• Second quarter earnings per share were $0.02 including restructuring charges of $0.12 per share
• Financial guidance for the full year remains unchanged
• Plastic Packaging segment results continue to improve
• Strong sales growth with key pharmaceutical customers
• Plant consolidation and closure costs negatively affect premium branded and food and household market sectors' results

RICHMOND, Va. - Chesapeake Corporation (NYSE:CSK) today announced second quarter results for 2002.

The net income for the second quarter of 2002 was $0.3 million, or $0.02 per share, down from second quarter 2001 net income from continuing operations of $2.6 million, or $0.17 per share. The second quarter 2002 results included a restructuring charge of $1.8 million after taxes, or $0.12 per share. The restructuring charge was related to the closure of a facility in Congleton, England, which produced packaging for the food and household markets, and the consolidation of two facilities in Scotland serving the premium branded packaging market.

Net income from continuing operations before the restructuring charge was $2.1 million, or $0.14 per share. Beginning in 2002, the company's results no longer include the amortization of goodwill based on the adoption of a new accounting pronouncement, FASB Statement No. 142. Second quarter 2001 results from continuing operations, eliminating goodwill amortization, would have been $6.0 million, or $0.39 per share. The decrease in comparable earnings for the second quarter of 2001 and the second quarter of 2002 was primarily due to increased interest expense, reduced operating margins in the Paperboard Packaging segment and decreased land sales, partially offset by a reduction in corporate expenses and the favorable effects of foreign currency translation. Earnings before interest, taxes, depreciation and amortization (EBITDA) before restructuring charges was $25.6 million for the second quarter of 2002 compared to $26.8 million for the second quarter of 2001.

Net sales for the second quarter of 2002 were up 1 percent compared to net sales from continuing operations for the second quarter of 2001. On a local currency basis, which reflects 2002 results using 2001 foreign currency translation rates, net sales were down 1 percent quarter-over-quarter. The reduction in sales was primarily due to the timing of land sales.

For the first half of 2002, net income was breakeven compared to net income from continuing operations for the comparable period of 2001 of $2.9 million, or $0.19 per share. The first half of 2001 results from continuing operations, eliminating goodwill amortization, would have been $9.0 million, or $0.60 per share. Net income for the first half of 2002 before the restructuring charge was $1.8 million, or $0.12 per share. The decrease in comparable earnings for the first half of 2001 and the same period of 2002 was primarily due to increased interest expense, reduced operating margins in the Paperboard Packaging segment and decreased land sales, partially offset by a reduction in corporate expenses.

Net sales for the first half of 2002 were down 4 percent compared to net sales from continuing operations for the first half of 2001. On a local currency basis, net sales were down 2 percent year-over-year. The reduction in sales was primarily due to lower Paperboard Packaging sales.

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