WATERLOO, ON, CANADA-DALSA Corporation, an international leader in high-performance digital imaging and semiconductors, announced plans to increase the profitability of its core operations through several specific initiatives in order to facilitate net earnings of greater than 10% in its Digital Imaging and Semiconductor businesses moving into 2008. In these two core businesses, DALSA will focus on products that provide margins necessary to support the R&D, marketing, and sales efforts that will fuel continued growth.
Within Digital Imaging, DALSA will begin to divest its operations in Colorado Springs. It will immediately explore strategic alternatives for the X-ray imaging business activities that currently take place at the Colorado Springs location. In addition, the company will transfer production and R&D related to industrial products to other DALSA facilities, where it will be carried out more efficiently and at a lower cost.
Within its Semiconductor business, DALSA will cease production of certain low-margin 100 mm processes within a customer-specific timeframe. Resources will be refocused on products with sustainable margins and higher growth, such as the company’s MEMS, image sensor, and high-voltage CMOS processes.
“As I described at the end of July, the top priority of the management team is to ensure that DALSA remains vibrant and competitive, even during this challenging business environment,” said Brian Doody, CEO of DALSA. “Despite our strong and growing brand, product, and technology position in our Digital Imaging and Semiconductor businesses, we are anticipating flat to slightly negative sales growth in the short term, due mainly to the impact of foreign exchange and softness in some key end markets. However, with the planned changes, including those highlighted today, we expect to increase the profitability of our core businesses heading into 2008.”
One of the impacts of the above changes will be the reduction of the workforce in its Digital Imaging and Semiconductor businesses by approximately 8% to 9% compared to that in place at the end of 2Q07, with the staff reductions already underway at several locations through a combination of attrition, retirement, and selective termination.