The Westaim Corporation Reports 2012 Third Quarter Results

Nov 09, 2012, 16:06 ET from Westaim Corporation

TORONTO, Nov. 9, 2012 /CNW/ - The Westaim Corporation ("Westaim") today announced it recorded net income of $95.4 million or $0.14 per share for the quarter ended September 30, 2012, compared to net income of $13.5 million or $0.02 per share for the quarter ended September 30, 2011.  For the nine months ended September 30, 2012, Westaim recorded net income of $104.0 million or $0.15 per share compared to net income of $28.3 million or $0.04 per share for the nine months ended September 30, 2011.  On September 28, 2012, Westaim paid $521.4 million or $0.75 per share to Westaim's common shareholders as a return of capital.  At September 30, 2012, Westaim's consolidated shareholders' equity was $35.6 million or $0.05 per share compared to $417.3 million or $0.65 per share at December 31, 2011.

On May 2, 2012 Westaim announced that it had entered into an agreement to sell all the issued and outstanding shares in the capital of Jevco for $530.0 million in cash. Shareholder approval of the sale and related matters was received at a special meeting held on June 28, 2012.  All regulatory approvals were received and other conditions for the sale were met during the third quarter and the sale of Jevco closed on September 4, 2012.  The profit on the sale of Jevco is reflected in Westaim's statements of financial position, comprehensive income, equity and cash flow for the three and nine months ended September 30, 2012.  For the nine months ended September 30, 2012, a post-tax gain on sale of Jevco of $106.7 million was realized.

"Westaim's book value per share appreciated by 23% during the first nine months of 2012 from $0.65 at December 31, 2011 to $0.80 at September 28, 2012 prior to the payment of the $0.75 per share return of capital.  Following payment of the distribution, management is continuing to pursue Westaim's business strategy, by searching for and investigating potential investments to grow shareholder value over the long term." said Cameron MacDonald, President and Chief Executive Officer of Westaim.

Westaim is a publicly traded Canadian-based financial services company that 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's strategy is to pursue investment opportunities to grow shareholder value (as measured by book value per share) over the long term.  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: strategies, alternatives and objectives to maximize value for shareholders; expectations and assumptions relating to Westaim's business plan; the effect of adverse changes in equity markets or Westiam's operations; expectations regarding Westaim's assets and liabilities; Westaim's ability to retain key employees, management's belief that its estimates for determining the valuation of Westaim's assets and liabilities are appropriate; Westaim's views regarding potential future remediation costs; the effect of changes to interpretations of tax legislation on income tax provisions in future periods; and Westaim's determination that the adoption of new accounting standards will not have a material impact on its consolidated financial statements. 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 Westaim's control, including but not limited to: (i) difficult economic conditions or a prolonged economic downturn may adversely affect Westaim's business; (ii) Westaim may not be able to realize its investment objectives or its liquid assets may prove to be insufficient to meet future obligations; (iii) Westaim may have undisclosed liabilities; (iv) Westaim may require significant additional funding;; and (v) other risk factors set forth in Westaim's Annual Report, Quarterly Reports 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.

The Westaim Corporation                  
Financial Highlights                  
(thousands of Canadian dollars except share
and per share data)    
          Three Months Ended September 30       Nine Months Ended September 30
      2012   2011   2012   2011
Loss from continuing operations                  
  Revenue of continuing operations $ 32 $ 23 $ 191 $ 2,846
  Expenses of continuing operations   16,472   2,110   32,551   8,126
Loss from continuing operations     (16,440)   (2,087)   (32,360)   (5,280)
Gain on sale of discontinued operations                  
  Proceeds on sale of subsidiary   530,000     530,000  
  Carrying value of subisdiary   (414,289)     (414,289)  
  Transaction costs   (6,085)     (7,498)  
  Income tax expense   (1,530)     (1,530)  
Post-tax gain on sale of discontinued operations     108,096     106,683  
Post-tax profit of discontinued operations     3,704   15,631   29,667   33,541
Income from discontinued operations     111,800   15,631   136,350   33,541
Comprehensive income   $ 95,360 $ 13,544 $ 103,990 $ 28,261
Earnings per share                  
  Loss from continuing operations -
basic and diluted
$ (0.02) $ $ (0.05) $ (0.01)
  Comprehensive income - basic and diluted $ 0.14 $ 0.02 $ 0.15 $ 0.04
Weighted average number of common and                  
Series 1 Class A preferred shares outstanding (in thousands)                  
  Basic   658,016   650,412   648,804   647,610
  Diluted   679,664   661,679   671,622   658,318
      September 30   December 31        
Financial position     2012   2011        
Cash and cash equivalents   $ 42,371 $ 24,347        
Other     367   1,271,786        
Total assets   $ 42,738 $ 1,296,133        
Total liabilities   $ 7,147   878,870        
Shareholders' equity     35,591   417,263        
Total liabilities and shareholders' equity   $ 42,738 $ 1,296,133        
      September 30   December 31        
Book value per share     2012   2011        
At September 30, 2012 and December 31, 2011   $ 0.05 $ 0.65        
Return of capital to shareholders on September 28, 2012   $ 0.75            
Prior to return of capital at September 28, 2012   $ 0.80            



SOURCE Westaim Corporation