Welcome to the West Pharmaceutical Services Third Quarter 2012 Conference Call. [Operator Instructions] My name is Zulu, and I will be your operator today. [Operator Instructions] This call is being recorded on behalf of West and is copyrighted material. It cannot be re-recorded or rebroadcast without the Company’s expressed permission. Your participation in this call implies your consent to our taping. If you have any objection, you may disconnect at this time. And now, I’d like to turn today’s meeting over to Mr. John Woolford from Westwicke Partners. Sir, you may begin.

Thank you, operator. Good morning, everyone, and welcome to West’s Third Quarter 2012 results conference call. We issued our financial results this morning and the release has been posted in the Investor Section on the Company’s website located at www.westpharma.com. If you have not received a copy of this announcement, please call Westwicke Partners at 443-213-0500 and a copy will be sent to you immediately. Posted on the Company’s website is a slide presentation that management will refer to in their remarks today. The presentation is in PDF format. Should you require it, a link to a free download of software to enable users to view the presentation is also available on the website. I remind you that statements made by management on this call and in the presentation will contain forward-looking statements within the meaning of U.S. federal securities law and that are based on management’s beliefs and assumptions, current expectations, estimates and forecasts. Statements that are not historical facts, including statements that are preceded by, followed by, or that include words such as estimate, expect, intend, believe, plan, anticipate, and other words and terms of similar meaning are forward-looking statements. West’s estimated or anticipated future results, product performance or other non-historical facts are forward-looking and reflect our current perspective on existing trends and information. Many of the factors that will determine the Company’s future results are beyond the ability of the Company to control or predict. These statements are subject to known or unknown risks or uncertainties and therefore actual results could differ materially from past results and those expressed or implied in any forward-looking statement. You should bear this in mind as you consider forward-looking statements. For a non-exclusive list of factors which could cause actual results to differ from expectations, please refer to today’s press release. Investors are also advised to consult any further disclosures the Company makes on related subjects in the Company’s 10-K, 10-Q, and 8-K reports. Except as required by applicable securities law, the Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information future events or otherwise. In addition, during today’s call management may make reference to non-GAAP financial measures including adjusted operating profit and adjusted diluted EPS. These measures and their component parts have no standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to and should not be viewed as a substitute for U.S. GAAP operating income and diluted EPS. Reconciliations of the non-GAAP financial measures to the most comparable financial results prepared in conformity to GAAP are provided in materials accompanying this morning’s earnings release. At this time, I’d like to turn the call over to Don Morel, West’s Chairman and CEO. Don?

Thank you, John, and good morning, everyone. Welcome to West’s third quarter 2012 conference call. Joining me today are Bill Federici, West’s Chief Financial Officer; and Mike Anderson, our Treasurer and primary investor relations contact. Also as a reminder, to support our prepared remarks this morning, Bill and I will refer to a PowerPoint slide deck that can be accessed via our website under Investors. If you cannot access the file, the information in the slides is covered in both this morning’s release and our commentary. Beginning with slide number 3, sales during the quarter, totaled $303.8 million, an increase of 3.5% or 9.2% excluding the impact of currency. As summarized on slide number 4, Pharmaceutical Packaging sales were again driven by higher sales of value-added products, whereas sales in the Delivery Systems group benefited from higher demand for a range of proprietary products and healthcare-related contract manufacturing services. Versus the third quarter of 2011, our consolidated gross margin improved 2.1 percentage points to 29.8%, a very strong performance given the broad plant shutdowns that occurred in the quarter for preventive maintenance and the European vacation period. Adjusted operating profit was $27.9 million and adjusted earnings per share were $0.52. Unfavorable currency exchange lowered operating profit by approximately $0.04 per share and earnings were also negatively impacted by an increase in variable incentive compensation cost and a slightly higher effective tax rate. Excluding currency, revenues in the Packaging Systems segment increased just over 10% versus the third quarter of 2011 with the bulk of the increase again being driven by sales of high value products, which were up 17%. Delivery Systems sales rose 6.7%, excluding currency, as a result of strong demand for contract manufacturing services and proprietary devices for reconstitution and safety. Bill will provide additional detail on our…

Thank you, Don, and good morning, everyone. We issued our third quarter results this morning reporting net income of $14.8 million or $0.43 per diluted share, versus the $0.49 per diluted share we reported in the third quarter of 2011. Excluding the effects of restructuring costs, discrete tax items and acquisition-related earn out adjustments, third quarter 2012 earnings were $0.52 per diluted share versus the $0.53 we earned in Q3 2011. A reconciliation of these non-GAAP measures is provided on slides 14 through 17. Keep in mind as you review our results that foreign currency translation rates, most notably the decline in the euro’s value compared to the U.S. dollar, resulted in a $0.04 per share reduction in Q3 2012 earnings per share in comparison to the same period in 2011. On a year-to-date basis, through September 2012, foreign currency translation is $0.13 per share unfavorable to the prior year period. Turning to sales. Slide 7 shows the components of our consolidated sales increase. Consolidated third quarter sales were $303.8 million, an increase of 9.2% over third quarter 2011 sales excluding exchange. The increase was driven by favorable mix, modest unit volume gains, and sales price increases which in the aggregate added sales of $27 million in the current quarter at constant exchange rates. Packaging Systems sales increased by $21.6 million or 10.4% over the same quarter 2011 sales excluding exchange. A favorable sales mix and modest volume growth accounted for 7.1 percentage points of the increase. Higher selling prices in Packaging Systems contributed the remainder of the increase. High value product sales increased 17% versus the prior year quarter excluding exchange. Our Q3 2012 sales comparisons to the prior year period continue to benefit from customer inventory management actions and supportive customer product launch activities, the impact of which…

Thank you very much, Bill. This concludes our prepared remarks for this morning and we now look forward to answering your questions. Operator?

[Operator Instructions] The first question comes from the line of Arnie Ursaner of CJS Securities.

I guess I have sort of a broad question. In your prepared remarks, you mentioned the moderation of the growth in pharmaceutical and other sales. I assume that’s related to the new bookings you had earlier in the year for a customer fell out of inventory, because it’s inconsistent with the very positive trends you have in booking. Is that the right way to think of this?

That is the right way.

Yes, that is the right way.

It was positive to the quarter, but not nearly as positive as it was for the first 2 quarters, and that was both inventory builds by the customer and launch activities by customers.

Okay. And the other, sort of inconsistency I think in your remarks is you mentioned Eris doing very well, but yet you had a write-down of the value. And then in CZ, you mentioned Scottsdale sold out capacity and yet in your longer=term view -- the multi-year view, you mentioned a slower than previously expected commercialization of CZ. Maybe you could help us understand how they kind of hang together?

Yes. If you take a look at the commentary relative to the near term, we haven’t filled those orders yet. Obviously, we are producing and they're in the queue, but I don’t think we've changed our long-term outlook at all. We expect that ramp up to occur in that '14, '15 kind of timeframe as the first approvals start to roll through. But there is no change in the long-term outlook.

Yes. And on FX, Arnie, I mean, we were negative both in the quarter and year-to-date, $0.04 in the quarter and $0.13 year-to-date. But when you look at the last guidance we gave, was at $1.22. The euro's hanging in at about $1.29 now. That differential in terms of looking at guidance causes an increase in EPS of about $0.05 for the fourth quarter versus the prior guidance.

Okay. And as following your normal pattern, you gave preliminary sales guidance for next year, but to the extent you are going to have a lot more of your higher margin products, working through some proprietary ones, would your assumptions be that we should expect a fairly meaningful margin improvement next year?

We should see an improvement overall. We're still rolling up the final figures. We’ll know a little bit more when we get to our call in February. But in general, we should see that.

Okay. And then just on the $310 million of backlog and the $20 million increase you had, how far out are orders stretching and are you continuing to see customers perhaps preorder in anticipation of an inability to get what they need?

We think the lead time issue is stretching things a bit. Right now, we do have orders for the first quarter rolling in. But it’s very light beyond that.

Yes. As you said, it’s about $20 million more that we see now for 2013 than we had seen last year for 2012.

The next question is from the line of Ross Taylor of CL King.

My first question, I just wonder if you could clarify your comments about Resin CZ again, because in response to the last question, it sounds like your expectations really haven’t changed at all. But the press release does just kind of mention "somewhat slower than previously expected commercialization." I was just trying to square up those 2 comments.

Well, I think that refers back to the commentary we had at the end of last year, where we talked about this extension in terms of our customers getting approval. What we see right now is no change to what we had guided to then. We think that it’s a very positive sign that we’ve got the strong orders on the books with the syringes that we have that’s filled up that capacity. But in the long term, really nothing has changed relative to our commentary at the end of 2011.

Okay. And another question is, your business has very good momentum right now and I'm just trying to figure out with some of the higher value products, whether that’s just due to increased end-customer demand that your own customers are seeing or whether it’s just driven by more of your customers adopting some of the high value products that you sell?

When we look at it, Ross, and we tried to capture that for you but, certainly, clearly there is an impact from inventory building and the launch was also - the launch -- the product that it uses -- our products that it uses are our high value products. So, yes, absolutely, there's some of that in there. But there still is, above and beyond -- we still had 17% growth in high value products in the quarter on the Packaging Systems side. A portion of that is due to the inventory build and launch activities. It’s not an exact science. We don't -- we can’t pick out exactly how much it is, but when we step back from it and try to analyze it, looking at that, plus the price increases above what we normally see, which were due to the material prices last year, the spike that we saw, we think it’s something like 5% to 7% increase in total. So as you can imagine, on the high value product side, it’s probably closer to high-singles to low-doubles.

Okay. And last 2 questions relate to 2013. I just wondered, first if you expect this higher tax rate to really continue next year, and I just wondered if there are any easily identifiable factors that maybe could make your range, or make your growth vary from the low-end of that 4% to 7% range that you provided for next year versus the high end?

Yes, I think the answer to the first question is we’ll have to see where the sales falls. Certainly, if the momentum we’ve seen in North America and Europe continues, it will have a negative impact on our tax rate. It will be higher. Could you repeat the second question please?

Second question is, for 2013, you provided organic revenue guidance of 4% to 7% and I just wondered what factors maybe could make you come in at the low end versus the high end of that?

I think the primary factors would be either a delay in some of the launches that we are looking at or more likely a slowdown in terms of the inventory rebuild that we’ve seen through this year. It’s most likely that the inventory rebuild would have more of an effect than the product launch.

[Operator Instructions]. Okay, sir, we have no further questions in the queue. I would now like to turn the call over to Mr. Don Morel for closing remarks.

Thank you very much for your time this morning. We look forward to our year-end call in February of 2013 when we will provide full year guidance in terms of revenues and earnings. Thank you very much.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day. Thank you.