MAY 14, 2009--DALSA (Waterloo, ON, Canada; www.dalsa.com), a supplier of digital imaging and semiconductor technologies, has reported revenues from continuing operations of $37.9 million for the quarter ended Mar. 31, 2009 and net income from continuing operations of $1.3 million or $0.07 per share, diluted.
"In the first quarter, as anticipated, the dramatic downturn in the global economy had a negative impact on our financial results," comments Brian Doody, CEO of DALSA. "Our Digital Imaging business was hardest hit, as we saw a sharp decrease in demand from Asian OEM customers involved in semiconductor, flat panel, and electronics manufacturing. In our Semiconductor business, despite another record quarter of MEMS shipments, we saw a more moderate decline in revenue, due largely to an expected decrease in demand for CMOS wafer processing.
Doody says, per earlier statements this year, the company is focusing on new revenue opportunities to move forward in the current economic climate, and its record backlog proves that the company has signed new contracts in markets that are "less sensitive to the economic downturn."
"We expect this to help replace lost standard products revenue," explains Doody. "On the cost side, we have implemented a number of initiatives that have allowed us to lower our breakeven revenue level while at the same time enabling us to continue to work on key developments and retain our key assets, our employees, such that we can deliver strong results when the economy recovers."
In the Digital Imaging business, revenues were $19.4 million and net income was $1.8 million in 1Q09, compared to revenues of $31.7 million and net income of $3.2 million in 1Q08. Net income in this quarter includes a before-tax gain of $1.3 million from the sale of land that was completed during the quarter. The revenue decrease is due largely to significantly decreased product demand in the Asia/Pacific region as OEMs continued to delay their investment in capital equipment. Standard product gross margins in the Digital Imaging business for the first quarter were 47.1%, down 4.5 percentage points from 1Q08. The decrease is due largely to lower sales and weaker product mix. The division ended the year with a backlog of $34.0 million, up marginally from 4Q08. A slight decrease in the standard products backlog was offset by an increase in Application Specific Contracts backlog, which was at record high levels at the end of the quarter.
In the first quarter, the Semiconductor Business had revenues of $18.5 million and a net loss of $0.5 million, compared to revenues of $22.5 million and net income of $2.5 million in 1Q08. During the quarter, record shipments of MEMS wafers were offset by an anticipated decline in CMOS wafer shipments and lower shipments of integrated circuits, largely image sensor chips. Gross margins decreased 13.6 percentage points to 22.8% from 1Q08. This decrease was due largely to the delivery of lower margin 100-mm last-time-buy orders and lower yields of certain products as the company ramps up production. The backlog in the Semiconductor business increased quarter over quarter by $12.9 million to a record $59.5 million. The increase was fueled in part by new orders received for image sensor chips, largely in the photogrammetry end market.
The company's net cash position decreased $1.0 million to $11.5 million compared to the end of 4Q08. In the quarter, operations used $7.7 million in cash, compared to cash provided by operations of $6.7 million in 1Q08. This is largely due to lower profitability as well as cash used to discharge obligations related to income taxes, capital spending, and accounts payable. 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, allowing them to manage the company through the current period of worldwide economic downturn.
In 1Q09, DALSA repurchased and canceled 61,032 shares at a weighted average purchase price of $4.91 as part of its Normal Course Issuer Bid that commenced on Sept. 11, 2008 and expires on Sept. 10, 2009.
The board of directors has declared a quarterly dividend of $0.05 per common share to all shareholders of record on May 15, 2009. The dividend is payable on May 29, 2009. The company has designated the full amount of these dividends as "eligible dividends" for Canadian income tax purposes.
