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CHESAPEAKE REPORTS SECOND QUARTER EARNINGS

 RICHMOND, Va., July 21 /PRNewswire/ -- Chesapeake Corporation (NYSE: CSK) announced second quarter net income of $1.3 million, or $.05 a share, up from a first quarter net loss of $.8 million, or $.03 a share, and down from $4.3 million, or $.19 a share, earned in the second quarter of 1992. Sales for the quarter ended June 30, 1993, were a record $236.4 million, up 13 percent from $209.3 million in the first quarter of 1993 and up 3 percent from $229.3 million a year ago. EBIT (earnings before interest and taxes) for the second quarter was $10.3 million, up 43 percent from $7.2 million in the first quarter of 1993 and down 28 percent from $14.3 million in 1992.
 Net income for the first half of 1993 was $.5 million, or $.02 a share, down from $6.6 million, or $.30 a share, earned in 1992 before the cumulative effect of accounting changes. Year to date sales for 1993 were up 1 percent to $445.7 million. EBIT for the first two quarters was $17.5 million compared to $26.4 million in 1992. Year to date interest expense of $16.4 million approximated 1992 levels, despite $2.4 million less capitalized interest. Long-term debt decreased by $13.1 million during the second quarter to $382.7 million at quarter end, resulting in a debt to total capital ratio of 46 percent.
 "EBIT + D" (earnings before interest, taxes and accounting changes plus depreciation and other noncash charges) for the second quarter of 1993 was $28.8 million, or $3.0 million more than the first quarter of the year. For the first two quarters of 1993 "EBIT + D" was $54.6 million, or 9 percent less than $60.3 million in the first two quarters of 1992. Capital expenditures for the first half of 1993 were $38 million, or $12 million less than first half 1992. Working capital declined $15.1 million for the quarter as seasonal inventories were reduced.
 All three of Chesapeake's major businesses achieved strong shipments in the second quarter of 1993. Compared to the first quarter, tissue and kraft shipments were up 5 percent each, and packaging shipments were up 4 percent. Compared to the first half of 1992, year to date shipments were up 5 percent for tissue products, 9 percent for kraft products and 2 percent for packaging products.
 J. Carter Fox, president and chief executive officer commented, "Second quarter results improved over the first quarter, primarily due to superlative efforts by our operating personnel. Our three major businesses delivered perhaps the best operating quarter in Chesapeake's history as numerous production records were broken, working capital was lowered and capital spending was controlled effectively.
 "After the planned spring maintenance outage, our kraft mill operated at record efficiency and quality levels, and our tissue mill ran in excess of 100 percent of its rated capacity for the quarter. Our container plants had an outstanding quarter while graphic and specialty packaging continued to experience strong growth."
 Fox continued, "Although earnings are still substantially below our objectives, primarily because of nearly $19 million of price erosion during the first half of the year, cash flow was positive which allowed us to reduce long-term debt by $13 million from first quarter levels.
 "Better pricing remains the key to a meaningful improvement in Chesapeake's financial results. Generally, kraft products continue to be sold at ridiculously low prices with little near-term relief in sight. However, tissue prices improved during the second quarter, and a subsequent price increase has been announced that will be effective early in the third quarter."
 Fox concluded: "We did well given world economic and industry conditions. However, we are not satisfied. We will continue to pay close attention to cash flow and the daily management of our business while challenging our strategy given current business conditions and the outlook for the industry."
 Chesapeake Corporation, a Fortune 500 company headquartered in Richmond, is a paper and packaging company. Chesapeake's primary businesses are tissue and kraft paper products and packaging. Other businesses include consumer tissue products, land development and wood products.
 CHESAPEAKE CORPORATION
 Second Quarter Financial Results
 Percent
 Second Quarter 1993 1992 Change
 Net sales $236,374,000 $229,294,000 3 pct.
 Income from operations 10,117,000 13,820,000 (27 pct.)
 Interest expense 7,955,000 7,541,000 5 pct.
 Income before taxes 2,361,000 6,755,000 (65 pct.)
 Income taxes 1,091,000 2,432,000 (55 pct.)
 Net income 1,270,000 4,323,000 (71 pct.)
 Earnings per share $0.05 $0.19 (74 pct.)
 Weighted average
 shares and equivalents
 outstanding 23,330,000 23,234,000
 Percent
 Year to Date 1993 1992 Change
 Net sales $445,676,000 $439,429,000 1 pct.
 Income from operations 16,584,000 24,565,000 (32 pct.)
 Interest expense 16,379,000 16,040,000 2 pct.
 Income before taxes
 and cumulative effect
 of accounting changes 1,150,000 10,348,000 (89 pct.)
 Income taxes 631,000 3,725,000 (83 pct.)
 Income before cumulative
 effect of accounting changes 519,000 6,623,000 (92 pct.)
 Cumulative effect of
 accounting changes -- (9,665,000) --
 Net income 519,000 (3,042,000) 117 pct.
 Per share:
 Earnings before cumulative
 effect of accounting changes $0.02 $0.30 (93 pct.)
 Cumulative effect of
 accounting changes -- (0.46) --
 Earnings $0.02 (0.16) 113 pct.
 Weighted average
 shares and equivalents
 outstanding 23,330,000 22,021,000
 -0- 7/21/93 R
 /CONTACT: Andrew J. Kohut, chief financial officer, Chesapeake Corporation, 804-697-1153/
 (CSK)


CO: Chesapeake Corporation ST: Virginia IN: PAP SU: ERN

MH-TW -- DC003 -- 3810 07/21/93 09:33 EDT
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Date:Jul 21, 1993
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