<B>Caraustar Reports Loss for Quarter</B>

Caraustar Industries, Inc. reported that revenues for the fourth quarter were $223.1 million, a decrease of 10.3 percent from revenues of $248.8 million for the same quarter of 1999. The net loss for the fourth quarter was $906,000, compared to fourth quarter 1999 income of $9.3 million.

For the year revenues were $963.4 million, an 8.2 percent increase over revenues of $890.1 million for 1999. Net income, including restructuring and other nonrecurring costs, decreased to $8.1 million, compared with $41.1 million for 1999. Excluding restructuring and other nonrecurring costs, net income for 2000 was $18.7 million and diluted earnings per share were $0.71.

Gross paperboard margins at the company's paperboard mills increased $6 per ton in the fourth quarter of 2000 compared to the third quarter of 2000, as paperboard selling prices decreased $17 per ton and recovered fiber costs declined $23 per ton. Energy costs increased $9 per ton in the fourth quarter compared to the third quarter of 2000, more than offsetting the improvement in gross paperboard margins. Paperboard margins on tubes and cores increased by $8 per ton as selling prices increased by $6 per ton and paperboard costs decreased by $2 per ton in the fourth quarter of 2000 compared to the third quarter of 2000.

Thomas Brown, president and CEO of Caraustar, noted, "As discussed above, the principal reasons for the decline in fourth quarter results were weak market conditions, rising energy prices and our continuing contract dispute with Georgia-Pacific. The fourth quarter of 2000 was a period of continued volume deterioration for the recycled paperboard industry and the company. Total industry shipments were down almost 9 percent compared to last year's fourth quarter and were down almost 5 percent compared to a weak third quarter of 2000. Caraustar experienced a decline in volume in all of its major product lines at both its paperboard mills and converting plants.

"Due to the weakened demand for recycled paperboard, we previously announced the permanent closure of our Chicago, Illinois paperboard mill, which was idled in early November. We are also in the process of consolidating the operations of our Salt Lake City, Utah carton plant into our Denver, Colorado carton plant, which will result in a one time pre-tax charge of $2.5 million in the first quarter of this year, and an after-tax cash cost of approximately $0.7 million. Savings from the consolidation should more than cover the pre-tax charge this year.

"We continued to make progress in lowering the operating costs of our Sprague mill. Sprague's quarterly loss improved by $2.4 million in the fourth quarter compared to the third quarter of 2000. Further material improvement at the Sprague mill will depend on securing additional volume.

"Earnings from our joint ventures were disappointing in the fourth quarter. We incurred a loss of $500 thousand on our 50 percent interest in Standard Gypsum LLC due to lower volume of gypsum wallboard sales and lower selling prices that averaged slightly less than $80 per thousand square feet. Our other joint venture, Premier Boxboard, did not contribute to earnings as we expected. December performance, however, exceeded expectations in spite of declining corrugated medium pricing, and we expect a significant improvement in Premier's contribution to our earnings in the first quarter of this year.

"We have scaled back expectations for 2001, based on continued lower volume demand and higher energy costs. Business activity has improved marginally in comparison with the fourth quarter in most product lines. We continue to evaluate rationalizing excess capacity in all businesses while we reduce controllable operating costs.

"The shutdowns of the Chicago, Illinois paperboard mill and the Salt Lake City, Utah carton plant in the first quarter and the closures of our Baltimore, Maryland and Camden, New Jersey paperboard mills last year were all helpful in managing supply. Industry demand, however, has declined beyond anyone's expectations.