Welcome to Clearwater Paper Corporation's second quarter 2014 earnings conference call. As a reminder, this call is being recorded today, July 23, 2014. I would now like to turn the conference over to Ms. Robin Yim, Vice President, Investor Relations of Clearwater Paper. Please go ahead.

Thank you, Saeed. Good afternoon and thank you for joining Clearwater Paper's second quarter 2014 earnings conference call. Joining me on the call today are Linda Massman, President and Chief Executive Officer, and John Hertz, Chief Financial Officer. Financial results for the second quarter were released shortly after today's market close. Posted on the Investor Relations page of our Web site at clearwaterpaper.com you will find both the earnings press release and a presentation of supplemental information including an updated outlook slide providing the company's current expectations and estimates as to certain cost, pricing, shipment, production and other factors for the third quarter of 2014. Additionally, we will be providing certain non-GAAP information in this afternoon’s discussion. A reconciliation of the non-GAAP information to comparable GAAP information is included in the press release or in the supplemental material provided on our Web site. I would like to remind you that this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include those risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2013 and Form 10-Q for the quarter ended March 31, 2014. Any forward-looking statements are made only as of this date and the company assumes no obligation to update any forward-looking statement. John Hertz will begin today's call with a review of the financial results for the second quarter and Linda Massman will provide an overview of the business environment and our outlook for the third quarter of 2014 and then we will open up the call for the question-and-answer session. Now, I’ll turn the call over to John.

Thank you, Robin. Before I get to our second quarter 2014 results, I’ll start with a little housekeeping. We are providing both GAAP results and results that are adjusted to exclude certain charges and benefits that we believe are not indicative of our core operating performance. For the second quarter of 2014, those include $2 million of cost associated with the prior closure of our Long Island, New York and Thomaston, Georgia, converting facilities and $1.4 million onetime, non-cash tax expense associated with the change in the New York State tax code. The mark-to-market impact from directors cash settled stock unit was de minimis in the second quarter. Second quarter net sales came in at $499 million, up 3% versus the first quarter due to a 3% increase in paperboard pricing resulting from previously announced price increases and a 6% increase in tissue shipment volumes which was slightly above the high end of our updated outlook of up 4% to 5%. The higher tissue volumes more than offset a 2% decline in paperboard shipments caused by the previously announced operational issues at our Arkansas pulp and paperboard facility. In the third quarter, the paper machine at the Arkansas mill has been running well and other than the $1 million cost headwind associated with the recovery boiler, we do not expect those same issues to impact Q3. Versus Q2 2013, net sales were up 6% primarily due to higher paperboard prices and volumes. Second quarter adjusted gross margin of $67 million or 13.4% which excludes the Thomaston and Long Island shutdown cost, was up 40 basis points from the first quarter due primarily to lower energy prices and usage compared to first quarter as the weather related issues abated towards the end of April as well as lower operating supply cost.…

Thanks, John. Hello everyone and thanks for joining us today. On balance, we had a solid quarter despite the operational issues in Arkansas. Our adjusted operating profit came in at $35 million or 7.1% which was slightly above the high end of our revised outlook for Q2 despite coming in at the low end of the range in revenues. This is evidence that the steps we are taking to improve operating efficiencies are beginning to take hold and we are still in the early stages of our planned improvements. Our EBITDA margin improved modestly in Q2, helped by price increases in SBS, a reduction in weather related energy costs and better operating leverage due to plant closures and consolidation of converting activities. These improvements were offset by some Q2 operational challenges in our Arkansas mill that are largely behind us. Paperboard market conditions remain tight and pricing firm. Our paperboard backlogs are currently ranging from 4 to 6 weeks. I am very pleased with the progress we have made in our consumer products division. TAD sales grew 15% in Q2 and we had our highest level of TAD product sales this quarter. Our tissue volumes were up nearly 6% quarter-over-quarter which is indicative of our leading supplier position that were solidified during Q1 with key customers. The volume growth is a result of our overall momentum with customers across all sales channels. The 1% decline in pricing versus Q1 was as expected, driven by the persistently competitive market environment. Before I address our view of the market environment and outlook, I would like to mention that we have created a new cross-divisional supply chain function to bring increased focus to purchasing and supply management with the goal of driving out costs system wide, achieving greater operational efficiencies and improving customer…

(Operator Instructions) And our first question comes from Paul Quinn from RBC Capital Markets. Your line is open, please go ahead.

Just a question on Shelby. Where are you in terms of the ramp up of that facility and when do you expect to have it fully ramped up?

Yes, I would say the paper mill is performing to full expectation. The biggest factor is what mix we run on the machine. Converting is performing quite well. We still have maybe some opportunities on that side of the equation but for the most part it's up and running where we would expect.

So when you start to look at further capacity expansions, you know at Shelby or other facilities. Is that in the 2014 or is that a 2015 look? Or is that something that you are currently nervous around given the other capacity additions coming to the market?

So, Paul, we have said before that through 2015 we are more focused on internal efficiencies and growing margin and cash flow and at the top of our list would not be a significant capital expansion. So I will stick with that storyline.

Okay. And then just, you mentioned hardwood pulp pricing expected to come down in Q3. We are seeing some pretty strong shipment data today on global stats. What kind of pricing drop are you anticipating?

It's going to be somewhat modest, Paul. But we are starting to see some of that already and same thing on softwood, we are starting to see of the spot market have a little bit more favorable pricing in some of the contract pricing we have seen. So across the board I guess we would probably expect to see some modest improvement in Q3.

Okay. And that’s baked in your EBITDA guidance of $68 million to $76 million?

It is.

Yes.

Okay. And then just lastly, just on paperboard. Where we are at or how you guys manage on the recent price increase and it looks like you are guiding prices up 1% for Q3. Does that fully capture the price increase or is it portion of it?

Yes. That would round out the balance of the price increase that was announced in Q1. And the reason for the delay is just through contractual arrangements with certain customers.

And you guys haven't noticed any additional imports coming in on the paperboard side in North America as of yet?

I wouldn’t say in any kind of material way. Market is pretty stable, very strong. On concerns from that regard today.

Thank you. Our next question comes from James Armstrong from Vertical Research. Your line is open. Please go ahead.

My first question is on the Arkansas mill issue. Do you still expect that to be resolved early next year and is there an estimate to the additional capital needed to completely fix the issue?

Yes, James, so there is a planned major maintenance in the first quarter where that mill will come down and so we will get in and look at the recovery boiler at that time. You know, we haven't put anything out there in terms of what we think the total cost to that is and I think we will probably learn more as we get closer to that and we would update you maybe at the end of Q4.

Okay. That helps. And then switching to consumer products. As you continue to place TAD tons, how was the market acceptance of the private label product. Another way of asking this is, if you had more tons to ship to date, do you think the market would accept the additional tonnage?

The market is really strong with regard to the TAD products. I would say there has been very good retailer and consumer acceptance of the product. I think the biggest factor with regard to how much this is grow in the next couple of quarters is all around the brand promotion. You know how deep the promotions go, how frequent they are. But I would say we are feeling pretty good about how the TAD shipments are shaping up.

Okay. That’s helpful. And then switching gears one more time. The pulp and paperboard segment seems to be running ahead of your boilerplate capacity. Do you think that’s sustainable over the next few quarters? Just the volumes coming out there look very very impressive.

Yes, they are very impressive. And we do expect that to continue and hopefully even get better from there.

Thank you. (Operator Instructions) I am showing no further questions. I would like to hand the conference back over to Ms. Massman for any closing or additional remarks.

Great. Thank you. Just to close out, I would just say we are very excited about the prospects of our business and the opportunities to increase operating efficiency across the company. We really appreciate everybody joining us today for the call and definitely thank you for your continued interest in Clearwater Paper. And then on one final note, we will be presenting at the RBC Global Industrial Conference on September in Las Vegas and hope to see you all there. Thank you.

Ladies and gentlemen, that does conclude the Clearwater Paper second quarter 2014 earnings conference call. We do appreciate your participation.