Welcome to Clearwater Paper Corporation’s second quarter 2015 earnings conference call. As a reminder, this call is being recorded today, July 30, 2015. I would now like to turn the call over to Ms. Robin Yim, Vice President, Investor Relations of Clearwater Paper. Please go ahead.

Thank you, operator. Good afternoon, and thank you for joining Clearwater Paper’s second quarter 2015 earnings conference call. Joining me on the call today are Linda Massman, president and chief executive officer, and John Hertz, chief financial officer. Financial results for the second quarter were released shortly after today’s market close. You will find a presentation of supplemental information including an updated outlook slide providing the company’s current expectations and estimates as to certain costs, pricing, shipments, production, and other factors for the second quarter of 2015 posted on the investor relations page of our website at clearwaterpaper.com. Additionally, we will be providing certain non-GAAP information in this afternoon’s discussion. A reconciliation of the non-GAAP information to comparable GAAP information is included in the press release or in the supplemental material provided on our website. I would like to remind you that this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements are based on current expectations, estimates, assumptions, and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include those risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2014 and form 10-Q for the quarter ended March 31, 2015, as well as our earnings release and supplemental information. Any forward-looking statements are made only as of this date, and the company assumes no obligation to update any forward-looking statement. John Hertz will begin today’s call with a review of the financial results for the second quarter and Linda Massman will provide an overview of the business environment and our outlook for the third quarter of 2015, and then we will open up the call for the question-and-answer session. Now I’ll turn the call over to John.

Thank you, Robin. Before I get into our second quarter 2015 results, I’d like to preface my comments by stating that throughout the rest of my remarks, I will be distinguishing between GAAP and non-GAAP or adjusted results. The adjusted results exclude certain charges and benefits that we believe are not indicative of our core operating performance. Reconciliation from GAAP to adjusted results is provided in the supplemental slides posted on our website. For the second quarter of 2015, those items netted to a $2.1 million pretax benefit and is comprised of a $1.5 million benefit related to the mark-to-market adjustments to our outstanding directors’ common stock units, a $1.3 million net gain due to the release of restricted cash in escrow related to the sale of the specialty mills, and those items are offset by $700,000 in costs associated with the close of the Long Island, New York facility. So with that, let’s get to our results. Q2 was a solid quarter with stronger than expected seasonal demand for paperboard and good operational execution in our consumer products division. As a result, we ended the quarter above the high end of our outlook for revenues, shipments, shipment volumes, operating income, and EBITDA. Improving operational efficiencies on the tissue side of the business continue to contribute to better financial results. With that, our second quarter net sales came in at $445 million. That is up 2.4% versus the first quarter and above the high end of our outlook of flat to up 2% that we provided in our Q1 earnings call. As I mentioned, we saw stronger than expected paperboard shipments, and we also saw higher parent roll shipments. That volume upside was partially offset by a less favorable price mix in both paperboard and tissue products. Versus Q2 2014,…

Thanks, John. Hello, everyone. Thank you for joining us today. I’m pleased to report a strong second quarter with results that were comfortably above the high end of our outlook. On the consumer side, the business performance continues to improve. During the quarter, we added a significant new grocery customer in the east and an additional distribution center for an existing mass customer in the west. Initial shipments for this new business will help fulfil some of the volume gap we experienced at a recently merged top five customer. Equally as important, our efforts to improve the division’s cost structure through the divestiture of the specialty mills and focus on the operating efficiencies are continuing to show up in our financial results. Compared to a year ago, our consumer products division improved operating leverage by 110 basis points to a 7% adjusted operating margin, despite a 20% drop in revenues due to the sale of the specialty mills. Adjusted EBITDA margin reached 12.5% in the second quarter, which is the highest level since Q4 2012. On the paperboard side, stronger than expected seasonal demand led to a record level of shipment volumes. We saw the typical upswing in cup, plate, and gable stock in preparation for the summer months, and initial ramp up of folding cartons for the holiday season. Now I’d like to provide an update on our strategic capital investment projects, which are all on track. First, in pulp optimization, we are still in the engineering design and planning phase and working through environmental permitting requirements. Moving to warehouse automation, our first conversion at Shelby, North Carolina, is progressing on schedule. We completed the engineering and design phase of the equipment and product flow and the equipment has been ordered, and installation is scheduled for the first quarter…

[Operator instructions.] And our first question comes from the line of Steve Chercover of DA Davidson.

First question on tissue prices. One of the big boys indicated that their retail tissue prices were down 4% year over year. So if you stripped out the elimination of the specialty mills that you sold, would your mill nets have been down approximately that same magnitude?

I think our retail prices have been fairly stable. I think what you see more of is the mix going on in our numbers this quarter with the increased parent roll shipments. And then of course we have the mix of product from conventional [tad]. And as we stated before, we have seen pricing pressures in conventional tissue, but nothing new this quarter from last quarter.

I thought you said your tissue prices were down 2.5% versus Q1.

That would be because of the mix of more parent rolls versus retail cases, an increase in parent rolls versus the mix.

That’s on a per-ton basis.

And did you say you’re going for 8% in Q3?

8%?

Price hike?

No, we gave an EBITDA dollar impact at the full run rate of $3 million in the second quarter too.

I got that, but what was the magnitude, then, of the price hike on a per-ton basis?

We didn’t give that.

There is a new entrant, evidently, from what’s traditionally been a newsprint company, that are targeting private label, high end tissue. How much of a threat is that? Is that the thin edge of the wedge for those guys?

Steve, I’d say, first of all, overall, you talked about capacity, and if you look at all the announcements that have been out there, including that company that you’re referring to, we still are in operating ranges that’s 94% to 96%, which we said is fairly balanced. I’d say specifically, private label tissue as you know is a pretty competitive business, and from our experience, a lot of our retail customers are looking for suppliers that have breadth geographically as well as product mix and quality. So I think that tends to come from companies that have a little bit more scale from the one tissue machine, but nonetheless, it’s going to remain a fairly balanced market, even with that capacity addition.

[Operator instructions.] Our next question comes from the line of James Armstrong of Vertical Research.

My first question is on the paperboard side, and it looked like shipments were higher than your boilerplate capacity, if I’m correct. Did you draw down inventory, or did the mix shift allow you to run a bit faster in that segment?

Yeah, we drew down on some of the inventory.

So that will be hard to repeat those shipment levels on a sustainable basis. Okay. And then you know, going over to tissue, what are you seeing from branded players in the market? You talked a little bit about this, but are you seeing any signs of price competition or do the branded players really just continue to use promotional activity to maintain their market share?

I would say it’s been pretty stable. We said promotional activity was down a little bit, primary seasonal, is what we would attribute that to. We’ve seen some product changes, and some innovation from the brands, which of course we are looking at and determining how we’re going to potentially adjust our quality level to meet those new products. But other than that, it’s a pretty stable market.

Thank you again for the market share slide. Are you seeing any noticeable change in the market size? What I’m trying to figure out is is the market growing fast enough that private label is just providing the additional capacity? Or do you actually seeing private label reducing branded volumes?

I’d say generally the market, we think, is growing still 1% to 2% a year. I would say that private label has grown share historically. We expect it would continue to grow share. But again, it’s modest.

[Operator instructions.] And ladies and gentlemen, that does conclude our question and answer session. At this time, I will turn the call over to Ms. Massman for any closing or additional remarks.

Thank you. We are proud of the Clearwater Paper team, who delivered a strong second quarter by providing solid operational execution, and we look forward to further increasing operating efficiency across the company. Thank you for joining us today and for your continued interest in Clearwater Paper. On a final note, we will be at the RBC, Keybanc, and UBS conferences in September, and we hope to see you there. Thanks.