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Westaim Announces 2003 Year-End Results
CALGARY, Feb 19, 2004 (Canada NewsWire via COMTEX) -- The Westaim Corporation
announced today that for the year ended December 31, 2003, it recorded a net
loss of $34.5 million, or 44 cents per share compared to a net loss of $49.8
million, or 64 cents per share, in the previous year. The results included
income from discontinued operations of $2.4 million in 2003 and losses from
discontinued operations of $10.7 million in 2002. Revenues from continuing
operations were $17.3 million in 2003 compared to $12.6 million in 2002.
For the three months ended December 31, 2003, the Company posted a net loss of
$17.7 million, or 23 cents per share, on revenues of $3.6 million compared to a
net loss of $9.4 million, or 12 cents per share, on revenues of $3.6 million in
the previous year. For the quarter, losses from discontinued operations were
$0.9 million in 2003 and $0.5 million in 2002.
The divisional loss from continuing operations for 2003 was $23.1 million,
compared to a loss of $24.7 million in 2002. This loss primarily reflects the
planned level of investment towards research and development in NUCRYST
Pharmaceuticals and iFire Technology, Westaim's technology divisions.
At December 31, 2003, Westaim had $68.1 million in cash and equivalents,
compared to $101.3 million in 2002. The Company has no debt. In January 2004,
Westaim sold its Westaim Ambeon division for $35 million, further adding to its
strong cash position.
"Westaim has made strategic decisions to both strengthen our balance sheet and
increase focus on our two high-potential technology divisions, iFire Technology
and NUCRYST Pharmaceuticals," said Barry M. Heck, President & CEO of Westaim.
"Last year we saw NUCRYST enter its first human trials for a new atopic
dermatitis drug and iFire successfully scale its proprietary flat panel display
to 34 inches in size."
Review of Operations:
iFire Technology made important advancements with both technology progress and
partner collaborations in 2003. Early in the year, iFire added Dai Nippon
Printing Co., Ltd. (DNP) as a technology collaboration partner, and in 2004,
this relationship has expanded to include pilot production of 34-inch iFire (TM)
display modules to help iFire prove its low-cost manufacturing model. iFire's
other major technology collaboration partner, Sanyo Electric Co., Ltd., has also
contributed to the technical progress of iFire's technology.
In early 2003, iFire progressed from its traditional triple-patterned red, green
and blue phosphors to the Color-by-Blue(TM) process where a single blue phosphor
and color conversion materials are used. This created improvements in the
display's performance and is projected to reduce future capital and production
costs by approximately 15 per cent. By the end of the year, iFire successfully
scaled its technology from 17 inches in size to 34 inches, the anticipated size
of its initial product. Collaborative work with its partners DNP and Sanyo
Electric, along with the new Color-by-Blue(TM) method made this accomplishment
happen faster than anticipated.
NUCRYST Pharmaceuticals entered an important new chapter as a pharmaceutical
company in 2003 when it began Phase 2 human clinical trials for its first drug
candidate, (NPI 32101) for the treatment of atopic dermatitis, or eczema, and
other skin conditions. The company believes that its nanocrystalline technology
with dual anti-inflammatory and antimicrobial properties addresses both the
inflammation associated with atopic dermatitis and the secondary infections that
often accompany the disease.
NUCRYST's profitable wound care division continued to grow in 2003 with revenue
of $16.2 million, compared to $8.3 million in 2002. The results for 2003 include
a US$3.0 million milestone payment from NUCRYST's wound care partner Smith &
Nephew plc for achievement of additional regulatory approvals in Europe.
Strategic Review:
In 2003 the Board completed a thorough, strategic review of the company and its
businesses. As disclosed in last year's information circular, a Strategic Review
Committee was formed to help facilitate this process. As part of this review,
the Board and the Strategic Review Committee worked with independent advisors,
including GMP Securities Ltd., who also acted as the exclusive financial advisor
for the sale of Ambeon, and CIBC World Markets. The review reaffirmed Westaim's
continued focus and commitment to iFire and NUCRYST. In its final report to the
Board of Directors of Westaim, the Strategic Review Committee reached a number
of recommendations and conclusions, which included:
iFire Technology - The Committee believes that iFire has been, and
continues to be, a significant opportunity for Westaim and that the
continued support of iFire is justified. Although there are
technology, manufacturing and marketing risks for the successful
development by iFire of a commercial product, the magnitude of the
potential rewards justifies Westaim's continued support.
NUCRYST Pharmaceuticals - The Committee believes that the NUCRYST
wound care business is a valuable asset and supports continuing to
pursue further wound care opportunities with Smith & Nephew. Although
monetizing the royalty stream of the wound care business is possible,
the Committee concluded the value of this business could be
substantially enhanced as the ability to achieve projected sales
targets is proven. The Committee affirmed that NUCRYST should continue
to fund its current Phase 2 human efficacy trials for atopic
dermatitis. With respect to all other indications, the Committee
recommends that NUCRYST's management continue to assess and develop
its pharmaceutical strategy.
As disclosed in last year's information circular, the Board of Directors added
two new members who were nominated by some of the company's large institutional
shareholders. These new Board Members were Michael B.C. Davies and G. Wesley
Voorheis, both of whom were members of the Strategic Review Committee. Now that
the strategic review is complete, Mr. Davies and Mr. Voorheis have retired from
the Board. Westaim thanks them for their contribution. As recommended by the
Strategic Review Committee, Westaim's Board will commence a search for two new
independent Board members.
Shareholder Rights Plan:
Westaim also announced today that its Board of Directors has approved the
renewal of a shareholder rights plan designed to ensure the fair treatment of
shareholders in the event of a take-over offer for the common shares of Westaim.
This action has been taken as part of the Board's fiduciary responsibility to
shareholders and is not in response to any specific effort to acquire control of
the company. The plan is subject to regulatory approval, and must be ratified at
Westaim's next annual meeting of shareholders. Full details of the plan will be
included in the proxy circular that will be sent to all shareholders prior to
the annual meeting.
The plan will provide Westaim's Board of Directors and shareholders more time to
evaluate any unsolicited take-over bid and, if appropriate, to seek out other
alternatives to maximize shareholder value. The plan will be in effect for six
years, but must be reconfirmed by shareholders after a three- year period.
Under the plan, one right is issued and attaches to each outstanding common
share at no cost. Rights issued under the plan become exercisable only when a
person, including certain related persons, acquires or announces their intention
to acquire 20 per cent or more of Westaim's outstanding common shares without
complying with the "permitted bid" provisions of the plan or without the
approval of Westaim's Board. Should such an acquisition occur, each right, if
exercised, would entitle the holder, other than the acquiring person and persons
related to it, to purchase Westaim's common shares at a price equal to half
their current market value.
A "permitted bid" or offer for Westaim's common shares must be made to all
shareholders. The offer must remain open for at least 60 days and must be
accepted by a minimum of 50 per cent of the shares not already held by the
bidder. If this occurs, the bidder may take up and pay for tendered shares, but
must extend the offer for another 10 days. This will allow shareholders
sufficient time to consider the bid and any other available options. It also
gives Westaim's Board of Directors time to consider alternatives and make
recommendations to shareholders. Westaim's plan is similar to plans adopted by a
number of other Canadian companies.
About Westaim:
The Westaim Corporation's technology investments include: NUCRYST
Pharmaceuticals, which researches, develops and commercializes wound care and
pharmaceutical products based on its nanocrystalline silver technology; and
iFire Technology, which has developed a revolutionary 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.
This news release may contain forward-looking statements, including but not
limited to those concerning technology progress, partner collaborations, pilot
production of display modules, anticipated size of initial display products,
product development, technology, manufacturing and marketing risks, potential
rewards of product development, and pharmaceutical strategy. These statements
are based on current expectations that are subject to risks and uncertainties,
and the Company 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 the risk factors set forth in our Form
40-F as filed with the U.S. Securities and Exchange Commission. The Company
disclaims any intention or obligations 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)
--------------------------------------------------
Twelve Months Twelve Months
Quarter Ended Quarter Ended Ended Ended
Statement of December 31, December 31, December 31, December 31,
Operations 2003 2002 2003 2002
--------------------------------------------------
Revenue $ 3,594 $ 3,564 $ 17,285 $ 12,627
Loss from continuing
operations (16,753) (8,966) (36,858) (39,110)
Net loss (17,673) (9,445) (34,498) (49,762)
Loss per common share
- basic & diluted
Continuing
operations (0.21) (0.11) (0.47) (0.50)
Net loss (0.23) (0.12) (0.44) (0.64)
Weighted average
number of
outstanding common
shares (thousands) 78,073 78,033 78,045 77,924
--------------------------------------------------
Twelve Months Twelve Months
Quarter Ended Quarter Ended Ended Ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
--------------------------------------------------
Revenue
Nucryst
Pharmaceuticals $ 3,457 $ 2,496 $ 16,212 $ 8,344
iFire Technology - 1,067 911 4,270
Other 137 1 162 13
--------------------------------------------------
Continuing
operations $ 3,594 $ 3,564 $ 17,285 $ 12,627
--------------------------------------------------
--------------------------------------------------
Divisional Loss
Nucryst
Pharmaceuticals (2,302) $ (1,897) $ (1,948) $ (6,985)
iFire Technology (6,137) (4,544) (19,861) (16,915)
Other (215) (218) (1,284) (841)
--------------------------------------------------
Continuing
operations $ (8,654) $ (6,659) $ (23,093) $ (24,741)
--------------------------------------------------
--------------------------------------------------
Balance Sheet December 31, 2003 December 31, 2002
--------------------------------------------------
Cash and short-term investments $ 68,137 $ 101,302
Current assets 107,767 145,167
Other assets 37,139 39,016
Current liabilities 13,524 17,655
Shareholders' equity 123,818 158,214
%SEDAR: 00002793E
VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION:
www.newswire.ca/en/releases/orgDisplay.cgi?okey=67476
CONTACT: For further information: David Wills, Investor Relations,
(416) 504-8464, info(at)westaim.com, www.westaim.com;
To request a free copy of this organization's annual report, please go to
www.newswire.ca and click on reports(at)cnw
News release via Canada NewsWire, Calgary 403-269-7605
Copyright (C) 2004 CNW, All rights reserved
