Westaim announces 2009 third quarter results

TORONTO , Nov. 13 /CNW/ - The Westaim Corporation announced today that for the quarter ended September 30, 2009 , it recorded a net loss of $0.2 million , or zero cents per share, on revenues of $6.7 million compared to a net loss of $3.1 million , or 3 cents per share, on revenues of $5.5 million in the same quarter for the previous year.

The loss from continuing operations for the quarter ended September 30, 2009 was $0.02 million compared to a loss of $1.9 million for the same period in 2008.

For the nine months ended September 30, 2009 , the Company posted revenues of $17.6 million and a net loss of $4.1 million or 4 cents per share. For the same period in 2008, Westaim reported revenues of $15.4 million and a net loss of $13.0 million , or 14 cents per share, which included the write-down of the capital assets and the termination of the operations of iFire Technology Ltd.

The loss from continuing operations for the nine months ended September 30, 2009 was $3.4 million compared to $0.5 million in the same period last year. The 2008 results benefited from a dilution gain of $6.0 million relating to the sale of a non-core subsidiary.

At September 30, 2009 , Westaim had $38.6 million in consolidated cash and cash equivalents and $2.2 million in short-term investments compared to $39.1 million in consolidated cash and cash equivalents at September 30, 2008 . Westaim's cash position, excluding cash and cash equivalents and short-term investments held by its 75 per cent owned subsidiary, NUCRYST Pharmaceuticals Corp., was $24.2 million .

Westaim recently announced the execution of an amalgamation agreement with NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS). Under the agreement, NUCRYST has agreed to amalgamate with a newly-formed, wholly-owned subsidiary of Westaim with each holder of NUCRYST common shares (other than Westaim) to receive one redeemable preferred share in the capital of the amalgamated company, which will be redeemed for US$1.77 in cash upon completion of the amalgamation. The amalgamation agreement follows the execution of an asset purchase agreement between NUCRYST and subsidiaries of Smith & Nephew plc. under which NUCRYST has agreed to sell all of its operations and assets including all rights to its proprietary nanocrystalline silver technology to Smith & Nephew for US$21 million, plus the value of working capital, subject to certain adjustments.

"The amalgamation of Westaim and NUCRYST announced earlier this week is expected to significantly strengthen our balance sheet," said Cameron MacDonald, President & CEO of Westaim. "We remain committed to enhancing shareholder value and the strengthened cash position will provide additional resources to deploy in the assessment of new business opportunities."

The Westaim Corporation invests, directly and indirectly, through acquisitions, joint ventures and other arrangements, with the objective of providing its shareholders with capital appreciation and real wealth preservation. Westaim holds an approximate 75 per cent interest in NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS). Westaim's common shares are listed on The Toronto Stock Exchange under the trading symbol WED.

Certain portions of this press release as well as other public statements by Westaim, contain forward-looking statements. Such forward-looking statements include but are not limited to statements concerning the transactions described herein; investment strategies and expected rates of return; and strategic alternatives to maximize value for shareholder. These statements are based on current expectations that are subject to risks, uncertainties and assumptions and Westaim can give no assurance that these expectations are correct. Westaim's actual results could differ materially from those anticipated by forward-looking statements for various reasons generally beyond our control, including but not limited to: (i) failure to complete one or both of the transactions referred to herein; (ii) changes in market conditions or deterioration in underlying investments; (iii) general economic, market, financing, regulatory and industry developments and conditions; and (iv) other risk factors set forth in Westaim's Annual Report or Annual Information Form. Westaim disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise except as required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.

    
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    Three Months Ended
     September 30                 Three Months Ended       Nine Months Ended
    Consolidated Statements             September 30            September 30
     of Operations                  2009        2008        2009        2008
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    Revenue                    $   6,672   $   5,466   $  17,644   $  15,428
    Loss from continuing
     operations                      (18)     (1,851)     (3,382)       (511)
    Net loss                        (175)     (3,122)     (4,144)    (12,981)
    Net loss per common share
     - basic and diluted
      Continuing operations        (0.00)      (0.02)      (0.04)      (0.01)
      Net loss                     (0.00)      (0.03)      (0.04)      (0.14)
    Weighted average number
     of common shares
     outstanding (thousands)      94,221      94,215      94,219      94,205


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    Three Months Ended            Three Months Ended       Nine Months Ended
     September 30                       September 30            September 30
    Segmented Information           2009        2008        2009        2008
    -------------------------------------------------------------------------
    Revenue from continuing
     operations
      Nucryst Pharmaceuticals  $   6,672   $   5,466   $  17,644   $  15,428
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (Loss) income from
     continuing operations
      Nucryst Pharmaceuticals  $     506   $    (114)  $  (1,381)  $  (4,133)
      Other (including
       corporate costs)             (524)     (1,737)     (2,001)      3,622
    -------------------------------------------------------------------------
    Loss from continuing
     operations                $     (18)  $  (1,851)  $  (3,382)  $    (511)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated           September 30,  December 31,
     Balance Sheets                2009          2008
    --------------------------------------------------

    Cash and cash equivalents  $  38,562   $  46,768
    Current assets                50,792      59,783
    Other assets                  15,891      17,494
    Current liabilities            9,002      10,091
    Shareholders' equity          46,018      50,002
    

%SEDAR: 00002793E

For further information: Jeff Sarfin, Chief Financial Officer, The Westaim Corporation, [phone], [email protected]