Pixelplus Reports Financial Results for Fiscal Third Quarter 2010

SEOUL, South Korea, Nov. 19, 2010 /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 third quarter of fiscal 2010, which ended on September 30, 2010.

Based on these unaudited results of operations which were prepared in accordance with Korean GAAP on a non-consolidated basis, revenue for the third quarter of fiscal 2010 was 7.0 billion Korean won (US$6.1 million), compared to 6.8 billion Korean won (US$6.0 million) in the second quarter of fiscal 2010, and 3.6 billion Korean won (US$3.1 million) in the third quarter of fiscal 2009.

Net income in the third quarter of fiscal 2010 was 1.6 billion Korean won (US$1.4 million), or a net income of 470 Korean won (US$0.41) per diluted ADS, compared to a net income of 0.7 billion Korean won (US$0.6 million), or a net income of 213 Korean won (US$0.19) per diluted ADS, in the second quarter of fiscal 2010, and 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.

Gross margin for the third quarter of fiscal 2010 was 40.5%, compared to 33.6% in the second quarter of fiscal 2010. The Company's increase in gross margin was mainly due to its sales of high margin-driven products.

The Company's SG&A expenses in the third quarter of fiscal 2010 were about 0.9 billion Korean won (US$0.8 million), compared to roughly 0.8 billion Korean won (US$0.7 million) in the second quarter of fiscal 2010, and approximately 0.6 billion Korean won (US$0.5 million) in the third quarter of fiscal 2009.  Moreover, the Company's operating expenses in the third quarter of fiscal 2010 were around 1.2 billion Korean won (US$1.0 million), compared to about 1.4 billion Korean won (US$1.2 million) in the second quarter of fiscal 2010, and approximately 1.0 billion Korean won (US$0.9 million) in the third 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 1140.1 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 September 30, 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 and are encouraged that we continue to effectively manage our operating expenses on a reliable and consistent basis, we continue to design and introduce new products, technologies.  Separately, 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.  In parallel, 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. 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 moving ahead."

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 third 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.