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Edited Transcript of SWM earnings conference call or presentation 8-Nov-18 1:30pm GMT

Q3 2018 Schweitzer-Mauduit International Inc Earnings Call

ALPHARETTA Nov 13, 2018 (Thomson StreetEvents) -- Edited Transcript of Schweitzer-Mauduit International Inc earnings conference call or presentation Thursday, November 8, 2018 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jeffrey Kramer

Schweitzer-Mauduit International, Inc. - CEO & Director

* Mark Chekanow

Schweitzer-Mauduit International, Inc. - Director of IR

* R. Andrew Wamser

Schweitzer-Mauduit International, Inc. - Executive VP of Finance & CFO

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Conference Call Participants

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* Daniel Andres Jacome

Sidoti & Company, LLC - Equity Research Analyst

* Kurt Willem Yinger

D.A. Davidson & Co., Research Division - Research Associate

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Presentation

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Operator [1]

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Welcome to SWM's Third Quarter 2018 Earnings Conference Call. Hosting the call today from SWM is Dr. Jeff Kramer, Chief Executive Officer. He is joined by Andrew Wamser, Chief Financial Officer; and Mark Chekanow, Director of Investor Relations.

Today's call is being recorded and will be available for replay later this afternoon. (Operator Instructions) It is now my pleasure to turn the floor over to Mr. Chekanow. Sir, you may begin.

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Mark Chekanow, Schweitzer-Mauduit International, Inc. - Director of IR [2]

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Thank you, George. Good morning. I'm Mark Chekanow, Director of Investor Relations at SWM. Thank you for joining us to discuss our third quarter 2018 earnings results.

Before we begin, I'd like to remind you that the comments on today's conference call may include forward-looking statements. Actual results may differ materially from the results suggested by these comments for a number of reasons, which are discussed in more detail in our Securities and Exchange Commission filings, including our quarterly reports on Form 10-Q and our annual report on Form 10-K.

Some financial measures discussed during this call are non-GAAP financial measures. Reconciliations of these measures to the closest GAAP measures are included in the appendix of this presentation and the earnings release. Unless stated otherwise, financial and operational metric comparisons are to the prior year period and relate to continuing operations. This presentation and the earnings release are available on the Investor Relations section of our website, www.swmintl.com.

I'll now turn the call over to Jeff.

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [3]

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Thank you, Mark, and good morning, everyone. Yesterday, we reported third quarter results with sales up 1% to $260 million and adjusted EPS of $0.77. During the quarter, we worked hard to offset a highly inflationary raw materially environment, which concealed several pieces of good news. For example, we delivered another solid quarter of organic growth in AMS, although input cost headwinds in the final stage expenses from our facility consolidation project pressured margins. We'll detail these 2 topics throughout the call, but 3 important takeaways from the quarter are: the Austin closure is now complete with fixed cost set to decline in the fourth quarter; second, we've recently implemented another round of price increases to offset raw materials cost pressure and we'll continue to do so as required; and third, we completed a highly strategic bond financing during the third quarter, which provides additional balance sheet flexibility. While the bond debt does carry higher interest rate expense and will have a modest impact on 2018 earnings, it was time to well in a rising rate environment. Though input cost inflation has been a challenging headwind this year, we have generated enough offsets to neutralize a good portion of these additional costs and expect to still be essentially on plan as we close out the year. Excluding the impact of the bonds and refinancing activities, we expect to finish the year at the lower end of our initial guidance. Of note, the third quarter adjusted EPS comparison to prior year was skewed by a third quarter 2018 expense of $0.02 per share related to our recent refinancing activities and the third quarter 2017 gain of $0.11 per share from an asset sale.

Now shifting to our operating segments. AMS delivered 4% organic sales growth, consistent with our investment theme. Filtration sales continued to have strong momentum leading the portfolio during the quarter with awarded business up double digits and solid growth in other subsegments. We also saw our infrastructure and construction business come back after a slow start to the year. Recall that earlier this year, tough weather conditions had post installation challenges for the downstream users of our products. We were encouraged to see this area get back on track, with our core erosion and sediment control products driving growth.

Transportation and medical had modest sales growth and both are up solidly year-to-date. Our transportation films business remains a globally growing product line driven by increased consumer penetration and category awareness.

Consistent with trends earlier this year and across many industries, operating margins were impacted by higher input costs but we expect AMS margin pressure to subside in the coming quarters.

Regarding resin prices. Market prices for polypropylene continued to increase and were up approximately 30% during the third quarter compared to last year. While polypropylene doesn't represent our entire resin cost basket, it is a significant purchase for us. In addition to rising market prices, we had a challenging comparison to last year as high third quarter 2017 margins were boosted by some opportunistic and attractive resin purchases by our procurement team. In response to continued escalation in resin, we recently implemented another price increase on a large portion of the AMS revenue base. Unfortunately, in a rapidly rising cost environment, price increases typically have a timing lag for implementation, but we believe we will be generally caught up from a price recovery standpoint heading into 2019.

Another impact on margins were the final stage cost associated with the Austin closure. We are pleased to report that we have completely exited the facility at the time of this call. As we have been discussing throughout the year, this action is an important component of driving our $10 million Conwed synergy plan by reducing fixed cost. As is typical in these exercises, as we have come to the final stages, we have been essentially occurring duplicate costs in Austin. We also kept several lines running a little longer than anticipated as we had higher-than-expected volumes in certain products that we were transitioning to other facilities. All told, the project is essentially complete with slightly more costs than originally expected in Q3 impacting AMS results. We believe this demonstrates our ability to execute against our commitments.

Though the resin increase and Austin closure combined for a tough quarter for margins, we expect the fourth quarter will benefit from price increases and lower fixed costs. While we are addressing short-term cost pressures, we have remained committed to executing our longer-term strategic growth projects. We recently generated our first sales of a new filtration paper product, realizing a unique synergy between EP's manufacturing capabilities and AMS' commercial organization, expanding offerings in our important filtration product category.

Another notable highlight is that our new film line in the U.K. is producing high-quality products and received its first full customer qualification, marking another important commercial milestone for this investment.

Moving to engineered papers. Second quarter sales declined 1%. Good price, mixed performance provided nearly a full offset to a 6% volume decline driven by our tobacco business. Currency, which had been a strong tailwind for us to date, is no longer providing a year-over-year benefit, giving the pullback in the euro compared to last year's level. The year-to-date segment volume decline of 3% generally reflecting the standard trends of the tobacco market. There were no particular product lines that drove the volume decline, but positive price/mix was supported by our specialty wrapper and binder recon products, price increases in our non-tobacco paper business, a strong quarter for our battery separated papers and LIP volumes outperforming the rest of the cigarette paper products. Similar to AMS, EP also felt pressure from rising cost, specifically wood pulp, which was up more than 35% during the quarter compared to last year. We have raised prices where contracts permit with a further portion of our contract price escalators with large cigarette manufacturers to take effect in early 2019.

Regarding Heat-not-Burn as well as the broader reduced risk product category, I'd like to review the factors that affect us and note that do not particularly as there has been increased headlines in the U.S. recently on vaping products, which are an entirely different category from which we participate. Consistent with some of the data and commentary reported by the major tobacco companies, our third quarter Heat-not-Burn volumes were down. As we have shared previously, rollout of new products such as this are lumpy as our customers navigate this new commercial landscape across a variety of international markets. And our volumes remained up substantially year-to-date. We continue to engage in very active development discussions across our customer base and remain optimistic about our ability to capitalize on its long-term potential, but repeat that it may not be a linear path from quarter-to-quarter. As a reminder, we supply tobacco-based materials for heated sticks. This technology has not yet been approved in the U.S., where recent headlines regarding the FDA's concern over vaping products has been escalating. Simply put, the vaping products in the U.S. are primarily flavored nicotine liquids, and the FDA is concern about their popularity among the adolescents. This is not a market we participate in.

I will now turn the call over to Andy.

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R. Andrew Wamser, Schweitzer-Mauduit International, Inc. - Executive VP of Finance & CFO [4]

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Thank you, Jeff. I'll now review our financial results, starting with segment performance. In the third quarter, AMS net sales increased 4% to $121 million. Adjusted operating profit was $17.5 million or 14.5% of sales, down 440 basis points versus last year. The market contraction was a function of several factors, the largest of which was higher resin costs. As Jeff referenced earlier, higher costs were driven by elevated market prices compared to last year's quarter when we benefited from some very attractive opportunistic resin purchases. For perspective, the year-over-year impact of resin cost was responsible for approximately 300 basis points of margin contraction.

The other key pressure on margin was inefficiencies associated with the Austin site closure, which accounted for approximately 200 basis points of margin contraction. In aggregate, these cost elements totaled about 500 basis points, more than offsetting the benefits of our organic growth. Going forward, we expect the benefits of both, the newly implemented price increases and the closing of our Austin facility, to provide an uplift to our AMS margins.

The Engineered Paper segment net sales were down 1%, with favorable price/mix of 5%, providing the offset to a 6% decline in volume. The adjusted operating margin for this segment was 19.7%, down 400 basis points versus last year. The year-over-year margin decline was driven by significantly higher raw material costs, which accounted for the full impact in operating margin.

Wood pulp comprise the majority of the cost inflation as it was up more than 35% year-over-year. We continue to look for efficiency improvement opportunities and price increases, but the majority of the contractual price escalators will not take effect until early 2019.

Adjusted corporate unallocated expenses decreased by 11% during the quarter due to fluctuations of general administrative expenses, but were down 1% year-to-date. This is more indicative of the spending trend and a demonstration of our solid cost control.

On a consolidated basis, net sales increased 1% as there is no acquisition benefits and currency had a minimal impact. Adjusted operating profit was $36.7 million and adjusted EBITDA was $46.5 million, both down versus last year for the reasons just discussed. Overall, our trailing 12-month adjusted EBITDA is $196 million, essentially flat with the trailing 12-month prior period, despite the pressures from rising raw material costs and a short-term expenses associated with our Austin synergy plan.

Shifting to consolidated earnings. Third quarter 2018 GAAP EPS was $1.33, up from $0.84 in the prior year. The increase was driven by 2 items. The first was a $0.43 benefit from an adjustment related to the tax expenses booked in the fourth quarter of 2017 as a result of the new tax legislation in the U.S. The second was a $0.25 gain from the reevaluation of a contingent consideration liability effectively an earn-out related to the Conwed acquisition. Both of these items were excluded from third quarter adjusted EPS, which were $0.77 versus $1 a year ago. Of note, third quarter 2018 adjusted EPS included a $0.02 write-off of unamortized debt issuance costs associated with refinancing of our credit facility. And as a reminder, last year's third quarter adjusted EPS had an $0.11 gain from an asset sale, making $0.89 a more apples-to-apples year-ago comparison. The decline in adjusted operating profit was partially offset by lower tax rate. Our normalized third quarter tax rate was 21.2%, down from 27% a year ago, and our year-to-date normalized rate now stands at 23.8%. Currency impact on EPS was negative $0.01 for the quarter.

Looking at our full year performance relative to guidance, as we said on prior calls, there are several puts and takes. Sales growth had been fairly positive, though organic growth, pricing action and various efforts to improve profitability have been more than offset by raw material costs, well exceeding our expectations at the beginning of the year. Tax rates continue to run favorable to our initial projection, and the early 2018 euro strength have now subsided. As Geoff referenced earlier, putting aside the impact of the bond financing, we believe we're still on track to finish at the lower end of our original guidance. However, our recent financing activities are expected to have a negative $0.05 impact to our 2018 adjusted EPS that was not contemplated when we issued guidance earlier this year.

Moving to cash flow and liquidity. Year-to-date 2018 free cash flow was $72 million, up from $63 million a year ago. CapEx was approximately $7 million in the quarter and $21 million year-to-date, which annualizes below our guidance for approximately $40 million. We anticipate heavier spending in the fourth quarter, but it's likely we'll finish below our original plan.

From a leverage perspective, for the terms of our credit facility, we were at 2.6x net debt to adjusted EBITDA at the end of the third quarter, down from 3x at year-end 2017.

Lastly, we announced a 2% increase in our dividend, continuing to build on our track record of dividend growth. The debt refinancing completed in the third quarter, which included our inaugural issuance of unsecured notes with a key milestone for SWM for several long-term strategic benefits.

First, the addition of unsecured debt to our capital structure enhances our financial flexibility. Second, in a rising interest rate environment, we were able to lock in 8-year fixed rate debt. Third, we have assets to new capital by expanding our investor base to the fixed income market adding creditors beyond our supportive bank facility syndicate.

Lastly, we reset the maturities on our revolver and term loan to 5 and 7 years, respectively, which would have otherwise been maturing in 2020 and 2022. We highlight that SWM received an attractive Ba3/BB- corporate credit rating from their rating agencies through a rigorous business and financial diligence process, demonstrating their confidence in our cash flow generation and the growth potential of our business. Of course, these bonds do carry a higher interest rate. For modeling purposes, we suggest using a baseline effective interest rate of approximately 5%, reflecting current rates. On various modeling the potential of rising interest rates associated with LIBOR, given the revolver and term loan are floating rate debt, and we assume some debt reduction on the revolver throughout 2019 absent any M&A activity.

Regarding the negative $0.05 impact on 2018 results due to these financing activities, $0.02 of expenses were incurred during the third quarter, and the fourth quarter impact of higher interest expense is expected to be $0.03. We note that the financing completed in September was leverage neutral, as we use the proceeds from the bonds to repay borrowings on our credit facility and term loan. At the end of the third quarter, our new debt structure was comprised of $350 million of senior unsecured notes, the $200 million term loan and $95 million outstanding on a $500 million revolving credit facility, which also includes a $400 million accordion.

And I will turn the call back over to Jeff.

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [5]

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Thank you, Andy. As we enter the homestretch of 2018, we remain diligently focused on delivering on our operating plan. We acknowledge the headwinds that we face on input costs are unfortunately above our assumptions at the outset of the year and, of course, earnings volatility along the way. However, we believe we have acted appropriately as we have navigated this environment and remain committed to our long-term strategic direction. We are in frequent discussions with our customers and the low pricing discussions are never easy. Our increases have generally been accepted by the market and our collaborative customer-centric approach is especially valuable in the context of these discussions. We look forward to realizing the benefits of our latest increases and the completion of the Austin facility consolidation in AMS and some pricing resets in EP early next year. All told, we believe we are weathering the cost storm fairly well, finding offsets anywhere from SG&A controls to taxes that supplement our pricing actions. We consider our expectation to finish at the lower end of our original guidance, excluding the bond impact, a significant achievement in the face of roughly $20 million of year-over-year input cost increases thus far in 2018.

We appreciate your continued interest and support. That concludes our remarks. George, please open the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Dan Jacome with Sidoti and Co.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [2]

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A couple of questions. First on the AMS segment. I think the press release called out some softness in the industrial markets but then conversely the water filtration market seems to have taken off. Can you give us a little bit more granularity on those 2 verticals, please?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [3]

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Sure. So let's start with our filtration's market, which is one of the key market places that we participate in. We've actually seen good growth in both our water-based segments that particularly go into reverse osmosis. As you may recall in earlier conversations, there are 2 components of growth in that segment, new facility construction, but also a replenishment cycle that had previously last year been a bit delayed. We're seeing that replenishment cycle continue to accelerate and we're seeing very good growth there, but we're also seeing good growth in our process segment side too, which is filtration of other fluids. So overall, it's been a very positive segment for us and we hope that, that continues into the future. The industrial segment for us on the other hand is more of a catch-all with a number of subsegments. And so there isn't anything in particular in that. It's just a number of our segments in that -- a number of our subsegments in that overall segment have just been down, but there's nothing material to discuss on that.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [4]

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Okay. Now that's helpful. Just following on the water filtration. So the replacement cycle turnaround, so to speak, do you still have all rooms project delays rolled off? Or there's still some left and does incremental offset in the next couple of quarters. I just want to understand that better.

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [5]

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Yes. So just to be clear, those aren't project related. Those costs are replenishment cycle. So once you've installed an RO system, the cartridges basically have a 5-year-ish life cycle. At the end of that time, usually, the following or the efficiency is fallen off sufficiently that you need to restock the facility. And that's just the typical life style -- life cycle. It just had been delayed last year due to low energy costs just because you actually have a trade-off between overall efficiency and replacing some of these cartridges with the rising cost of energy over the last year. It's been -- just been time for them to finish those replenishment cycles.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [6]

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Got you. Okay, well then on industrial. Is there 1 or 2 segments there that you're seeing the most strength just for us to know?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [7]

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Yes. In general, it's pretty -- again, it's really much of a catch-all. It's such a number of subsegments and I think there's anything particular to call out.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [8]

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Okay. And then, lastly, I wanted to talk about -- so your CapEx expectations I think are coming in a little bit and sorry if I missed that. What -- what's driving that again?

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R. Andrew Wamser, Schweitzer-Mauduit International, Inc. - Executive VP of Finance & CFO [9]

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Yes. So our original guidance at the beginning of the year was $40 million as we sit here through the first 3 quarters, we're sitting at $21 million. I would expect it to be -- to end the year closer to $30 million as we look at the year. I mean, the real 2 key drivers for the low end of the CapEx is really just the existing projects that we did have. We had lower expenses than we anticipated. We're conservative with those original estimates. And then there were some CapEx are up a bit, but again, we are cautiously optimistic again about the segment overall. It's not indicative of what we think the long-term potential there is. It's just that some selected projects have been delayed.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [10]

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So there were some Heat-not-Burn projects, Inc. in the original guidance? So is that what you're saying?

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R. Andrew Wamser, Schweitzer-Mauduit International, Inc. - Executive VP of Finance & CFO [11]

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The CapEx would include -- got to be CapEx for the EP and AMS segment and then from the larger projects within EP works Heat-not-Burn related.

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Operator [12]

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And our next question comes from the line of Kurt Yinger with D.A. Davidson.

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Kurt Willem Yinger, D.A. Davidson & Co., Research Division - Research Associate [13]

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I just wanted to start out. Could you bucket the volume and price within the 4% AMS growth this quarter?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [14]

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Sure.

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R. Andrew Wamser, Schweitzer-Mauduit International, Inc. - Executive VP of Finance & CFO [15]

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No.

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [16]

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Mark, just the -- in the growth in general, again the filtration was the double digits, infrastructure and construction was about 5%. Transportation was low single digits and in line with medical, et cetera.

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Kurt Willem Yinger, D.A. Davidson & Co., Research Division - Research Associate [17]

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And I mean, how much of the 4% overall number was price versus volume?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [18]

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It was pretty balanced, but we haven't broken that out.

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Kurt Willem Yinger, D.A. Davidson & Co., Research Division - Research Associate [19]

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Okay. And then could you just talk about any initial feedback you've had on the price increases on the AMS products? And whether you've seen any sort of volume impact from that, from the previous price hikes you've announced?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [20]

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Yes. So in general, I think their price discussions go as you expect. No one likes to see a price increase, but I think there is a general understanding throughout the marketplace that raw materials are increasing. And so we actually have very constructive conversations with our end users. We've not seen a material impact on volumes because of those increases.

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Kurt Willem Yinger, D.A. Davidson & Co., Research Division - Research Associate [21]

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Okay, that's helpful. And then 2018 has certainly been a year of greater stability in Engineered Papers. Could you just maybe update us based on your visibility at present and how you're seeing 2019 with some of the bigger pieces of LIP and RTL?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [22]

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Yes. We typically don't like to give that much guidance going forward at this particular time in the year, but we don't see any major changes in the general overall trends of the marketplace. It's -- I think it's been fairly consistent from the things that we've said in the past. So I would just keep the consistent view.

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Kurt Willem Yinger, D.A. Davidson & Co., Research Division - Research Associate [23]

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Okay. And then qualitatively, do you think the Heat-not-Burn opportunity going into next year is bigger or smaller as it sort of relates to being able to offset some general volume weakness in traditional cigarette-related products?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [24]

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Yes. It's always an interesting discussion. I think we've been pretty consistent in we find that marketplace to be attractive. We think it's a fascinating concept. I think we're well positioned. In fact, we've always said we think it'll be a little bit lumpy but we think the outlook is going to be generally positive to us to offset those and I don't think we've changed that. It's more of a question around timing and how things role. I think part of interesting news for us is because of the end user manufacturers will need to continue to tailor their products to continue to have success in the marketplace, I think that continues to position us very well because we're that development partner of choice in many cases.

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Kurt Willem Yinger, D.A. Davidson & Co., Research Division - Research Associate [25]

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Okay, that's helpful, Jeff. And then how much of your EP related volumes have price escalators that are in some way directly tied to market pulp?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [26]

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Quite a bit of the cigarette paper businesses have built-in guidances and so it really is a lag around that.

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Kurt Willem Yinger, D.A. Davidson & Co., Research Division - Research Associate [27]

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And then just lastly, net leverage is down to sub 3x. Maybe you could just give us an update on how you're thinking about M&A as we turn the page into 2019? And just any general high-level comments about valuation or opportunities that you're seeing?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [28]

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Yes. And just in general, I don't think our investment or strategic strategy has changed. Our key focus for the business is delivering organic growth for the overall corporation, particularly in the AMS segment and focusing on margins and cash flows, et cetera. So I don't think that's changed. I think even with the bond financing, we consistently like where we are in the marketplace. So the good news is I don't believe we need to do any acquisitions. I think though that as we've said, we will continue to look at the marketplace and continue to screen the marketplace to see if there is something that would be attractive and accretive to us that fits into our strategic sandboxes we play today and the market segments that we have. And so we continue to do that. Overall, I would say in the marketplace, valuations are still on the higher side, rather than more reasonable side. I think there's still interesting cash-chasing attractive deals. But with that said, we continue to see opportunities within many of our segments and we'll continue to screen for those.

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Operator [29]

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And our next question is a follow-up question from Dan Jacome with Sidoti & Co.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [30]

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Just one more. I think I heard you guys say there was some new film products in AMS that you were targeting or something about new capacity? Can you -- did I mishear that? Or on specialty film, I guess?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [31]

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No. I think, Dan, we have talked a little bit before. We had one of the interesting synergies that we had as we believe we had the opportunity to utilize some of our EP papermaking capabilities and leverage that into our filtration marketplaces and take advantage of the commercial relationships we have there. We had put it in a material capital investment to make that product. We've now scaled that product up and have introduced it into the marketplace and are getting very favorable feedback on it. But for competitive reasons, we're not sharing more details at this particular time other than to say that, that project is making significant progress.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [32]

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Right. That was my next question is what end markets specifically because you had a couple of pockets of -- especially last year that saw a lot of strength. So I'll leave it at that.

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [33]

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Yes, but this would be new volume that's pretty new.

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Daniel Andres Jacome, Sidoti & Company, LLC - Equity Research Analyst [34]

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You mean in new end market?

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [35]

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No it's in the same filtration. It's a new product though, yes.

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Operator [36]

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(Operator Instructions) And I'm showing no further questions at this time. I would like to turn the call back over to Dr. Jeff Kramer for closing remarks.

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Jeffrey Kramer, Schweitzer-Mauduit International, Inc. - CEO & Director [37]

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Well, again, everyone, thank you very much for your participation and interest in SWM. It was a challenging quarter, but I think a lot of the actions that we've discussed have offset some of those pressures. We continue to thank all of our stakeholders for their interest and support and we'll continue to endeavor to do the best we can to justify and earn your support in the future, so thank you very much.

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Operator [38]

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Ladies and gentlemen, thank you for participating on today's conference. This does concludes today's program, and you may all disconnect. Everyone, have a great day.