NOVEMBER 5--DALSA Corporation (Waterloo, ON, Canada;www.dalsa.com) recently reported its final third-quarter financial results for the period ended September 30, 2003. Total revenue for the quarter was $33.0 million, up from $32.7 million in the second quarter of 2003. Net income was $2.6 million or $0.16 per share, a 13% increase compared to $2.3 million or $0.14 per share in the second quarter of 2003. Standard product revenue was $31.3 million, as compared to $31.5 million in the second quarter. Application Specific Contract (ASC) revenue was $1.7 million, an increase of 55% from $1.1 million in the second quarter. The company was cash flow positive, improving its net cash position by $5.3 million in the quarter.
The semiconductor business reported record revenues and profits in the third quarter. Excluding intersegment sales, revenues were $14.0 million, a 6% increase from $13.2 million in the second quarter of 2003. Net income was $2.0 million, a 43% increase from $1.4 million in the second quarter.
Results in the digital imaging business were below management's expectations, despite a recovery in the ASC business and strong Asian and European standard products sales. As reported recently, three separate factors had an estimated $0.09 to $0.10 per share impact on the company's net earnings. First, growth in standard products imaging sales in North America was slower than expected in the quarter due to continued conservatism amongst standard products customers which led to delays in adoption rates for new orders. Furthermore, three large customers notified DALSA that they had built up inventories of DALSA imaging products through the first half of 2003 and, as a result, delayed deliveries previously booked for shipment in the third quarter. The third factor was a one-time production yield event that occurred during ramp up of certain image sensor products at DALSA's semiconductor plant late in the third quarter.
"Although we had a few challenges in the quarter, I am encouraged by the gains we made in growing our business," said Savvas Chamberlain, CEO of DALSA Corporation. "Our semiconductor business posted record results. so far this year, our digital imaging sales in asia are double our start of year expectations. these results, combined with strong european sales, helped us weather the slower than expected growth in north american sales. in addition, our ASC group landed its sixth significant custom contract in two years in the semiconductor capital-equipment market. We also generated cash in the quarter, as expected. I am therefore confident we can achieve revenues of $130 million to $134 million in 2003. Furthermore, I feel a goal of 18%-20% revenue growth in 2004 is realistic."
In late September, at the DALSA International Digital Imaging Products Sales Seminar, the company introduced, for the first time, its full suite of imaging products to its external sales channel. During the seminar, which was held in Bromont, Quebec, and attended by 72 sales people from 30 companies representing 21 countries, the company rolled out six image sensors from Professional Imaging, two new x-ray cameras from Life Sciences, and launched five new Vision for Machines products.
On September 16, 2003, DALSA acquired an additional 13.5% interest in Rad-icon Imaging Corp. As consideration, the company converted its outstanding loan plus accrued interest of $629,060 into voting preferred shares. On September 18, 2003, the Company acquired an additional 6.7% interest in voting preferred shares in Rad-icon Imaging Corp from a third party for cash consideration of $410,885. Overall, DALSA has increased its ownership of Rad-icon Imaging Corp. from 38.5% to 58.7%. "The CMOS x-ray imaging sensor technology of Rad-icon fits in well with our technology strategy. I am confident that such a strategic alliance will be beneficial to both DALSA and Rad-icon," said Savvas Chamberlain.
For more financial news, see the company's Web site:www.dalsa.com.