Feb 15, 2012. /Lesprom Network/. KapStone Paper and Packaging Corporation reported preliminary record results for the 4Q and year ended December 31, 2011. KapStone acquired US Corrugated Inc. ("USC") on October 31, 2011. Therefore, 4Q results include two months of USC's operations. Net sales for the quarter ended December 31, 2011 were $268.8 million, an increase of 35%, when compared to the 4Q 2010 sales of $199.6 million. The increase in net sales was attributable primarily to the USC acquisition, increased volume, and higher selling prices. Average mill revenue per ton increased to $620 versus $611 during the 4Q 2010 despite lower prices during the current quarter for export containerboard. Operating income of $20.6 million for the 2011 quarter exceeded prior year's results by $3 million, or 16.9%. Operating income improved due to increased volume, the USC acquisition, and higher prices. 4Q operating income was negatively impacted by increases in input costs, mainly caustic soda, higher planned maintenance outages, and acquisition related expenses. Roger W. Stone, Chairman and CEO, stated, "4Q was transformational for KapStone as we greatly expanded our operations with the October 31st acquisition of U.S. Corrugated. The integration is moving along very well, and we expect significant benefits in 2012." "Exceptionally strong operations during the 4Q helped to achieve record paper production for the quarter of 368 thousand tons despite having lost 14 thousand tons due to planned annual maintenance outages at both Roanoke Rapids and Cowpens in the fourth quarter. In addition to producing more tons, our improved manufacturing operations have lowered our manufacturing costs. We increased our average mill revenue per ton during the year by approximately $41 to $627 per ton. While we experienced some softness in export markets in the fourth quarter, demand remained stable enough that we shipped a record 332 thousand tons of paper and 1 billion square feet of corrugated packaging products. Together, all these factors produced record sales for the company for both the quarter and the year. Cash flow from operations for 2011 reached $136 million." Net sales for the year ended December 31, 2011, were $906.1 million, an increase of 16%, compared to 2010 sales of $782.7 million. The increase in net sales was attributable primarily to the USC acquisition, higher selling prices, increased volume and favorable foreign exchange rates. Average revenue per ton increased to $627 versus $586 in 2010. Operating income of $106.7 million for the year ended December 31, 2011 exceeded the prior year's results by $60.2 million after excluding the 2010 benefit from alternative fuel mixture tax credits of $22.2 million. The improvement resulted from higher selling prices, increased volume, productivity gains, favorable foreign exchange rates, and the USC acquisition. Partially offsetting these gains were inflationary increases on input and freight costs, higher incentive compensation and acquisition related expenses. KapStone Paper and Packaging Corporation is a leading North American producer of containerboard, 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.