Ladies and gentlemen, thank you for standing by. Welcome to the Wausau Paper 2013 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I’d now like to turn the conference over to our host, Mr. Perry Grueber. Please go ahead.

Thank you, Stacy. Good morning, everyone. Thank you for joining us. I’m pleased to be here today with Hank Newell, our President and Chief Executive Officer; and Sherri Lemmer, our Chief Financial Officer. After our prepared remarks, we look forward to your questions. This call is being webcast and slides are provided to summarize key elements of our presentation. Your webcast viewer should allow you to download these slides and yesterday’s earnings release, both of which are also available from the Investors section of our website at wausaupaper.com. Statements made during this presentation, other than those that refer to past results, are forward-looking statements made pursuant to the Safe Harbor provisions of the Securities Reform Act of 1995. Such statements, including those concerning expected performance, future earnings or dividends, involve risks and uncertainties that may cause results to differ materially from the expectations set forth during this discussion. Among other things, these risks and uncertainties include the risks and assumptions described in Item 1A and Item 7 of the company’s Form 10-K for the year ended December 31, 2012. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. Additionally, our presentation refers to certain non-GAAP financial measures. A reconciliation of these measures to GAAP is provided in the appendix of this presentation. There you’ll also find a variety of other summary presentations and data points you might find useful. And with that I’ll now turn the call over to Hank Newell, our President and Chief Executive Officer. Hank?

Good morning. The third quarter represents our first quarter as a 100% tissue company, a major milestone in our multi-year transformation. Over the last 24 months the team has as a part of our strategic repositioning successfully accomplished the divestiture of two major business units, the sale of its timberlands, and completed the closure of two major manufacturing sites. As part of our Tissue expansion we have successfully repositioned the EcoSoft brand in terms of both quality and cost, built a new 70,000 ton ATMOS tissue machine which is capable of making high-quality towel and tissue from 100% recycled fiber, launched a new premium brand family, DublNature, while continuing to grow our tissue volume at two to three times the market. Organizationally during this same period we built a new leadership team that includes the CEO, CFO and Senior Vice President and General Manager of Tissue. We’ve added five new board members with substantial tissue experience and executed an overall realignment of the salaried organization that will result in over a 22% reduction in salaried staffing. We are building a record for execution and have created a new Wausau Paper that is focused on continuing to demonstrate above market growth, industry leading margins, and high returns on capital. In our first quarter as a 100% tissue company we delivered year-over-year case volume growth of 7.4%. This is the strongest volume quarter in our history and well above market growth rates. Revenues were up 5.6% versus last year. A great start for the new Wausau Paper and our team as we build a strong growth oriented company. Our EBITDA margins as we expected continued to expand with Q3 EBITDA margins improving to 11.5% with progress in ramping up the new paper machine and optimizing our operations platform a significant element of…

Thank you Hank and good morning. With the sale of the technical specialty paper business during the second quarter of this quarter and in accordance with generally accepted account principles, certain restatements have been made between continuing and discontinued operations to reflect the ongoing operations of Wausau Paper. The comments that follow reflect the results of continuing operations for our company. In our second quarter conference call on July 30th we indicated that with a full range of DublNature products available during the third quarter and continued improvements in operating efficiencies we expected improved results over the balance of the year. In the third quarter of 2013 we achieved improvement in sales volume with the record $4,358 million cases shipped representing a 7.4% increase over the third quarter of 2012. Our mix of strategic versus support products increased about 1% point over the previous two quarters in 2013 and in the quarter a strategic mix at 48.4% of total cases shipped in the three month period. We expect to maintain strong performance with 6% case growth in the fourth quarter and total case volume improvement for the full year in the range of 4% to 5% again demonstrating our ability to grow at above market rates which were in the neighborhood of 1.5%. As a result of strong volume net sales were $91.7 million a new quarterly record marketing improvement of 5.6% over the $86.8 million in the prior year third quarter and on a year-to-date basis we are just slightly above where we were in the same time in 2012. Adjusted earnings before interest, taxes, depreciation, amortization or adjusted EBITDA up $10.6 million represented an adjusted margin of 11.5% for the third quarter of 2013 and has improved with each quarter this year. The improvement has been generated as…

Thank you, Sherri. Wausau Paper today is well positioned for a significant earnings expansion and cash flow growth. Sherri took you through our expectations for 2014. We have previously provided EBITDA guidance of approximately $140 million by 2017. Our outlook has not changed but any long-term forecast has uncertainties. Our improvement in earnings and cash flow was a ramp-up curve and that improvement will not be in a straight line. Macro factors such as fiber are expected to increase in both 2014 and as we move towards 2017. We expect product pricing over time to offset these costs but there will be a time lag that can impact results at any given point in time. To wrap-up we are today a company that has 100% focused on Tissue and uniquely positioned to grow and deliver value. We had a third quarter that demonstrated excellent progress delivering volume growth and margin expansion. We are committed to growing free cash and distributing approximately 50% to our shareholders as a priority. We look forward to sharing our continued progress. Thank you very much for your support. And I’d now turn this call over for Q&A to Perry.

Thank you, Hank and Sherri. That concludes our comment proportion of today’s call. Stacey will you call for any questions please.

Sure. (Operator Instructions). We’ll go to Mike Roxland with Bank of America. Please go ahead.

Thanks very much. Just want to get a little more clarity on the capital allocation strategy of returning 50% free cash flow to the investors. How does that ultimately jive with your desire to fund growth? I think if it sounds like on this call you changed the – you changed like – you changed your direction because I feel on the last call if I recall correctly you said that the priority for the company was going to be to use future free cash flow for our growth investments. So, now that you’ve laid out this free cash flow target, it sounds like -- correct me if I am wrong, it sounds like you are going to be focused on returning cash to shareholders over growth, would that be correct?

So, I think the number one priority is to deliver on our stated strategic goals as relates to revenue growth and EBITDA. And what we’ve articulated as it relates to capital allocation priority is that capital required to deliver on those expectations. So, building a strong profitable growth oriented company is our objective. There is level of ongoing dispenser investment and investment in proprietary converting that’s required. And I think with our targeted capital allocation we’ve had an adequate free cash flow that has opportunities for acquisitions in areas that are close to home would become available or that we would have the capacity to execute. So I think what we try to do here Mike is provide more, just more clarity around what those capital and cash needs are and reinforce our commitment to provide a growing dividend and or repurchase shares in a way that continues to return and create value for our shareholders.

Okay, I got that, I mean how would you frame, how would you rank it so what’s the order of priority for cash flow, is it the growth, is this dispenser investment, is this proprietary investment is the opportunistic acquisitions or is it really trying to return cash to shareholder through – the higher dividend or through share purchase, how should we think about it in terms of order or priority.

So I think as you step back and as the board considered it’s announced policy to return 50% of free cash flow to shareholders, we considered all of those factors and ultimately first we need to have a resilient balance sheet that does not constrain us in periods of whether it would be economic uncertainty or if we have an opportunity. Two, we need to have a balance sheet that supports what we know to be the requirements to successfully grow our business. And then as we’ve announced our intent and commitment to return cash to shareholders we feel comfortable that targeting a 50% pay-out ratio free cash as we’ve defined it is appropriate.

Got you. I appreciate that. Just a couple more quick questions, in terms of the last one released on the free cash flow at a minimum because of what you laid out there in terms of the dispenser investment, the converting capacity investment, and maintenance cap investment. You are looking at a CapEx hurdle typically of around $50 million, $70 million, would that be – is that fair?

That’s I think that’s right on, Mike.

Okay. Got you. Then just on the new tissue line when do you expect the new line to be running higher quality products to reduce the amount of turnover of the new machine? And secondly if there is such high demand of your new products why did you choose more measured approach to support distributors in the quarter?

So I think we grew our support categories at over 8% in the quarter and strategic was growing at – in the neighborhood of 7%. So there is a little bit of how much transition and inventory can you manage and how much in the way of new product introductions can your supply chain, your distributors manage. So as we work through and kind of solve for that equation it said we need to take a more measured approach as we introduced product to the marketplace. So we’ve got the full launch out there now. As you look at Q3 an awful lot of the improvement in Q3 was really related to operations as we moved into Q4 and into 2014 you will start to see the full benefit of growth in DublNature products and that shows up in two ways. One, DublNature which is our premium product offering carries a much higher margin. And two, as you get the scale of those premium products on our new machine you get larger run sizes or getting the – getting the experience on those grades, they were getting the experience in converting. So you’re getting kind of a two pluses, one, the higher margin product and two, much more optimized operation and that becomes the source of the real EBITDA expansion as you move into 2014.

Got it. And then just can you remind us what you see in terms of new capacity, new tissue capacity which I believe is largely geared for away-from-home. And then why you think your business is particularly defensible versus other competitors. We’ve recently heard from someone else, someone from another company in paper forestland, whose business is also presented as defensible. And your competition appears to have heated up potentially pressuring pricing in that sector and also their margin. So what makes your business so special, why it’s defensible, why couldn’t others replicate the model?

So I think first I think the first part of your question was around capacity additions and ours is really the only – our investment in the ATMOS technology is really the only investment purely targeted at the premium space of the away-from-home market. There is nobody else that is making the kind of investment in technology that we are. It gives us the ability to produce the full spectrum of quality using our 100% recycled fiber. In terms of what really – you think about what makes us unique, we uniquely view the distributor as our customer and our job in life is to make that our customer successful. We want to help him grow his business, his success is ours. We are the green leader in our space, we offer controlled use proprietary dispensing supported by proprietary converting and now we’re – we’ve invested in technology that provides product attributes that I think are very difficult for our competitor set to approach.

Got you. Last question and I’ll just turn it over. The trade press has reported that a buyer who is [indiscernible] buying Brainerd mill recently walked away citing environmental concerns. Can you provide us some color on what those issues are and what steps you’ve taken to address them and ultimately what’s the – can you remind us also what the company’s strategy is now for the mill?

Yes. So our – first, our ideal objective for Brainerd is to find and operating owner for the site. We have a wide range of interest in the – in liquidating the site so there is a source of cash there for us. But our primary objective there is that we think we can optimize value best by finding an operating owner. So we’re proceeding down that path. As it relates to the comment on environmental, I think that really doesn’t relate as much to the site as it relates to the capital requirements that were required for that potential buyer or two produce what they wanted to produce there. So the – as they looked at the investment required in the site to produce the grades that they wanted I think probably the environmental piece of that equation was larger than they thought.

Got it. Thank you very much.

Thanks, Mike.

(Operator Instructions) And there are no questions in queue. Please continue.

All right. Thank you, Stacy. Just to repeat we anticipated earnings, releasing our fourth quarter earnings the afternoon of Monday, February 10 and look forward to our next scheduled conference call which is set for 10:00 A.M. Eastern the following morning Tuesday, February 11. We appreciate you’re taking part into this discussion and your interest in Wausau Paper. Thank you. Stacy?

Thank you ladies and gentlemen. This conference will be available for replay after 11 O’clock A.M. today running through November 5 till midnight. You may access the AT&T replay system at any time by dialing 1-800-475-6701 and when prompted enter the access code of 304-389, those numbers again 1800-475-6701, access code 304-389. That does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.