STAMFORD, CONN. — After a sluggish 1996, sales and profit rebounded last year for Davis-Standard Corp., the manufacturer of extrusion systems, blow molding machines and cast and blown film equipment and wire coating machinery.
Sales increased more than 9 percent. A financial analyst who follows the company predicts a sales gain this year of 5-6 percent.
In 1997, Davis-Standard enjoyed higher sales volumes, reduced costs, higher pricing and an improved product mix, according to the fourth-quarter and year-end financial statement from its parent, Stamford-based Crompton & Knowles Corp.
Davis-Standard, based in Pawcatuck, Conn., struggled in 1996, a year in which sales stayed flat and operating profit plunged nearly 42 percent.
But in 1997, Davis-Standard's sales grew by 9.4 percent, to $311.7 million, up from $284.9 million the year before. Operating profit for the year soared by 53.7 percent, to $35.9 million, from $23.4 million in 1996.
However, the operating profit total remained below Davis-Standard's record level reached in 1995 of $40.2 million.
Davis-Standard enjoyed a strong fourth quarter of 1997. Fourth-quarter sales were $80.9 million, an 11.2 percent increase from $72.8 million in the 1996 fourth quarter. Operating profit for the quarter nearly doubled, to $10 million, from $5.3 million in the year-earlier period.
In the fourth quarter, Davis-Standard reported its unit volume increased 13 percent and pricing gained 1 percent. The company blamed the small pricing gain in part on lower foreign currency translation.
At the end of 1997, Davis-Standard had an equipment order backlog of $106 million. The backlog was $92 million at the end of 1996.
Crompton & Knowles also manufactures chemicals, clothing dyes and specialty ingredients for food. In financial reports, the company lists its Davis-Standard subsidiary as the specialty process equipment and controls segment.
Robert Ottenstein, a New York analyst for Paine Webber Inc., expects specialty equipment sales to grow 5-6 percent. Davis-Standard's operating margin should continue its climb from its slumping 8.2 percent in 1996, Ottenstein predicted in a report issued Feb. 23. He thinks operating margins will increase about 1 percentage point each year through 2001, from 11.5 percent in 1997 to 15.4 percent in 2001. Operating margin was 14.3 percent in 1995.