Clearwater Paper Corp (CLW) 2014 Q3 法說會逐字稿

Welcome, ladies and gentlemen, to Clearwater Paper Corporation's third-quarter 2014 earnings conference call. As a reminder, this conference is being recorded today, October 22, 2014. I would now like to turn the conference over to Ms. Robin Yim, Vice President, Investor Relations, of Clearwater Paper.

Please go ahead, ma'am.

Thank you, Sayeed.

Good afternoon and thank you for joining Clearwater Paper's Third-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 third quarter were released shortly after today's market close. Posted on the Investor Relations page of our website at Clearwaterpaper.com, you will find both the earnings press release and the presentation of supplemental information, including an updated outlook slide providing the Company's current expectations and estimates as to net sales, operating margin, adjusted EBITDA, certain costs, pricing, shipment, production, and other factors for the fourth 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 materials provided on our website.

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 quarters ended March 31 and June 30, 2014. Any forward-looking statements are made only as of this date. And the Company assumes no obligation to update any forward-looking statements.

John Hertz will begin today's call with a review of the financial results for the third quarter. And Linda Massman will provide an overview of the business environment and our outlook for the fourth quarter of 2014. And then 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 into our third-quarter 2014 results, I will 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 third quarter of 2014, there was a net charge of $30 million, which includes a $24 million charge related to the early retirement of the $375 million notes; $5 million of costs associated with the prior closure of our Long Island New York converting facility; $1 million in severance and other expenses associated with the specialty paper optimization within our Customer Consumer Products Division; and lastly, the mark-to-market impact from directors' cash-settled stock unit was a $200,000 benefit in the third quarter.

Let me start by saying that I'm very pleased to report that Clearwater Paper had a milestone quarter and in the process set many new record highs, which Linda will cover in more detail. We delivered $72 million in adjusted EBITDA, a record quarter for the Company and at the midpoint of our outlook of $68 million to $76 million. We estimate that the number would be $80 million if pricing and input costs were similar to those seen in 2011, which was the baseline of our $75 million EBITDA per quarter objective.

So with that, I'll turn to the quarterly results.

Net sales came in at $511 million. That's up 2.5% from Q2 and in line with our outlook for the quarter of up 2.4%. On the paperboard side, we saw a 3% increase in paperboard shipments as the paper machine in Arkansas recovered from its Q2 operational issues and resumed normal production levels.

On the tissue side, we saw a 2% increase in case shipment volumes accompanied by a 2% average price increase as through-air-dried, or TAD product, shipments continued to grow as a percentage of our total tissue sales. Versus Q3 2013, net sales were up 5%, primarily due to higher prices and volumes in both paperboard and tissue.

Third-quarter adjusted gross margin of $81 million, or 15.8%, which excludes the Long Island shut down costs, was up 240 basis points from the second quarter. On the paperboard side, we saw lower operational and maintenance costs at the Arkansas mill as operations improved there and there was no boiler maintenance in the quarter, as well as seasonally lower energy usage. On the tissue side, we had a 2% increase in average pricing. And hardwood pulp prices were down from last quarter.

Those improvements were partially offset by higher transportation costs due to some short-term tissue converting capacity constraints, which caused an increase in the number of miles traveled, as well as tight fleet supply nationwide. In addition, we saw higher wood fiber prices due to strong demand and wet weather in the South limiting supply.

Versus Q3 2013, gross margin was nearly 6 percentage points higher due to strong paperboard pricing and volumes; higher average tissue prices; the absence of major maintenance costs; as well as savings from facility closures.

Adjusted SG&A expense was $31 million, or 6% of third-quarter net sales, which is down approximately $1 million from Q2. Q3 2013 adjusted SG&A was 5.6% of net sales. Adjusted corporate expense was $14 million of the SG&A spend in the third quarter, or 2.7% of net sales, and was also 2.7% of net sales in Q2.

Adjusted operating income of $50 million, or a 9.7% margin, came in at the midpoint of our third-quarter outlook of 9% to 10.5% and up from 7.1% in Q2. Versus Q3 2013, adjusted operating income more than doubled. And adjusted operating margin percentage improved by 5.4 percentage points, primarily due to a near 14-percentage-point operating margin gain in our Pulp and Paperboard Division due to higher prices and volumes shift and the absence of major maintenance in Q3 of 2014.

Adjusted EBITDA was $72 million, or 14.1% of net sales, which is 90 basis points below our cross-cycle of margin target. When compared to Q2, at 11.5%, and Q3 of 2013, at 8.8%, our operating leverage in PPD continues to strengthen. And operating efficiency in CPD is modestly improving. Net interest expense was $10 million, which excludes early debt retirement costs of $24 million.

Turning to taxes, on an adjusted basis, our Q3 effective tax rate was 36% and in line with our outlook of 36% plus or minus 2% and down from 38% in the second quarter.

Third-quarter 2014 GAAP net earnings were $6 million, or $0.31 per diluted share, and on an unadjusted basis $26 million, or a record $1.28 per diluted share. That is compared to adjusted net earnings of $15 million, or $0.74 per diluted share, in the second quarter and $6 million, or $0.29 per diluted share, in the third quarter of 2013.

Non-cash expenses in the third quarter of 2014 included $22 million of depreciation and amortization; a $5 million write-off of unamortized deferred debt issuance costs; $2 million of non-cash pension and retiree medical expense; and $2 million in equity-based compensation. Employee headcount at the end of the third quarter was approximately 3,700.

Now I'll get to the segment results. Consumer Products net sales were $306 million for the third quarter of 2014, up 2.3% versus the second quarter and 130 basis points better than our outlook of up 100 basis points, due to a richer product mix and parent roll pricing was up 2%. We shipped just over 135,000 tons, which was essentially flat with the second quarter and in line with our stable outlook for the quarter. Case shipments were up again by 2% to a new record 14.4 million cases shipped in the third quarter.

Contributions to EBITDA resulting from TAD expansion related shipments came in, as expected, at $12 million, up from $9 million in Q2. Consumer Products adjusted operating income for the third quarter of 2014 was $18 million, or 6% of net sales, versus $15 million, or 5%, in the second quarter. The improvement was primary due to the higher case shipments and tissue pricing, as well as lower hardwood pulp prices. These improvements were partially offset by higher costs in the persistently tight transportation market and increased transportation requirements associated with our short-term converting constraints in the quarter.

There was also increased chemical usage associated with investments and product quality enhancements in the Ultra tier household towel category. And the maintenance was higher than anticipated. Consumer Products Q3 adjusted EBITDA and margin increased $3 million to $33 million, or 11% of sales, from $30 million, or 10%, in the second quarter, but remains below our CPD model of 17%. Linda will further discuss the progress of our initiatives to improve operating and EBITDA margins within CPD.

Now turning to the Pulp and Paperboard Division. Pulp and Paperboard net sales of $205 million for the third quarter of 2014 were up 3% versus the second quarter. With the exception of the recovery boiler, Arkansas was fully recovered from its second-quarter operational issues and, together with our Idaho mill, achieved a record production quarter of 197,000 tons and another near-record shipment quarter of 202,000 tons, which was at the low end of our outlook range of up 3% to 5%.

Average pricing of $1,016 per ton was flat with Q2 and lower than our outlook of a 1% price increase as the increase associated with the full effect of the Q2 price increase was offset by a mix shift to a higher percentage of lower-priced, non-extruded and non-prime board.

Pulp and Paperboard's Q3 adjusted operating income was $46 million, or 22% of net sales, as compared to $34 million, or 16.8% of net sales, in the second quarter. The significant margin percentage improvement versus Q2 was due to the absence of all but $1 million of the $9 million cost headwinds from Arkansas's operational issues, as well as no boiler maintenance in the quarter. Pulp and Paperboard's record Q3 adjusted EBITDA margin of 25% remains above the 19% divisional objective inherent in our cross-cycle financial model.

Now turning to the balance sheet. Capital expenditures were $26 million in the third quarter and are now expected to total approximately $95 million in 2014. That is up from our prior outlook of $78 million, as we are accelerating action on warehousing, converting, and distribution efficiencies and other optimization-related activities.

Long-term debt outstanding on September 30, 2014, decreased from $650 million to $575 million. In the quarter, we refinanced our $375 million 7.125% notes with $300 million in half-year notes at 5.375%, and paid down $75 million of long-term debt concurrently with a combination of cash from the balance sheet and our secured revolver.

At the end of the quarter, we had $47 million outstanding under our $125 million revolver. We incurred early debt retirement costs totalling $24 million, of which $19 million was for the make whole premium, and the remaining $5 million was a non-cash charge for unamortized deferred issuance costs related to the 2018 notes. This timely refinancing helped us reduce our weighted cost of capital from 6.5% at the end of 2013 to 4.9% today.

Turning to the stock buyback program. In Q3, we completed the $100 million share buyback authorization. This year we repurchased a total of 1.6 million shares under that authorization at an average price of $63.50 per share. Since the inception of our buyback program in 2012, we have repurchased 4.5 million shares for $230 million, or $51.13 per share.

Looking forward, we remain committed to returning at least 50% of discretionary free cash flow to shareholders through 2015. As a reminder, we define discretionary free cash flow as cash flow from operating activities minus $50 million of maintenance CapEx.

As of the most recent measurement date of December 31, 2013, our Company-sponsored pension plans were underfunded by approximately $7 million. We have contributed $60 million to those plans through Q3 of 2014 and an additional $1 million here in the fourth quarter.

With regard to our liquidity, we ended the first quarter with $14 million of unrestricted cash and $70 million available under our revolver. During the third quarter, we generated $7 million of cash from operating activities, or 1% of net sales, down from 12% in Q2 and well below our cash flow model of 11% to 13%. Operating cash flow in the third quarter was impacted by the $19 million make whole payment; a seasonal inventory build in pulp logs and some opportunistic spot buys of hardwood pulp; and then timing of receivable collections.

Our focus is on driving shareholder value through a combination of focused efforts to improve operating efficiency and strong management of the balance sheet and capital structure. We continue to improve the spread between our return on invested capital and the weighted average cost of that capital from 11.8 percentage points at the end of Q2 to 12.3 percentage points in Q3. We examine all options available to maximize shareholder value. And to that end, we have been evaluating applicability of the master limited partnership structure to our business.

Our time spent over the last three months has shown some potential applicability to parts of our business. This is a complex undertaking with long-term ramifications. While we continue to analyze the structure, I would characterize our status of evaluation as in the early innings.

I will now turn the call over to Linda Massman, who will discuss the Company's outlook.

Thanks, John.

Hello, everyone. Thanks for joining us today.

I'm extremely pleased to report on a record quarter for Clearwater Paper. I'd like to thank our entire team of employees for their hard work and dedication, which helped us reach this milestone in the Company's history. It was a great quarter in which we topped many historical records.

In the quarter, we reached record revenues on a consolidated basis of $511 million; record consolidated adjusted gross, operating, and EBITDA margins; record adjusted EBITDA of $72 million which, as John mentioned, we estimate to be $80 million in 2011 cost structure terms, which was the baseline on which we initially set the goal for Clearwater Paper.

While we've had a tailwind from a healthy pulp and paperboard market over the period since 2011, we have faced significant headwinds from decreases in conventional tissue pricing and input cost inflation for external pulp, natural gas and chemicals. In light of these challenges, this is an outstanding accomplishment by the team.

Record adjusted EBITDA margin of $52 million, or 25%, in our Pulp and Paperboard Division, with record production levels in both Arkansas and Idaho. This was the second-highest quarterly shipment level for the division, with 202,000 tons shipped.

Record net sales in Consumer Products, with a record 14.4 million cases shipped in the quarter. Record TAD product shipments, which grew another 8.5% in Q3, resulting from growing customer adoption of our private-label TAD products despite continued heavy promotions by the brand. And we achieved our full TAD expansion EBITDA run rate of $12 million in the quarter.

While we take this time to acknowledge our achievements, we recognize that we still have significant work ahead of us to achieve our cross-cycle margin model, particularly in the Consumer Products Division. More importantly, we are confident in our strategy and ability to get there. The progress we've made this quarter is further evidence that the steps we are taking to improve operating efficiencies are materializing, though I would still consider this to be the early stages of our planned improvements.

To that end, last quarter I announced the creation of our cross-divisional supply chain function to improve and streamline our purchasing and supply management while driving out costs systemwide to achieve greater operational efficiency and improve customer service performance. Our supply chain team has completed an optimization study identifying potential savings of 3% to 5% within our CPD warehouse and transportation operations. Our new service model will provide optimal finished-goods sourcing while improving production flow. These changes will require minimal capital and early projected benefits are expected to begin in Q2 of 2015.

In parallel with our new service model, we are quickly developing key concepts of collaboration with our three PL partners. This is expected to improve our overall inventory management while delivering exceptional service performance for our customers.

In addition, we also announced last quarter the formation of our Specialty Products Group within our Consumer Products business, comprised of our non-retail tissue products, such as parent rolls, machine-glazed, and other specialty papers. The changes made to date have had a positive impact on these mills by increasing production levels while lowering operating costs.

Now I will discuss our view of the market environment and our outlook for each of our business segments, starting with the Consumer Products business. Growth in the North American consumer tissue market is tracking as expected at approximately 1%. And we are confident in our ability to grow with our retail customers, even in the midst of historically high levels of promotional activities from key branded manufacturers. We are currently seeing, and expect to continue, trend toward expansion and focus on private-label products by our customers across all channels.

Based on data provided by IRI, year to date through quarter three, Clearwater Paper is outperforming the competition in both private label and the brands. The brands were down nearly 2%, while private label is up 2.6%; and Clearwater paper is up 3.6%. We believe this reflects a growing consumer trend in acceptance of the quality and value proposition of private-label products, with Clearwater Paper leading the way. All that being said, the North American tissue market does remain competitive, with continued verification of increasing tissue capacity expected to come online in 2015 through 2016.

We're making good progress on several of our other optimization and efficiency projects, which will help us get to our target EBITDA margin of 17% in CPD. Here are a few of those examples.

In an effort to standardize our maintenance procedures and adopt a uniform engineering practice, we are in the process of installing new equipment that will allow us to standardize several parts of our converting equipment. This should improve operating and packaging efficiencies and also reduce our spare parts inventory. With elevated production volumes and converting activity well above historic norms, we have instituted new scheduling initiatives to optimize utilization rates of our equipment.

To reduce waste in converting supplies, we utilize lean manufacturing tools to lower inventories and waste in our complex packaging process across a large number of customers and their SKUs. We continually look for opportunities to further leverage our purchasing power and consolidate the procurement of pulp, chemical, packaging, operating supplies, and capital equipment wherever possible. And other projects, such as SKU rationalization and pulp optimization, are ongoing.

Getting to our fourth-quarter outlook for the Consumer Products business, we are expecting shipment tons to decrease from Q3 due to normal seasonality. Our outlook is for a 3% to 6% decline in shipment tons, which is in line with the average Q3 to Q4 seasonal change in volumes. By achieving our TAD shipment expansion goal in the third quarter, we expect price mix to be stable in the fourth quarter.

On the cost side of the equation, we expect to see external hardwood pulp prices stabilize, as demand has kept pace with new capacity coming online. Chemicals, operating, and package supply costs, maintenance, transportation, and SG&A are also expected to remain stable.

Turning to Pulp and Paperboard, in Q3 we saw our average price per ton for SBS flatten for the first time in six consecutive quarters, which was primarily due to a mix shift in products. Our outlook for the fourth quarter is a seasonal decline in volumes of 4% to 8%, coming off of record-high volume production and near-record shipment volumes in Q3. Our outlook for pricing is stable to up 1% as we return to a more normal product mix. Our backlogs are currently in the three- to four-week range, which is above average for this time of year.

The growth drivers in SBS are still coming from food service categories, particularly in cup and to a lesser extent plate, driven by the trend away from foam for environmental reasons. Certain costs in pulp and paperboard will be higher in the fourth quarter. Starting with wood fiber, costs are expected to be up in Idaho and Arkansas. Our regional wood basket in the Southeast continues to be negatively impacted by persistently wet weather conditions. And our outlook is for a price increase of 3% to 4%.

We've scheduled $6 million to $7 million in planned maintenance for the quarter relating to a water wash at a boiler in Arkansas and the rebuild of a cogeneration turbine in Idaho that was originally planned for Q2 but was delayed to the fourth quarter. The downtime of the cogeneration turbine will drive an increase in purchased energy for the quarter. The good news is, our outlook for cost of chemicals, operating, and packaging supplies, and transportation is stable.

Looking at the consolidated business for Q4 versus Q3, we expect net sales to be lower by 4% to 7% due to seasonality, together with a relatively stable price mix for both divisions.

The outlook for our consolidated operating margin is in the range of 7% to 8.5%. In addition, we expect adjusted SG&A to be flat with Q3; adjusted corporate spending to be $13 million to $14 million; net interest expense to be about $8 million; and an adjusted tax rate of 36%, plus or minus 2 percentage points.

All these variables combined are expected to result in a Q4 EBITDA range of $56 million to $64 million. The key variables we see determining where we land in that range are pulp and wood fiber prices, brand promotional activities, any changes in consumer demand, and actual maintenance expenditures.

In conclusion, we remain well-positioned in both our Pulp and Paperboard and Consumer Products businesses. We will continue our sharp focus on increasing operational efficiencies Company-wide.

Finally, I'd like to thank our employees for an outstanding quarter, and for their loyalty and commitment to Clearwater Paper's success.

Thank you for listening to our prepared remarks, and we will now take your questions.

Thank you.

(Operator Instructions)

James Armstrong, Vertical Research Partners.

Good afternoon.

Hi, James.

My first question is going to be the obligatory MLP question. Your pulp and paper side of the business may qualify for MLP status, but do you think anything on the tissue side would qualify?

I think it is still being looked into, but I'd put a potentially on the paper machine assets within tissue.

Okay. So just to the paper machine assets. That's helpful.

And then switching gears, you saw your average price rise during the quarter as you sold more of your capacity as TAD, but at least one of your branded competitors has says that consumer tissues margins are at a near-term high-water mark. Could you comment on what you're seeing in terms of the pricing environment, and specifically what you're seeing on TAD pricing versus away-from-home pricing?

I would say competitively we have seen trends that would indicate through 2014. We have definitely seen, and we've talked about this, an increase in promotional activity during the vast majority of 2014 by a few key competitors. I think our expectation is, given that commentary from earlier this week, that we would expect a continued competitive marketplace. And that, coupled with some of the new capacity coming online, would indicate that we need to continue to sharpen our pencils on the efficiency side and the optimizing our profitability side, which is where we're focused.

That helps. And then I'll ask one more before I get back in the queue. During the quarter, you attempted of bleach board price increase that, at least according to RISI, didn't go through. Can you talk about the drivers behind the need to hold pricing study, and do you believe that on the margin there was some switching down from bleach board to the CMK grades in the US?

Well, I'd say our experience with the price increase is different than what Price Watch described. So consistent with, I'd just say, our outlook for Q4, we think are going to have either flat to slightly up pricing in Q4 (technical difficulty).

Okay. But do you think there is any switching during the quarter between grades in the overall market, in your opinion?

Not that we saw.

Okay. That helps. Thank you.

Thank you. Paul Quinn, RBC Capital Markets.

Thanks very much, and congratulations on the record results. Just a couple questions. One on -- sounds like you're worried about pulp and fiber. What are driving those -- the expected increase in those areas?

Well, on the fiber side, I think the biggest piece of it is the wet weather down in the South and just being able to get the supply, and then that's exacerbated by strong demand from the pulp producers.

Okay. In terms of pulp pricing itself, I mean, we sort of saw it looks like, anyways, a bottom in hardwood prices in the summer. Do you expect those prices to rise going forward? If so, do you expect at some point an increase in tissue price to offset that?

I'd say with regard to pulp, at least into Q4, we would say looking fairly stable. Probably have seen kind of stabilization in hardwood. Much further out than that, I think it's hard to predict, Paul. RISI has their prediction out there. We've looked at it. I think it's kind of hard to balance what's going on in the marketplace with all the supply coming on line. Clearly, demand is keeping up pretty well, but I think it's a fairly stable pulp market for at least a while.

Okay. In terms of just big goals that you've got, looks like you've reached your $300 million EBITDA goal based on the 2011 pricing. What's next for the Company?

Well, our focus is really going to be turning towards ensuring that we optimize our business and generating additional free cash flows we've talked about. Our main areas of focus are on how we standardize our business, how we tend to streamline some of our processes and take some cost out and then focusing on selling our product to optimize our mix.

Paul, I would say as we get through the end of 2015, the real focus is more on net margin model and getting to the 15% and the opportunity we see there is, obviously, within the consumer side of the business.

On the consumer side of the business, that 3% to 5% cost that you outlined, in our model we have about $1 billion in cost in that segment on the year-to-date basis -- sorry, on an LTM basis. Is that -- can we translate that in a $30 million to $50 million cost savings?

I think what you need to apply that 3% to 5% to is more on, call it, purchasing supply chain related costs, which is kind of more in the $125 million area.

Okay. All right. That's all I had. Thanks very much.

Thanks, Paul.

Thank you. Steve Chercover, Davidson.

Good afternoon. I was hoping we could kind of instead of calibrating off 2011, if we were to look at that 15% EBITDA objective off of what -- the current run rate, would that get us towards something in the vicinity of $325 million in EBITDA?

I think if you looked at the revenue we did in the third quarter, that sounds probably about right.

Okay. That's kind of what I thought. And then, maybe I'm way too far out of business school, but I was looking at slide 13 where you show your weighted average cost of capital at 4.9%. I mean, you just issued debt at 5 3/8%, which is terrific, but are we to -- what is your cost of equity, then?

Inherent in that cost of equity is around, I think, about 5.5%. Now, remembering there's a tax shield on the debt, so that might be where you're --

That just seems like an extremely low weighted average cost of capital. But clearly you're earning well in excess, so that's terrific.

You can look it up on Bloomberg, too. (Laughter)

Okay. I guess just one other question. Can you give us a sense of how you're outperforming the market in private label? Obviously, you're just better. Are there any big wins that you could point to? Are you growing with bigger customers than your competitors?

Steve, I would say our sales team on the CPD side has been working extremely hard to take care of our current customers and then have put a lot of effort into expanding our customer base within grocery retailing but also in additional channels. They've done a nice job of ensuring we understand the needs of the customer and delivering the right product to those customers and we are focused now on making sure our service levels are where they need to be to satisfy our customer demand.

Okay. And I don't want to take to stay on the wrong direction, but are you sold out in -- through air-dried product? And if so, hopefully you're not contemplating new capacity.

Sold-out, I think we've reached our targeted financial metrics as it relates to TAD, but we continually work on how to get more capacity out of all of our equipment and we will do that with our TAD capacity as well.

All right. Sounds like there's a fire somewhere. I'll go back in queue. Thank you.

Thanks, Steve.

Thank you.

(Operator Instructions)

James Armstrong, Vertical Research.

Thanks for taking my follow-up. The first one I have is on capital allocation. With the expansion projects pretty much done and running on track, could you rank your priority between acquisitions, share repurchases, and dividends as we go forward? And on acquisitions, if you do acquire, would you prefer to acquire in the paper or tissue space?

I think we've been consistent with our messages over the last couple years that through 2015, our first priority is return the 50% free cash flow to shareholders. That has been by share buyback as we look forward into 2015.

With got a board meeting in December with our Board of Directors where we have those discussions and everything is on the table. I think through 2015 as well, we're more focused on capital expenditures that can really drive margin expansion and free cash flow, and so there's obviously, I got number three down on that list then acquisition.

Okay. That's really helpful. And then just real quick. Could you update us on your maintenance schedule at the paper mills? Should we still expect most of the maintenance to come in the first half of 2015?

Yes, we've got our Idaho mill in the first quarter and we got our Arkansas mill in the second quarter.

Perfect. Thank you very much.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. At this time, I will turn the call over to Ms. Massman for any closing or additional results.

Thank you, everybody, for joining us. I appreciate everybody's attention and look forward to the continued progress of optimizing our businesses. Thank you.

Ladies and gentlemen, this concludes Clearwater Paper third-quarter 2014 earnings conference call. We appreciate your participation. You may all disconnect, and have a wonderful day.