DALSA Reports Solid Earnings for First Quarter 2002

„…DALSA’s digital imaging products are designed to replace human vision and act as high performance \“electronic eyes\“ in machine vision…….DALSA’s semiconductor products are found in digital x-ray machines, medical equipment, manufacturing equipment, steer telecom traffic,…“;“WATERLOO, ON, May 2 /CNW/ – DALSA Corporation (TSE:DSA – news), a world leader in the design, development and manufacture of high value digital imaging products and solutions, and semiconductor wafer foundry services, today reported its first quarter financial results for the period ended March 31, 2002. Despite the continued slowdown in the Semiconductor and Electronics market segment DALSA delivered earnings consistent with management’s expectations.\r\n
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\r\nFor the quarter ended March 31, 2002, the Company reported total revenue of $14,663,000 as compared to $15,723,000 in the first quarter of 2001. Net earnings for the three months ended March 31, 2002 were $1,047,000 or $0.09 per share as compared to net earnings of $1,233,000 or $0.10 per share in the first quarter of 2001.\r\n
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\r\nThe Life Sciences group showed continued revenue growth this quarter, which helped to counter the continued softness in the Company’s imaging solutions sales in the semiconductor and electronics business. Revenue for the quarter also included five week’s revenue from DALSA Semiconductor (\“semiconductor foundry business\“) of $2,830,000, which met Company expectations. These semiconductor foundry business revenues exclude sales to other operating units within DALSA Corporation. The Company reported that net earnings from DALSA Semiconductor were accretive to earnings in the quarter.\r\n
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\r\nDALSA Corporation CEO, Dr. Savvas Chamberlain, noted \“I am pleased that our Company has demonstrated good revenue and earnings results in what has traditionally been our softest quarter. Since the second quarter of last year our industry watched as our primary market of semiconductors and electronics experienced a notable downturn. But now, as the first quarter ends, we have begun to see positive indicators of a recovery, including a strengthening of the industry’s book to bill ratio. We look for this recovery to continue and strengthen as we move through 2002. Such a recovery will help our Company directly in our new semiconductor wafer foundry business, and indirectly through our sales of digital imaging solutions to the semiconductor and electronics industry.\“\r\n
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\r\nGross margin in the Company’s digital imaging solutions business improved in the quarter, although the Company’s total gross margin was 47.0% as compared to 51.5% in the same quarter in 2001. Excluding the effects of the semiconductor foundry business, the gross margin in the current quarter was better than the Company’s goal of 53% to 55%. This improvement was attributed to continued cost containment and improved production variances. Together, these factors resulted in improved margins in the Company’s digital imaging solutions business. With expected improvements in sales and corresponding improvements in gross margins in the semiconductor foundry business, the Company expects overall gross margin to return to, or exceed, historical levels.\r\n
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\r\nResearch and development (R&D) expenses for the quarter were $2,543,000 (17.3% of total revenues) as compared to $3,040,000 (19.3% of total revenues) for the same quarter of 2001. The reduction in R&D in absolute value and as a percentage of total revenues is partially due to the deferral of development costs of the Digital Cinema business unit. The deferral of these costs is consistent with the Company’s accounting policy on deferred development costs and these costs will be expensed in future periods when commercial utilization commences.\r\n
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\r\nSelling, general and administrative (SG&A) expenses for the quarter were $3,641,000 as compared to $3,682,000 in the same quarter of 2001. As noted above, the Company continues with cost reduction plans and is reducing expenses where feasible, resulting in reduced expenses for the current quarter.\r\n
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\r\nCash used in operating activities in the current quarter was $3,002,000 as compared to cash provided by operating activities of $2,208,000 in the same quarter in 2001. Net cash for the current period decreased $4,112,000 as compared to a decrease in net cash of $3,790,000 in the first quarter of 2001. The net decrease in cash in the current period was due to an increase in working capital, primarily in the semiconductor foundry business.\r\n
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\r\nFor further detail please refer to the First Quarter 2002 Management Discussion and Analysis, http://www.dalsa.com/investor/2002/DSA_2002Q1_release.pdf.\r\n
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\r\nAcquisitions\r\n
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\r\nThe Company completed two acquisitions during the three months ended March 31, 2002. On February 22, 2002, the Company acquired an 80.1% interest in the Semiconductor Wafer Foundry Business of Zarlink Semiconductor Inc. for cash consideration of $21,543,000. On March 29, 2002, the Company acquired the CCD Image Sensors Business of Royal Philips Electronics for cash consideration of $9,654,000. The CCD Image Sensor Business financial results are included in the Company’s Digital Imaging Products and Solutions segment. Since the acquisition of the CCD Image Sensor Business from Philips occurred at the period end, no results of operations are included in the consolidated results in the current quarter, although the balance sheet does reflect the value of assets acquired.\r\n
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\r\nThe Semiconductor Wafer Foundry Business is presented as a separate segment and the results of its operations are included in the consolidated financial statements for the period subsequent to February 22, 2002.\r\n
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\r\nFor further detail please refer to the First Quarter 2002 Financial Statements and the accompanying notes, http://www.dalsa.com/investor/2002/ DSA_2002Q1_release.pdf.\r\n
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\r\nSpecial Warrant Issue\r\n
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\r\nOn February 4, 2002, the Company issued 2,300,000 Special Warrants by way of private placement for gross proceeds of $23,000,000. Each Special Warrant, upon exercise, entitles the holder to receive one common share of the Company, without further payment. On April 24, 2002, the Company received its receipt for the final short form prospectus and the Special Warrants will be converted to common shares on May 2, 2002.\r\n
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\r\nThe proceeds of the Special Warrant offering were used in connection with the acquisition of the Semiconductor Wafer Foundry Business of Zarlink Semiconductor Inc. noted above.\r\n
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\r\nFinancial Guidance 2002\r\n
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\r\nThe Company reiterates its previously stated financial goals for 2002. The Company expects the net earnings per share to be in the range of $0.65 to $0.80.\r\n
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\r\nInvestor Conference Call\r\n
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\r\nDALSA will be hosting a conference call on Friday, May 3, 2002 at 8:45am EDT to discuss the First Quarter Results. The conference call will be broadcast live and recorded on the web at http://www.newswire.ca/webcast/pages/DALSACorporation20020503. In order to join the conference call, please call 416-640-4127 or toll free at 1-888-881-4892. A taped replay of the conference call will also be made available until May 10, 2002 until 11:59 P.M. by calling 416-640-1917 or 877-289- 8525 (passcode 187418(number sign)).\r\n
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\r\nAbout DALSA Corporation\r\n
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\r\nDALSA is an international high performance semiconductor and electronics company that designs, develops, manufactures, and markets digital imaging products and solutions, in addition to providing wafer foundry services. DALSA’s core competencies are in specialized integrated circuit and electronics technology, and highly engineered semiconductor wafer processing. Products include image sensor components; electronic digital cameras; and semiconductor wafers for use in MEMS, power semiconductors and mixed signal CMOS chips.\r\n
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\r\nDALSA’s digital imaging products are designed to replace human vision and act as high performance \“electronic eyes\“ in machine vision. DALSA’s semiconductor products are found in digital x-ray machines, medical equipment, manufacturing equipment, steer telecom traffic, sense and actuate the environment in automotive and fiber-optic telecom, manage power in electronic systems, and are the heart of the silicon chips used in many other industrial applications.\r\n
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\r\nDALSA’s continually expanding markets include Semiconductors, Life Sciences, Vision for Machines, and Digital Cinema. The company’s technology products derive the majority of revenue from the semiconductor and electronics industry. DALSA sells to Original Equipment Manufacturers (OEMs), fabless semiconductor manufacturers, end users, and to the scientific and research communities in Canada, the United States, Europe, Japan, and Asia Pacific.\r\n
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\r\nDALSA is a public company listed on the Toronto Stock Exchange under the symbol \“DSA\“. Based in Waterloo, On. Canada, the company has operations in Bromont, PQ; Colorado, Springs, Co; Tucson, AZ; Eindhoven, NL; Munich, Germany and Tokyo, Japan.\r\n
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\r\nThis press release contains forward looking statements based on assumptions, uncertainties and management’s best estimates of future events. Actual results may differ materially from those currently anticipated. 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.“;0;59;3;“Webmaster“;““;0;““;0;0;0;0;0