Waterloo, Ontario October 28, 2010 - DALSA Corporation (TSX:DSA), an international leader in high performance digital imaging and semiconductors, today reported revenue from continuing operations of $55.3 million for the quarter ended September 30, 2010 and net income from continuing operations of $4.8 million or $0.26 per share, diluted.

The following table summarizes the key results for the third quarter of 2010 and compares them to the third quarter of 2009.

“In the third quarter, we achieved record revenue and strong earnings in our Digital Imaging business, fueled by continued healthy demand for our products in all geographic regions,” commented Brian Doody, CEO of DALSA Corporation. “I am also pleased to report a return to profitability in our Semiconductor business and a positive outlook for the division. I am particularly encouraged by our progress in MEMS. In the third quarter, MEMS shipments increased significantly, quarter over quarter, and we ended September with a record MEMS backlog, reflecting growth in both demand and diversity of customers.”

In the Digital Imaging business, we posted $38.4 million in revenue and net income of $4.2 million, compared to revenue of $21.5 million and net income of $0.2 million in the third quarter last year. Demand was strong, not only in flat panel display capital equipment (included in the “semiconductor inspection” end market) and machine vision/industrial, but also in electronics and life science imaging. Backlog for Digital Imaging at the end of the quarter was $37.9 million, down slightly from the end of the second quarter.

Subsequent to the end of the third quarter, we provided further detail relating to the support of the Ontario Government towards DALSA’s R&D activities at its Waterloo, Ontario, facility. A grant of up to $24.3 million has been awarded to DALSA to help fund eligible expenses in our R&D programs over the next 5 years. Up to 15% of R&D expenditures will be reimbursed to DALSA as part of the Next Generation of Jobs Fund program. The award will allow us to realize our R&D driven plans for business growth in Waterloo, in particular in areas such as infrared and x-ray imaging. These programs will create jobs in Ontario and are expected to provide access to a number of large attractive markets adjacent to those we already serve. We anticipate that our net R&D expenditures, company-wide, will remain within our business model goal of 8% to 10% of revenue.

In the Semiconductor Business, we reported revenue of $16.9 million and net income of $0.6 million, compared to revenue of $19.5 million and net loss of $0.1 million in the third quarter last year. Improved year over year profitability, even in light of lower revenues than a year ago, was driven by improving gross margins in our Bromont foundry. MEMS revenue increased 27% to $8.0 million in Q3 2010 from $6.3 million in Q2 2010. The MEMS order backlog also rose during the quarter, representing an increasingly important component of overall backlog.

Cash provided by operating activities was $8.6 million, compared to cash provided by operating activities of $3.4 million in the same quarter last year. The improvement is due to higher profitability in the quarter. The Company’s net cash position at the end of the third quarter was $17.2 million, up $15.3 million from the end of June, 2010.

Dividend
The Company’s Board of Directors has declared a quarterly dividend of $0.07 per common share to all shareholders of record on November 9, 2010. The dividend is payable on November 18, 2010. The Company has designated the full amount of these dividends as "eligible dividends" for Canadian income tax purposes.

For further detail, please refer to the third quarter 2010 Financial Statements, accompanying notes, and Management’s Discussion and Analysis on the DALSA website. The address is http://www.dalsa.com/corp/investor/financials.aspx

Investor Conference Call Information
A conference call to discuss the results will be held today at 5:00pm EDT. The conference call, followed by the question and answer period, will be broadcast live and open to anyone interested in listening at http://www.gowebcasting.com/2052 . The phone numbers for those who wish to participate in the question and answer period are as follows:

Live Conference Access Information:
Local Access: 416-340-8530
Toll-Free Access: 888-340-9642

Instant Replay Access information:
Local Access: 416-695-5800
Toll-Free Access: 800-408-3053
Passcode: 6108331
Expiry Date: November 11, 2010

DALSA Investor Day, November 23, 2010
As previously in announced, DALSA will be hosting an Investor Day on Tuesday, November 23rd, 2010 at the TMX Broadcasting Centre Toronto. The event will provide analysts and investors a unique opportunity to hear from and to interact with DALSA’s executive team. Participants are welcome to attend in person or through a live webcast.

Date: November 23, 2010
Time: 9:00am to 12:30pm
Where: TMX Broadcasting Centre
The Exchange Tower, 130 King St W, Toronto

To register, visit http://www.dalsa.com/investorday.

About DALSA Corporation
DALSA (TSX: DSA) is an international leader in high performance digital imaging and semiconductors with approximately 1000 employees worldwide, headquartered in Waterloo, Ontario, Canada. Established in 1980, the company designs, develops, manufactures and markets digital imaging products and solutions, in addition to providing semiconductor products and services. For more information, visit www.dalsa.com

For more information, please contact:
Patrick Myles
Vice President, Corporate Communications
DALSA Corporation
Tel: (519) 886-6001 Ext. 2177
E-mail: [email protected]
Internet: www.dalsa.com

Some of the statements in this press release, including those relating to the company’s strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, or similar expressions, are forward-looking statements within the meaning of securities law. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements are detailed from time to time in DALSA’s periodic reports filed with the Ontario Securities Commission and other regulatory authorities. Investors should read review the Business Risks and Prospects sections of the DALSA 2009 annual Management’s Discussion and Analysis (“MD&A”) to understand the assumptions, risks and uncertainties inherent in forward looking information or statements. 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.