For the year ended December 31, 2012, the Company reported a net loss of $9.3 million or $0.22 per share compared with last year's net loss of $7.0 million or $0.18 per share. This year's loss included a $0.6 million non-cash write-down of decortication equipment not commercially viable at a pilot research facility. The Company's Adjusted EBITDA for the year was a loss of $5.9 million compared with an Adjusted EBITDA loss of $4.3 million last year. The Adjusted EBITDA loss increase from the prior year was largely due to increased spending on salaries and benefits due in part to additional hiring as the company prepared for commercialization. In addition, the Company spent $0.8 million on professional fees this year reflecting costs incurred in financing activities, applying for listing on a senior exchange, name change and reorganization costs.

"During 2012 we financed and built the first large scale production facility for CRAiLAR Flax fiber and expanded our partner relationships with many leading companies in the textile industry" stated Kenneth C. Barker, Chief Executive Officer. "We are now at an inflection point where we transform from a developmental company to an operating company in 2013 as we scale-up production of CRAiLAR Flax fiber."

Cash and cash equivalents and investments at December 31, 2012 were $2.9 million down from $6.3 million at December 31, 2011. The decrease in cash equivalents of $3.5 million resulted from $5.7 million of cash used in operations and $10.7 million of cash invested in property and equipment partially offset by $12.9 million of cash from financing activities through the issuance of $10 million of convertible debentures (net $9.0 million after expenses) and $3.9 million of common stock.

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):

A conference call to discuss the Company's fourth quarter and year ended December 31, 2012 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 Daylight Time (5:00 pm Eastern Daylight Time) on Thursday, March 14, 2013. Participants may access the call by dialing 888-481-2877(North America) or 719-325-2329 (international), 5 to 10 minutes before the call, and use conference ID number 8477532. 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 midnight on March 28, 2013 by dialing 877-870-5176 or 858-384-5517 for international callers, and entering pin number 8477532. A transcript will be available approximately 24 hours after the call on CRAiLAR's investor page.

About CRAiLAR Technologies Inc.

Safe Harbor Statement

For further information:

Corporate Officer
Ted Sanders
CFO
(503) 387-3941
ir@crailar.com

Investor Contact:
Mark McPartland
MZ Group
(646) 593-7140
markmcp@mzgroup.us

Media Contact:
Ryan Leverenz
Director, Corporate Communications
(415) 999-1418
ryan.leverenz@crailar.com