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EXHIBIT 99.1
(CARAUSTAR LETTERHEAD)
FOR IMMEDIATE RELEASE
SEPTEMBER 12, 2000
CONTACT: H. Lee Thrash, III
Chief Financial Officer
(770) 948-3101
CARAUSTAR REVISES THIRD QUARTER EXPECTATIONS
ATLANTA, Georgia - Caraustar Industries, Inc. (NASDAQ-NMS Symbol: CSAR) today
announced that it expects its third quarter per share earnings to be reduced by
$0.21 to $0.23 as the result of three developments.
In a public conference call and Webcast, the Company announced that it is in
litigation with its largest gypsum facing paper customer, Georgia-Pacific
Corporation (G-P), over G-P's refusal to continue purchasing gypsum wallboard
under the terms of a long-term supply contract. Caraustar estimates that as a
result of G-P's reductions in purchases, Caraustar's pre-tax operating income
will be reduced by $2.0 million to $2.9 million, and per-share earnings will be
reduced by $0.05 to $0.07 in the third quarter. Caraustar will also immediately
close its Camden, New Jersey mill, which will result in a one-time after-tax
charge of approximately $6.0 million.
In addition, the Company announced that dramatically falling prices in the
recovered fiber market would result in a devaluation of the Company's recovered
fiber inventory that would result in a non-recurring charge of approximately
$0.11 per share in the third quarter. The Company noted that it expects to
recoup the effect of this charge in the fourth quarter with increased margins.
The Company also announced that lower than expected profitability at the
Company's wallboard venture with Temple-Inland would reduce the Company's per
share earnings by approximately $0.05 in the third quarter.
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" and converted products. Please visit
the Caraustar Web site at http://www.caraustar.com for additional information
on the company.
-more-
PHONE 770-948-3101 . P.O. BOX 115 . AUSTELL, GA 30168-0115
3100 JOE JERKINS BOULEVARD . AUSTELL, GA 30106-3227
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Caraustar Industries, Inc.
September 12, 2000
Page 2
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 Company's expected
performance in future quarters. 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, the outcome of the pending dispute with G-P and
the Company's ability to minimize the impact of, or recover from G-P, losses
resulting from the dispute, fluctuations in raw material prices and the economy
in general, the degree and nature of competition, demand for the company's
products, changes in government regulations and the company's ability to
complete acquisitions and successfully integrate the operations of acquired
businesses. 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).
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