Pixelplus Reports Financial Results for Fiscal Third Quarter 2008

SEOUL, South Korea , Oct. 30 /PRNewswire-FirstCall/ -- Pixelplus Co., Ltd. (Nasdaq: PXPL), a fabless semiconductor company in Korea that designs, develops, and markets CMOS image sensors for various consumer electronics applications, today announced...


SEOUL, South Korea , Oct. 30 /PRNewswire-FirstCall/ -- Pixelplus Co., Ltd. (Nasdaq: PXPL), 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 third quarter of fiscal 2008, which ended on September 30, 2008 .

Revenue for the third quarter of fiscal 2008 was US$3.7 million, compared to US$3.1 million in the second quarter of fiscal 2008, and US$3.9 million in the third quarter of fiscal 2007. Pixelplus' weaker-than-expected revenues in the third quarter were mainly attributable to the economic slowdown in China , which caused the Company to sustain lower-than-anticipated revenues arising from its supply of image sensors to module makers and handset manufacturers in China .

Net loss in the third quarter of fiscal 2008 was US$2.9 million, or a net loss of US$0.84 per diluted ADS, compared to a net loss of US$2.3 million, or a net loss of US$0.68 per diluted ADS, in the second quarter of fiscal 2008, and a net loss of US$1.2 million, or a net loss of US$0.36 per diluted ADS, in the third quarter of fiscal 2007.

Revenue for the first nine months of fiscal 2008 was US$9.7 million, compared to US$12.0 million for the same period in fiscal 2007. Net loss for the first nine months of fiscal 2008 was US$7.2 million, or a net loss of US$2.13 per diluted share, compared to a net loss of US$3.5 million, or a net loss of US$1.07 per diluted share, for the same period in fiscal 2007.

The Company sold approximately 7.4 million image sensors in the third quarter of fiscal 2008, which represents an increase of about 0.3 million units from its sale of around 7.1 million units in the second quarter of fiscal 2008. Separately, the Company provided approximately 0.8 million image sensors arising from its supply of services to a leading Japanese module maker in the third quarter of fiscal 2008, which represents a decrease of roughly 0.3 million units from its sale of around 1.1 million units in the second quarter of fiscal 2008. So, in terms of combined figures, the Company sold and supplied a total of about 8.2 million image sensors in the third quarter of fiscal 2008, which is nearly the same as its supply of around 8.2 million units in the second quarter of fiscal 2008.

Gross margin for the third quarter of fiscal 2008 was 15.3%, compared to 4.9% in the second quarter of fiscal 2008. The Company's increase in gross margin was primarily due to its rise in the total number of PC1030 NTSC/PAL image sensors sold in the third quarter of 2008. To improve gross margin in the fourth quarter of 2008, the Company aims to increase its revenues arising from the steadily increasing supply of its 'System-on-a-Chip' ("SoC") image sensors, especially its PC1030 NTSC/PAL image sensors.

The Company's SG&A expenses in the third quarter of fiscal 2008 were about US$2.9 million, compared to roughly US$1.5 million in the second quarter of fiscal 2008, and approximately US$1.7 million in the third quarter of fiscal 2007. This increase in SG&A expenses mainly stemmed from a rise in bad debt expenses of US$1.8 million in the third quarter of 2008. The Company's operating expenses in the third quarter of fiscal 2008 were around US$3.7 million, compared to about US$2.4 million in the second quarter of fiscal 2008, and approximately US$2.7 million in the third quarter of fiscal 2007.

The Company notes that all U.S. dollar figures specified above were converted at the rate of 1,206.3 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, 2008 .

Due to the current economic turmoil in Asia arising from the Global Financial Crisis, the Company is not in a position to provide specific guidance for the fourth quarter of fiscal 2008, but does expect its revenues in the fourth quarter of fiscal 2008 to increase over the third quarter of fiscal 2008.

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