Good day ladies and gentlemen and welcome to the MagnaChip Semiconductor’s Quarterly Earnings Conference Call. At this time all participants are in listen only mode later we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder this conference maybe recorded. I would now like to introduce your host for today's conference Mr. Robert Pursel, Director of Investor Relations. Sir please go ahead.

Thank you, Michelle. Thank you for joining us for to discuss the company's financial results for the first quarter ended March 31, 2015. The first quarter earnings release and the 2014 10-K we filed today can both be seen on the company's Investor Relations website. A telephone replay of today's call will be available shortly after the completion of the call and the webcast will be archived our website for one year. Access information is provided in the first quarter earnings press release. Joining us today are Y.J. Kim MagnaChip's Chief Executive Officer and Jonathan Kim Chief Financial Officer. Y.J. will begin the call with a discussion of the company's recent operating performance. Following Y.J. Jonathan will provide an overview of our financial results. Y.J. will then discuss the company's overall business strategy and provide financial guidance for the second quarter of 2015. There will be a question and answer session following today's prepared remarks. During the course of this conference call, we may make forward-looking statements about MagnaChip’s business outlook and expectations. Our forward-looking statements and all other statements that are not historical facts reflect our beliefs and predictions as of today and, therefore, are subject to risks and uncertainties as described in the Safe Harbor discussions found in our SEC filings. During the call, we will also discuss non-GAAP financial measures. The non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. But are intended to illustrate and alternative measure of MagnaChip's operating performance that maybe useful. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in our first quarter earnings release and in our SEC filings for the other periods discuss today. Before turning over the call to Y.J. I will like to remind you that today Y.J. was named as our CEO on a non-interim basis and elected as a member of our Board of Directors and Jonathan Kim was named as our CFO on a non-interim basis. I would now like to turn the call over to Y.J. Kim. Y.J.?

Thank you Robert, and welcome to everyone joining us today. I am honored that the Board choose me to lead MagnaChip during this important time. I'd like to thank you for your patience and support during the financial review and restatement process which is now behind us with the filing of the related reports in February 2015. We have emerged from the reinstatement process with enhanced financial discipline and stronger internal controls. With the filing of our 2014 10-K today and with the filing of our 10-Q for the first quarter of 2015 which we expect to file within the next two weeks, we will become current with our filings and plan to be a timely filer starting in the second quarter. We currently anticipate our second quarter financial results will be announced in early August. Before I discuss Q1 results I like to present to you our key priorities. We are facing many challenges but our management team is committed to restoring shareholder value and regaining investor confidence over time. We are taking immediate actions designed to help move the company in the right direction. Specifically we have launched a comprehensive cost and portfolio optimization review, engaged in independent business advisory firm to exist with evaluation of our cost structure and product portfolio, combined our display and power solution business lines into a standard products group and appointed a Chief Compliance Officer a newly created position reporting directly to the Board of Directors. Let me first discuss the cost and portfolio optimization review. During Q1 we started implementing cost savings programs affecting every area of the company including manufacturing, procurement, supply chain management, capital expenditures and human resources. While we have made progress, we have determined that more can and must be done to restore and enhance our long…

Thank you, Y.J. and good afternoon everyone. While my discussion will focus primarily on our first quarter financial performance, the financial results for 2014 were also filed today on Form 10-K for the year ended December 31, 2014 and can be found on our corporate website. MagnaChip reported on a GAAP basis, revenue of 164.9 million and gross margin of 21.2% for the quarter ended March 31, 2015. On a sequential basis, revenue declined 1.7% and was essentially flat on a year-over-year basis. First quarter is typically a seasonally weak quarter for MagnaChip, aside from seasonal factors we were also impacted by the continued weakness of our foundry business. As Y.J. stated, our foundry business is showing the effects of our prior focus on a narrow segment, which had the impact of increasing our reliance on the high end smartphone market. Gross profit was 35 million or 21.2% of revenue for the first quarter. This was up from 20.6% last quarter primarily because of improved stabilization. However, our overall factory loading is below where we would like to be, because of our weak foundry revenue. We're addressing this by reaching out to a broader base of accounts in order to bolster our revenue pipeline and improve our manufacturing utilization. Total operating expenses were 47.2 million down from 64.9 million last quarter, excluding non-recurring, statements legal, restructuring and impairment charges total operating expenses for the first quarter was 40.1 million. This compares to 42.5 million for the previous quarter. On a GAAP basis, net loss for the first quarter was 20 million or loss of $0.59 per share. Adjusted net loss was 9.6 million, while adjusted EBITDA was 2.5 million. Turning to the balance sheet, our cash and cash equivalents totaled 91.4 million at the end of the first quarter compared to 102.4 million at the end of 2014. Capital expenditures were less than a $1 million this quarter. And we expect to will be approximately 20 million for the full year. With the financial restatement behind us we can now focus our efforts, a more analyzing all areas of cost saving opportunities. Our manufacturing and operating costs have risen and this is unacceptable for our management team. We've engaged a global advisory firm to help us to evaluate our cost structure. Looking ahead, although we have much work to do, the company is focused on doing the right things to restore the help of the business and to deliver value to our shareholders. Now let me turn the call back to Y for his closing comments and financial guidance. Y.J.?

Thank you Jonathan while I remain confident in MagnaChip's long term prospect, I want to be clear that we continue to phase major challenges but they result of strategic [indiscernible]. We have made changes to our strategy and we have initiated a comprehensive review of a cost structure and product portfolio. Combining our display solutions and power solution divisions into a single standard product group is an important step forward which will improve our ability to optimize our resources and product portfolio. We believe the ongoing transformation will position MagnaChip for growth over the long term and is consistent with our goal of maximizing the value we deliver to our customers and shareholders. As we look ahead we are seeing the same softness in specific end markets such as computing and consumer electronics and smartphones with certain customers. We are also seeing the softness in the foundry business that many of our peers are also seeing. As a result of this demand weakness we expect our second quarter revenue will be in the range of $155 million to $165 million. So based on this anticipated revenue level and our current manufacturing utilized rate we anticipate gross margin is expected to be in the range of 17% to 19%. Now I will turn over the call to Robert. Robert?

Thank you Y.J.. So Michelle, this concludes our prepared remarks we will now open the call for questions.

Thank you. [Operator Instruction]. Our first question comes from the line of Blayne Curtis with Barclays. Your line is open. Please go ahead.

Hey, thanks for taking my questions, a couple here. Just, first, I was just curious as you look the rest of the year, you talked about the foundry business had some decaying of some prior losses, how do you think about getting the business back to breakeven, has the foundry losses -- will that bottom in the June quarter and then how do you think about the cost base? Would you be able to get to breakeven through just reducing cost or will you see some revenue growth?

So in terms of the gross margin, there are three key factors, the utilization as you saw it went down and our fixed cost labor and utility went up. And our product mix was not as healthy as before. So our plan is to diversify customer base, expanding to new markets and also drive increased penetration with existing market. But at the same time we are streamlining the cost and we already have implemented wage fees and organization rightsizing so forth. But as you know this will take time and for now we will all give you guidance and the Q2 but not beyond that.

Okay and then I guess -- from the gross margins. You're guiding to high teen level, I think part of the story in prior was mix richer of gross margin product, just curious on two things, one, did you see any benefit. I know you had a right that a lot of product depth interaction, are you getting any positive benefit in that number from sales written off inventory and then as you think about other than utilization what drivers you have on the growth margin side.

In terms of the inventory write off there was significant build up inventory during 2013. So we have to reserve for those items. In terms of any kind of additional benefit because of the reserve that does not appear to be the case. We are actively working on diversifying our product portfolio so that we could improve our utilization rate. But in terms of inventory reserve back in 2013 that does not have any kind of benefit going forward.

Okay. I guess the second part is what other drivers do you have to get the gross margin. And you said gross margin approaching 30%. It's the high teens, is it going to be the level will be for a while any sort of growth on a unit basis or do you have any leverage in terms of mix or any such that you could get that gross margin higher this year?`

So just what we are in a rate that right now we are in challenging environment and what we are doing is to diversify customer base and expanding new market and change in the product mix and increase the product development efficiency so for us. But in terms of modeling we cannot quantify at this time.

And our next question comes from the line of Rajvindra Gill from Needham & Company. Your line is open. Please go ahead.

Hi this is Josh in for Rajiv thank you for taking my questions. I guess you guys can talk a little bit about OpEx going forward, look like it's come down a bit over the last couple quarters and can you maybe explain , why that happened and what we should expect going forward with your our cost-cutting initiatives. Thank you.

We did start our cost cutting measures in 2014 and one of the major items that we looked at was freezing our wages. And we obviously don’t have any plans of changing that policy in 2015. In terms of giving guidance or policies to provide guidance for revenue and gross margin for the next question, I'm not going to be able to provide you with any kind of a range in terms of OpEx, but in terms of the impact of the some of the cost cutting measures that we already put into 2014, as you noted when you look our operating expenses for Q1 in comparison to our historical periods it has flattened out.

Okay, great. Thank you. And then I'm just wondering if you could maybe elaborate a little bit more on what drove you to combine the Display and Power business?

So as you know in terms of organization streamlining organization is definitely a one way of increase efficiency as well as the reduce the redundancies, but also that creates the opportunity for us to enhance the portfolio optimization. And the team will be managed by new confident leadership over there. And we are also rebuilding the SMS foundry infrastructures were I'll be the new acting general manger to build the business.

Our next question is from Suji De Silva with Topeka. Your line is open. Please go ahead.

Best of luck in the new role. So first of all, in terms of the Foundry segment, can you talk about when you perhaps the effort to diversify the customer base following that sales cycle is believed ramp in some of the new customers in the second half '15 versus '16?

Yes so I think in the remarks we told you that the foundry business doesn’t take over night it takes process where it could be a year or more. But I think we have started to diversify the customer base. We started to get more expanding the design pipeline. So again this is an effort that is not going to be overnight but it will take. But we are taking an action to fix this issue.

Okay. And then broad follow up to your question asked -- in gross margin are there any one-time items. And I look forward to your 1Q number that we should be aware of --?

Suji you're kind of breaking up.

I am sorry. I will repeat the question. In the gross margin are there any one-time items in the fourth quarter or first quarter results [indiscernible]?

Any one time non-recurring items in gross margin, Jonathan.

So nothing significant in the gross margin for Q1 it was Q4.

Okay. And lastly can you elaborate on the resignation of VP of Sales and then it coincides with the assignment of both of these permanent management. Is there a search for a new VP of Sales. Any comments there?

Right now we have new confident existing leaders that are heading up the worldwide sales and again these departures is part of the organization streamlining and to increase our effectiveness by a natural result.

Thank you. [Operator Instructions].

Michelle I think that's it for the question and answers, why don’t we go ahead and close it up. I have closing remarks here. So this concludes our Q1 earnings conference call. Please look for details of our future events on MagnaChip's Investor Relations website. Again we thank you for joining us today.

Ladies and gentlemen thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a great day.