Crailar Technologies Inc., which raised capital from Adidas Group's venture capital fund in 2013 to develop fibers from flax and hemp, greatly reduced its losses on a big jump in sales in the first quarter.

The Canadian company reported revenues of $1.7 million for the first quarter ended March 28, up 300 percent compared with the first quarter ended March 29, 2014.

The net loss for Q1 2015 was  $0.2 million, or $0.00 per share, a $2.4 million improvement compared with Q1 2014's net loss of $2.6 million or $0.05 per share. The company's Adjusted EBITDA for the quarter was a loss of $0.7 million, a reduction of $0.9 million, or 60 percent, from Q1 2014's Adjusted EBITDA loss of $1.6 million. 

During Q1 2015, the company continued to optimize its European production facility. Fiber output volume for Q1 2015 was over one million pounds, an increase of 400 percent over Q1 2014 and 38 percent over Q4 2014. 

Gross loss for Q1 2015 was $40 thousand compared to a gross loss of $0.4 million for Q1 2014. Production output continues to improve, although Q1 2015 production was hampered by equipment challenges that improved towards the end of the quarter. The sales mix for Q1 2015 was evenly split between premium high value fibers and standard lower value fibers while the sales mix for Q4 2014 was predominantly premium fibers. Variable gross profit for Q1 2015 increased three-fold from Q1 2014 from increased volume. Q1 2015 variable gross profit improved, although labor inefficiencies created by equipment downtime and feedstock costs continue to dampen profitability.

The company worked with its strategic customers during the Q1 2015 to organize trials to validate the opportunity for dedicated facilities. Results so far indicate that the trials have successfully achieved their expected goals and both customer plants remain under discussion. The company also advanced a number of initiatives to reduce feedstock costs. Test plots of flax and hemp have been planted by a five thousand farmer cooperative, and a term sheet for a direct to farmer program was signed.  Direct to farmer feedstock sourcing could reduce feedstock costs by 50 percent and is an important step in fully realizing Crailar's disruptive potential.

The company ended Q1 2015 with cash and cash equivalents of $0.9 million down $0.3 million from the year ended Dec. 27, 2014.  Cash used in operations was $0.1 million and cash invested in capital equipment was $ 0.3 million. The company is in compliance with its debt instruments.

Crailar is focused on bringing cost-effective, sustainable, bast fiber-based products to market that are environmentally friendly natural fiber alternatives with equivalent or superior performance characteristics to cotton, wood or fossil-fuel based fibers. The company's business operations consist primarily of the production of its natural and proprietary Crailar Flax fibers targeted at the natural yarn and textile industries, as well as the deployment of its Crailar processing technologies in the cellulose pulp and composites industries.