Exhibit 99.1

KAPSTONE PAPER AND PACKAGING CORPORATION REPORTS
FOURTH QUARTER AND FULL YEAR 2010 RESULTS

NORTHBROOK, IL — February 14, 2011 — KapStone Paper and Packaging Corporation

(NYSE: KS) today reported preliminary results for the fourth quarter and year ended December 31, 2010.

For the fourth quarter ended December 31, 2010:

·                  Record net sales of $200 million, up 21% versus 2009

·                  Diluted EPS of $0.28, down $0.27 per share versus prior year

·                  Record adjusted diluted EPS of $0.28, up $0.45 per share versus prior year

For the year ended December 31, 2010:

·                  Record net sales of $783 million, up 24% versus 2009

·                  Diluted EPS of $1.38, down $0.91 per share versus prior year

·                  Record adjusted diluted EPS of $0.67, up $1.48 versus prior year

·                  Net debt (total debt less cash) reduced by $102 million in the year to $48 million

Roger W. Stone, Chairman and Chief Executive Officer, stated, “This past year was an excellent period for our company.  Strong price recovery during the year pushed our average revenue per ton up from $503 per ton in the fourth quarter of 2009 to $611 per ton in the fourth quarter of 2010.  Higher selling prices helped to generate record sales of $783 million.  Our full year operating rate of 98.5 percent resulted in record production of 1.27 million tons of paper.  Continued strong cash flows from operations of $136 million enabled us to slash our net debt from over $470 million just 30 months ago to $48 million at year end.”

“Early in the fourth quarter of 2010 our Roanoke Rapids mill completed its annual planned maintenance outage at a cost of $6.6 million. In January 2011, we successfully negotiated a lower earn-out payment of $49.7 million with International Paper Company relating to our 2007 kraft paper business acquisition and saved over $5 million.”

Fourth Quarter Operating Highlights

Net sales for the quarter ended December 31, 2010, were $199.6 million, an increase of 20.9 percent, compared to fourth quarter of 2009 sales of $165.1 million. The increase in net sales was attributable primarily to $32.5 million from higher unit selling prices. Average revenue per ton increased to $611 versus $503 during the fourth quarter of 2009. Volume and mix gains accounted for $4.4 million of the sales increase. Sales in the fourth quarter of 2010 were negatively impacted by $2.4 million due to exchange rates reflecting a stronger US dollar.

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Operating income of $17.6 million for the fourth quarter exceeded the prior year’s results by $28.9 million after excluding the 2009 benefit from alternative fuel mixture tax credits of $56.5 million. The improvement resulted from higher selling prices, as well as $2.7 million from mix improvement and higher volume. Fourth quarter operating income was negatively impacted by $2.0 million in inflationary cost increases and $1.5 million for higher compensation and benefits costs that were curtailed in 2009, but reinstated for 2010. Additionally, foreign exchange rates reduced operating income by $2.4 million.

Interest expense was $0.7 million for the fourth quarter of 2010, down $0.6 million from a year ago as a result of year over year net debt reduction.   At December 31, 2010, the interest rate on the majority of the Company’s debt was 1.76 percent. Amortization of debt issuance costs of $0.4 million for the fourth quarter of 2010 was reduced by $1.4 million from a year ago due to a significantly lower amount of debt repayments in 2010.

The effective tax rate for the 2010 fourth quarter was 19.4 percent compared to 40.1 percent for the 2009 fourth quarter. The 2010 effective tax rate is lower due to a discrete adjustment relating to state income taxes, a higher than expected benefit related to the domestic manufacturing deduction and the recently announced extension of the federal research and development tax credit.

For income tax purposes, the Company has taken the position that the alternative fuel mixture tax credit is not taxable as it is similar to an excise tax refund. Since the IRS has issued no specific guidance in this area, the Company has recorded a $68 million liability for an unrecognized tax benefit.

Full Year Operating Highlights

Net sales for the year ended December 31, 2010, were $782.7 million, an increase of 23.7 percent, compared to 2009 sales of $632.5 million. The increase in net sales was attributable primarily to $60.8 million from higher unit selling prices. Average revenue per ton increased to $586 versus $524 in 2009. Volume and mix gains accounted for $101.2 million of the sales increase driven by an 11.8 percent increase in unit sales. Sales in 2010 were negatively impacted by $4.9 million due to exchange rates reflecting a stronger US dollar.

Operating income of $68.7 million for the year ended December 31, 2010 exceeded the prior year’s results by $75.5 million after excluding the net benefit from alternative fuel mixture tax credits of $141.8 million and $16.4 million for the gain on sale of the dunnage bag business. The improvement resulted from $60.8 million of higher selling prices, $33.6 million from mix improvement and higher volume, $9.7 million of lower amortization expenses and $5.1 million from lower transitional services. 2010 operating income was negatively impacted by $11.2 million for higher compensation and benefits costs that were curtailed in 2009, but reinstated for 2010, $9.8 million of inflationary increases on input and freight costs and $6.8 million for the Charleston mill’s tri-annual planned maintenance outage. Additionally, foreign exchange rates reduced operating income by $4.9 million.

Interest expense was $3.2 million for the year ended December 31, 2010, down $10.0 million from a year ago as a result of year over year net debt reduction.  Amortization of debt issuance costs of $2.2 million for 2010 was reduced by $3.7 million from a year ago due to a significantly lower amount of debt repayments in 2010.

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The effective tax rate for the year ended December 31, 2010 was (3.8) percent compared to 39.4 percent for 2009. The 2010 effective tax rate is lower due to the cellulosic biofuel producer’s tax credit, a higher expected benefit related to the domestic manufacturing deduction and lower state income taxes.

Cash Flow and Working Capital

Cash and cash equivalents increased by $25.7 million in the quarter ended December 31, 2010, reflecting $44.9 million provided by operating activities offset by $14.5 million used in investing activities and $4.7 million used in financing activities.

Cash and cash equivalents increased by $64.9 million in the year ended December 31, 2010, reflecting $136.1 million provided by operating activities offset by $35.2 million used in investing activities and $36.0 million used in financing activities.

Total net debt outstanding as of December 31, 2010, was $47.5 million and was reduced by $31.1 million during the fourth quarter of 2010. For the year, net debt was reduced by $102.3 million.

At December 31, 2010, the Company had approximately $67.4 million of cash, $106.7 million of working capital and $88.2 million of revolver borrowing capacity.

Capital expenditures for the quarter and year ended December 31, 2010 were $14.5 million and $38.3 million, respectively, of which about $25.0 million was spent on maintenance and upgrade projects at the mills. The Company expects capital expenditures to increase to approximately $41.0 million in 2011.

The Company was in compliance with all debt covenants at December 31, 2010.   Due to the significant debt reduction and the high EBITDA generated over the past two years, the Company’s debt to EBITDA ratio was 1.08 to 1 at December 31, 2010.

Conclusion

In summary, Stone commented, “2010 was a record year for KapStone and provides a strong foundation. Looking forward, we should benefit from a full year of the 2010 price increases for our products and improved product mix.  With our very low net debt and strong cash flows, we are very well positioned to take advantage of growth opportunities.”

Conference Call

KapStone will host a conference call at 11 a.m. Eastern Time, February 15, 2011 to discuss the Company’s financial results for the fourth quarter and full year 2010.  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: 800.561.2718

International: 617.614.3525

Participant Pass code: 49183955

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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://streetevents.com) a password-protected event management site.

A replay of the webcast will be available for 30 days on the Company’s web site 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.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income”, and “Adjusted Diluted EPS” to measure our operating performance.  Management uses these measures to focus on the on-going operations, and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes that EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA for evaluating the Company’s performance against competitors and as a primary measure for employees’ incentive programs.  Reconciliations of Net Income to EBITDA, EBITDA to Adjusted EBITDA, Net Income to Adjusted Net Income, Basic EPS to Adjusted Basic EPS, and Diluted EPS to Adjusted Diluted EPS are included in the financial schedules contained in this press release.  However, these measures should not be construed as an alternative to any other measure 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 income tax impact of the

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federal incentive program for alternative fuel mixtures.  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 and elsewhere in reports that the Company files 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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Consolidated Statements of Income

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

(preliminary and unaudited)

OPERATING SEGMENT DATA

($ In thousands)

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KapStone Paper and Packaging Corporation

Consolidated Balance Sheets

($ in thousands)

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Consolidated Statements of Cash Flows

($ in thousands)

(preliminary and unaudited)

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Supplemental Information

GAAP to Non-GAAP Reconciliations

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

(preliminary and unaudited)

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KapStone Paper and Packaging Corporation

Supplemental Information

Net Debt and Debt to Equity Ratio

(preliminary and unaudited)

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