DALSA posts 4Q09 profit, shows decline in sales

FEBRUARY 9, 2010--DALSA (Waterloo, ON, Canada), a developer of digital imaging and semiconductor products, has reported revenue from continuing operations of $43.4 million for the quarter ended Dec. 31, 2009, and net loss from continuing operations of $1.0 million or $0.06 per share, diluted. Excluding a foreign exchange loss of $0.5 million and restructuring costs of $1.3 million, net income from continuing operations for 4Q09 was $0.4 million or $0.02 per share. For the full year 2009, the company achieved revenue of $162.5 million and earnings from continuing operations of $0.5 million.

"In the fourth quarter we were pleased to see strengthening of demand for our digital imaging products, particularly in the Asia-Pacific region," comments Brian Doody, CEO. "A steady rise in bookings for standard products in the Digital Imaging business and an increasing proportion of orders for delivery in the short term are strong indicators for improved results starting in the first half of 2010.

"In our Semiconductor business in 2009, we grew our MEMS revenue by 14% relative to last year, a significant achievement given that industry-wide growth for 2009 was largely flat. This once again placed DALSA among the fastest growing 'pure-play' MEMS foundries in the world," adds Doody.

Despite the announcement by one of the company's customers that its customer had excess inventory, stalling MEMS growth in 4Q09 and into early 2010, the outlook for MEMS growth continues to be strong, reports Doody.

Digital Imaging saw revenue of $26.4 million and net income of $1.2 million, compared to revenue of $24.5 million and net income of $2.6 million in 4Q08. The revenue increase resulted primarily from higher product shipments in the Asia-Pacific region, as OEMs increased their investment in capital equipment. Earnings declined largely due to a foreign exchange loss in the quarter compared to a gain in 4Q08. Standard product gross margin in the Digital Imaging business for the fourth quarter was 42.1%, down 6.4 percentage points from the previous year. The decrease is largely due to an inventory provision taken in the quarter. The division ended the year with a backlog of $29.1 million.

In the fourth quarter, the Semiconductor Business had revenue of $17.0 million and a net loss of $2.2 million, compared to revenue of $21.6 million and net income of $1.7 million in 4Q08. Certain image sensor customers decreased their orders due to lack of demand for their products. The decrease in net income in the Semiconductor Business is largely due to a restructuring expense of $1.3 million in the quarter as operations in the Professional Imaging segment were adjusted to align them with current revenue levels. The drop in revenue and the lower margin in DALSA's foundry as the company wound down 100-mm wafer processing line, in addition to a foreign exchange loss, also pushed earnings lower.

The company's cash position at the end of 4Q09 was $8.5 million compared to $11.4 million at the end of 3Q09. The decrease is due to its investment in 200-mm MEMS equipment in Bromont, which is anticipated to satisfy demand for MEMS wafer processing in higher volume at lower prices. Cash provided from operations was $0.6 million, compared to $6.5 million from the same quarter in the previous year.

-- Posted by Carrie Meadows, Vision Systems Design