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                                                                    EXHIBIT 99.1



                                [CARAUSTAR LOGO]

FOR IMMEDIATE RELEASE
JANUARY 17, 2003


                                                CONTACT: Ronald J. Domanico
                                                         Chief Financial Officer
                                                         (770) 948-3101


               CARAUSTAR COMMENTS ON PENSION LIABILITY, ANNOUNCES
                COMPLETION OF ITS NORTHWEST CONVERTING OPERATION
             ACQUISITION, ANNOUNCES RESTRUCTURING AND NON-RECURRING
                   CHARGES AND UPDATES FOURTH QUARTER OUTLOOK

ATLANTA, Georgia - Caraustar Industries, Inc. (Nasdaq-NMS Symbol: CSAR) today
announced that, as discussed in its third quarter 2002 10Q SEC filing, the
company expects to incur an after-tax charge to equity resulting from the
recognition of an additional minimum liability in its pension plan. The fourth
quarter 2002 charge will be approximately $22 million and has no effect on the
company's earnings or its cash position. The underfunded status is primarily due
to the poor performance of the equity markets. Pension expense for financial
reporting purposes is expected to increase from approximately $4.5 million in
2002 to $9.9 million in 2003, while cash funding is expected to increase from
approximately $7.1 million in 2002 to $12.1 million in 2003. The company has
also amended its revolving credit facility to avoid a technical default at
December 31, 2002 that would have resulted from the reduction in shareholders'
equity attributable to the pension charge and expects to be in compliance with
its debt covenants in 2003.

The company also announced that it has completed the purchase of the remaining
equity of Caraustar Northwest, LLC, located in Tacoma, WA, from its venture
partner, Paccess, a Portland, Oregon based general partnership. The Tacoma
facility, which manufactures tubes, cores, and edge protectors and performs
custom slitting for customers on the West Coast, will become part of the
Caraustar Industrial & Consumer Products Group. This operation strongly
complements the Northwest paper mill that Caraustar acquired from Smurfit-Stone
Container Corporation (SSCC) in September, 2002.

In other consolidation and restructuring decisions, the company announced:

- -        The Halifax paperboard mill, located in Roanoke Rapids, NC, has been
         permanently closed. The mill has been idle since mid-2001 due to
         reduced market demand for uncoated recycled boxboard for the specialty
         product businesses.


                                     -more-
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Caraustar Industries, Inc.
January 17, 2003
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- -        Carolina Converting, Inc. (CCI) in Fayetteville, NC is being
         consolidated and relocated in recognition of the trend toward offshore
         sourcing of various specialty products, such as board games and
         puzzles.

- -        The Ashland, OH carton facility is being restructured to serve a
         smaller, more focused carton market.

Associated with these actions, the company will take a fourth quarter after-tax
restructuring charge of approximately $7.6 million or $0.27 per share. The
restructuring charge is $12.2 million before tax, of which approximately $2.5
million is expected to be paid in cash.

The company had other nonrecurring charges in the fourth quarter of
approximately $5.3 million after tax or $0.19 per share due to business
interruptions in North Carolina caused by power outages from the December ice
storm, postponed high yield debt offering costs, noncapitalized costs associated
with the acquisition of the SSCC assets, and one-time employee transition
expenses.

Additionally in the fourth quarter, the company completed a comprehensive review
of the remaining estimated useful lives of its machinery and equipment. As a
result of this review, Caraustar has revised its estimate of the useful lives
for machinery and equipment from an average of approximately 10 years to an
average of approximately 20 years. The company believes that the change more
appropriately reflects the useful lives of the assets and is consistent with the
prevailing industry practice. Although there is no cash impact, the gain in net
income in the quarter is expected to be approximately $4 million, or $0.14 per
share. For 2003, the reduced depreciation charge is expected to increase net
income by approximately $19 million, or $0.67 per share.

The company estimates that it will report a net loss for the fourth quarter,
including all of the above charges, of approximately ($14 million), or ($0.50)
per share. Excluding the restructuring and non-recurring charges, but including
the impact of the change in depreciation, the company expects to report a net
loss for the fourth quarter of approximately ($1 million), or ($0.04) per share.

Commenting on the expected results and announced restructuring charges for the
fourth quarter, Thomas V. Brown, president and chief executive officer of
Caraustar, stated, "Cash generation continues to be strong even during the
current depressed market conditions. Caraustar completed the $80 million
acquisition of certain Smurfit-Stone assets, made interest payments of $36
million, capital improvements of $22 million and retired $7 million of long-term
debt. We ended the year with no borrowings on our revolver account and $33
million of cash on our balance sheet.

"The consolidations and restructurings are part of an ongoing effort to
rationalize our capacity to meet the continuing decline in US industrial demand
and the associated drop in demand for packaging products. On the positive side,
despite the third consecutive year of reduced demand for paperboard packaging,
Caraustar realized a substantial increase in demand for its mill and converted
products. Excluding the new volume associated with the SSCC business additions,
mill


                                    - more -

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Caraustar Industries, Inc.
January 17, 2003
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volume for the full year grew 4.5 percent or approximately 40,000 tons overall.
In the fourth quarter, which included the first full quarter of the SSCC
acquisition, mill volume increased approximately 34,000 tons (up 15 percent)
over the fourth quarter of last year. The integration of the SSCC mills and
converting operations into Caraustar is progressing as planned."

Caraustar will be hosting a live Webcast of a conference call today beginning at
11:00 a.m. (EDT). In order to listen to the Webcast of its conference call,
participants can log on at http://www.firstcallevents.com/service/
ajwz372538209gf12.html or http://www.caraustar.com and look for the Webcast
button/icon on "Our Financials" page of the Caraustar Website.

The company will report its fourth quarter and full-year 2002 financial results
on Tuesday, February 4, 2003, and host a conference call at 11:00 a.m. (EST)
that will be webcast live.

Caraustar, a recycled packaging company, is one of the largest and most
cost-effective manufacturers and converters of recycled paperboard and recycled
packaging products in the United States. The company has developed its
leadership position in the industry through diversification and integration from
raw materials to finished products. Caraustar serves the four principal recycled
paperboard product markets: tubes, cores and cans; folding carton and custom
packaging; gypsum wallboard facing paper; and miscellaneous "other specialty"
and converted products.

FORWARD-LOOKING STATEMENTS
This press release contains certain "forward-looking statements," within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, that represent the company's expectations,
anticipations or beliefs, including statements regarding the expected effect of
the pension plan charge, restructuring and non-recurring charges and revised
estimate of useful lives on its machinery and equipment discussed above, as well
as statements regarding the expected amount of net loss for the fourth quarter
of 2002 and expectations regarding the company's ability to comply with debt
covenants in 2003. These statements are not statements of historical fact and
involve risks and uncertainties that could cause actual results to differ
materially depending on a variety of important factors, including, but not
limited to, fluctuations in raw material prices and energy costs, downturns in
industrial production, housing and construction and the consumption of durable
and nondurable goods, the degree and nature of competition, demand for the
company's products, the degree of success achieved by the company's new product
initiatives, changes in government regulations, the company's ability to
complete and successfully integrate the operations of acquired businesses
(including specifically, the SSCC acquisition) and the company's ability to
service its substantial indebtedness. Additional relevant risk factors that
could cause actual results to differ materially are discussed in the company's
registration statements and reports filed with the Securities and Exchange
Commission, which are available from the company. These documents also may be
examined at public reference facilities maintained by the Securities and
Exchange Commission or, to the extent filed via EDGAR, accessed through the Web
Site of the Securities and Exchange Commission (http://www.sec.gov). The company
does not undertake any obligation to update any forward-looking statements and
is not responsible for any changes made to this press release by wire or
Internet services.

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