<B>Caraustar Reports Quarterly Revenue Drop</B>

Caraustar Industries announced revenues for the third quarter were $236.7 million, a decrease of 1.9 percent from revenues of $241.3 million for the same quarter of 1999. During the quarter, the company took a pretax restructuring charge of $8.6 million related to the permanent shutdown of its Camden paperboard mill, located in Camden, New Jersey.

The net loss for the third quarter , including the restructuring charge, was $2.6 million, compared to third quarter 1999 net income of $10.1 million.

For the nine-month period revenues were a record $740.4 million, a 15.5 percent increase over revenues of $641.3 million for the first nine months of 1999. Net income, including the restructuring charges, decreased to $9.0 million in the first nine months of the year, compared with $31.8 million in the first nine months of 1999. Excluding restructuring charges, net income for the first nine months of 2000 was $18.7 million. Operating cash flow for the first nine months of 2000 was $33.3 million, down 43.8 percent from $59.3 million in the first nine months of 1999.

Total unit volume in the mills and converting businesses decreased 47,000 tons to 271,000 tons in the third quarter of 2000 from 318,000 tons in the third quarter of 1999. Compared to the third quarter of 1999 gypsum facing paper volume declined 29,000 tons, folding carton grades declined 17,000 tons and other specialty grades declined 4,000 tons, while tube, core and can volume increased 3,000 tons. Paperboard mill volume decreased 17 percent to 242,000 tons and converted products volume was unchanged at 120,000 tons compared to the third quarter of 1999.

Gross paperboard margins at the company's paperboard mills increased $30 per ton in the third quarter compared to the second quarter, as paperboard selling prices increased $7 per ton and recovered fiber costs declined $23 per ton. Paperboard margins on tubes and cores declined $5 per ton as increased selling prices of $16 per ton were more than offset by an increase in paperboard costs of $21 per ton in the third quarter of 2000 compared to the second quarter of 2000.

Thomas Brown, president and CEO of Caraustar, noted, ``Over two-thirds of the decline in gypsum facing volume was the result of Georgia-Pacific Corp.'s refusal to continue making purchases under the terms of its long-term supply contract with Caraustar. The balance of the decline in gypsum facing paper volume resulted from a slowdown in wallboard shipments in the third quarter of 2000 compared to the peak volumes experienced in last year's third quarter. The decline in shipments of paperboard for folding cartons was the result of continued weak market conditions in the folding carton market and the bankruptcy of several independent folding carton manufacturers over the last year.

``The decline in mill volumes more than offset the improvement in paperboard margins of $30 per ton in the third quarter compared to the second quarter of 2000. As previously reported, we devalued our recovered fiber inventory by approximately $40 per ton in the third quarter to reflect the rapid decline in recovered fiber prices. Our operating income results were also negatively affected by an $8 per ton increase in energy costs in the third quarter of 2000, compared to the prior year's third quarter and the second quarter of 2000. On the other hand, business thus far into the fourth quarter is significantly stronger than in the third quarter of this year. The Sprague mill, for example, has a full backlog of business for the first time this year, even though it is operating at improved productivity rates. Fiber pricing remains favorable and product pricing appears to have stabilized. We are also encouraged by the smooth start-up of the Premier Boxboard Limited LLC paper machine. This joint venture with Temple-Inland earned over $1 million in September, its first full month of operations, and we expect it to be a strong contributor to Caraustar's earnings in the fourth quarter.''