Welcome to the Pixelworks, Inc., First Quarter 2016 Earnings Conference Call. I'll be your operator for today's call. [Operator Instructions]. I'd now like to turn the call over to management and your host, Chief Financial Officer of Pixelworks, Mr. Steve Moore.

Good afternoon and thank you for joining us. With me today on today's call is Todd DeBonis, Pixelworks' CEO and also Steve Domenik, Director of Pixelworks' Board who has recently served as Interim CEO.. The purpose of today's conference call is to supplement the information provided in our press release issued earlier today, announcing the company's financial results for the first quarter ended March 31, 2016. Before we begin, I would like to remind you that various remarks we make on this call, including those about our projected future financial results, economic and market trends and our competitive position constitute forward-looking statements. These forward-looking statements and all other statements made on this call that are not historical facts are subject to a number of risks and uncertainties that may cause actual results to differ materially. All forward-looking statements are based on the company's beliefs as of today, Thursday, April 28, 2016, and we undertake no obligation to update any such statements to reflect events or circumstances occurring after today. Please refer to today's press release, our Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results. Additionally, the company's press release and management's statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms, including gross margin, operating expenses, net loss and net loss per share. These non-GAAP measures exclude stock-based compensation expense and an additional amortization of a prepaid royalty. We use these non-GAAP measures internally to assess our operating performance. The company believes these non-GAAP measures provide a meaningful perspective on our core operating results and underlying cash flow dynamics, but we caution investors to consider these measures in addition to, not as a substitute for, nor superior to, the company's consolidated financial results as presented in accordance with GAAP. Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP net loss and GAAP net loss to adjusted EBITDA, which provide additional details. We will start today's call with a few opening remarks from Steve Domenik, a member of the Board and recent Interim CEO who will then turn the call over to Todd DeBonis who we announced as part of today's press release has now assumed the permanent CEO role. Todd will provide additional comments on the business and quarter after which I will review our first quarter financial results in more detail and then provide our outlook for the second quarter of 2016.

Thank you, Steve. Good afternoon everyone and thanks for joining us on today's call as most of you are aware. I have been serving as Pixelworks Interim CEO since early February. The Board has concluded a formal search process to identify a permanent CEO. I could not be any more pleased to announce the Board's decision to promote Todd DeBonis to President and CEO. Just prior to Pixelworks Todd was a Vice President of Global Sales and Strategic Development at TriQuint Semiconductor where he was a key contributors to company's rapid growth and from having a few hundred million dollars mobile business to one that generated over a $1 billion in sales. He has nearly 30 years of experience as a seasoned executive with expertise spending strategy, sales and operations across a global organization. And since coming to Pixelworks earlier this year Todd has demonstrated in depth knowledge of the industry, a strong understanding of Pixelworks technology as well as required sales and operational capabilities required to lead the organization going forward. Put simply I'm confident he's the right CEO to capitalize on the intrinsic value of Pixelworks technology and available market opportunities. With all that said I would like to make a few brief remarks before turning the call over to Todd. As announced on April 7th we implemented a restructuring plan with the goal of achieving two objectives. The first was to streamline the organization and our product offerings in order to concentrate the company's resources and market opportunities with the largest potential impact. The second objective was to right size the organization by better aligning expenses with current revenue levels. I will let Steve Moore speak to the numbers in more detail but I want to highlight that we have been diligently focused on implementing this plan over the last several weeks and both management and the Board remain fully committed to realize as expected $5 million in annualized cost savings as well as the achievement of cash flow breakeven. I look forward to continuing to serve as Director on Pixelworks Board supporting Todd as he leads the company's efforts to capitalize on growth opportunities and realize Pixelworks full potential. It is now my pleasure to turn the call over to Todd.

Thank you, Steve and good afternoon to those joining us on today's call. I would like to first start by thanking Steve Domenik for the kind words and the Board for the vote of confidence and opportunity to lead Pixelworks as CEO. I'm very enthusiastic about taking on this role and also the future of the company. However before talking about the future I believe it is constructive to first take stock of where we are today. As most of you know I joined Pixelworks earlier this year and was pointed COO in February. During the last few months the majority of my time has been spent meeting with fellow employees to gain a deeper understanding of Pixelworks technology and capabilities and also meeting with our current projector customers as well as current and prospective mobile customers. My takeaway from these interactions has been positive and providing further validation of the value of Pixelworks Technology. While at the highest level Pixelworks consist of two very different businesses and end markets. They share the key enabling technology of video processing. Pixelworks is a long heritage and deep expertise in this field which the company has consistently invested in and continue to advance over the last 20 years. Innovation rarely happens overnight and it would be difficult for any company to quickly replicate Pixelworks' combined expertise in motion estimation motion compensation or MEMC, frame rate conversion and in picture quality. Before talking about the mobile market an opportunity let me first address our digital projection business. As part of the recently announced restructuring we are prudently working to streamline our projector business and respective product portfolio. This means serving the same customer base but doing so with a smaller and more targeted product portfolio allowing Pixelworks to continue to deliver world class…

Thank you, Todd. Revenue for the first quarter of 2016 was 11.2 million which compares to 13.5 million in the prior quarter. The sequential decline in Q1 total revenue was slightly better than our original forecast but ultimately reflected the expected impact of a challenging macro environment in emerging markets on our digital projection business. Revenue from chips sold into the TV panel market was higher compared to the fourth quarter however as previously mentioned we expected contribution from this legacy business to decline in future quarters saw an anticipated end of life orders from existing customers. We also recorded a nominal amount of mobile revenue in the first quarter as part of follow on orders from our initial customer, however mobile was not a meaningful contributor to the sequential Q1 decline in total revenue. Non-GAAP gross profit margin was 48% in the first quarter compared to 50.9% in the fourth quarter. Non-GAAP operating expenses were 9.2 million in the first quarter compared with 8.8 million in the fourth quarter of 2015. Adjusted EBITDA was a negative 2.9 million for the first quarter of 2016 compared to a negative 941,000 in the fourth quarter. The reconciliation of adjusted EBITDA to GAAP net loss maybe found in today's press release. On a non-GAAP basis we recorded a net loss of 4 million or loss of $0.14 per share in the first quarter of 2016 as compared to a non-GAAP net loss of 2.2 million or a loss of $0.08 per share in the prior quarter. The first quarter net loss excludes stock based compensation expenses as well as 4.3 million or $0.15 per share in charges related to the restructuring. Moving to the balance sheet. We ended the first quarter with cash and cash equivalents of approximately 22.9 million compared to…

[Operator Instructions]. Our first question is from Charlie Anderson with Dougherty. You may begin.

I wanted to start with -- you talked narrowing focus for Iris you mentioned focusing on smartphones and tablets but I think maybe a little beyond that, it sounded like you wanted to narrow maybe even more on the technology. I recall the first Iris was a of a swiss army knife, so I wonder as you’ve talked to customers what are they specifically asking you in terms of problem to solve with that technology versus how the product has been positioned in the past?

I'm not sure they're asking us to change the value proposition what we're offering. I think what they're looking for is an easier implementation, they're certainly looking for lower cost. They're challenged with that fact that it is an architectural change form, right. And so I think -- I don’t want to go too much into the product plans and the devices but this is really -- we're going to review the whole go to market strategy and semiconductors will definitely a part of it but I think we need to broaden our horizons on how we position video processing technology to the mobile market place.

Todd, I wonder are there IP ways to monetize either through licensing the technology or licensing the technology or licensing which I think the company has done a few times in the past and I'm just curious how you are reviewing those options?

We have incoming. Interests, I would say fairly continually on licensing our technology for four different markets and including mobile, I think we entertain those incoming requests on a semi normal basis, it depends who's bringing it in and how they serious they are because it is a little bit disruptive. I would suggest that as we go forward, I would hope that licensing be a more integral part of our go forward business but I think it's too early to say right now. And I certainly wouldn't model anything in regards to licensing today.

[Operator Instructions]. Our next question comes from Krishna Shankar with ROTH Capital. You may begin.

I’ve questions as you look at the projector business, I think your folks mentioned that you see kind of inventories down and a little bit of stability in the emerging market especially with respect to the projector business, talk about your visibility in the projector business through the rest of this year and you know what you see both in terms of existing customers, moving your platform for production and continued market share gains.

I mean I will let Steve sort of talk about his feelings on where we are through the inventory curve, I will give you my perspective, my perspective is we’re now through the inventory correction, the order pattern for the Q2, has come back and we anticipate the back half of the year to be more of an normal pattern for Pixelworks on a year over year basis.

Our visibility into manufacturing inventories and the order patterns that would seem more normal seasonal projector business in the second half of the year. It always is based on what the macro environment is doing but that too seems firming up if not strengthening.

And then on the in the mobility business, Todd you talked Asus having I guess modest volume requirement, so far can you talk about the additional design wins within other Asus platforms and then the put ramp for this U.S. wireless carrier tablet, what is the timing of that and want is the potential outlook for the U.S. tablet design win that you’ve.

For the one that had been previously mentioned, the design wins that we previously mentioned we have backlog. I mean I don't have complete insight into Asus plans with the carrier. But I know they are preproduction and they're taking shipments in preparation for the launch. So I will assume it's fairly soon.

Okay. And then any comments on other types of customers you’re working on in terms of design wins, are they Asian, Chinese? Can you talk about the types of customers tablets and smartphones that you’re engaging with now?

We’re fairly focused on the mid to high end smartphone market in Greater China. We've probably visited 20 customers of relevance in that target market in the last three weeks. Is that enough of a scope for you?

So kind of the mid to high end smartphone customers in China and do you’ve a focus on tablets in China also or just smartphones?

Some of those companies do have programs in the tablet arena and certainly we would entertain those programs, our focus is to try to hit the higher volume mid to high end smartphone segment an area that high resolution screens are becoming more common. Tie-ins with quality video services are being sought after and the need for something like our Iris solution where our overall video processing solution is of interest.

Thank you. I'm showing no further questions at this time. I would like to turn the call back over to management for any closing remarks.

Okay. Well thank you for joining us today. We look forward to speaking with you on the Q2 call.