The ratings on Hagerstown, Md.-based Phoenix Color Corp. reflect the company's niche position in the printing industry as a printer of book components, heavy debt levels, small cash flow base, and competitive market conditions. This is mitigated in part by Phoenix Color's position as the largest independent North American printer of book components--mainly book jackets, paperback covers, and preprinted case covers. The company has maintained long-term customer relationships with most major book publishers--including HarperCollins, Pearson Publishing, Simon & Schuster, and McGraw-Hill--and its performance is highly dependent on the health of the publishing industry. The book component business contributes over 90% of the company's annual cash flow. Additionally, the company owns a small multi-color juvenile book manufacturing facility in Rockaway, N.J.