Pixelplus Reports Financial Results for Fiscal First Quarter 2010

SEOUL, South Korea, May 28 /PRNewswire-FirstCall/ -- Pixelplus Co., Ltd. (Pink Sheets: PXPLY), a fabless semiconductor company in South Korea that designs, develops, and markets CMOS image sensors for various consumer electronics applications, today announced unaudited financial results for the first quarter of fiscal 2010, which ended on March 31, 2010.

Based on these unaudited results of operations which were prepared in accordance with Korean GAAP on a non-consolidated basis, revenue for the first quarter of fiscal 2010 was 4.1 billion Korean won (US$3.6 million), compared to 6.0 billion Korean won (US$5.3 million) in the fourth quarter of fiscal 2009, and 3.5 billion Korean won (US$3.1 million) in the first quarter of fiscal 2009.  The Company's lower-than-expected revenue was primarily due to the seasonality of sluggish sales in Asia typically exhibited annually in the first quarter, especially with respect to the seasonally slow first quarter in China which caused the Company to sustain weaker-than-anticipated sales to Chinese distributors and module makers.

Net income in the first quarter of fiscal 2010 was 0.3 billion Korean won (US$0.3 million), or a net income of 94 Korean won (US$0.08) per diluted ADS, compared to a net income of 2.0 billion Korean won (US$1.8 million), or a net income of 584 Korean won (US$0.52) per diluted ADS, in the fourth quarter of fiscal 2009, and a net loss of 1.1 billion Korean won (US$1.0 million), or a net loss of 321 Korean won (US$0.28) per diluted ADS, in the first quarter of fiscal 2009.

The Company sold roughly 1.6 million image sensors in the first quarter of 2010, which represented a decrease of about 2.4 million from its sale of around 4.0 million units in the fourth quarter of 2009.  Separately, the Company furnished approximately 0.06 million image sensors arising from its supply of services to a leading Japanese module maker in the first quarter of 2010, which represented a decrease of about 0.04 million units from its supply of around 0.1 million units in the fourth quarter of 2009.  So, in terms of combined figures, the Company sold and supplied a total of about 1.7 million image sensors in the first quarter of 2010, which represented a decrease of roughly 2.4 million units from its sale and supply of around 4.1 million units in the fourth quarter of 2009.  

Gross margin for the first quarter of fiscal 2010 was 40.5%, compared to 44.5% in the fourth quarter of fiscal 2009.  The Company's high gross margin was mainly due to its sale of high margin-driven products and service revenues.

The Company's SG&A expenses in the first quarter of fiscal 2010 were about 0.8 billion Korean won (US$0.7 million), compared to roughly 0.4 billion Korean won (US$0.3 million) in the fourth quarter of fiscal 2009, and approximately 1.0 billion Korean won (US$0.9 million) in the first quarter of fiscal 2009.  Moreover, the Company's operating expenses in the first quarter of fiscal 2010 were around 1.3 billion Korean won (US$1.1 million), compared to about 0.5 billion Korean won (US$0.4 million) in the fourth quarter of fiscal 2009, and approximately 1.7 billion Korean won (US$1.5 million) in the first quarter of fiscal 2009.

The U.S. dollar amounts disclosed in this earnings release are presented solely for the convenience of the reader, and have been converted at the rate of 1131.2 Korean won to one U.S. dollar, which is the noon buying rate of the U.S. Federal Reserve Bank of New York in effect on March 31, 2010. Such conversions should not be construed as representations that the Korean won amounts represent, have been, or could be, converted into, U.S. dollars at that or any other rate.

"The key to our consistent growth and success will be our ability to transform our organization to achieve long-term profitability.  For this aim, I believe our strategic and ongoing cost-control measures should help us decrease our cash requirements, concentrate on our core business, maintain our continuity, and improve the efficiency of our operations," said Dr. S.K. Lee, CEO and Founder of Pixelplus.  "While we vigorously pursue these cost-control measures, we continue to design and introduce new products, technologies, and approaches to image sensor manufacturing and release to the market other innovative technologies currently in research and development later this year. With our leading PO8030 VGA 'System-on-a-Chip' or "SoC", POA030 VGA SoC, PC1030 NTSC/PAL image sensors and PO1150 1.5 megapixel image sensors, as well as our PM1002 SoC processor featured in various image recognition applications, we continue to develop our core strategic business with multiple mobile camera phone, automobile applications, and medical endoscope manufacturers in South Korea, with key distributors as well as manufacturers of security and surveillance applications in China, Hong Kong, and Taiwan, and with a leading module marker in Japan through our co-development of image sensors.  Separately, to improve profitability, we are committed to enhancing the quality, capacity, and production yields for all of our products and are working vigorously with all parts of our supply chain to increase efficiencies, streamline the production process, and drive down costs to ensure that we operate under the most cost-effective model possible.  In addition, we are encouraged that we continue to effectively manage our operating expenses on a reliable and consistent basis.  By focusing on these important areas, we are confident that we can enhance our operating model, ramp new and existing sources of revenue, and enhance profitability in the second half of 2010."  

Korean GAAP

The financial results mentioned in this earnings release were prepared and presented in accordance with Korean GAAP on a non-consolidated basis.  Significant differences exist between Korean GAAP and U.S. GAAP, including accounting principles with respect to the consolidation of financial results of any subsidiary, which might be material to the non-consolidated financial information provided in this release.

About Pixelplus Co., Ltd.

Pixelplus is a South Korea-based developer of high-performance, high-resolution, and cost-effective CMOS image sensors for use primarily in mobile camera phones.  In addition to mobile phones, Pixelplus provides CMOS image sensors and SoC solutions for use in webcams and notebook embedded cameras, toys and games, and security and surveillance system applications.

As a fabless semiconductor company, Pixelplus is focused on creating proprietary design technologies to develop CMOS image sensors with sharp, colorful and enhanced image quality, size efficiency, and low power consumption.

Forward Looking Statement

This earnings release contains certain statements that are not historical in nature but are "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements generally can be identified by the use of forward-looking terminology, such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "project," or "continue" or the negative of such words or other similar words.  Pixelplus cautions readers that forward-looking statements are based on the Company's current expectations, estimates and assumptions about our company and our industry, and are subject to a number of risks and uncertainties.  Actual results may differ materially from those contained in such forward-looking statements. Investors are directed to Pixelplus' reports and documents filed from time to time with the U.S. Securities and Exchange Commission for a description of various factors that should be considered before investing in Pixelplus' securities. These factors may cause Pixelplus' results to differ materially from the forward-looking statements made in this release.  The forward-looking statements speak only as of the date of this earnings release, and Pixelplus assumes no duty or obligation to update them to reflect new, changing, or unanticipated events or circumstances.  The financial results for the first quarter of fiscal 2010 contained in this document have not been audited by Pixelplus' independent registered public accountants.

The Company's functional currency on its financial statements is the Korean won.  Please note that the above non-consolidated financial statements were prepared in accordance with Korean GAAP.

SOURCE Pixelplus Co., Ltd.