CALGARY, Feb. 15 /CNW/ - The Westaim Corporation announced today that for
the year ended December 31, 2005, it recorded net income of $9.3 million, or
10 cents per share compared to a net loss of $25.2 million, or 30 cents per
share, in the previous year. For the three months ended December 31, 2005, the
Company posted net income of $22.0 million, or 24 cents per share compared to
a net loss of $10.6 million, or 11 cents per share in the same period in the
previous year. Westaim's results for both the year and the fourth quarter
benefited from a $30.1 million gain on the issuance of shares of its NUCRYST
subsidiary.
At December 31, 2005, Westaim had $119.6 million in cash and short term
investments, compared to $101.1 million at December 31, 2004.
In the fourth quarter of 2005, Westaim's NUCRYST Pharmaceuticals
subsidiary completed an initial public offering of 4,500,000 common shares at
a price of US$10 per share. NUCRYST common shares are now traded on the Nasdaq
National Market under the trading symbol NCST and on the Toronto Stock
Exchange under the trading symbol NCS. Westaim continues to own approximately
75.3 per cent of NUCRYST's outstanding common shares.
"2005 marked a solid year of performance and significant milestone
achievements for both NUCRYST and iFire," said Barry M. Heck, President & CEO
of Westaim. "Westaim was pleased with the results of the IPO for NUCRYST and
is encouraged with the progress of NUCRYST's pre-clinical research for its
nanocrystalline silver. iFire is now in pilot manufacturing, a major step in
the commercialization of its TDEL flat panel technology."
Review of Operations:
iFire Technology
iFire Technology's pilot production facility began operation at the end
of 2005. The $46-million pilot facility was completed on time and on budget.
Through pilot production, iFire intends to complete the baseline processes for
the manufacture of its displays and focus on continual improvements to both
performance and manufacturing efficiency.
The pilot facility is intended to produce engineering samples of high-
definition 34-inch flat panel display modules based on its proprietary thick
dielectric electroluminescent (TDEL) technology and to simulate manufacturing
in a commercial environment. iFire expects to commercialize its technology in
partnership with industry leaders and plans to initially target the 30- to
45-inch screen size television segment. The pilot plant will provide
information and experience to allow iFire to work with partners to construct
and operate the first volume production facility. Initial planning work for
this facility is under way.
NUCRYST Pharmaceuticals
NUCRYST's profitable wound care division continued to grow in 2005 with
wound care product revenue of $22.7 million compared to $18.9 million in 2004
and total revenue including milestones of $28.6 million, compared to
$31.9 million in 2004. The results for 2005 include one US$5-million milestone
payment compared to two US$5-million milestone payments in 2004. NUCRYST's
agreement with Smith & Nephew plc for the global sales and distribution of
Acticoat(TM) dressings for burns and chronic wounds, includes up to
US$56.5 million in milestone payments that can be earned upon the achievement
of sales and regulatory milestones. To date, NUCRYST has earned US$19 million
in milestone payments as a result of strong global sales of Acticoat(TM)
dressings.
In 2005, NUCRYST initiated its second Phase 2 human clinical trial of a
topical cream formulation of its nanocrystalline silver. The investigational
drug (NPI 32101 topical cream) is being studied for the treatment of atopic
dermatitis, a form of eczema, and other skin conditions. Results of the second
Phase 2 human clinical trial are expected by the end of 2006.
NUCRYST completed a $7-million expansion of its production facility in
Fort Saskatchewan, Canada to meet anticipated demand from Smith & Nephew for
its Acticoat(TM) family of dressings. NUCRYST has initiated a further
expansion of its production facility in Fort Saskatchewan, Canada in order to
further increase its capacity to manufacture Acticoat(TM) dressings for Smith
& Nephew.
NUCRYST has begun pre-clinical research to extend its nanocrystalline
silver technology to the treatment of other dermatological and
gastrointestinal conditions. Infection and inflammation are issues in many
therapeutic areas and demand exists for effective pharmaceuticals and medical
devices and products for the treatment of these common afflictions.
Financial Information Follows
The Westaim Corporation's technology investments include 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 and iFire Technology Corp,
which has developed a low-cost flat panel display. Westaim's common shares are
listed on NASDAQ under the symbol WEDX and on The Toronto Stock Exchange under
the trading symbol WED.
Acticoat(TM) is a trademark of Smith & Nephew plc
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
financial considerations, the completion of baseline manufacturing processes
for iFire displays, intentions regarding production of engineering samples of
iFire displays, statements related to manufacturing of iFire displays in a
commercial environment, potential iFire partnering activities and strategies,
the information and experience anticipated from the iFire pilot plant,
anticipated demand from Smith & Nephew for NUCRYST dressings, and the
expansion of NUCRYST's production facilities and resulting increased
manufacturing capacity. 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)
-------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31 December 31
Consolidated Statements ----------------------- ---------------------
of Operations 2005 2004 2005 2004
(Restated) (Restated)
-------------------------------------------------------------------------
Revenue $ 5,607 $ 6,042 $ 28,560 $ 31,907
Income (loss) from
continuing operations 19,483 (10,403) (5,508) (28,734)
Net income (loss) 21,998 (10,600) 9,270 (25,177)
Income (loss) per common
share - basic and diluted
Continuing operations 0.21 (0.11) (0.06) (0.34)
Net income (loss) 0.24 (0.11) 0.10 (0.30)
Weighted average number
of common shares
outstanding (thousands) 92,901 92,828 92,852 84,094
-------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31 December 31
----------------------- ---------------------
2005 2004 2005 2004
(Restated) (Restated)
-------------------------------------------------------------------------
Revenue
Nucryst Pharmaceuticals $ 5,607 $ 6,042 $ 28,560 $ 31,907
-------------------------------------------------------------------------
Continuing operations $ 5,607 $ 6,042 $ 28,560 $ 31,907
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating (loss) income
Nucryst Pharmaceuticals $ (2,087) $ (301) $ 1,590 $ 6,079
iFire Technology (8,116) (7,286) (31,844) (27,884)
Other 55 (529) 54 (1,189)
-------------------------------------------------------------------------
Continuing operations $ (10,148) $ (8,116) $ (30,200) $ (22,994)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated Balance December December
Sheets 31, 2005 31, 2004
-------------------------------------------------
Cash and short-term
investments $ 119,627 $ 101,139
Current assets 136,169 111,994
Other assets 76,292 60,269
Current liabilities 26,614 12,963
Shareholders' equity 157,640 147,797
THE WESTAIM CORPORATION
Consolidated Statements of Operations and Consolidated Statements of
Deficit
(unaudited)
-------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31 December 31
----------------------- ---------------------
(thousands of dollars 2005 2004 2005 2004
except per share data) (Restated) (Restated)
-------------------------------------------------------------------------
Revenue $ 5,607 $ 6,042 $ 28,560 $ 31,907
Costs
Manufacturing 2,830 2,620 10,799 8,450
Research and development 9,391 8,648 36,514 35,489
General and
administrative 1,172 1,538 4,109 5,240
Depreciation and
amortization 2,362 1,352 7,338 5,722
-------------------------------------------------------------------------
Operating loss (10,148) (8,116) (30,200) (22,994)
Corporate costs (2,113) (2,224) (8,217) (7,396)
Foreign exchange 642 (645) 410 (563)
Interest 454 684 2,073 2,362
Gain on issuance of
shares of subsidiary 30,055 - 30,055 -
Writedown of capital
assets and intangible
assets (567) (69) (570) (22)
Gain on sale of
investment 1,120 - 1,120 -
-------------------------------------------------------------------------
Income (loss) from
continuing operations
before income taxes 19,443 (10,370) (5,329) (28,613)
-------------------------------------------------------------------------
Income tax recovery
(expense) 40 (33) (179) (121)
-------------------------------------------------------------------------
Income (loss) from
continuing operations 19,483 (10,403) (5,508) (28,734)
Income (loss) from
discontinued operations
net of income taxes 2,515 (197) 14,778 3,557
-------------------------------------------------------------------------
Net income (loss) for
the period $ 21,998 $ (10,600) $ 9,270 $ (25,177)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Income (loss) per common
share
Continuing operations
- basic and diluted $ 0.21 $ (0.11) $ (0.06) $ (0.34)
-------------------------------------------------------------------------
Net income (loss)
- basic and diluted 0.24 (0.11) 0.10 (0.30)
-------------------------------------------------------------------------
Weighted average number
of common shares
outstanding (thousands) 92,901 92,828 92,852 84,094
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Deficit at beginning of
period $(289,289) $(265,961) $(276,561) $(251,384)
Net income (loss) 21,998 (10,600) 9,270 (25,177)
-------------------------------------------------------------------------
Deficit at end of period $(267,291) $(276,561) $(267,291) $(276,561)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
THE WESTAIM CORPORATION
Consolidated Balance Sheets
(unaudited)
-------------------------------------------------------------------------
December December
(thousands of dollars) 31 2005 31 2004
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents $ 115,673 $ 89,139
Short-term investments 3,954 12,000
Accounts receivable 8,199 6,712
Inventories 7,773 3,605
Other 570 538
-------------------------------------------------------------------------
136,169 111,994
Other receivable - 1,800
Capital assets 71,112 46,776
Capital assets available for sale - 5,500
Intangible assets 5,180 5,693
Investments - 500
-------------------------------------------------------------------------
$ 212,461 $ 172,263
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 16,302 $ 12,963
Current portion of long-term debt 10,312 -
-------------------------------------------------------------------------
26,614 12,963
Long-term debt 6,000 4,795
Provision for site restoration 6,760 6,708
-------------------------------------------------------------------------
39,374 24,466
-------------------------------------------------------------------------
Non-controlling interest 15,447 -
Shareholders' equity
Common shares 421,466 421,233
Contributed surplus 3,968 3,125
Cumulative translation adjustment (503) -
Deficit (267,291) (276,561)
-------------------------------------------------------------------------
157,640 147,797
-------------------------------------------------------------------------
$ 212,461 $ 172,263
-------------------------------------------------------------------------
-------------------------------------------------------------------------
THE WESTAIM CORPORATION
Consolidated Cash Flow Statements
(unaudited)
-------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31 December 31
----------------------- ---------------------
(thousands of dollars) 2005 2004 2005 2004
(Restated) (Restated)
-------------------------------------------------------------------------
Operating Activities
Income (loss) from
continuing operations $ 19,483 $ (10,403) $ (5,508) $ (28,734)
Items not affecting cash
Depreciation and
amortization 2,362 1,352 7,338 5,722
Foreign exchange on
long-term debt (352) - (1,637) -
Provision for site
restoration - 327 - 327
Writedown of capital
assets and intangible
assets 570 69 570 22
Gain on sale of
investment (1,120) - (1,120) -
Gain on issuance of
shares of subsidiary (30,055) - (30,055) -
Deferred licensing
revenue - - - -
Stock based
compensation expense 225 612 905 1,210
-------------------------------------------------------------------------
Cash used in continuing
operations before non-cash
working capital changes (8,887) (8,043) (29,507) (21,453)
Changes in continuing
operations non-cash
working capital
Accounts receivable 6,581 3,791 (2,541) (670)
Inventories (1,639) 150 (4,341) (831)
Other 1,178 180 (32) 121
Accounts payable and
accrued liabilities 1,882 (6,225) 4,045 2,996
Site restoration
expenditures net of
recoveries - (100) 52 (1,183)
-------------------------------------------------------------------------
Cash used in continuing
operations (885) (10,247) (32,324) (21,020)
Cash used in discontinued
operations 97 (93) (518) (2,221)
-------------------------------------------------------------------------
Cash used in operating
activities (788) (10,340) (32,842) (23,241)
-------------------------------------------------------------------------
Investing activities
Capital expenditures (3,823) (7,528) (30,754) (23,432)
Redemption and sale of
short-term investments 8,442 75,683 98,335 149,151
Purchase of short-term
investments (3,954) - (90,289) (137,708)
Intangible assets (202) (3,276) (977) (3,686)
Proceeds on sale of
assets - - - 61
Proceeds on sale of
investment 1,620 - 1,620 -
Proceeds on sale of
discontinued operations 7,029 - 22,614 30,559
-------------------------------------------------------------------------
Cash provided from
investing activities 9,112 64,879 549 14,945
-------------------------------------------------------------------------
Financing activities
Proceeds from long-term
debt 1,147 4,795 7,154 4,795
Issuance of common
shares of subsidiary,
net of share issuance
costs 45,502 - 45,502 47,946
Issuance of common
shares - - 171 -
Issuance of convertible
debentures of
subsidiary - - 6,000 -
-------------------------------------------------------------------------
Cash provided from
financing activities 46,649 4,795 58,827 52,741
-------------------------------------------------------------------------
Net increase in cash and
cash equivalents 54,973 59,334 26,534 44,445
Cash and cash equivalents
at beginning of period 60,700 29,805 89,139 44,694
-------------------------------------------------------------------------
Cash and cash equivalents
at end of period $ 115,673 $ 89,139 $ 115,673 $ 89,139
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>
%SEDAR: 00002793E
