6 million in severance costs.5 million pre-tax) and freight costs (up $3.2 178.8
Folding Carton Tons 105.2 65.6

EBITDA ($ in millions) $14.7
CSAR Mill Tons Converted 104.02 $(0. ATLANTA, Caraustar Industries, Inc.

paperstock wynalda

2 million pre-tax, or $0. Keough, president and chief executive officer of Caraustar ,
stated, "Our year-over-year improvement was driven by higher margins in our
mill and carton system and strong results from our joint ventures as
construction continued to perform well.1 293.2 265.1 $6.3
Tubes + Cores Average Paperboard Cost 49.

wynalda sonoco

Caraustar Industries Inc . Reports First Quarter 2005 Results

8 million, or $0.03 per
share), planned downtime in the gypsum facing paper mills ($0.03 per share)
and approximately $6. Additional relevant risk factors that could
cause actual results to differ materially are discussed in the company's
registration statements and its most recent reports on Form 10-K, 10-Q and 8-
K, as amended, filed with or furnished to, the Securities and Exchange
Commission, which are available from the company.2 100.6 319.2 65.8
Total Paperboard Controlled * 324.3 $17.9 95.6
Specialty Paperboard Tons * 64.2
Mill Average Fiber Cost 11.
Despite the positive impact of improved mill operating rates, this price
change is necessary to help offset ongoing cost escalation.

mailers chipboard

4 million, or $0."

Joint Ventures
Caraustar's 50 percent interest in the PBL mill and the two Standard
Gypsum wallboard manufacturing facilities contributed $8.4 million of equity
in income of unconsolidated affiliates for the first quarter of 2005 compared
to $2 .7 million a year ago.

Liquidity
The company ended the first quarter of 2004 with a cash balance of $86. As of March 31, 2005, the company had no borrowings
outstanding under its $75. In order to listen to the
web cast of its conference call, participants can log on to the Caraustar
website at http://www.9 34.9
Total Paperboard Controlled * 324.5 22.

mailers carton

07 per share, respectively,
related to various closures. The 2005 quarterly improvement
in results was driven by a $29/ton increase in mill pricing (partially offset
by a $17/ton increase in fiber and energy costs) and continued strong
performances by our two 50 percent owned joint ventures, Standard Gypsum and
Premier Boxboard Limited (PBL).0 million revolving credit facility but does have
$37 .5 101.3 43. Q1 2005 vs.

mailers cartons

4 million to
$4. These statements involve
risks and uncertainties that could cause actual results to differ materially
depending on a variety of important factors , including, but not limited to,
fluctuations in raw material prices and energy costs, increases in pension and
insurance costs, downturns in industrial production, housing and construction
and the consumption of durable and nondurable goods, the degree and nature of
competition, demand for the company's products, the degree of success achieved
by the company's new product initiatives, changes in government regulations,
the company's ability to complete acquisitions and successfully integrate the
operations of acquired businesses, the company's ability to service its
substantial indebtedness and unforeseen difficulties with the consolidation,
integration or relocation of the company's accounting and control operations,
IT systems or legal function.3 $20.6 277.1 56.4 18.24)

Weighted average number of shares
outstanding 28,761 28,391

DILUTED

NET INCOME (LOSS) PER COMMON SHARE $0. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)

March 31, December 31,
2005 2004

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $86,496 $89,756
Receivables, net of allowances 113,018 102,644
Inventories 90,004 89,044
Refundable income taxes 361 409
Current deferred tax asset 10,662 11,035
Other current assets 12,773 11,059
Total current assets 313,314 303,947

PROPERTY, PLANT AND EQUIPMENT:
Land 11,814 11,856
Buildings and improvements 138,801 138,872
Machinery and equipment 623 ,234 616,791
Furniture and fixtures 16,039 15,725
789,888 783,244
Less accumulated depreciation (402,588) (395,110)
Property, plant and equipment, net 387,300 388,134

GOODWILL 183,130 183,130

INVESTMENT IN UNCONSOLIDATED AFFILIATES 64,072 59,676

OTHER ASSETS 24,627 24,818

$972,443 $959,705

LIABILITIES AND SHAREHOLDERS ' EQUITY

CURRENT LIABILITIES:
Current maturities of debt $80 $80
Accounts payable 86,728 84,890
Accrued interest 20,127 8,810
Accrued compensation 8,368 11,742
Capital lease obligations 524 0
Other accrued liabilities 34,823 34,959
Total current liabilities 150,650 140,481

SENIOR CREDIT FACILITY 0 0
OTHER LONG-TERM DEBT , less current
maturities 505,567 506,141
LONG-TERM CAPITAL LEASE OBLIGATIONS 883 0
DEFERRED INCOME TAXES 57,466 57,320
PENSION LIABILITY 34,772 32,897
OTHER LIABILITIES 5,331 5,614

SHAREHOLDERS' EQUITY:
Common stock 2 ,876 2,875
Additional paid-in capital 191,829 191,903
Unearned compensation (4,075) (4,334)
Retained earnings 49,006 48,552
Accumulated other comprehensive loss (21,862) (21,744)
Total Shareholders' equity 217,774 217,252
$972,443 $959,705

CARAUSTAR INDUSTRIES, INC.

returnable sscc

02 per share, compared to the first quarter 2004 net
loss of $6. The first quarter 2004 included $3. For the first quarter of 2005, the company generated $0 .7 310.4 29. Caraustar
continues to be dedicated to providing customers with superior quality
products and value-added service.

corrugating cardboard

3 percent for the same period last
year. Caraustar has
developed its leadership position in the industry through diversification and
integration from raw materials to finished products.caraustar.sec.0 71.1 327.
Unaudited Supplemental Data
For the Eight Quarters Ending March 31, 2005

Volume Sold (tons 000's): Q1 2004 Q4 2003 Q3 2003 Q2 2003

CSAR Mill Tons Sold (Market) * 169.5 80.2 57. Domanico
Senior Vice President and
Chief Financial Officer
(770) 948-3101

schrage negi

We have higher volumes overall; however, our tube and core and folding
carton boxboard shipments were down slightly , in line with the industry.
Although we continue to see indications of a slowing general economy in the
first quarter of 2005, we remain encouraged about our opportunities,
particularly in the gypsum business as our PBL mill continues to lead the
industry in the production of lightweight facing paper.2 277.1 327.4

Caraustar Industries, Inc.3 152.6
Total Paperboard Controlled * 306.

honeycomb carton

5 million, an increase of 4. Caraustar's 6 percent year -over-year
overall volume increase was led by higher gypsum and specialty paperboard
products, while the recycled boxboard industry recorded a 0.
Yesterday, we announced a price increase on all coated and uncoated recycled
paperboard grades by $35 per ton, effective May 23, 2005 to offset increasing
costs.7 million for both the first
quarter of 2005 and 2004.
For this purpose, any statements that are not statements of historical fact
may be deemed to be forward-looking statements.3
CSAR Mill Tons Converted 108.2 103.8

PBL gypsum facing and other specialty
paper sold * 49.8

EBITDA ($ in millions) $9.4 $0. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)

For the Three Months Ended
March 31,
2005 2004

SALES $269,524 $257,095

COST OF SALES 229,897 220,569
Gross profit 39,627 36,526

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 36,411 35,449
Income from operations before
restructuring and impairment costs 3,216 1,077

RESTRUCTURING AND IMPAIRMENT COSTS (603) (3,172)

Income (loss) from operations 2,613 (2,095)

OTHER (EXPENSE) INCOME:
Interest expense (10,677) (10,704)
Interest income 509 187
Equity in income of unconsolidated
affiliates 8,356 2,682
Other, net 91 (31)
(1,721) (7,866)
INCOME (LOSS) BEFORE MINORITY INTEREST
AND INCOME TAXES 892 (9,961)

MINORITY INTEREST IN INCOME (25) (164)

(PROVISION) BENEFIT FOR INCOME TAXES (413) 3,352

NET INCOME (LOSS) $454 (6,773)

BASIC

NET INCOME (LOSS ) PER COMMON SHARE $0.

Caraustar Industries Inc. Announces Price Increase for All Coated and Uncoated Recycled Paperboard Grades

cardboard pasteboard

1
million for the same quarter in 2004. Net income for the first quarter of 2005
was $0. Negatively impacting first quarter 2005 results
compared to the same period a year ago were two fewer shipping days ($0.
"Our SG+A and purchasing cost reduction activities are making progress;
however, results have been muted due to higher than anticipated employee and
infrastructure costs as well as increased input costs.com and look for the web cast button/icon on the
"Investor Relations" page. These documents also may be
examined at public reference facilities maintained by the Securities and
Exchange Commission or, to the extent filed via EDGAR, accessed through the
web site of the Securities and Exchange Commission ( http://www.

Caraustar Industries, Inc.7 86.3
Gypsum Paper Tons * 65 .2
Outside Paperboard Purchased 32.5 6.24)

Weighted average number of shares
outstanding 28,927 28,391

CARAUSTAR INDUSTRIES, INC.

mailers rexam

ATLANTA, Caraustar Industries, Inc.4 million in charges
related to a customer bankruptcy and $0. PBL
mill volume was up over 10 percent with 70 percent of its product mix in
gypsum facing paper. Interest expense was $10.5 33.8 103.9 254.2 2.

cardboard mailers

(Nasdaq: CSAR) today announced that sales for the first quarter ended March
31, 2005 were $269. Higher than expected 2005 selling, general
and administrative (SG+A) costs of approximately $3.2 percent decrease
in volume for the same period.5
million.
Caraustar will be hosting a web cast of its first quarter 2005 results
beginning at 10:00 a.

This press release may contain certain "forward-looking statements,"
within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, that represent the company's
expectations, anticipations or beliefs about future events, operating results,
financial condition , business opportunities or cost reduction initiatives.9 298.0
Gypsum Paper Tons * 52.1) 9.

schrage hunza

8 percent over sales of $257.5 million pre-tax (or $0.
The improvement from first quarter 2004 to 2005 was partially offset by
significantly higher energy costs that not only increased the cost to operate
our production facilities (up $1.6 million of
cash from operating activities compared to $0.8

Tube + Core Tons 83.6 319.8 $17.4 162.7 32.1 59.3 24.0 $10.8
Net Increase (Decrease) ($0. Caraustar has
developed its leadership position in the industry through diversification and
integration from raw materials to finished products.

corrugated chipboard

Caraustar mill operating rates were 98 .3
percent in first quarter 2005 versus 96.

Caraustar, a recycled packaging company, is one of the world's largest
integrated manufacturers of converted recycled paperboard.7 284.9
Specialty Paperboard Tons * 70.

negi cartons

0 million pre-tax (or
$0.
Michael J. We expect to benefit
from these initiatives over time and continue to manage them aggressively. Cash dividends were $4. Both
joint ventures benefited significantly from a strong construction market. Caraustar serves the
four principal recycled boxboard product end-use markets: tubes, cores and
composite cans; folding cartons; gypsum facing paper and specialty paperboard
products.
Unaudited Supplemental Data
For the Eight Quarters Ending March 31, 2005

Volume Sold (tons 000's): Q1 2005 Q4 2004 Q3 2004 Q2 2004

CSAR Mill Tons Sold (Market) * 185.6
Total CSAR Mill Tons * 293.4 66 .6 277.5 $17.0
Net Increase (Decrease) $11.

CARAUSTAR INDUSTRIES, INC.

pasteboard sonoco

5 million in 2005.m.0 176.9
Outside Paperboard Purchased 31.1 44.5
Total CSAR Mill Tons * 274.7 91.2 $27. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

For the Three Months Ended
March 31,
2005 2004
Cash (used in) provided by
Operating activities:
Net income (loss) $454 $(6,773 )
Depreciation and amortization 6,675 7,251
Stock-based compensation expense 255 0
Restructuring and impairment costs 183 1,305
Deferred income taxes 369 (3,515 )
Equity in income of unconsolidated
affiliates, net of distributions (4,356) (182)
Changes in operating assets
and liabilities (2,973) 2,389
Net cash provided by
operating activities 607 475

Investing activities:
Purchases of property, plant
and equipment (4,482) (4,379)
Proceeds from disposal of
property, plant and equipment 695 1,351
Investment in unconsolidated affiliates (40) (150)
Net cash used in investing activities (3,827) (3,178)

Financing activities:
Repayments of short and long-term debt 0 (3,509)
Payments for capital leases (136) 0
Proceeds from swap agreement unwinds 0 380
Issuances of stock, net of forfeitures 96 1,658
Net cash used in financing activities (40) (1,471)

Net change in cash and cash equivalents (3,260) (4,174)
Cash and cash equivalents at
beginning of period 89,756 85,551
Cash and cash equivalents at end
of period $86,496 $81,377

Supplemental Disclosures:

Cash payments for interest $301 $0
Income tax payments $94 $116
Property acquired under capital leases $1,464 $0

CONTACT: Ronald J.
(Nasdaq: CSAR) today announced that it will raise prices on all coated and
uncoated recycled paperboard grades by $35 per ton.

fibro chipboard

Capital expenditures increased slightly year-over-year from $4.7 81.7 82.9 298.0 282.9

Changes in Selling Price and Costs ($/ton):

Q1 2005 vs.9)

Tubes and Cores Average Net Selling Price $49.

corrugating hunza

9 110.2 248.1 81.
Q1 2004 Q4 2004
Mill Average Net Selling Price $29. Caraustar serves the four
principal recycled boxboard product end-use markets: tubes, cores and
composite cans; folding cartons; gypsum facing paper and specialty paperboard
products.

returnable wallboard

The first quarter 2005 and 2004
results included restructuring and impairment costs of approximately $0.14 per share) of fuel, freight
and raw material cost increases. This centralization process
continues, but transition has been slower than expected due to continued
regulatory demands and information systems development to further leverage
personnel.0 million in the first
quarter of 2005 versus $2.5 million the previous year.8 million of letters of credit outstanding that reduce availability.9 72.0
Total Paperboard Controlled * 306.1 106.0 50. The increase will become
effective with shipments on May 23, 2005.

paperboard fibro

4 million pre-
tax). (EDT) on April 27, 2005 .9 85.6 102.1 28.2 49.1
Mill Average Fuel + Energy Cost 6.

wallboard pasteboard

01 and $0.06 per share) on a comparable basis to the same period a year ago also
reduced earnings.gov ) .4 97.7 60.0
Folding Carton Tons 105.02 $(0.

corrugated sscc

24 per share.5 million in the first quarter a year ago.1 100.7 310.6 36.7 ($7.
Caraustar, a recycled packaging company, is one of the world's largest
integrated manufacturers of converted recycled paperboard .

stringent fibro

6
million and $3.
The company continues to restructure its operations through a focused plan
to match capacity to demand and reduce costs.6 million pre-tax) but also increased the
cost of certain raw materials (petroleum-based coatings, chemicals and resins,
which were up $1. In addition to energy-related cost increases, we also incurred
increased SG+A expenses related to the centralization of accounting, human
resources, legal, credit, procurement and other back office functions in
Austell , Georgia to achieve compliance with Sarbanes-Oxley requirements and
which are expected to reduce costs long term.
"Generally, pricing has improved quarter-over-quarter although it has been
outpaced by increases in raw materials, energy, freight and employee costs.5 106.0 33.4 42.3 151 .0 282.2

PBL gypsum facing and other specialty
paper sold * 28.5

* Includes gypsum facing and other specialty paper sold by Caraustar's
50% owned unconsolidated Premier Boxboard ("PBL") joint venture.

honeycomb cardboard

The
company does not undertake any obligation to update any forward-looking
statements and is not responsible for any changes made to this press release
by wire or Internet services.2 183.2

Tube + Core Tons 84.3 17.