Caraustar Sees Drop in Earnings

Caraustar Industries announced that revenues for the fourth quarter were $216.0 million, a decrease of 8.3 percent from revenues of $235.5 million for the same quarter of 2000. Net loss for the quarter was $5.1 million, compared to fourth quarter 2000 net loss of $930,000. For the year, revenues were $913.7 million, a 9.9 percent drop from revenues of $1.014 billion for 2000. The net loss was $14.6 million compared to net income of $8.2 million in 2000.

Total volume declined three percent to 247,000 in the fourth quarter compared to the same time last year. Mill volume decreased one percent to 219,000 tons, and converted products volume declined two percent to 112,000 tons.

Gross paperboard margins at the company’s board mills decreased $10 per ton in the fourth quarter compared to the third quarter of 2001, as selling prices decreased $8 per ton and recovered fiber costs increased $2 per ton.

Thomas Brown, president and CEO, stated, "While the slight decline in mill and tube and core gross paperboard margins were negative factors in the quarter, they were offset by decreases in energy costs and other operating cost savings.  However, the unexpected decline in mill and converting volumes could not be overcome and led to the substantial decline in operating profits in the fourth quarter of 2001.

"The recycled boxboard industry as a whole contracted by 7.5 percent in the fourth quarter compared to the third quarter of 2001. This decline was spread across all four major product markets: tube and core declined by 7.4 percent, folding cartons declined by 3.0 percent, gypsum facings by 14.0 percent and the other specialty market by 9.0 percent.

The company also announced plans to permanently close its Halifax Paperboard mill this year if sluggish markets continue. The mill, idle since June of 2001, has an annual capacity of approximately 35,000.