Schweitzer-Mauduit International, Inc.

shortly. Thank you for your patience. Thank you very much for your patience ladies and gentlemen. The call will begin shortly. Thank you. Thank you. Thank you very much for your patience the call will begin shortly. Thank you. Thank you. Hello and welcome to SWM's earnings conference call. Hosting the call today from SWM is Dr Jeff Kramer, Chief Executive Officer. He is joined by Andrew Warmster, Chief Financial Officer and Mark Chaconnel, Director of Investor Relations. Today's call is being recorded and will be available for replay later this afternoon. At this time, all participants have been placed in listen-only mode and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star followed by one on the telephone keypad. And if at any point your question has been answered and you may remove yourself from the question, please do so by pressing star followed by two on your telephone keypad. If you should require operator assistance, please press star followed by zero. We ask that you please pick up your handset to allow optimal sound quality. It is now my pleasure to turn the floor over to Mr. Checker now. Sir, you may begin. Thank you.

Thank you, Gemma. Good morning. I'm Mark Checkenow, Director of Investor Relations at SWM. Thank you for joining us to discuss SWM's first quarter 2022 earnings results. Before we begin, I'd like to remind you that the comments included in today's call 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 annual report on Form 10-K and our quarterly reports on Form 10-Q. 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.

Thank you, Mark, and good morning, everyone. I'm pleased to share that we are off to a good start to 2022 and that the two most critical themes we expected to play out this year are already materializing. First and foremost, the pricing actions we discussed on our last earnings call have been successful in offsetting higher raw material costs. Second, demand remains robust across our portfolio, and we are expecting it to remain so for the remainder of the year. Though we had a tough comparison versus a very strong first quarter last year, organic sales were up an additional 5%. EPS, though, was down versus last year, which can mostly be explained by the fact that inflation and supply chain issues did not begin impacting results until the second quarter of 2021 and then accelerated from there. Even though global uncertainties remain, we are pleased to say that we enter the second quarter with good momentum and are confident in reaffirming our financial guidance for the year. We continue to expect adjusted EPS of 350 to 395, supported by adjusted EBITDA growth of 20 to 30%. As such, we expect strong and accelerating free cash flows as the year progresses, which will deliver the balance sheet throughout the remainder of the year. And last, but certainly not least, we remain incredibly excited about the pending merger of equals with NENA. we see strong value creation opportunities from the combination, ranging from the strategic benefits of a significantly expanded portfolio of complementary technologies and multiple avenues for cross-selling and geographic expansion to more than $65 million of highly actionable cost synergies and increased long-term strategic optionality. I'll come back to the transaction later, but let me first review the quarter. Starting with AMS, sales were up 67%, including the benefit of the SCAPA acquisition, with organic sales increasing 3%. Recall that in the first quarter last year, we delivered 15% organic sales growth as many end markets surged back with post-COVID recovery sales with only minimal signs of the supply chain disruptions that would accelerate throughout the year. Given that comparison, and under continued challenging supply chain conditions, we still posted organic growth as price increases implemented over the last several quarters were effective. On our last call, we highlighted that due to the rapidity of escalating costs, we had previously been lagging with price increases, but we're confident that we have addressed the underlying challenges to this unprecedented pricing environment, and our results show that this quarter. In our discussions on pricing with customers, They have acknowledged that we have approached the issue in a measured way, and they recognize the extraordinary importance of our efforts to be reliable partners in an uncertain and strained environment. This trust and recognition of the value we provide has allowed us to maintain our competitive shares. Unfortunately, as most are aware, the global inflationary environment has not yet settled. So we continue to proactively monitor the situation and have already initiated additional pricing actions to offset these pressures. Bottom line, we will continue to focus on offsetting inflation in 2022. To dive a little deeper into my earlier comments on demand, demand remains strong across most of our end markets, with the key drivers of sales growth for the quarter being filtration, construction, and industrial. Water and process filtration sales are healthy, the construction industry is active, and sales of our broad range of industrial products are performing well. In fact, the main constraint on our ability to capitalize on an even greater degree of demand was availability of certain key raw materials. We continue to be impacted in the quarters by tightness in a variety of select materials that varied across the spectrum from some specialty adhesives to materials such as release liners. We have been actively sourcing from a variety of suppliers and are starting to see some relief going forward. One area, though, that has been a key sales constraint remains the raw material shortage for our transportation films. As we've shared, there is a global shortage of a key ingredient up in the value chain that is limiting supply across all manufacturers. As the leading producer of transportation films, we remain the go-to source for customers worldwide for these materials, but see tight supplies until 2023. Although there are recent announcements about raw material expansions, that should help alleviate the situation and move us back to aggressive growth. If we were to assess AMS segment sales excluding transportation, organic sales would actually have been up 7%, showing the broad sales strength of the portfolio. Importantly, as we enter the coming quarters and comparisons normalize, We expect quarterly organic sales growth to increase from first quarter levels. Switching to engineer papers, the quarter went as expected. Price increases, both contractual and to the market, were effective, as were the increased volumes we were able to secure with certain customers to help further offset higher pulp costs. Total sales increased 7% in the first quarter, with broad strength across the portfolio. Traditional products perform well, and we saw continued momentum in reduced-risk heat-not-burn demand, with sales up over 25% in that fast-growing area. In particular, we are excited about many of the innovative products we have in development for a variety of customers, from sustainable biodegradable filter solutions to innovations in sustainable packaging and replacement of other single-use materials. And while I will discuss the Nina transaction later, our customers across end markets have shared that they are excited about what the combined capabilities of both companies can contribute to accelerating this innovation. I would be remiss in not mentioning the ongoing tragedy represented by the Russia-Ukraine conflict. I am incredibly proud of and inspired by the leadership of our SWM European and global community have shown in sending supplies and supporting the people impacted by this action. In regard to our customers, we have also been working with our EP customers as they adapt their supply chains in response to this invasion. While we can only disclose limited details, we will be able to help certain customers who relied on regional supply chains and manufacturing sites for both reconstituted tobacco and paper products to continue production by switching their volumes to SWM facilities, both in the short term and in multi-year commitments. While we, of course, wish these actions were unnecessary, we are proud to support our customers and act swiftly to address unanticipated changes and challenges with our global supply chain capabilities. Turning back from Eastern Europe specifically, as we highlighted, we are pleased that the price increases and additional volumes have covered our higher pulp costs. But with the above conflict, energy costs remain a challenge. Much as we detailed in AMS, we continue to engage our customers on this inflationary element, including the implementation of surcharges and other pricing discussions. Given these ongoing actions and early signs of success, we remain confident that the EP segment will deliver stable operating profits in 2022 consistent with what was assumed in our guidance. With that, I'll turn the call over to Andy to review the financials in more detail. Thank you, Jeff.