Matthew DellaMaria - Vice President and Assistant Secretary Stephen J. Hagge - Chief Executive Officer, President, Director and Member of Executive Committee Robert W. Kuhn - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Secretary

Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division Phil M. Gresh - JP Morgan Chase & Co, Research Division George L. Staphos - BofA Merrill Lynch, Research Division Chip A. Dillon - Vertical Research Partners, LLC Adam J. Josephson - KeyBanc Capital Markets Inc., Research Division Alex Ovshey Ovshey - Goldman Sachs Group Inc., Research Division Christopher D. Manuel - Wells Fargo Securities, LLC, Research Division Albert T. Kabili - Macquarie Research Jon Andersen - William Blair & Company L.L.C., Research Division Deborah Jones - Deutsche Bank AG, Research Division Todd Wenning - Morningstar Inc., Research Division Jason A. Rodgers - Great Lakes Review Gregory W. Halter - LJR Great Lakes Review

Ladies and gentlemen, thank you for standing by. Welcome to AptarGroup's 2013 First Quarter Conference Call. [Operator Instructions] Introducing today's conference call is Mr. Matt DellaMaria, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Jonathan, and welcome, everyone. Participating on the call today are Steve Hagge, President and Chief Executive Officer; and Bob Kuhn, Executive Vice President, Chief Financial Officer and Secretary. Steve will begin our call with an overview of our quarterly performance. Bob will then discuss our financial results in greater detail, after which, we'll open it up for questions. Information that will be discussed on today's call includes some forward-looking comments. Actual results or outcomes could differ from those projected or contained in the forward-looking statements. Please refer to AptarGroup's SEC filings to review factors that could cause our actual results to differ materially from those projected or contained in the forward-looking statements. We will post a replay of this conference call on our website. AptarGroup undertakes no obligation to update the forward-looking information contained therein. I would now like to turn the conference over to Steve.

Thanks, Matt, and good morning, everyone. Yesterday, we reported record quarterly revenue of $618 million, with earnings per share before restructuring charges of $0.64 per share that was equal to the prior year. On the global view, the U.S. was our weakest region, and Asia and Latin America were our strongest in terms of growth, compared to the prior year. There were positives and negatives to report across each of our different businesses, and I'll cover some of those in details by segment. The most important impact on the quarter came from the decline in sales of our Beauty + Home segment, compared to the prior year. Despite another strong quarter and growth in Latin America and Asia and modest growth in Europe, substantial declines in sales to the U.S. beauty and personal care markets more than offset the gains in the other regions. The decrease in our U.S. business was a result of several factors. First off, we were affected by the storm that hit the East Coast in February, causing some temporary facility shutdowns. Also, we walked away from some unprofitable business that we were supplying last year. We continue to see some caution on the part of certain U.S. customers going into the quarter. Taken together with these -- taken together, these items created certain operational inefficiencies that had significant downward pressure on the Beauty + Home segments' income, compared to the prior year. However, we continue to have good level of project dialogue with our customers on a global basis. We participated in several new launches by customers this quarter, including in the personal care market, a new line of the AXE hairsprays was launched using our aerosol valve and locking actuator. And a new brush -- a new breath freshener from Hello brands was introduced…

Thank you, Steve, and good morning, everyone. As announced in our press release, our reported sales grew 4% to a record quarterly level. On a constant currency basis, and excluding the Aptar Stelmi acquisition, our core sales decreased 1% in the first quarter. Our first quarter guidance did not include any impact from our European Operations Optimization plan, which was $0.05 in the quarter. So on a comparable basis to our guidance, when you adjust from the $0.05 from the optimization plan, we earned $0.64 in the quarter, and this compares to the $0.64 we earned in the prior year. As Steve had mentioned, Aptar Stelmi had a strong quarter, and results of this business contributed $0.06 to our earnings per share. Increased resin prices had a negative impact on our earnings. We estimate that the impact was between $0.015 to $0.02 in the quarter. Free cash flow, which we defined as cash flow from operations, less capital expenditures, improved by approximately $20 million in the quarter. On a gross basis, debt-to-capital is about 24%; while on a net basis, it is roughly 14%. We paid a little over $16 million in dividends in the quarter, representing $0.25 per share. Regarding our share repurchase program, in the quarter, we spent approximately $10.8 million to repurchase 201,000 shares in the quarter. We had approximately 1.8 million shares authorized for repurchase at the end of the quarter. Now turning to market details by business segment. Our Beauty + Home segments core sales declined 3%, compared to the prior year. Looking at our markets on a constant currency basis, sales to the beauty market decreased 2% from the prior year, sales to the personal care market decreased 3% and sales to the home care market decreased 5%. Our Pharma segment's reported sales increased…

[Operator Instructions] Our first question comes from the line of Ghansham Panjabi from Robert W. Baird. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Can you just give us some more color on the Beauty + Home business that you walked away from? Do you think that will be a continued headwind as -- throughout the year as you kind of comp through that? Or do you have some new business that you gained that could be an offset?

Okay. First of all, in terms of the second part of your question, Jonathan, we I think that'll -- will improve as we go through the year as we fill that with new business. The biggest part of that business was one of our customers moved their manufacturing from a North -- from a U.S. facility down to Mexico. And we're looking for us to actually move and an increase our Mexican operations, and given the profitability, we decided that wasn't a good profitable move for us. So we also had another customer that we lost in terms of a bid situation. So those were the 2 primary customers that had an impact on the quarter. Again, we're seeing several new projects that we're coming back into that we see benefiting particularly the second half of the year. So the second quarter will still be a bit soft, but we see that improving as we get to the second half. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And just to clarify on the Beauty + Home business, again, is this a customer mix issue? Because it seems unusual, I mean, I know your big customers across the board and the consumer segments have been reporting some weakness as well, but it does seem a disproportionate impact on you. So is this a customer mix issue?

I think it's a bit of a customer mix issue. Also one of the areas that we play quite a bit in is in sun care area. And frankly, here in the United States, if you remember a year ago, we actually had a pretty early spring. Our customers were ramping up for a strong sun care season. This year, I'm not sure spring has arrived any place in the U.S. yet. So we're seeing inventory -- we've been very cautious about carrying over it to that. So we think it's a bit of an aberration. I guess, can't jump [ph], but right now, that's -- those are the 2 issues that we had coming back into the quarter. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And just lastly, on Stelmi, just given the top line performance you're seeing there, what's your capacity situation as it stands right now? And how do you think that will evolve as we progress through the next 18 months, because the growth rates seem quite a bit faster than maybe what you'd anticipated initially?

Again let's go to the growth rates, because the growth rates in terms of top line growth, if you compare just to a year ago, realizing that they weren't in our financials was core growth rate of about 6% top line. But a significant -- we've been significantly able to increase profitability at Stelmi by taking a look at costs, reallocating products, et cetera. What we've done is we've expanded capacity now at Stelmi to include weekend shifts, so we're able to facilitate some of that growth, but that is the biggest challenge. We're capacity-constrained at Stelmi right now, and we're looking at different ways on where we're going to be able to increase that, and we'll be coming up probably with a plan before we get through the end of the year that we can share with you.

Our next question comes from the line of Phil Gresh from JPMorgan. Phil M. Gresh - JP Morgan Chase & Co, Research Division: I got a couple of questions. First, on the accretion number, the $0.16 to $0.20, is that the incremental accretion? Or is that the total accretion, because you had $0.03 in the fourth quarter last year.

Yes, that's the total annual accretion, so not the incremental over what we had last year, but that's what we would expect that Stelmi would add for the full year. Phil M. Gresh - JP Morgan Chase & Co, Research Division: So is there seasonality here? I mean, because you had $0.06 in the first quarter. So is there, I mean, just being [indiscernible] the reason you can't multiply it by 4?

Yes, there's a little bit of seasonality. And again, we're still learning a lot about this business, but our feeling is that there's a little bit of seasonality in the third, and also a little bit in the fourth. So we'll see where that comes out. The other thing that's important to mention while Steve mentioned, we're running on kind of all cylinders, we will continue to -- with the capacity increases that we're attempting to increase some of the structure costs there and continue in pushing out improvements via the integration process. I mean, we're going to see some additional costs there, that's why we're not seeing $0.06 x 4 quarters, if you will. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Yes, okay, that's helpful. And then on the legacy Pharma, I guess my question there your margins you said in the release, 29.3%, last year it was 28.1%, but your core sales were down 4%. So what drove that margin improvement despite the sales decline?

A couple of things, I think, going in. The last year we had some tooling sales in our sales number. We didn't have that this year. We were actually down in tooling in the Pharma segment. Our product sales are definitely more profitable than our tooling sales, so that was one of the contributors. Secondly, I think we've -- the mix of products did well for us in the quarter. And thirdly, and I wouldn't underestimate this is the -- really we saw this being somewhat soft going into the quarter, and we've put a lot of focus on controlling costs. And I think that part of our business did an excellent job in that area. So that was the dynamics going into the -- to the higher margin. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Got it, okay. Look, last question is just, can you talk about trends on the pharma side as we head into the second quarter that gives you the confidence that we are going to see more normalized order rates and sales trends? And are you actually expecting sales growth at this point in the second quarter for Pharma? Anything you can give to just give to just give us confidence in what you're seeing already as we progress to this quarter?

A couple of things in that area, Phil. First, we are seeing order backlogs improving, particularly in the consumer health side, so we expect to see both sequential improvement from the first quarter to the second quarter in that part of our business, and then also between the second quarter last year, an increase coming back into the second quarter of '13. On the U.S. generic market, we think that the inventories are now becoming much more normalized, and we're seeing much more normal order patterns as we come back into the season. And frankly, we're moving into the allergy season, which is also a plus for us. So we're seeing that momentum and we're, at this point, confident that we're going to see an increase in that business as we go into the second quarter and then through the second half of the year.

Our next question comes from the line of George Staphos from Merrill Lynch.

I want to come back to the Beauty + Home discussion in the quarter. You enumerated a couple of things during the quarter that impacted you. You had the storm on the East Coast, you had -- you walked away from the unprofitable business, you've gone through that with Ghansham on his question. You mentioned a couple of other things. Can you, if possible, enumerate or parse what each of those was within the quarter, if you had, I've missed it. And then I had a couple of follow-ons.

It's tough to come back and give you specific to specific because one leads to another. I mean, we did have, as a result some of the sales shortfall, some underutilization of our capacity that we're not able to adjust quickly to that, so we're maintaining some of those fixed costs. That had a negative impact. We introduced some new equipment in the quarter, particularly in one of our Midwestern facilities that was relatively complex piece of assembly equipment that took -- the debug time took longer than we were anticipating when that equipment came in. That's now basically done, and we expect that to be behind us. So there was also, in terms of some of these other things, they tend to be interlinked, George, so unfortunately, I can't give you a specific breakdown.

Yes, I know it's difficult for you. I guess what I'm trying to get at ultimately is how much of the -- how much sort of built-in sequential benefit should you get in the second quarter, as some of the one-off issues are now behind you? Can you give us, at least, an estimate of that?

Yes, I think, we're going to -- I mean, we've certainly in our projections, are anticipating some significant improvement. I mean, it's not going to be at last year's level. I also don't want to come back and give you the impression we're going to be. This is now North America for Beauty + Home because the rest of our business in Beauty + Home performing reasonably well. But I think we're going to continue to ramp up in that. And I think we'll be much better positioned as we get to the second half, but we expect considerable increase as we go into the second quarter. And again, I don't have specific numbers that I'm going to be able to disclose on that.

Okay. I'm probably asking for too much, and if I am, I respectfully appreciate your answer. At this juncture, do you think Beauty + Home, in aggregate, can be up year-on-year in the quarter?

That's going to be difficult to say. At this point, I would -- I think it will be a challenge, given the North American side. We'll certainly be improved from the first quarter going to the second quarter, but I'm not sure we're going to be up compared to last year.

I appreciate your patience, Steve. The last, and I'll turn it over, any implications from the tooling decline within Pharma that we should be, at least, mindful of over the next several quarters?

No. Tooling for us is very lumpy in terms of where do you come back on the year. We're confident of the projects we're getting. So all the tooling is really just a matter of the timing, and when we're recognizing it. So I -- from our perspective, we don't -- there's nothing in there that, I think, gives any future trends issues to be concerned about at this point.

Our next question comes from the line of Chip Dillon from Vertical Research.

I apologize, I jumped on late, so I might have missed this. But I know you talked about the resin cost issue in the quarter, and my guess is, as we look at the various segments, I would guess that in the food area, that's where you might have seen the biggest impact, if you could verify that. And also when you look at the 13% volume growth in that quarter, and I know you mentioned there were some tooling, I think you said the underlying -- that the growth was -- the tooling only grew 3%, so the underlying growth was bigger. Could you just verify that, please?

Sure. So you're right, Chip. It should be the biggest part of the resin impact of that kind of $0.015 to $0.02 in the quarter did come in our Food + Beverage segment. And then tooling on an overall segment basis, negatively, if you will, affected the Food + Beverage sales by about 2%.

Okay, got you. And you did mention you passed through some of the resin, not all of it. So if I would to kind of guess add it, and say, okay, well, the overall segment was up 13% and let's say without tooling, it was up 15%, would you say volumes were certainly -- were double digits, and so the pricing was, say, less than 5% of that?

Yes. I mean you're getting most of the growth on the core side being volume basis. So I mean, even if we didn't pass through all of it, there was an immaterial positive impact, if you will, on the top line, something less than 1%. So almost all of what we disclosed in terms of the core sale is going to be coming from volume.

Got you. And then the last question is, when we look at Pharma and the core sales rate, I know there's been a lot of moving -- unusual moving parts, I guess you'd say with the generic business, et cetera. And what would you view as sort of a normalized growth rate for that segment? And maybe you could tell us with Stelmi and without Stelmi. So the legacy growth rate and then what Stelmi would add if -- when all the smoke clears?

Yes, I think, overall, we've continued to give guidance of the area of around 6% to 10% in terms of Pharma growth. That has been our legacy growth. Given what we see with Stelmi today, when that becomes fully integrated on a year-to-year basis, we'll basically going to continue that same long-term growth rate. So what you're right is over the last year, so we've seen some lumpy growth in terms of the pharma side. We think we'll be lapping that and now we're going to be getting some of these inventory issues corrected. And we would anticipate the growth to be at those long-term rates as we go forward.

And with that, you would -- it's fair to say that Stelmi's probably well into double digits and the legacy business might be at the lower end of that range?

Not as much, so Stelmi, for example, in the quarter if they would have been consolidated last year, again, they were -- we hadn't acquired at that point, but sales growth-wise for them was 6%, on kind of comparable basis. So I think that we're sitting in that 6% to 10%. So where we'll see bigger growth for Stelmi's is frankly, when we come back and have to look at additional capacity expansions outside of what we have today.

Okay. And then the last thing is, if you could just point to 2 or 3 of the real juggernauts that are leading the core sales growth in Food + Beverage. Is it tied to beverage dispensers or, I mean, tops, or could you give us a little bit of help with that?

Well, I think, again, as we've talked about in prior calls, what's been benefiting the Food + Beverage is we're converting markets that in the past, were nondispensing. We talked about last quarter, we went into the baby formula market for the first time with Perego. That business is expanding for us. We are on Tropicana who is going out with more dispensing in terms of the orange juice market in their various lines. Kraft's business in terms of their water flavoring market is doing well. We're getting into new categories like honey, that I mentioned in my comments. So the good news, I think, at this point, Chip, is it's pretty well diversified. And I think right now, we're still in that kind of the third inning of a conversion game that we think will have good future potential going forward.

Our next question comes from the line of Adam Josephson from KeyBanc.

A couple of questions. If I take the midpoint of your second quarter guidance, you're guiding up about 10% year-on-year on an adjusted basis. Should I assume that Stelmi's about $0.05 of that and then core growth is the remainder? Or is there some resin benefit embedded in that guidance because of falling polypropylene prices?

Again, on the polypropylene side, let me deal with that first. Last year we also saw declines going in polypropylene in the second quarter last year. So while we've seen some declines in April, it's not a material amount when I go quarter-to-quarter, second quarter last year to second quarter this year. In terms of Stelmi, what we've got in there, as Bob said, we've readjusted the range, so we're not going to give specific to that, but it's going to fall within that range that we gave you for Stelmi for the second quarter.

Terrific, Steve. You've lapped -- now you've lapped your more difficult year-ago core sales growth comparisons, do you expect a return to your historical core sales growth rates in the second quarter and thereafter? Or perhaps more of a slower ramp up to that 5% to 7% historical rate?

I think it will be a bit slower as we go into the second quarter. I think you guys have heard our customers like Procter & Gamble and some of the consumer products companies. I don't know that any are pessimistic, but I don't -- what we're hearing from our customers, they're not overly bullish at this point in terms of growth. So they're pretty conservative. We think that'll be the case as we is go into the second. New projects will help us as we get into the back half of the year. So we see good growth, but I wouldn't come back and say that we're going to jump from kind of flattish growth back up to historical growth rates on being upper single digits.

Just one last one on the same issue, on the last call, you talked about your consumers being concerned about the fiscal cliff and other issues. I mean, has the tone changed much over the past 3 months or so? Or would you say it's pretty much that you're hearing a similar a kind of tone from your large customers?

I would tell you, again, it's going to be very dependent on different parts, particularly our Food + Beverage and some of these other markets. But overall, I think the tone is similar. So while you had this sequester, you've had other issues that people would look at here in the United States. Again, I want to underpin, it's not a negative comment, they're just more cautious. So I think it's pretty consistent the -- what we saw in the first quarter.

Our next question comes from the line of Alex Ovshey from Goldman Sachs.

In your Beauty + Home business, would you be able to give us the organic volume growth rates for the key regions in the first quarter?

Not -- I can't give it to you by the segment, I can give you overall geographic and that will kind of talk a little bit to the diversity of the business model. But I mean, for example, in the first quarter, sales across all of our segments in the U.S. were down 11% compared to last year in the first quarter. Europe was basically flat, and then both Latin America and Asia were up single -- double digits rather.

That's helpful, Bob. And on the European Operations Optimization program, you have a target out there, but how do you think about the potential upside/downside risk to the current target in place for the Europe Optimization program?

Overall, I think we're -- I think we've done an excellent job and the team that's been in place is doing an excellent job of managing this really complex project. So in terms of the expected cost, if I take out currency, which can move that number, we're very comfortable that we'll be within the numbers we've given. And also, we're trending very much at the potential savings that we've anticipated. So right now, we're -- there's a great deal of confidence we'll be able to achieve both the cost targets that we had and the savings targets.

Our next question comes from the line of Chris Manuel from Wells Fargo Securities.

Just a couple questions. First, if I could follow on to the restructuring element. I think previously, you talked about that $12 million or so beginning to benefit you in '14, but it sounds now like some of that may come into '13, do you have a sense of will $1 million, $2 million of that flow into 4Q? Or how that might come through, Bob?

We're going to start to get some ramp up of that. As Steve mentioned, 1 of our -- 1 of the 2 facilities there marked to be closed is now closed. So we'll start to see some of the savings coming into the second quarter and then ramping up in the third and the fourth. But again, it's not, at this point, going to be a real significant amount. But we'll definitely get some of those savings in the back half of the year.

Okay, and then, as you wind that program up over the balance of the year, have you looked at other areas around the globe or in other operations, i.e., potentially in North America to do any types of restructuring, particularly maybe to come at it a little differently, if you have some customers that are moving filling capacity and such around between North America or between U.S. and Mexico, have you looked at any optimization or thoughts here?

A couple of things I think that's important to point out is, we continue, kind of on a regional basis, to do this. We've actually consolidated last year business both in Brazil and Mexico. We bought businesses together to optimize our production platforms in those areas. So we're doing smaller levels to this on a continual basis. The reason Europe for us was a much bigger deal is given the size of that. So in answer to your question, we'll always continue to look on how we better utilize our operations and we'll end up tweaking those as we go forward. At this point, we don't have any major plans in place for the other regions that would have the significant amount of cost or savings impact that Europe -- the European Operations plan has today.

Okay, that's helpful. And then the last question I had was when we think about the Food + Beverage business, you had some pretty significant tooling last year in the beverage side and that's all bid very nicely for growth over the past year in that business. Now it seems like you've got some sort of outsized tooling in the food side. Should we suggest something similar that over the next 12 months or so, we could see some pretty significant, more of the growth coming from the food as opposed to the beverage side?

I think that's been the beauty of what we've looked at in this business is that we're seeing different projects coming back. And as we mentioned, even going into this, food has been a bit slower in the growth, but I think the tooling, as you point out, will help facilitate that growth going forward. So, again, I -- we're very excited about the Food + Beverage segment continuing its growth. And we think that the tooling we've got in place in the food is going to continue to help that.

Okay. And the profitability is relatively similar between those 2, right?

Across either segment, it's pretty consistent in terms of the profitability platform. And the other thing on that too, Chris, is one of the things that's helping us is leveraging the Lincolnton facility that we have in place here in North America, as we have more product going through, we're actually levering at overhead on a better basis also.

Our next question comes from the line of Al Kabili from Macquarie.

Just on that point on leveraging the Lincolnton in Food + Beverage, any sense as the sales growth in Food + Beverage continues, and hopefully, continues double digits, how should we be thinking about the operating profit growth? Do we think that grows 1.5x what sales can grow, given the leverage there? How should we be thinking about that?

Again, overall, for the Food + Beverage, we're looking like a 12% to 15% operating margin business over time that we're continuing to move towards that. So that's kind of -- as we add, we would certainly feel that as we add top line growth, we're going to get faster bottom line growth, as we feel those facilities, Al, so at least in short term, you're right, we're going to improve the margins and the margin dollars faster at the bottom line than the top and with double-digit growth.

Okay, all right, that's helpful. We talked a lot about -- earlier, you talked a lot about Beauty + Home in the U.S. and I was just wondering what you were seeing in Europe along those lines. I think macro conditions are still pretty soft.

Actually I would -- we've been, frankly, a bit pleasantly surprised given our European base. Now that -- we are actually up or flat to up a little bit in Europe, given some of those challenging economic conditions over there, which again, points to the diversification of our business in Europe. We see our Beauty business, which a lot of that is international, as well as our Prescription business on the Pharma side being international. So those, while it's not robust growth, it's not as dire as what you may be hearing on some of the other news broadcasts. So overall, we think that we're seeing good growth in those markets and across all of the segments we see that improving as we go through the year.

Okay, good, that's encouraging. And final question is on Pharma. You talked about the improved ordering trends as we got past some of the headwinds in the first quarter. Is -- how about the risk that -- after a period of de-stocking, is there risk that what you're seeing thus far in 2Q is, in a way, overstated on a restocking from a restocking perspective? Or how do you get kind of comfortable assessing that part of the equation?

It's a good question, Al. It's difficult for us to kind of -- what we're trying to do is on the overall market, we can -- we get reasonable numbers on where overall market growth is going for allergies, asthma, et cetera. And try to compare how we're doing within those segments. So as a result, we don't think we will always get certain little blips coming back into that. But we don't think that the second quarter is going to be just unusual with an inventory restocking issue. So we don't consider that to be a major issue.

Our next question comes from the line of Jon Andersen from William Blair. Jon Andersen - William Blair & Company L.L.C., Research Division: I guess, I'll just start with Stelmi and the increase in the accretion guidance for the year. Could you talk a little bit more about what you're seeing in that business and what has prompted you to move that guidance higher? Is it stronger top line? Are you further along in some of the integration activities in the cost savings side of that effort as well?

I think it's a little both on those Jon. We're -- when we look at Stelmi, we were frankly higher in sales level that we had anticipated at this point in the process. But as importantly, the integration, and again, our teams that are going through this have really done an excellent job between the steel [ph] legacy Stelmi organization and our organizations, identifying savings, becoming more efficient in the production, taking a look at pricing and cost issues within the plans. So we're -- as you can see, while we're getting a 6% top line growth, we're getting almost a significant, about a 50% increase, in the profitability. So I think it's across the board on that, it's not just one item leading to the increase. Jon Andersen - William Blair & Company L.L.C., Research Division: Some of the CPG companies that we covered, branded companies have talked this quarter about some moderation in end market growth rates, both developed and emerging. I'm just wondering if when you think about it in the context of what you said earlier about Beauty + Home and caution from customers, should we be thinking about that caution as maybe being the primary driver of the softer performance in Beauty + Home in Q1 and some lingering effect in Q2? Or is it the storm and the walkaway from some of the low or no margin business as the primary driver?

I think, it's a combination. I would tell you, I think, the caution is a big issue. And depending on where you're at, we can see our business with the branded guys, whether that's Proctor, Unilever, et cetera, has been a bit softer than we would have anticipated going into the quarter. And frankly, looking at our order patterns, we had a very strong January coming out of year end. And then February was probably as weak as I've seen in a long time and then starting to rebound in February. So I still think there's a lot of our consumer products companies are still pretty cautious as they go into the second quarter. Jon Andersen - William Blair & Company L.L.C., Research Division: Fair enough. And if I can ask a more detailed question on certain product line. You've talked about moving in the infant formula recently and that being a new area for you. I think you're doing that with your bonded aluminum plastic technology. Is that meeting expectations -- is demand meeting expectations at this point and are there broader applications in infant formula either internationally or with branded players?

You're correct. We are using on the [indiscernible] projects that we're on with today is using our bonded-to -- bonded process that is a patented process. And yes, we are very optimistic, I think, going forward in terms of working with some of the other international players both here in the United States, and also we see significant opportunities going outside the U.S. So what is really helping is the more we get into these markets, the more we can understand the needs of the market and bring creative innovative dispensing solutions to that marketplace. So I think right now, we're very helpful -- we're very positive with where we're at, and also very optimistic as we look forward into that particular market segment.

Our next question comes from the line Debbie Jones from Deutsche Bank.

I was just curious in your European Operations Optimization, your expected return is actually quite good. And people are asking, could you do more in other regions? I'm just actually curious if you see more runway in Europe? If there's anything you're seeing there that maybe you could tackle in 2014 that would -- can you provide some more upside to that number?

Well, I think, at this point, right now, we're focusing on making sure we complete what we've got, which taking a tremendous amount of effort from our people throughout Europe. So as I mentioned earlier in the call, we're going to continue to look at other opportunities, but there's nothing right now on cap for 2014 that we've got in place.

Okay. And then I was curious with Stelmi, was any of the above trend sales increase that you saw a result of leveraging some of your existing relationships that you already have? And then just I'm curious how this acquisition may have shaped or changed or kept the same your M&A priorities going forward?

Well, I'll deal with the second one. I think as we talked about Stelmi, Stelmi was on our M&A priority list for 5 years. So I will tell you, I think what it has done, it hasn't changed what we're looking for. We have fairly targeted issues that companies that we think would fit well. We're continuing to pursue those. In terms of Stelmi's growth side...

I think it's still a little early. I mean, we're leveraging the customers that we have in both directions, but it is -- due to the longer-term nature of that business, we're not seeing a significant portion of that sales growth coming from our -- let's say our leveraging of the customers at this point.

Which, I think, gives us a strong potential going forward because we do think that's an area that we can continue to leverage for the longer-term.

Okay. And just last quick question, can you just remind me of Lat Am and Asia, how much that is as a percent of your revenue? And then just what categories were really driving the growth in those regions?

Sure. So in total you're looking at about 16% of our total turnover is coming from Latin America and Asia, 16%, 17%. Latin America, the biggest portion of that is going to be in the Beauty + Home sector, both on beauty side and the personal care side. Smaller presence on the Food + Beverage and Pharma, but good growth off a small base in both of those. And the in Asia, you really looking at their -- we've seen strong sales in our Food + Beverage market coming out, but also good growth on the Pharma side and Beauty + Home as well. A little bit more balanced in terms of the overall segment representation.

Our next question comes from the line of Todd Wenning from Morningstar.

Following up on Debbie's question, given some of your success in Latin America and Asia this quarter, are seeing any expansion potential in those regions in addition to what's already in the works?

Again, we're going to continue to look at that. And again, what we've seen in those areas generally when we've done acquisitions in both Latin America and Asia, they have been on the smaller nature and then we've added onto that just given some of the size of the companies in that area. And we've also done a combination with Greenfield expansions there. So we're going to -- we're continuing to pursue those. We're aggressively looking at Latin America in terms of expanding our presence there today because we see some significant growth. So to answer your question, yes, we are continuing to aggressively pursue growth opportunities in both of those areas.

Okay, great. And then my second question was on Pharma, are you seeing any more traction with drug companies migrating from traditional delivery systems to aerosol or valve?

Again, on different products, I mean, one of areas that are talked about in my comments were actually moving to topical. When you come back it goes on top of the skin, gets entered back into -- those, we're seeing growth into that. The other one is their ophthalmic area where right now, we have never really participate in that and now, we just saw 5 new companies coming up with new ophthalmic dispensing, so those are opening up outside of our traditional allergy and asthma markets, good growth potential in other areas for us.

Great. And then on the fragrance side, are you seeing customers asking for lower margin dispensing equipment or is that sort of just generally weak demand?

I think it's a little bit. First of all, I think we have to -- on the fragrance side, we were seeing probably a more flattish demand, but we're seeing excellent growth in the cosmetic side of the business in terms of what we're seeing, lotion applications those are continuing to grow worldwide. So in terms of the cost factor, I haven't noticed that there's been anybody moving downscale. I think in, it's a very much a product differentiation, how does dispensing help the application, having products that eliminate preservatives, those types of things are actually in very big demand in that part of business.

Our next question comes from the line of Jason Rodgers from Great Lakes review.

Just one question left that I had. Are you seeing any material changes in competitor pricing?

I wouldn't say material changes. It's always been a competitive business that's been out there, so I don't think that there's anything that says significant one way or the other.

Our next question is a follow-up question from the line of George Staphos from Merrill Lynch.

Two product-related questions. SimpliSqueeze has been out probably since the mid-1990s. You're seeing it grow in things like honey now. Can you go through what the growth ramp has been in SimpliSqueeze over time, kind of what the average growth has been? And are you seeing an opportunity for its growth to accelerate in the next few years? You mentioned the honey application, which I think you've talked about 10 years ago, any new places where we're starting to see SimpliSqueeze get in?

I think let me give you a couple. I would guess and frankly, George, this is a -- I always get -- this is dangerous because I'm guessing. But I'm guessing SimpliSqueeze probably has been growing for us on the average of over 10%, 15% a year in terms of application. And if I look at, just going back -- let's just go back on a couple over the last year, the water flavoring, that Kraft's got on their meal project, that's been significant growth in the market that didn't exist. The other one that we -- that I've talked about in my comments was the -- there's a powdered system that actually uses SimpliSqueeze and dispenses powder, vitamin powder into water, which is a category we've not been in before. So what we're finding is as we get into new categories, it's providing different benefits and that, I think -- -- that's been the beauty of what we've got. We are certainly the most cost-efficient producer now worldwide of a silicone valving system. We -- that technology, we're way ahead of where our competitions at.

Okay. And that actually a segue to how -- I didn't recall where you stood in terms of patent protection on that, but it seems like that's long gone. So now, it's just trying to keep ahead of everybody else?

Well, it's actually the patents are just starting to expire depending on where you're at worldwide. So they started late last year and going to this year. But to your point, is really right now the competitive advantage in terms of the cost structures is we and the, frankly, the knowledge of the system, the ability and the production of different valving systems around the world.

Okay, my last question, and I'll turn it over. Do you have anything in development? And if you've already have, and I've talked about apologies for forgetting it. If you have anything in development regarding plastic lithing [ph] that -- as opposed to bonded aluminum, that would be able to hold up to retour and provide a barrier particularly for food and beverage applications?

We -- I can tell you, we are looking at that. We have several projects that we're working on. We don't have anything we can talk about specifically in that area.

[Operator Instructions] And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Steve Hagge for any closing comments.

Thank you very much, Jonathan. This concludes our call today, and I'd like to thank everybody for joining us.

Thank you, ladies and gentlemen, for your participation on today's conference. This does conclude the program. You may now disconnect. Good day.