Waterloo, Ontario July 28, 2010 - DALSA Corporation (TSX:DSA), an international leader in high performance digital imaging and semiconductors, today reported revenue from continuing operations of $52.3 million for the quarter ended June 30, 2010 and net income from continuing operations of $5.5 million or $0.30 per share, diluted. Net income in the quarter was positively impacted by $1.1 million or $0.06 per share as a result of Province of Ontario funding relating to certain eligible R&D activities, as described below.
The following table summarizes the key results for the second quarter of 2010 and compares them to the second quarter of 2009.
|
Quarterly Comparisons
($C millions, except per share and percentage amounts)
|
Q2, 2010
|
Q2, 2009
|
Change
|
|
Revenue
|
$ 52.3
|
$ 40.3
|
30.0%
|
|
Net income from continuing operations
|
5.5
|
0.1
|
6467%
|
|
Earnings per share from continuing operations
|
0.30
|
0.00
|
–
|
|
Standard product gross margin
|
41.4%
|
32.5%
|
8.9pp
|
|
Order backlog at June 30, 2010
|
82.0
|
99.7
|
(17.8%)
|
|
Cash provided by operating activities
|
8.7
|
1.8
|
394%
|
“In the second quarter, we were pleased to see continued strong demand in our Digital Imaging business in all geographic regions, contributing to record revenue in the division and solid earnings company-wide,” commented Brian Doody, CEO of DALSA Corporation. “Although the recovery in our Semiconductor business has been slower to materialize than in our Digital Imaging business, we are encouraged by the continued progress we are seeing in our MEMS business. MEMS shipments improved quarter over quarter and our MEMS backlog rose to a record level at the end of June, reflecting an increase in both demand and diversity of customers.”
“In addition to our strong financial results this quarter, I am pleased to share some additional good news. On June 18, 2010, Canada’s Governor General, Michaëlle Jean, inducted DALSA Chairman and founder, Savvas Chamberlain, as a Member of the Order of Canada at a ceremony in Rideau Hall in Ottawa. Savvas was recognized for his contributions to Canada’s reputation as a global leader in high performance imaging and semiconductors. Even more recently, these same contributions led to Savvas’s induction as a Fellow in the Royal Society of Canada, the national academy of distinquished scholars, artists, and scientists. Along with all DALSA staff, I wish to extend my sincere congratulations to Savvas on these two extraordinary accomplishments.”
In the second quarter of 2010, the Digital Imaging business generated revenue of $36.7 million, up over 70% from the second quarter of last year and up over 10% from the first quarter of 2010. Year-over-year sales increased significantly in all geographic regions, led by the Asia/Pacific region where revenue was more than twice the level of the second quarter last year. Net income in Digital Imaging was $6.4 million in the second quarter, up from a loss of $0.1 million in the second quarter last year. Net income was positively impacted by a combination of higher sales and a before tax gain of $1.5 million relating to the Province of Ontario funding that was announced in the second quarter. Excluding the funding, net income for Digital Imaging in the quarter was $5.3 million, or 14.4% return on sales. Backlog for Digital Imaging at the end of the quarter was a record $38.3 million, up $4.0 million from the end of the first quarter, with the majority of the orders for delivery in the next six months.
The Semiconductor Business had revenue of $15.6 million in the second quarter and a net loss of $0.9 million, compared to revenue of $19.5 million and net income of $0.2 million in the second quarter last year. Lower year-over-year MEMS and image sensor revenue was partially offset by higher High Voltage CMOS and non-image sensor IC revenue. Earnings in the Semiconductor Business were lower than last year’s comparable quarter due to decreased revenue as well as foreign exchange losses. We saw our quarter-over-quarter MEMS revenue increase to $6.3 million in second quarter from $5.8 million in the first quarter and our MEMS order backlog increased at the end of June. The Semiconductor business’s overall backlog increased from $40.7 million at the end of the first quarter to $43.7 million, led largely by the MEMS demand and new Application Specific Contracts.
Cash provided by operating activities was $8.7 million, compared to cash provided by operating activities of $1.8 million in the same quarter last year. The improvement is due to higher profitability in the quarter. The Company’s cash position at the end of the first quarter was $15.3 million, up $3.2 million from the end of March 2010.
Province of Ontario Funding for Research and Development
During the second quarter of 2010, we announced an agreement with the Province of Ontario to invest in product innovations and related job creation at DALSA’s Waterloo facility. Under the agreement, the Ontario government will contribute a maximum grant of up to $24.3 million to support DALSA’s new research and development (R&D) efforts in digital imaging technology. The grant is to be paid over a period of five years, and is subject to customary conditions. As a result of this funding, certain R&D expenditures incurred since September 2009 are eligible for reimbursement, as per the following table.
|
(C$ millions)
|
Period
Sept – Dec 2009
|
Three months ended
March 31, 2010
|
Three months ended
June 30, 2010
|
Total
|
|
Pretax funding
|
$0.7
|
$0.4
|
$0.5
|
$1.5
|
The pretax effect of this funding was a net reduction in R&D expenditures in the second quarter in the Digital Imaging business of $1.5 million. This positively impacted our total net income by $1.1 million or $0.06 per share. We are currently working with the Province of Ontario to schedule an announcement in which we will provide more details on the project.
Dividend
The Company’s Board of Directors has declared a quarterly dividend of $0.06 per common share to all shareholders of record on August 5, 2010. The dividend is payable on August 13, 2010. The Company has designated the full amount of these dividends as "eligible dividends" for Canadian income tax purposes.
Investor Conference Call Information
A conference call to discuss the results will be held today at 5:00pm EDT. The conference call, followed by the question and answer period, will be broadcast live and open to anyone interested in listening at
http://www.gowebcasting.com/1821. The phone numbers for those who wish to participate in the question and answer period are as follows:
Live Conference Access Information:
Local Access: 416-340-8530
Toll-Free Access: 888-340-9642
Instant Replay Access information:
Local Access: 416-695-5800
Toll-Free Access: 800-408-3053
Passcode: 6108331
Expiry Date: Aug 11, 2010
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 Communications
DALSA Corporation
Tel: (519) 886-6001 Ext. 2177
Fax: (519) 886-3972
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 2009 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.
