May 02, 2012. /Lesprom Network/. KapStone Paper and Packaging Corporation reported record results for the 1Q, ended March 31, 2012. Consolidated net sales of $299.8 million in the 1Q 2012 increased by $93.1 million, or 45%, compared to $206.7 million for the 1Q 2011, primarily due to the USC acquisition and from increased volume from legacy operations, as the company said in a press release received by Lesprom Network. In the quarter, 330,000 tons of paper were sold compared to 323,000 tons a year earlier. The USC acquisition added 1.5 billion square feet of corrugated product sales in the 1Q 2012 compared to none a year earlier. Lower average selling prices driven mainly by softness in export containerboard markets and a less favorable product mix partially offset the sales gains. Operating income of $27.5 million for the 1Q 2012 increased by $2 million, or 8%, compared to the 1Q 2011. The improved financial performance primarily reflects benefits from the acquisition, productivity gains and higher sales volume. Partially offsetting these gains were lower selling prices, a less favorable product mix, inflation on labor, benefits and input costs and acquisition start up expenses. The first quarter's operating income was also negatively impacted by higher stock compensation expense resulting from the March 2012 grants and the immediate expensing of a significant portion of those grants. Roger W. Stone, Chairman and CEO, stated: "With all of our operations running well, KapStone achieved record 1Q results. Our mills produced a record 396,000 tons of paper. Production at our two legacy mills was three percent higher than a year ago benefiting from various productivity programs and strategic capital investments. Our USC acquisition also performed well and added $10 million in adjusted EBITDA. Average selling prices of $608 per ton decreased by $10 per ton compared to the 1Q 2011, reflecting softness in export containerboard markets. By the end of the quarter, the export containerboard market was recovering and prices have been increasing." KapStone Paper and Packaging Corporation produces 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 14 converting plants across the eastern and midwestern US.