Westaim announces 2007 second quarter results

    CALGARY, Aug. 9 /CNW/ - The Westaim Corporation announced today that for
the second quarter ended June 30, 2007, it recorded a net loss of $7.4 million
or 8 cents per share, on revenues of $6.7 million. In the same quarter last
year, the Company recorded a net loss of $12.0 million, or 13 cents per share,
on revenues of $7.0 million.
    In the 2007 second quarter, the Company recorded a one-time gain of $8.6
million through the sale of its real estate holdings in Fort Saskatchewan,
Alberta for net proceeds of $14.4 million. Also in the second quarter, the
Company recorded reorganization costs, including severances of $4.3 million
related to operational changes at iFire and the Company, which will
significantly reduce annual operating costs.
    For the six months ended June 30, 2007, the Company posted revenues of
$12.8 million and a net loss of $14.1 million or 15 cents per share. For the
same period in 2006, Westaim reported revenues of $14.2 million and a net loss
of $30.0 million or 32 cents per share. Results in 2007 benefited from the
gain on sale of the real estate and a dilution gain of $4.5 million reported
in the first quarter of 2007.
    At June 30, 2007, Westaim had $55.6 million in consolidated cash and
short-term investments which includes $21.6 million of NUCRYST Pharmaceuticals
Corp. cash and short-term investments.
    "Through our ongoing strategic review process to maximize shareholder
value, Westaim implemented a series of changes over the course of the second
quarter," said Drew Fitch, President & CEO of The Westaim Corporation. "The
sale of our Fort Saskatchewan real estate holdings has strengthened our
balance sheet and the operational changes at iFire have allowed the technology
development team to focus on the core issues relating to phosphor development,
while preserving our financial resources. We are committed to supporting the
advancement of iFire's TDEL technology and remain confident in the potential
it holds for the consumer marketplace."

    The Westaim Corporation's technology investments include iFire Technology
Corp., which is developing a low-cost flat panel display technology, and a
74.7 per cent interest in 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. Westaim's common shares are listed on NASDAQ under the symbol WEDX
and on The Toronto Stock Exchange under the trading symbol WED. A more
detailed discussion of Westaim's 2007 second quarter results can be found 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
maximization of shareholder value, steps taken to allow the technology
development team to focus on core issues relating to phosphor development
while preserving financial resources, the advancement of iFire's TDEL
technology, and the potential which TDEL technology holds for the consumer
marketplace. 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.

    Financial Highlights
    (thousands of dollars except per share data)


                                  Three Months Ended        Six Months Ended
                                             June 30                 June 30
                               ----------------------  ----------------------
    Consolidated Statements
     of Operations                  2007        2006        2007        2006

    Revenue                    $   6,686   $   6,995   $  12,817   $  14,248
    Net loss                      (7,388)    (11,980)    (14,088)    (29,986)
    Net loss per common share -
     basic and diluted             (0.08)      (0.13)      (0.15)      (0.32)
    Weighted average number of
     common shares outstanding
     (thousands)                  94,051      93,231      94,021      93,077


                                  Three Months Ended        Six Months Ended
                                             June 30                 June 30
                               ----------------------  ----------------------
    Segmented Information           2007        2006        2007        2006

      Nucryst Pharmaceuticals  $   6,686   $   6,995   $  12,817   $  14,248
    ------------------------------------------------- -----------------------
    ------------------------------------------------- -----------------------

    Operating loss
      Nucryst Pharmaceuticals  $  (1,815)  $  (3,037)  $  (3,972)  $  (6,378)
      iFire Technology           (10,029)     (8,915)    (18,624)    (20,288)
      Other (including
       corporate costs)           (3,511)       (422)     (4,785)     (5,046)
    Operating loss             $ (15,355)  $ (12,374)  $ (27,381)  $ (31,712)

    Consolidated Balance                 December 31,
     Sheets                June 30, 2007        2006

    Cash and short-term
     investments               $  55,588   $  62,832
    Current assets                69,921      80,256
    Other assets                  56,557      68,083
    Current liabilities            7,390      15,797
    Shareholders' equity          99,588     112,977

    %SEDAR: 00002793E

For further information:

For further information: Gillian McArdle, Investor Relations, (416)
504-8464, info@westaim.com, www.westaim.com

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