Chesapeake's Transformation Highlighted at Annual Meeting.

Business Editors

RICHMOND, Va.--(BUSINESS WIRE)--April 26, 2000

Improved Financial Returns and Long-Term Sustainable Growth Expected

Five Directors Elected

At Chesapeake Corporation's (NYSE:CSK) annual meeting today in Richmond, Va., Chesapeake President and Chief Executive Officer Thomas H. Johnson described Chesapeake's achievements in 1999 to transform itself into a premier global specialty packaging and merchandising services company.

"The rapid series of transforming steps that we took in 1999 have created a new shape for our company," Johnson said. "Today Chesapeake is a highly focused, specialty packaging and merchandising services company. Through the market positions Chesapeake already had, and through the acquisitions we have made, we now enjoy leadership positions in multiple markets with sustainable competitive advantages."

In describing Chesapeake's growth strategy of focusing on key targeted market sectors, Johnson said, "We believe we will be able to deliver above average growth and above average profitability. Market leadership positions in packaging and merchandising services should thus translate into improved and sustainable financial returns for our shareholders."

Chesapeake's 1999 financial results, Johnson said, showed how the company's transformation continues to generate positive momentum. Chesapeake's 1999 net sales of $1.2 billion were up 22 percent from 1998's net sales of $950 million and up 14 percent from 1997 sales of $1 billion. Chesapeake's operating income for 1999 was $106 million, up 7 percent from 1998's operating income of $99 million and up 76 percent from 1997's operating income of $60 million. Chesapeake's Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), a measure of Chesapeake's internal cash flow, was $169 million in 1999, up 13 percent from 1998's EBITDA of $149 million, and up 45 percent from 1997's EBITDA of $116 million.

In a 10-year comparison of Chesapeake's earnings per share, Johnson noted the stability of the EPS for 1998 and 1999, compared to the cyclicality of the previous earnings. 1998 and 1999 marked the start of Chesapeake's transformation from being in forest products and commodity paper businesses to its new portfolio of businesses in specialty packaging and merchandising services.

"In the year 2000, we are expecting EPS growth of 18 to 26 percent over 1999," Johnson told Chesapeake shareholders. "Our future is bright...we are excited about the earnings potential going forward." He emphasized that Chesapeake's first quarter financial results, announced April 20, showed the Company was on track for a strong performance in 2000. "During the first quarter, we completed the acquisitions of Boxmore International and Green Printing and the formation of the litho-laminted graphic packaging joint venture with Georgia-Pacific." Boxmore International is a European specialty packaging company, based in Belfast, Northern Ireland, with both paper-based and plastics packaging capabilities. Green Printing, based in Lexington, North Carolina, is a specialty packaging producer and sheet-fed printer.

Johnson told shareholders that Chesapeake would continue to focus on executing its strategy of improving productivity, attaining reasonable growth and producing strong profits, while exceeding customer expectations. "We expect to continue to report strong revenue growth and healthy cash flow generation, with a relentless focus on increasing the value of your investment."

In other business, stockholders elected four directors to Class II to hold office for a term of three years. One director was elected to Class I to hold office for a term of two years.

The following directors were elected to Class II:

-- James E. Rogers, 55, president of SCI Investors, Inc.

-- Wallace Stettinius, 67, retired, former chairman of the board, Cadmus Communications Corporation.

-- Joseph P. Viviano, 61, retired, former vice chairman and director, Hershey Foods Corporation.

-- Harry H. Warner, 64, financial consultant.

The director elected to Class I:

-- Sir David Fell, 57, chairman and director of Northern Bank Limited, Belfast, Northern Ireland.

Chesapeake Corporation, headquartered in Richmond, Va., is a global leader in specialty packaging and merchandising services. Chesapeake is the largest North American producer of temporary and permanent point-of-purchase displays, the leading European folding carton, leaflet and label supplier, and a local leader in specific U.S. markets for customized, corrugated packaging. Chesapeake has over 70 locations in North America, Europe, Africa and Asia. Chesapeake's net sales in 1999 were $1.2 billion. Chesapeake's web site address is http://www.cskcorp.com .

This news release, including comments by Thomas H. Johnson, contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The accuracy of such statements is subject to a number of risks, uncertainties, and assumptions that may cause Chesapeake's actual results to differ materially from those expressed in the forward-looking statements including, but not limited to: competitive products and pricing; production costs, particularly for raw materials such as corrugated box, folding carton, and display materials; fluctuations in demand; governmental policies and regulations affecting the environment; interest rates; currency translation movements; and other risks that are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission.