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Fibres/​Yarns/​Fabrics

CRAiLAR Technologies reports net loss of US 8.2 million for 4Q 2014

For the full year 2014, the company reported a net loss of US 14.2 million, compared with a net loss of US 15.2 million the previous year.

21st April 2015

Innovation in Textiles
 |  Victoria, BC

Sustainable

This compares with sales of US 0.4 million and a net loss of US 3.2 million for the fourth quarter of 2013. The company’s adjusted EBITDA for the quarter was a loss of US 0.3 million, a reduction of US 0.8 million from Q4 2013's Adjusted EBITDA loss of US 1.1 million.

Output volume

During the fourth quarter of 2014, the company continued to make progress optimizing its European production facility.

Fibre output volume increased by 43% over the third quarter 2014. Drying capacity was doubled with installation and programming of a second dryer and a kier overhaul, which increases loads per cycle. Improved quality and volumes increased customer confidence, and products using branded CRAiLAR fibres were launched this quarter, the company reports.

Forecasted demand for CRAiLAR fibres now exceeds plant capacity. Two customers are investigating dedicated facilities and have scheduled validation trials for the second quarter 2015.

European production

New equipment installation and overhaul this quarter led to some production disruptions, and some equipment failures limited output.

A preventative maintenance regime is improving plant stability. An US 8 million non-cash impairment charge was recorded in Q4 to write-down the value of the company’s South Carolina plant, equipment and feedstock.

This charge reflects the company's focus on European production and lack of near term plans to restart the plant. Decortication equipment from that location may be redeployed to support future direct-to-farmer feedstock sourcing initiatives in Western or Eastern Europe.

Year results

For the year ended 27 December 2014, the company reported sales of US 4.2 million and a net loss of US 14.2 million, compared with US 0.6 million sales last year and a net loss of US 15.2 million.

This year’s loss includes the aforementioned US 8 million impairment charge associated with the South Carolina plant. Last year's loss included a US 4.6 million write-down of feedstock and seed inventory. The company’s adjusted EBITDA for the year was a loss of US 3.4 million compared with an adjusted EBITDA loss of US 6.0 million last year.

Strategic initiatives

The company is focused on two strategic initiatives: reducing feedstock costs and increasing production volume. To reduce feedstock costs the manufacturer is expanding supply sources and beginning the process of contracting directly with farmers. The company’s feedstock strategies are believed to allow it to improve margin, influence farming techniques, and create a more secure supply chain.

An optimized supply chain will create substantial cost advantages over traditional and competing sustainable fibres, according to the company. To increase production volume and satisfy customer demand, it is optimizing the existing European plant and supporting customer validation trials.

Expanded feedstock supply chain, direct to farmer sourcing, optimized production at it current plant, and future customer supported plants are critical future steps for CRAiLAR’s natural and sustainable fibres to make an impact to the fibre industry, the company reports.

www.crailar.com

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