Pixelplus Reports Financial Results for Fiscal Second Quarter 2009 (with Tables)

SEOUL, South Korea, Sept. 1 /PRNewswire-FirstCall/ -- Pixelplus Co., Ltd. (PinkSheets: PXPLY), a fabless semiconductor company in Korea that designs, develops, and markets CMOS image sensors for various consumer electronics applications, today announced unaudited financial results for the second quarter of fiscal 2009, which ended on June 30, 2009.

Based on these unaudited results of operations which were prepared in accordance with Korean GAAP on a non-consolidated basis, revenue for the second quarter of fiscal 2009 was 4.4 billion Korean won (US$3.5 million), compared to 3.5 billion Korean won (US$2.7 million) in the first quarter of fiscal 2009, and 3.8 billion Korean won (US$3.0 million) in the second quarter of fiscal 2008.

Net income in the second quarter of fiscal 2009 was 0.03 billion Korean won (US$0.02 million), or a net income of nine Korean won (US$0.01) per diluted ADS, compared to a net loss of 1.1 billion Korean won (US$0.9 million), or a net loss of 321 Korean won (US$0.3) per diluted ADS, in the first quarter of fiscal 2009, and a net loss of 2.6 billion Korean won (US$2.1 million), or a net loss of 776 Korean won (US$0.6) per diluted ADS, in the second quarter of fiscal 2008.

The Company sold roughly 4.7 million image sensors in the second quarter of 2009, which represented a decrease of about 0.2 million from its sale of around 4.9 million units in the first quarter of 2009. Separately, the Company furnished approximately 0.5 million image sensors arising from its supply of services to a leading Japanese module maker in the second quarter of 2009, which represented an increase of about 0.3 million units from its supply of around 0.2 million units in the first quarter of 2009. So, in terms of combined figures, the Company sold and supplied a total of about 5.2 million image sensors in the second quarter of 2009, which represented an increase of roughly 0.1 million units from its sale and supply of around 5.1 million units in the first quarter of 2009.

Gross margin for the second quarter of fiscal 2009 was 21.0%, compared to 26.5% in the first quarter of fiscal 2009.

The Company's SG&A expenses in the second quarter of fiscal 2009 were about 0.6 billion Korean won (US$0.5 million), compared to roughly 1.0 billion Korean won (US$0.8 million) in the first quarter of fiscal 2009, and approximately 1.5 billion Korean won (US$1.2 million) in the second quarter of fiscal 2008. Moreover, the Company's operating expenses in the second quarter of fiscal 2009 were around 1.2 billion Korean won (US$0.9 million), compared to about 1.7 billion Korean won (US$1.4 million) in the first quarter of fiscal 2009, and approximately 2.8 billion Korean won (US$2.2 million) in the second 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 1273.5 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 June 30, 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 third quarter 2009 results on or before November 30, 2009.

"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 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 continue 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 our history. With our PO8030 VGA 'System-on-a-Chip' or "SoC", POA030 VGA SoC, and PC1030 NTSC/PAL image sensors, as well as our PM1002, which is our SoC processor for various image recognition applications, we continue to develop our core strategic business with first and second-tier mobile camera phone, automobile applications, and medical endoscope manufacturers in 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. Moreover, 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, including our PO1150 1.5 megapixel image sensors which are designed for automotive black-box and security applications. In addition, we are encouraged that we continue to effectively manage our operating expenses, and believe this demonstrates that we have significantly lowered our breakeven point over the course of the last few quarters."

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

    Contact:

    Hae-Su Hwang
    Pixelplus Co., Ltd.
    6th Floor, Gyeonggi R&DB Center
    906-5 Iui-dong, Yeongtong-gu
    Suwon-si, Gyeonggi-do, 443-766
    Republic of Korea
    +82-31-888-5307

    OR

    Taylor Rafferty:
    London - Emilia Whitbread at +44 (0) 20 7614 2900
    New York - Jessica McCormick at +1 212 889 4350
    E-mail pixelplus@taylor-rafferty.com



                                Pixelplus Co., Ltd.

                      Non-Consolidated Statements of Operations
                  (In millions of Korean won, except per ADS data)
                                    (Unaudited)

                                                                       THREE  MONTHS                        SIX  MONTHS
                                                                                      ENDED                                    ENDED
                                                                          June  30,      June  30,      June  30,      June  30,
                                                                              2009              2008              2009              2008

        Revenues                                                    4,415            3,797            7,948            7,186
            Products                                                4,101            3,592            7,411            6,788
            Services                                                    314                205                537                398

        Cost  of  revenues                                    3,478            3,612            6,075            6,611
            Products                                                3,459            3,573            6,046            6,538
            Services                                                      19                  39                  28                  73

        Gross  profit                                                938                185            1,874                575

        Operating  expenses                                1,171            2,820            2,900            5,520
            Selling,  general  and
              administrative                                      624            1,547            1,587            3,167
            Research  and  development,  net
              of  government  grants                          547            1,273            1,313            2,353

        Income  (loss)  from  operations            -233          -2,634          -1,027          -4,945

        Other  income  (expense)
            Interest  income  (expense),  net      (104)              (34)            (224)              (22)
            Foreign  exchange  gain  (loss),
              net                                                            229                (99)                36                  (2)
            Others,  net                                              164                  46                300                  81
        Income  (loss)  before  income
          taxes                                                              57          -2,721              -915          -4,889
        Income  tax  expenses                                      -                    -                    -                    -
        Income  (loss)  before  gain  (loss)
          from  equity  method  investments,
          net  and  minority  interest                      57          -2,721              -915          -4,889
        Gain  (loss)  from  equity  method
          investments,  net                                      (25)                84              (146)                84
        Minority  interest
        Before  cumulative  effect  of
          change  in  accounting  principle            32          -2,637          -1,061          -4,804
        Cumulative  effect  of  change  in
          accounting  principle                                  0                    0                    -                    -
        Net  Income  (loss)                                        32          -2,637          -1,061          -4,804

        Accretion  of  preferred  shares                  -                    -                    -                    -
        Net  income  (loss)  attributable
          to  common  shareholders                            32          -2,637          -1,061          -4,804
        Income  (Loss)  per  ADS
            -  basic  and  diluted                                  9              -776              -312          -1,425
        ADSs  used  in  computing  Income
          (loss)  per  ADS                              3,403,433    3,400,112    3,403,433    3,371,387
            -  basic  and  diluted



                                                        Pixelplus  Co.,  Ltd.

                                              Non-Consolidated  Balance  Sheets
                            (In  millions  of  Korean  won,  except  per  ADS  data)
                                                                  (Unaudited)

                                                                            June  30,  2009        Dec.  31,  2008

        Assets
            Cash  and  cash  equivalents                                  296                              93
            Restricted  cash                                                  5,000                        5,000
            Accounts  receivable,  net                                1,497                        2,080
            Inventories,  net                                                    900                        2,225
            Other  current  assets                                        1,097                            905
            Total  current  assets                                        8,789                      10,303

            Other  non  current  assets                                1,156                        6,126

            Total  assets                                                        9,945                      16,429

        Liabilities,  minority  interest
          and  Shareholders'  equity
            Trade  accounts  payable                                    2,629                        3,574
            Other  accounts  payable                                    2,090                        2,029
            Short-term  borrowings                                      7,780                        8,460
            Other  current  liabilities                              1,081                        2,380
            Total  current  liabilities                            13,580                      16,443

            Long-term  borrowings                                                0                        2,272
            Other  non  current  liabilities                          511                            811
            Total  liabilities                                            14,091                      19,525

        Shareholders'  equity
            Common  stock                                                        3,403                        3,403
            Additional  paid-in  capital                            7,435                        7,507
            Accumulated  other  comprehensive                          2                            -81
              loss
            Accumulated  deficit                                      -14,987                    -13,925
            Total  Shareholders'  equity                          -4,146                      -3,096

        Total  liabilities,  minority  interest
          and  Shareholders'  equity                                  9,945                      16,429
 


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