Good day, and welcome to the Bemis Company hosted First Quarter 2014 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Erin Winters. Please go ahead.

Thank you. Welcome to our first quarter 2014 conference call. Today is April 24, 2014. After today's call, a replay will be available on our website, bemis.com, under the Investor Relations section. Joining me for this call today are Bemis Company's Chairman and Chief Executive Officer, Henry Theisen; our Chief Operating Officer, Bill Austen; our Vice President and Controller and interim Principal Financial Officer, Jerry Krempa; and our Vice President and Treasurer, Melanie Miller. Today, Henry will begin with comments on business performance and outlook for the remainder of 2014, and then Jerry will cover the financial statements. After our comments, we will answer any questions you have. [Operator Instructions] At this time, I would like to direct you to our website, bemis.com, under the Investor Relations tab, where you will find our press release, along with our supplemental schedules. We'll be referring to these schedules at points throughout today's discussion. On today's call, we will also discuss non-GAAP financial measures as we talk about Bemis' performance. Reconciliations of these non-GAAP measures to GAAP measures that we consider most comparable can be found in the press release and the supplemental schedules. I'd like to remind everyone that statements regarding future performance of the company made in this teleconference are forward-looking and are therefore subject to certain risks and uncertainties. Actual results may differ materially from historical, expected or projected results due to a variety of factors. Please refer to Bemis Company's regular SEC filings, including the most recently filed Form 10-K for the year ended December 31, 2013, to review these risk factors. Now I'll turn the call over to Henry Theisen.

Thank you, Erin, and thank you for joining us today. Today, we reported adjusted earnings of $0.58 per share for the first quarter of 2014, an increase of 9.4% over the prior first quarter and in line with our most recent guidance. During the first quarter, we benefited from strong pricing discipline, a stabilizing European economy and our growing business in China. We prudently controlled costs, refocused resources on our core business and repurchased 1.1 million shares of stock. Unit volumes were lower than expected, driven by inflationary pressures in Brazil, along with the slowdown at our customers who were challenged by recent weather events in North America. While these weather events also created some headwinds at our own plants, our business teams did a great job of managing operations to minimize the impact. As we enter our seasonally strong second quarter, we are seeing the normal increase in orders from our customers. During this first quarter, we executed plans that support our goals of margin improvement and value-added volume growth. For example, in Brazil, we expanded our capacity to produce high-barrier films to meet the demand for protein packaging. In Europe, we brought up additional multilayer capacity to support the growing need for roll stock in high-barrier shrink applications for fresh meat and cheese. In North America, we are starting up new capacity on a barrier sheet line that will support increasing demand for shelf-stable and refrigerated liquid applications, such as coffee creamers, pudding cups, yogurt cups and single-serve coffee formats. In addition, our robust 2014 capital expenditure plan will further support the expanding market for standup pouch formats, reflecting the continuing product launches that require superior sealability and barrier properties. We accelerated innovation by introducing new products to our customers that will deliver measurable volumes to support our…

Thank you, Henry, and good morning, everyone. Before we get into color on the income statement, I would like to highlight a couple of unique items related to the first quarter of 2014 that are reflected on our reconciliation of non-GAAP earnings per share that was included in our earnings release and are also shown on Page 3 of the supplemental schedules that Erin previously mentioned. There are 2 items that reconcile our GAAP earnings of $0.48 per share to our non-GAAP earnings of $0.58 per share. First, as Henry mentioned, we announced the closure of our Pressure Sensitive Materials plant in Stow, Ohio. Operations at this facility are scheduled to cease during May. In the first quarter of 2014, we recorded a pretax charge of approximately $25 million, or $0.16 per share related to this closure. This charge primarily affected cost of products sold on the income statement and was excluded from the calculation of adjusted diluted earnings per share. The charge includes an estimated settlement of a multiemployer pension plan liability, employee severance and benefit costs and fixed asset-related expenses. We expect the charges in 2014 to total approximately $30 million. The second unique item this quarter was a sale of our Paper Packaging Division on March 31. Net proceeds from the transaction totaled $79.8 million. A $9.4 million pretax gain on the sale was recorded as part of other nonoperating income and was excluded from the calculation of adjusted diluted earnings per share as noted on Page 3 of the supplemental schedules. Proceeds from the sale will be directed towards our capital allocation priorities this year. Next, I will walk through the sales and operating profit performance of each of our reportable segments. As I discuss sales, focus on Page 4 of the supplemental schedules, which provides…

[Operator Instructions] And we'll take our first question from Phil Ng with Jefferies.

This is Alex Hutter on for Phil. On the CapEx guide, it looks like you took some top end out, and I believe it was $175 million to $200 million. Does that reflect you guys investing in fewer projects or potentially slightly softer volume outlook for the year or is it just kind of an adjustment?

This is Bill Austen, I'll take that one. When we put our guidance together of $175 million to $200 million earlier in the year late last year, a lot of that is done with some engineering estimates. And now that we've gotten into the quarter, we have really refined those engineering estimates. We've also worked with some of our suppliers, and we have worked to improve on some of the costs associated with that CapEx. Now that we're further into the quarter, we have much more visibility. We've narrowed that down to $175 million because we've done a nice job in engineering and in our sourcing arena to bring that number down.

Okay, great. And then just one follow-up. In PSM, you guys saw some strong margin growth from the reversal of the mixed headwinds you guys have seen. Is that a trend you guys expect will continue? Do you think things have bottomed or is it a kind of a one-quarter event?

Well, I think we're going to continue to see improvement in our Pressure Sensitive business. A lot of this is generated in Europe as the economy has strengthened a little bit or stabilized is maybe a better word. And we're seeing a pickup in graphics, and of course, graphics is one of our higher-margin parts of our business. And so I think that Pressure Sensitive is going to operate about where it did in the first quarter.

And we'll take our next question from Ghansham Panjabi with Robert W. Baird & Co. Mehul M. Dalia - Robert W. Baird & Co. Incorporated, Research Division: It's actually Mehul Dalia sitting -- it's actually Mehul sitting in for Ghansham. Can you quantify how much weather impacted you on the cost side during the quarter?

If you take a look at more of our fixed costs, if you're talking about -- because we have some facilities that were down and didn't have power, employees couldn't get to work. We had some higher energy costs, some freight costs that hit us, that's about $0.01. If you want to talk about volumes which really kind of make up the other part of it, we thought we would do slightly better than GDP. And so whatever the difference is between slightly better than GDP and where we ended up, I think it's kind of the volume trend that our customers were talking about and our customers were concerned with their sales. So that's about what it is. Mehul M. Dalia - Robert W. Baird & Co. Incorporated, Research Division: Okay, great. And just as a follow-up, just as you said, volumes came a little bit lighter than your GDP plus expectations. Do you think that you can make it up throughout the remainder of the year?

I don't think we'll make up those volumes because if people didn't buy those products, and most of the products we sell are perishable products, so I don't think we're going to make it up. I think we're going to continue going forward doing slightly better than GDP.

And we'll take our next question from George Staphos with Bank of America Merrill Lynch.

It's actually Alax Wang sitting in for George. Can you comment on how high-barrier volumes are doing versus some of your more commodity-like products?

We have a strategy to grow our higher-barrier products, our value-added products, and we've been talking about that for the last few years. We saw -- and actually we saw a slight bit of growth in our meat business, in our dairy business. Our problems or lack of volumes really come in more of those commodity type areas that we've been trying to shrink in the size of our company.

Understood. And then just as a follow-up, can you discuss pricing overall in Flexible, and then maybe if you could comment on high barrier in particular as well?

Overall, I think our markets are very competitive. We have a fragmented competitive base. Pricing and competition are no different today than they were last quarter or 2 years ago. They're still the same consistent environment that we operate in.

And we'll take our next question from Scott Gaffner with Barclays.

Henry, I just had a question for you. On the -- on your commentary, when you reiterate the full year guidance, you said the high end of the guidance, and I might get this wrong, but I think you said it was contingent upon FX, mostly the real volumes, and I think the third thing was productivity or margin improvement. Of those 3, which one is most impactful to whether or not you can get to the high end of the guidance and why?

I think the most impactful thing we have is the successful commercialization of our new business. Volumes are important for us now. We have to grow our volumes. And we've got a lot of good projects in the pipeline that should be commercializing in the second quarter, the third quarter, the fourth quarter. We've also got a lot of good products -- projects within our customer base that I can't talk about because they're still not out in the marketplace. But to me, it's going to be the growth of those new products and how fast and how well we execute the commercialization of those new businesses.

Okay. And if I look at your growth, and I think you mentioned this before, it looks like volumes were maybe down about 1%. GDP, on average, across your geographies is maybe up 1.5% or so, somewhere in that range. What gives you confidence that you can then get to, if you were at minus 1% volume for the first quarter to the 4% total top end growth for Packaging in 2014?

I think in the second, third and fourth quarters, we really should do slightly better than GDP. And I say that because I look at the orders we have. I look at the new products, the commercialization of business that's in line. And then you look at what happened to us in the first quarter, and those volumes are really related to our customers and their problems with the weather. And we can't change what happened in the first quarter, but you can pretty well pinpoint exactly where those -- the lack of volume occurred and why, and that weather pattern should, I hope -- I'm living in Wisconsin, I hope it goes away.

And we'll take our next question from Adam Josephson with KeyBanc.

Just 2 questions. One, Henry, with respect to the good order levels you've seen thus far in the second quarter, is that just all seasonality/better weather or there -- is there something more to it than that?

I think it's just really the seasonality. Our second quarter is generally a good sales quarter for us. You see the switch into more the summer-type products in the grilling season and all of those things. So I think the order pattern is consistent with going from first quarter to second quarter.

Okay. And just a broader question. Obviously, you sold Paper Packaging. You're closing your Pressure Sensitive plant. You closed enormous facilities last year. Should we read anything into your [indiscernible] activity [indiscernible] [Technical Difficulty]

And we'll take our next question from Chris Manuel with Wells Fargo Securities.

It's actually Gabe Hajde for Chris. One question around the plant closure in Ohio. Can you talk about any [indiscernible] for a return on that project or [indiscernible].

[Indiscernible].

Can you?

This is Melanie. You mean with regard to what we expect going forward in results of operations for Pressure Sensitive would be -- that plant was a --- sorry?

[Indiscernible] You do intend to make some x million dollars of savings from the 115 less employees or how should we think about it?

No, it's more focused on the reduction in the improvement of the underlying business going forward because it was a -- we'll call it a low margin plant that had lower production than the plant could support going forward.

I think the best -- I was just going to say, we also changed the adhesive technology from solvents to 100% solid, and that was the real driver here so that we could reach our 2020 goal of sustainability with less solvents. We moved that platform of solvent-based adhesive. We moved a lot of it over to 100% solids, UV technology in an entirely different facility. So the Stow facility became somewhat redundant and older.

In the press release, I think, Henry, you had mentioned some commercialization of new products and I've heard a couple of times on the call. Can you provide some sort of parameters around what that might look like or quantify it at a high level, how we can kind of see it flow through for the year or the next 24 months? I mean, is that a...

I don't think I can really quantify that for you in a dollar figure. These are some new products that are launched by our customers. For example, the single-serve protein snack, it's going to kind of depend upon how well that does in the marketplace. A lot of these things are not really like taken from somebody else. There are new products and new things are coming out, and I hope very much that they are very popular and a lot of people buy them.

And we'll take our next question from Al Kabili with Macquarie.

Henry, I was wondering if you could just help us with how you're thinking about the outlook on the Global Packaging side from a volume perspective for the rest of the year, as I think you mentioned sort of the price increases you've had to do on the inflationary front has pushed down volumes in Brazil, and how do you see that playing out the remainder of the year?

I think that there's a lot of inflation going on in Brazil, and it's going to affect what people want to buy, their purchasing power, how they're going to do it. I don't know how Brazil is going to do with its inflationary presence, but I would suspect that Brazil will continue through the rest of the year, much like it is in the first quarter.

Okay. And then a second question, just wanted to clarify on the guidance, are you factoring in any expected resin decline during May, June in that outlook? And in addition, from an order pattern perspective, I think you said it was sort of the normal seasonal order pattern that you've seen sort of pick up in 2Q thus far, and I just wanted to clarify, is that adjusting for the weather impact because given that weather sort of pushed down 1Q volumes, you'd probably have a little bit of a bigger-than-normal sort of pickup in 2Q that I just wanted to clarify there as well.

Yes, this is Bill Austen. On the resin front, as Henry said in his comments, we saw -- we took an increase in the first quarter as the resin guys passed through. But we have our model going forward for the rest of the year, we have flat resin pricing built into our plan going forward for the rest of the year. Now on the volume side, as you talked about weather-related issues in the first quarter, you're not going to get that volume back. I mean, that inventory is in the pipeline, so people aren't going to eat more just because there was bad weather, so that inventory is going to work its way through the pipeline. And we're just seeing our normal seasonal second quarter pickup in orders rate that we see every year. But no, we will not see an increase in orders and/or volumes because of the bad weather in Q1.

And our next question comes from Scott Gaffner with Barclays.

I think when you were going through the segments earlier in U.S. Packaging, you had talked about the volume in the first quarter. You mentioned fresh meat was somewhat pressured, confectionary, a couple others that I didn't hear. But one thing that I did notice, it didn't sound like cheese and dairy saw that much volume weakness. Can you talk a little bit more about what you saw in cheese and dairy in the first quarter, especially in U.S. Packaging? And if any of the inflationary pressures that your customers are seeing should impact volumes as we go forward?

We saw in the higher value-added processed meats, dairy, cheeses, we saw a slight growth. It was less than what we expected, but we did see a slight growth in those areas. Areas like you talked about, candy, confection, some of the personal health care, things like that, that we have talked about that are more competitive, a lot more competitive, don't involve some of the technology that we have in our company. We have been, in the past, as we closed facilities, taking pricing, walking away from some business, those markets where we aren't given the chance to earn the margins we think we need or deserve for our technology. Those were stagnant to slightly worse. I made a comment on fresh meat. Fresh meat is so small in our company. We are such a distant #2 that -- slightly up, slightly down, it really doesn't move the needle for us.

Okay, fair enough. And then just on PSM, I want to make sure I heard your commentary right. Somebody was asking about the margins in the second quarter. Were you saying that the margin -- you thought the margin would be similar in the second quarter as it was in 1Q '14? And then...

I think our Pressure Sensitive business will do in the second quarter similar to the first quarter.

And we'll take our next question from Adam Josephson with KeyBanc.

Just 2 quick ones. Henry, at what point do you expect total sales to stop declining on a year-on-year basis, assuming stable exchange rates?

If you assume a stable exchange rate, I would expect to see our volumes stabilize here in the second quarter and maybe even have a little bit of a gain. I really thought we were going to start to see our volumes coming back in the first quarter, but I didn't plan on a polar vortex.

Got it. And you touched on this earlier, but in terms of the pricing environment in North America, I think you said you hadn't seen any meaningful changes there. Obviously, your large public competitor has been vocal about raising prices in recent months. Can you comment at all in that regard?

Like I said, we really are in the process side of the business, and that competitor is really in the fresh meat side of the business where we have a very distant #2. We don't see any change in pricing patterns or anything in the marketplace.

And we'll take our next question from Mark Henneman with Mairs and Power.

I was wondering if you could talk a little bit about the investments that you've been making in your business for the last 3 and 4 years, as you've been more focused on return on invested capital, now that you've got some time. Can you give us some indication that those investments are earning a higher incremental return, now that you've had the chance to see how those investments have worked out?

Well, with regard -- Mark, this is Melanie. I think we could divide that -- if we talk about investments alone and separate out the facility consolidation exercise, we really have been focused on expanding our capacity for value-added high-barrier products. And examples of that would be the platform we have now for liquid packaging and other -- and variations on that, that are on high barrier. And then that goes around the globe.

Yes. Mark, this is Bill Austen. If you look over the last few years, as Melanie has just described, we've put in multilayer extrusion capacity into Brazil to upscale our product portfolio in that part of the world to go after the protein packaging, the barrier requirements for meat and cheese. And we've seen a nice gain in that part of the world in Brazil, specifically, around our protein platform. We've seen nice pickups there. We've actually transferred technology from the U.S. to that part of the world. We've put -- we're putting the same kind of capacity into Asia, now that we have an extrusion platform there. If you look at the recent extrusion capacity that we've put into Europe, it is for a new type of barrier film, which is a flat film to get away from shrink bags. So all of those products and all of that entire portfolio has a much better return than does confectionary packaging, if you will. So we're changing the mix through these new assets that we're putting in place around the world, and we're putting in, as Henry said or Melanie has said, to capitalize on this conversion of metal and glass containers to Flexible Packaging for the liquid categories in the U.S., which is a, for us, is a large opportunity as we go forward. And that would be for these kinds of baby foods, fruit slurries, all of those types of products that are moving out of cans and glass to flexibles. That's where our investments have gone over the last few years, and that's where they'll continue to go, as well as investing in our medical and pharma platform, as we continue to see that as a bigger part of our business.

In North America, as we went through the closing of the facilities, we really looked at our product mix, and as we've talked about in the past, took some very courageous decisions around pricing and about what business we would move. And we've been diligently working on using our assets in the more high-value and high-barrier areas rather than the commodity areas. So as we see that product mix shift, we also see a higher return on our invested capital. In addition, we are being very diligent about new CapEx spending, and we're using return on invested capital as a key component in making any decision around capital spending.

And we'll take our next question from Scott Gaffner with Barclays.

Just 2 quick ones. Henry, have you seen any change in the competitive landscape in PSM? And then just if you could give us an update on the CFO search, I'd appreciate it.

No, I don't think we've seen any change in the competitive landscape in the Pressure Sensitive business. As far as the search for a CFO, we are continuing to go through the process. We have very capable financial people here at the Bemis Company. We're not in any rush. We want to make sure that we get the right person. So the search continues, and we're very confident in the people that we have here at the Bemis Company, and we don't feel pressure to have to go out and fill that position with someone that isn't the best candidate.

[Operator Instructions] It appears we have no further questions at this time. I'd like to turn the call back to Erin Winters for any additional or closing remarks.

Thank you, all, for joining us today. This concludes our conference call.

This concludes today's conference. We thank you for your participation.