CALGARY, May 23 /PRNewswire-FirstCall/ - The Westaim Corporation announced today that as part of its strategic review of all operations, it is implementing operational changes at iFire Technology and an organizational change at The Westaim Corporation.
The Company will be reducing staffing levels at iFire Technology to a core team of approximately 50 employees, who will focus primarily on phosphor development projects. These changes are expected to save more than $15 million in annual operating costs for iFire. One-time reorganization costs including severance and transition costs are expected to be approximately $7 million.
“Westaim’s examination of iFire’s operations determined that narrowing the development focus to phosphor performance is the right approach to take at this time,” said Barry M. Heck, President & CEO, The Westaim Corporation. “We have demonstrated scalability of the TDEL technology and the primary outstanding development issue is phosphor repeatability and manufacturability. Once phosphor performance has been suitably improved it will be transferred onto demo panels. We remain confident that TDEL can be a significant flat panel display technology.”
The company also announced that Barry M. Heck, President and CEO of Westaim, will resign his position as CEO and Director of Westaim to devote more time to NUCRYST Pharmaceuticals. Mr. Heck’s role at NUCRYST will change from non-executive Chairman to Executive Chairman. Drew Fitch, Westaim’s current Senior Vice President and Chief Financial Officer, will be appointed President and Chief Executive Officer of Westaim and will also be appointed to the Board of Directors. Both changes are effective immediately.
“Barry has done an excellent job of leading Westaim during his four-and-a-half-year tenure as CEO,” said Ian W. Delaney, Chairman, The Westaim Corporation. “NUCRYST is a valuable asset to Westaim and we do not intend to liquidate our holdings in order to provide cash for iFire. Barry is being tasked with building value in NUCRYST that will benefit both Westaim and NUCRYST shareholders. As the CFO of Westaim for more than 10 years, combined with his business and corporate finance experience, Drew Fitch is the ideal person to lead Westaim during this time of transition.”
On April 23, 2007, Westaim announced it was conducting a strategic review of its business strategy to determine the optimal use of existing resources and assets to maximize value for shareholders. At March 31, 2007, Westaim had $51.7 million in consolidated cash and short-term investments, which included $21.2 million of NUCRYST Pharmaceuticals Corp. cash and short-term investments.
As part of the strategic review, Westaim recently sold its real estate holdings in Fort Saskatchewan, Alberta for net proceeds of $13.5 million. The Company will record a book gain of approximately $7.5 million on the real estate transaction. The gain on the sale will be recorded in the second quarter of 2007.
The Westaim Corporation’s technology investments include iFire Technology Corp., which is developing a low-cost flat panel display technology, and a 74.8 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 The Toronto Stock Exchange under the trading symbol WED and on the NASDAQ under the trading symbol WEDX.
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 expected severance and reorganization costs, anticipated savings in annual operating costs, transferability of phosphor performance results, the potential for TDEL to be a significant flat panel display technology, and potential benefits to Westaim and Nucryst shareholders. 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.
Source: Westaim Corporation
