The ratings reflect Appleton Paper Inc.'s aggressive financial profile, declining carbonless paper volumes, expectations for lower operating margins because of a shifting product mix, and potential acquisition risks, partially offset by leading market shares in certain specialty paper markets, diverse end uses, and relatively stable earnings and cash flows. The Appleton, Wis.-based company is the world's largest manufacturer of carbonless paper, which is used in multipart forms such as invoices, credit-card receipts, and packing slips. The industry is modestly cyclical and highly concentrated. NewPage Corp. (recently sold by MeadWestvaco Corp. to an equity sponsor) is Appleton's primary competitor. However, NewPage recently announced that it is looking at selling or restructuring its carbonless business, so the future competitive environment is somewhat
