---

---

---

---

---

---

---

---

---

---

•	provides for a secured U.S. revolving credit facility in the maximum principal amount of $125 million (the “U.S. Revolving Credit Facility”);

•	provides for a secured, multicurrency, revolving credit facility for the German borrowers in the maximum principal amount of $75 million (the “German Revolving Credit Facility,” and together with the U.S. Revolving Credit Facility, the “Global Revolving Credit Facilities”); and

---

•	provides for an accordion feature permitting one or more increases in the Global Revolving Credit Facilities in an aggregate principal amount not exceeding $50 million, such that the aggregate commitments under the Global Revolving Credit Facilities do not exceed $250 million.

---

---

---

(a)	We have announced the closure of the Reading facility by mid-2017. The current collective bargaining arrangement will remain in effect until that time.

---

•

The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products.

•	The Fine Paper and Packaging business is a leading supplier of premium printing and other high-end specialty papers, premium packaging and specialty office papers primarily in North America.

•

The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products businesses.

---

---

---

•

Net sales in our technical products business increased $5.2 million (5%) from the prior period due to acquired sales and organic volume growth led by transportation filtration and tape and abrasive backings. These items were partially offset by a decline in net selling prices resulting from a lower-priced mix of products sold and reduced selling prices on products with contractual adjusters for certain input costs.

•

Net sales in our fine paper and packaging business decreased $4.0 million (3%) from the prior year period due to a decline in average net selling price due to a lower-priced mix of products sold, and reduced organic volume compared to a strong third quarter of 2015. The sales mix in 2016 reflected a higher proportion of sales of non-branded products. These items were only partially offset by acquired volume and increased list prices for some products.

•	Net sales in our technical products business increased $40.9 million (13%) from the prior period due to acquired volume and organic volume growth, which were partially offset by lower net selling prices.

•	Net sales in our fine paper and packaging business increased $10.1 million (3%) from the prior year period due to acquired volume, which was partially offset by lower net selling prices.

•	Net sales in our other business segment increased $12.7 million from the prior year period due to acquired volume.

---

•

Operating income for our technical products business increased $3.1 million (28%) from the prior year period primarily due to incremental volume growth, lower manufacturing costs resulting from lower material prices and operational efficiencies, and lower integration and restructuring costs. These favorable variances were partially offset by added SG&A from the acquisition and lower net selling prices. Excluding integration and restructuring costs of $0.1 million and $1.1 million for 2016 and 2015, respectively, operating income increased $2.1 million (17%) from the prior year.

---

•

Operating income for our fine paper and packaging business increased $0.1 million (1%) from the prior year period as lower manufacturing material prices, reduced SG&A expense, and lower integration costs, combined, were mostly offset by a lower-priced mix of products sold and lower volumes. Excluding integration costs of $0.3 million and $0.9 million for 2016 and 2015, respectively, operating income decreased $0.5 million (3%).

•	Unallocated corporate expenses for the three months ended September 30, 2016 of $4.6 million were $1.0 million higher than the prior year period. The unfavorable comparison to the prior year period is primarily due to the non-capitalizable costs related to the U.S. Filtration project, which is expected to go into production in early 2017.

•

Operating income for our technical products business increased $11.7 million (28%) from the prior year period primarily due to incremental volume growth, lower manufacturing material and other costs and lower integration and restructuring costs. These favorable variances were partially offset by incremental acquired SG&A and lower net selling prices. Excluding integration and restructuring costs of $0.6 million and $1.1 million for 2016 and 2015, respectively, operating income increased $11.2 million (26%).

•

Operating income for our fine paper and packaging business increased $1.0 million (2%) from the prior year period as lower manufacturing material costs and manufacturing efficiencies were partially offset by lower net selling prices, incremental acquired SG&A, and higher integration costs. Excluding integration costs of $1.1 million and $0.9 million for 2016 and 2015, respectively, operating income increased $1.2 million (2%).

•	Unallocated corporate expenses for the nine months ended September 30, 2016 of $14.5 million were $1.3 million higher than the prior year period. The unfavorable comparison to the prior year period is primarily due to the non-capitalizable costs related to the U.S. Filtration project, which is expected to go into production in early 2017.

---

•	SG&A expense of $21.0 million for the three months ended September 30, 2016 was $0.2 million lower than SG&A expense of $21.2 million in the prior year period as incremental acquired SG&A was offset by reduced expense due to timing of certain items. For the three months ended September 30, 2016, SG&A expense as a percent of sales decreased to 9.0 percent from 9.2 percent in the prior year period.

•	For the three months ended September 30, 2016, we incurred net interest expense of $2.7 million which was slightly lower than the prior year period due to higher borrowings in the third quarter of 2015 under our Global Revolving Credit Facilities to partially fund the FiberMark Acquisition.

•

In general, our effective tax rate differs from the U.S. statutory tax rate of 35 percent primarily due to the proportion of pre-tax income in jurisdictions with marginal tax rates that differ from the U.S. statutory tax rate. For the three months ended September 30, 2016 and 2015, we recorded an income tax provision of $7.8 million and $8.0 million, respectively. The effective income tax rate of 32 percent for the three months ended September 30, 2016 was lower than the tax rate of 37 percent for the three months ended September 30, 2015. The 2015 rate was unusually high due to an adjustment to the amount of state R&D Credits which were expected to be utilized prior to expiration as a result of the FiberMark acquisition. For 2016, the adoption of ASU 2016-09, as discussed in Note 2 in the consolidated financial statements, allowed excess tax benefits from share-based payments to be shown as a reduction to income tax expense and reduced the rate for the quarter by 1.75 percent. Our effective income tax rate of 32 percent for the nine months ended September 30, 2016 was consistent with the full-year rate for 2015.

---

•

Cash provided by operating activities of $97.7 million for the nine months ended September 30, 2016 was $18.2 million higher than cash provided by operating activities of $79.5 million in the prior year period. The favorable comparison was primarily due to higher operating earnings and a decrease in our investment in working capital, partly offset by higher post-retirement benefit contributions in the current year.

•

For the nine months ended September 30, 2016 and 2015, cash used by investing activities was $49.5 million and $143.5 million, respectively. Cash used by investing activities for the nine months ended September 30, 2015 includes acquisition related spending of $118.2 million. Capital expenditures for the nine months ended September 30, 2016 were $49.4 million compared to spending of $25.7 million in the prior year period. In general, we expect aggregate annual capital expenditures of approximately 3 to 5 percent of net sales. For 2016, we expect annual capital expenditures of approximately $75 million to exceed our normal level of spending due to incremental investments in filtration assets in the U.S. We expect that capital spending will return to our normal range in 2017. We believe that the level of our capital spending can be more than adequately funded from cash provided from operating activities and allows us to maintain the efficiency and cost effectiveness of our assets and also invest in expanded manufacturing capabilities to successfully pursue strategic initiatives and deliver attractive returns.

•

For the nine months ended September 30, 2016 and 2015, cash used in financing activities was $44.9 million and $2.4 million, respectively. Cash used in financing activities consists primarily of net repayments of long-term debt, dividends paid, and share repurchases. For the nine months ended September 30, 2015, we drew down from our Global Revolving Credit Facilities to fund the FiberMark Acquisition.

•	Availability under our revolving credit facility varies over time depending on the value of our inventory, receivables and various capital assets. As of September 30, 2016, we had $32.7 million outstanding under our Global Revolving Credit Facilities and $113.4 million of available credit (based on exchange rates at September 30, 2016).

•	We have required debt principal payments through September 30, 2017 of $1.3 million for principal payments on the German loan agreement.

---

•	For the nine months ended September 30, 2016, cash and cash equivalents increased $3.1 million to $7.3 million at September 30, 2016 from $4.2 million at December 31, 2015. Total debt decreased $18.2 million to $211.2 million at September 30, 2016 from $229.4 million at December 31, 2015. Net debt (total debt minus cash and cash equivalents) decreased by $21.3 million.

•	As of September 30, 2016, our cash balance of $7.3 million consists of $4.6 million in the U.S. and $2.7 million held at entities outside of the U.S. As of September 30, 2016, there were no restrictions regarding the repatriation of our non-U.S. cash and, we believe, the repatriation of these cash balances to the U.S. would not materially increase our income tax provision.

•

In November 2015, our Board of Directors approved a ten percent increase in the annual dividend rate on our common stock to $1.32 per share. Beginning in March 2016, the dividend is being paid in four equal quarterly installments of $0.33 per share. For the nine months ended September 30, 2016 and 2015, we paid cash dividends of $0.99 per common share or $16.8 million and $0.90 per common share or $15.2 million, respectively.

•

Purchases under the 2016 Stock Purchase Plan will be made from time to time in the open market or in privately negotiated transactions in accordance with the requirements of applicable law. The timing and amount of any purchases will depend on share price, market conditions and other factors. The 2016 Stock Purchase Plan does not require us to purchase any specific number of shares and may be suspended or discontinued at any time. For the nine months ended September 30, 2016 and 2015, we repurchased approximately 127,400 shares of Common Stock at a cost of $7.8 million and 103,000 shares of Common Stock at a cost of $5.8 million, respectively. For further details on our Stock Purchase Plans refer to Note 8.

•

As of September 30, 2016, we had $71.5 million of state NOLs. Our state NOLs may be used to offset approximately $2.3 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between 2016 and 2035. In addition, we had $23.3 million of U.S. federal and state R&D Credits which, if not used, will expire between 2027 and 2035 for the U.S. federal R&D Credits and between 2017 and 2030 for the state R&D Credits. As of September 30, 2016, we recorded a valuation allowance of $2.8 million against a portion of the R&D Credits.

---

•	changes in market demand for our products due to global economic conditions;

•	fluctuations in (i) exchange rates (in particular changes in the U.S. dollar/Euro currency exchange rates) and (ii) interest rates;

•	increases in commodity prices, (particularly for pulp, energy and latex) due to constrained global supplies or unexpected supply disruptions;

•	the availability of raw materials and energy;

•	the impact of competition, both domestic and international, changes in industry production capacity, including the construction of new mills or new machines, the closing of mills and incremental changes due to capital expenditures or productivity increases;

•	capital and credit market volatility and fluctuations in global equity and fixed-income markets;

•	unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations;

•	the enactment of adverse state, federal or foreign tax or other legislation or changes in government policy or regulation;

•	our ability to control costs and implement measures designed to enhance operating efficiencies;

•	the loss of current customers or the inability to obtain new customers;

•	loss of key personnel;

•	increases in the funding requirements for our pension and postretirement liabilities;

•	changes in asset valuations including write-downs of assets including property, plant and equipment; inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons;

•	our existing and future indebtedness;

•	our ability to successfully integrate acquired businesses into our existing operations;

•	our net operating losses may not be available to offset our tax liability and other tax planning strategies may not be effective;

•	strikes, labor stoppages and changes in our collective bargaining agreements and relations with our employees and unions; and

•	other risks that are detailed from time to time in reports we file with the SEC.

---

---

---

---