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Caraustar Industries, Inc. Reports First Quarter 2009 Results; Reaches Agreement to Extend Revolving Credit Facility.

Article Excerpt
ATLANTA, May 1 /PRNewswire-FirstCall/ -- Caraustar Industries, Inc. today announced that sales from operations for the first quarter ended March 31, 2009 were $159.3 million compared to sales of $216.5 million for the same quarter in 2008. Net loss for the first quarter of 2009 was $4.4 million, or $0.15 per share, compared to 2008 first quarter income of $0.2 million, or $0.01 per share. The first quarter 2009 and 2008 results from operations included restructuring and impairment costs of approximately $9.5 million, or $0.21 per share, and $0.7 million, or $0.02 per share, respectively. The $9.1 million decrease in pre-tax results was primarily attributable to higher restructuring and impairment costs of $8.8 million, increased pension expense of $2.3 million, and higher professional fees of $1.9 million related to efforts to restructure the company's 7.375 percent Senior Notes maturing on June 1, 2009. These costs were partially offset by lower salaries and a reduction in other employee benefit expenses of $1.9 million and lower interest expense of $0.4 million.

Total paperboard volume for the first quarter of 2009 decreased approximately 73.4 thousand tons, or 31.4 percent, compared to the same quarter last year. The decrease was attributable to 33.4 thousand tons of lower gypsum facing paper and other specialty paperboard tons from PBL (Premier Boxboard Limited LLC), which membership interest was sold on July 24, 2008, an 8.8 thousand ton decrease in other (non-PBL) gypsum facing paper, and a 16.3 thousand ton decrease in tube and core board. The decrease in gypsum facing paper production is associated with declines in the construction industry, and the shortfall in the tube and core segment is attributable to lower overall demand due to the recessionary economic conditions. The company operated 3 fewer paperboard mills in the first quarter of 2009 compared to the same period last year. In the first quarter of 2009, Caraustar's mill capacity utilization was 93.3 percent, compared to industry capacity utilization of 82.6 percent.

Michael J. Keough, president and chief executive officer of Caraustar, commented, "Overall, we were pleased with the results of operations in the first quarter. Despite a challenging economic backdrop, the company was able to deliver solid results. Our employees continue to remain focused on meeting customers' needs...

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