Caraustar Expects Loss for Quarter

Caraustar Industries announced that the company expects to incur an after-tax charge to equity resulting from the recognition of an additional minimum liability in its pension plan. The underfunded status is primarily due to the poor performance of the equity markets.

The company estimates that it will report a net loss for the fourth quarter of approximately $14 million.

Commenting on the expected results and announced restructuring charges for the fourth quarter, Thomas V. Brown, president and chief executive officer of Caraustar, stated, "Cash generation continues to be strong even during the current depressed market conditions. Caraustar completed the $80 million acquisition of certain Smurfit-Stone assets, made interest payments of $36 million, capital improvements of $22 million and retired $7 million of long-term debt. We ended the year with no borrowings on our revolver account and $33 million of cash on our balance sheet.

The company also announced that it has completed the purchase of the remaining equity of Caraustar Northwest, LLC, Tacoma, Wash., from its venture partner, Paccess, a Portland, Ore.-based general partnership. The facility manufactures tubes, cores, and edge protectors and performs custom slitting for customers on the West Coast.

The company also announced that its Halifax paperboard mill, Roanoke Rapids, NC, has been permanently closed.  The mill has been idle since mid-2001 due to reduced market demand for uncoated recycled boxboard for the specialty product businesses.

Carolina Converting, Inc. in Fayetteville, NC is being consolidated and relocated in recognition of the trend toward offshore sourcing of various specialty products.