Crailar Technologies Inc : CRAiLAR TECHNOLOGIES INC. REPORTS ON AGM AND THIRD QUARTER RESULTS

Portland, Ore. (November 7, 2013) CRAiLAR Technologies Inc. ("CL" or the "Company") (TSXV: CL) (OTCQB: CRLRF).

AGM results

The Company is pleased to announce the results from its Annual and Special General Meeting (the "AGM") held on November 6, 2013 in Vancouver, Canada.

In conjunction with the holding of its AGM, each of Kenneth Barker, Robert Edmunds, Jason Finnis, Miljenko Horvat, Jeremy Jones and Peter Moore were re-elected to the Board of Directors (the "Board") of the Company.  In addition, at the AGM shareholders also approved the appointment of the Company's current auditor, the adoption of certain amendments to the Company's 2011 Fixed Share Option Plan and the adoption of an alteration to the Company's Articles to include certain advance notice provisions; all as set forth in the Information Circular for the AGM.  Immediately following the AGM the Board met and appointed Lesley Hayes as a director of the Company and, in addition, made appointments for each of the Board's three standing Board committees and the following Company executive officers resulting:

Lesley Hayes: Chairperson;

Kenneth Barker: Chief Executive Officer;

Jason Finnis: President and Chief Innovation Officer;

Theodore Sanders: Chief Financial Officer and Treasurer;

Larisa Harrison: Corporate Administration Officer and Secretary;

Jay Nalbach: Chief Marketing Officer;

Thomas C. Robinson: Chief Operations Officer; and

Guy Prevost: Compliance Officer and Corporate Controller.

Third Quarter results

Third Quarter Highlights:

• Adjusted EBITDA for Q3 2013 was a loss $1.6 million compared with a loss of $1.5 million for Q3 2012.

The Company, which produces and markets CRAiLAR® Flax fiber The Friendliest Fiber On The Planet™, today reported sales of $0.02 million and a net loss of $5.7 million or $0.13 per share for the third quarter ended September 28, 2013. This includes a non-cash $2.6 million charge associated with transitioning production to Europe and replacement of some equipment at its South Carolina facility. This compares with no sales and a net loss of $2.0 million or $0.05 per share for Q3 2012. Absent the charges discussed above, the Company's net loss would have been $2.7 million. The Company's Adjusted EBITDA for the quarter was a loss of $1.6 million compared with a loss of $1.5 million for Q3 2012. For further information regarding Adjusted EBITDA, including a reconciliation of Adjusted EBITDA to net loss, see "Non-GAAP Financial Measures" below.

Noteworthy developments since last quarter:

• The Company announced in September its intention to acquire a production facility in Europe (final documents executed) that at full capacity can produce in excess of 250,000 pounds of Crailar Flax per week. The acquisition accelerates the projected timeline to profitability and cash flow breakeven by six to nine months. The substantial quality and cost advantages necessitated the immediate transfer of production of Crailar Flax production in Q3. This decision did delay $400,000 of orders into Q4. These orders have been subsequently been billed and collected.  

• The Company reduced overhead required to support a fully integrated facility in South Carolina with the near-term focus on European production. These reductions, once severance is completed, will reduce quarterly Adjusted EBITDA loss to less than $1.0 million from this quarter's  $1.6 million loss. Completion of a fully integrated facility in South Carolina will be postponed until the capacity of its European facility is exceeded or a strategic partner desires a dedicated facility and supports the $14 million build-out.

• The Company elected to replace the South Carolina bale entry equipment that is impeding cost efficient production of feedstock fiber. While this equipment is manufactured and installed, South Carolina will be idled for least six months to reduce cash-burn. Additionally, the Company does not intend to contract crops this season as it expects to have sufficient feedstock available. The replacement of the bale entry equipment and forgoing contract planting for 2014 resulted in a non-cash write-down of $2.6 million for equipment, seed and straw inventory.

"We are breaking new ground bringing our technology into production and we learned some difficult lessons over the past nine months" stated Ken Barker, CEO of CRAiLAR.  "Much of what we are doing has never been done at scale before and setbacks are unfortunately inevitable. We have however made significant progress during the quarter positioning the Company for a prosperous future and an achievable path towards profitability with our European production facility. Our team is committed to realizing Crailar's potential as are our customers who continue to work closely with us."

Cash and cash equivalents and investments at Sept 28, 2013 were $0.35 million, down from $2.9 million at December 31, 2012. The changes in cash equivalents resulted from $7.5 million of cash used in operations and $2.8 million of cash invested in property and equipment, partially offset by $7.5 million of cash from financing activities through the issuance of $8.1million of convertible debentures (net $7.3 million after expenses) and $.20 million of common stock and exchange gains of $0.3 million. The Company continues to explore financing options with its strategic customers and has completed the due diligence phase. Three strategic customers have indicated an interest in contributing financial resources in varying forms and we hope to conclude this process soon. Until these resources become available, if at all, two employees and one independent director have provided bridge financing to enable the Company to conclude a financing.

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):  

A conference call to discuss the Company's third quarter ended September 28, 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 2:00 pm Pacific Time (5:00 pm Eastern Time) on Thursday, November 7, 2013. Participants may access the call by dialing 888-428-7458 (North America) or 862-255-5400 (international), 5 to 10 minutes before the call, and asking for the Crailar Technologies Inc. third quarter 2013 conference call. 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.  If you are unable to participate during the live call, an audio replay will be available until 11:59 pm Eastern Time on November 21, 2013 by dialing 877-870-5176 or 858-384-5517 for international callers, and entering pin number 38864995.  The playback of the call will also be available on the investor relations page of CRAiLAR's website.Conference Call

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, 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.

For further information please contact:

Corporate Officer:

Ted Sanders

Chief Financial Officer

CRAiLAR Technologies Inc.

(866) 436-7869 

ir@crailar.com

ADVISORY: This press release contains forward looking statements which may include statements concerning completion of any proposed acquisitions, capital programs, debt, funds flow from operations, closing date of the Offering and the anticipated use of the net proceeds of the Offering.  Although CL believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because CL can give no assurance that they will prove to be correct.  Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Any proposed acquisition may not be completed if required approvals or some other condition to closing is not satisfied.  The closing of the Offering could be delayed if CL is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned.  The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied.  Accordingly, there is a risk that any proposed acquisition or offering will not be completed within the anticipated time or at all.  The intended use of the net proceeds of the Offering by CL might change if the board of directors of CL determines that it would be in the best interests of CL to deploy the proceeds for some other purpose.

The forward looking statements contained in this press release are made as of the date hereof and CL undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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.