Good morning, my name is Bridgette, and I will be your conference operator today. At this time, I would like to welcome everyone to the Neenah Paper Fourth Quarter and Year End Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, February 19, 2014. Thank you. I will now turn the call over to Mr. Bill McCarthy, Vice President, Financial Analysis and Investor Relations. Please go ahead, Mr. McCarthy.

Okay. Thank you. Good morning, and thanks, everyone, for joining Neenah's Fourth Quarter Earnings Call. With me today are John O'Donnell, our Chief Executive Officer; and Bonnie Lind, our Chief Financial Officer. I'll recap a few items and then John and Bonnie will review business activities and financial results in detail, as well as provide comments relative to 2014 expectations. Following our prepared remarks, we'll open up the call for questions. We released results yesterday afternoon and reported earnings per share from continuing operations of $0.78. This was up 30% compared with adjusted earnings of $0.60 per share in the fourth quarter of 2012 and marked our strongest fourth quarter ever. For the full year, adjusted earnings per share were $2.93 compared to $2.78 per share in 2012. Increased operating income and reduced interest expense in 2013 more than offset an $0.18 per share impact from a higher tax rate. With lower integration costs in 2013, GAAP earnings increased even more, growing from $2.41 to $2.96 per share. Adjusted earnings are a non-GAAP measure and are reconciled to these comparable GAAP figures in our press release. Finally, as a reminder, our press release and call today contains forward-looking statements and actual results could differ materially from these statements due to risks and uncertainties described in detail in our SEC filings and in the Safe Harbor disclaimer contained on our website. With that, I'll turn things over to Bonnie to discuss fourth quarter results.

Thanks, Bill. In addition to reviewing the fourth quarter, I'll also provide some comments on our outlook for certain corporate items in 2014. As Bill mentioned, our businesses delivered a very strong fourth quarter with volume-driven top line growth of 6% and improved operational and cost performance that helped boost earnings by 30%. Each of our business segments contributed to these results, and I'll start our review this morning with Technical Products. Sales of $99 million in the quarter were up 4% compared with last year. Filtration continues to be a key driver of results and delivered double-digit growth in units and in sales dollars. In addition to share gains and growth in Europe with an improving economy, international revenues grew 24% and sales of our advanced filter media increased by 17%. In other product categories, sales of abrasives and industrial products also grew strongly in the quarter and helped offset some of -- some slowing in labels and tape. Of our total sales increase of 4%, volumes accounted for 3% and the balance reflected favorable currency translation from a stronger euro, partly offset by lower average selling prices. Prices fell for certain products with contractual price adjustors that move with input costs, as well as due to some competitive conditions in some of our markets. Operating income topped $10 million in the quarter, up more than 60% from $6 million in 2012. Income grew as a result of higher sales, but more so due to improved costs and manufacturing efficiencies. In addition to very good operational performance, manufacturing costs were helped by increased production schedules in Germany where economic conditions were on an upswing at year end compared to a more cautious environment in 2012. Input costs were mixed, but lower overall with higher pulp prices being offset by…

Thank you, Bonnie, and good morning, everyone. As Bonnie described, we ended the year on a strong note, helped by a recovering economic environment, but our success was ultimately due to solid execution of top line initiatives that improved the operational performance. For the full year, sales of $845 million increased 4%, while adjusted EBIT was up 6% and adjusted earnings per share grew 5%. Each of our businesses contributed to the success, with volume-driven top line growth and improvements in manufacturing operations that offset higher input costs. In fact, our teams were able to grow our top line while improving both operating margins and return on invested capital, which is not always an easy task. At around 12%, our return on invested capital remains well above our cost of capital, and we continue to use this as a key criteria in our business decisions. There are a number of activities in the past year that supported our 3 strategic priorities, contributed to our results in 2013 and will benefit us going forward. Our first strategic cornerstone is to develop and grow meaningful positions in profitable niche markets. In filtration, we grew globally in core transportation filtration media, while at the same time, expanded into market adjacencies that require advanced, high-performance materials. To support this growth, we successfully started up our third nonwovens meltblown line early in the fourth quarter. This asset has the ability to handle and blend a variety of polymers to meet customers' needs. Our technical capabilities, coupled with a reputation for innovative products and high service levels continue to earn us the opportunity to grow share in filtration. Specialty backings comprised of tape and abrasive products are another key market for us. In 2013, tape revenues grew 8% as we successfully recovered share by increasing our…

[Operator Instructions] And your first question comes from the line of Mark Weintraub with Buckingham Research.

The first question was on the M&A side, when you think about debt carrying capacity, what type of metrics should we consider?

Yes. So our targeted range, Mark, is 2x to 3x. We've indicated that we would be willing to go as high as 4x, but not hang out there for very long. So I think it's pretty safe to go in that 2x to 4x range.

Okay. So up to 4x debt-to-EBITDA?

EBITDA. Debt-to-EBITDA.

Okay. And is it fair to say that given the borrowing capacity that you have, even if you were making an acquisition in some of the higher multiple areas, which you're talking about, that it should likely accretive from the get-go?

That would certainly be our expectation.

Okay, great. And then just shifting gears a little bit, there was a fair bit of capacity closure in the commodity side of the uncoated free sheet business. Obviously, you don't, in general, compete directly there. But is that having any knock-on -- any positive knock-on impact for your business, and maybe provide a little color there if you could?

Yes. I would suggest that it's definitely following what's probably in our segment has already been the consolidation and rationalization. But most and many of those products are sold through the same forms of distribution, whether they're in retail or they're in the merchant channel. So I think, if nothing else, it helps those channels of distribution pick who they want to line up with as they move through rationalization. So it's got a positive effect, I would suggest. Although we don't see -- as you highlighted, we really don't compete with those commodity markets from that standpoint, but we do share customers.

Okay. And just one last one if I could. The technical specialty business did a fair bit better profit-wise than I'd anticipated. Can you maybe put a little bit more color as to were there any surprises there and what were those surprises? And/or if there were no surprises, what were you delivering on that you had anticipated?

Yes, I would say a couple things on the Technical Products side. Early in the year, when we talked about operational challenges, that really was a Technical Products business. So I think an element of it is not only restoring to where they have historically been; they ran very, very well across all of our facilities. I also mentioned, especially in our German facility where we're going to add capacity next year in our filtration business, they continue to operate even more for -- full than we probably historically would have in the fourth quarter to ensure there'll be no customer interruption or challenges as we move into 2014. I think those are probably larger drivers, so good operating performance.

And your next question comes from the line of Jonathan Tanwanteng with CJS Securities.

Just a little bit more on the margin side. Obviously, you closed out the year on a very high note. Just on gross and operating margins, how sustainable is that? And is there more low-hanging fruit for you guys heading into Q1 and 2014?

Boy, as hard as it felt, I don't believe low-hanging fruit's the way I would describe. But we do have expectation that for each of our businesses that they would have double-digit margins, because we participated really in defensible performance niches from that standpoint. So our margins have remained in the mid-teens in our Fine Paper business. And I'll tell you, I'm as giddy, if that's an appropriate word to use, on their ability to not only grow, yet maintain those mid-teen margins. Our expectation for the Technical Products business is double-digit will continue. We believe that will provide the great returns to continue to invest behind that business going forward.

Okay, great. And then maybe just a little bit more color on the M&A side. Can you just give us a little more color on the pipeline and maybe the general size of the opportunities and valuations that you're pursuing? Are they reasonable at all?

Yes. I think that we -- I might have mentioned in the transcript, I believe I did, that the process, besides being disciplined, it's fairly robust. So there's -- we have a number of candidates and I'll communicate and talk about M&A opportunities as we come to opportunities for announcement. In the last call, we talked about the size of our risk appetite. As how big they may be, we're seeing opportunities. It's probably more difficult finding the right acquisition than finding the -- a acquisition -- or an acquisition. So I think what we've demonstrated, and I'm hoping you view it as patience, is that we are committed to ensuring that you cannot make up for overpaying for a company. And we're going to make sure that we find the right long-term solution for us. I'm not discouraged at all by any means, and feel that we're in a really good place to find the right opportunity.

Okay. And then finally, in the past year, you added the new meltblown line. Heading into 2014, your CapEx is going to be roughly the same. Is there a specific project that you can point to that is accounting for the similar level of spend? I know you talked about the German filtration expansion.

Yes, that's fair. And as we've said in the past, really up to $30 million in capital spending, that's really $25 million to $30 million is where we've historically talked about our capital spending. Bonnie mentioned $10 million of it is in sustaining, so the rest, really, are cost reduction and growth. The growth projects continue to get our priority. And then the cost reduction have to -- the highest returning project moves to the top of the line. So it's important for us as we look, we look out 5 years and we make sure we space these and more major projects where we can feed those into consistent CapEx spending. So the meltblown that we did really into '12 and '13, this filtration project that you've talked about, which is a rebuild of one of our paper machine, will be the more major projects in 2014, in addition to strong cost-reduction activities that we have in Fine Paper now that we've integrated the last 2 acquisitions that we made there.

And your next question comes from the line of Steven Chercover with D.A. Davidson.

I, too, was interested in margins. I mean, these EBITDA margins in the upper teens sounds like they're certainly sustainable. But from an aspiration standpoint, do you think you can get a 2 handle in front of those at some stage?

I'm probably famous for my silly sayings, but up and to the right is one of them. I'm not going to commit to any 2 handle on this call. But what I would suggest is that I continue to be impressed, both with the organization's understanding on what activities really drive meaningful value and their ability to continue to improve the margins. And it sounds like others are pleased with that as well.

And the mix, as you move more into the premium packaging and gift cards, would that see -- would that come at the expense of other Fine Papers? Or is there actually going to be some capacity creep?

Yes, what I would suggest on -- what we're trying to do is we're -- we want to, obviously, have our portfolio filled with the highest-returning. So if Fine Paper is in decline, then it's really not the expense of it, because it wasn't available. From our standpoint, we believe the packaging market has a lot of growth opportunities, opportunities for us to repurpose those assets, from that standpoint. I wouldn't view it as at the expense of it as we are just stepping into this market, really understanding where can we have lasting value. There's always room for managing our marginal business and we do that across our entire asset base.

Okay. And then staying on margins but switching technical specialties. I mean, you said -- sorry, double-digit margins are the objective. Again, can they approach the mid-teens, kind of where paper has been the last few years?

Yes. I take great resistance at comparing the kids, and I think that Fine Paper business, which is consolidated and is really predominantly branded. And I think that's really key. And that mid-teens, it's best compared to other paper alternatives. That's, I think, the easiest one from that standpoint. It's nice having that aspirational target right here in the building for that business to continue to look at and to understand where they can go. But I'd be hard-pressed to say that because Fine Paper's in double-digit, that Technical Products would be. In fact, I would be happy to double my Technical Products business at its current margin if that gave me the opportunity. So double digit is really what I look for and then up and to the right in regards to managing marginal businesses on our asset base.

Okay, understood. Two more quickies and then I'll turn it over. The new meltblown line, can you give us a sense of what kind of utilization rate it's currently running at, or your expectation for 2014?

Yes, we try to bridge in at least a half-full from that standpoint, from the overall capacity. But that's got a little difficulty to understanding that because the newest line that you put in is also the most cost-effective and most productive. So we have 2 other meltblown lines, and naturally, we'll be optimizing the full asset base for meltblown. So if you wanted to view it as an asset -- a standalone asset, it's over 50% full, we've actually qualified new customers on it recently, so very excited about the progress they've made. But in reality, since it's the lowest-cost asset, we're running it more full at the expense of a higher cost meltblown line.

Makes sense. Okay. And it's encouraging to hear that Europe's getting better. Can you give us maybe a little color? Is that in automotive filtration? Or what markets are perking up there?

Sure. Our largest business in Europe is in our automotive filtration. And just a reminder, the demand for that is typically driven by miles, as 30% of our consumption is driven by OEM or original equipment manufacturers, and 70% by the aftermarket. As the markets pick up, people drive more miles, that helps that business in itself. They also have a couple of other businesses over there. And I talked about our backings business, and we've seen that pick up as well. So with the pickup of those markets, it's just proportionately going to help transportation filtration solely because it's the largest business in our European assets.

And your next question comes from the line of Frank Duplak with Prudential.

Just had a question on the debt that you guys drew down in the period. Was that on the German revolver or was there another term loan done? And just where it was that? I'm trying to get at just total revolver availability as of the end of the year.

Yes, we drew that on our German revolver. And so what we had is an opportunity to be able to bring cash back from Germany in the month of December very tax efficiently. So we drew their lines, pretty much all of their lines. And then repatriated the cash to the U.S., and then we will be repaying that line in the first 6 months of 2014.

Okay. Then do you have a [indiscernible] look at just the GAAP underfunding for the pension as of the end of 2013?

Yes. So our -- we have pension plans -- defined benefit pension plans in Germany that are not required to be funded, so they don't have any assets. So I won't include them. But if you look at the U.S. pension plan, we're about 98%, 97% funded at the end of the year. That's on a PBO basis.

And thank you. There are no further questions at this time, I'd like to turn the call back over to John O'Donnell.

Thank you very much, and I'd like to thank everyone for your participation and interest in Neenah. We look forward to updating you on our progress and results again in May. Thank you.

And thank you. This does conclude today's conference call. You may now disconnect your line.