8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

October 25, 2017

Date of Report (Date of earliest event reported)

KapStone Paper and Packaging Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-33494	20-2699372
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1101 Skokie Boulevard, Suite 300
Northbrook, Illinois 60062

(Address of principal executive offices)

(847) 239-8800

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).

Emerging growth company   o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o

Item 2.02Results of Operations and Financial Condition.

On October 25, 2017, KapStone Paper and Packaging Corporation (“KapStone”) issued a press release announcing third quarter 2017 financial results. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a copy of KapStone’s 2017 Third Quarter Financial Review slides which will be used for the conference call on October 26, 2017 is attached hereto as Exhibit 99.2.

Item 7.01Regulation FD Disclosure.

On October 26, 2017, the management of KapStone will participate in a conference call discussing KapStone’s financial results for the quarter ended September 30, 2017. A copy of a presentation entitled “2017 Third Quarter Financial Review” to be used in the conference call is attached as Exhibit 99.2 to this report.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

The following exhibits are being furnished herewith.  The exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall the exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Exhibit No.	Description
Exhibit 99.1	Press release dated October 25, 2017, announcing third quarter 2017 financial results
Exhibit 99.2	2017 Third Quarter Financial Review slides of KapStone Paper and Packaging Corporation, dated October 25, 2017

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  October 25, 2017
	KAPSTONE PAPER AND PACKAGING CORPORATION
	By:	/s/ Andrea K. Tarbox
	Name:	Andrea K. Tarbox
	Title:	Executive Vice President and Chief Financial Officer

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EX-99.1

Exhibit 99.1

FOR FURTHER INFORMATION:	FOR IMMEDIATE RELEASE
Andrea K. Tarbox	Wednesday, October 25, 2017
Executive Vice President and Chief Financial Officer
847.239.8812

KAPSTONE REPORTS THIRD QUARTER RESULTS

CASH FLOW ALLOWS FOR $75 MILLION DEBT PREPAYMENT

NORTHBROOK, IL — October 25, 2017 — KapStone Paper and Packaging Corporation (NYSE:KS) today reported results for the third quarter ended September 30, 2017. As compared to 2016’s third quarter, results for 2017’s third quarter are below:

·Net sales of $868 million up $92 million, or 12 percent

·Net income of $30 million down $1 million, or 3 percent

·Diluted EPS of $0.30 down $0.02 per share, or 6 percent

Non-U.S. GAAP financial measures for the 2017 third quarter are as follows:

·Adjusted EBITDA of $121 million up $13 million, or 12 percent

·Adjusted net income of $38 million up $2 million, or 5 percent

·Adjusted diluted EPS of $0.39 up $0.02 per share, or 5 percent

Matt Kaplan, President and Chief Executive Officer, stated, “Markets for our products are strong.  In September of 2017, we announced a $50 per ton price increase, effective with shipments in October 2017, for certain specialty paper products, which when fully realized, should yield approximately $25 million annually of additional revenues.

“During the third quarter, we streamlined our West Coast box operations with the closure of our Oakland, California box plant and distributed its production to our other facilities including our newest plant in Ontario, California.   The closure resulted in a $9 million pre-tax charge against earnings.

“Finally, strong operating cash flow of $126 million in the third quarter of 2017 enabled KapStone to make a $75 million prepayment on our term loans. This combined with our improved operating performance resulted in our leverage ratio being reduced to 3.87 times.”

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Third Quarter Operating Highlights

Consolidated net sales of $868 million in the third quarter of 2017 were $92 million, or 12 percent higher than the 2016 third quarter. This increase was due to $57 million of higher prices and a more favorable product mix, and higher volume in the paper and packaging segment. Net sales in the distribution segment increased $8 million due to higher prices partially offset by lower volume. The Company’s average mill selling price of $698 per ton in the third quarter of 2017 increased by $72 per ton, or nearly 12 percent, compared to the third quarter of 2016 due to higher domestic and export containerboard prices, and higher kraft paper prices.

Net income of $30 million for the 2017 third quarter was $1 million lower than the 2016 third quarter. The lower earnings primarily reflect the following (all dollar amounts on a pre-tax basis):

·Inflation driven higher recycled fiber costs, salaries and wages of $12 million;

·$9 million of higher planned maintenance outages;

·Higher management incentives and reinstated employee benefits of $12 million;

·A total of $7 million for unplanned boiler downtime, a bad debt charge due to a customer bankruptcy in our distribution segment, and the effects of Hurricanes Harvey and Irma;

·A $9 million charge for the closure of the Oakland, California box plant; and

·Higher interest expense due to higher interest rates on term loans and interest on long-term financial obligations of $5 million.

These items were partially offset by $57 million of significantly higher selling prices and a better product mix, and a $4 million reduction in the fair value of the contingent consideration liability relating to the earn-out for the Victory Packaging acquisition.

The effective income tax rate for the 2017 third quarter was 33.3 percent compared to 28.9 percent for the 2016 third quarter.  The 2017 effective income tax rate increased due to higher state income taxes. The 2016 third quarter effective income tax rate was lower due to a favorable discrete tax adjustment reflecting higher energy tax credits.

Cash Flow and Working Capital

Cash and cash equivalents increased by $4 million during the 2017 third quarter to $11 million at September 30, 2017.  Operating activities provided $126 million during the 2017 third quarter, including seasonally improved working capital. Investing activities used $34 million for capital expenditures.  Financing activities used $88 million, including a $75 million debt prepayment and $10 million for a cash dividend payment.

On August 10, 2017, our Board of Directors approved a regular $0.10 per share cash dividend which was paid on October 12, 2017.

At September 30, 2017, the Company had approximately $437 million of working capital and $483 million of revolver borrowing capacity.

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Conclusion

In summary, Kaplan commented, “As the year winds down, the benefits of the positive momentum related to the strong market should drive positive results in the fourth quarter and beyond. We have high expectations for 2018.”

Conference Call

KapStone will host a conference call at 10:00 a.m. CDT, Thursday, October 26, 2017, to discuss the Company’s financial results for the 2017 third quarter. All interested parties are invited to listen and may do so by either accessing a simultaneous broadcast webcast on KapStone’s website, http://www.kapstonepaper.com, or for those unable to access the webcast, the following dial-in numbers are available:

Domestic:   888-608-7946
International:   484-747-6633
Participant Passcode:  97997521

A presentation to be viewed in conjunction with the call will also be available on our website, http://www.kapstonepaper.com, in the “Investors” section.

Replay of the webcast will be available for 30 days on the Company’s website following the call.

About the Company

Headquartered in Northbrook, IL, KapStone Paper and Packaging Corporation is the fifth largest producer of containerboard and corrugated packaging products and is the largest kraft paper producer in the United States. The Company has four paper mills, 23 converting plants and 60 distribution centers. The business has approximately 6,400 employees.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income”, and “Adjusted Diluted EPS” to measure our operating performance. Management uses these measures to focus on the on-going operations, and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes that EBITDA and Adjusted EBITDA provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency to key measures used to evaluate the performance of the Company. Management uses EBITDA and Adjusted EBITDA for evaluating the Company’s performance against competitors and as a primary measure for employees’ incentive programs. Reconciliations of Net Income to EBITDA, EBITDA to Adjusted EBITDA, Net Income to Adjusted Net Income, and Diluted EPS to Adjusted Diluted EPS are included in the financial schedules contained in this press release.

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However, these measures should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.

Forward-Looking Statements

Statements in this news release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as “may,” “will,” “should,” “would,’ “expect,” “project,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “outlook,” or “continue,” the negative of these terms or other similar expressions. These statements reflect management’s current views and are subject to risks, uncertainties and assumptions, many of which are beyond the Company’s control that could cause actual results to differ materially from those expressed or implied in these statements.  Factors that could cause actual results to differ materially include, but are not limited to: (1) industry conditions; (2) market and economic factors; (3) results of legal proceedings and compliance costs; (4) the ability to achieve and effectively manage growth; (5) the ability to pay the Company’s debt obligations; (6) the ability to carry out the Company’s strategic initiatives and manage associated costs; (7) managing labor relations; (8) realizing the synergies and benefits of strategic investments; and (9) unanticipated business disruptions. Further information on these and other risks and uncertainties is provided under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and elsewhere in reports that the Company files with the SEC. These filings can be found on KapStone’s Web site at http://www.kapstonepaper.com and the SEC’s Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

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KapStone Paper and Packaging Corporation

Consolidated Statements of Income

(In thousands, except share and per share amounts)

(Unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net sales	$	868,418		$	776,636		$	2,456,978		$	2,299,762
Cost and expenses:
Cost of sales, excluding depreciation and amortization	612,434			548,811			1,765,847			1,650,919
Depreciation and amortization	47,462			44,954			138,864			135,528
Freight and distribution expenses	77,043			71,750			225,671			207,787
Plant closure costs	8,967			—			8,967			—
Selling, general and administrative expenses	62,767			56,113			196,565			172,407
Operating income	59,745			55,008			121,064			133,121
Foreign exchange (gain) / loss	(415		)	543			(1,501		)	1,518
Equity method investments income	(671		)	—			(1,377		)	—
Loss on debt extinguishment	631			679			631			679
Interest expense, net	15,164			10,148			38,205			29,965
Income before provision for income taxes	45,036			43,638			85,106			100,959
Provision for income taxes	15,010			12,620			29,312			33,045
Net income	$	30,026		$	31,018		$	55,794		$	67,914
Net income per share:
Basic	$	0.31		$	0.32		$	0.58		$	0.70
Diluted	$	0.30		$	0.32		$	0.57		$	0.70
Weighted-average number of shares outstanding:
Basic	96,931,315			96,581,703			96,811,060			96,499,771
Diluted	98,707,395			97,888,469			98,521,491			97,639,370
Effective income tax rate	33.3		%	28.9		%	34.4		%	32.7		%

Supplemental Information

GAAP to Non-GAAP Reconciliations

($ in thousands, except share and per share amounts)

(unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net Income (GAAP) to EBITDA (Non-GAAP) to Adjusted EBITDA (Non-GAAP):
Net income (GAAP)	$	30,026		$	31,018		$	55,794		$	67,914
Interest expense, net	15,164			10,148			38,205			29,965
Provision for income taxes	15,010			12,620			29,312			33,045
Depreciation and amortization	47,462			44,954			138,864			135,528
EBITDA (Non-GAAP)	$	107,662		$	98,740		$	262,175		$	266,452
Stock-based compensation expense	2,650			1,826			12,676			7,188
Acquisition, integration, start-up and other expenses	1,815			1,674			7,197			4,215
Longview piping inspection settlement	—			—			2,034			—
Union contract ratification cost	946			—			5,925			—
Plant closure costs	8,967			—			8,967			—
Loss on asset disposals	1,960			2,270			1,960			2,270
Change in fair value of contingent consideration liability	(3,910		)	1,527			(340		)	4,579
Severance expenses	—			863			—			7,027
Loss on debt extinguishment	631			679			631			679
Accumulated EBITDA adjustments	13,059			8,839			39,050			25,958
Adjusted EBITDA (Non-GAAP)	$	120,721		$	107,579		$	301,225		$	292,410
Net Income (GAAP) to Adjusted Net Income (Non-GAAP):
Net income (GAAP)	$	30,026		$	31,018		$	55,794		$	67,914
Accumulated EBITDA adjustments	13,059			8,839			39,050			25,958
Accumulated tax adjustments	(4,897		)	(3,315		)	(14,644		)	(9,734		)
Adjusted Net Income (Non-GAAP)	$	38,188		$	36,542		$	80,200		$	84,138
Diluted EPS (GAAP) to Adjusted Diluted EPS (Non-GAAP):
Diluted earnings per share (GAAP)	$	0.30		$	0.32		$	0.57		$	0.70
Accumulated EBITDA adjustments	0.14			0.09			0.39			0.27
Accumulated tax adjustments	(0.05		)	(0.04		)	(0.15		)	(0.11		)
Adjusted Diluted EPS (Non-GAAP)	$	0.39		$	0.37		$	0.81		$	0.86

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KapStone Paper and Packaging Corporation

Consolidated Balance Sheets

(In thousands)

	September 30,			December 31,
	2017			2016
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	11,294		$	29,385
Trade accounts receivable, net of allowances	468,630			392,962
Other receivables	15,625			13,562
Inventories	333,606			322,664
Prepaid expenses and other current assets	14,810			10,247
Total current assets	843,965			768,820
Plant, property and equipment, net	1,472,369			1,441,557
Other assets	25,113			25,468
Intangible assets, net	305,219			314,413
Goodwill	720,611			705,617
Total assets	$	3,367,277		$	3,255,875
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings	$	2,500		$	—
Other current borrowings	2,084			—
Capital lease obligation	29			—
Dividend payable	10,215			10,052
Accounts payable	220,147			189,350
Accrued expenses	101,531			76,480
Accrued compensation costs	60,597			48,840
Accrued income taxes	9,983			15,971
Total current liabilities	407,086			340,693
Long-term debt, net of current portion	1,461,595			1,485,323
Long-term financing obligations	85,840			—
Capital lease obligation	4,603			—
Pension and post-retirement benefits	29,746			34,207
Deferred income taxes	400,254			405,561
Other liabilities	32,148			85,761
Total other liabilities	2,014,186			2,010,852
Stockholders’ equity:
Common stock $0.0001 par value	10			10
Additional paid-in capital	288,788			275,970
Retained earnings	716,139			689,668
Accumulated other comprehensive loss	(58,932		)	(61,318		)
Total stockholders’ equity	946,005			904,330
Total liabilities and stockholders’ equity	$	3,367,277		$	3,255,875

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KapStone Paper and Packaging Corporation

Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Operating activities:
Net income	$	30,026		$	31,018		$	55,794		$	67,914
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of plant and equipment	39,718			37,442			115,710			110,143
Amortization of intangible assets	7,744			7,512			23,154			25,385
Stock-based compensation expense	2,650			1,826			12,676			7,188
Pension and postretirement	(745		)	(561		)	(1,971		)	(1,588		)
Excess tax benefit from stock-based compensation	—			—			—			150
Amortization of debt issuance costs	1,199			1,250			3,557			3,625
Loss on debt extinguishment	631			679			631			679
Loss on disposal of assets	2,799			2,503			3,785			3,156
Deferred income taxes	(7,768		)	(484		)	(6,240		)	220
Change in fair value of contingent consideration liability	(3,910		)	1,527			(340		)	4,579
Equity method investments income, net of cash received	365			—			473			—
Plant closure costs	8,043			—			8,043			—
Provision for bad debt	2,012			—			2,926			—
Changes in operating assets and liabilities	43,658			40,050			(42,279		)	(9,064		)
Net cash provided by operating activities	$	126,422		$	122,762		$	175,919		$	212,387
Investing activities:
Capital expenditures	(34,234		)	(26,873		)	(108,012		)	(99,246		)
Purchase of intangible assets	—			(500		)	—			(2,025		)
Acquisition, net of cash acquired	—			(15,438		)	(33,500		)	(15,438		)
Equity method investments	—			(10,500		)	—			(11,750		)
Proceeds from the sales of assets	—			25			—			4,881
Net cash used in investing activities	$	(34,234	)	$	(53,286	)	$	(141,512	)	$	(123,578	)
Financing activities:
Proceeds from revolving credit facility	$	79,000		$	89,500		$	347,500		$	353,200
Repayments on revolving credit facility	(98,500		)	(94,000		)	(345,000		)	(348,100		)
Proceeds from receivables credit facility	24,854			15,462			75,248			36,556
Repayments on receivables credit facility	(5,055		)	(5,497		)	(26,676		)	(32,667		)
Proceeds from long-term debt	—			—			—			—
Repayments on long-term debt	(75,000		)	(64,687		)	(75,000		)	(64,687		)
Repayments on long-term financial obligations	(263		)	—			(263		)	—
Payment of loan amendment costs	(1,301		)	138			(1,488		)	(2,250		)
Proceeds from other current borrowings	—			—			6,214			—
Repayments on other current borrowings	(2,071		)	—			(4,130		)	—
Repayments on capital lease obligation	(8		)	—			(19		)	—
Cash dividends paid	(9,683		)	(9,653		)	(29,026		)	(29,001		)
Payment of withholding taxes on vested stock awards	(996		)	(55		)	(1,871		)	(841		)
Proceeds from exercises of stock options	188			367			1,041			788
Proceeds from issuance of shares to ESPP	485			508			972			971
Excess tax benefit from stock-based compensation	—			—			—			(150		)
Net cash (used in) financing activities	$	(88,350	)	$	(67,917	)	$	(52,498	)	$	(86,181	)
Net increase (decrease) in cash and cash equivalents	3,838			1,559			(18,091		)	2,628
Cash and cash equivalents-beginning of period	7,456			7,890			29,385			6,821
Cash and cash equivalents-end of period	$	11,294		$	9,449		$	11,294		$	9,449

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KapStone Paper and Packaging Corporation

Operating Segment Information

(In thousands)

(Unaudited)

	Net Sales								Segment  Operating			Depreciation				Total Assets
Three Months Ended September 30, 2017	Trade		Inter- segment			Total			Income  (Loss)			and  Amortization		Capital  Expenditures		at Sept. 30,  2017
Paper and Packaging	$	617,255	$	21,234		$	638,489		$	63,434		$	39,727	$	32,154	$	2,647,034
Distribution	251,163		—			251,163			5,776			5,864		118		684,740
Corporate	—		—			—			(9,465		)	1,871		1,962		35,503
Intersegment eliminations	—		(21,234		)	(21,234		)	—			—		—		—
	$	868,418	$	—		$	868,418		$	59,745		$	47,462	$	34,234	$	3,367,277

	Net Sales								Segment  Operating			Depreciation				Total Assets
Three Months Ended September 30, 2016	Trade		Inter- segment			Total			Income  (Loss)			and  Amortization		Capital  Expenditures		at Sept. 30,  2016
Paper and Packaging	$	533,562	$	18,674		$	552,236		$	57,731		$	37,491	$	24,900	$	2,526,342
Distribution	243,074		—			243,074			8,230			5,795		936		676,350
Corporate	—		—			—			(10,953		)	1,668		1,037		41,376
Intersegment eliminations	—		(18,674		)	(18,674		)	—			—		—		—
	$	776,636	$	—		$	776,636		$	55,008		$	44,954	$	26,873	$	3,244,068

	Net Sales								Segment  Operating			Depreciation
Nine Months Ended September 30, 2017	Trade		Inter- segment			Total			Income  (Loss)			and  Amortization		Capital  Expenditures
Paper and Packaging	$	1,726,816	$	68,112		$	1,794,928		$	142,009		$	115,325	$	101,695
Distribution	730,162		—			730,162			19,158			17,814		1,861
Corporate	—		—			—			(40,103		)	5,725		4,456
Intersegment eliminations	—		(68,112		)	(68,112		)	—			—		—
	$	2,456,978	$	—		$	2,456,978		$	121,064		$	138,864	$	108,012

	Net Sales								Segment  Operating			Depreciation
Nine Months Ended September 30, 2016	Trade		Inter- segment			Total			Income  (Loss)			and  Amortization		Capital  Expenditures
Paper and Packaging	$	1,586,173	$	55,667		$	1,641,840		$	145,054		$	112,790	$	91,520
Distribution	713,589		—			713,589			21,947			17,158		3,934
Corporate	—		—			—			(33,880		)	5,580		3,792
Intersegment eliminations	—		(55,667		)	(55,667		)	—			—		—
	$	2,299,762	$	—		$	2,299,762		$	133,121		$	135,528	$	99,246

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KapStone Paper and Packaging Corporation

Operating Segment EBITDA and Adjusted EBITDA

(In thousands)

(Unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
Paper and Packaging	2017			2016			2017			2016
Segment operating income	$	63,434		$	57,731		$	142,009		$	145,054
Equity method investments income	(671		)	—			(1,377		)	—
Foreign exchange (gain) / loss	(173		)	18			(809		)	(18		)
Depreciation and amortization	39,727			37,491			115,325			112,790
EBITDA	104,005			95,240			259,520			257,862
Severance expenses	—			701			—			5,998
Acquisition, integration, start-up and other expenses	988			—			3,306			1,819
Longview piping inspection settlement	—			—			2,034			—
Plant closure costs	8,967			—			8,967			—
Loss on asset disposals	645			1,710			645			1,710
Union contract ratification costs	946			—			5,925			—
Adjusted EBITDA	$	115,551		$	97,651		$	280,397		$	267,389
Adjusted EBITDA margin	18.1		%	17.7		%	15.6		%	16.3		%

	Quarter Ended September 30,						Nine Months Ended September 30,
Distribution	2017			2016			2017			2016
Segment operating income	$	5,776		$	8,230		$	19,158		$	21,947
Foreign exchange (gain) / loss	(242		)	(561		)	(692		)	1,536
Depreciation and amortization	5,864			5,795			17,814			17,158
EBITDA	11,882			13,464			37,664			37,569
Acquisition, integration, start-up and other expenses	51			1,129			1,714			1,654
Loss on asset disposals	1,315			—			1,315			—
Severance expenses	—			153			—			633
Adjusted EBITDA	$	13,248		$	14,746		$	40,693		$	39,856
Adjusted EBITDA margin	5.3		%	6.1		%	5.6		%	5.6		%

	Quarter Ended September 30,						Nine Months Ended September 30,
Corporate	2017			2016			2017			2016
Segment operating (loss)	$	(9,465	)	$	(10,953	)	$	(40,103	)	$	(33,880	)
Loss on debt extinguishment	631			679			631			$	679
Depreciation and amortization	1,871			1,668			5,725			5,580
EBITDA	(8,225		)	(9,964		)	(35,009		)	(28,979		)
Stock-based compensation expense	2,650			1,826			12,676			7,188
Acquisition, integration, start-up and other expenses	776			545			2,177			742
Loss on asset disposals	—			560			—			560
Change in fair value of contingent consideration liability	(3,910		)	1,527			(340		)	4,579
Loss on debt extinguishment	631			679			631			679
Severance expenses	—			9			—			396
Adjusted EBITDA	$	(8,078	)	$	(4,818	)	$	(19,865	)	$	(14,835	)

	Quarter Ended September 30,						Nine Months Ended September 30,
Consolidated	2017			2016			2017			2016
Segment operating income	$	59,745		$	55,008		$	121,064		$	133,121
Equity method investments income	(671		)	—			(1,377		)	—
Foreign exchange (gain) / loss	(415		)	(543		)	(1,501		)	1,518
Loss on debt extinguishment	631			679			631			679
Depreciation and amortization	47,462			44,954			138,864			135,528
EBITDA	107,662			98,740			262,175			266,452
Stock-based compensation expense	2,650			1,826			12,676			7,188
Acquisition, integration, start-up and other expenses	1,815			1,674			7,197			4,215
Longview piping inspection settlement	—			—			2,034			—
Union contract ratification costs	946			—			5,925			—
Plant closure costs	8,967			—			8,967			—
Loss on asset disposals	1,960			2,270			1,960			2,270
Change in fair value of contingent consideration liability	(3,910		)	1,527			(340		)	4,579
Loss on debt extinguishment	631			679			631			679
Severance expenses	—			863			—			7,027
Adjusted EBITDA	$	120,721		$	107,579		$	301,225		$	292,410

9

KapStone Paper and Packaging Corporation

Summary of Interest Expense, net

(In thousands)

(Unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Interest on term loans and revolver	$	10,722		$	8,128		$	29,147		$	24,103
Interest on receivables securitization facility	1,601			877			3,937			2,440
Sub-total	12,323			9,005			33,084			26,543
Amortization of debt issuance costs	1,199			1,250			3,557			3,625
Implicit interest on long-term financing obligations	1,523			—			1,776			—
Interest on capital lease obligation	133			—			356			—
Other interest	63			—			63			(9		)
Capitalized interest	(28		)	(80		)	(490		)	(151		)
Interest income	(49		)	(27		)	(141		)	(43		)
Total interest expense, net	$	15,164		$	10,148		$	38,205		$	29,965

10

EX-99.2

Exhibit 99.2

2017 Third Quarter Financial Review October 25, 2017 Matt Kaplan, President and Chief Executive Officer Randy Nebel, Executive Vice President of Integrated Packaging Andrea K. Tarbox, Executive Vice President and CFO

Forward-looking Statements The information in this presentation and statements made during this presentation may contain certain forward-looking statements within the meaning of federal securities laws. These statements reflect management’s expectations regarding future events and operating performance. Risk Factors These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to differ materially from those expressed in, or underlying, any forward-looking statements can be found in the Company’s filings with the Securities and Exchange Commission, such as its annual and quarterly reports. The Company disclaims any obligation to revise or update such statements to reflect the occurrence of events after the date of this presentation. Non-GAAP Financial Measures This presentation refers to non-U.S. GAAP financial information. A reconciliation of non-U.S. GAAP to U.S. GAAP financial measures is available at the end of the press release and on the company’s website at KapStonepaper.com under Investors. Forward-Looking Statements 2

Quarter 3 Financial Summary ($ in Millions, except per share) Q3 2017 Q3 2016 Inc/(Dec)(1) Q2 2017 Inc/(Dec)(1) Net Sales $ 868 $ 77712%$ 823 6% Net Income$30 $31 (3%)$2052% Diluted EPS$0.30 $0.32 (6%)$0.2050% EBITDA$107 $999%$8822% Adjusted EBITDA(2)$121$10812%$ 10021% Adj. Net Income(2)$38$375%$2742% Adj. Diluted EPS$0.39$0.375%$0.2744% (1) Percentage change calculations made using unrounded source financials (2) Excludes non-cash stock compensation and changes in contingent consideration, and acquisition, integration, severance expenses, union bonus ratification, loss on asset disposals, plant closure costs and other charges. Net of accumulated tax adjustments for Adjusted Net Income 3

Q3 2017 Compared to Q3 2016 Favorable Price/Mix Fuels Earnings Gain Net Sales Adjusted EBITDA $57 $4 $12 $9 $12 $868 $26 $8 $128 $8 $7 $57 $121 $777 $108 Price/mix was favorably impacted by higher average mill selling prices, up $72 per ton reflecting: Higher prices of $29 million due to higher domestic and export containerboard and kraft paper prices Favorable product mix of $7 million primarily reflects 13,000 tons of lower roll pulp, 29,000 tons of higher Durasorb shipments and10,000 tons of higher extensible kraft paper shipments Higher corrugated prices of $20 million for October 2016 and March 2017 price increases 4 Sales volume up $26 million in Paper and Packaging segment (up 35,000 tons) Inflation includes $10 million for OCC and $2 million for salaries/wages Planned outages reflect $9 million at Charleston (machine upgrade and annual maintenance) Other includes $7 million higher freight/maintenance Unanticipated includes $4 million for unplanned boiler outages, $2 million for customer bankruptcy and $1 million due to hurricanes $ in Millions $ in Millions

Q3 2017 Compared to Q2 2017 $28 $128 $7 $121 Price/mix was favorably impacted by higher average mill selling prices, up $37 per ton reflecting: Higher prices of $17 million due to March containerboard and corrugated products increases, $2 million of higher export containerboard prices, and $3 million of higher kraft paper and Kraftpak prices Favorable product mix of $2 million primarily reflects higher domestic containerboard shipments Sales volume up 36,000 tons in Paper and Packaging segment mainly due to specialty paper Distribution segment sales and earnings down due to seasonality Lower planned outage costs of $5 million due to $14 million of annual outages at Roanoke Rapids and Longview in Q2, partially offset by $9 million at Charleston in Q3 Other costs include $5 million for management incentives; $2 million for OCC Unanticipated includes $4 million for unplanned boiler outages, $2 million for customer bankruptcy and $1 million for hurricanes 5 $ in Millions $ in Millions Favorable Price/Mix and Lower Outages Drive Improvement Net Sales $823$28$27$10$868 Adjusted EBITDA $6$5$7$4 $100

Cash Flows million YOY primarily due to improved working capital $75 million early principal payment included 6 $ in Millions Q3 Operating Cash Flows $123$126 20162017 For Q3 2017 cash flow from operations increased $3 Capex increased by $8 million to $34 million Net debt at September 30, 2017 - $1,475 million, down $81 million from June 30, 2017 No principal payments due until Q2 2020 Debt to EBITDA leverage ratio (per credit agreement) 3.87 times – September 30, 2017 4.17 times – June 30, 2017 $10 million cash dividend paid in July

Quarterly Key Performance Indicators 469 475 476 451 249 223 7 (1)Containerboard includes all domestic and export sales of linerboard and medium (2)Specialty paper includes Kraft paper, Durasorb, Kraftpak and roll pulp Sales and Production Average Mill Revenue per Ton $698$661 3Q 172Q 173Q 16 Tons Produced (000) 693688700 3Q 172Q 173Q 16 Mill External Shipments (000) 506 3Q 172Q 173Q 16 Paper and Packaging Product Mix (000 Tons) Containerboard and Corrugated Products(1) Specialty Paper(2) 260 3Q 172Q 173Q 16 3Q 172Q 173Q 16

Key Assumptions for Q4 2017 8 Compared to Q3 2017 expected impacts to Q4 2017 results for the following: Unanticipated events in Q3 2017 of $7 million not expected to re-occur in Q4 Price/Mix impact should be:  Price benefits: o$50 per ton kraft paper increase: $2 million oHigher export linerboard prices: $1 million oSaturating kraft price increase not significant until Q1 2018  Seasonally less favorable product mix due to lower Durasorb shipments and corrugated products mix: ($6 million) Lower corrugated products volume due to one less shipping day and seasonality: ($4 million) Planned maintenance outages: ($1 million) Lower recycled fiber costs: $5 million, partially offset by ($3 million) of higher virgin fiber costs in Northwest Seasonally higher energy costs: ($1 million) Extended recovery boiler outage at LV due to discovery of additional repairs: ($3 million) Distribution segment seasonally weaker ($2 million) Lower interest expense due to improved leverage ratio subject to December Fed rate action Effective income tax rate of 34 percent. Cash income tax rate of 30 percent CAPEX in Q4 2017: $29 million  Full year 2017: $136 million

Maintenance Outage Expense & Production Impact *The 12,800 ton impact includes 11,600 tons at Roanoke Rapids ** 11,500 ton impact mainly reflects boiler outages at Charleston and Longview, and a PM1 upgrade at Charleston *** Includes boiler outages at Longview and Roanoke Rapids and a cogeneration outage at Charleston 9 Financial Impact ($ in millions) Q1 Q2 Q3 Q4 Year 2015 Actual $ 8.6 $11.1 $4.4 $ 13.3 $ 37.4 2016 Actual $6.6 $19.0 $3.8 $3.2 $ 32.6 2017 Actual / Forecast $6.2 $17.6 $13.0 $14.1 $ 50.9 Lost Production Impact (Tons) Q1 Q2 Q3 Q4 Year 2015 Actual 2,000 10,400 2,400 16,900 31,700 2016 Actual 4,800 12,900 1,900 5,300 24,900 2017 Actual / Forecast 6,400 12,800* 11,500** 9,700*** 40,400