Crailar Technologies Inc. (fka CRLRQ)

[wplong89]

It's definitely sink or swim time for the company unfortunately. My hunch is that they were not able to supply GP in an orderly fashion. The company promoted its ability to produce over a million pounds in Q1, but in reality they need to be at the 2 million pounds per quarter mark yesterday! Remember, "exclusivity clauses that require them to purchase, in the aggregate, approximately 8.5 million pounds of CRAiLAR ® Flax fibers in 2015 and approximately 10.1 million pounds in 2016". Everything had been looking alright but looking at Q1 again, it was a massive failure in production, again. The company made it seem like a few capital investments here and there or as they say "plant optimizations" and the plant would be capable of producing 280,000 pounds a week. Here we sit barely producing 100,00 pounds a week after a year of costly plant upgrades. I thought we would be at least over 200,000 pounds a week at this point. Every quarter seems to talk about slow downs in production due to some constraint and always kicking the can down the road and saying next quarter. "Production output continues to improve, although Q1 2015 production was hampered by equipment challenges that improved towards the end of the quarter". Equipment challenges every quarter it seems. They NEED to be cash flow break even NOW. I was expecting revenue around 3 million for Q2 but its looking like we might be lucky to break 2 million. Refinancing and paying off debts wouldn't have been much of an issue if they reached profitability in a timely fashion. If the plant hasn't significantly increased output this quarter, the road is going to be really tough. Having said all this, just one dedicated facility could go a long ways in securing the future of the company. Maybe they will be more aware of how to start a second plant without shitty equipment and a lack of operations management. I should have known to probably step aside for a little while when Q1 numbers came out. But at these price levels I still think its worth the risk. It's time the company surprises us with something positive instead of more plant downtime. The lack of additional financing keeps me hopeful that they have managed to finally step up production this quarter. I guess we will see soon enough.