3rd Quarter Results In From Caraustar Industries (CSAR)

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10:48:19 am on October 31, 2008

Caraustar Industries, a maker of recycled paper products, just released their 3rd quarter results. Before restructuring and impairment costs are accounted for, the company posted a net income that rose just slightly from their net income this time last year, $7 million compared to $6.2 million. However, this year they posted a net loss from continuing operations of $75.4 million, or $2.63 per share. That’s a drop from this time in 2007, when they posted third quarter income of $1.1 million, or $0.04 per share. Compared to last years third quarter, sales  rose to $214.5 million from $209.6 million.

Other significant figures from the report:

– EBITDA of $12.8 million
— Non-cash goodwill write-off of $125.3 million
— Cash of $37.7 million; Liquidity of $80.8 million

In the press release, company president and CEO Michael J. Keough commented on the results:

"Caraustar’s operating results for the third quarter 2008 were significantly improved sequentially and over the same period last year, despite a challenging economic environment. Year-over-year increases in selling prices were mostly offset by increases in energy. Our margin improvement was primarily the result of internal cost take-out and restructuring initiatives implemented in prior periods. Our investments in strategic capital projects have enabled us to provide cost effective, value-added products that have improved mix.

"While we are pleased to see positive results from these efforts, our financial performance was clearly impacted by global recessionary fears, increased energy costs and a depressed housing market. Input cost and market volatility will continue to be significant drivers throughout the remainder of 2008. Our liquidity position is improved compared to both December 31, 2007 and the second quarter of 2008. EBITDA was approximately $13 million for the third quarter 2008. While we have clearly been attentive to the business and have improved our operating results, our main focus and top priority continues to be the redemption of our Senior Notes, which mature in June 2009. To this end, on October 29, 2008, the company announced that it is marketing its Recovered Fiber Group for sale."

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