Pixelplus Co (GREY:PXPLY)

SEOUL, South Korea, Dec. 6, 2011 /PRNewswire/ -- Pixelplus Co., Ltd. (PXPLY: PK), a fabless semiconductor company in South Korea that designs, develops, and markets CMOS image sensors for various consumer electronics applications,announced that the Company will terminate its American Depositary Receipts ("ADR") Program.

As a first step for that purpose, the Company will provide written notice to its Depositary to terminate the Deposit Agreement with respect to its existing ADRs, with such termination to take effect on February 29, 2012. The Depositary will contact ADR holders in due course with additional information on this process, including those necessary and proper actions to be executed.

We will begin tracking PXPLY. ($1.35)

The company has reported three straight quarter of dramatic EPS improvement.

Many Caveats exist to this story

• In late 2009 the company voluntarily delisted its shares to the Pink Sheets
• We could not locate a 2009 20F (due to voluntarily delisting).
• Company has negative Total Shareholders' equity
• The 2010 fourth quarter appears to have a challenging 2009 fourth EPS comparable.
• With little financial transparency, we will not be able to calculate GAAP vs. non-GAAP EPS figures.
• History of losses
• Industry growth can be volatile
• Past legal problems.
• Company appears to have a tiny float which could limit liquidity. (3.4 million shares outstanding).
• We have not probed into share structure, such as the existence of dilutive securities.
• Financials are prepared according to Korean GAAP

We will attempt to contact management.

Third quarter of fiscal 2010, which ended on September 30, 2010.

• Revenue for the third quarter of fiscal 2010 was7.0 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, and3.6 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.

"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."