CSAR Caraustar Industries (MM)

ATLANTA, Dec. 11 /PRNewswire-FirstCall/ -- Caraustar Industries, Inc. (NASDAQ:CSAR) today announced the permanent closure of its Richmond Paperboard mill in Richmond, Virginia, effective December 11, 2008. The Richmond mill is an uncoated recycled boxboard (URB) manufacturing facility with annual capacity of 49 thousand tons. Associated with this mill closure, the company will record a pre-tax charge of approximately $5.9 million, of which approximately $4.7 million will be non-cash. This rationalization is expected to generate an estimated $5.1 million in annual pre-tax savings. The closure of the Richmond mill will affect approximately 52 salaried and hourly employees. Caraustar will provide a comprehensive program of separation pay, benefits coverage and job assistance to the employees affected by the Richmond closure to facilitate their transition to alternate employment. The company also announced that effective December 19, 2008 it will idle the Carolina Paperboard mill in Charlotte, North Carolina. The Carolina mill is a URB manufacturing facility with annual capacity of 62 thousand tons. The company will continue to monitor its product demand and expects to determine by the end of the first quarter 2009 when it will restart URB production at the Carolina mill. Greg Bartlett, vice president, sales Mill Group, stated "Recession and declines in product demand necessitate that the company move aggressively to retain cost efficiencies and increase capacity utilization across its mill system. Strategic capital investments have enhanced our mill system and allowed for this further consolidation. We value our customer relationships and will continue to supply all of their needs from other Caraustar mills." 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 the company's expectations, anticipations or beliefs about future events, operating results, financial condition, business plans and industry trends and their potential impact on the company's business and financial results. Statements that are not statements of historical fact, as well as statements including words such as "expect," "intend," "will," "believe," "estimate," "project," "budget," "forecast," "anticipate," "plan," "may," "would," "could," "should," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by such statements. Such risk factors include, among others: fluctuations in raw material prices and energy costs, increases in pension and insurance costs, downturns in industrial production, housing and construction and the consumption of durable and nondurable goods, the degree and nature of competition, the degree of market receptiveness to price increases and energy surcharges, changes in demand for the company's products, the degree of success achieved by the company's new product initiatives, uncertainties related to the company's ability to successfully complete certain asset sales to finance a portion of the redemption of its debt, future financing plans and needs, the impact on the company of its results of operation in recent years and the sufficiency of its financial resources to absorb the impact, changes in government regulations, the company's ability to service its substantial indebtedness, and unforeseen difficulties with the consolidation, integration of the company's accounting and control operations and IT systems. Additional relevant risk factors that could cause actual results to differ materially are discussed in the company's registration statements and its most recent reports on Form 10-K, 10-Q and 8-K, as amended, filed with or furnished to, the Securities Commission. These documents may be 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 and is not responsible for any changes made to this press release by wire or Internet services. 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, Caraustar Industries, Inc., +1-770-948-3101 Web site: http://www.caraustar.com/

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