Pixelplus Reports Financial Results for Fiscal Fourth Quarter 2009

SEOUL, South Korea, March 23 /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 fourth quarter of fiscal 2009, which ended on December 31, 2009.

Based on these unaudited results of operations which were prepared in accordance with Korean GAAP on a non-consolidated basis, revenue for the fourth quarter of fiscal 2009 was 6.0 billion Korean won (US$5.1 million), compared to 3.6 billion Korean won (US$3.1 million) in the third quarter of fiscal 2009, and 4.5 billion Korean won (US$3.9 million) in the fourth quarter of fiscal 2008.

Net income in the fourth quarter of fiscal 2009 was 2.0 billion Korean won (US$1.7 million), or a net income of 584 Korean won (US$0.50) per diluted ADS, compared to a net income of 0.17 billion Korean won (US$0.15 million), or a net income of 51 Korean won (US$0.04) per diluted ADS, in the third quarter of fiscal 2009, and a net loss of 5.8 billion Korean won (US$5.0 million), or a net loss of 1,706 Korean won (US$1.47) per diluted ADS, in the fourth quarter of fiscal 2008.

The Company sold roughly 4.0 million image sensors in the fourth quarter of 2009, which represented an increase of about 1.5 million from its sale of around 2.5 million units in the third quarter of 2009.  Separately, the Company furnished approximately 0.1 million image sensors arising from its supply of services to a leading Japanese module maker in the fourth quarter of 2009, which represented a decrease of about 0.2 million units from its supply of around 0.3 million units in the third quarter of 2009.  So, in terms of combined figures, the Company sold and supplied a total of roughly 4.1 million image sensors in the fourth quarter of 2009, which represented an increase of approximately 1.3 million units from its sale and supply of about 2.8 million units in the third quarter of 2009.  

Gross margin for the fourth quarter of fiscal 2009 was 44.5%, compared to 32.2% in the third quarter of fiscal 2009.  The Company's increase in gross margin was mainly due to its sale of high margin-driven products and excess inventory accrued in the fourth quarter of fiscal 2008.

The Company's SG&A expenses in the fourth quarter of fiscal 2009 were about 0.4 billion Korean won (US$0.36 million), compared to roughly 0.6 billion Korean won (US$0.5 million) in the third quarter of fiscal 2009, and approximately 2.9 billion Korean won (US$2.5 million) in the fourth quarter of fiscal 2008.  Moreover, the Company's operating expenses in the fourth quarter of fiscal 2009 were around 0.5 billion Korean won (US$0.45 million), compared to about 1.0 billion Korean won (US$0.85 million) in the third quarter of fiscal 2009, and approximately 3.5 billion Korean won (US$3.0 million) in the fourth quarter of fiscal 2008.

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 1163.65 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 December 31, 2009. 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.

Pixelplus will separately issue an announcement to discuss the Company's first quarter 2010 results on or before May 31, 2010.

"We are confident that Pixelplus' PO8030 VGA 'System-on-a-Chip' or "SoC", POA030 VGA SoC, and PC1030 NTSC/PAL image sensors, as well as our PO1150 1.5 megapixel image sensors designed for automotive black-box and security applications and PM1002 SoC processor featured in various image recognition applications, will enable us to achieve our business goals in moving forward.  For these aims, we continue to adapt to sluggish market conditions connected with the slower-than-expected economic recovery arising from the Global Financial Crisis and seek to identify and capture new business opportunities by adjusting and implementing creative sales and marketing strategies which should enable us to further strengthen our customer focus and select growth initiatives, as well as enhance our abilities to increase new business margins, drive higher profitability, and improve our performance," said Dr. S.K. Lee, CEO and Founder of Pixelplus.  "In addition, I believe our strategic cost-control measures should help us decrease our cash requirements, concentrate on our core business, maintain our continuity, and galvanize synergies and efficiencies in our operations.  While we aim to vigorously pursue these cost-control measures, we also are pleased to have more products in various stages of development and deployment than ever in the Company's history.  With Pixelplus' cutting-edge technologies and state-of-the-art products, we seek 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 and in parallel, we are working closely with our customers on a pro-active basis to provide them with higher resolution, better image quality, and smaller form factor products, and we continue to dedicate all of our efforts and energies on achieving our long-term growth targets and business strategies through developing new products, entering new markets, and securing new design wins.  While we aim to invest smartly in valued R&D programs and new market opportunities and do everything possible to ramp new sources of revenue, we positively believe that our strategic business adjustments will guide us to achieve our goals in the most cost-efficient and effective manner possible, and enable us to see gradual gains and improvements in 2010 and beyond."

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 fourth quarter of 2009 contained in this document have not been audited by Pixelplus' independent registered public accountants.

    
    
    
    
                                Pixelplus Co., Ltd.
                     Non-Consolidated Statements of Operations
                 (In millions of Korean won, except per ADS data)
                                    (unaudited)
    
                                     THREE MONTHS ENDED        YEAR ENDED
                                     -------------------   ------------------
                                     Dec. 31    Dec. 31    Dec. 31    Dec. 31
                                       2009       2008       2009       2008
                                     --------   --------   --------   --------
    
    Revenues                           5,970      4,514     17,469     16,196
          Products                     5,766      4,173     16,194     15,270
          Services                       204        341      1,275        925
    
    Cost of revenues                   3,315      4,306     11,798     14,725
          Products                     3,310      4,289     11,742     14,608
          Services                         5         16         57        117
                                           -         --         --        ---
    Gross profit                       2,656        209      5,671      1,471
                                       -----        ---      -----      -----
    
    Operating expenses                   522      3,540      4,413     13,452
       Selling, general and
        administrative                   421      2,858      2,622      9,244
       Research and development, net
        of government grants             101        682      1,790      4,208
                                         ---        ---      -----      -----
    Income(loss) from operations       2,134     (3,331)     1,258    (11,982)
                                       -----     ------      -----    -------
    
    Other income(expense)
       Interest income(expense), net    (126)      (154)      (432)      (241)
       Foreign exchange gain (loss), net (20)      (612)         4       (618)
       Others, net                      (130)      (854)       360       (312)
    Income(loss) before income taxes   1,858     (4,951)     1,190    (13,153)
    Income tax expenses                    -          -          -          -
    Income(loss) before gain(loss) 
     from equity method investments,
     net and minority interest         1,858     (4,951)     1,190    (13,153)
    Gain(loss) from equity method
     investments, net                    129       (857)       (93)      (773)
    Minority interest
    Before cumulative effect of 
     change in accounting principle    1,987     (5,808)     1,098    (13,925)
    Cumulative effect of change in
     accounting principle                  -          -          -          -
                                         ---        ---        ---        ---
    Net Income (loss)                  1,987     (5,808)     1,098    (13,925)
                                       =====     ======      =====    =======
    
    Accretion of preferred shares          -          -          -          -
                                         ---        ---        ---        ---
    Net income(loss) attributable 
     to common shareholders            1,987     (5,808)     1,098    (13,925)
                                       =====     ======      =====    =======
    Income(Loss) per ADS
          - basic and diluted            584     (1,706)       323     (4,110)
    ADSs used in computing 
     Income(loss) per ADS          
          - basic and diluted      3,403,433  3,403,433  3,403,433  3,388,461
    
    
    
                                Pixelplus Co., Ltd.
                          Non-Consolidated Balance Sheets
                  (In millions of Korean won, except per ADS data)
                                    (Unaudited)
    
                                         Dec. 31, 2009  Dec. 31, 2008
                                         -------------  -------------
    
    Assets
       Cash and cash equivalents                   697             93
       Restricted cash                           5,000          5,000
       Accounts receivable, net                    428          2,080
       Inventories, net                          1,196          2,225
       Other current assets                        802            905
                                                   ---            ---
       Total current assets                      8,123         10,303
    
       Other non current assets                  1,316          6,126
                                                 -----          -----
       Total assets                              9,439         16,429
                                                 =====         ======
    
    Liabilities, minority interest and
     Shareholders' equity
       Trade accounts payable                    2,708          3,574
       Other accounts payable                      169          2,029
       Short-term borrowings                     7,690          8,460
       Other current liabilities                   574          2,380
                                                   ---          -----
       Total current liabilities                11,141         16,443
    
       Long-term borrowings                          0          2,272
       Other non current liabilities               428            811
                                                   ---            ---
       Total liabilities                        11,569         19,525
    
    Shareholders' equity
       Common stock                              3,403          3,403
       Additional paid-in capital                7,450          7,507
       Accumulated other comprehensive loss          2            (81)
       Accumulated deficit                     (12,985)       (13,925)
                                               -------        -------
       Total Shareholders' equity               (2,130)        (3,096)
                                                ------         ------
    Total liabilities, minority
     interest  and Shareholders' equity          9,439         16,429
                                                 =====         ======

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.