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CHESAPEAKE REPORTS FIRST QUARTER EARNINGS

 CHESAPEAKE REPORTS FIRST QUARTER EARNINGS
 RICHMOND, Va., April 20 /PRNewswire/ -- Chesapeake Corporation


(NYSE: CSK) announced first quarter 1992 net income of $2.5 million, or $.12 a share, up 3 percent compared to first quarter 1991 net income of $2.4 million, or $.12 a share.
 Sales for the first quarter ended March 31, 1992 were $210.1 million, up 6 percent compared to the first quarter of 1991. Income from operations was $11.3 million, or 12 percent less than first quarter 1991. Interest expense of $8.5 million was 5 percent less than 1991 due to higher capitalized interest and lower interest rates. Chesapeake's first quarter EBIT+D cash flow (earnings before interest and taxes plus depreciation and other non-cash charges) of $29.7 million was unchanged from first quarter 1991. Lower EBIT was offset by increased depreciation which totaled $17.1 million, up $.6 million from 1991. Capital expenditures during the first quarter of 1992, primarily for the recovery boiler project at the West Point, Virginia mill, were $21 million, and working capital increased $21.8 million due to increased receivables and seasonal inventory in treated lumber and tissue products.
 Volume was up 5 percent in both the kraft and tissue businesses. Packaging volume was up 7 percent, with continued strong gains in graphic packaging. Treated lumber shipments increased 42 percent.
 The average price for paperboard products was basically equal to 1991 first quarter levels. Bleached hardwood pulp prices continued to improve as $40 per ton increases were implemented on March 1 and April 1 for export and domestic markets, respectively. Tissue prices continued to be competitive, with average prices down 9 percent compared to first quarter 1991 and 3 percent compared to fourth quarter 1991.
 In early April, the net proceeds of $59.7 million from the sale of 2.5 million additional shares of the company's common stock were used to reduce long-term debt. After the debt reduction, Chesapeake's long-term debt to total capital ratio was reduced to 45 percent.
 J. Carter Fox, president and chief executive officer, commented, "First quarter is the seasonal low point for many of our businesses. Earnings improvements in our kraft and treated lumber businesses were offset by declines in our tissue and packaging businesses.
 "Volume was good for the quarter but order patterns were unpredictable and backlogs generally weak. However, design activity in our promotional display division was strong towards the end of the quarter which provides one indication that confidence levels of consumer product companies are increasing.
 "Second quarter earnings will show improvement for Chesapeake. However, the extent of the improvement will be determined by the realization of the announced price increases in paperboard and orrugating medium. Additionally, during April, we lost production time and experienced higher costs because of our annual maintenance outage at our West Point kraft mill."
 Mr. Fox concluded, "Although Chesapeake's financial performance is still not acceptable, I am optimistic about the future. We set production records at West Point during the quarter and our tissue facility again achieved operating efficiencies in excess of 100 percent. After our recent equity offering, we have an improved balance sheet and lower interest costs - we are ready for the economic recovery."
 Chesapeake Corporation is an integrated paper and forest products company that produces and sells kraft, tissue, packaging and wood products.
 Percent
 First Quarter 1992 1991 Change
 Net Sales $210,135,000 $198,439,000 6 pct.
 Income from Operations 11,345,000 12,861,000 -12 pct.
 Interest Expense 8,499,000 8,906,000 -5 pct.
 Income Before Taxes 4,193,000 4,327,000 -3 pct.
 Income Taxes 1,677,000 1,878,000 -11 pct.
 Net Income 2,516,000 2,449,000 3 pct.
 Earnings per Share $0.12 $0.12 0 pct.
 Weighted average shares
 and equivalents
 outstanding 20,815,000 20,444,000
 -0- 4/20/92
 /CONTACT: Andrew J. Kohut, Chief Financial officer, Chesapeake Corporation, 804-697-1153/
 (CSK) CO: Chesapeake Corporation ST: Virginia IN: PAP SU: ERN


CM-JM -- CH003 -- 9896 04/20/92 09:34 EDT
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Date:Apr 20, 1992
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