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CHESAPEAKE ANNOUNCES FOURTH QUARTER EARNINGS

 CHESAPEAKE ANNOUNCES FOURTH QUARTER EARNINGS
 RICHMOND, Va., Jan. 23 /PRNewswire/ -- Chesapeake Corporation


(NYSE: CSK) announced fourth quarter net income of $5.7 million, or $.28 a share, up from $1.8 million, or $.08 a share, earned in the fourth quarter of 1990. Net income for the quarter increased 17 percent from $4.9 million recorded during third quarter 1991. Sales for the quarter ended Dec. 31, 1991 were $203.8 million, up 2 percent from $198.9 million a year ago, and down 7 percent from $219.4 million during the third quarter of 1991.
 Overall pricing improved slightly during the fourth quarter, with price increases being obtained in containerboard products, packaging and bleached hardwood market pulp. Shipments of tissue products increased 16 percent compared to fourth quarter 1990, but tissue pricing remained competitive as the industry operating rate dropped below 90 percent during the quarter.
 Net income for 1991 was $15.4 million, or $.75 a share, down 8 percent from 1990's earnings of $16.7 million, or $.81 a share. 1991 net sales were $840.5 million compared with record 1990 net sales of $841.2 million. EBIT+D cash flow (earnings before interest and taxes plus depreciation) for 1991 was $126 million, an increase of 8 percent over last year's $117 million. The increase in EBIT+D was attributed to a $6 million increase in depreciation and a $3 million increase in operating earnings. Depreciation totaled $65 million for 1991, an increase of $6 million over 1990 and $14 million over 1989. Capital spending for 1991 totaled $92 million, a decrease of 28 percent from 1990 and 34 percent from record 1989 levels. Net interest expense increased $6.0 million to $35.4 million because of higher debt levels associated with the company's capital spending program which exceeded operating cash flow. Capitalized interest totaled $2.5 million, a reduction of $3.0 million from 1990 levels.
 Chesapeake's three major businesses all experienced volume increases during 1991. Tissue shipments were up 19 percent to 190,000 tons. The additional volume, combined with significant cost improvements, enabled this business to achieve record earnings. Kraft shipments were 708,000 tons, an increase of 5 percent from 1990. Depressed pricing throughout most of the year more than offset this volume increase and profitability declined by 58 percent from 1990. Packaging had record profitability from continuing operations as container volume increased 3 percent and graphic packaging gained 23 percent.
 Consumer products business results improved dramatically in 1991. Sales increased 35 percent and operating losses were cut by approximately $8 million. Business activity for the company's housing related businesses, treated lumber, land development and wood products, was down for the year, but the businesses remained profitable.
 J. Carter Fox, president and chief executive officer, commented: "As I stated throughout the past year, Chesapeake's 1991 performance would be largely determined by the national economy and length of the recession. Even though our results approximate 1990 levels, I was pleased with the improvement in results in the second half of the year. I am convinced that our long-term strategy, which has shifted our focus to more specialty oriented businesses, has made us a stronger company which is more capable of withstanding adverse economic conditions.
 "Our people worked hard and made effective decisions to overcome adverse economic conditions. Many significant events occurred during the year but four were most notable. First, Wisconsin Tissue had an outstanding year. Paper machine efficiencies averaged at least 100 percent for the year. Sales volume increased 19 percent compared to industry growth of 1-2 percent. Costs were controlled and margins were improved despite negative industry and economic conditions. Second, our packaging division had its third consecutive excellent year and turned in record profitability. Third, in the kraft area, value added white paperboard shipments totaled 238,000 tons, an increase of 30 percent from 1990, and accounted for 75 percent of our paperboard product mix. Fourth, our consumer products business rebounded from 1990, and with a better focused business strategy, posted impressive gains both in sales and overall performance."
 Fox continued: "We are still uncomfortable with our debt level and plan to reduce debt once the necessary recovery boiler and related projects are completed at our West Point complex. Capital spending for 1992 should approximate 1991 levels as we finish this $100 million project in the third quarter."
 Fox concluded: "I am encouraged by recent price increases in bleached hardwood pulp. However, even at these new levels, prices are no higher than those of the first quarter of 1991, and are still 46 percent below peak levels achieved during 1989. Additionally, first quarter 1992 results will be hindered by the normal seasonal slowdown in many of our businesses and the unsettled state of the national economy. As business activity improves during the year, our financial results will too, and I anticipate higher earnings for the year. Chesapeake is ready for an economic upturn."
 Chesapeake Corporation is an integrated paper and forest products company that produces and sells kraft, tissue, packaging and wood products.
 Percent
 Fourth Quarter 1991 1990 Change
 Net Sales $203,766,000 $198,833,000 2
 Income from Operations 16,843,000 14,335,000 17
 Interest Expense 8,937,000 9,019,000 -1
 Income Before Taxes 9,413,000 4,094,000 130
 Income Taxes 3,768,000 2,308,000 63
 Net Income 5,645,000 1,786,000 216
 Earnings per Share $0.28 $0.08 250
 Weighted average shares
 and equivalents
 outstanding 20,669,000 20,435,000
 Percent
 Year to Date 1991 1990 Change
 Net Sales $840,490,000 $841,172,000 0
 Income from Operations 58,447,000 58,899,000 -1
 Interest Expense 35,398,000 29,405,000 20
 Income Before Taxes 26,028,000 29,083,000 -11
 Income Taxes 10,663,000 12,354,000 -14
 Net Income 15,365,000 16,729,000 -8
 Earnings per Share $0.75 $0.81 -7
 Weighted average shares
 and equivalents
 outstanding 20,544,000 20,560,000
 -0- 1/23/92
 /CONTACT: Andrew J. Kohut, Chief Financial Officer, Chesapeake Corporation, 804-697-1153/
 (CSK) CO: Chesapeake Corporation ST: Virginia IN: PAP SU: ERN


CM-JZ -- CH001 -- 2667 01/23/92 09:58 EST
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Date:Jan 23, 1992
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