Mr. Cameron MacDonald reports

THE WESTAIM CORPORATION REPORTS Q4 AND FULL YEAR 2023 RESULTS

The Westaim Corp. has released its audited financial results for the quarter and full year ended Dec. 31, 2023. Westaim recorded a net profit of $35.1-million (26 cents diluted earnings per share) for fourth quarter 2023 compared with a net profit of $32.8-million (23 cents diluted earnings per share) for Q4 2022. For the full year ended Dec. 31, 2023, Westaim recorded a net profit of $183.9-million ($1.32 diluted earnings per share) compared with a net profit of $18-million (12 cents diluted earnings per share) for 2022. All dollar amounts in this press release are expressed in U.S. dollars, except as otherwise noted.

At Dec. 31, 2023, Westaim's consolidated shareholders' equity was $518.3-million and the company had 131,757,285 common shares outstanding. Book value per fully diluted share was $3.83 ($5.08 (Canadian)) at Dec. 31, 2023, compared with $2.56 ($3.46 (Canadian)) at Dec. 31, 2022.

In Q4 2023, Westaim cancelled 3,761,100 common shares that it acquired at a cost of $10.1-million through its normal course issuer bid (NCIB). In the full year 2023, Westaim cancelled an aggregate of 9,896,178 common shares that it acquired at a cost of $26.4-million.

Westaim participated in an upsized follow-on offering of Skyward Specialty Insurance Group Inc.'s common shares on Nov. 20, 2023, and sold 3.6 million Skyward Specialty common shares for net cash proceeds of approximately $104.9-million. Together with the previously announced June 12, 2023, Skyward Specialty secondary offering, Westaim sold a total of 7,587,500 Skyward Specialty common shares in the full year 2023 for net cash proceeds of approximately of $192.3-million.

Key results for Q4 2023

Skyward Specialty

Westaim's income from its investment in Skyward Specialty common shares was $51.9-million in Q4 2023 compared with $40.5-million in Q4 2022. The full-year income from the valuation of Skyward Specialty was $210.3-million in 2023 compared with $26.8-million in 2022. Westaim's investment in Skyward Specialty is $236.5-million at Dec. 31, 2023, compared with $218.9-million at Dec. 31, 2022, which is net of proceeds of $192.3-million from selling Skyward Specialty common shares which decreased the investment value at Dec. 31, 2023.

Arena FINCOs:

• Q4 2023 net loss from Arena FINCOs was $900,000 (negative-0.5-per-cent net return) compared with a net loss of $6.1-million (negative-3.6-per-cent net return) in Q4 2022.
• Full-year 2023 net loss from Arena FINCOs was $6-million (negative-3.7-per-cent net return) compared with a net loss of $2.4-million (negative-1.6-per-cent net return) in the full year 2022.
• Arena FINCOs' results reflect mark-to-market valuations within its portfolio which has a net value of $147.2-million at Dec. 31, 2023, compared with $160.1-million at Dec. 31, 2022, after the Arena FINCOs distributed $6.9-million to the company in the full year 2023.

Arena:

• Arena Investors' achieved total recurring revenue of $10.7-million in Q4 2023 compared with $11.5-million in Q4 2022 from its fee-paying assets under management (AUM). Fee-related earnings (FRE) in Q4 2023 were $500,000 in Q4 2023 compared with $1.2-million in Q4 2022 and net incentive fees were $2.5-million in Q4 2023 compared with $500,000 in Q4 2022.
• Arena Institutional Services (AIS) EBITDA (earnings before interest, taxes, depreciation and amortization) was a loss of $1.3-million in Q4 2023 compared with a loss of $400,000 in Q4 2022.
• Total Arena EBITDA for Q4 2023 was $1-million compared with $0.8-million in Q4 2022.
• Committed AUM was $3.2-billion at Dec. 31, 2023, and $3.5-billion at Dec. 31, 2022. Fee-paying AUM was $2.5-billion at Dec. 31, 2023, and $2.6-billion at Dec. 31, 2022.
• Westaim recorded its share of net income from Arena of $600,000 for Q4 2023 compared with $100,000 for Q4 2022. Westaim's share of net income from Arena was $4.5-million in the full year 2023 compared with $700,000 in the full year 2022.

"We believe Westaim materially increased the intrinsic value per diluted share of the company due to the excellent operating performance of Skyward Specialty and Arena, highlighted by the initial public offering (IPO) of Skyward Specialty early in the year. We are incredibly pleased with the results in 2023, as they reflect several years of value creating activities in our businesses," said Cameron MacDonald, president and chief executive officer of Westaim. "Arena's platform is built and we are collectively laser focused on capitalizing on the market opportunity created by elevated interest rates and inflation following a decade of irresponsible monetary policy and COVID-inspired acceleration of fiscal imprudence. Fundraising momentum since the end of the year has been solid, resulted in AUM increasing to $3.5-billion at Feb. 29, 2024. Westaim's activities through 2023 were focused on increasing our intrinsic value per diluted share, with the proceeds from the sales of Skyward Specialty shares resulting in a debt-free balance sheet and the ability to acquire and cancel 9.9 million common shares at a cost of $26.4-million."

This press release should be read in conjunction with Westaim's audited consolidated financial statements and management's discussion and analysis for the year ended Dec. 31, 2023, and 2022, which were filed on SEDAR+. These documents and the company's Q4 2023 investor presentation can be found on the company's website.

About The Westaim Corp.

Westaim is a Canadian investment company specializing in providing long-term capital to businesses operating primarily within the global financial services industry. The company 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 with a focus toward the financial services industry and grow shareholder value over the long term. Westaim's investments include significant interests in Skyward Specialty, Arena and Arena FINCOs. Skyward Specialty, Arena FINCOs and Arena are defined in the notes to Westaim's audited consolidated financial statements for the year ended Dec. 31, 2023, and 2022, and the MD&A. Westaim's common shares are listed on the TSX Venture Exchange under the trading symbol WED.

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