DALSA Reports Third Quarter 2009 Financial Results

WATERLOO, ONTARIO, Oct 29 (MARKET WIRE) --
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.

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Quarterly Comparisons Q3, 2009 Q3, 2008 Increase/
(In millions of dollars, except per (Decrease)
share amounts)
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Revenue $41.0 $52.6 (22.2%)
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Earnings from continuing operations $0.1 $6.0 (98.1%)
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Earnings per share from continuing $0.00 $0.32 (100.0%)
operations, diluted
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Standard product gross margin percentage 32.4% 45.2% (12.8pp(i))
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Order backlog at September 30 $88.7 $72.3 22.7%
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Cash provided by continuing operations $3.8 $3.7 4.5%
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(i) 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.

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.

Contacts:
DALSA Corporation
Patrick Myles
Vice President, Corporate Communications
(519) 886-6001 Ext. 2177
(519) 886-3972 (FAX)
patrick.myles@dalsa.com
www.dalsa.com

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