CALGARY, Feb. 18 /CNW/ - The Westaim Corporation announced today that for the year ended December 31, 2008, it recorded a net loss of $10.2 million, or 11 cents per share, on revenues of $22.4 million compared to a net loss of $58.0 million, or 62 cents per share, on revenues of $31.8 million in the previous year. For the three months ended December 31, 2008, the Company posted a net income of $2.7 million, or 3 cents per share, compared to a net loss of $26.8 million, or 28 cents per share, in the same period in the previous year.
The loss from continuing operations for the year ended December 31, 2008 was $1.7 million compared to a loss of $2.8 million in 2007. At the operations level, this improvement resulted from lower manufacturing and research and development costs compared to 2007 and $4.9 million of severance costs included in the 2007 results, all of which was offset by $10.1 million milestone revenue earned by NUCRYST Pharmaceuticals Corp. in 2007. The improvement in results also benefitted from a $7.3 million favourable change in foreign exchange gains as a result of the stronger U.S. dollar in 2008 as well as lower write-downs in the value of asset-backed commercial paper (ABCP). These improvements were partially offset by an $8.7 million gain on the sale of real estate in 2007. The loss from discontinued operations, which includes windup and operating costs at the Company's wholly owned subsidiary, iFire Technology Ltd., declined significantly in 2008 to $8.5 million compared to $55.2 million in 2007. This improvement is the result of reduced operating costs of $26.7 million and lower severances and net asset write-downs in 2008 compared to 2007.
At December 31, 2008, Westaim had $46.8 million in consolidated cash and cash equivalents, compared to $31.0 million at December 31, 2007. Westaim's cash position, excluding cash and cash equivalents held by its 74.7 per cent owned subsidiary NUCRYST Pharmaceuticals Corp., was $18.0 million. In addition, Westaim held ABCP with a book value of $4.3 million.
"Westaim's strong cash position is a significant advantage for the Company as we continue our review of strategic alternatives," said Drew Fitch, President & CEO of Westaim. "Westaim's cash resources, together with the return of capital to be received from NUCRYST in Q1 2009, will provide the Company a strong consolidated footing as we examine new investment opportunities to enhance shareholder value."
The Westaim Corporation's common shares are listed on The Toronto Stock Exchange under the trading symbol WED. Westaim holds a 74.7 percent interest in NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS).
A more detailed discussion of Westaim's 2008 consolidated year end results can be found in the 2008 audited consolidated financial statements and Management's Discussion and Analysis, which will be available at www.westaim.com and www.sedar.com
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 regarding Westaim's pursuit of strategic alternatives and examination of possible new investment opportunities in an effort to enhance shareholder value. Westaim disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise. Accordingly, readers are advised not to place undue reliance on forward-looking statements, and should not rely on this information at any date other than the date of this news release. 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
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Consolidated Statements
of Operations 2008 2007 2008 2007
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Revenue $ 6,969 $ 11,174 $ 22,397 $ 31,830
(Loss) income from
continuing operations (1,224) 1,169 (1,735) (2,830)
Net income (loss) 2,746 (26,807) (10,235) (58,033)
Net (loss) income per
common share - basic and
diluted
Continuing operations (0.01) 0.01 (0.02) (0.03)
Net income (loss) 0.03 (0.28) (0.11) (0.62)
Weighted average number
of common shares
outstanding (thousands) 94,215 94,136 94,207 94,070
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Three Months Ended Twelve Months Ended
December 31 December 31
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Segmented Information 2008 2007 2008 2007
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Revenue from continuing
operations
Nucryst Pharmaceuticals $ 6,969 $ 11,174 $ 22,397 $ 31,830
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(Loss) income from
continuing operations
Nucryst Pharmaceuticals $ 1,295 $ 3,209 $ (2,838) $ (4,771)
Other (including
corporate costs) (2,519) (2,040) 1,103 1,941
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(Loss) income from
continuing operations $ (1,224) $ 1,169 $ (1,735) $ (2,830)
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Consolidated Balance December December
Sheets 31, 2008 31, 2007
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Cash and cash equivalents $ 46,768 $ 30,993
Current assets 59,783 51,561
Other assets 17,494 31,826
Current liabilities 9,841 8,461
Shareholders' equity 50,002 56,371
THE WESTAIM CORPORATION
Consolidated Statements of Operations, Comprehensive Loss and Deficit
(unaudited)
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Three Months Ended Twelve Months Ended
December 31 December 31
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(thousands of dollars
except per share data) 2008 2007 2008 2007
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Revenue $ 6,969 $ 11,174 $ 22,397 $ 31,830
Costs
Manufacturing 3,577 3,226 12,603 14,617
Research and development 1,016 1,334 4,582 6,356
General and administrative 2,896 2,660 9,666 9,348
Depreciation and
amortization 497 403 1,937 2,093
Corporate costs 1,591 1,845 5,068 10,856
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Operating (loss) income (2,608) 1,706 (11,459) (11,440)
Foreign exchange gain
(loss) 2,452 (305) 3,510 (3,804)
Interest 141 141 712 1,822
Change in fair value
of third party asset-
backed commercial paper (856) (1,067) (1,706) (4,048)
Loss on sale of third
party asset-backed
commercial paper - (1,067) - (1,067)
Write-down of capital
assets (215) - (215) (1,203)
Gain on sale of capital
assets - 75 - 8,722
Dilution gain - - 6,000 4,525
Gain on sale of investments - 2,648 534 2,648
Gain (loss) on issuance and
repurchase of shares of
subsidiary 121 (14) 96 (134)
Non-controlling interest (259) (806) 804 1,293
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(Loss) income from continuing
operations before income
taxes (1,224) 1,311 (1,724) (2,686)
Income tax expense - (142) (11) (144)
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(Loss) income from
continuing operations (1,224) 1,169 (1,735) (2,830)
Income (loss) from
discontinued operations
net of income taxes 3,970 (27,976) (8,500) (55,203)
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Net income (loss) $ 2,746 $ (26,807) $ (10,235) $ (58,033)
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(Loss) income per common
share
Continuing operations -
basic and diluted $ (0.01) $ 0.01 $ (0.02) $ (0.03)
Net income (loss) -
basic and diluted 0.03 (0.28) (0.11) (0.62)
Weighted average number
of common shares
outstanding (thousands) 94,215 94,136 94,207 94,070
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Consolidated Statements of
Comprehensive Loss
Net income (loss) for
the period $ 2,746 $ (26,807) $ (10,235) $ (58,033)
Unrealized gain (loss)
on translation of net
foreign operations 2,021 (145) 2,899 (1,103)
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Comprehensive income
(loss) $ 4,767 $ (26,952) $ (7,336) $ (59,136)
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Consolidated Statements
of Deficit
Deficit at beginning
of period $(388,862) $(349,074) $(375,881) $(317,848)
Net income (loss) for
the period 2,746 (26,807) (10,235) (58,033)
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Deficit at end of period $(386,116) $(375,881) $(386,116) $(375,881)
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THE WESTAIM CORPORATION
Consolidated Balance Sheets
(unaudited)
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December 31 December 31
(thousands of dollars) 2008 2007
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ASSETS
Current
Cash and cash equivalents $ 46,768 $ 30,993
Accounts receivable 6,272 14,931
Inventories 3,535 4,373
Other 772 674
Current assets held for sale 2,436 590
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59,783 51,561
Investments 4,262 5,968
Capital assets 11,486 12,581
Capital assets held for sale 1,103 10,086
Intangible assets 643 799
Intangible assets held for sale - 2,392
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$ 77,277 $ 83,387
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 6,956 $ 7,018
Accounts payable and accrued liabilities
held for sale 2,885 1,443
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9,841 8,461
Deferred gain - 218
Provision for site restoration 6,580 6,580
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16,421 15,259
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Non-controlling interest 10,854 11,757
Shareholders' equity
Capital stock 426,280 426,262
Contributed surplus 8,718 7,769
Accumulated other comprehensive income (loss) 1,120 (1,779)
Deficit (386,116) (375,881)
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50,002 56,371
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$ 77,277 $ 83,387
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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
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(thousands of dollars) 2008 2007 2008 2007
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Operating Activities
(Loss) income from
continuing operations $ (1,224) $ 1,169 $ (1,735) $ (2,830)
Items not affecting cash
Gain on sale of capital
assets - (75) - (8,722)
Change in fair value of
third party asset-backed
commercial paper 856 1,067 1,706 4,048
Loss on sale of third
party asset-backed
commercial paper - 1,067 - 1,067
Depreciation and
amortization 497 403 1,937 2,093
Stock-based compensation
expense 276 667 1,027 2,469
Non-controlling interest 259 806 (804) (1,293)
(Gain) loss on issuance
and repurchase of
shares of subsidiary (121) 14 (96) 134
Write-down of capital
assets 215 - 215 1,203
Dilution gain - - (6,000) (4,525)
Gain on sale of
investments - (2,648) (534) (2,648)
Accounts receivable 3 (4,407) 9,057 (7,190)
Inventories 662 1,508 838 4,128
Other (553) 1,087 (90) (98)
Accounts payable and
accrued liabilities (2,435) (5,808) 270 1,131
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Cash (used in) provided
from continuing operations (1,565) (5,150) 5,791 (11,033)
Cash used in discontinued
operations (565) (3,462) (5,712) (19,739)
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Cash (used in) provided from
operating activities (2,130) (8,612) 79 (30,772)
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Investing activities
Capital expenditures (166) (402) (1,243) (2,376)
Maturity of short-term
investments - - - 46,904
Purchase of short-term
investments - - - (29,453)
Purchase of short-term
investments reclassified
to investments - - - (14,400)
Reclassification of cash
equivalents to investments - (16) - (2,650)
Proceeds on sale of third
party asset-backed
commercial paper - 5,968 - 5,968
Intangible assets (6) (11) (39) (72)
Intangible assets -
discontinued operations - (12) - (480)
Proceeds on sale of
capital assets 65 75 65 14,437
Proceeds on sale of
subsidiary - - 1,816 -
Proceeds on sale of
investments - 1,582 - 1,582
Proceeds on sale of
discontinued operations 8,165 15 8,165 24
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Cash provided from investing
activities 8,058 7,199 8,764 19,484
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Financing activities
Repurchase of common
shares by subsidiary (63) - (63) -
Issuance of common shares
of subsidiary - - 1,000 14
Issuance of common shares - - - 27
Issuance of convertible
debentures of subsidiary - - 3,500 -
Net cash outflow on
deconsolidation of former
subsidiary - - - (2,306)
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Cash (used in) provided
from financing activities (63) - 4,437 (2,265)
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Effect of exchange rate
changes on cash and cash
equivalents 1,756 29 2,495 (489)
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Net increase (decrease) in
cash and cash equivalents 7,621 (1,384) 15,775 (14,042)
Cash and cash equivalents
at beginning of period 39,147 32,377 30,993 45,035
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Cash and cash equivalents
at end of period $ 46,768 $ 30,993 $ 46,768 $ 30,993
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Cash and cash equivalents
is comprised of:
Cash $ 4,332 $ 12,537 $ 4,332 $ 12,537
Cash equivalents 42,436 18,456 42,436 18,456
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46,768 30,993 46,768 30,993
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Supplemental disclosure
of cash flow information:
Non-cash capital asset
additions included in
accounts payable and
accrued liabilities $ 5 $ 452 $ 5 $ 452
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%SEDAR: 00002793E