Nov 02, 2011. /Lesprom Network/. KapStone Paper and Packaging Corporation reported results for the 3Q ended September 30, 2011. Net sales for the quarter ended September 30, 2011 were $215.8 million, an increase of 4%, when compared to 3Q 2010 net sales of $207.5 million. The increase in net sales was attributable primarily to higher unit selling prices, as the company said in a press release received by Lesprom Network. Operating income of $30.1 million for the 2011 quarter exceeded prior year's results by $3.5 million. The primary reasons for the improved results were higher unit pricing and improved mix which contributed $7.9 million and productivity improvements of $1.7 million. The stronger Euro, up 10% on the third quarter average, improved operating income by $1.5 million. However, operating income was negatively impacted by $5.1 million of inflation on input costs, mainly for caustic soda, higher wages, and freight-in for wood and $1.2 million for higher maintenance work at our Charleston mill. In addition, KapStone incurred $1.1 million of expenses related to the USC acquisition. Roger W. Stone, Chairman and CEO, stated, "KapStone's strong production in the 3Q 2011 enabled us to achieve record net sales of $216 million and generate $38 million of free cash flow. Our mills produced nearly 329,000 tons of paper, and we improved operating margins year-over-year with pricing and productivity improvements. We are implementing a $50 per ton price increase for our kraft paper grades which will be fully realized in early 2012. Our order backlog remains strong." KapStone Paper and Packaging Corporation is a leading North American producer of unbleached kraft paper products, linerboard and shipping containers.