Federal Paper Board Reports Third Quarter Results.

MONTVALE, N.J.--(BUSINESS WIRE)--September 29, 1995--Federal Paper Board Company, Inc. (NYSE:FBO) today announced record third quarter sales and earnings for 1995.

Sales for the twelve weeks ended September 9, 1995 were $457.9 million compared to $373.9 million last year, an increase of 23 percent. Net income was $55.3 million or $1.12 per fully diluted common share compared to $15.2 million or $.32 per fully diluted common share for the third quarter 1994.

Sales for the thirty-six weeks ended September 9, 1995 were $1,357.1 million, a 30 percent increase over the prior year of $1,041.3 million. Net income was $160.2 million or $3.31 per fully diluted common share compared to $23.9 million or $.45 per fully diluted common share for 1994. Total debt for the Company has decreased approximately $115 million since year-end 1994 and Shareholders' Equity has increased approximately $145 million for the same period.

John R. Kennedy, President, stated, "The Company achieved record earnings in spite of a major annual maintenance shutdown at the Riegelwood, NC, mill, and scheduled maintenance shutdowns at the Inverurie, Scotland, and Sprague, CT, mills. The impact on earnings from these scheduled outages is approximately $.15 per fully diluted common share. During the quarter production records were set at both Riegelwood, NC, and Augusta, GA, our two largest facilities. Although business has slowed somewhat in the last several weeks, we expect these operations to continue to perform well in the fourth quarter.

"Results from the Company's recycled paperboard mill at Sprague, CT, were adversely affected by the scheduled outage, continued high waste paper prices and softening demand. The Company's U.K. uncoated free-sheet paper business has continued to perform well, offsetting higher pulp costs with higher selling prices. Our wood products business continues to be impacted by decreased selling prices as supply has outpaced demand, but we expect the fourth quarter results to improve compared to the last six months as housing starts improve with lower mortgage rates.

"During the past two years the Company has implemented a cost reduction program to improve earnings from its cup operations; however, earnings have not improved to expected levels. The Company, therefore, has decided during the fourth quarter, to implement a restructuring program which will include the consolidation of the business into three core plants: Shelbyville, IL; Kenton, OH; and Visalia, CA, and anticipates a charge associated with this program."

Federal Paper Board Company, Inc. manufactures and sells solid bleached paperboard, bleached market pulp, recycled paperboard, paper and plastic cups, folding cartons, lumber and uncoated free-sheet paper. The Company operates two bleached kraft paperboard and pulp mills, one recycled paperboard mill, four sheeting and distribution centers, one extrusion coating plant, five cup plants, four folding carton plants and five wood products mills in the United States along with one uncoated free-sheet paper mill and one sheeting and distribution center in the United Kingdom. Federal has approximately 6,800 employees. -0-

                    FEDERAL PAPER BOARD COMPANY, INC.
                           PRELIMINARY RESULTS
                    CONSOLIDATED STATEMENT OF INCOME
                               (Unaudited)
                  (In millions except per share amounts)

                                 For the              For the
                           Twelve Weeks Ended   Thirty-Six Weeks Ended
                           Sept. 9, Sept. 10,     Sept. 9, Sept. 10,
                             1995      1994         1995      1994

NET SALES                    $457.9   $373.9     $1,357.1 $1,041.3
 Costs and Expenses:
 Cost of Products Sold        295.3    272.1        879.2    779.1
 Depreciation, Amortization &
  Cost of Timber Harvested     35.1     34.4        106.4    100.2
  Selling and
   Administrative Expenses     21.5     15.9         63.5     47.3
  Interest Expense             20.8     20.3         63.4     59.1
  Other - Net (A)               1.6      6.5         (4.9)    21.7
Total Costs and Expenses      374.3    349.2       1107.6   1007.4

Income before Taxes            83.6     24.7        249.5     33.9
Provision for Income Taxes (B) 28.3      9.5         89.3     10.0
Net Income                    $55.3    $15.2       $160.2    $23.9

AVERAGE COMMON SHARES OUTSTANDING:
Assuming No Dilution           46.0     42.3         43.8     42.2
Assuming Full Dilution (B)     48.7     43.3         48.4     43.2

INCOME PER COMMON SHARE:
Assuming No Dilution           $1.20   $0.32        $3.59    $0.46
Assuming Full Dilution         $1.12   $0.32        $3.31    $0.45

(A) Year-to-date 1995 and 1994 include charges of $0.6 million and
$19.4 million, respectively, associated with nonhedged financial
instruments.

(B) 1995 includes a tax benefit of approximately $2.5 million for
the change in the effective tax rate.

(C) Earnings per common share assuming full dilution for 1994 does
not assume the conversion of the Company's $2.875 preferred stock as
the effect is antidilutive.

                     FEDERAL PAPER BOARD COMPANY, INC.
                          PRELIMINARY RESULTS
                     INDUSTRY SEGMENT INFORMATION
                             (Unaudited)
                            (In millions)

                                For the              For the
                          Twelve Weeks Ended   Thirty-Six Weeks Ended
                           Sept. 9, Sept. 10,    Sept. 9, Sept. 10,
                            1995      1994         1995      1994

NET SALES:

Paper, Paperboard and Pulp    $332.9  $244.1    $1020.2   $697.5
Wood Products                   58.8    65.3      176.8    184.3
Converting Operations           95.4    89.5      252.6    237.6
Intersegment Eliminations      (29.2)  (25.0)     (92.5)   (78.1)
Total                         $457.9  $373.9    $1357.1  $1041.3

INCOME BEFORE TAXES:

Paper, Paperboard and Pulp    $108.3   $34. 2    $316.7    $70.0
Wood Products                    5.2     16.8      20.3     53.3
Converting Operations            3.1      5.6       2.2      7.9
Intersegment Eliminations       (1.2)    (0.1)     (6.9)     0.3
General Corporate
    Expense - Net              (11.0)   (11.5)    (19.4)   (38.5)
Interest Expense               (20.8)   (20.3)    (63.4)   (59.1)
Total                          $83.6    $24.7    $249.5    $33.9

CONTACT: Quentin J. Kennedy

Executive Vice President

Federal Paper Board Company, Inc.

[phone]