Davis-Standard Corp. continues to feel the pain from a U.S. capital-spending slump.
The maker of extruders, film equipment and blow molding machines said it lost money in 2002, as sales declined. Davis-Standard generated 2002 sales of $172.7 million, a 14.8 percent decline from $202.6 million in 2001.
The machinery maker in Pawcatuck, Conn., reported an operating loss of $13.8 million for the year. In 2001, Davis-Standard lost $15.6 million.
Crompton Corp., Davis-Standard's parent, reported the numbers Feb. 4. Davis-Standard ``continues to suffer a demand drought'' facing industrial machinery, said Vincent Calarco, Crompton's chairman, president and chief executive officer.
``The demand outlook seems weak for the months ahead,'' Calarco told analysts during a conference call Feb. 5. But he said machinery customers seem to be more optimistic, and company officials hope a rebound could begin in the second half of 2003.
Crompton, based in Middlebury, Conn., is traded on the New York Stock Exchange.
Davis-Standard saw sales decline in each of the first three quarters before rebounding to $42 million in a fourth-quarter bump-up. On a year-over-year basis, fourth-quarter sales declined 6.4 percent from $44.8 million in the final period of 2001.
Backlog at the end of 2002 was $76 million, down $7 million from the end of 2001. However, Calarco told analysts profit margins have improved for that work.
``We've been successful with a number of good-sized orders to get the backlog where it is today,'' he said. ``And we've been very aggressive with costs and that has helped to offset some pricing [pressures] and certainly helped improve our margins.''
Davis-Standard is a small fraction of Crompton, which also makes polymers, additives, organo-silicones and crop-protection chemicals. Crompton generated 2002 sales of $2.55 billion.
Crompton sold its industrial specialties business last year, using the money to reduce debt. Calarco said debt reduction remains a primary goal this year. Responding to an analyst's question, Calarco said Crompton would sell any business that is worth more to somebody else than it is to Crompton.
``There are no sacred cows in the corporate portfolio,'' he said.