Caraustar Announces Fourth Quarter Results

Caraustar Industries Inc., Atlanta, has announced that sales from continuing operations for the fourth quarter, ending Dec. 31, 2007, were $203.9 million compared to sales of $203.0 million for the same quarter in 2006.

Loss from continuing operations for the fourth quarter 2007 was $7 million, or $0.25 per share, compared to a 2006 fourth quarter loss of $10.8 million, or $0.38 per share.

Paperboard volume as recorded by the company declined 22.2 thousand tons, or 9.3 percent, in the fourth quarter 2007 compared to the fourth quarter 2006. Driving the decline was a reduction in outside paperboard purchased, the closing of the Lafayette, Ind., and Reading, Pa., mills and lower gypsum facing paper production from the company’s Premier Boxboard Ltd. joint venture attributed to the decline in the housing market. Partly offsetting these reductions was an increase in same-mill uncoated recycled boxboard volume of 3.2 thousand tons. Containerboard volume sold at the PBL joint venture was up 24.3 thousand tons in the same period, but historically has not be included in the company’s volume reporting. Industry volume was down 3.8 percent overall. Caraustar reports its URB mill utilization was 91 percent versus industry utilization of 90.3 percent.

Michael J. Keough, president and CEO of Caraustar, comments, “The company has worked hard to replace volume impacted by a slowing U.S. economy. During the fourth quarter, our gypsum facing paper mills operated near capacity by producing alternate paper grades (tube and core grades at our Sweetwater mill and containerboard grades at our PBL joint venture), and our same-mill URB volume was up slightly over prior year. Capacity utilization for the industry continues in the low 90 percentiles. We are still challenged by high fiber and energy cots, which compressed margins $17 per ton in our mill group in the fourth quarter. As a result of continued cost pressures, we announced price increases for URB ($40/ton) and converted products (8 percent) in the first quarter 2008.

“We continue to invest in our core businesses, which is exemplified by the upgrade at our Sweetwater mill for tube and core grades, improvements at Austell Mill One for book stock, the new baler and shredder at our RFG facility in Texarkana, four new high-speed tube and core winders, one new edge protector line, two new folding carton presses and the recent acquisition of the assets of Mayers Fibre Tube and Core in Winnipeg, Canada.  At our PBL joint venture, we have had a number of successful trials for higher margin white-top linerboard for our partner, Temple-Inland.  As we refine production, we expect that this additional product line will complement PBL’s production of gypsum facing paper and other containerboard products.  We believe that PBL will provide improved performance in 2008 versus 2007.

“Despite market pressures, we continue to refine and redefine the company to operate in these challenging times,” he says.

More information is available at www.caraustar.com.