KapStone Paper And Packaging : Announces Investments In Converting Assets

NORTHBROOK, Ill., Sept. 7, 2016 /PRNewswire/ -- KapStone Paper and Packaging Corporation (NYSE: KS) (the 'Company' or 'KapStone') today announced it is making an investment in building a new state-of-the-art sheet plant in Ontario, California, as well as investing as a minority partner in a sheet feeder in Ontario, California. The new sheet plant is expected to be manufacturing boxes by January 2017 and is intended to primarily supply the Company's Victory Packaging operations in Southern California as well as other KapStone customers. This venture, as well as another minority investment in a sheet feeder announced today, are expected to increase KapStone's vertical integration by over 60,000 tons per year and will ramp up to that level over eighteen months. Collectively, these investments are expected to be approximately $25 million and will be largely funded before fiscal year end 2016.

Roger Stone, Chairman and Chief Executive Officer of KapStone, said, 'These investments are consistent with our strategy to increase the vertical integration of KapStone's mills, reducing exposure to non-integrated end markets, and are in addition to the 20,000 to 25,000 tons per year vertical integration from the Central Florida Box acquisition. The Ontario, California, sheet plant will further extend our geographic reach to better service KapStone's customers while internalizing the production of some of our Victory Packaging corrugated box demand.'

About the Company
Headquartered in Northbrook, Illinois, the Company is the fifth largest producer of containerboard and corrugated packaging products and is the largest kraft paper producer in the United States. The Company has 4 paper mills, 22 wholly owned corrugated converting facilities including Ontario, California, 65 distribution centers, and approximately 6,300 employees.

Forward-Looking Statements

Statements in this news release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as 'will,' 'should,' 'expect,' 'project,' 'intend,' 'plan,' 'believe,' 'estimate,' 'potential,' 'outlook,' 'guidance,' or 'continue,' the negative of these terms or other similar expressions. These statements reflect management's current views and are subject to risks, uncertainties and assumptions, many of which are beyond the Company's control that could cause actual results to differ materially from those expressed or implied in these statements.

Achieving the anticipated benefits from mill integration associated with the converting asset investments presents challenges to management. Any investment or acquisition may not achieve the same levels of profitability or revenues as our existing business or perform as expected and could require us to make unexpected capital contributions, expose us to additional liabilities or require a disproportionate amount management time and attention. Other factors that could cause actual results to differ materially include, but are not limited to: (1) industry conditions; (2) market and economic factors; and (3) the ability to achieve and effectively manage growth Further information on these and other risks and uncertainties is provided under Item 1A 'Risk Factors' in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and elsewhere in reports that the Company files with the SEC. These filings can be found on KapStone's Web site at http://www.kapstonepaper.com and the SEC's Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

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SOURCE KapStone Paper and Packaging Corporation

Andrea K. Tarbox, Vice President and Chief Financial Officer, 847-239-8812 or Michael J. Murphy, Vice President Finance, 847-239-8879