Good morning. My name is Amber, and I will be your conference operator today. At this time, I would like to welcome everyone to fourth quarter and full year 2008 Neenah Paper, Inc.’s earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) I would like to remind everyone that the presentation today contain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's beliefs and assumptions regarding future events based on currently available information. Listeners are therefore cautioned not to put undue reliance on forward-looking statements as they are not a guarantee of future performance and remain subject to a number of uncertainties and other factors that could cause actual results to differ materially from forecasts. A more detailed description of these uncertainties and risk factors is provided in Neenah Paper's earnings release and filings with the Securities and Exchange Commission, which you are encouraged to review. Except to the extent required by applicable securities laws, Neenah Paper undertakes no obligation to update or publicly revise any of the forward-looking statements during the course of this presentation that include references to non-GAAP financial measures as defined by SEC regulations. As required by those regulations, if that were to happen, a reconciliation of these measures to what management believes are the most directly comparable GAAP measures would be posted on the company's Webs site at www.neenahpaper.com. At this time, I would now like to turn the call over to our host Mr. Bill McCarthy, Vice President of Financial Analysis and Investor Relations. Sir, please go ahead.

Thank you. Good morning and thank you for joining Neenah Paper’s 2008 fourth quarter earnings call. With me today are Sean Erwin, our Chief Executive Officer; and Bonnie Lind, our Chief Financial Officer. I will briefly recap consolidated results and then Sean and Bonnie will discuss fourth quarter financial performance, business conditions and actions we are taking, and our 2009 outlook. Consolidated net sales for the fourth quarter were $147 million in 2008 and $193 million in 2007. Both Fine Paper and Technical Products saw steep declines in end-use market demand that was exacerbated by inventory destocking in customers. Operating earnings similarly dropped as we responded to the lower volumes with significantly reduced operating schedules in order to minimize spending and optimize cash flows and inventory levels. Fourth quarter results in Technical Products included a $55 million charge for impairment of goodwill and other intangible assets. This charge is largely non-tax deductible and approximately the same on a pre- and post-tax basis. While our outlook on future earnings from our German business hasn't changed significantly, accounting rules for impairment testing require future cash flow projections be discounted back at rates and valuations that reflect current unfavorable market conditions and higher cost of capital. Excluding the goodwill charges and a $4 million adjustment to current year tax expense, we reported a loss from continuing operations of $9.1 million or $0.62 per share in the quarter. This compared with earnings of $1.4 million or $0.09 a share last year. Discontinued operations had a fourth quarter loss of $700,000 in 2008 and $24 million in 2007. The 2007 loss resulted from a non-cash charge for final settlement of our Ontario pension plan. Despite these losses and a difficult economic conditions, we generated free cash flow of more than $6 million in the quarter which was used to pay down debt. I would like to now turn things over to Sean.

Thank you Bill and good morning everyone. Our last earnings call was November 06 in 2008. To say that things have changed since then is stating the obvious. In that call, we said orders were looking soft and that we would adjust operating schedules in the fourth quarter. We also said that we expected pulp and other raw materials to begin to decline. It turns out actual market softness and input cost declines have both been much more dramatic. The actions that we said we would take in response to the economic situation were executed by our teams. Our actions and responses have resulted in us improving free cash flow in the quarter and paying down our debt. I remain confident in our ability to whether these current conditions. Our liquidity position remains acceptable and our teams are doing the right things, taking further actions to cut costs significantly, while continuing to work closely with our customers to provide the service, support and products they need. Let me share some comments on each of the businesses. In Fine Paper, demand for uncoated free sheets fell 14% in the fourth quarter and 8% for the full year. The decline in printing and writing paper markets over the past few months have been correctly called unprecedented and compares to historical annual declines averaging around 2%. Premium writing, text and cover may have fallen even more as key end-use markets such as the financial sector, automotive and real estate have been at the epicenter of the economic downturn. Consequently, the industry continues to consolidate both in terms of competitors and capacity, which is painful but necessary. Ultimately, only the strongest firms will succeed and Neenah Paper has the power brands coupled with the go-to-market knowledge and operating capabilities that support customers in our…

Thank you Sean. I will lead off with a few general comments, then go through segment results and then wrap up with corporate finance topics. The primary reasons for the decline in profits in the fourth quarter were significantly lower volumes and unabsorbed costs related to significantly reduced operating schedules. Combined, these two had an impact of almost $20 million in the quarter. In addition, input costs in the fourth quarter were higher than last year by $6 million, but prices have started to drop and we will benefit from this in 2009. List prices per ton for northern softwood pulp were $780 in the fourth quarter and our estimated average $680 in the first quarter of 2009. Prices for latex and energy also have fallen substantially. While more of our German contracts had fixed prices including a portion of their pulp purchases, overall at the company we expect to see a very substantial benefit from lower input prices in 2009. And finally, Bill already noted the Technical Products $55 million goodwill impairment charge, so I won't go into much more detail other than to reiterate that it is non-cash and it is largely non-tax-deductible. The impairment is a result of discounting future cash flows with substantially higher cost of debt and equity that are reflective of current financial and market conditions rather than a shift in our long-term expectations of cash flows from our German operations. The write-off represented slightly more than half of our reported goodwill. Moving on to the segment results; Fine Paper net sales were $72 million in the fourth quarter versus $95 million last year. The decline in sales reflected an uncoated free sheet market that experienced its steepest quarterly decline ever. End uses such as, advertising and corporate identity documents, particularly for the financial,…

Thanks Bonnie. I will wrap up with just a few items. Let me start off on safety. We are extremely proud of our teams at the mills for their performance this past year. We reduced our reportable incident rate from 2.0 to 1.8 and we’ve had significant improvement in a number of facilities like our Ripon, California mill which has now gone well over a year without any injuries. Safety performance for Neenah is well above the industry standards and our teams continue to improve on this despite having to deal with reduced operating schedules and the uncertainties of today's economy. We listed a number of items in our press release about our 2009 outlook, and Bonnie covered some of these already including capital spending, pension and taxes. We've also talked about the very significant declines in input costs that are now occurring including pulp our largest raw material which is already $250 per ton of last year's peak price. While the amount of input cost savings is volume dependent, we should recover a large part of the $25 million of input cost increases that occurred during 2008. Balancing this will be weak markets and volumes, especially in the first half of the year coupled with the cost of downtime. While we can't predict with any accuracy what will happen with volumes, I am confident that what we are doing to reduce spending and maximize cash flow will deliver important benefits and we intend to continue to use our available cash flow to pay down debt. We also plan to continue to pay our quarterly dividend of $0.10 per share, which obviously provides an attractive yield at today’s stock price. We have accomplished a lot in the past year, completing the Fox integration and transforming Neenah into a pure premium and specialty paper company with the sale of the Pictou pulp mill last June. In fact, if we still had our pulp mills, I'm sure we'd be having a very different type of call today. Our remaining timberlands represent an important non-core asset and we are continuing with our efforts to unlock their value and still believe a sale is probable. I hope you have sensed our teams are very focused and are up to the challenges of the current environment. We are taking appropriate actions to address costs and cash flow in the short term while continuing to execute strategies that make us a leader in the markets we serve. These strategies and actions are intended to generate future value for our customers and our shareholders, and our teams remain committed to this joint success. Thank you for your continued interest and investment in Neenah Paper, and I’d now like to open up the call to any questions that you may have.

(Operator instructions) And your first question comes from the line of Mark Weintraub with Buckingham Research.

Good morning, Mark.

Good morning. First if we could just get a little bit more color on the input costs situation, and where things look today reiterative to where they were in the fourth quarter. I think you indicated that in pulp, the list price was about $100 per ton lower than in the fourth quarter.

That would be an average quarter to quarter.

Okay. So can we just take your approximate pulp consumption, which I imagine it was 55,000 tons or so a quarter in this environment? A little lower?

Lower. Yes, I would go a little lower. You know, it will be significant there. We do have a couple pulps, Mark, more of the specialty pulps, mercerized pulps that are used in filtration that the pricing doesn’t necessarily follow receipt because it is a specialty pulp. But that’s maybe 12,000 to 15,000 tons of the total. The rest should follow the market.

12,000 to 15,000 of the total annual or quarterly?

Annual.

Okay. So, I mean order of magnitude, if we take 40,000 times by 100, we should get approximately the quarterly benefit, is that fair?

That’s a fair math. And you follow this probably as well as I do. There has been quite a bit of movement since late last year. With current prices, list prices at least down in the low 600, 630 or so. Keep in mind our fine paper business uses more hard wood than soft wood but the hard wood prices have tracked at the same time.

Okay. And then if we think about latex energy and any other big movers, what parameters can you layout to help us analyze the magnitude of benefit you can get from this as we look at the first quarter to start with versus where it was in the fourth quarter.

Latex I think we said with our second quarter call last year, we were getting in some cases two price increases a month. I think it was at the beginning of May and end of May, and so that went up dramatically and is coming down pretty quickly. I would expect quarter to quarter you should see 25% to 35% reduction. Keep in mind, in total I think our latex is second behind fiber in total corporate raw material costs. We spend just under $40 million a year on latex.

Okay. So about $2.5 million benefit in latex? 1Q versus 4Q?

I have the calculator and I’m never going to challenge your calculations. You know that.

And then energy going to be also a fairly significant mover?

Yes, more so in North America than Germany. In Germany there is more annual contracts. Munising, keep in mind the major fuel source at Munising is coal. We produce our own electricity and coal prices are negotiated earlier in the year. We only get delivery through the early fall. So we won't see significant declines in US Technical Products until later this year but those will be significant. Full year I believe our energy price cost us $8 million in '08 versus '07.

I guess what I'm trying to figure out is in the fourth quarter you lost $16 million pretax and you layout for us some of the operating costs improvements you are hoping to get. We’ve talked about some of the input costs improvements, I guess I still don't – unless you are going to be taking less downtime – meaningfully less downtime which I didn’t get the sense from the presentation you just gave – it would seem that you are still from an earnings basis going to struggle to get to break even in the near term. A, is that would you say that is true? And B, that seems to not foot with your statement that you don’t expect to pay cash taxes on your North American profits because obviously you got to be making profit for that statement to be meaningful.

The first quarter isn't going to be the fourth quarter. There was a lot of shock in the fourth quarter, especially later in it as the situations we are experiencing spread to Europe. As I mentioned – I think as Bonnie mentioned in her comments – downtime when you take it in Germany, early on it is very difficult to shed costs. You in effect get into a gardening leave approach where you continue to pay the wages even though the operations are down, as Bonnie highlighted, there is government support for that that has now kicked in. So we see the benefits much more so in the first quarter than we would have in the fourth. We are – I'm not going to say that the volumes, Mark, are kicking back quickly. We have worked very closely with a lot of customers. We are seeing a few bright spots. We are prepared for low volumes. We have made the necessary changes in the mill to reduce our cost structures in the mill. And between our cost savings and our raw material input savings and the changes that we have made, we are pretty comfortable that we won’t see a repeat of the fourth quarter. The programs that we implemented – I mentioned them briefly in the comments. We finalized our budgets in early December. At that time we were predicting raw material input cost decreases, but we knew volumes would be threatened. But it was because of the uncertainty looking forward and the difficulty in predicting that we went ahead and implemented the further programs that we summarized. Some of the comments, where we froze salary, head count, implemented other savings that we think really is the insurance that we needed to deliver performance in 2009.

And I appreciate, Sean, that given all you’ve discussed, first quarter is not going like fourth quarter. I guess I was just trying to sense whether or not you think you have taken enough measures that you can now be profitable in this type of environment. And clearly, you can be free cash positive given the things you are doing. But can you actually be profitable from a P&L basis or will additional measures need to be taken to achieve that and/or help from market forces.

As you know going back a few years, we don’t give guidance. We’ve actually said more on this call in terms of some of the outlook and details, Mark, I think you would agree than in past. But this is a unique time for many people in manufacturing industries. We are not going to sit here and feel good and sit on our hands saying we are generating cash. We are happy not to be profitable. That's not what this is about. So we will do whatever we can to deliver results for the corporation. I'm not going to give you guidance on it. But we are not sitting waiting for the markets to improve.

Fair enough. I appreciate that. Obviously, what happen in the fourth quarter was probably a bigger surprise than we have seen in prior periods. So to the extent that any help to understand how much of it is under control now versus how much of it is a new plateau level is much beneficial.

That's a fair comment.

The other question – I just wanted to follow-up on – you mentioned briefly, Bonnie, on the fixed charge covenant. Could you just go into a little bit more detail of what they are and under what circumstances we have to be thinking about them?

The fixed charge coverage ratio, that's on our ADL. And like we said, that was really an availability trigger. We don't have any covenant the kind of things where you have to maintain so much EBITDA or anything like that. We do have availability triggers at various levels that would restrict our ability to do certain things. So, for example we had really over $50 million of availability at the end of the year. And if we were to have less than $35 million for 60 consecutive days, that would restrict our ability to pay dividends. If we have – the next thing that would affect us is the availability would have to drop to below 25 before we would be in a testing position to where we would have to test that fixed charge coverage ratio.

Okay. And just to clarify, two things on that. One, when you talk about the availability, is that just a function of unused capacity or are there – is that a calculation as to figure out what the availability is dependent on a bunch of different variables?

It is not hard, Mark. It is based on your borrowing base. And primarily our borrowing base is in accounts receivable – it is a working capital line as well as we get some extra capacity from fixed assets. So, we look at what those numbers are at the end of every month and then compare that to what we’ve drawn on our ADL and the difference is what you have available to draw.

Okay. I'm not going to get into it here. But is there somewhere where I can see what the various tests are below the $25 million. Is that public?

It is in our K.

It is in your K? Okay. Thank you.

It is only the one test but you will see it in there.

And your next question comes from the line of Aaron Rickles with Oppenheimer.

Thanks, good morning. I guess to pick up a little bit where Mark left off. I guess trying to understand the downtime a little better and sort of how you managed your production to demand levels. Can you give us a sense, do you think that you were overly aggressively in terms of trying to stem some of your production, and how did that relate to what you actually saw from your customers, I guess as start. And then if you can give us a sense of what you’ve been doing in the first quarter and how that would compare to the fourth quarter in terms of downtime?

We did move pretty quick. I think one of the reasons that we were able to is to manage the information and make decisions with the – since we have implemented the Oracle ERP system. It’s given our team’s enhanced capabilities in understanding each mill and each machine and the best way to optimize the manufacturing footprint. So, we did move quick in the fourth quarter to take the downtime as necessary because we do have the available capacity when demand picks up to produce the inventory at that time quickly. And so we moved quickly I think in line with demand though as the fourth sales numbers reflect, it was some significant declines as our customers destocked. We did a lot of things, obviously and you heard Bonnie talk about it in terms of to build up cash and to make sure that liquidity was maintained in the fourth quarter. I think we are all smart enough to know our customers and in many cases their customers did the same thing. So this is behavior that has moved throughout the entire supply chain. And so there has been a lot of destocking that has taken place that will obviously have to be replenished, in many cases even before there is significant recovery in the economy.

That's helpful. And I actually wanted to touch on that in a second. Can you tell us at least through the first couple months of the first quarter how the mills have run in terms of downtime. Is it comparable to what we saw in Q4?

We are still taking quite a bit as I mentioned in Germany the cost will be quite a bit less. The automotive industry in Germany and then our filtration customers, their downtime was for – really from early-to-mid December carried into January. So, we carried into January also. It is safe to say that the operating rates are higher but we are not in a position to predict annual operating rates at this point. We hope and we expect them to be better but we will be responsive to the market.

Is it fair to ballpark if you basically absorbed $10 million in downtime cost impact Q4, maybe it is going to be 5 kind of range, give or take Q1?

I'm sorry. I am not going to give you that.

Fair enough. (inaudible).

We do think in terms of the input costs. Those you can put into a calculator. Those are real because those are market prices. Downtime we will take as necessary and we are not going to take any more than necessary.

That's fair. Can you comment then – talking about the volumes a little bit and the customer destocking. Is there a way to sort of quantify the volume declines and maybe break that into at least what you think is customer destocking as compared to overall just general demand –?

Yes, we've talked to customers – we have always been close, but the relationships are much closer than ever. I think if you look at published industry data in North America, the printing and writing markets, you are not seeing a significant recovery. I think both January in total printing and writing was more than 20, February I think the preliminary numbers are 20. So it's continuing. One of the benefits though that actually we are seeing is having a branded product when it is specified, we are still selling our leading branded products. And so we are seeing some improvements in mix and those are also tend to be the higher priced products. So even though the volumes may still be suffering, we are seeing some improvements, realizing improvements due to the products that we are selling.

That's fair. There is no way to say if your volumes were down, 24% and 25% in Q4, half of that you think is destocking maybe on the Technical Products? Can you just give us a little more color to understand how it’s going to go forward?

And it really depends, markets that you get into. I think even within Technical Products we are seeing different behavior in different product categories, and candidly in different regions of the world. It hit first in North America. We've seen Europe came on later. We are seeing some changes in customer behavior depending on who their customers are, some are very, very close to the automotive industry and if they shut let’s say 40% of their capacity. Other ones it is much smaller. So we are making sure that one, we don’t lose share in this; and two, we are getting through our organization and our sales and marketing folks in particular, I think what is happening right now – it happened in the fourth quarter and in this quarter – customers are going to remember this good or bad for the next 10 years or so. And we are going out of our way to strengthen these relationships to support them. As Bonnie mentioned, the quality of our receivables is very good. We have premiere customers. Our days sales outstanding, we have been reducing it and our customers have been great. They have issues but we are working with them. And I think this is just going to strengthen relationships. So I can't tell you when the recession is going to end, but I will tell you when it does, we are going to be in stronger shape than when we went into it with good liquidity throughout it.

Thanks, I will pass it on. Good luck.

Your next question comes from the line of Joe Stivaletti with Goldman Sachs.

Hi Joe.

Good morning. Just to pull some of this together, on the input cost side of things, you are talking about sort of market sizes for pulp and things like that but of course with some of our companies it takes a while for some of that to flow through their inventory and their cost of sales. So I was just sort of wondering, I mean, are we really going to see significant impact, should we expect to see significant impact in the first quarter from lower input costs for pulp and chemicals and things or is there going to be a big lag?

Excellent question and the answer is yes. You didn’t see a lot of it in the fourth quarter, I have been around long enough and have been surprised enough over the years that prices go down, pulp prices for instance drop, I get giddy about the impact but then you find out that quarter the accountants say okay, you got to revalue your inventory down now and so your pulp is going down and your costs are going up. We have been through that, we have lived through that in the quarter, we have lived through and we offset most of that with LIFO adjustment. So we really did not see dramatic impact from the fourth quarter but it is going to begin to happen. This quarter as I mentioned in some of the comments the technical products team in the US did a very good job of driving down working capital dramatically and so they see even quicker impacts because they flushed it through right away.

Right. And then on the volume side, it does not really sound like there is any reason or you have not really seen any kind of pressure on volumes subsiding at all it sounds like as you got into ’09, I mean I know the published numbers we’re not really seeing kind of better news month to month but it sounds like it is still pretty tough going, there is no real signs of, major signs of optimism there right at the moment.

As I mentioned either during a question or in the comments that I am not going to disagree with you Joe but also our teams are not sitting on their hands. They are not sitting there saying, okay, let’s just ride this thing out and take advantage of some lower input cost. They are very aggressive and working with customers and programs and plans both from products and processes and information to win in this market and I could not be happier with what I see the team coming up with. So we are not sitting still.

Right. And then just to clarify, in your release it says that downtime cost in the first half of ’09 is expected to be higher than ’08, does this mean higher than in the first half of ’08 or higher than what you just experienced?

Yes. I think it is true, it is actually true, if I look at the analysis, they have changed numbers through the first six months of ’08 if you take a fixed cost absorption number it was actually positive and we really, the fourth quarter I mean is when we really bit the bullet with downtime.

So we might see some improvement from that side of non-absorption level–?

And keep in mind we are also talking about capacity and headcount. And so as we reduce capacity and take out the cost, the cost of the downtime declines also but in overall downtime and just business condition, I don’t think anyone is saying that the first six months of ’09 is going to better than ’08.

Right, right.

Actually I am looking forward to the fourth quarter because (inaudible) the fourth quarter is a hell of a lot better–

Right.

But I am not going to make that prediction on the first six months.

So switching gears, what is going on with the sale at timberlands, I mean where does that stand, what kind of timing shall we be thinking about, and also given all the changes in the economy and the environment what do you expect to use the proceeds for?

Well in the short run, let me answer that in reverse order, the immediate plan would be we would just pay down debt in the short run. We know that there are other opportunities obviously that we are always looking at but immediately we would pay down debt. Remember we announced about a year ago that we are moving forward on Pictou. We said at that time we are going to do two separate transactions the mill and the timberlands because, as we evaluated it, we felt that that was the best way to capture real value for shareholders rather than bearing the timberlands and the mills sale, the mills sale was just completed about eight months ago. It was hard to do the trees without doing the mill because the tree buyers want to see who their customer is to be able to evaluate that. We completed that, we are working on the trees, obviously late in the year with what was going on both in the equity and credit markets some of the potential strategic buyers of the timberland slowed things down but it is still an attractive market. This is the mill when you think about what a tree buyer wants this has a predictable cash flow with a long-term stumpage agreement to a pulp mill that has as its major customer on a taker [ph] pay basis a tissue user that is a pretty stable demand and so it is an attractive cash flow situation and we are confident that a successful sale will take place. As Bonnie highlighted in the past, the tax benefit of this to our shareholders is going to be huge because there won’t be taxes on it, so we are pushing forward and if you are interested give me a call.

So it is a ’09 event most likely.

The 10-K will say to have assets held for re-sale the accounting requirement is that a sale is probable within the next 12 months and we have reviewed the situation with our auditors and they agree with their assessment.

Okay, Bonnie, so the bank revolver is a $210 million facility, say you got about $50 million available for drawing, what is your outstanding on that as of the end of December, what have you drawn on that?

$101 million was drawn.

Okay, alright. And then just to clarify on the pension, you say in the release that your cash contribution will go from $7 million to $11 million this year and your pension expense will go up similarly, what was the expense in ’08 just with the–?

For just the defined benefit pension plan itself Joe the expense was $3 million and it will go to $6 million. We are talking about a few other things just for the US and that is where the contributions that we were talking to you about. But if you look at pension OPEB that whole related topic, we had expense of $11 million in 2008 and we expect it to be $4 million higher in 2009 and then we had contributions of $12 for everything, you know I could say contributions and payments. So that is why when you look at the whole universe, pension OPEB is on like the German pay-as-you-go type of thing, all in then what we expense and what we contribute our pay will be about the same.

Okay so total payments were about $12 million this year and this includes everything globally.

Right.

Okay, yes that is helpful. And the last thing that I had was just one little clarification, when you talked in your release about your technical products business and you said there is some one-time write-offs and I did not know if that was of any significant–?

No it was just some obsolete assets in the mills in Germany in the quarter.

Okay, thanks a lot.

Thank you Joe.

Your next question comes from the line of Jonathan Lichter with Sidoti & Company.

Hi Jonathan.

Hi, good morning. Talking about the timberland again, I know in the past you have said that you would consider an option, are you any closer to that or do you think you will sell it just regularly?

Yes, one way or the other, I mean we are very active in things right now and as soon as we have – we are not going to announce anything until we have a definitive sales agreement, our purchase agreement that is financed but if we sign an engagement letter in an auction that is not something that we disclose. So we know all the options and we are pursuing what we think will get the most value for shareholders and with some certainty we want to move forward. Did I lose you, hello?

Yes.

Oh sorry.

Okay, earlier you had mentioned there were some relative bright spots, can you talk about which industries you saw that in or which areas, the reason?

Relative to good work, as I mentioned in the comments, we are not seeing declines in our medical packaging business, as a matter of fact order entry looks a bit shaky [ph] interesting I was in Germany last week and I will give you a little anecdotal information that you may find interesting, the backlog that we had in security papers in Germany was down near record levels and we started talking but it is not a huge piece of business in Germany but what they have done in Germany is to support the auto industry is a car that is nine years old or older you can turn it into the government to be crushed and they will give you a coupon for 2500 Euros off of a new car and with the feeling being the new cars are both more efficient and environmentally from an emission standpoint and the manufacturers are depending on the value of the car you are buying, they match that and so new car registrations in Germany shot up in February and we supply a durable paper. So we are seeing in so many words a German stimulus program that we are beginning to benefit from. As we talked about technical products, remember in the prepared comments we said that in areas of like filtration we had a very good year and through the first three quarters of last year we were up 7% and then with the fourth quarter it ended flat for the year, essentially flat for the year. So I think when we get through the shock of some of the downtime that was taken by our customers, we would expect to see some benefits going forward.

Okay.

We have a good position with our customers.

Have you seen any price pressures at all, are some of your customers coming back for lower prices?

Our price increases lacked the input cost increases and in some cases prices just went up in January of this year due to contractual things done late in the year. I would expect some pressure. We have good relationship with the customers, they understood what had happened to us last year, and as I mentioned in the comments, we have some contractual ones, so I would expect some pressure but I think it is also one of the benefits of having specialty products as well as branded products, they don’t necessarily behave like a commodity.

Okay. I was just looking at the SG&A line, why was that about $3 million sequentially? I know it was down year over year but–?

SG&A third quarter to fourth quarter.

Yes SG&A typically has been running at a range of about $19 million a quarter. When I looked at it, it was up $1 million so let me see what you are looking at.

We announced Bonnie in the third quarter we did take some adjustments to the vacation policy the benefit of the quarter a little bit about $3 million.

Yes.

So, I will tell you what, we may come back on that.

I was looking at average.

We will come back to you on that question. We don’t have the full analysis of that.

That is what it was John, it is timing I am looking at SG&A, the third quarter did reflect certain things like the change in vacation policy as well as other spending reductions that were – a lot of it was timing related but when you look at it Q4 like in $20 million for that quarter, the 2008 run rate is $19 million and then our expectation is $19 million. So I would say that Q3 was more of an anomaly and that Q4 is looking more like where we expect it to be on run rate.

Okay. And then just lastly, when does it not make sense I guess anymore to pay the dividend, is that constantly reviewed or what is it?

We discussed that as part of the strategy both internally and with the board. Obviously there is a high yield on it right now, very high yield. We think it is a fair dividend so our opinion is it is more reflective of a low stock price than a high dividend and we are prepared to continue to pay it which we think is a reasonable return to the shareholders and hopefully the yield will decline and the stock price is going to increase. But we don’t – I mean if we believe that long term we are a $5 company, it probably is too high of a dividend but that is not our belief.

Thank you.

Your final question comes from the line of Jean Goldberg [ph] with Wachovia Securities.

Good morning Jean.

Yes, how are you doing? Actually I just had a question about that dividend as well, I was wondering that maybe (inaudible) happen to answer that and also with the timberlands how much do you think because of this economic crisis or whatever they call it nowadays, do you think the actual value has de-valued, what do you think it was worth then and what do you think it is worth now?

We have never gone public with those valuations. I think you can – there is plenty of market data out there, we think that is significant value to our shareholders to proceed on it. Our projections, you know, we are getting stumpage payments on the use of the woodland, the timberlands by the pulp mill and it is based on a market rate and long term that is $5 million to $7 million a year and we think selling the timberlands would be worth more to shareholders than that earning strength.

You are not necessarily going to sell – you want a favorable price, you are not just give it away.

This is true and I think that shareholders will be pleased when we complete the transaction. If you do go back and look at what we sold the first half for in 2006, I am not going to predict that we are going to match or beat that number valuations have come down plus, as we disclosed at the time, there were some timber agreements along with that fiber supply agreement that really increased the selling price of that timberland. This will be more of a plain vanilla transaction because we already have the stumpage agreement with the pulp mill and that was established and we sold that and the new owner would be accepted and would want to accept that contract which is a market driven contract.

Fair enough. Thank you very much.

Thank you.

At this time there are no further questions.

Well, thank you for joining us, good questions, we expect to discuss the first quarter earnings in early May and we look forward to reviewing our progress with you at that time.

Thank you for participating in today’s conference. You may now disconnect.