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

May 7, 2013

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))

Item 2.02              Results of Operations and Financial Condition.

On May 7, 2013, KapStone Paper and Packaging Corporation (“KapStone”) issued a press release announcing first quarter 2013 financial results. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a copy of KapStone’s First Quarter 2013 Financial Review which will be used for the conference call on May 7, 2013 is attached hereto as Exhibit 99.2.

The information is being furnished under Item 2.02 “Results of Operations and Financial Condition” of Form 8-K. Such information, including 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 it 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.

Item 7.01              Regulation FD Disclosure

On May 8, 2013, the management of KapStone will participate in a conference call discussing KapStone’s financial results for the quarter ended March 31, 2013.

Item 9.01              Financial Statements and Exhibits

(d)           Exhibits

Exhibit No.	Description
Exhibit 99.1	Press release dated May 7, 2013, announcing first quarter 2013 financial results
Exhibit 99.2	First Quarter 2013 Financial Review of KapStone Paper and Packaging Corporation, dated May 7, 2013

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SIGNATURE

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

Date:  May 7, 2013
	KAPSTONE PAPER AND PACKAGING CORPORATION
	By:	/s/ Andrea K. Tarbox
	Name:	Andrea K. Tarbox
	Title:	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, May 7, 2013
Vice President and Chief Financial Officer
847.239.8812

KAPSTONE REPORTS RECORD FIRST QUARTER RESULTS

NORTHBROOK, IL — May 7, 2013 — KapStone Paper and Packaging Corporation (NYSE:KS) today reported record results for the first quarter ended March 31, 2013.

·Net sales of $319.8 million up $20.0 million, or 7 percent, versus prior year

·Net income of $18.5 million up $2.9 million, or 19 percent, versus 2012

·Adjusted EBITDA of $50.7 million up $4.4 million, or 9 percent, versus prior year

·Diluted EPS of $0.38 up $0.05 per share, or 15 percent, versus 2012

·Adjusted diluted EPS of $0.42 up $0.04 per share, or 11 percent, versus prior year

Roger W. Stone, Chairman and Chief Executive Officer, stated, “Our operations performed well during the quarter, propelling the Company to record first quarter results. Average mill selling prices of $653 per ton increased by $45 per ton compared to the first quarter of 2012.  In the first quarter of 2013, we realized 2012’s domestic containerboard and corrugated price increases, and we benefitted from increasing prices of over $100 per ton on export containerboard sales compared to 2012’s first quarter.”

First Quarter Operating Highlights

Consolidated net sales of $319.8 million in the first quarter of 2013 increased by $20.0 million, or 6.7 percent, compared to $299.8 million for the 2012 first quarter, primarily due to full realization of the October 2012 $50 per ton containerboard price increase, higher box and sheet prices and continued recovery of export containerboard prices. Average mill selling prices per ton climbed to $653 from $608 a year ago. A better product mix in the 2013 quarter was partially offset by lower volume.

Operating income of $30.8 million for the 2013 first quarter increased by $3.3 million, or 12.1%, compared to the 2012 first quarter. The improved financial performance primarily reflects benefits from higher prices, partially offset by inflation on input, labor and benefit costs, higher outage costs, increased depreciation charges resulting mainly from the 2012 investment in new information systems and start-up expenses for the Company’s new manufacturing plant in Aurora, Illinois. The first quarter’s operating income included $2.3 million of stock compensation expense. We expect total stock compensation expense to approximate $1 million for each of the remaining three quarters of 2013.

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Interest expense was $1.9 million for the first quarter of 2013, down $0.5 million from a year ago mainly due to lower interest rates. At March 31, 2013, the interest rate on the majority of the Company’s debt was 1.95 percent down from 2.24 percent a year ago. Amortization of debt issuance costs of $0.7 million for the first quarter of 2013 decreased by $0.2 million from a year ago.

The effective income tax rate for the 2013 first quarter was 33.8 percent compared to 36.0 percent for the 2012 first quarter. The lower effective income tax rate is due to a higher expected benefit from the domestic manufacturing deduction and lower state income taxes. The 2013 rate also includes a favorable discrete benefit for a 2012 R&D tax credit. For 2013, the Company estimates its full year effective income tax rate to be 34.3 percent and its cash tax rate to be 10 percent.

Cash Flow and Working Capital

Cash and cash equivalents decreased by $8.9 million in the quarter ended March 31, 2013, to $7.6 million reflecting $15.6 million of net cash provided by operating activities, $16.8 million of cash used by investing activities and $7.7 million of cash used for financing activities.

Capital expenditures for the first quarter of 2013 totaled $16.8 million which included $7.4 million for the new manufacturing plant in Aurora, Illinois. The Company estimates $73.0 million of capital expenditures for the year.

At March 31, 2013, the Company had approximately $97.4 million of working capital and $95.1 million of revolver borrowing capacity.

Conclusion

In summary, Stone commented, “The April 2013 $50 per ton domestic containerboard price increase should be fully implemented late in the second quarter and should boost our EBITDA by approximately $50 million annually. Our new Aurora, Illinois manufacturing plant made its first shipment in April. With our strong cash flows and balance sheet KapStone is in an excellent position to continue growing profitably.”

Conference Call

KapStone will host a conference call at 11 a.m. EDT, Wednesday, May 8, 2013, to discuss the Company’s financial results for the 2013 first 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: 877.415.3178

International: 857.244.7321

Participant Passcode: 78657838

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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.

The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at http://earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (http://streetevents.com) a password-protected event management site.

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 a leading North American producer of unbleached kraft paper and corrugated products. The Company is the parent company of KapStone Kraft Paper Corporation and KapStone Container Corporation which includes three paper mills and 15 converting plants across the eastern and midwestern US. The business employs approximately 2,700 people.

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 and liquidity 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, Basic EPS to Adjusted Basic EPS, 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, including changes in cost, competition, changes in the Company’s product mix and demand and pricing for the Company’s products; (2) market and economic factors, including changes in raw material and healthcare costs, exchange rates and

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interest rates; (3) results of legal proceedings and compliance costs, including unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations; (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 and (7) the income tax impact of the federal incentive program for cellulosic biofuel producers. 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, 2012 and elsewhere in reports that the Company files with the SEC. These filings can be found on KapStone’s Web site at 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)

							Fav / (Unfav)
	Quarter Ended March 31,						Variance
	2013			2012			%
Net sales	$	319,813		$	299,843		6.7	%
Cost and expenses:
Cost of sales, excluding depreciation and amortization	224,946			214,074			-5.1	%
Depreciation and amortization	17,224			15,176			-13.5	%
Freight and distribution expenses	27,920			25,743			-8.5	%
Selling, general and administrative expenses	19,128			17,572			-8.9	%
Other operating income	202			198			2.0	%
Operating income	30,797			27,476			12.1	%
Foreign exchange gain / (loss)	(311		)	120			-359.2	%
Interest expense, net	1,875			2,373			21.0	%
Amortization of debt issuance costs	726			906			19.9	%
Income before provision for income taxes	27,885			24,317			14.7	%
Provision for income taxes	9,426			8,754			-7.7	%
Net income	$	18,459		$	15,563		18.6	%
Net income per share:
Basic	$	0.39		$	0.33
Diluted	$	0.38		$	0.33
Weighted-average number of shares outstanding:
Basic	47,482,010			46,491,626
Diluted	48,226,209			47,841,371
Effective tax rate	33.8		%	36.0		%

Supplemental Information

GAAP to Non-GAAP Reconciliations

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

(unaudited)

	Quarter Ended March 31,
	2013		2012
Net Income (GAAP) to EBITDA (Non-GAAP) to Adjusted EBITDA (Non-GAAP):
Net income (GAAP)	$	18,459	$	15,563
Interest expense, net	1,875		2,373
Amortization of debt issuance costs	726		906
Provision for income taxes	9,426		8,754
Depreciation and amortization	17,224		15,176
EBITDA (Non-GAAP)	$	47,710	$	42,772
Acquisition, start up and other expenses	611		1,223
Stock-based compensation expense	2,345		2,313
Adjusted EBITDA (Non-GAAP)	$	50,666	$	46,308
Net Income (GAAP) to Adjusted Net Income (Non-GAAP):
Net income (GAAP)	$	18,459	$	15,563
Acquisition, start up and other expenses	404		783
Stock-based compensation expense	1,552		1,480
Adjusted Net Income (Non-GAAP)	$	20,415	$	17,826
Basic EPS (GAAP) to Adjusted Basic EPS (Non-GAAP):
Basic EPS (GAAP)	$	0.39	$	0.33
Acquisition, start up and other expenses	0.01		0.02
Stock-based compensation expense	0.03		0.03
Adjusted Basic EPS (Non-GAAP)	$	0.43	$	0.38
Diluted EPS (GAAP) to Adjusted Diluted EPS (Non-GAAP):
Diluted earnings per share (GAAP)	$	0.38	$	0.33
Acquisition, start up and other expenses	0.01		0.02
Stock-based compensation expense	0.03		0.03
Adjusted Diluted EPS (Non-GAAP)	$	0.42	$	0.38

KapStone Paper and Packaging Corporation

Consolidated Balance Sheets

(In thousands)

	March 31,			December 31,
	2013			2012
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	7,618		$	16,488
Trade accounts receivable, net	136,752			111,592
Other receivables	6,263			10,061
Inventories	110,699			113,511
Prepaid expenses and other current assets	9,588			9,808
Deferred income taxes	5,864			5,864
Total current assets	276,784			267,324
Plant, property and equipment, net	577,459			576,115
Other assets	4,484			4,412
Intangible assets, net	54,884			57,027
Goodwill	226,289			226,289
Total assets	$	1,139,900		$	1,131,167
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings	$	52,200		$	63,500
Other current borrowings	2,719			—
Accounts payable	82,033			89,638
Accrued expenses	25,679			25,032
Accrued compensation costs	16,334			20,421
Accrued income taxes	446			—
Total current liabilities	179,411			198,591
Long-term debt, net of current portion	294,973			294,310
Accrued pension and post retirement benefits	13,313			13,193
Deferred income taxes	101,001			96,459
Other liabilities	11,507			10,666
Total other liabilities	420,794			414,628
Stockholders’ equity:
Common stock $.0001 par value	5			5
Additional paid-in capital	239,285			236,034
Retained earnings	303,470			285,011
Accumulated other comprehensive loss	(3,065		)	(3,102		)
Total stockholders’ equity	539,695			517,948
Total liabilities and stockholders’ equity	$	1,139,900		$	1,131,167

KapStone Paper and Packaging Corporation

Consolidated Statement of Cash Flows

(In thousands)

(unaudited)

	Quarter Ended March 31,
	2013			2012
Operating activities:
Net income	$	18,459		$	15,563
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	17,224			15,176
Stock-based compensation expense	2,345			2,313
Excess tax benefit for stock-based compensation	(386		)	(445		)
Amortization of debt issuance costs	726			906
Loss on disposal of fixed assets	18			68
Deferred income taxes	4,906			6,202
Changes in operating assets and liabilities	(27,655		)	(19,992		)
Net cash provided by operating activities	$	15,637		$	19,791
Investing activities:
USC acquisition	$	—		$	(314	)
Capital expenditures	(16,832		)	(10,905		)
Net cash used in investing activities	$	(16,832	)	$	(11,219	)
Financing activities:
Proceeds from revolving credit facility	$	49,500		$	38,000
Repayments on revolving credit facility	(60,800		)	(38,000		)
Proceeds from other current borrowings	3,731			3,398
Repayments on other current borrowings	(1,012		)	(921		)
Proceeds from exercises of stock options	362			420
Proceeds from issuance of shares to ESPP	170			90
Payment of withholding taxes on vested stock awards	(12		)	—
Excess tax benefit for stock-based compensation	386			445
Net cash provided by (used in) financing activities	$	(7,675	)	$	3,432
Net (decrease) / increase in cash and cash equivalents	(8,870		)	12,004
Cash and cash equivalents-beginning of period	16,488			8,062
Cash and cash equivalents-end of period	$	7,618		$	20,066

EX-99.2

Exhibit 99.2

 2013 First Quarter Financial Review Roger W. Stone Chairman and Chief Executive Officer Andrea K. Tarbox Vice President and Chief Financial Officer May 7, 2013

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. 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. This presentation refers to certain non-U.S. GAAP financial information. A reconciliation of non-U.S. GAAP to U.S. GAAP financial measures is available on the company’s website at KapStonepaper.com under Investors. Forward-Looking Statements Non-GAAP Financial Measures Risk Factors 2

3 KapStone’s Record Growth Pace Continues 1st Quarter *Adjusted to exclude non-cash stock compensation, acquisition, and start up expenses **Adjusted to exclude items above after tax Net Sales Q1 Record All-Time Record Average Mill Selling Price Q1 Record All-Time Record Adj. EBITDA* Q1 Record All-Time Record Adj. Diluted EPS** Q1 Record Tied All-Time Record

First Quarter Financial Results 4 *Adjusted to exclude non-cash stock compensation, acquisition, and start up expenses **Adjusted to exclude items above after tax ($ in Millions, except per share data) Q1 2013 Q1 2012 Inc/(Dec) Q4 2012 Inc/(Dec) Net Sales $320 $300 7% $301 6% EBITDA $48 $43 12% $36 33% Adj. EBITDA* $51 $46 11% $38 34% Net Income $18 $16 13% $10 80% Adj. Net Income** $20 $18 11% $13 54% Diluted EPS $0.38 $0.33 15% $0.22 73% Adj. Diluted EPS** $0.42 $0.38 11% $0.28 50%

 Higher prices drive improvement in Adjusted EBITDA 5 Q1 2013 Compared to Q1 2012 Price reflects full realization of September 2012 domestic containerboard and corrugated products price increase and continued price recovery in export containerboard markets Export containerboard up over $100 per ton Average nets up $45 per ton to $653 per ton on all mill tons Volume/Mix reflects: 29,000 ton increase in domestic containerboard shipments 11,000 ton increase in Durasorb reflecting higher volume in Europe 43,000 ton decrease in export containerboard shipments 3.1% increase in corrugated products’ volume; up 6.4% on comparable workday basis Partially offset by lower mill volume due to 1 less mill production day Outage costs up $4 million due to deferral of some planned maintenance from Q4 2012 Inflation reflects higher costs for labor, benefits, and input costs Net Sales $ in Millions

 Lower outage costs and higher prices improve Adjusted EBITDA 6 Q1 2013 Compared to Q4 2012 Volume / mix reflects: Overall volume up 12,000 tons as gain from Q4 outage was partially offset by two less days of production in Q1 2013 Durasorb volume up 11,000 tons, mainly in Europe Corrugated products volume up 3,500 tons on seasonality Price reflects higher domestic containerboard and corrugated products prices and continued price recovery in export containerboard Average mill nets up $19 per ton on all tons Outage costs down $9 million mainly due to annual mill outages in Q4 2012 Inflation includes seasonally higher fiber and OCC costs and higher compensation and benefits expense Net Sales $ in Millions Adjusted EBITDA

7 Balance Sheet and Free Cash Flows Net debt at March 31, 2013 was $353 million Net debt to EBITDA ratio of 1.85 Interest rate was 1.95 percent at March 31, 2013 Free cash flow of ($1) million for Q1 2013, or ($0.02) per diluted share $7 million invested in new Chicago area corrugated facility $29 million swing in working capital which is typical in Q1 Primarily on higher receivables from increased March sales compared to December sales and extension of credit terms at year end due to potential port strike Timing of annual payments including incentive payments, retirement plan contributions, insurance premiums and property taxes increase cash use in Q1 Working capital should improve during the remaining quarters Total Capex for Q1 2013 was $17 million including new corrugated plant Capex for the year projected to be $73 million

Summary of Key Assumptions for Q2 2013 April 2013 $50 per ton containerboard and 10 to 12 percent corrugated products price increases are being implemented Should benefit Q2 by approximately $3 - $4 million dollars Once fully implemented, annualized benefit expected to be approximately $50 million Q2 2013 has 1 more mill production day than Q1 2013 and 2 more corrugated shipping days Q2 2013 current planned outages and major maintenance Total $8 million planned outage expense including the Charleston tri-annual outage and loss of 9,500 production tons Continued upward cost pressure on wood prices (2012 extremely dry year) Q2 stock compensation expense approximately $1 million lower compared to Q1 as a significant portion of 2013 awards were expensed in Q1 Effective income tax rate of 34.5 percent Cash tax rate for 2013 should be approximately 10% 8

Appendix

10 Components of Quarterly Net Sales Avg. Revenue per Mill Ton Domestic CB DuraSorb Kraft Paper Kraftpak Product Mix Desktop.lnk