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STAMFORD, CONN. — Machinery maker Davis-Standard Corp. rebounded in the first quarter of 1997, after it was hit in 1996 by flat sales and a major decline in profit.

The Crompton & Knowles division reported its first-quarter sales were $75.2 million, a 9.3 percent gain from $68.7 million in the first quarter of 1996. First-quarter operating profit increased 7.3 percent, to $7.6 million, from $7.1 million.

Davis-Standard, based in Pawcatuck, Conn., manufactures extruders, extrusion coating equipment, cast and blown film systems and blow molding machines. In financial documents, Stamford-based Crompton & Knowles calls Davis-Standard its specialty process equipment and controls segment.

``Sales growth was achieved in most business areas, especially in the wire and cable and profile businesses,'' the company said.

The results were issued April 29. The first quarter ended March 29.

Crompton & Knowles' annual report also gives more details about Davis-Standard's difficult 1996 results. For the full year, Davis-Standard reported sales of $284.9 million, a 1.8 percent gain over 1995 sales of $279.9 million. However operating profit dropped 41.8 percent, to $23.4 million, from a record $40.2 million in 1995.

``Although consumption and processing of plastics remained at record levels during the year, North American ... plastics equipment orders slowed in 1996 as the industry focused on increasing utilization rates of the large number of new extrusion systems acquired over the prior two years,'' the annual report said.

Weak demand reduced sales volume and led to lower pricing and weaker profit margins.

The outlook was brighter outside of North America. Davis-Standard purchased ER-WE-PA, a German maker of equipment for extrusion coating, cast film and sheet, in January 1996.

Sales from ER-WE-PA ``more than offset the sales decline experienced in North America,'' the annual report said. ``However, costs associated with restructuring the business [ER-WE-PA] resulted in losses from this operation.''

Because of ER-WE-PA, international sales accounted for 43 percent of Davis-Standard's 1996 sales, up from 25 percent the year before.

Crompton & Knowles also makes chemicals, dyes for clothing and specialty food ingredients.