Waterloo, Ontario October 29, 2009 - DALSA Corporation (TSX:DSA), an international leader in high performance digital imaging and semiconductors, today reported revenues from continuing operations of $41.0 million for the quarter ended September 30, 2009 and $0.1 million in earnings or $0.00 per share from continuing operations. The following table summarizes the key results for the third quarter of 2009 and compares them to the third quarter of 2008.

*percentage points

“As anticipated, revenue improved marginally from the second quarter while earnings from continuing operations remained flat, both in spite of the sharp appreciation in the Canadian dollar during the quarter. We saw our business outlook begin to improve as customers, particularly in the Asia Pacific region of our Digital Imaging business, started to order products for shipment in the fourth quarter and into 2010,” commented Brian Doody, Chief Executive Officer of DALSA. “Beginning in September and subsequent to the end of the quarter we saw a rise in bookings in our Digital Imaging business with an increasing proportion of these orders for delivery in the short term, both of which are strong indicators for improved results in the coming quarters.”

In the Digital Imaging business, revenue in the third quarter was $21.5 million, with a net income of $0.2 million, compared to revenue of $31.1 million and net income of $4.5 million in the third quarter last year. On a quarter over quarter basis, Digital Imaging revenue increased 3.9% from Q2 2009. The Digital Imaging business exited the third quarter with a backlog of $29.6 million, which although down from the end of the second quarter (due largely to revaluation of orders caused by a further appreciation of the Canadian dollar) is up slightly from the same quarter last year. Furthermore, new bookings late in the quarter and subsequent to the end of the quarter have strengthened, demonstrating renewed demand for our Digital Imaging products.

In the Semiconductor Business, we reported revenue of $19.5 million in the quarter and a net loss of $0.1 million, compared to revenue of $21.6 million and net income of $1.5 million in the third quarter last year. On a quarter over quarter basis, Semiconductor revenue remained flat while a quarterly change in product mix resulted in a small change in profitability. Shipments of MEMS wafers continue to be strong. For the first nine months of 2009, MEMS revenue has increased 28% over the same period last year. This places DALSA among the fastest growing and highest revenue “pure play” MEMS foundries in the world. Our 200mm MEMS expansion at Bromont, which will help satisfy the high level of demand we are seeing for MEMS wafer processing, continues to progress well. In the third quarter, several pieces of 200mm MEMS equipment were installed and commissioned, which will allow us to deliver our first customer samples in the fourth quarter. In parallel, we continued to move product from our 100mm wafer fabrication line, as we work towards ultimately closing this line. This planned closure will allow us to provide more cost efficient processing on our 150mm line, and provide room for the aforementioned 200mm MEMS expansion. As the 100mm line utilization continues to decline prior to closure, margins remain under pressure due to the volume-independent fixed costs; however, ultimate closure of the 100mm line is also expected to translate into an improvement in gross margins.

Overall standard product gross margins from continuing operations for the quarter were 32.4%, roughly flat from the second quarter of 2009. Although below our business model, due to depressed revenues in the quarter, these margins were within the range of our expectations. The Company’s cash position improved by $1.5 million to $11.4 million from the second quarter of 2009. Cash provided by continuing operations was $3.8 million, up $0.1 million from the same quarter last year. Management believes that cash on hand, existing bank facilities and cash flow from operating activities will be sufficient to fund currently anticipated working capital, planned capital spending, new business initiatives and debt service requirements for the next twelve months.

Dividend
The Company’s Board of Directors has declared a quarterly dividend of $0.05 per common share to all shareholders of record on November 13, 2009. The dividend is payable on November 27, 2009. The Company has designated the full amount of these dividends as "eligible dividends" for Canadian income tax purposes.

For further detail, please refer to the third quarter 2009 Financial Statements, accompanying notes, and Management’s Discussion and Analysis on the DALSA website. The address is http://www.dalsa.com/public/corp/investor/2009/DSA_2009Q3_release.pdf

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://events.digitalmedia.telus.com/dalsa/102909/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: 416-340-8061
Toll-Free Access: 866-225-0198

Instant Replay Access information:
Local Access: 416-695-5800
Toll-Free Access: 800-408-3053
Passcode: 7348358
Expiry Date: November 12, 2009

DALSA Investor Day, November 25, 2009
As previously announced, DALSA will be hosting an Investor Day on Wednesday, November 25th, 2009 at the TMX Broadcasting Centre in Toronto. The event will provide analysts and investors a unique opportunity to hear from and to interact with DALSA’s executive team. Participants are welcome to attend in person or through a live webcast.

Date: November 25, 2009
Time: 9:00am to 12:30pm
Location: TMX Broadcasting Centre
The Exchange Tower, 130 King St W, Toronto

To register, visit our registration page at http://dalsa.com/corp/investor/investordayreg.aspx .

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
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 2008 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.