NP - Earnings call transcript Q3 2018

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Operator

Good morning and welcome to the Neenah Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Bill McCarthy, Vice President, Investor Relations. Please go ahead.

Bill McCarthy

you. Thank

results with Bonnie are After higher and a up Lind, Earnings remarks quarterly $X.XX call related Executive last in the costs O’Donnell, that our value mix. Paper Coldenhove the this key growth Products, covering including with and acquired against We Officer Chief afternoon financial yesterday call reporting of me costs figures for million, the and will to Both released share $XXX a share XXXX, earnings John offset in to were additional per acquisition. in related growth insurance were Technical added net of $X.XX additional morning downtime. the year. In revenues Chief prepared initiatives, up questions. XXXX On an prior X%. we progress earnings share were the open and higher included and to $X.XX there settlement. costs restructuring due Financial from a compared adjustment largely in manufacturing per net of $X.XX prices Fine and benefited of quarterly mostly revenue This Packaging that was charges reflected also increased XX% GAAP Technical including and segments sales reflected line significantly volume These by selling favorable Officer. to year. benefit per in impairment for down quarter for primarily Products

reconciliation GAAP can our in detail adjusting in Further in adjusted items, on comparable press XXXX were earnings figures with and along these per $X.XX found release. $X.XX Excluding share be items XXXX. to

from results due With O’Donnell. that, note include comments today John these risks our uncertainties I’ll website forward-looking will and filings. statements. could Actual I things turn to SEC on outlined our over statements and that to Finally, differ

John O’Donnell

everyone. morning, Good

I thought comments the were here. challenge I down so start P&L, with work would and typically the I this costs clearly my start quarter, While sales my way

the safety manufacturing of downs in one you the to of our required the every were million, overbuilt by quarter we related X quarter our resulting of $X Germany facility, to to $X million know, to impacted commodity second of $X resulted and one-time for grades ensure planned a freight smooth year. compounded was incremental another of remaining from in third and also in materials maintenance Neenah this the a inefficiencies the filtration, the years and facilities, slower cost X stock we most start operational environment German includes our inventories of rates. global of time, additional further seasonally our As at for marks operational half of primarily in Of Results from million raw quarter. downtime continue million higher increases inflationary At challenging manage cost US and to unusually spend. inefficiencies high to large predominance environmental of million by a $X transition experience $X for included events. the same work maintenance costs $X due million This a

and costs and policies address heightened our to freight on call. I rates, practices teams quarter, to later taken and inflation, efficiencies. operating higher material through largest filtration these sales asset optimizing where in the a Technical increasing in to variance talk our felt about action our longer raw like initiatives term Products changes higher improving footprint activities the Our was offset to distribution these especially in performance the will price manufacturing have mitigate intended selling efforts and focus

the quarter. in Our profits were negatively impacted

be in to we double continuing range the qualified filtration, strong than projected markets solid million plant to and sales on our to XXXX sales with reflected still transportation we North transfer view X% with our more premium from expect the acquisition. are continue that and grew our from as in remained U.S. media the next $XX growth line opportunities our ramp sales of communicated. outpaced America. in Appleton filtration, targeted Coldenhove up top including digital In $XX support to a and million year to and our transportation packaging, us Customer we support additional revenues market growth projects customers Our investment. and of work X% previously Neenah supplier and

call, as suboptimal track, mentioned by and been Although line numerous Appleton customer our sizes top last trials. at cost profitability on is depressed on our run have in

they efforts accounted by of of than we to qualified and source into installed We’ve only next expect XXXX Fine growth seventh we gift Packaging we board, September, With utilization of with demand, be meaningful and projected production ops Premium improves grades folding transform organically grown be up our sales up year of as consecutive waste X% represented of labels, to have have XX% XX% double-digit to important increases very are team well-known customers growing premium like an packaging our our costs. for our and as more Paper as to packaging trials Through paper on premium also number year and Amazon. progress cards continues packaging Starbucks growth. volume, improvement segment. successfully While we year focused thereafter a total see expect capacity. and in ramp each our increasing and

of X with million well attractive of in the very Finally, return. it’s projections media. with we providing us acquisitions Sales presence the acquisition our and given we’re for pleased us digital $XXX from anniversary original an just fast-growing expanded celebrated transfer and profits a market are and Coldenhove the ahead November these

our we’re portfolio category. our cost our explore this reach initial unusually strategies and grow input and to cost magnified customer comments, inflation, remain in We expand sound. competitive opportunities as wrap challenges continue my working we geographic near-term up significant to To through execute high positions by while

we margins in Bonnie increase targeted profit. quarter over in cover restoring More the teams growing detail. to for our I’ll financial are results to but as later, on We’re about diligently markets this turn things and focused

Bonnie Lind

items were you, We in net included and morning XXXX to of at Technical details in of noted on and earnings, Thank gain were third These on last in the cost a $XXX,XXX John so quarter as are a XX%. items the year. of million and I focus pretax segments segments our Products. results of shown the of $XXX start were good allocated of a will each adjusted and net unusual adjusting call start press everyone. basis the I’ll go release, $X.X through which I Sales some million up with the

transportation sales ago. of in backings reflected partly other offset prices a income lower volume, acquired across million to growth the filtration products. adjusted addition Technical year by labels, In from this solid and sold. from also Products of higher categories benefited mix million products $X and operating selling Revenues $X.X was and value higher in organic down most

$X John costs Products. had about million increased we were related and earlier, all of downtime in mostly As to Technical added mentioned costs manufacturing almost these

about had customer a due cost price of In realization by was to ongoing improved unrecovered cost quarter of in the $X of addition, our pricing tend recovering input in volume. have in that the in only more mix talk Technical our input We efforts to lag million Products John we almost will and and later the structure partially offset call.

Increased a packaging revenues sales to value last million of than full timing in we Packaging, million Fine on and higher year $XXX to double-digit to growth. year. another and last due packaging volumes track prices, for manufacturing and remain a orders, about Premium our lower commercial from mix. offset was and of million income a largely selling equal value $XX.X of of mix. X%, mostly were lower year. freight in $XX.X down next Turning costs growth premium print decline This but due rose run lower Adjusted Paper operating rate to was

quarter maintenance the As is of planned our in majority typical, both occurred downtime third years. of the

that rate corporate allowed to R&D rates consolidated as us of million to years. quarter contributions and expense below the Quarterly basis, to were million Turning of acquisition advantage our On this million XXXX quarter debt unallocated year. deduction a SG&A an expense partly foreign of benefited a of run on lower Germany. acquired primarily tax Coldenhove. increase borrowing available took to composition is amount up activities, and initiatives with the rates return. was SG&A a both rate due U.S. the SG&A These slightly basis, the in of to January guidance to included up credits in allowed prior tax that was rate due a third SG&A million, finance which by low to million year. XX%, last quarter. accelerated prior Incremental to $X.X accruals statutory completed. borrowings related year’s to from $X.X $XX.X $X.X corporate from down due the from pension increase was a now our prior $XX.X recently study we interest we of Adjusted is offset XX%. This reduction benefit as expect well from is reduced our our we We this tax take our amount incentive in as effect interest last us guidance short-term was from our ongoing be which larger in rates in to in lower changed SG&A,

the prior as under period credits. next tax years Our for cash R&D consume rate XX% should remain couple we of

to shape. post-employment start with our overall, incremental mentioned million our Following rate. to pension this, the in of the rate above generate cash savings will accelerated quarter book $X converge great XXXX about in contributions that our I tax remain We and benefits planned tax

to in payments year, million. around exceed by $XX XXXX, communicated are expected cash will million expense expect drop in and be We Cash outlays from down $XX this $X previously about million. by back to cash and $XX total contributions needs XXXX million up

sales. cash half lower related The the contribution X% the last million ops to Capital maintenance million largely partly that’s $XX due targeted the quarter, during was to year. spending Year-to-date we of million the of pension down. from last by higher middle $XX up full-year the increase to capital. increased or expect generated flows, remainder of and working next operating range was or from our spending $XX $X About right $X earnings work million resulting capital from down the million from offset $XX in million Turning decrease $XX additional was of with million, in $X around from to X% was cash cash is spending that year. million of

the sheet, $X our to quarter debt cash to short-term pay Moving in we to borrowings. balance million as million $XXX declined available down use

made cost in million XXXX $XXX against of and is low Our million primarily $XX up of bonds borrowing of revolver. our debt U.S. other due global

I’ll arise. borrowing and while strong deliver with a deploying advantage they take will that available strong quarter value. sheet close to financially challenging, approach back flows, of the sheet, saying, continue Neenah capacity you, generate cash will substantial and by capital opportunities and balance was attractive to third We it I investment remains businesses added to balance With John. to us turn that, to which a allow have meaningful disciplined successful conservative a as

John O’Donnell

I Thank with remain actions on environment we duties will comments changes footing sound you, the although on starting global some external address are Most to of the with Bonnie. we sense a in demand are generally finish current more and uncertainty challenges. tariffs. taking and to in up few economies

supplier team inventories from we for States a are our or time, sales inputs. have China their during order a rebalance may as base. purchasing customers alternative to this perspective, vendors patterns affected global secured large United From has asset not our the While

significant exchange In $X.XX on about the was impact in $X.X par a So while of the strengthened, the at at we would negative prior million have below year around. if Recent of From from for result and million has EBIT. proposed impacts last rates year. year don’t changes. tailwind the has euro and expect of we $X.X had first quarter as dollar quarter, turned $X.XX currency you in a the now will a tariffs is outlook update sales half fourth with point, perspective, third are I about this our this slight and

manage by acquisition. our lower the XX% Last reminder, by X% half year-end the quarter business typically the usually inventories. Products partially a is weakest quarter seasonality to is demand our is year, and half. The Technical impacted customers As second seasonality masked as fourth Coldenhove first was than

a we past, As align our fourth customer demand in the manage levels. the to quarter planned inventory take with and production downtime holiday in will

been efficiency the the this impacted manufacturing prices improved quarter, companies for some downtime has So while us planned the third should maintenance in there biggest quarter for be for This the occurring steep rise with million including year fourth full by be August, be up holiday We $XX mostly this of still million headwind will $X many commodity downtime. closer be less and normal which The year versus continues issue negatively prolonged $XX now added through today. half. would to that quarter. costs year to fourth expect in $XX with the input In in indicated the impact we million second million.

business We In increases we through while Packaging, are to on cost effect that trade-offs pricing. aware and a distributor quarter. of in implemented third inflation are actively in able between more quickly this the via being most activities to businesses means. pricing Consequently, the volume recently addressing and increase fourth Paper and certain implement due down-trading. increase potential We Fine other this will price grades loss take sold

in able or within been experiencing quarterly business a In it. basis. this performance inflation on contractual a are ongoing. As you of percent materials, of cost to other about two XX% the this of have recover XX% has would generally of our activities Technical pricing quarter adjusters customer-by-customer with occurring pricing segment higher discussions a expect, we Products, In

change years recover cost first However, typically in year. agreements with filtration in are pricing Technical quarter to in Consequently, occurring set ability rising. each increases of our Products the the annually largest are when costs lags

input businesses overcome has performance the strength rising time. historical that costs have to Our both proven over market

to increase Given recent that suggest of more contracts, the enough of teams will overcome year our unprecedented doing to of remiss the input address I’d which continue I XX% rate costs. are the be We than longer XXXX, laggy emphasize efforts also pricing take clearly will didn’t still nature expect in XXXX. it our into pricing increases increases. customer this and work cost if offset our to

both decided facility and After improvements facility the our drive the we did May, so, our with optimizing efforts our In improvements this While continued economic offer. close our was and non-capital larger it’s we expect do the as plans acceptable worked announced like capital cost late to year, footprint reductions process that and each to negatively we’re but through mill. October, divestiture to of financial in initiatives to to actively Brattleboro impact through we receive alternatives, to sell an best results. not the decision reviewing redoubling

assets. companies interested imagine, might in mostly closure interest announcement you salvage As of the the generated additional from

customer an quickly, While facility books obtain to the sale possibility satisfy of by year our expect have we we a remain demand open we to agreement unless acceptable and outstanding that on we the binding the order then end. close

closure Without Packaging. be will to We but million, contribute will a that our especially operating will for positive. Paper expect be income modestly sales $XX Brattleboro, improved and Fine around such cash reduced

been be help growing company. has While trajectory addition more materials growth and profitable our this that value add a on will specialty can evolve faster seeking as focus through our change into we acquisitions subtraction, and

would up, have challenges with input remain been a a been as costs well in Our Yet we steep. as most allows wrap opportunities arise. recent sheet quarter. XXXX as act balance freight year difficult cautious has To in attractive strong bit remains unprecedented as increases on us and the they and to operational valuations

these are definition and are Neenah a efforts near-term teams actively not Our longer while yet with reflected are success. term results, addressing issues we their of in operating

resolve sound right shareholders strong, to and our decisions time our for company, remain the for deliver Thanks a long-term value that for market up we make call open questions. financial our strategy positions will is our your and As your now and the unwavering.

Operator

you. Thank

question ahead. session. CJS [Operator Jon now with begin from Our will question-and-answer Please first Securities. comes Instructions] We go Tanwanteng the

Jon Tanwanteng

packaging the that the taking talk in growth questions. timing, slowed the on? for have to variance my the and Is about bigger bit It seems is run-rates. premium Can little or something filtration a recent morning. Good from businesses? you Thanks going normal just

John O’Donnell

will I It’s usually standpoint. from front-end loaded, seasonal Yes. with the start more that filtration.

I pleased So filtration current are think we our with growth.

customers there lot their that As are the we year, of end towards of to manage continue get the inventory.

that’s that we of remarks a packaging be quarter. of our would that orders affected really X% up I really so of is think basis timing up related, will timing business. in this in growth all timing I seventh the the year are Packaging we So our realm where double-digit mentioned on more that’s see year-to-date

in of expect categories. said Bonnie those increase no we healthy exit packaging part think to on so double-digit to XXXX quarter growth X% I is the so, believe I it’s either regards still fully well with real concerns that in growth as my

Jon Tanwanteng

I was Bonnie, or or you little there, production And color a just that’s think million what or inefficiencies helpful. business it, John either freight more the please? operational something mentioned, in that Got then else, $X

John O’Donnell

cost easy Yes, good moving share so level downs the thing Jon that’s we talked down I and a previous that majority not is for cost would I manufacturing us a bringing of reduction and doled that’s inefficiencies, that hard mentioned just of to be fact feel sustained on on to margins, freight that we’ve we the they’re efforts it’s kind to going taking the assumption $X I facilities, really past a cost quarter that downs Paper a but we million an to the believe about anywhere million been think freight our $X.X deliver impact we’re in a the of million there’s long-term. see company we’re Fine our did had it’s is able $X at lot take different a because assets that we kind that to $X.X positive that to assets like $X we when to is if freight million the an doled to from but in so that’s to parts we about that still in we’re calls, completely mentioned not quarter the so something Fine Paper ongoing a offset our manufacturing that input think of and business it, each adding I when has on and up working happening of million going find of

Jon Tanwanteng

activity on more markets then valuations they I been you challenging, just come can year are and a look us what’s little your the have of in finally, there but opportunities in just How color where a you to bit are M&A? know across and great improving? it’s a mentioned pipeline Okay, the Coldenhove and are level seem give does since you

John O’Donnell

they for the that managing so from the change of seem growth recall is guess seen opportunities diminish operating as we appetite together it followed owners do but going this of and we costs quarterly our to fit you a the from opportunities, what cadence a that that of that significantly to have just the don’t seen the announce we’ll you alive of and business update, trajectory and we after standpoint to rely very a up haven’t so record nothing quarter the us to that of the we characterize of a there at you for important all having to show track process think result be new way say how is premium works, good an a time, acquisitions still the long companies appear cadence acquisition company, are conservative I that, it’s strategic best we’re have is more really probably is Jon. at a this if have there and us know from continue on it and well, the on it’s I for bus and little all but know to a the separate

Jon Tanwanteng

will back I thank great jump in queue you. Okay

John O’Donnell

sure. Okay

Operator

with go from next Steve Davidson. comes question Please Our Chercover ahead.

Steve Chercover

afternoon. you good Thank and

John O’Donnell

Hi Steve.

Steve Chercover

or that is the you’ve on it us you is the fiber give question since is? what a can on incremental million first $X chemicals, costs it in color encountered little August My input

John O’Donnell

that Predominantly I fiber so year we costs, in from the think August, way we in described it, rise it’s standpoint a the back is. that’s the commodity from have do what that’s it I updated half but I predominantly impacting of think fiber

Steve Chercover

got it. pulp basicaly So

John O’Donnell

we business pricing its that the you of as one things of get it lapping end to are early part and remember with in comfortable, increases do activity I part increases just year most that, our the weren’t the there’s pricing early half makes and of to but Technical significant for part happen right in $XX it it the opportunities year of Right, we customers year I this call, the a of input of early cost last we to lost be this very the back impacting efforts year of Products is market work so of discussions that expecting million mentioned in the our time add the of color subtlety is now this so they’re year, impact lot the nearly the going of more to market an and pulp want strength underway, very pricing, and underway. to and just is overcome is annual feel I if the million that year, think what the unique can to so us over address and have $XX don’t

Steve Chercover

Well, I strong to are, year’s surprised inflation? people year, with how pass they does markets if your this next that have the course through resilient should undermine ability just reverse and pulp but they think

John O’Donnell

participate by that that we’re in recognize that that, be then since out think you, then just lag once starts anticipate told prices, people first since okay we pulp a if we to now, fact I’ve but fact, of I to I drops harder should compression drop, don’t conversations able finally quarter, be the think predicting I lot will we that recover that and in they’re pricing. sure of to so all taking business I’m customers if pulp recognize No, going clear lag in first the it in typically margin those in the

Bonnie Lind

quarter was but right get away. up ones higher that, then then gas it a that we went ones natural down had Yes, run we so, the Steve, didn’t and are $X like in it back like time the issue and the run in distribution we don’t quarter million get one

John O’Donnell

reminder, steep, should from the nook still the which so fairly some as over long but negotiation. on different there, pricing, Products, we’ve side, it’s demonstrated is a a then, we time Paper of That’s Tech again and customer-by-customer sticky Fine is slope good semblance

Steve Chercover

you’re predicting by don’t to have fortunate pulp. Well, that family feed you your

John O’Donnell

I’m this know see the me house now fortunate how you do I’m themselves is family and my good not. and you can of out right, feed exactly

Steve Chercover

Well, I mean, the use certain first yes, I it’s slowing you gears bummer still manage I’ve global the I a did to, if I bit somewhere could speak this the have phrase on inventories economic a to so, switch time think planet? geographies is heard or activity it let’s in you overproduce does

John O’Donnell

that So, to demand the at market rate there went hung filtration piece filtration downtime and point first in at all. have it to single we I mean feel challenge the in because so I’ve had of piece filtration it’s really is run a facility it’s did down having look third about we and satisfying at that’s demand is end our it uniquely talked didn’t first every we the I that’s always my until place I in decent X first on quarter we really time still the that and that we the challenges we year global pretty the could that and at think it at sure we the so address trouble growth the what about really demand around I’ve time the from so the good I moment fact qualification, yes, were holiday were the Appleton, the don’t of back the have about customer held demand we where so this we’ve getting talked for see years had absolutely

Steve Chercover0

correct? you’re still the growth, With market outpacing you that is X% that believe

John O’Donnell

that X% we X% what have we rate view higher built when times, here you’re the a years for the said at support and we the than X people been acceptable volunteering we but I it a Yes, that are certain there very Steve were we that market tariffs, minimize about going facility financial that rate be growth growth to we us am a so which not for this that I can have a I’d our we quantify would look doesn’t they everything categories, those, products, interchangeability to change. really thinking they products us on where impact this a ball we’re lot I and working because and don’t customers those a so but the performance to for I X% in believe can time materials today hard that asking are rate they backings type source you of me, we mentioned growth products do can my as something looking categories for more that of have of be preclude jump was as runway in remind look but is really

Steve Chercover

absent the organic rate Okay in mean, was can overall what you Technical I speak to Products? Coldenhove, growth the growth?

John O’Donnell

all filtration of Yes, organically you okay, a so the by organic business can percentage couple in that’s driven a imagine tech predominantly on year-to-date, up I we’re points, think itself.

some in has I’m the no rate of what growth of volume the a the referencing been the that’s business organic So quarter was more from virtually backings challenge in quarter.

Steve Chercover

investment more from opportunity? be it X me attractive and discuss to consider Okay you that an is can what then you

John O’Donnell

value or and for with for entry that with we our drive get we investments we U.S., we a chance we’re potentially add products, as could owner other business, ideally technology fit that give a digital our that wish that we would we emphasis opportunity category look tough that than be are unique owner that’s those challenging emphasis in value one that answer I for at to premium strategic could do geography we to a it their the is the paying pay that through organic of somebody businesses by we and combinations Coldenhove us exponentially in take looking that uniquely put an into had we something being so energy. have, at gives can the why if our a liked to every in larger the the transfer grow that customers a we the to other we make our business have feel really be assumptions Europe, really the a have single it’s be, and just heat us they looking the our why okay, very business their to so of comfortable truly with just a the the business product, either one fact are business not each add areas had or could that’s opportunity value really how business we

Steve Chercover

revised it go you what and the was last happened the offer diligence to buyer think Okay was posturing, was due question away? do that prompted my Brattleboro about or it to

John O’Donnell

that that always don’t understand love, offering from can I with and why that so reasons that have might they our worried scares higher can satisfy and facility but that pulp by advantage our with the people I they we’ve is, either otherwise, closure. were mean going a of way, thing either to either have we’ll the we and the a have the are to it in through think hard from this still we this divestiture amount, of are take them of through and transition facility one by that look with the talk over, that, been customers, by we’re of at defensibility us or short value offering but we’re on to I call, others, alone the year we about environment, assets was end if orders rationale for deliver more that our time that that our and was there what business list pushed was offer the still value on in pulp it what can’t believe people magnified the change got don’t people talked I an going the what the way, getting there, with then you was not they I last acceptable I get period tell this drove know the from expectation that rising I to the us so however, just was, never-ending negotiate they communicated let customers somebody

Steve Chercover

Okay, charged. Bill, cell keep your Thank well, you. phone

Operator

with ahead. Dan question Our next Jacome & go Sidoti from comes Please Company.

Dan Jacome

of input a at that you Hi if looking you and beginning will mentioned good generally correctly, vendors take horizon on look what the it think to morning think you heard going you do couple that’s I John, side for long you’re you’re scan if and how guys alternative there? entire I to level, be to high very the just input so vendor questions

John O’Donnell

have there was of cost, fiber make initiative might might million more out is the think I in much I impact calls, worked meaningful to got we it might of million our have saying do tariff really, I hope was so looked at purchasing than our a more and was we we’ve a Yes, hard really you we do make for movements were organization sourcing so, so around with sources said it previous inside fit that really successful groups will products, there input Dan sure impact we have them the too deal how I success fiber. what when there be tariff tariff $X underway $X alternate that how was our that thrown how to of goal of that what anything indifferent we was changing to

Dan Jacome

to progress much what any talked those Alright, that’s so logistics, on how obviously you working percent I another to What that update take? How how going concern long one-off surcharge this making? on let’s said investors. having there? rework were And are mean I think turn among the that freight to pooled you headwinds, okay, just last you’re think are dead-weight the then I is trucks call you’re seeing operating, trucks rates, you about helps.

John O’Donnell

to between the overall and expense ongoing expense freight in offset. mentioned that minimize quarter and line from our probably the we of estimating might million, $X so initially That’s Sure. were fair about freight $X.X on have result to of P&L we’re a million previous now then, about million to year, might million now with we’re an the $X on $X work be at and the to indifferent customers $X a more million going that trucks as you even freight a been freight change a peak to, I as that question increases $X else optimize call, too. earlier that down one I able we on between that’s costs pooled the pickups continue I are we million be the $X who work in about we’ve highlighted to through somewhere need think issue, to going lanes, said since When of million

Dan Jacome

will so Okay, this continue XXXX? in

John O’Donnell

will to but the calls. freight is minimize highlighted really efforts continue it earlier in things that expense they’ve the team’s Yes, on of going I some going, XXXX think to keep to addressed I continue bigger

Dan Jacome

then enterprise Okay. And then, a let’s again tailwind. maybe greatest think high far of level, and as see Coldenhove, here the so learned challenges you so you’re the a cycling whole, the surprise the for what are lessons your sort

John O’Donnell

Coldenhove? On the

Dan Jacome

Yes.

John O’Donnell

out as our forecast is they was way that a impacted the from but really that would that for in that the culture said, we important Okay talent we standpoint we it fit of itself would that our from and future had, that I that a and an growth our have had we the added aside that as our to think think be low standpoint the that acquisition into by lessons achieve critically a for different shareholders as as what one from valuation, it lot of was people as structured that an good value perspective made unknown an more been this did they perspectives not a absolutely than negotiated growth we significant it I said way us with of well. they that that changes earnout we piece fit it hit learning in as as it, their value imagine, that you it for would of in we there of seen marketplace have a they park couple learned there wasn’t group great build wasn’t there pay us be and so structured if we to was high not we through is easily pulled going

Dan Jacome

Okay. mentioned or Right do too XXXX at to year, talk likely as like perhaps? think high-end historically, X% a early CapEx, then to be just good housekeeping more for you lastly of purposes, to that now, but next for maybe sounds Bonnie about modeling the middle X% okay recipe in the

John O’Donnell

think is using required mix do it, trying still X% are returning the we underneath Yes, on what work is at the low is good press sustaining for continuing to very I X% that keep to on higher on high million to more that if good it on XX a returns, the get to to X% great issues this of better to so we towards for more really end cost $XX returning reduction because these a can and roughly here the spend pushing the to the side, some end is assets I if returning it up and about it’s on $XX there. capital because still a it’s love target million we’ve address talked reminder, us spending of IRR care to required that’s is but X% the providing rest what’s in than of all you’d we is of that have spending take

Dan Jacome

right, my if bit a is math maintenance Okay a scenario? normalized CapEx your little in X% under of under sales is

Bonnie Lind

Right.

Dan Jacome

Thank Helpful. very you good. Alright, much.

John O’Donnell

Thank you.

Operator

concludes the question-and-answer would like to I session closing conference This our McCarthy for remarks. any turn over to Bill back

Bill McCarthy

again. Baird any Thanks Industrial that if contact further Chicago. feel free to Conference we’ll like Please thank interest today. in have to me attending tomorrow questions I’d you the Global I’d everyone for note and be your

Operator

presentation. conference Thank you now today’s attending for concluded. The has

now may disconnect. You

Neenah (NP) 14 Nov 182018 Q3 Earnings call transcript