Waterloo, Ontario, April 26, 2007 - DALSA Corporation (TSX:DSA), an international high performance digital imaging and semiconductor company, today reported revenue of $45.3 million for the quarter ended March 31st, 2007, and net income of $0.2 million or $0.01 per share, diluted. The following table summarizes the key results for the first quarter of 2007 and compares them to the same quarter of 2006:

 

"Although our Semiconductor business delivered strong revenues and Digital Cinema saw a sharp increase in revenue, our overall profitability was below our expectations," commented Savvas Chamberlain, CEO of DALSA Corporation. "Our Digital Imaging group's sales in the first quarter were soft, as expected, and several events combined to reduce margins in that part of the business. Despite these results, we are entering the second quarter with our largest backlog of booked orders, to date, in all parts of our business. Our anticipated increase in sales should deliver stronger earnings in the second quarter and throughout 2007."

Semiconductor Business revenues increased by 12.6% to $20.6 million compared to the first quarter of 2006. This was driven by increased sales activity in our integrated circuit image sensor orders as well as continued growth in production deliveries of MEMS and CMOS semiconductor wafers. As planned, the MEMS business continued to become a larger part of the Semiconductor business sales with a growth of 12.5% over the same period in 2006. The Semiconductor business net income increased by $0.6 million, relative to a loss of $0.1 million in the first quarter of 2006, to a net income of $0.5 million in the current quarter. The mix of products shipped from our Semiconductor business was favorable and included several orders related to final buys on certain older 100mm processes. The Semiconductor Business backlog increased by $4.6 million quarter over quarter to $44.3 million, resulting from rescheduled orders from the fourth quarter of 2006, increased MEMS orders and certain final buys, as noted earlier.

In the first quarter, Digital Imaging revenues were $24.0 million, down 14.1% from the first quarter of 2006. These softer revenues were anticipated by management, as there was a reduced backlog in this part of the business, entering 2007. Sales of product into the semiconductor inspection market segment, specifically for FPD inspection in Asia-Pacific, were particularly slow, following high sales in this same market in the fourth quarter of 2006. Management continues to expect sales into the semiconductor inspection market, including FPD, to fluctuate in future quarters as the related capex installations are large and subject to changes in timing. However, the company expects to hold its leadership position in this market and will use its leading edge technology and products to continue to have well balanced sources of revenue for Digital Imaging. Net income in Digital Imaging was $1.5 million, down 61.4% from the first quarter last year. The lower revenue levels did not generate sufficient margin to effectively cover fixed costs in manufacturing. The backlog for Digital Imaging increased by $9.2 million compared to the fourth quarter of 2006. Management expects this strong backlog will lead to marked improvement in revenue and income throughout this year and that there will be year over year revenue growth for 2007, despite soft first quarter revenue results.

Digital Cinema revenue increased sharply to $0.7 million in the quarter, fuelled primarily from increased rental of HD/SD equipment. DALSA's profile and exposure in the cinematography rental market is increasing as coverage and attention on the Origin camera increases, although rental revenues on Origin remained small in the quarter. The Digital Cinema business incurred a loss of $1.7 million in the quarter, an increase of $0.3 million compared to fourth quarter of 2006. This unusual increase was driven primarily by higher marketing and promotion costs incurred in the current quarter, as the group prepared for a significant trade show presence at NAB (Las Vegas in April 2007) and launched a significant upgrade to our Digital Cinema website with improved content and navigability for our customers. In the coming quarters management expects the level of losses to return to a similar level as that reported in 2006, at an average of $1.5M per quarter, until 4K workflow and the use of the Origin camera gain traction.

Cash provided by operations was $0.7 million in the first quarter of 2007, a decrease of $3.0 million over the same quarter in 2006.

For further detail, please refer to the first quarter 2007 Financial Statements, accompanying notes, and Management's Discussion and Analysis at the DALSA website.

Investor Conference Call
A conference call to discuss the company's first quarter 2007 financial results will be held this afternoon at 5:00pm ET. The conference call, followed by the question and answer period, will be broadcast live and open to anyone interested in listening at http://events.onlinebroadcasting.com/dalsa/042607/index.php. The phone numbers for those who wish to participate in the question and answer period are as follows:

Live Conference Access Information:
Local Access: 416-695-5261
Toll-Free Access: 1-800-355-4959

Instant Replay Access information:
Local Access: 416-695-5275
Toll-Free Access: 1-888-509-0081
Passcode: 643695
Expiry Date: May 10, 2007

About DALSA Corporation
DALSA is an international leader in high performance digital imaging and semiconductors with more than 1000 employees world-wide. Established in 1980, the company designs, develops, manufactures, and markets digital imaging products and solutions, in addition to providing semiconductor products and services. DALSA's core competencies are in specialized integrated circuit and electronics technology, software, and highly engineered semiconductor wafer processing. Products and services include image sensor components (CCD and CMOS); electronic digital cameras; vision processors; image processing software; and semiconductor wafer foundry services for use in MEMS, high-voltage semiconductors, image sensors and mixed-signal CMOS chips. DALSA is listed on the Toronto Stock Exchange under the symbol "DSA" and has its corporate offices in Waterloo, Ontario, Canada.

For more information, please contact:

Patrick Myles
Director, Corporate Communications
DALSA Corporation
Tel: (519) 886-6001 Ext. 2177
Fax: (519) 886-3972
E-mail: [email protected]
Internet: www.dalsa.com

Some of the statements in this presentation, including those relating to the company's strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", or similar expressions, are forward-looking statements within the meaning of securities law. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements are detailed from time to time in DALSA's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. Investors should read review the Business Risks and Prospects sections of the DALSA 2006 annual Management's Discussion and Analysis ("MD&A") to understand the assumptions, risks and uncertainties inherent in forward looking information or statements. DALSA has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.