Exhibit 99.1

KAPSTONE REPORTS FIRST QUARTER 2010 RESULTS

First Quarter Cash Flows From Operations Generate $23 Million

NORTHBROOK, IL — May 5, 2010 — KapStone Paper and Packaging Corporation (NYSE: KS) today reported results for the first quarter ended March 31, 2010.

·                  Net sales of $176.5 million, up 26 percent, versus prior year

·                  Cash flows from operations of $23.0 million, up $26.6 million versus prior year,  include $13.1 million of alternative fuel mixture tax credit receipts

·                  Alternative fuel mixture tax credit of $22.2 million earned in the quarter

·                  Net income of $6.4 million, down 43 percent, versus prior year

·                  Diluted EPS of $0.14, down 64 percent, versus prior year

·                  Successful completion of Charleston tri-annual planned maintenance outage

·                  Net debt (total debt less cash) reduced by $16.7 million in the quarter

Roger W. Stone, Chairman and Chief Executive Officer, stated, “I am very encouraged by the favorable industry dynamics that have driven higher operating rates and pricing. In 2010, we have implemented several price increases that will benefit our operations beginning in the second quarter and throughout the remainder of the year. Due to our very strong order backlog, we experienced a lag for improving our product mix while we worked to honor our commitments from previous orders taken in leaner times. Our operations are now starting to benefit from mix improvements. The unusually wet weather in the Southeast in late 2009 and early 2010, which put upward pressure on our wood costs, seems to be improving, and the higher costs experienced in the first quarter are decreasing.  Our operations performed well this quarter as we produced about 299,000 tons of paper yielding an operating rate of 96%, despite the Charleston mill being down for its tri-annual maintenance outage.”

First Quarter Operating Highlights

Consolidated net sales of $176.5 million in the first quarter of 2010 increased by $35.9 million compared to $140.6 million for the 2009 first quarter, up 26 percent, mainly due to $57.8 million of higher sales volume, partially offset by $11.5 million of lower selling prices, $4.4 million due to a less favorable product mix from a higher percentage of linerboard sales and $6.0 million due to the sale of the dunnage bag business.

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Operating income of $12.0 million for the 2010 quarter, decreased by $14.3 million, or 54 percent compared to the 2009 quarter primarily due to approximately $17.4 million for the 2009 gain on sale of the dunnage bag business, $11.5 million of lower selling prices, $6.5 million due to the Charleston mill’s tri-annual planned maintenance outage, $4.4 million due to a less favorable product mix, $4.2 million due to inflation on input costs and $2.4 million as certain compensation benefits were reinstated effective November 2009 and January 2010. These declines were partially offset by approximately $16.7 million of higher alternative fuel mixture tax credits (the tax credit expired on December 31, 2009 and earnings in 2010 reflect $14.3 million for the amount of the credit deferred in inventory at year end and an adjustment of $7.9 million for the amount of inorganic material included with our black liquor that was burned in 2009, but excluded from refunds).  Operating income in the 2010 quarter also increased by $14.4 million due to higher sales volume, $2.3 million of lower depreciation and amortization expenses mainly due to the expiration of a coal contract acquired as part of the 2008 Charleston Kraft Division acquisition and $1.5 million of lower selling and administrative expenses due to the termination of the MeadWestvaco transitional support agreement in the fourth quarter of 2009.

Interest expense of $0.9 million for the first quarter of 2010 decreased by $4.0 million over the comparable quarter in 2009 and reflected significantly lower debt levels as the Company made approximately $278 million of repayments since March 31, 2009. At March 31, 2010, the interest rate on the majority of the Company’s debt is 1.7 percent. Amortization of debt issuance costs for the 2010 quarter includes approximately $0.3 million of accelerated amortization due to the $10.0 million voluntary debt repayment.

The effective tax rate for the 2010 first quarter was 35.9 percent compared to 45.0 percent for the 2009 first quarter. The 2009 effective tax rate was higher due to a discrete adjustment relating to the sale of the dunnage bag business and a lower expected benefit from the domestic manufacturing deduction.

Cash Flow and Working Capital

Cash and cash equivalents increased by $1.4 million in the quarter ended March 31, 2010, reflecting $23.0 million of net cash provided by operating activities, $6.6 million of cash used by investing activities and $15.0 million of cash used for financing activities.

On March 31, 2010, the Company made a $10.0 million voluntary debt repayment. Total debt outstanding as of March 31, 2010, was $137.0 million and net debt was reduced by $16.7 million from year end.  The Company was in compliance with all debt covenants at March 31, 2010.

At March 31, 2010, the Company had approximately $63.0 million of working capital and $82.5 million of revolver borrowing capacity. The Company expects to receive in cash approximately $13.2 million in federal income tax refunds and $7.9 million from alternative fuel mixture tax credits. The majority of this cash is expected to be used to make additional repayments.

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In December 2009, the Company filed its registration as a cellulosic biofuel producer for the year 2009. The cellulosic biofuel tax credit, under Section 40(b)(6) of the Internal Revenue (“IRS”) Code, is a $0.51 per gallon credit for cellulosic biofuel producers. The Company will not recognize any benefit associated with this tax credit until it is approved by the IRS.  If approved, the Company can apply for the tax credit related to cellulosic biofuel produced during 2009 and it would be realized by reducing future income tax payable.

Conclusion

In summary, Stone commented, “We continue to work hard to obtain much needed price recovery and improve our product mix.  We believe that KapStone’s second quarter of 2010 and the remainder of the year will benefit on an increasing basis from the realization of the announced price increases and better mix management.  We are focused on maintaining strong cash flows and reducing our debt to ensure a healthy and profitable future.”

Conference Call

KapStone will host a conference call at 3 p.m. ET, Thursday, May 6, 2010, to discuss the Company’s financial results for the 2010 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: 866.271.0675

International: 617.213.8892

Participant Passcode: 45990908

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://www.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 products and linerboard.   The Company is the parent company of KapStone Kraft Paper Corporation which includes paper mills in Roanoke Rapids, NC and North Charleston, SC, a lumber mill in Summerville, SC, and five chip mills in South Carolina.  The business employs approximately 1,600 people.

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Non-GAAP Financial Measures

In addition to our audited consolidated financial statements presented in accordance with U.S. GAAP, management uses certain non-GAAP measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income”, and “Adjusted Diluted EPS” to measure our operating performance.  Investors are cautioned that EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS are not financial measures under U.S. GAAP.  Management uses these measures to focus on the on-going operations, and believes that they are useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes that these non-GAAP measures 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 for evaluating the Company’s performance against competitors and as a primary measure for employees’ incentive programs and potential future contingent earn-out payments to International Paper Company.  Reconciliations of net income to EBITDA, EBITDA to Adjusted EBITDA, net income to Adjusted Net Income, and diluted EPS to Adjusted Diluted EPS are included in the financial schedules contained in this press release.  In addition, these measures should not be construed as alternatives to any other measures 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 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 tax impact of the federal incentive program for alternative fuel mixtures and the Company’s qualification for the credit 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, 2009, Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and elsewhere in reports that the Company files or furnishes 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)

OPERATING SEGMENT DATA

(In thousands)

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KapStone Paper and Packaging Corporation

Consolidated Balance Sheets

(In thousands)

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KapStone Paper and Packaging Corporation

Consolidated Statement of Cash Flows

(In thousands)

(unaudited)

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KapStone Paper and Packaging Corporation

Supplemental Information

GAAP to Non-GAAP Reconciliations

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

(unaudited)

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