CSAR Caraustar Industries (MM)

ATLANTA, March 19 /PRNewswire-FirstCall/ -- Caraustar Industries, Inc. (NASDAQ:CSAR) today announced that on March 19, 2009 it made the determination to permanently cease production of uncoated recycled boxboard (URB) at its Carolina Paperboard mill in Charlotte, NC. Production was ceased effective today. The company had previously announced, on December 11, 2008, the idling of the Carolina Paperboard mill. The mill had an annual capacity of approximately 62 thousand tons. The company will continue to service customers and their needs from other Caraustar locations. Associated with this closure, the company will record a pre-tax charge of approximately $9.7 million, of which $7.3 million will be non-cash. It is expected that the rationalization of this facility will generate $11.4 million in annual pre-tax savings. The closure of the Carolina Paperboard mill will affect approximately 111 salaried and hourly employees. Caraustar will provide a comprehensive program of separation compensation, benefits coverage and job assistance to the employees affected by the closure to facilitate their transition to alternate employment. In making the announcement, Greg Bartlett, vice president, sales Mill Group, stated, "In December, we announced that we were idling the Carolina Paperboard mill and would monitor demand in order to determine whether it was feasible to resume production at the facility. In this increasingly challenging economic environment, it is not economically prudent to resume paperboard production or to continue to keep the paper machine idle. Our focus continues to be on our customers. We are committed to providing superior customer service." Caraustar Industries, Inc. is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. The company is a socially responsible corporation, is committed to environmentally sound practices and is dedicated to providing customers with outstanding value through innovative products and services. Caraustar has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled boxboard product end-use markets: tubes and cores; folding cartons; gypsum facing paper and specialty paperboard products. For additional information on Caraustar, please visit the company's website at http://www.caraustar.com/. 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 our expectations, anticipations or beliefs about future events, including our operating results, financial condition, liquidity, expenditures, and compliance with legal and regulatory requirements. 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, our ability to continue as a going concern, our ability to refinance our substantial indebtedness, the effect that the "going concern" disclosure included in the opinion of our public accounting firm will have on our relationships with customers, suppliers, vendors and employees, 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 our products, the degree of success achieved by our new product initiatives, increases in pension and insurance costs, changes in government regulations, the application or interpretation of those regulations or in the systems, personnel, technologies or other resources we devote to compliance with regulations, the delisting of our common stock from the NASDAQ Capital Market Systems and the impact thereof on our liquidity and ability to raise capital, our ability to complete acquisitions and successfully integrate the operations of acquired businesses, the impact on the company of its results of operations in recent years and the sufficiency of its financial resources to absorb the impact and our ability to successfully dispose of our assets held for sale. Additional relevant risk factors that could cause actual results to differ materially are discussed in the "Risk Factors" section below and elsewhere in this press release and in our other reports on Forms 8-K, 10-Q and 10-K we file with the SEC from time to time. With respect to such forward-looking statements, we claim protection under the Private Securities Litigation Reform Act of 1995. Our SEC filings are available from us, and 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 website of the SEC (http://www.sec.gov/). We do not undertake any obligation to update any forward-looking statements we make. CONTACT: Ronald J. Domanico Senior Vice President and Chief Financial Officer (770) 948-3101 DATASOURCE: Caraustar Industries, Inc. CONTACT: Ronald J. Domanico, Senior Vice President and Chief Financial Officer of Caraustar Industries, Inc., +1-770-948-3101 Web Site: http://www.caraustar.com/

Copyright