This recession was very personal for Appleton. As our 103-year-old company's first president and CEO chosen from outside the paper industry, it was especially personal for me.
Starting in 2005, we adopted a new mission statement, focused on our technical papers and packaging business, and placed a greater priority on serving international markets. To achieve these goals, we assembled a team of talented executives to deliver on a five-year strategic plan committed to securing or holding the number-one or number-two spot in every market we do business in.
Things were going well... and then the global recession hit.
As the world's largest producer of carbonless paper, we have seen our fair share of ups and downs over the years. But last year was one of the toughest in our century-old history. We entered 2009 facing the extraordinary challenges created by the recession. Like many business people, we were uncertain about the economic outlook for 2009... How far would the economy fall? Where would it bottom-out?
We are a proud and competitive organization and we weren't about to let a recession get in the way of our plans to achieve the goals we set for the company. The executive team rallied our employees by instituting proactive measures to counteract the effects of the recession. We are an employee-owned company, and felt we owed it to the community that is our namesake to put in the good fight.
We took some early, decisive steps to cut costs and reduce debt while staying focused on winning with our customers. Those efforts resulted in Appleton reporting a net income of $25.1 million in 2009, a huge turnaround from a $97.3 million net loss we reported in 2008.
It wasn't easy. We had to make some very tough decisions. To counteract the recession we continued to focus on lean manufacturing. We slowed down, and in some cases shut down, operations to match production to demand. We instituted pay freezes and two-week furloughs for all non-union employees and temporarily suspended company match of employee contributions to 401(k) plan. And, unfortunately, the company was forced to eliminate jobs and say goodbye to talented, loyal employees.
Ultimately, we reduced our selling, general and administrative expenses by 17.7%, lowered inventories by 10% and generated cash from operations of $61.2 million. We completed the sale of the C&H Packaging Company Inc., a non-core asset and used the $16.9 million proceeds to pay down debt.
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