Company to engage an advisor to seek out strategic partnership opportunities for Digital Cinema business

Waterloo, Ontario, April 30, 2008 - DALSA Corporation (TSX:DSA), an international leader in high performance digital imaging and semiconductors, today reported revenues of $54.6 million for the quarter ended March 31, 2008, and net income of $3.8 million or $0.20 per share, diluted. The following table summarizes the key results for the first quarter of 2008 and compares them to the same quarter of 2007.

* percentage points

“By just about every measure, Q1 was a very successful quarter for DALSA,” said Brian Doody, Chief Executive Officer of DALSA Corporation. “We saw shipments increase significantly across the board, and for the first time in our history we exceeded $50 million in quarterly revenues – by a very healthy margin. I am pleased to report that we are delivering on our commitment to return our core operations to their traditional levels of profitability. Our efforts in the second and third quarter of 2007 have led both our Digital Imaging and Semiconductor businesses to a greater than 10% return on sales in the quarter. Of course, the credit for this strong comeback goes to the DALSA employees, managers, and executives world-wide who have helped me in making this return to revenue growth and improved profitability a reality.”

In the first quarter, Digital Imaging revenues were $31.7 million, up 32.1% from the first quarter of last year. The increase is due to a rebound in demand across all product lines, but particularly in the Asia/Pacific region where we are seeing continued strong demand from flat panel display and machine vision end markets. Standard product gross margins were 51.6%, up 0.6 percentage points from the same period last year. Despite the impact of $1.1 million in restructuring charges relating to the substantial completion of the divestiture of the Colorado Springs operations, net earnings in the Digital Imaging business more than doubled to $3.2 million. The division exited the quarter with a strong order backlog of $28.0 million. 

Revenues in our Semiconductor business were $22.5 million, up 9.1% from the first quarter of 2007. MEMS revenues in the quarter increased almost 40% to $7.5 million and were a significant contributor to the overall increase in revenues in the division. Standard product margins were 36.4%, up 5.7 percentage points compared to the same quarter last year, and were fueled by higher revenues, improved product mix, and improved yield. Gross margins also benefited from a $0.5 million business interruption payment received in the first quarter relating to the equipment failure that occurred in our Bromont facility in the third quarter last year. Net income in the Semiconductor Business was $2.5 million, and the backlog at the end of the quarter was $47.8 million.

In the Digital Cinema business unit, revenues in the first quarter were $0.4 million. The majority of the revenues came from the rental of HD/SD equipment; however, Origin rentals also contributed to revenues. HD/SD rentals suffered in the quarter due to a delayed impact of the writer’s strike in the industry, which was resolved late in the period. The Company’s success during the quarter with the use of the Origin cinematography camera on the upcoming James Bond film is expected to increase awareness of the technology in the industry.

Subsequent to the end of the quarter, the Company’s board of directors authorized management to seek out strategic partnership opportunities for the Digital Cinema business. The objective of the board and management in this endeavour is to enhance the adoption rate of DALSA's product offerings in the market through the financial and industry support that a well positioned strategic partner can offer. The Company has engaged Genuity Capital Markets to assist management in identifying potential partners with the goal of completing a transaction before year end.

In the first quarter, cash provided by operations was $6.7 million, an increase of $2.2 million over the fourth quarter of 2007. The Company’s net cash position (cash and cash equivalents and marketable securities) at the end of the first quarter was $13.5 million, a $3.8 million increase from the end of 2007.

For further detail, please refer to the first quarter 2008 Financial Statements, accompanying notes, and Management’s Discussion and Analysis on the DALSA website.

Investor Conference Call Information
A conference call to discuss the first quarter 2008 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/043008/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: 416-641-6136
Toll-Free Access: 866-223-7781

Instant Replay Access information:
Local Access: 416-695-5800
Toll-Free Access: 800-408-3053
Passcode: 3255894
Expiry Date: May 06, 2008

About DALSA Corporation
DALSA is an international leader in high performance digital imaging and semiconductors with approximately 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
Vice President, Corporate Secretary
DALSA Corporation
Tel: (519) 886-6001 Ext. 2177
Fax: (519) 886-3972
E-mail: [email protected]
Internet: http://www.dalsa.com

Some of the statements in this press release, 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 2007 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.