      483          -
Income tax (benefit) provision               -          -
Depreciation and amortization              303         54
EBITDA                                 (2,246)    (1,387)
Share-based compensation                   480        711
Impairment loss on inventory               477          -
Adjusted EBITDA                        (1,288)      (677)

Conference Call
A conference call to discuss the Company's second quarter ended June 29, 2013
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 1:30 pm Pacific Daylight Time (4:30 pm
Eastern Daylight Time) on Thursday, August 8, 2013. Participants may access
the call by dialing 888-438-5448 (North America) or 719-325-2361
(international), 5 to 10 minutes before the call, and use conference ID number
1110808. In addition, the call will be broadcast live over the Internet and
accessible through the investor section of the CRAiLAR website: If you are unable to participate during the
live call, an audio replay will be available until midnight on August 29, 2013
by dialing 877-870-5176 or 858-384-5517 for international callers, and
entering pin number 3645532. 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

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 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)
                                              June 29,      December 31,
                                                2013            2012
Current assets:                                                      
 Cash and cash equivalents                          594          2,877
 Accounts receivable                                175             72
 Inventory                                        2,504          2,905
 Prepaid expenses and other                         272            107
  Total current assets                        3,544          5,961
Deferred Debt Issuance Costs                       1,342          1,024
Property and Equipment, net                       15,172         13,249
Intangible Assets, net                               128             95
  Total assets                               20,185         20,329
LIABILITIES AND STOCKHOLDER'S EQUITY                                 
Current liabilities:                                                 
 Accounts payable                                 2,253          1,406
 Accrued liabilities                              1,055          1,481
 Derivative Liability                                 6            488
  Total current liabilities                   3,315          3,375
Long Term Debt                                    14,269         10,051
  Total liabilities                          17,584         13,426
Stockholders' equity:                                                
    Common stock, authorized: 100,000,000                           
           common shares without par value
 Issued and outstanding : 44,472,698             32,975         32,617
  common shares
 (December 31, 2012 - 44,239,198)                                   
Subscription receivable                             (64)           (64)
Additional Paid-in Capital                         7,932          7,061
Accumulated Other Comprehensive Loss                 264          (459)
Deficit                                         (11,485)       (11,485)
Deficit accumulated in the development          (27,020)       (20,768)
  Total stockholders' equity                  2,601          6,902
  Total liabilities and             20,185         20,329
  stockholders' equity

                          Crailar Technologies Inc.
                        Consolidated Income Statement
               (in thousands, except share and per share data)
                                                  Thirteen Weeks
                                               2013           2012
Revenues                                             182              -
Cost of sales                                        201              -
Gross profit (loss)                                 (18)              -
Operating expenses:                                                  
 Advertising and promotion                       181             58
 Amortization and depreciation                   303             54
 Consulting and contract labour                   89            216
 General and administrative                      302            227
 Interest                                        483              -
 Professional fees                               379              -
 Production costs                                226            261
 Research and development                         37            215
 Salaries and benefits                           945          1,035
Loss from operations                             (2,963)        (2,065)
Other (income) expense:                                              
 Gain on disposal of assets                      (1)              -
 Write down of inventory                         477              -
 Fair Value adjustment derivative              (408)          (623)
 Total other expense, net                  69          (623)
Net loss                                         (3,032)        (1,442)
EPS - basic and diluted                     $ (0.07)   $ (0.03)
Shares used in computation of basic          44,407,621    42,542,218
and diluted net loss per share

                          Crailar Technologies Inc.
                     Consolidated Statement of Cash Flows
                                (in thousands)
                                                     Twenty-Six Weeks
                                                    2013       2012
Operating activities                                                
Net loss                                            (6,252)    (4,231)
Adjustments to reconcile net loss to net cash                       
from operating activities
 Amortization and depreciation                        587        105
 Amortization of deferred debt issuance               177          -
 Rent                                                  74          -
 Stock based compensation                           1,035      1,454
 Gain on disposal of assets                           (1)          -
 Write down of inventory                              874          
 Fair value adjustment of derivative                (482)        269
Changes in working capital assets and                               
 (Increase) decrease in accounts receivable          (102)         89
 (Increase) decrease in inventory                    (473)    (1,153)
 (Increase) decrease in prepaid expenses             (165)        (2)
 Increase in accounts payable                          441        731
Decrease in accrued liabilities                        (94)      (351)
 Net cash used in operating activities of          (4,381)    (3,089)
continuing operations
 Net cash flows used in operating activities       (4,381)    (3,089)
Investing activities                                                
 Purchase of property and equipment                (2,493)    (3,463)
 Acquisition of intangible assets                     (50)       (20)
Net cash flows used in investing activities         (2,542)    (3,483)
Financing activities                                                
 Issuance of capital stock and warrants                193      1,002
 Convertible Debenture                               4,218          -
 Deferred issuance costs for convertible             (494)          -
Net cash flows from financing activities              3,917      1,002
Effect of exchange rate changes on cash and             723         35
cash equivalents
Increase (decrease) in cash and cash                (2,283)    (5,536)
Cash and cash equivalents, beginning                  2,877      6,341
Cash and cash equivalents, ending                       594        805
Supplemental disclosures of cash flow                               
 Cash paid for interest                                277          -
 Capital stock issued as share issue costs               -          -

SOURCE Crailar Technologies Inc.


Investor Contact:Mark McPartland, MZ Group, (646)

Corporate Officer:Ted Sanders, CFO, (503) 387-3941,

Media Contact,Ryan Leverenz, Director, Corporate Communications, (415)
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