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Last updated on April 24, 2014 at 17:35 EDT

CRAiLAR Technologies, Inc. Reports First Quarter 2013 Results

April 18, 2013

First Quarter, 2013 Highlights:

        --  Adjusted EBITDA for Q1 was a loss $1.8 million.
        --  Commenced CRAiLAR production in Pamplico, S.C.
        --  Completed $4.4 million (net) financing

VICTORIA, BC and PORTLAND, OR, April 18, 2013 /CNW/ – CRAiLAR
Technologies Inc. (“CRAiLAR” or the “Company”) (TSXV: CL) (OTCBB:
CRLRF), which produces and markets CRAiLAR® Flax fiber The Friendliest Fiber On The Planet(TM), today reported a net loss for the first quarter ended March 30, 2013
of $3.4 million or $0.08 per share compared with a net loss of $2.8
million or $0.07 per share for Q1 2012. This quarter’s loss included a
$0.4 million non-cash impairment loss. The Company’s Adjusted EBITDA
for the quarter was a loss of $1.8 million unchanged from Q-1 2012. For
further information regarding Adjusted EBITDA, including a
reconciliation of Adjusted EBITDA to net loss, see “Non-GAAP Financial
Measures” below.

“Q1 2013 is an important milestone for us as a company, in that we
started production of our first full scale CRAiLAR production facility”
stated Kenneth C. Barker, Chief Executive Officer. “Fiber processed at
our Pamplico facility was sent to our third party enzyme processor for
CRAiLAR processing, and was still in enzyme processing at the end of
the quarter. We therefore are looking forward to the current quarter as
the first quarter in which we will generate CRAiLAR revenue. In
addition, the harvest for flax begins in May and runs through June
which will provide additional feedstock for future production.”

Cash and cash equivalents and investments at March 30, 2013 were $2.9
million unchanged from December 31, 2012. Changes in cash equivalents
were the result of $2.8 million of cash used in operations and $1.9
million of cash invested in property and equipment. This was partially
offset by $4.4 million of cash from financing activities through the
issuance of $4.7 million of convertible debentures (net $4.2 million
after expenses) and $0.2 million of common stock and exchange gains of
$0.3 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 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):


                                   Thirteen Weeks Ended

                                            March 30

                                      2013       2012

    Net loss                       $(3,378)    $(2,789)

    Interest expense, net               312           -

    Income tax (benefit) provision        -           -

    Depreciation and amortization       294          50

    EBITDA                          (2,772)     (2,739)

    Share-based compensation            555         929

    Impairment loss                     396           -

    Adjusted EBITDA                $(1,821)    $(1,810)

Conference Call

A conference call to discuss the Company’s first quarter ended March 30,
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, April 18,
2013. Participants may access the call by dialing 888-329-8862 (North
America) or 719-325-2495 (international), 5 to 10 minutes before the
call, and use conference ID number 3645532. 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. For those unable to participate in the live call, an audio replay will
be available until midnight on May 2, 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 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)

                                                   March 30,   December 31,

                                                      2013           2012

    ASSETS                                                                 

    Current assets:                                                        

      Cash and cash equivalents                       $2,947         $2,877

      Accounts receivable                                 54             72

      Inventory                                        2,614          2,905

      Prepaid expenses and other                         218            107

        Total current assets                           5,834          5,961

    Deferred Debt Issuance Costs                       1,421          1,024

    Property and Equipment, net                       14,864         13,249

    Intangible Assets, net                                83             95

        Total assets                                 $22,202        $20,329

    LIABILITIES AND STOCKHOLDER'S EQUITY                                   

    Current liabilities:                                                   

      Accounts payable                                 1,660          1,406

      Accrued liabilities                                745          1,481

      Derivative Liability                               414            488

        Total current liabilities                      2,819          3,375

    Long Term Debt                                    14,765         10,051

        Total liabilities                             17,584         13,426

    Stockholders' equity:                                                  

      Common stock, authorized: 100,000,000 common
      shares without par value                                             

      Issued and outstanding : 44,435,198 common
      shares                                          32,928         32,617

      (March 31, 2012 - 42,442,804)                                        

    Subscription receivable                             (64)           (64)

    Additional Paid-in Capital                         7,498          7,061

    Accumulated Other Comprehensive Loss               (113)          (459)

    Deficit                                         (11,485)       (11,731)

    Deficit accumulated in the development stage    (24,146)       (20,522)

        Total stockholders' equity                     4,618          6,902

         Total liabilities and stockholders'
         equity                                      $22,202        $20,329

 


                                     Crailar Technologies Inc.

                                  Consolidated Income Statement

                    (in thousands, except share and per share data)

                                                     Thirteen Weeks Ended

                                                             March 30

                                                          2013       2012

    Operating expenses:                                                  

                Advertising and promotion                 $144        $60

                Amortization and depreciation               52         50

                Consulting and contract labour             204        216

                General and administrative                 277        186

                Professional fees                          253        138

                Production costs                           731          -

                Research and development                    56        138

                Salaries and benefits                      878      1,108

    Loss from operations                                 2,596      1,897

    Other (income) expense:                                              

                Impairment of assets                       396          -

                Interest                                   312          -

                Fair value adjustment to derivative         74        892
                liabilities

                  Total other expense, net                 782        892

    Net loss                                          $(3,378)   $(2,789)

    EPS - basic and diluted                            $(0.08)    $(0.07)

    Shares used in computation of basic and diluted 43,029,135 42,028,271
    net loss per share


                      Crailar Technologies Inc.                 

             Consolidated Statement of Cash Flows               

                              (in thousands)                    

                                                      Thirteen Weeks Ended

                                                               March 30

                                                          2013        2012

    Operating activities                                        

    Net loss                                          $(3,378)    $(2,789)

    Adjustments to reconcile net loss to net cash
    from operating activities              

       Amortization and depreciation                       294          50

       Interest                                             86           -

       Rent                                                 37           -

       Stock based compensation                            555         744

       Impairment of assets                                396           -

       Fair value adjustment of derivative liability      (74)         892

    Changes in working capital assets and liabilities                     

       Decrease in accounts receivable                      19          90

       (Increase)  in inventory                          (106)       (165)

       (Increase) decrease in prepaid expenses           (112)           8

       Increase in accounts payable                        254         211

       (Decrease) in  accrued liabilities                (772)       (345)

       Net cash used in operating activities of        (2,802)     (1,303)
       continuing operations

       Net cash flows used in operating activities     (2,802)     (1,303)

    Investing activities                                                  

       Purchase of property and equipment              (1,895)       (756)

       Acquisition of intangible assets                    (2)        (15)

    Net cash flows used in investing activities        (1,897)       (772)

    Financing activities                                                  

       Issuance of capital stock and warrants              193         842

       Convertible Debenture                             4,713           -

       Deferred issuance costs for convertible           (482)           -
       debenture          

    Net cash flows from financing activities             4,424         842

    Effect of exchange rate changes on cash and cash
    equivalents                                            346          58

    Increase (decrease) in cash and cash equivalents        70     (1,175)

    Cash and cash equivalents, beginning                 2,877       6,341

    Cash and cash equivalents, ending                   $2,947      $5,166

    Supplemental disclosures of cash flow
    information:              

       Cash paid for interest                              277           -

       Capital stock issued as share issue costs             -            -

 

 

 

 

 

SOURCE Crailar Technologies Inc.


Source: PR Newswire