On its outlook for the third quarter of 2014, CRAiLAR Technologies Inc. said that although capacity will be constrained by a customary three-week shutdown and equipment installation during the third quarter, it expects third quarter 2014 sales to double from second quarter of 2014.
CRAiLAR Technologies Inc., which produces and markets CRAiLAR Flax fibre, what it calls the friendliest fibre on the planet, reported sales of $0.7 million and a net loss of $2.0 million or $0.04 per share for the second quarter ended June 28, 2014.
This it said, includes a non-cash derivative liability gain of $0.3 million.
For the comparable quarter of 2013, CRAiLAR Technologies posted sales of $0.2 million and a net loss of $3.0 million or $0.07 per share. This quarter included a non-cash inventory impairment charge of $0.5 million.
CRAiLAR reported a loss of $1.0 million in adjusted EBITDA for the second quarter of 2014, down $0.5 million from the similar quarter of 2013.
Cash and cash equivalents and investments as on June 28, 2014 were $0.5 million down from $1.2 million on December 31, 2013.
The decrease in cash equivalents of $0.7 million resulted from $4.9 million of cash used in operations and $1.1 million of cash invested in property and equipment offset by $5.3 million of cash received from financing activities from a private placement, it said.
CRAiLAR said that during the quarter under review, it continued to optimize its European production facility purchased in December 2013 as it produced and shipped CRAiLAR Flax fiber.
Although it had completed installation of equipment necessary for the final step in the CRAiLAR process in May, air quality issues and related worker welfare delayed operating the equipment until late in the quarter which impacted production.
This delay, it said, resulted in approximately $0.1 million of CRAiLAR fiber remaining as inventory at the end of the reporting quarter.
It also added that it incurred $0.3 million of incremental costs, outsourcing certain production processes, and training new employees. Although inefficiencies were created while the plant was undergoing modification, supplying customers was viewed as critically important as filling orders is necessary to create future demand.
Additional equipment designed to provide energy, feedstock, chemical, and labor efficiencies are scheduled for installation during the third quarter and once installed, further cost and quality improvements are anticipated, it informed.
On its outlook, CRAiLAR said that although capacity will be constrained by a customary three-week shutdown and equipment installation during the third quarter, it expects third quarter 2014 sales to double from second quarter of 2014.
