Dalsa Reports First Quarter 2009 Financial Results
"In the first quarter, as anticipated, the dramatic downturn in the global economy had a negative impact on our financial results," says Brian Doody, chief executive officer of Dalsa Corp. "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."
"As I described earlier this year, we are taking a number of steps to address this challenging economic environment," continues Doody. "We are focusing on revenue opportunities to deliver market share in new markets with new product offerings. As you can see from the record backlog this quarter we have been successful in signing new contracts in markets that are less sensitive to the economic downturn. We expect this to help replace lost standard products revenue. 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 the first quarter, compared to revenues of $31.7 million and net income of $3.2 million in the first quarter last year. 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 the first quarter last year. 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 the fourth quarter of 2008. 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 the first quarter last year. 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 the same quarter last year. This decrease was due largely to the delivery of lower margin 100mm last time buy orders and lower yields of certain products as we ramp 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 fuelled 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 the fourth quarter of 2008. In the quarter, operations used $7.7 million in cash, compared to cash provided by operations of $6.7 million in the first quarter of 2008. 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.