CALGARY, ALBERTA, CANADA - The Westaim Corporation today announced that it will close or sell non-core assets to increase the focus of its management and financial resources on its two high-potential emerging businesses, iFire Technology Inc. and NUCRYST Pharmaceuticals Corp.
Westaim will close its coinage division, sell the ethylene coatings business, and cease to make further venture capital investments through Westaim Partners. The company also announced that effective immediately Barry Heck will replace Michael Goldstein as President of iFire. Mr. Heck is currently a Senior Vice President with The Westaim Corporation and has played a key role in iFire’s discussions with potential partners.
“We have consistently indicated that we will not tolerate sustained losses in our non-core businesses,” said Kevin Jenkins, President & CEO of Westaim. “We recognize that this is a difficult decision for those impacted. However, both NUCRYST and iFire are entering new and exciting growth phases – NUCRYST into pharmaceutical development and iFire toward pilot production – and will require additional financial and leadership resources.”
The changes will reduce cash outflows in 2002 and future years. The one-time costs, including severance, are expected to be more than offset by asset realizations and reduced operating costs. As a result, Westaim’s year-end cash position in 2002 is expected to improve by approximately $10 million. Last year Westaim recorded a one-time non-cash $34.7 million write-down of the carry-value of assets related to its coinage and ethylene coatings businesses.
Westaim’s decision to shut down its coinage business follows several quarters of underperformance by the division. The market for coin blanks is in a state of oversupply following the completion of the Euro coin project as several suppliers increased production capacity. In addition, the demand for new coin blanks has dropped.
The ethylene coatings business, Surface Engineered Products (SEP), produces anti-coking coatings for furnaces used in the production of ethylene. Westaim will look for a strategic buyer for SEP in the coming months. SEP’s main target market, the ethylene industry, has been experiencing harsh economic conditions and adoption of the anti-coking technology has not met the expectations of Westaim.
Westaim’s Ambeon division, which produces coatings for the aerospace and electronics industry, will continue operations. Ambeon has been a consistent generator of cash flow for the company and remains a source of earnings that will help fund commercialization of Westaim’s high potential emerging businesses.
iFire Technology has developed a flat panel display technology with low cost and high performance potential. iFire is targeting the large screen consumer television market where TV’s greater than 25 inches in size account for more than US$50 billion in annual sales. It features low-cost manufacturing due to its solid state structure and the performance characteristics required for commercial television, including unrestricted viewing angle, rapid video response speed and commercial quality color. iFire plans on commercializing its flat panel technology in partnership with major consumer electronics manufacturers and expects to begin pilot production in 2004.
NUCRYST Pharmaceuticals researches, develops and commercializes medical devices and pharmaceutical products based on its proprietary noble metal nanotechnology. Its first products, dressings coated with silver nanocrystals that serve as a barrier to infection for burn and other serious wounds, are marketed and sold under the brand ActicoatTM by Smith & Nephew, the world’s leading wound care company. NUCRYST is concentrating its research and development on Rx nanocrystals, which are custom designed nanocrystals for a range of potential prescription drugs. Laboratory studies have demonstrated significant anti-inflammatory and antimicrobial properties that have the potential to treat a variety of dermatological and respiratory conditions. Pre-clinical studies are currently being conducted and investigational new drug (IND) applications for a dermatological and respiratory indication are expected to be filed with the US Federal Drug Administration in 2003.
The Westaim Corporation is a technology accelerator that launches exceptional technologies into the marketplace. Westaim's common shares are listed on Nasdaq under the symbol WEDX and on The Toronto Stock Exchange under the symbol WED.
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For more information contact:
Tony Johnston, Senior Vice President
The Westaim Corporation
(403) 234-3103
info@westaim.com
www.westaim.com
This news release may contain forward-looking statements. 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 financial considerations and those predicting the timing and market acceptance of future products. 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.
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