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CALGARY, Feb. 15 /CNW/ - The Westaim Corporation announced today that for the year ended December 31, 2006, it recorded a net loss of $50.6 million, or 54 cents per share compared to net income of $9.3 million, or 10 cents per share, in the previous year. For the three months ended December 31, 2006, the Company posted a net loss of $11.0 million, or 12 cents per share compared to net income of $22.0 million, or 24 cents per share in the same period in the previous year. Westaim's higher net loss in 2006 is primarily attributable to $14.8 million income from discontinued operations in 2005 and a $30.1 million gain on the issuance of shares of its NUCRYST subsidiary in the fourth quarter of 2005.
At December 31, 2006, Westaim had $62.8 million in consolidated cash and short-term investments, compared to $119.6 million at December 31, 2005.
"Westaim and its subsidiaries were impacted by some major challenges in 2006," said Barry M. Heck, President & CEO of Westaim. "NUCRYST experienced disappointing results in the Phase 2 clinical trial for NPI 32101 as a pharmaceutical candidate for the treatment of atopic dermatitis. iFire transitioned from R&D to pilot operations and has made progress in demonstrating the manufacturing processes required for mass production; however, we have not yet achieved the necessary performance characteristics required for commercial production which has delayed our commercialization efforts. We will continue to address these challenges in 2007 and maintain our course in working towards taking iFire's TDEL technology to the consumer market."
The Westaim Corporation's technology investments include iFire Technology Corp., which has developed a low-cost flat panel display technology and a 74.8 per cent interest in NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX; NCS), which develops, manufactures and commercializes medical products that fight infection and inflammation based on its nanocrystalline silver technology. Westaim's common shares are listed on NASDAQ under the symbol WEDX and on The Toronto Stock Exchange under the trading symbol WED. A more detailed discussion of Westaim's 2006 consolidated year end results can be found in the 2006 consolidated audited financial statements and Management's Discussion and Analysis, which will be available at www.westaim.com and www.sedar.com
The financial results in this news release are unaudited and are not a complete disclosure of Westaim's quarterly or annual financial results. This news release contains forward-looking statements. These statements are based on current expectations that are subject to risks and uncertainties, and Westaim can give no assurance that these expectations are correct. Various factors could cause actual results to differ materially from those projected in such statements, including but not limited to statements involving iFire's progress in demonstrating the manufacturing processes required for mass production, low cost panel displays, and the ability of NUCRYST's products to fight infection and inflammation. Westaim disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.
THE WESTAIM CORPORATION
Financial Highlights
(unaudited)
(thousands of dollars except per share data)
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Three Months Ended Twelve Months Ended
December 31 December 31
Consolidated Statements -------------------- --------------------
of Operations 2006 2005 2006 2005
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Revenue $ 5,140 $ 5,607 $ 27,591 $ 28,560
(Loss) income from
continuing operations (11,019) 19,483 (50,557) (5,508)
Net (loss) income (11,019) 21,998 (50,557) 9,270
(Loss) income per common
share - basic and diluted
Continuing operations (0.12) 0.21 (0.54) (0.06)
Net (loss) income (0.12) 0.24 (0.54) 0.10
Weighted average number of
common shares outstanding
(thousands) 93,979 92,901 93,523 92,852
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Three Months Ended Twelve Months Ended
December 31 December 31
Segmented Information - -------------------- --------------------
Continuing Operations 2006 2005 2006 2005
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Revenue
Nucryst Pharmaceuticals $ 5,140 $ 5,607 $ 27,591 $ 28,560
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Continuing operations $ 5,140 $ 5,607 $ 27,591 $ 28,560
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Operating (loss) income
Nucryst Pharmaceuticals $ (2,200) $ (2,087) $(11,216) $ 1,590
iFire Technology (8,825) (8,116) (37,556) (31,844)
Other (including corporate
costs) (1,311) (2,058) (6,128) (8,163)
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Continuing operations $(12,336) $ (12,261) $(54,900) $(38,417)
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December December
Consolidated Balance Sheets 31, 2006 31, 2005
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Cash and short-term
investments $ 62,832 $119,627
Current assets 80,256 136,169
Other assets 68,083 76,292
Current liabilities 15,797 26,614
Shareholders' equity 112,977 157,640
THE WESTAIM CORPORATION
Consolidated Statements of Operations and
Consolidated Statements of Deficit
(unaudited)
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Three Months Ended Twelve Months Ended
December 31 December 31
(thousands of dollars ------------------------ ------------------------
except per share data) 2006 2005 2006 2005
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Revenue $ 5,140 $ 5,607 $ 27,591 $ 28,560
Costs
Manufacturing 2,899 2,830 17,324 10,799
Research and
development 7,707 9,391 37,920 36,514
General and
administrative 2,101 1,172 6,762 4,109
Depreciation and
amortization 3,719 2,362 14,362 7,338
Corporate costs 1,050 2,113 6,123 8,217
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Operating loss (12,336) (12,261) (54,900) (38,417)
Foreign exchange 1,333 642 (897) 410
Interest 657 454 3,181 2,073
Write-down of capital
assets and intangible
assets (1,210) (567) (1,210) (570)
Gain on disposal of
assets - - 110 -
(Loss) gain on
issuance of shares
of subsidiary (5) 30,055 (99) 30,055
Gain on sale of
investment - 1,120 - 1,120
Non-controlling
interest 466 - 3,222 -
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(Loss) income from
continuing operations
before income taxes (11,095) 19,443 (50,593) (5,329)
Income tax recovery
(expense) 76 40 36 (179)
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(Loss) income from
continuing operations (11,019) 19,483 (50,557) (5,508)
Income from discontinued
operations net of
income taxes - 2,515 - 14,778
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Net (loss) income
for the period $ (11,019) $ 21,998 $ (50,557) $ 9,270
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(Loss) income per
common share
Continuing operations
- basic and diluted $ (0.12) $ 0.21 $ (0.54) $ (0.06)
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Net (loss) income
- basic and diluted (0.12) 0.24 (0.54) 0.10
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Weighted average number
of common shares
outstanding (thousands) 93,979 92,901 93,523 92,852
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Deficit at beginning
of period $ (306,829) $ (289,289) $ (267,291) $ (276,561)
Net loss (income) (11,019) 21,998 (50,557) 9,270
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Deficit at end
of period $ (317,848) $ (267,291) $ (317,848) $ (267,291)
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THE WESTAIM CORPORATION
Consolidated Balance Sheets
(unaudited)
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December 31 December 31
(thousands of dollars) 2006 2005
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ASSETS
Current
Cash and cash equivalents $ 45,381 $ 115,673
Short-term investments 17,451 3,954
Accounts receivable 8,314 8,199
Inventories 8,506 7,773
Other 604 570
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80,256 136,169
Capital assets 63,958 71,112
Intangible assets 4,125 5,180
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$ 148,339 $ 212,461
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 7,797 $ 16,302
Current portion of long-term debt 8,000 10,312
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15,797 26,614
Long-term debt - 6,000
Provision for site restoration 6,760 6,760
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22,557 39,374
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Non-controlling interest 12,805 15,447
Shareholders' equity
Common shares 426,122 421,466
Contributed surplus 5,379 3,968
Cumulative translation adjustment (676) (503)
Deficit (317,848) (267,291)
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112,977 157,640
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$ 148,339 $ 212,461
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THE WESTAIM CORPORATION
Consolidated Cash Flow Statements
(unaudited)
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Three Months Ended Twelve Months Ended
December 31 December 31
------------------------ ------------------------
(thousands of dollars) 2006 2005 2006 2005
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Operating Activities
Loss from continuing
operations $ (11,019) $ 19,483 $ (50,557) $ (5,508)
Items not affecting
cash
Depreciation and
amortization 3,720 2,362 14,362 7,338
Write-down of
capital assets and
intangible assets 1,210 570 1,210 570
Stock-based
compensation expense 427 225 1,650 905
Non-controlling
interest (466) - (3,222) -
Foreign exchange on
long-term debt - (352) 122 (1,637)
Foreign exchange
on short-term
investments - - (52) -
Gain on disposal
of assets - - (110) -
Gain on sale of investment - (1,120) - (1,120)
Loss (gain) on issuance
of shares of subsidiary 5 (30,055) 99 (30,055)
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Cash used in continuing
operations before non-cash
working capital changes (6,123) (8,887) (36,498) (29,507)
Changes in continuing
operations non-cash
working capital
Accounts receivable 1,698 6,581 (165) (2,541)
Inventories (488) (1,639) (733) (4,341)
Other 211 1,178 (30) (32)
Accounts payable and
accrued liabilities (2,245) 1,976 (7,605) 5,186
Site restoration
expenditures net of
recoveries - - - 52
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Cash used in continuing
operations (6,947) (791) (45,031) (31,183)
Cash provided from
(used in) discontinued
operations - 97 - (518)
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Cash used in operating
activities (6,947) (694) (45,031) (31,701)
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Investing activities
Capital expenditures (811) (3,917) (7,880) (31,895)
Maturity of short-term
investments 1,285 8,442 30,594 98,335
Purchase of short-term
investments (17,450) (3,954) (44,039) (90,289)
Intangible assets (156) (202) (649) (977)
Proceeds on disposal
and sale of assets - - 312 -
Proceeds on sale of
investment - 1,620 - 1,620
Proceeds on sale of
discontinued operations - 7,029 - 22,614
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Cash (used in) provided
from investing
activities (17,132) 9,018 (21,662) (592)
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Financing activities
Proceeds from
long-term debt - 1,147 - 7,154
Repayment of
long-term debt - - (10,434) -
Issuance of common
shares of subsidiary,
net of share issuance
costs 40 45,502 325 45,502
Issuance of
common shares - - 4,484 171
Issuance of
convertible debentures
of subsidiary - - 2,000 6,000
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Cash provided from
(used in) financing
activities 40 46,649 (3,625) 58,827
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Effect of exchange rate
changes on cash and
cash equivalents 33 - 26 -
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Net (decrease) increase
in cash and cash
equivalents (24,006) 54,973 (70,292) 26,534
Cash and cash equivalents
at beginning of period 69,387 60,700 115,673 89,139
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Cash and cash
equivalents at end
of period $ 45,381 $ 115,673 $ 45,381 $ 115,673
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Supplemental
disclosure of cash
flow information:
Non-cash capital
asset additions
included in accounts
payable and accrued
liabilities $ 508 $ 1,304 $ 508 $ 1,304
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%SEDAR: 00002793E