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 23, 2018

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:

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

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

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

oPre-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 23, 2018, KapStone Paper and Packaging Corporation (“KapStone”) issued a press release announcing third quarter 2018 financial results. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a copy of KapStone’s 2018 Third Quarter Financial Review which will be included on the company’s website under Investors is attached hereto as Exhibit 99.2.

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 exhibit 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 23, 2018, announcing third quarter 2018 financial results
Exhibit 99.2	2018 Third Quarter Financial Review

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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 23, 2018
	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	Tuesday, October 23, 2018
Executive Vice President and Chief Financial Officer
847.239.8812

KAPSTONE REPORTS RECORD THIRD QUARTER RESULTS

STRONG CASH FLOWS PROVIDE FOR $100 MILLION DEBT REDUCTION

NORTHBROOK, IL — October 23, 2018 — KapStone Paper and Packaging Corporation (NYSE:KS) today reported record results for the third quarter ended September 30, 2018. As compared to 2017’s third quarter, results for 2018’s third quarter are below:

·Net sales of $894 million up $25 million, or 3 percent

·Net income of $73 million up $42 million, or 142 percent

·Diluted EPS of $0.72 up $0.42 per share, or 140 percent

Non U.S. GAAP financial measures for the 2018 third quarter compared to 2017 are as follows:

·Adjusted EBITDA of $163 million up $42 million, or 35 percent

·Adjusted net income of $78 million up $40 million, or 104 percent

·Adjusted diluted EPS of $0.78 up $0.39 per share, or 100 percent

Matt Kaplan, President and Chief Executive Officer, stated, “I’m extremely proud of our record third quarter results which reflect continued higher prices, good demand and excellent operating performance despite Hurricane Florence’s $6 million EBITDA impact.  In addition, we successfully completed our once every five years cold mill maintenance outage at Longview.

“Our balance sheet has strengthened substantially in the past year.  Record operating cash flows enabled us to reduce our debt by over $100 million from June 30, 2018, and our bank debt to EBITDA leverage ratio is now 2.33, a significant improvement from a year ago.

“Victory Packaging, our distribution business, had a seasonally strong third quarter and is expecting a strong finish for 2018.”

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Third Quarter Operating Highlights

Consolidated net sales of $894 million in the third quarter of 2018 increased by $25 million, or 3 percent, compared to $868 million for the 2017 third quarter. The increase in net sales is primarily due to higher prices, partially offset by lower sales volume. The Company sold 702,000 tons of paper during the third quarter of 2018 compared to 735,000 tons a year earlier. The Company’s average mill selling price of $756 per ton in the third quarter of 2018 increased by $58 per ton, or about 8 percent, compared to the third quarter of 2017 due to higher prices for most products and a favorable product mix. Mill selling prices increased by $20 per ton, or nearly 3 percent, compared to the second quarter of 2018.

Net income of $73 million for the 2018 third quarter increased by $42 million, or 142 percent, compared to the 2017 third quarter. The higher earnings primarily reflects:

·Higher selling prices and a better product mix of $41 million;

·Improved productivity and lower spending generated $9 million of benefits;

·Planned maintenance costs were $4 million lower than the prior year;

·Lower recycled fiber costs of $14 million; and

·A lower effective income tax rate resulting from the passage of the Tax Cuts and Jobs Act passed in December 2017.

The above items were partially offset by:

·WestRock merger related expenses of $5 million;

·Inflation of $12 million driven by higher virgin fiber, freight and compensation costs;

·Hurricane Florence idled our Charleston mill for five days with a negative impact of $6 million; and

·$7 million of higher management incentives due to higher earnings.

Cash Flow and Working Capital

Cash and cash equivalents of $22 million as of September 30, 2018, increased by $13 million from June 30, 2018.  Operating activities provided $156 million during the third quarter. Investing activities used $32 million and financing activities used $110 million of cash in the current quarter, reflecting a $75 million debt prepayment, $25 million of other debt reductions and a $10 million quarterly dividend payment.

On August 30, 2018, our Board of Directors approved a regular $0.10 per share cash dividend which was paid on October 11th.

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At September 30, 2018, the Company had approximately $501 million of working capital and $484 million of revolver borrowing capacity. The Company’s net debt to EBITDA ratio as defined by our credit agreement decreased to 2.33 times at September 30, 2018, down from 3.87 times a year ago.

KapStone and WestRock are targeting completing the proposed merger by the end of the calendar year 2018, subject to satisfaction or waiver of the closing conditions in the merger agreement.

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, 22 converting plants and over 60 distribution centers. The business has approximately 6,300 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. 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; (9) unanticipated business interruptions; and (10) the ability of KapStone and WestRock to receive the required regulatory

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approvals for the proposed acquisition of KapStone by WestRock (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction) and to satisfy the other conditions to the closing of the proposed transaction on a timely basis or at all; the occurrence of events that may give rise to a right of one or both of the parties to terminate the merger agreement; negative effects of the announcement or the consummation of the transaction on the market price of WestRock’s or KapStone’s common stock and/or on their respective businesses, financial conditions, results of operations and financial performance; risks relating to the value of the Whiskey Holdco, Inc. shares that may be issued in the transaction, significant transaction costs and/or unknown liabilities; the possibility that the anticipated benefits from the proposed transaction cannot be realized in full or at all or may take longer to realize than expected; risks associated with third party contracts containing consent and/or other provisions that may be triggered by the proposed transaction; risks associated with transaction-related litigation; the possibility that costs or difficulties related to the integration of KapStone’s operations with those of WestRock will be greater than expected; the outcome of legally required consultation with employees or other employee representatives; and the ability of KapStone and the combined company to retain and hire key personnel. There can be no assurance that the proposed transaction will in fact be consummated in the manner described or at all. Further information on these and other risks and uncertainties is provided under Part I, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 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 Sept. 30,
	2018			2017			2018			2017
Net sales	$	893,595		$	868,418		$	2,605,526		$	2,456,978
Cost and expenses:
Cost of sales, excluding depreciation and amortization	593,231			613,997			1,781,741			1,770,536
Depreciation and amortization	45,129			47,462			138,823			138,864
Plant closure costs	—			8,967			1,752			8,967
Freight and distribution expenses	82,158			77,043			236,997			225,671
Selling, general and administrative expenses	61,721			62,767			192,826			196,565
Merger expenses	4,590			—			20,490			—
Gain on sale of property	(680		)	—			(8,133		)	—
Operating income	107,446			58,182			241,030			116,375
Foreign exchange (gain) / loss	(187		)	(415		)	760			(1,501		)
Non operating pension and postretirement income	(3,092		)	(1,563		)	(9,275		)	(4,689		)
Equity method investment income	(311		)	(671		)	(1,551		)	(1,377		)
Loss on debt extinguishment	456			631			456			631
Interest expense, net	15,865			15,164			45,921			38,205
Income before provision for income taxes	94,715			45,036			204,719			85,106
Provision for income taxes	22,204			15,010			46,284			29,312
Net income	$	72,511		$	30,026		$	158,435		$	55,794
Net income per share:
Basic	$	0.74		$	0.31		$	1.62		$	0.58
Diluted	$	0.72		$	0.30		$	1.59		$	0.57
Weighted-average number of shares outstanding:
Basic	97,874,258			96,931,315			97,665,114			96,811,060
Diluted	100,135,846			98,707,395			99,955,448			98,521,491
Effective income tax rate	23.4		%	33.3		%	22.6		%	34.4		%

Supplemental Information

GAAP to Non-GAAP Reconciliations

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

(unaudited)

	Quarter Ended September 30,						Nine Months Ended Sept. 30,
	2018			2017			2018			2017
Net Income (GAAP) to EBITDA (Non-GAAP) to Adjusted EBITDA (Non-GAAP):
Net income (GAAP)	$	72,511		$	30,026		$	158,435		$	55,794
Interest expense, net	15,865			15,164			45,921			38,205
Provision for income taxes	22,204			15,010			46,284			29,312
Depreciation and amortization	45,129			47,462			138,823			138,864
EBITDA (Non-GAAP)	$	155,709		$	107,662		$	389,463		$	262,175
Acquisition, integration, start-up and other expenses	$	(922	)	$	1,815		$	2,431		$	9,231
Union contract ratification cost	1,036			946			1,036			5,925
Merger expenses	4,590			—			20,490			—
Plant closure costs	—			8,967			1,752			8,967
Change in fair value of contingent consideration liability	518			(3,910		)	518			(340		)
Gain on sale of property / loss on asset disposals	(680		)	1,960			(8,133		)	1,960
Stock-based compensation expense	2,011			2,650			7,176			12,676
Loss on debt extinguishment	456			631			456			631
Accumulated EBITDA adjustments	7,009			13,059			25,726			39,050
Adjusted EBITDA (Non-GAAP)	$	162,718		$	120,721		$	415,189		$	301,225
Net Income (GAAP) to Adjusted Net Income (Non-GAAP):
Net income (GAAP)	$	72,511		$	30,026		$	158,435		$	55,794
Accumulated EBITDA adjustments	7,009			13,059			25,726			39,050
Accumulated tax adjustments	(1,682		)	(4,897		)	(6,174		)	(14,644		)
Adjusted Net Income (Non-GAAP)	$	77,838		$	38,188		$	177,987		$	80,200
Diluted EPS (GAAP) to Adjusted Diluted EPS (Non-GAAP):
Diluted earnings per share (GAAP)	$	0.72		$	0.30		$	1.59		$	0.57
Accumulated EBITDA adjustments	0.08			0.14			0.25			0.39
Accumulated tax adjustments	(0.02		)	(0.05		)	(0.06		)	(0.15		)
Adjusted Diluted EPS (Non-GAAP)	$	0.78		$	0.39		$	1.78		$	0.81

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KapStone Paper and Packaging Corporation

Consolidated Balance Sheets

(In thousands)

	September 30,			December 31,
	2018			2017
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	22,431		$	28,065
Trade accounts receivable, net of allowances	488,007			443,462
Other receivables	17,218			23,289
Inventories	348,432			315,575
Prepaid expenses and other current assets	18,177			17,470
Total current assets	894,265			827,861
Plant, property and equipment, net	1,456,648			1,453,607
Other assets	27,760			24,431
Intangible assets, net	274,243			297,475
Goodwill	720,611			720,611
Total assets	$	3,373,527		$	3,323,985
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings	$	—		$	—
Other current borrowings	2,272			—
Other financial obligations	1,123			30
Dividend payable	10,392			10,302
Accounts payable	210,098			199,574
Accrued expenses	85,948			105,951
Accrued compensation costs	82,457			75,215
Accrued income taxes	528			31,458
Total current liabilities	392,818			422,530
Long-term debt, net of current portion	1,309,486			1,374,502
Long-term financing obligations	91,794			82,199
Capital lease obligation	4,570			4,595
Pension and post-retirement benefits	5,574			14,196
Deferred income taxes	254,968			252,101
Other liabilities	32,471			36,848
Total other liabilities	1,698,863			1,764,441
Stockholders’ equity:
Common stock $0.0001 par value	10			10
Additional paid-in capital	306,711			291,629
Retained earnings	1,022,942			894,061
Accumulated other comprehensive loss	(47,817		)	(48,686		)
Total stockholders’ equity	1,281,846			1,137,014
Total liabilities and stockholders’ equity	$	3,373,527		$	3,323,985

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KapStone Paper and Packaging Corporation

Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)

	Quarter Ended September 30,						Nine Months Ended Sept. 30,
	2018			2017			2018			2017
Operating activities:
Net income	$	72,511		$	30,026		$	158,435		$	55,794
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of plant and equipment	37,385			39,718			115,591			115,710
Amortization of intangible assets	7,744			7,744			23,232			23,154
Stock-based compensation expense	2,011			2,650			7,176			12,676
Pension and postretirement	(2,568		)	(745		)	(7,650		)	(1,971		)
Amortization of debt issuance costs	1,203			1,199			3,553			3,557
Loss on debt extinguishment	456			631			456			631
Loss on disposal of fixed assets	474			2,799			1,499			3,785
Deferred income taxes	207			(7,768		)	2,633			(6,240		)
Change in fair value of contingent consideration liability	518			(3,910		)	518			(340		)
Equity method investments income, net of cash received	749			365			455			473
Plant closure costs	—			8,043			793			8,043
Provision for bad debts	322			2,012			1,180			2,926
Gain on sale of property	(680		)	—			(8,133		)	—
Multiemployer pension plan withdrawal expense	—			—			226			—
Changes in operating assets and liabilities	35,549			43,658			(111,068		)	(42,279		)
Net cash provided by operating activities	$	155,881		$	126,422		$	188,896		$	175,919
Investing activities:
Capital expenditures	(33,334		)	(34,234		)	(111,739		)	(108,012		)
Proceeds from the sale of property	1,039			—			15,720			—
API acquisition	—			—			—			(33,500		)
Net cash used in investing activities	$	(32,295	)	$	(34,234	)	$	(96,019	)	$	(141,512	)
Financing activities:
Proceeds from revolving credit facility	$	28,000		$	79,000		$	270,000		$	347,500
Repayments on revolving credit facility	(53,000		)	(98,500		)	(270,000		)	(345,000		)
Proceeds from receivables credit facility	9,873			24,854			45,599			75,248
Repayments on receivables credit facility	(10,014		)	(5,055		)	(39,461		)	(26,676		)
Repayments on long-term debt	(75,000		)	(75,000		)	(75,000		)	(75,000		)
Repayments on other financing obligations	(275		)	(271		)	(812		)	(282		)
Proceeds from other current borrowings	—			—			6,767			6,214
Payments on other current borrowings	(2,256		)	(2,071		)	(4,495		)	(4,130		)
Payment of loan amendment costs	—			(1,301		)	(162		)	(1,488		)
Cash dividends paid	(9,781		)	(9,683		)	(29,253		)	(29,026		)
Payment of withholding taxes on vested stock awards	(52		)	(996		)	(1,957		)	(1,871		)
Proceeds from exercises of stock options	1,759			188			8,927			1,041
Proceeds from issuance of shares to ESPP	442			485			936			972
Payment of Victory Packaging contingent consideration	—			—			(9,600		)	—
Net cash provided by financing activities	$	(110,304	)	$	(88,350	)	$	(98,511	)	$	(52,498	)
Net increase (decrease) in cash and cash equivalents	13,282			3,838			(5,634		)	(18,091		)
Cash and cash equivalents-beginning of period	9,149			7,456			28,065			29,385
Cash and cash equivalents-end of period	$	22,431		$	11,294		$	22,431		$	11,294

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KapStone Paper and Packaging Corporation

Operating Segment Information

(In thousands)

(Unaudited)

	Net Sales								Operating			Depreciation				Total Assets
Three Months Ended September 30, 2018	Trade		Inter- segment			Total			Income (Loss)			and Amortization		Capital Expenditures		at Sept. 30, 2018
Paper and Packaging	$	632,406	$	20,201		$	652,607		$	109,695		$	37,880	$	32,586	$	2,657,300
Distribution	261,189		—			261,189			11,793			5,757		67		672,321
Corporate	—		—			—			(14,042		)	1,492		681		43,906
Intersegment eliminations	—		(20,201		)	(20,201		)	—			—		—		—
	$	893,595	$	—		$	893,595		$	107,446		$	45,129	$	33,334	$	3,373,527

	Net Sales								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		$	61,871		$	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		$	58,182		$	47,462	$	34,234	$	3,367,277

	Net Sales								Segment Operating			Depreciation
Nine Months Ended September 30, 2018	Trade		Inter- segment			Total			Income (Loss)			and Amortization		Capital Expenditures
Paper and Packaging	$	1,848,026	$	59,819		$	1,907,845		$	268,545		$	116,356	$	107,376
Distribution	757,500		—			757,500			27,082			17,575		973
Corporate	—		—			—			(54,597		)	4,892		3,390
Intersegment eliminations	—		(59,819		)	(59,819		)	—			—		—
	$	2,605,526	$	—		$	2,605,526		$	241,030		$	138,823	$	111,739

	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		$	137,320		$	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		$	116,375		$	138,864	$	108,012

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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 Sept. 30,
Paper and Packaging	2018			2017			2018			2017
Segment operating income	$	109,695		$	61,871		$	268,545		$	137,320
Equity method investments income	(311		)	(671		)	(1,551		)	(1,377		)
Foreign exchange loss / (gain)	70			(173		)	551			(809		)
Non operating pension and postretirement income	(3,092		)	(1,563		)	(9,275		)	(4,689		)
Loss on debt extinguishment	456			—			456			—
Depreciation and amortization	37,880			39,727			116,356			115,325
EBITDA	150,452			104,005			394,720			259,520
Acquisition, integration, start-up and other expenses	948			988			3,655			5,340
Gain on sale of property / loss on asset disposals	(680		)	645			(8,133		)	645
Plant closure costs	—			8,967			1,752			8,967
Loss on debt extinguishment	456			—			456			—
Union contract ratification costs	1,036			946			1,036			5,925
Adjusted EBITDA	$	152,212		$	115,551		$	393,486		$	280,397
Adjusted EBITDA margin	23.3		%	18.1		%	20.6		%	15.6		%

	Quarter Ended September 30,						Nine Months Ended Sept. 30,
Distribution	2018			2017			2018			2017
Segment operating income	$	11,793		$	5,776		$	27,082		$	19,158
Foreign exchange (gain) / loss	(257		)	(242		)	209			(692		)
Depreciation and amortization	5,757			5,864			17,575			17,814
EBITDA	17,807			11,882			44,448			37,664
Gain on sale of property / loss on asset disposals	—			1,315			—			1,315
Acquisition, integration, start-up and other expenses	(1,637		)	51			(1,511		)	1,714
Adjusted EBITDA	$	16,170		$	13,248		$	42,937		$	40,693
Adjusted EBITDA margin	6.2		%	5.3		%	5.7		%	5.6		%

	Quarter Ended September 30,						Nine Months Ended Sept. 30,
Corporate	2018			2017			2018			2017
Segment operating (loss)	$	(14,042	)	$	(9,465	)	$	(54,597	)	$	(40,103	)
Loss on debt extinguishment	—			631			—			631
Depreciation and amortization	1,492			1,871			4,892			5,725
EBITDA	(12,550		)	(8,225		)	(49,705		)	(35,009		)
Stock-based compensation expense	2,011			2,650			7,176			12,676
Acquisition, integration, start-up and other expenses	(233		)	776			287			2,177
Change in fair value of contingent consideration liability	518			(3,910		)	518			(340		)
Loss on debt extinguishment	—			631			—			631
Merger expenses	4,590			—			20,490			—
Adjusted EBITDA	$	(5,664	)	$	(8,078	)	$	(21,234	)	$	(19,865	)

	Quarter Ended September 30,						Nine Months Ended Sept. 30,
Consolidated	2018			2017			2018			2017
Segment operating income	$	107,446		$	58,182		$	241,030		$	116,375
Equity method investments income	(311		)	(671		)	(1,551		)	(1,377		)
Foreign exchange (gain) / loss	(187		)	(415		)	760			(1,501		)
Non operating pension and postretirement income	(3,092		)	(1,563		)	(9,275		)	(4,689		)
Loss on debt extinguishment	456			631			456			631
Depreciation and amortization	45,129			47,462			138,823			138,864
EBITDA	155,709			107,662			389,463			262,175
Stock-based compensation expense	2,011			2,650			7,176			12,676
Acquisition, integration, start-up and other expenses	(922		)	1,815			2,431			9,231
Union contract ratification costs	1,036			946			1,036			5,925
Plant closure costs	—			8,967			1,752			8,967
Loss on debt extinguishment	456			631			456			631
Change in fair value of contingent consideration liability	518			(3,910		)	518			(340		)
Gain on sale of property / loss on asset disposals	(680		)	1,960			(8,133		)	1,960
Merger expenses	4,590			—			20,490			—
Adjusted EBITDA	$	162,718		$	120,721		$	415,189		$	301,225

9

EX-99.2

Exhibit 99.2

2018 Third Quarter Financial Review October 23, 2018

Forward-looking Statements The information in 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

Third Quarter Financial Results (1) Percentage change calculations made using unrounded source financials (2) Excludes non-cash stock compensation, merger expenses, changes in contingent consideration, union contract ratification costs, and acquisition, integration, expense and other charges. Net of accumulated tax adjustments for Adjusted Net Income (3) Reflects lower effective income tax rate in 2018 due to the Tax Cuts and Jobs Act enacted in Q4 2017 3 ($ in Millions, except per share) Q3 2018 Q3 2017 Inc/(Dec)(1) Q2 2018 Inc/(Dec)(1) Net Sales $894 $868 3% $913 (2%) Net Income(3) $73 $30 142% $53 37% Diluted EPS $0.72 $0.30 140% $0.53 36% EBITDA $156 $107 45% $132 18% Adj. EBITDA(2) $163 $121 35% $138 18% Adj. Net Income(3) $78 $38 104% $58 35% Adj. Diluted EPS $0.78 $0.39 100% $0.58 35%

Q3 2018 Compared to Q3 2017 Higher Prices Drive Earnings Growth Price/mix was favorably impacted by higher average mill selling prices, up $58 per ton reflecting: Higher containerboard and specialty paper prices of $27 million Favorable product mix of $1 million Higher corrugated products prices of $10 million and improved product mix of $3 million Sales volume down 33,000 tons in Paper and Packaging segment driven by lower production due to hurricane Florence and the Longview mill’s planned maintenance outage Distribution segment sales up $10 million mainly on price. Adjusted EBITDA up $2 million Deflation includes $14 million of lower OCC costs, offset by $12 million of higher virgin fiber and other costs Hurricane Florence had an impact of $6 million as the Charleston mill was idled for five days Other reflects $9 million of productivity and lower spending, partially offset by $7 million of higher incentives 4 $868 $41 $24 $10 $894 Net Sales $ in Millions $121 $41 $3 $2 $2 $6 $4 $2 $163 $ in Millions Adjusted EBITDA

Q3 2018 Compared to Q2 2018 Higher Prices, Productivity and Lower Outage Costs Increase Earnings 5 Price/mix was favorably impacted by higher average mill selling prices, up $20 per ton reflecting: Higher containerboard and specialty paper prices of $4 million Higher corrugated products prices of $6 million Paper and Packaging segment sales volume down $24 million, or 41,000 tons. Distribution segment sales down $5 million due to seasonality resulting in $2 million of lower Adjusted EBITDA Planned outages includes Q2’s Roanoke Rapids annual outage and completion of the Charleston boiler upgrade, partially offset by Q3 Longview outage (last performed in 2013) Hurricane Florence reflects the impact of idling the Charleston mill for five days Other reflects higher productivity and lower spending $913 $10 $24 $5 $894 Net Sales $ in Millions $138 $10 $4 $2 $12 $6 $15 $163 $ in Millions Adjusted EBITDA

Cash Flows  For Q3 2018 cash flow from operations increased $30 million YOY primarily due to $42 million higher earnings in 2018, partially offset by higher tax payments Capex of $33 million for the current quarter Net debt at September 30, 2018 - $1,303 million down $116 million from June 30, 2018    No term loan principal payments due until 2020  Debt to EBITDA leverage ratio (per credit agreement)    2.33 times – September 30, 2018 3.20 times – December 31, 2017 3.87 times – September 30, 2017    Interest rate will increase in Q4 due to FED increases No pension plan funding anticipated in 2018 and 2019 $10 million cash dividend paid in July 6 $ in Millions Q3 Operating Cash Flows $156 20182017 $126

Quarterly Key Performance Indicators 7 Sales and Production Paper and Packaging Product Mix (000 Tons) Containerboard includes all domestic and export sales of linerboard and medium Specialty paper includes Kraft paper, Durasorb®, Kraftpak® and roll pulp Containerboard and Corrugated Products(1) Specialty Paper(2) Average Mill Revenue per Ton Tons Produced (000) Mill External Shipments (000 Tons) $756 $736 $698 3Q 18 2Q 18 3Q 17 693 689 693 3Q 18 2Q 18 3Q 17 472 508 506 3Q 18 2Q 18 3Q 17 450 492 475 252 251 260 3Q 18 2Q 18 3Q 17 3Q 18 2Q 18 3Q 17

Maintenance Outage Expense & Production Impact *The 27,500 ton impact includes 25,700 tons for the boiler upgrade at Charleston ** The 17,400 ton impact is mainly due to the annual cold mill outage at Roanoke Rapids, and the continuation of the Charleston boiler upgrade *** The 12,600 tons impact reflects a cold mill outage at Longview ****The 9,300 tons impact in Q4 reflects downtime for machine upgrades at Charleston and Longview 8 Financial Impact ($ in millions) Q1 Q2 Q3 Q4 Year 2016 Actual $6.6 $19.0 $3.8 $3.2 $ 32.6 2017 Actual $6.2 $17.6 $ 13.0 $ 10.0 $ 46.8 2018 Actual / Forecast $14.7 $21.0 $9.2 $ 18.6 $ 63.5 Lost Production Impact (Tons) Q1 Q2 Q3 Q4 Year 2016 Actual 4,800 12,900 1,900 5,300 24,900 2017 Actual 6,400 12,800 11,500 4,200 34,900 2018 Actual / Forecast 27,500* 17,400** 12,600*** 9,300 66,800