Good morning, my name is Kimmie [ph], and I will be your conference operator today. At this time, I would like to welcome everyone to the Neenah Paper First Quarter 2014 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s prepared remarks there will be a question and answer period. (Operator Instructions) As a reminder, ladies and gentlemen, this conference is being recorded today, May 8, 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 everyone, and welcome to Neenah's 2014 First Quarter Earnings Call. With me on the call today are John O'Donnell, our Chief Executive Officer; and Bonnie Lind, our Chief Financial Officer. We reported earnings yesterday afternoon so everyone should have had a chance to get familiar with our results. I'll recap a few headlines and then turn things over to John and Bonnie will review business activities and financial performance in detail. Following our prepared remarks, we'll open up the call for questions. Net sales were a record $225 million, up 6% from a year ago and reflecting growth in both of our segments. Operating income was up similarly. as very strong performance in typical products more than offset fine paper earnings that were lower due to an unusual spike in natural gas prices that increased cost by more than $3 million or $0.12 per share. Nonetheless, consolidated operating income grew 5% and earnings per share increased 7% from $0.74 last year to $0.79 on an adjusted basis. Adjustments for a penny per share in both years, last year as we integrated acquired fine paper brands and this year as we restructured to improve cost in technical products. Adjusted earnings are in non-GAAP measures and reconcile to GAAP figure is in our press release. Finally, I would like to remind you that our call will contain forward-looking statements, risks and uncertainties that could cause actual results to differ materially from these statements are outlined in our SEC filings and in the Safe Harbor disclaimer on our web site. And with that, I'll like to turn things over to John

Good morning everyone. 2014 is off to a very good start building up the momentum that we reported in February. In the first quarter, our technical products business led the way with record sales and profits behind a strong volume growth in each of our major product categories. We also executed well in fine paper with could topline results and improved manufacturing operations. Nonetheless this good performance could not overcome the impact of almost $5 million of higher input costs in that segment, primarily foreign energy prices that were even higher than we have foreshadowed on our last call. In addition to the good topline in earnings our teams continue to do a nice job managing capital. Helped by improved working capital efficiencies in the quarter, we generated almost $13 million more free cash flow than last year. With increased earnings and capital efficiencies, return on invested capital improved and continues to be at a very attractive level of more than 12%. These results confirm that we are successfully executing against our strategic priorities. First, we are continuing to develop and grow meaningful positions in our core profitable niche markets. Filtration media sales grew 11%, led by transportation filtration growth in Europe, which is by far is the biggest market. We are leading with innovative high-performance products and are leveraging these technologies to grow with existing customers and expand both in international and adjacent filtration markets. New customer qualifications leverage filter materials, execution of announced price increases and our commitment to continue building presence in share position in North America and China, all supported our strong topline growth. In addition we recently entered into a relationship with a small nonwovens manufacturer in India as a responsible way to increase our understanding and presence in this growing market for supporting our…

Thanks John. As you heard or good start to the year was led by strong technical product segment performance. So I’m going to start there. First quarter technical product sales were a record 118 million, up 10% compared with last year. Higher volumes accounted for 8% of the growth with the remainder due to favorable currency translations, up 3% from a stronger Euro partially offset by lower price mix. Impressive growth were seen across all categories as filtration sales grew 11%, specialties also gained 11% driven by growth in labels and packings revenues were up 7%. While an improving economic environment in Europe certainly helped, we had good performance globally with increased sales in U.S. and in Asia. Selling price increases on many products also started to kick in during the quarter. Operating income of almost $14 million was up more than 40% from just under $10 million in the first quarter of 2013. Input costs were mixed with increased cost for energy and fiber offset by lower cost for other materials. Higher profits this year resulted from strong topline growth, bolstered by improved manufacturing efficiencies and lower administrative costs. In 2013, you may remember John discussing the operational challenges we experienced early in the year, these items have now been addressed. Bill mentioned, we had a small amount of restructuring costs in the quarter, about 300,000, as we implemented changes to our organization to reduce cost. As we complete these programs we expect additional charges of around 400,000 in each of the second and third quarters. These programs have less than a two-year payback with returns starting late in the year. Moving to find paper, quarterly sales were 102 million, up 2% versus last year. With the man in unquoted freesheets down 3%, we continue to outperform the market…

Thank you Bonnie. We had a solid start to 2014 with very good performance in our technical products businesses and what has been historically the best quarter of the year. The global economic environment appears to be trending upward in Europe despite showing signs of caution and still improve from where it was a year ago. Although markets remain competitive and the secular challenges in fine paper have not gone away our market position remains strong we’re continuing to grow share in key categories and expand in probable adjacent markets and geographies. I’ll start the call with a recap of a few strategic priorities interaction. But before I talk about our outlook I’d like to comment on what our employees are doing each day to drive value and activate those strategies. First, we ensure that we continue to be aligned with leading blue-chip customers who are wining in their markets, our joint development efforts with many technical products customers are helping us to share and grow in our share. Next, we’re working closely with our customers to provide them with supply chain solutions and support their growth efforts, this includes designing flexible programs that ensure that our product is there when they need it. We continue to invest in brands and capabilities. Our fine paper brands are known for their high quality and when image matters like at the recent Oscar ceremony when the envelope was opened we were inside. This year we re-launched our environment brand well known as a leader in green premium papers and in technical products we continue to invest in assets or capabilities that meet the unique specification and needs of our customers. Cost reduction and efficiency improvements is never ending and our teams are focused on relentlessly pursuing ways to enhance our competitive position.…

(Operator Instructions). Your first question comes from the line of Evan Wingren with D.A. Davidson.

Relative to our expectations, I think technical products outperformed us by quite a bit. I was hoping to get some granularity on the margin improvement year over year. And maybe is that a function of that melt-blown line that you started up? Just some commentary on that would be appreciated.

Couple of things, first I mentioned in the transcript that we had less than exciting performance in the last quarter, so I think we got a year-over-year comp change because of performance is poor. We’ve corrected all those and I think that’s really a positive. Filtration is the major driver of the change in the quarter, very strong volumes and as we talked before this is a category that’s grown 9% over the last 10 years on an annual basis. As Europe starts to recover and optimism of our customers continues to grow, we start to see the pipeline refill from that standpoint. It would be short sighted of me not to give them credit for all the cost production efforts that they have put in place, so we see strong utilization of the assets with the volumes, strong cost reduction activities as well. In regards to melt-blown, the melt-blown drives the enhanced mix, so melt-blown combined with our historical paper products gives us the opportunity to sell up a mix into more premium mix, especially in products like cabin air and we’ve continued to see those grow as well. So I think to give it all to a recent capital investment when it’s really of strong volume performance in our filtration business year-over-year comps and the relentless pursuit of cost reduction.

Sure. Thank you for that. And then maybe on filtration a little further, can you just kind of maybe give us a high-level update on the competitive environment in your current filtration markets, which I think primarily is transportation, and then maybe those that you're trying to enter as well?

Well I think really focusing from a competitive standpoint transportation filtration is probably the one that we spend the most time on. In Europe we’ve got a leading market share, there is three major players in transportation filtration, Ahlstrom, H.B. predominantly in the United States and our strongest position by far is in Europe which is great because that’s where our existing current existing capacity resides. Two other very large markets the U.S. and China are opportunities for growth, we represent about 15% share globally but 42% or so in Europe. So that opportunity for us to continue to follow and pursue those strong customers as they grow in those markets is what we see as the long-term opportunity for us in transportation filtration. Maybe other markets like beverage filtration some of the others, we’re really focused on entering into nice markets. So there is a variety of competitors in each of those and I think I probably caused more confusion than I would cause clarity. We’re looking sort of where the high value nice mix is and where we can bring unique capabilities from that standpoint. So predominantly I would think transportation filtration from a competitive position and then opportunistic mix enhancements in those other categories.

Okay. And maybe moving to paper, the 5 million in the first quarter. Is there a way that we could think about how much of that should be recovered maybe sequentially? I know you said $5 million higher input costs across the remainder of the year, but shouldn't you see the majority of that come back in the next quarter relative to the first?

The big spike in natural gas, we’re going to see that mitigate. So three of the five was natural gas. So from that standpoint we still expect that to be elevated all year. We’ve had and we’ll have to overcome that with pricing activity that was announced early on in the year. Pricing activity, really we can -- we see pulp and can act on pulp despite from natural gas, we couldn’t influence the pricing activity, we’re already taken by that. What our expectation is that all the businesses have been in the marketplace with price increases will carry those through as we move through the year. Pulp our expectation is not in the first half because we’re still going to see elevated costs in the first half but in the back half we do believe that it will be mitigated, so that more sticky pricing in our paper side, we should see our margins recover. So I would expect margin to recover significantly in the second quarter just as a result of the non-spike in natural gas but full year before we’re able to overcome the input cost that we talked about.

Alright, thanks for that. Just a couple more here, I tried to follow your maintenance commentary. I think in the paper, you usually take maintenance in Q3. Is that still the case and do you have an estimate for us for that you can share?

Yes, first of all no need to apologies, people have hard time following me all the time. I would say, yes, the majority of our maintenance happens historically in the third quarter and that’s still going to be the case this year and it typically is a $2 to $3 million impact for the downtime in that third quarter. What we see different this year is that we have a significant capacity adding capital project and the best opportunity for us is to move that into the fourth quarter. So, rather than have a maintenance down and then come to had take another down later, we combine the two to be more efficient. So, really what I was trying to suggest is that fourth quarter will have a 1 million of incremental cost to achieve that and you should see a million of our historical 2 to 3 move from the third quarter to the fourth quarter, that’s really it. And I am sure than in future years, you will see more of a third quarter maintenance activity for us seems to be the best time.

Okay. And then just the final one for me. Just maybe an update in general terms on your acquisition pipeline and sort of what you're seeing out there in the markets I think would be helpful.

Sure. Evan, I mentioned in the past and now it may sound redundant but learning comes from reputation. We got a very disciplined process and we have dedicated resources to that and continue to be very, very active. Our bias is towards asset in United States but open to the all opportunities in that regards and our bias is towards performance oriented technical products but would love to continue to grow our filtration portfolio as that’s where we believe we have the most unique value from that. And then finally, I mentioned in the call around packaging, it’s a large market we are early in it and those are the opportunities that we would want to continue to see what capabilities make sense for us to continue to invest behind it. So, active process, I am not discouraged in that regards. I think it’s really important to balance why is it right that Nina owns this company and what’s the long-term value with our desire to utilize some of the cash that we built on the balance sheet. And that’s kind of the tension I live in everyday.

Okay. Well, thank you for that given all the after commentary and the script, I think go hop off before I get played off. So..

Your next question comes from Jon Tanwanteng with CJS Securities.

Hi, Jon.

You did a very nice job on the technical products. My question is has the momentum in that segment carried into Q2 or should we view that Q1 has the seasonal high-water mark for both revenues and margins this year?

Yes, I did mention that Q1 is typically a strong quarter for technical products and there is some seasonality that happens as customers replenish inventories that they might have pull down. But I was hoping you could hear it in the tender of my voice, I am excited about the technical products opportunities and I don’t view it as a one-off, I believe that area, we’re going to continue to invest and have a meaningful point of difference. So our expectation is that is a great opportunity and a great area for us to continue to see growth.

Okay, great. And then aside from increased energy costs, was there any other impact from the poor weather in Q1, just from a demand side?

Great question, we turned over everything we could to try to really look hard to say what could I quantify as a result to the weather. This is a time I have got to have a shout out for my team, I am incredibly impressed with what they were able to overcome. For us I would say no I can’t suggest any revenue was lost as a result of cold weather. Remember we’re in business that often times have either longer lead times and so the weather was cold weather and it caused interruption in timing. In the quarter our team was able to act and react in a way that ensured that we protected all the revenue opportunities that we had in the quarter. So I am very pleased with their performance.

Okay, that's helpful. And then you mentioned 30% year-over-year growth in premium packaging. Can you update us as to what percent of the fine paper segment that is, and do you envision an inflection point where the growth there could kind of accelerate the overall segment growth?

That segment is pressured as we talked about with the secular decline, so the group has done a fabulous job over the last four years offsetting any pressures in top line. So remind we’ve growth that business over the last four years. The premium packaging, we said that it represents about $300 million addressable market in the segments we’re in. Today it represents about 10% of the Fine Paper businesses probably where I would look. As far as what kind of step change, today what we’ve done is we continue to point resources to it to learn more about it and to make sure that we’re meeting the needs of the customers, likely step changes will come with capacity additions or capability additions and we’ll talk about those more as we go forward. It won’t be a linear improvement from that standpoint but today with where we’re at we see lots of nice upside in that regard.

At this time there are no further questions. I'd like to turn the call back to John O'Donnell for closing remarks.

Thank you and I'd like to thank everyone for your participation and interest in Neenah today. We look forward to updating you on our progress and results in the future. Thank you again.

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