The ratings on Appleton Papers Inc. reflect currently weak demand because of the recessionary environment, declining carbonless paper volumes, and high debt leverage. Good market positions and diverse end uses of products partly offset these factors. Appleton is the world's largest manufacturer of carbonless paper, which includes multipart forms such as invoices, credit-card receipts, and packing slips. The industry is modestly cyclical and highly concentrated, with one primary competitor, P.H. Glatfelter Co. Factored into the ratings is the continuing decline in carbonless paper volumes in the U.S. at 5%-10% annually, because of the development of alternative technologies. However, Appleton has been able to somewhat offset the decline in the U.S. market through increased sales abroad and by further developing merchant
