STAMFORD, CONN. — Plastics machinery maker Davis-Standard Corp. saw operating profit decline by more than 40 percent in 1996, on a modest increase in sales, according to its parent, Crompton & Knowles Corp. of Stamford.
Crompton & Knowles refers to Davis-Standard as its specialty process equipment and controls segment in financial reporting. The company reported its year-end results Jan. 30.
An aggressive acquisition strategy has helped Davis-Standard to double sales since 1993. In 1995, Davis-Standard had reported a strong year, with sales jumping more than 40 percent and operating profit growing by nearly 25 percent.
But 1996 was another story for the Pawcatuck, Conn., machinery maker.
For the full year, sales reached $284.9 million, a 1.8 percent increase over $279.9 million in 1995. Operating profit at Davis-Standard sank by 41.8 percent, to $23.4 million, down from $40.2 million in 1995.
``The reduction in operating profit reflects primarily the decline in domestic unit volume and pricing,'' Crompton & Knowles said in a news release.
At the end of the fourth quarter of 1996, Davis-Standard had an order backlog of $92 million.
For the company's fourth quarter, sales were off marginally, at $72.8 million. Davis-Standard had fourth-quarter 1995 sales of $73.2 million.
Crompton & Knowles, which also manufactures chemicals, dyes for clothing and and specialty food ingred ients, nearly tripled its business in 1996 by merging with Uniroyal Chemical Corp. In 1995, the firm's sales were $665.5 million. After joining with Uniroyal Chemical, Crompton & Knowles had 1996 sales of $1.8 billion.
Crompton & Knowles reported its numbers from both years, 1995 and 1996, on a pro forma basis, to compare the years. The $1.8 billion in 1996 sales is 3.4 percent higher than 1995 sales of $1.74 billion.
The firm lost $22.5 million in 1996, in part because of costs from the merger and a special charge for environmental costs. Before those charges, its profit was $64.6 million. In 1995, measured on a pro forma basis, Crompton & Knowles and Uniroyal together had combined pro fit of $131.6 million.
In other product segments, softness continued in Crompton & Knowles' dyes business, which saw declining sales in 1996. But sales increased at all other segments.