Caraustar Industries, Inc. Reports First Quarter 2001 Results

Apr 24, 2001, 01:00 ET from Caraustar Industries, Inc.

    ATLANTA, April 24 /PRNewswire Interactive News Release/ --
 Caraustar Industries, Inc. (Nasdaq: CSAR) today announced that revenues for
 the first quarter ended March 31, 2001, were $220.1 million, a decrease of
 11.5 percent from revenues of $248.6 million for the first quarter of 2000.
 The net loss for the first quarter of 2001 was $10.8 million, compared to
 first quarter 2000 net income of $2.1 million.  The net loss for the first
 quarter of 2001 includes pre-tax restructuring charges of $4.4 million related
 to the permanent shutdown of its Chicago, Illinois paperboard mill and
 $2.6 million related to the consolidation of the operations of the Salt Lake
 City, Utah carton plant into the Denver, Colorado carton plant.  Also included
 in the first quarter 2001 net loss was an extraordinary loss of $2.7 million,
 net of tax benefit, related to the early extinguishment of debt.  The loss per
 diluted share for the first quarter of 2001 was $0.39, compared to earnings
 per diluted share of $0.08 in the first quarter of 2000.  Net loss before
 extraordinary loss and excluding restructuring costs for the first quarter of
 2001 was $3.7 million, or a loss per diluted share of $0.13, compared to net
 income excluding restructuring costs for the same period last year of
 $6.5 million, or earnings per diluted share of $0.25.
     Total unit volume in the mills and converting businesses decreased
 52 thousand tons to 250 thousand tons in the first quarter of 2001 from
 302 thousand tons in the first quarter of 2000.  Compared to the first quarter
 of 2000, gypsum facing paper volume declined 20 thousand tons, folding carton
 grades declined 19 thousand tons, other specialty grades declined 9 thousand
 tons, and tube, core and can volume decreased 4 thousand tons.  Paperboard
 mill volume decreased 19 percent to 218 thousand tons and converted products
 volume decreased 11 percent to 117 thousand tons compared to the first quarter
 of 2000. Tube, core and can converted product volume declined by 4 percent to
 53 thousand tons in the first quarter of 2001 compared to the first quarter of
 2000.  Converted carton volume declined by 15 percent to 36 thousand tons,
 excluding acquisitions, and increased by 2 percent to 43 thousand tons,
 including acquisitions, in the first quarter of 2001 compared to the first
 quarter of 2000.  Converted volume of other specialty products declined by
 40 percent to 20 thousand tons in the first quarter of 2001 compared to the
 prior year period.
     Gross paperboard margins at the company's paperboard mills decreased
 $4 per ton in the first quarter of 2001 compared to the fourth quarter of
 2000, as paperboard selling prices decreased  $10 per ton and recovered fiber
 costs declined $6 per ton. Energy costs at the company's paperboard mills
 increased $4 per ton in the first quarter of 2001, compared to the fourth
 quarter of 2000.  Paperboard margins on tubes and cores decreased by $6 per
 ton as selling prices decreased by $7 per ton and paperboard costs decreased
 by $1 per ton in the first quarter of 2001 compared to the fourth quarter of
 2000.
     Thomas V. Brown, president and chief executive officer of Caraustar,
 noted, "Volume continues to be the biggest challenge for the industry and our
 company.  Following the precipitous decline in demand in the fourth quarter of
 last year, industry volume rose by only 3 percent in the first quarter, with
 mixed results by market segment.  Tube and core board demand fell by
 4.2 percent, and folding boxboard decreased by a slight 0.4 percent.  On the
 other hand, gypsum facing paper rebounded from its fourth quarter low by
 11.3 percent, and the other specialty market grew by 8.2 percent.
     "The company's results in the first quarter were similar to the
 industry's, as shipments of tube and core board declined by only 1.8 percent.
 Shipments of gypsum facing paper were off by 12.9 percent as our customers
 took extra downtime late in the quarter.  Our shipments of gypsum facing paper
 continue to be depressed by the contract dispute with Georgia-Pacific, with
 volumes down approximately 17 thousand tons compared to the first quarter of
 2000.  Our shipments of folding boxboard declined by 1.6 percent, but
 shipments of other specialty paperboard increased by 5.8 percent.
     "The combination of volume declines and margin compression in all of our
 businesses reduced operating income before restructuring charges by
 $4.4 million compared to the fourth quarter of 2000.  Due to new business
 gains we remain optimistic about improved volumes in our mill system,
 particularly in the lightweight folding boxboard market.  These gains will be
 complemented by reduced operating costs as energy prices decline and fiber
 costs remain stable.
     "We expect that new business gains will bring an additional 50 thousand
 annual tons of folding boxboard into our mill system during the second
 quarter, with the clear prospect for additional gains in the second half of
 2001."
     Caraustar will be hosting a Web cast of its first quarter 2001 earnings
 results beginning at 10:30 a.m. (EDT) on Tuesday, April 24, 2001.  In order to
 listen to the Web cast of its conference call, participants can log on at
 http://www.videonewswire.com/CARAUSTAR/042401 or log on at
 http://www.caraustar.com and look for the Web cast button/icon on the Our
 Financials page of Caraustar's Web site.
     Caraustar, a recycled packaging company, is one of the largest and lowest-
 cost manufacturers and converters of recycled paperboard and recycled
 packaging products in the United States.  The company has developed its
 leadership position in the industry through diversification and integration
 from raw materials to finished products.  Caraustar is the only major
 packaging company that serves the four principal recycled paperboard product
 markets:  tubes, cores and cans; folding carton and custom packaging; gypsum
 wallboard facing paper; and miscellaneous "other specialty" products.
     This press release contains certain "forward-looking statements," within
 the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
 the Securities Exchange Act of 1934, that represent the company's
 expectations, anticipations or beliefs, including statements regarding the
 expected effect of new business gains and reduced operating costs.  For this
 purpose, any statements that are not statements of historical fact may be
 deemed to be forward-looking statements.  These statements involve risks and
 uncertainties that could cause actual results to differ materially depending
 on a variety of important factors, including, but not limited to, fluctuations
 in raw material prices and energy costs, downturns in industrial production,
 housing and construction and the consumption of durable and nondurable goods,
 the degree and nature of competition, demand for the company's products,
 changes in government regulations, the company's ability to complete
 acquisitions and successfully integrate the operations of acquired businesses
 and the company's ability to service its substantial indebtedness.  Additional
 relevant risk factors that could cause actual results to differ materially are
 discussed in the company's registration statements and reports filed with the
 Securities and Exchange Commission, which are available from the company.
 These documents also may be examined at public reference facilities maintained
 by the Securities and Exchange Commission or, to the extent filed via EDGAR,
 accessed through the Web site of the Securities and Exchange Commission
 (http://www.sec.gov).  The company does not undertake any obligation to update
 any forward-looking statements.
 
 
                  CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (In Thousands, Except Per Share Data)
 
                                             For the Three Months Ended
                                                     March 31,
                                                2001           2000
                                                    (Unaudited)
 
     SALES                                      $233,088      $260,850
     FREIGHT                                      12,986        12,297
          Net sales                              220,102       248,553
 
     COST OF SALES                               178,437       194,416
          Gross profit                            41,665        54,137
 
     SELLING, GENERAL AND ADMINISTRATIVE
          EXPENSES                                36,717        38,490
          Operating income before
           restructuring costs                     4,948        15,647
 
     RESTRUCTURING COSTS                           7,083         6,913
          Operating (loss) income                 (2,135)        8,734
 
     OTHER (EXPENSE) INCOME:
     Interest expense                             (9,210)       (7,787)
     Interest income                                  88           174
     Equity in (loss) income of
      unconsolidated affiliates                   (1,585)        2,910
     Other, net                                      278           (68)
                                                 (10,429)       (4,771)
     (LOSS) INCOME BEFORE MINORITY
      INTEREST, INCOME
          TAXES AND EXTRAORDINARY LOSS           (12,564)        3,963
 
     MINORITY INTEREST                               (28)          (75)
 
     (BENEFIT) PROVISION FOR INCOME TAXES         (4,443)        1,746
 
     (LOSS) INCOME BEFORE EXTRAORDINARY
      LOSS                                       $(8,149)       $2,142
 
     EXTRAORDINARY LOSS FROM EARLY
      EXTINGUISHMENT
          OF DEBT, NET OF TAX BENEFIT            $(2,695)           $0
 
     NET (LOSS) INCOME                          $(10,844)       $2,142
 
     BASIC
 
     (LOSS) EARNINGS PER COMMON SHARE
      BEFORE EXTRAORDINARY LOSS                   $(0.29)        $0.08
 
     EXTRAORDINARY LOSS PER COMMON SHARE          $(0.10)        $0.00
 
     NET (LOSS) INCOME PER COMMON SHARE           $(0.39)        $0.08
 
     Weighted average number of shares
      outstanding                                 27,815        25,624
 
     DILUTED
 
     (LOSS) EARNINGS PER COMMON SHARE
      BEFORE EXTRAORDINARY LOSS                   $(0.29)        $0.08
 
     EXTRAORDINARY LOSS PER COMMON SHARE          $(0.10)        $0.00
 
     NET (LOSS) INCOME PER COMMON SHARE           $(0.39)        $0.08
 
     Diluted weighted average number of
      shares outstanding                          27,815        25,649
 
 
 
                    CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                         (In Thousands, Except Share Data)
 
                                                  March 31,        December 31,
                                                    2001              2000*
                                                 (Unaudited)
                                      ASSETS
     CURRENT ASSETS:
         Cash and cash equivalents                  $22,229            $8,900
         Receivables, net                           103,923            93,145
         Inventories                                105,347           110,346
         Refundable income taxes                      3,675             3,857
         Other current assets                        11,992             9,438
            Total current assets                    247,166           225,686
 
     PROPERTY, PLANT AND EQUIPMENT:
         Land                                        12,648            12,663
         Buildings and improvements                 132,883           127,816
         Machinery and equipment                    615,464           620,418
         Furniture and fixtures                      12,211            12,164
                                                    773,206           773,061
         Less accumulated depreciation             (296,806)         (289,752)
         Property, plant and equipment,
          net                                       476,400           483,309
 
     GOODWILL, net                                  149,819           150,894
 
     INVESTMENT IN UNCONSOLIDATED
      AFFILIATES                                     64,310            65,895
 
     OTHER ASSETS                                    16,187             7,043
                                                   $953,882          $932,827
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
         Current maturities of long-term
          debt                                         $408            $1,259
         Accounts payable                            64,384            63,752
         Accrued liabilities                         41,850            56,531
         Dividends payable                            2,506             4,702
            Total current liabilities               109,148           126,244
 
     REVOLVING CREDIT LOANS                               0           194,000
     LONG-TERM DEBT, less current
      maturities                                    506,086           272,813
     DEFERRED INCOME TAXES                           44,029            50,437
     DEFERRED COMPENSATION                            2,214             2,315
     OTHER LIABILITIES                                6,826             6,853
     MINORITY INTEREST                                1,143             1,115
 
 
     SHAREHOLDERS' EQUITY:
         Preferred stock, $.10 par value;
          5,000,000 shares authorized; none issued        0                 0
         Common stock, $.10 par value;
          60,000,000 shares authorized, 27,850,814
          and 26,204,567 shares issued and outstanding
          at March 31, 2001 and December 31, 2000,
             respectively                             2,785             2,620
         Additional paid-in capital                 179,543           160,824
         Retained earnings                          102,999           116,359
         Accumulated other comprehensive
          income                                       (891)             (753)
                                                    284,436           279,050
                                                   $953,882          $932,827
     * Condensed from audited financial statements.
 
 
 
                   CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
 
                                                 For the Three Months
                                                         Ended
                                                       March 31,
                                                  2001         2000
     Cash provided by (used in)                      (Unaudited)
         Operating activities:
            Net (loss) income                    $(10,844)     $2,142
            Extraordinary loss from early
             extinguishment of debt                 4,305           0
            Depreciation and amortization          15,398      14,858
            Restructuring costs                     3,987       5,696
            Other noncash adjustments              (6,320)      3,355
            Equity in income of
             unconsolidated affiliates,
                net of distributions                1,585        (910)
            Changes in current assets and
             liabilities                           (2,717)      1,284
            Net cash provided by operating
             activities                             5,394      26,425
 
         Investing activities:
            Purchases of property, plant
             and equipment                        (11,826)    (17,151)
            Acquisitions of businesses, net
             of cash acquired                         (34)     (4,071)
            Investment in unconsolidated
             affiliates                                 0           0
            Other                                    (716)        380
            Net cash used in investing
             activities                           (12,576)    (20,842)
 
         Financing activities:
            Proceeds from revolving credit
             loans                                 18,000       4,000
            Repayments of revolving credit
             loans                               (212,000)    (14,000)
            Proceeds from the issuance of
             the 7.25% and 9.875% notes           291,200           0
            Repayments of long and short-
             term debt                            (67,051)        (42)
            7.74% senior notes prepayment
             penalty                               (3,565)          0
            Dividends paid                         (4,698)     (4,570)
            Proceeds from issuance of stock             0          86
            Other                                  (1,375)       (216)
            Net cash provided by (used in)
             financing activities                  20,511     (14,742)
 
         Net increase (decrease) in cash
          and cash equivalents                     13,329      (9,159)
         Cash and cash equivalents at
          beginning of period                       8,900      18,771
         Cash and cash equivalents at end
          of period                               $22,229      $9,612
 
 
 
         Supplemental Disclosures:
 
            Cash payments for interest             $7,092       1,822
            Cash payments for income taxes           $628         935
            Stock issued for acquisitions         $18,799       5,303
 
     CONTACT:  H. Lee Thrash, III
               Chief Financial Officer
               (770) 948-3101
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X32883009
 
 

SOURCE Caraustar Industries, Inc.
    ATLANTA, April 24 /PRNewswire Interactive News Release/ --
 Caraustar Industries, Inc. (Nasdaq: CSAR) today announced that revenues for
 the first quarter ended March 31, 2001, were $220.1 million, a decrease of
 11.5 percent from revenues of $248.6 million for the first quarter of 2000.
 The net loss for the first quarter of 2001 was $10.8 million, compared to
 first quarter 2000 net income of $2.1 million.  The net loss for the first
 quarter of 2001 includes pre-tax restructuring charges of $4.4 million related
 to the permanent shutdown of its Chicago, Illinois paperboard mill and
 $2.6 million related to the consolidation of the operations of the Salt Lake
 City, Utah carton plant into the Denver, Colorado carton plant.  Also included
 in the first quarter 2001 net loss was an extraordinary loss of $2.7 million,
 net of tax benefit, related to the early extinguishment of debt.  The loss per
 diluted share for the first quarter of 2001 was $0.39, compared to earnings
 per diluted share of $0.08 in the first quarter of 2000.  Net loss before
 extraordinary loss and excluding restructuring costs for the first quarter of
 2001 was $3.7 million, or a loss per diluted share of $0.13, compared to net
 income excluding restructuring costs for the same period last year of
 $6.5 million, or earnings per diluted share of $0.25.
     Total unit volume in the mills and converting businesses decreased
 52 thousand tons to 250 thousand tons in the first quarter of 2001 from
 302 thousand tons in the first quarter of 2000.  Compared to the first quarter
 of 2000, gypsum facing paper volume declined 20 thousand tons, folding carton
 grades declined 19 thousand tons, other specialty grades declined 9 thousand
 tons, and tube, core and can volume decreased 4 thousand tons.  Paperboard
 mill volume decreased 19 percent to 218 thousand tons and converted products
 volume decreased 11 percent to 117 thousand tons compared to the first quarter
 of 2000. Tube, core and can converted product volume declined by 4 percent to
 53 thousand tons in the first quarter of 2001 compared to the first quarter of
 2000.  Converted carton volume declined by 15 percent to 36 thousand tons,
 excluding acquisitions, and increased by 2 percent to 43 thousand tons,
 including acquisitions, in the first quarter of 2001 compared to the first
 quarter of 2000.  Converted volume of other specialty products declined by
 40 percent to 20 thousand tons in the first quarter of 2001 compared to the
 prior year period.
     Gross paperboard margins at the company's paperboard mills decreased
 $4 per ton in the first quarter of 2001 compared to the fourth quarter of
 2000, as paperboard selling prices decreased  $10 per ton and recovered fiber
 costs declined $6 per ton. Energy costs at the company's paperboard mills
 increased $4 per ton in the first quarter of 2001, compared to the fourth
 quarter of 2000.  Paperboard margins on tubes and cores decreased by $6 per
 ton as selling prices decreased by $7 per ton and paperboard costs decreased
 by $1 per ton in the first quarter of 2001 compared to the fourth quarter of
 2000.
     Thomas V. Brown, president and chief executive officer of Caraustar,
 noted, "Volume continues to be the biggest challenge for the industry and our
 company.  Following the precipitous decline in demand in the fourth quarter of
 last year, industry volume rose by only 3 percent in the first quarter, with
 mixed results by market segment.  Tube and core board demand fell by
 4.2 percent, and folding boxboard decreased by a slight 0.4 percent.  On the
 other hand, gypsum facing paper rebounded from its fourth quarter low by
 11.3 percent, and the other specialty market grew by 8.2 percent.
     "The company's results in the first quarter were similar to the
 industry's, as shipments of tube and core board declined by only 1.8 percent.
 Shipments of gypsum facing paper were off by 12.9 percent as our customers
 took extra downtime late in the quarter.  Our shipments of gypsum facing paper
 continue to be depressed by the contract dispute with Georgia-Pacific, with
 volumes down approximately 17 thousand tons compared to the first quarter of
 2000.  Our shipments of folding boxboard declined by 1.6 percent, but
 shipments of other specialty paperboard increased by 5.8 percent.
     "The combination of volume declines and margin compression in all of our
 businesses reduced operating income before restructuring charges by
 $4.4 million compared to the fourth quarter of 2000.  Due to new business
 gains we remain optimistic about improved volumes in our mill system,
 particularly in the lightweight folding boxboard market.  These gains will be
 complemented by reduced operating costs as energy prices decline and fiber
 costs remain stable.
     "We expect that new business gains will bring an additional 50 thousand
 annual tons of folding boxboard into our mill system during the second
 quarter, with the clear prospect for additional gains in the second half of
 2001."
     Caraustar will be hosting a Web cast of its first quarter 2001 earnings
 results beginning at 10:30 a.m. (EDT) on Tuesday, April 24, 2001.  In order to
 listen to the Web cast of its conference call, participants can log on at
 http://www.videonewswire.com/CARAUSTAR/042401 or log on at
 http://www.caraustar.com and look for the Web cast button/icon on the Our
 Financials page of Caraustar's Web site.
     Caraustar, a recycled packaging company, is one of the largest and lowest-
 cost manufacturers and converters of recycled paperboard and recycled
 packaging products in the United States.  The company has developed its
 leadership position in the industry through diversification and integration
 from raw materials to finished products.  Caraustar is the only major
 packaging company that serves the four principal recycled paperboard product
 markets:  tubes, cores and cans; folding carton and custom packaging; gypsum
 wallboard facing paper; and miscellaneous "other specialty" products.
     This press release contains certain "forward-looking statements," within
 the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
 the Securities Exchange Act of 1934, that represent the company's
 expectations, anticipations or beliefs, including statements regarding the
 expected effect of new business gains and reduced operating costs.  For this
 purpose, any statements that are not statements of historical fact may be
 deemed to be forward-looking statements.  These statements involve risks and
 uncertainties that could cause actual results to differ materially depending
 on a variety of important factors, including, but not limited to, fluctuations
 in raw material prices and energy costs, downturns in industrial production,
 housing and construction and the consumption of durable and nondurable goods,
 the degree and nature of competition, demand for the company's products,
 changes in government regulations, the company's ability to complete
 acquisitions and successfully integrate the operations of acquired businesses
 and the company's ability to service its substantial indebtedness.  Additional
 relevant risk factors that could cause actual results to differ materially are
 discussed in the company's registration statements and reports filed with the
 Securities and Exchange Commission, which are available from the company.
 These documents also may be examined at public reference facilities maintained
 by the Securities and Exchange Commission or, to the extent filed via EDGAR,
 accessed through the Web site of the Securities and Exchange Commission
 (http://www.sec.gov).  The company does not undertake any obligation to update
 any forward-looking statements.
 
 
                  CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (In Thousands, Except Per Share Data)
 
                                             For the Three Months Ended
                                                     March 31,
                                                2001           2000
                                                    (Unaudited)
 
     SALES                                      $233,088      $260,850
     FREIGHT                                      12,986        12,297
          Net sales                              220,102       248,553
 
     COST OF SALES                               178,437       194,416
          Gross profit                            41,665        54,137
 
     SELLING, GENERAL AND ADMINISTRATIVE
          EXPENSES                                36,717        38,490
          Operating income before
           restructuring costs                     4,948        15,647
 
     RESTRUCTURING COSTS                           7,083         6,913
          Operating (loss) income                 (2,135)        8,734
 
     OTHER (EXPENSE) INCOME:
     Interest expense                             (9,210)       (7,787)
     Interest income                                  88           174
     Equity in (loss) income of
      unconsolidated affiliates                   (1,585)        2,910
     Other, net                                      278           (68)
                                                 (10,429)       (4,771)
     (LOSS) INCOME BEFORE MINORITY
      INTEREST, INCOME
          TAXES AND EXTRAORDINARY LOSS           (12,564)        3,963
 
     MINORITY INTEREST                               (28)          (75)
 
     (BENEFIT) PROVISION FOR INCOME TAXES         (4,443)        1,746
 
     (LOSS) INCOME BEFORE EXTRAORDINARY
      LOSS                                       $(8,149)       $2,142
 
     EXTRAORDINARY LOSS FROM EARLY
      EXTINGUISHMENT
          OF DEBT, NET OF TAX BENEFIT            $(2,695)           $0
 
     NET (LOSS) INCOME                          $(10,844)       $2,142
 
     BASIC
 
     (LOSS) EARNINGS PER COMMON SHARE
      BEFORE EXTRAORDINARY LOSS                   $(0.29)        $0.08
 
     EXTRAORDINARY LOSS PER COMMON SHARE          $(0.10)        $0.00
 
     NET (LOSS) INCOME PER COMMON SHARE           $(0.39)        $0.08
 
     Weighted average number of shares
      outstanding                                 27,815        25,624
 
     DILUTED
 
     (LOSS) EARNINGS PER COMMON SHARE
      BEFORE EXTRAORDINARY LOSS                   $(0.29)        $0.08
 
     EXTRAORDINARY LOSS PER COMMON SHARE          $(0.10)        $0.00
 
     NET (LOSS) INCOME PER COMMON SHARE           $(0.39)        $0.08
 
     Diluted weighted average number of
      shares outstanding                          27,815        25,649
 
 
 
                    CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                         (In Thousands, Except Share Data)
 
                                                  March 31,        December 31,
                                                    2001              2000*
                                                 (Unaudited)
                                      ASSETS
     CURRENT ASSETS:
         Cash and cash equivalents                  $22,229            $8,900
         Receivables, net                           103,923            93,145
         Inventories                                105,347           110,346
         Refundable income taxes                      3,675             3,857
         Other current assets                        11,992             9,438
            Total current assets                    247,166           225,686
 
     PROPERTY, PLANT AND EQUIPMENT:
         Land                                        12,648            12,663
         Buildings and improvements                 132,883           127,816
         Machinery and equipment                    615,464           620,418
         Furniture and fixtures                      12,211            12,164
                                                    773,206           773,061
         Less accumulated depreciation             (296,806)         (289,752)
         Property, plant and equipment,
          net                                       476,400           483,309
 
     GOODWILL, net                                  149,819           150,894
 
     INVESTMENT IN UNCONSOLIDATED
      AFFILIATES                                     64,310            65,895
 
     OTHER ASSETS                                    16,187             7,043
                                                   $953,882          $932,827
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
         Current maturities of long-term
          debt                                         $408            $1,259
         Accounts payable                            64,384            63,752
         Accrued liabilities                         41,850            56,531
         Dividends payable                            2,506             4,702
            Total current liabilities               109,148           126,244
 
     REVOLVING CREDIT LOANS                               0           194,000
     LONG-TERM DEBT, less current
      maturities                                    506,086           272,813
     DEFERRED INCOME TAXES                           44,029            50,437
     DEFERRED COMPENSATION                            2,214             2,315
     OTHER LIABILITIES                                6,826             6,853
     MINORITY INTEREST                                1,143             1,115
 
 
     SHAREHOLDERS' EQUITY:
         Preferred stock, $.10 par value;
          5,000,000 shares authorized; none issued        0                 0
         Common stock, $.10 par value;
          60,000,000 shares authorized, 27,850,814
          and 26,204,567 shares issued and outstanding
          at March 31, 2001 and December 31, 2000,
             respectively                             2,785             2,620
         Additional paid-in capital                 179,543           160,824
         Retained earnings                          102,999           116,359
         Accumulated other comprehensive
          income                                       (891)             (753)
                                                    284,436           279,050
                                                   $953,882          $932,827
     * Condensed from audited financial statements.
 
 
 
                   CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
 
                                                 For the Three Months
                                                         Ended
                                                       March 31,
                                                  2001         2000
     Cash provided by (used in)                      (Unaudited)
         Operating activities:
            Net (loss) income                    $(10,844)     $2,142
            Extraordinary loss from early
             extinguishment of debt                 4,305           0
            Depreciation and amortization          15,398      14,858
            Restructuring costs                     3,987       5,696
            Other noncash adjustments              (6,320)      3,355
            Equity in income of
             unconsolidated affiliates,
                net of distributions                1,585        (910)
            Changes in current assets and
             liabilities                           (2,717)      1,284
            Net cash provided by operating
             activities                             5,394      26,425
 
         Investing activities:
            Purchases of property, plant
             and equipment                        (11,826)    (17,151)
            Acquisitions of businesses, net
             of cash acquired                         (34)     (4,071)
            Investment in unconsolidated
             affiliates                                 0           0
            Other                                    (716)        380
            Net cash used in investing
             activities                           (12,576)    (20,842)
 
         Financing activities:
            Proceeds from revolving credit
             loans                                 18,000       4,000
            Repayments of revolving credit
             loans                               (212,000)    (14,000)
            Proceeds from the issuance of
             the 7.25% and 9.875% notes           291,200           0
            Repayments of long and short-
             term debt                            (67,051)        (42)
            7.74% senior notes prepayment
             penalty                               (3,565)          0
            Dividends paid                         (4,698)     (4,570)
            Proceeds from issuance of stock             0          86
            Other                                  (1,375)       (216)
            Net cash provided by (used in)
             financing activities                  20,511     (14,742)
 
         Net increase (decrease) in cash
          and cash equivalents                     13,329      (9,159)
         Cash and cash equivalents at
          beginning of period                       8,900      18,771
         Cash and cash equivalents at end
          of period                               $22,229      $9,612
 
 
 
         Supplemental Disclosures:
 
            Cash payments for interest             $7,092       1,822
            Cash payments for income taxes           $628         935
            Stock issued for acquisitions         $18,799       5,303
 
     CONTACT:  H. Lee Thrash, III
               Chief Financial Officer
               (770) 948-3101
 
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 SOURCE  Caraustar Industries, Inc.