EXHIBIT 99.2
Milacron Inc.
Set forth below is information regarding preliminary unaudited financial results of Milacron Inc. and its consolidated subsidiaries (the "Milacron") for the fourth quarter and full year of 2008, as well as certain selected financial information.
Milacron had a net loss in the fourth quarter of 2008 of $12.3 million, or $2.41 per share (before the effect of goodwill impairment testing, which is not yet complete), which included $3.9 million in restructuring and other charges. This compared to a net loss of $71.7 million, or $14.32 per share, in the fourth quarter of 2007. The large year-ago net loss was caused primarily by a non-cash writedown of deferred tax assets of $63.0 million associated with the change of ownership of the majority of the company’s preferred stock, as well as by $10.7 million in restructuring and other charges.
Operating losses (EBIT) for the fourth quarter of 2008, including restructuring and other charges, were $3.5 million, compared to $1.2 million of operating earnings for the same quarter of 2007. Sales for the 2008 fourth quarter were $175 million, down from $217 million a year ago.
Consolidated Year 2008 Results
Milacron’s net loss for the year was $24.9 million, or $6.18 per share, in 2008, including restructuring and other charges of $9.9 million, versus $87.1 million, or $19.25 per share, including restructuring and other charges of $16.3 million, in 2007. In 2008 Milacron had operating earnings (EBIT) of $11.0 million, up from $4.8 million in 2007, in each case including restructuring and other charges. Sales in 2008 were $788 million, down from $808 million in the prior year.
Segment Results
Machinery Technologies-North America [machinery and related parts and services for injection molding, blow molding and extrusion supplied from North America, India and China] Fourth quarter sales of $83 million were down from $92 million a year ago. Segment earnings were $0.3 million, the same as in the fourth quarter of 2007.
For the year 2008, sales were $363 million, off slightly from $367 million in 2007. Segment earnings rose to $19.5 million, up from $10.8 million a year ago.
Machinery Technologies-Europe [machinery and related parts and services for injection molding and blow molding supplied from Europe] Sales in the fourth quarter fell to $41 million from $60 million in the year-ago quarter, leading to a segment loss of $0.9 million compared to earnings of $3.3 million in the fourth quarter of 2007.
Sales for 2008 were $173 million, off from $181 million in 2007. The segment loss for the year was $2.8 million compared to operating earnings of $3.3 million in the prior year.
Mold Technologies [mold bases and related parts and services, as well as maintenance, repair and operating (MRO) supplies for injection molding worldwide] Sales in the fourth quarter of $31 million declined from $38 million in the year-ago quarter. Segment earnings fell to $1.6 million from $2.8 million in the fourth quarter of 2007.
Sales for 2008 were $142 million, off from $148 million in the prior year. Segment earnings for the year rose, however, to $3.8 million from $1.9 million in 2007.
Industrial Fluids [water-based and oil-based coolants, lubricants and cleaners for metalcutting and metalforming operations worldwide] Fourth quarter sales were $26 million, down from $31 million in the year-ago quarter. Segment earnings also declined to $2.1 million from $6.6 million. The fourth quarter 2007 was aided considerably by a $4.1 million favorable resolution of product liability claims.
Industrial fluids sales in 2008 were $126 million, up over $124 million in 2007. Segment earnings fell to $13.0 million from $16.6 million in 2007.
Note: Financial results in this filing and accompanying tables are preliminary, unaudited and subject to change.
Selected 2008-09 Information
The following information is being provided for the sole purpose of making public certain information provided to representatives of Avenue Capital Group and DDJ Capital Management LLC in connection with their evaluation of restructuring transactions involving Milacron. In connection with that evaluation, Milacron provided the modified financial segment preliminary sales and EBITDA before restructuring charges results for 2008 and forecasts for 2009 set forth below to such representatives. Such segment information was modified in each case to exclude corporate allocation expense and, in the case of Machinery Technologies--North America, the results of Indian and Chinese operations. EBITDA before restructuring charges refers to earnings before restructuring charges, interest, taxes, depreciation and amortization and is reconciled to operating earnings for purposes of the presentation below.
($ in Millions)
| | |
| 12 Months Ended December 31, 2008 | 12 Months Ending December 31, 2009 |
| | |
Machinery Technologies --North America | | |
Sales | 318.0 | 206.2 |
EBITDA Before Restructuring Charges | 24.9 | 6.7 |
Restructuring Charges | 1.4 | .4 |
Depreciation and Amortization | 4.5 | 4.6 |
Operating Earnings | 19.0 | 1.7 |
| | |
Mold Technologies | | |
Sales | 141.6 | 111.1 |
EBITDA Before Restructuring Charges | 6.7 | 6.5 |
Restructuring Charges | 2.8 | 2.0 |
Depreciation and Amortization | 2.7 | 2.5 |
Operating Earnings | 1.2 | 2.0 |
| | |
Industrial Fluids | | |
Sales | 126.4 | 113.1 |
EBITDA Before Restructuring Charges | 14.1 | 8.4 |
Restructuring Charges | .5 | -- |
Depreciation and Amortization | 1.8 | 1.9 |
Operating Earnings | 11.8 | 6.5 |
Forward-Looking Statements
The above forward-looking statements by their nature involve risks and uncertainties that could significantly impact operations, markets, products and expected results, including the ongoing credit crisis, deteriorating global economic conditions, the potential adverse impact of its Chapter 11 cases on Milacron's operations and relationships with customers and suppliers and its ability to enter into and close a definitive asset purchase agreement for the sale of its assets. For further information please refer to the Cautionary Statement included in Milacron's most recent Form 10-Q on file with the Securities and Exchange Commission. Milacron disclaims any obligation to update such forward-looking statements.
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Milacron Inc. and Subsidiaries | | | | | | |
| | | | | | | | | | |
| | | | | | | | Fourth Quarter 2008 |
| | | | | | | | | | |
| | | | Three Months Ended | | Twelve Months Ended |
| | | | December 31, | | December 31, |
| | | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | | | | |
Sales | | | | $ 174,686,000 | | $ 216,582,000 | | $ 788,191,000 | | $ 807,868,000 |
| | | | | | | | | | |
Loss from continuing operations | | | (13,333,000) | | (72,709,000) | | (25,871,000) | | (88,223,000) |
Per Share | | | | | | | | | |
Basic | | | | (2.59) | | (14.52) | | (6.37) | | (19.48) |
Diluted | | | (2.59) | | (14.52) | | (6.37) | | (19.48) |
| | | | | | | | | | |
Earnings from discontinued operations | | 1,002,000 | | 1,037,000 | | 1,002,000 | | 1,172,000 |
Per Share | | | | | | | | | |
Basic | | | | 0.18 | | 0.20 | | 0.19 | | 0.23 |
Diluted | | | 0.18 | | 0.20 | | 0.19 | | 0.23 |
| | | | | | | | | | |
Net loss | | | | (12,331,000) | | (71,672,000) | | (24,869,000) | | (87,051,000) |
Per Share | | | | | | | | | |
Basic | | | | (2.41) | | (14.32) | | (6.18) | | (19.25) |
Diluted | | | (2.41) | | (14.32) | | (6.18) | | (19.25) |
| | | | | | | | | | |
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Common shares | | | | | | | | | |
Weighted average outstanding for basic EPS | | 5,670,000 | | 5,167,000 | | 5,377,000 | | 5,008,000 |
Weighted average outstanding for diluted EPS | 5,670,000 | | 5,167,000 | | 5,377,000 | | 5,008,000 |
Outstanding at quarter end | | | 6,033,000 | | 5,486,000 | | 6,033,000 | | 5,486,000 |
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Notes: | | | | | | | | | | |
These statements are unaudited and subject to year-end adjustments including goodwill impairment testing, which is not yet complete. |
Per-share amounts include accruals for preferred dividends and the effect of a beneficial conversion feature. |
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Consolidated Earnings | | | | | | | | | |
Milacron Inc. and Subsidiaries | | | | | | | | | |
| | | | | | | | | |
| | | | | | | Fourth Quarter 2008 |
| | | | | | | | | |
(In millions, except per-share data) | | | Three Months Ended | | Twelve Months Ended |
| | | December 31, | | December 31, |
| | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | | | |
Sales | | | $ 174.7 | | $ 216.6 | | $ 788.2 | | $ 807.9 |
Cost of products sold | | | 140.0 | | 168.0 | | 627.6 | | 644.9 |
Cost of products sold related to restructuring | | - | | 0.2 | | 0.4 | | 0.2 |
Total cost of products sold | | | 140.0 | | 168.2 | | 628.0 | | 645.1 |
Manufacturing margins | | | 34.7 | | 48.4 | | 160.2 | | 162.8 |
Percent of sales | | | 19.9% | | 22.3% | | 20.3% | | 20.2% |
| | | | | | | | | |
Other costs and expenses | | | | | | | | | |
Selling and administrative | | | 33.1 | | 39.3 | | 138.8 | | 144.6 |
Restructuring and other costs | | | 3.9 | | 7.2 | | 9.5 | | 12.3 |
Change in preferred stock ownership costs | | - | | 1.4 | | - | | 1.9 |
Pension plan curtailment cost | | | - | | 1.9 | | - | | 1.9 |
Other income - net | | | 1.2 | | (2.6) | | 0.9 | | (2.7) |
Total other costs and expenses | | | 38.2 | | 47.2 | | 149.2 | | 158.0 |
Operating earnings (loss) | | | (3.5) | | 1.2 | | 11.0 | | 4.8 |
Interest expense - net | | | (8.3) | | (7.8) | | (32.9) | | (31.4) |
Loss from continuing operations before | | | | | | | | | |
income taxes | | | (11.8) | | (6.6) | | (21.9) | | (26.6) |
Provision (benefit) for income taxes (a) | | | 1.5 | | 66.1 | | 4.0 | | 61.7 |
Loss from continuing operations | | | (13.3) | | (72.7) | | (25.9) | | (88.3) |
Discontinued operations - net of income taxes (b) | | 1.0 | | 1.0 | | 1.0 | | 1.2 |
Net loss | | | $ (12.3) | | $ (71.7) | | $ (24.9) | | $ (87.1) |
Loss per common share - basic and diluted | | | | | | | | | |
Continuing operations | | | $ (2.59) | | $ (14.52) | | $ (6.37) | | $ (19.48) |
Discontinued operations | | | 0.18 | | 0.20 | | 0.19 | | 0.23 |
Net loss | | | $ (2.41) | | $ (14.32) | | $ (6.18) | | $ (19.25) |
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(a) In 2007, includes a $63 million non-cash charge associated with the change in ownership of a majority of the company's |
Series B Preferred Stock, as announced in October, 2007. | | | | | | | |
(b) Represents adjustments of reserves related to prior divestitures. | | | | | | | |
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Notes: | | | | | | | | | |
These statements are unaudited and subject to year-end adjustments including goodwill impairment testing, which is not yet complete. |
Per-share amounts include accruals for preferred dividends and effect of beneficial conversion feature. | | | |
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Consolidated Balance Sheets | | | | | | | | | | | |
Milacron Inc. and Subsidiaries | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | Fourth Quarter 2008 |
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(In millions) | | | | | | | | | December 31, | | December 31, |
| | | | | | | | | 2008 | | 2007 |
| | | | | | | | | | | |
Assets | | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | $ 28.9 | | $ 40.8 |
Notes and accounts receivable-net | | | | | | | | | 92.5 | | 114.6 |
Inventories | | | | | | | | | 164.2 | | 179.7 |
Other current assets | | | | | | | | | 16.4 | | 34.9 |
Total current assets | | | | | | | | | 302.0 | | 370.0 |
Property, plant and equipment - net | | | | | | | | | 98.4 | | 106.4 |
Goodwill | | | | | | | | | 87.5 | | 90.5 |
Other noncurrent assets | | | | | | | | | 35.4 | | 36.0 |
Total assets | | | | | | | | | $ 523.3 | | $ 602.9 |
| | | | | | | | | | | |
Liabilities and shareholders' deficit | | | | | | | | | | | |
Short-term borrowings and long-term debt due within one year | | | | | $ 46.7 | | $ 29.0 |
Trade accounts payable and advance billings and deposits | | | | | | | 94.0 | | 121.5 |
Accrued and other current liabilities | | | | | | | | | 59.6 | | 76.6 |
Total current liabilities | | | | | | | | | 200.3 | | 227.1 |
Long-term accrued liabilities | | | | | | | | | 307.1 | | 193.3 |
Long-term debt | | | | | | | | | 244.6 | | 231.9 |
Shareholders' deficit | | | | | | | | | (228.7) | | (49.4) |
Total liabilities and shareholders' deficit | | | | | | | | $ 523.3 | | $ 602.9 |
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Note: These statements are unaudited and subject to year-end adjustments including goodwill impairment testing, which is not |
yet complete. | | | | | | | | | | | |
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Consolidated Cash Flows | | | | | | | | | |
Milacron Inc. and Subsidiaries | | | | | | | | | |
| | | | | | | Fourth Quarter 2008 |
| | | | | | | | | |
(In millions) | | | Three Months Ended | | Twelve Months Ended |
| | | December 31, | | December 31, |
| | | 2008 | | 2007 | | 2008 | | 2007 |
Increase (decrease) in cash and cash equivalents | | | | | | | | |
Operating activities cash flows | | | | | | | | | |
Net loss | | | $ (12.3) | | $ (71.7) | | $ (24.9) | | $ (87.1) |
Discontinued operations - net of income taxes | | | (1.0) | | (1.0) | | (1.0) | | (1.2) |
Depreciation and amortization | | | 3.3 | | 4.1 | | 13.9 | | 16.1 |
Restructuring and other costs | | | 1.9 | | 8.9 | | 4.5 | | 10.2 |
Working capital changes | | | | | | | | | |
Notes and accounts receivable | | | 12.2 | | 8.1 | | 19.8 | | 3.7 |
Inventories | | | 18.3 | | 5.8 | | 12.4 | | (4.4) |
Other current assets | | | 3.9 | | 0.9 | | 7.2 | | (3.7) |
Trade accounts payable | | | (3.7) | | 2.7 | | (14.9) | | 11.7 |
Other current liabilities | | | (23.8) | | (16.2) | | (20.5) | | (13.3) |
Deferred income taxes and other - net | | | (5.0) | | 68.0 | | (31.4) | | 77.6 |
Net cash provided (used) by operating activities | (6.2) | | 9.6 | | (34.9) | | 9.6 |
| | | | | | | | | |
Investing activities cash flows | | | | | | | | | |
Capital expenditures | | | (1.8) | | (3.6) | | (8.7) | | (9.6) |
Net disposals of property, plant and equipment | | - | | 0.1 | | 0.7 | | 0.3 |
Net cash used by investing activities | | | (1.8) | | (3.5) | | (8.0) | | (9.3) |
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Financing activities cash flows | | | | | | | | | |
Issuance (repayments) of long-term debt | | | (0.4) | | (1.0) | | 14.6 | | (1.6) |
Increase (decrease) in short-term borrowings | | 6.4 | | (2.3) | | 18.0 | | 1.0 |
Dividends paid | | | - | | - | | (0.1) | | (0.2) |
Net cash provided (used) by financing activities | 6.0 | | (3.3) | | 32.5 | | (0.8) |
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Effect of exchange rate fluctuations on cash | | | | | | | | |
and cash equivalents | | | (1.6) | | 0.5 | | (1.5) | | 2.8 |
Increase (decrease) in cash and cash equivalents | | (3.6) | | 3.3 | | (11.9) | | 2.3 |
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Cash and cash equivalents at beginning of period | | 32.5 | | 37.5 | | 40.8 | | 38.5 |
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Cash and cash equivalents at end of period | | | $ 28.9 | | $ 40.8 | | $ 28.9 | | $ 40.8 |
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Note: These statements are unaudited and subject to year-end adjustments including goodwill impairment testing, which is not yet complete. |
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Segment and Supplemental Information | | | | | | | |
Milacron Inc. and Subsidiaries | | | | | | | | |
| | | | | | | Fourth Quarter 2008 |
| | | | | | | | | |
(In millions) | | | Three Months Ended | | Twelve Months Ended |
| | | December 31, | | December 31, |
| | | 2008 | | 2007 | | 2008 | | 2007 |
Machinery technologies North America | | | | | | | | |
| Sales | | $ 83.0 | | $ 91.5 | | $ 363.1 | | $ 367.0 |
| Operating cash flow (a) | | 1.5 | | 1.6 | | 24.6 | | 16.6 |
| Segment earnings | | 0.3 | | 0.3 | | 19.5 | | 10.8 |
| Percent of sales | | 0.4% | | 0.3% | | 5.4% | | 2.9% |
| New orders | | 64.4 | | 98.8 | | 323.8 | | 378.2 |
Machinery technologies Europe | | | | | | | | |
| Sales | | $ 40.5 | | $ 60.4 | | $ 172.5 | | $ 180.5 |
| Operating cash flow (a) | | - | | 4.5 | | 0.9 | | 7.3 |
| Segment earnings (loss) | | (0.9) | | 3.3 | | (2.8) | | 3.3 |
| Percent of sales | | -2.2% | | 5.5% | | -1.6% | | 1.8% |
| New orders | | 23.4 | | 50.5 | | 152.6 | | 188.5 |
Mold technologies | | | | | | | | |
| Sales | | $ 31.2 | | $37.6 | | $ 141.6 | | $ 148.2 |
| Operating cash flow (a) | | 2.3 | | 3.9 | | 6.6 | | 6.4 |
| Segment earnings (loss) | | 1.6 | | 2.8 | | 3.8 | | 1.9 |
| Percent of sales | | 5.1% | | 7.4% | | 2.7% | | 1.3% |
| New orders | | 30.4 | | 37.2 | | 140.8 | | 147.8 |
Eliminations | | | | | | | | |
| Sales | | $ (6.1) | | $ (4.2) | | $ (15.0) | | $ (11.8) |
| New orders | | (3.4) | | (4.6) | | (14.8) | | (12.9) |
Total plastics technologies | | | | | | | | |
| Sales | | $ 148.6 | | $ 185.3 | | $ 662.2 | | $ 683.9 |
| Operating cash flow (a) | | 3.8 | | 10.0 | | 32.1 | | 30.3 |
| Segment earnings | | 1.0 | | 6.4 | | 20.5 | | 16.0 |
| Percent of sales | | 0.7% | | 3.5% | | 3.1% | | 2.3% |
| New orders | | 114.8 | | 181.9 | | 602.4 | | 701.6 |
Industrial fluids | | | | | | | | |
| Sales | | $ 26.1 | | $31.3 | | $ 126.0 | | $ 124.0 |
| Operating cash flow (a) | | 2.5 | | 7.0 | | 14.7 | | 18.2 |
| Segment earnings | | 2.1 | | 6.6 | | 13.0 | | 16.6 |
| Percent of sales | | 8.0% | | 21.1% | | 10.3% | | 13.4% |
| New orders | | 26.1 | | 31.3 | | 125.9 | | 124.0 |
Total continuing operations | | | | | | | | |
| Sales | | $ 174.7 | | $ 216.6 | | $ 788.2 | | $ 807.9 |
| Operating cash flow (a) | | 3.7 | | 16.0 | | 34.8 | | 37.2 |
| Segment earnings | | 3.1 | | 13.0 | | 33.5 | | 32.6 |
| Restructuring and other costs | | (3.9) | | (7.4) | | (9.9) | | (12.5) |
| Change in preferred stock ownership costs | | - | | (1.4) | | - | | (1.9) |
| Pension plan curtailment cost | | - | | (1.9) | | - | | (1.9) |
| Corporate expenses | | (2.6) | | (1.0) | | (11.9) | | (11.1) |
| Other unallocated expenses | | (0.1) | | (0.1) | | (0.7) | | (0.4) |
| Operating earnings (loss) | | (3.5) | | 1.2 | | 11.0 | | 4.8 |
| Percent of sales | | -2.0% | | 0.6% | | 1.4% | | 0.6% |
| New orders | | 140.9 | | 213.2 | | 728.3 | | 825.6 |
| Ending backlog | | 65.8 | | 129.1 | | 65.8 | | 129.1 |
(a) Represents EBITDA (earnings before interest, income taxes, depreciation and amortization) before restructuring costs. |
Note: These statements are unaudited and subject to year-end adjustments including goodwill impairment testing, which is not yet complete. |
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Reconciliation of Earnings to Operating Cash Flows | | | | | | |
Milacron Inc. and Subsidiaries | | | | | | | |
| | | | | | | | |
| | | | | | Fourth Quarter 2008 |
| | | | | | | | |
(In millions) | | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, |
| | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | | |
Machinery technologies North America | | | | | | | |
| Segment earnings | $ 0.3 | | $ 0.3 | | $ 19.5 | | $ 10.8 |
| Depreciation and amortization | 1.2 | | 1.3 | | 5.1 | | 5.8 |
| Operating cash flow | 1.5 | | 1.6 | | 24.6 | | 16.6 |
| | | | | | | | |
Machinery technologies Europe | | | | | | | |
| Segment earnings (loss) | $ (0.9) | | $ 3.3 | | $ (2.8) | | $ 3.3 |
| Depreciation and amortization | 0.9 | | 1.2 | | 3.7 | | 4.0 |
| Operating cash flow | - | | 4.5 | | 0.9 | | 7.3 |
| | | | | | | | |
Mold technologies | | | | | | | |
| Segment earnings (loss) | $ 1.6 | | $ 2.8 | | $ 3.8 | | $ 1.9 |
| Depreciation and amortization | 0.7 | | 1.1 | | 2.8 | | 4.5 |
| Operating cash flow | 2.3 | | 3.9 | | 6.6 | | 6.4 |
| | | | | | | | |
Total plastics technologies | | | | | | | |
| Segment earnings | $ 1.0 | | $ 6.4 | | $ 20.5 | | $ 16.0 |
| Depreciation and amortization | 2.8 | | 3.6 | | 11.6 | | 14.3 |
| Operating cash flow | 3.8 | | 10.0 | | 32.1 | | 30.3 |
| | | | | | | | |
Industrial fluids | | | | | | | |
| Segment earnings | $ 2.1 | | $ 6.6 | | $ 13.0 | | $ 16.6 |
| Depreciation and amortization | 0.4 | | 0.4 | | 1.7 | | 1.6 |
| Operating cash flow | 2.5 | | 7.0 | | 14.7 | | 18.2 |
| | | | | | | | |
Total continuing operations | | | | | | | |
| Net loss | $ (12.3) | | $ (71.7) | | $ (24.9) | | $ (87.1) |
| Discontinued operations - net of income taxes (a) | (1.0) | | (1.0) | | (1.0) | | (1.2) |
| Provision (benefit) for income taxes (b) | 1.5 | | 66.1 | | 4.0 | | 61.7 |
| Interest expense - net | 8.3 | | 7.8 | | 32.9 | | 31.4 |
| Restructuring and other costs | 3.9 | | 7.4 | | 9.9 | | 12.5 |
| Change in preferred stock ownership costs | - | | 1.4 | | - | | 1.9 |
| Pension plan curtailment cost | - | | 1.9 | | - | | 1.9 |
| Depreciation and amortization | 3.3 | | 4.1 | | 13.9 | | 16.1 |
| Operating cash flow | $ 3.7 | | $ 16.0 | | $ 34.8 | | $ 37.2 |
| | | | | | | | |
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(a) Represents adjustments of reserves related to prior divestitures. | | | | | | |
(b) In 2007, includes a $63 million non-cash charge associated with the change in ownership of a majority of the company's |
Series B Preferred Stock, as announced in October, 2007. | | | | | | |
Note: These statements are unaudited and subject to year-end adjustments including goodwill impairment testing, which is not yet complete. |