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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) October 2, 1998
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MILACRON INC.
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(Exact name of registrant as specified in charter)
Delaware 1-8475 31-1062125
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(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
4701 Marburg Avenue, Cincinnati, Ohio 45209
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513) 841-8100
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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On October 2, 1998 (the "Closing Date") pursuant to a
Purchase and Sale Agreement between Cincinnati Milacron Inc.
(the "Registrant") and UNOVA, Inc., UNOVA Industrial
Automation Systems, Inc. and UNOVA U.K. Limited
(collectively the "Purchaser") dated as of August 20, 1998,
as amended, (the "Purchase Agreement"), the Registrant
disposed of and transferred substantially all of the assets
and liabilities of its Machine Tool Group ("MTG") to the
Purchaser. A copy of the Purchase and Sale Agreement is
filed herewith as Exhibit 2.1 and a copy of the First
Amendment to Purchase and Sale Agreement is filed herewith
as Exhibit 2.2 and reference is made thereto for the
complete terms and conditions of the Agreement.
The purchase price was an amount equal to the closing net
book value of MTG as of June 30, 1998 less $42,400,000.
$180,000,000 was received by Registrant from the Purchaser
on the date of closing. The purchase price is subject to
adjustment, which will be calculated based on the net book
value shown on the balance sheet as of the effective
transfer date of September 26, 1998.
No material relationship exists between the Registrant and
the Purchaser or any of its affiliates, directors or
officers or any associate of any such directors or officers.
MTG employs approximately 2,400 employees and had sales of
approximately $458,000,000 in 1997.
The Joint News Release of the Registrant and the Seller
dated October 5, 1998, announcing the completion of the
transaction described above is filed herewith as Exhibit
99.1 and is incorporated herein by reference.
ITEM 5. OTHER EVENTS
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The News Release of the Registrant dated October 5, 1998,
announcing the change of the Registrant's name to Milacron
Inc. and the Registrant's intent to repurchase up to two
million shares of its outstanding common stock is filed
herewith as Exhibit 99.2 and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
FINANCIAL STATEMENTS
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(a) Financial statements of business acquired
No financial statements are required to be
included in this filing.
(b) Pro forma financial information
The Pro Forma Consolidated Balance Sheet as of
June 30, 1998, and the related Pro Forma
Consolidated Statement of Earnings for the six
month period ended June 30, 1998 and for the
fiscal year ended December 27, 1997, reflecting,
on a pro forma basis, the disposition of the
machine tools segment filed herewith as Item 7(b).
EXHIBITS
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Exhibit
Number Description of Exhibit
2.1 Purchase and Sale Agreement between UNOVA,
Inc., UNOVA Industrial Automation Systems,
Inc. and UNOVA UK Limited on the one part
and Cincinnati Milacron Inc. on the other
part dated August 20, 1998 (Schedules and
exhibits have been omitted pursuant to Item
6.01(b)(2) of Regulation S-K. Such schedules
and exhibits are listed and described in the
purchase and Sale Agreement. The Registrant
hereby agrees to furnish to the Securities
and Exchange Commission upon its request any
or all of such omitted schedules and exhibits.)
2.2 First Amendment to Purchase and Sale Agreement
between UNOVA, Inc., UNOVA Industrial Automation
Systems, Inc. and UNOVA UK Limited and
Cincinnati Milacron Inc. dated October 2, 1998.
(Schedules and exhibits have been omitted pursuant
to Item 6.01(b)(2) of Regulation S-K. Such schedules
and exhibits are listed and described in the Purchase
and Sale Agreement. The Registrant hereby agrees to
furnish to the Securities and Exchange Commission upon
its request, all of such omitted schedules and exhibits.)
99.1 Press release of Registrant on sale of MTG.
99.2 Press release of Registrant on share repurchase
and name change.
ITEM 7 (B)
MILACRON INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Effective September 26, 1998, with a closing date of October
2, 1998, the company completed the sale of its machine tools
segment (MTG) for $180 million in cash, subject to post-
closing adjustments. The company's machine tools segment
largely consists of aerospace systems and stand-alone
machinery for general metalworking. The proceeds from the
sale were used to repay bank borrowings incurred in the
acquisition of the plastics machinery division of Johnson
Controls, Inc. (see below).
On September 30, 1998, the company acquired the assets of
the plastics machinery division of Johnson Controls, Inc.
(Uniloy) for approximately $190 million, subject to post-
closing adjustments. Uniloy, which is known for its Uniloy
brand of equipment as well as various other brands, has
annual sales of approximately $190 million and is one of the
world's leading providers of blowmolding machines, as well
as structural foam systems, aftermarket parts, services and
molds for blowmolding. The transaction was financed
initially through the use of available cash and bank
borrowings, including a new $135 million senior term bank
loan. The company filed a Current Report on Form 8-K (Item
2) on October 15, 1998 related to the acquisition of Uniloy.
The information required by Item 7 was not required to be
included therein.
The following pro forma consolidated balance sheet and pro
forma consolidated statements of earnings (collectively, the
"pro forma consolidated statements") are based on the
historical consolidated financial statements of the company,
adjusted to give effect to the sale of the company's machine
tools segment.
The pro forma consolidated balance sheet assumes that the
disposition of the company's machine tools segment occurred
on June 30, 1998. The fiscal year 1997 and year-to-date
1998 pro forma consolidated statements of earnings assume
that the sale occurred as of the first day of the company's
1997 and 1998 fiscal years, respectively.
Certain pro forma adjustments relating to the sale are based
on the preliminary cash proceeds of $180 million received on
the date of closing. The ultimate selling price will be
adjusted for the change in the net asset value of MTG from
June 30, 1998, to September 26, 1998, as well as for other
post-closing adjustments, including the results from the
performance of physical inventory counts. The results of
these adjustments will affect the proceeds from the sale.
As a result, the ultimate effect of the transaction may
differ from the pro forma adjustments presented herein and
described in the accompanying notes.
The pro forma consolidated statements do not purport to
present what the company's financial position and results of
operations would actually have been had the disposition
occurred on June 30, 1998 for the pro forma consolidated
balance sheet, or on the first day of the company's 1997 and
1998 fiscal years for the pro forma consolidated statements
of earnings, or purport to project the company's results of
operations for any future period. The pro forma
consolidated statements reflect certain assumptions
described in the accompanying notes. The sale of the
machine tools segment was effective September 26, 1998,
therefore the pro forma statements as of June 30, 1998, do
not reflect the operations of this business up to the date
of sale or to the acquisition of Uniloy on September 30,
1998. The pro forma consolidated statements and
accompanying notes should be read in conjunction with the
audited consolidated financial statements of the company and
the related notes thereto which are included in the
company's Annual Report on Form 10-K for its fiscal year
ended December 27, 1997, the company's Quarterly reports on
Form 10-Q for the quarters ended March 31, 1998 and June 30,
1998, and the company's Current Report of Form 8-K dated
October 15, 1998, (all filed with the Securities and
Exchange Commission).
MILACRON INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(IN MILLIONS)
DIVESTITURE MILACRON
HISTORICAL HISTORICAL PRO FORMA LESS
MILACRON MTG (a) ADJUSTMENTS MTG
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ASSETS
Current assets
Cash and cash equivalents $ 30.3 $ - $ 180.0 (b) $ 30.3
(180.0)(b)
Notes and accounts receivable,
less allowances 268.1 (68.4) - 199.7
Inventories 434.4 (109.6) - 324.8
Other current assets 62.6 (2.5) - 60.1
-------- ------- ------- --------
Total current assets 795.4 (180.5) - 614.9
Property, plant and
equipment - net 349.2 (58.0) (.6)(c) 290.6
Goodwill 242.8 - - 242.8
Other noncurrent assets 77.2 (26.6) - 50.6
-------- ------- ------- --------
TOTAL ASSETS $1,464.6 $(265.1) $ (.6) $1,198.9
======== ======= ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Amounts payable to banks
and current portion of
long-term debt $ 98.1 $ - $ (98.1)(b) $ -
Trade accounts payable 148.6 (42.5) 9.8 (c) 115.9
Advance billings and deposits 38.3 (21.1) - 17.2
Accrued and other
current liabilities 190.2 (15.7) 6.8 (c) 181.3
-------- ------- ------- --------
Total current liabilities 475.2 (79.3) (81.5) 314.4
Long-term accrued liabilities 192.0 (14.5) 8.1 (c) 185.6
Long-term debt 310.2 - (81.9)(b) 228.3
-------- ------- ------- --------
TOTAL LIABILITIES 977.4 (93.8) (155.3) 728.3
SHAREHOLDERS' EQUITY
Preferred shares 6.0 - - 6.0
Common shares 39.4 - - 39.4
Capital in excess of
par value 370.5 (154.7) 180.0 (b) 370.5
(25.3)(c)
Reinvested earnings 112.4 (34.6) - 77.8
Accumulated other comprehensive
income (41.1) 18.0 - (23.1)
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TOTAL SHAREHOLDERS' EQUITY 487.2 (171.3) 154.7 470.6
-------- ------- ------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,464.6 $(265.1) $ (.6) $1,198.9
======== ======= ======= ========
See notes to Pro Forma Consolidated Balance Sheet.
MILACRON INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(IN MILLIONS)
Certain pro forma adjustments relating to the sale are based
on the preliminary cash proceeds of $180 million received on
the date of closing. The ultimate selling price will be
adjusted for the change in the net asset value of MTG from
June 30, 1998, to September 26, 1998, as well as for other
post-closing adjustments, including the results from the
performance of physical inventory counts. The results of
these adjustments will affect the proceeds from the sale.
As a result, the ultimate effect of the transaction may
differ from the pro forma adjustments presented herein and
described in the accompanying notes.
(a) The amounts in the "Historical MTG" column are derived
from the unaudited financial records of the company as of
June 30, 1998.
(b) The net proceeds received at closing from the sale of
MTG of $180.0 million are assumed herein to be used to repay
bank borrowings and other debt outstanding as of June 30,
1998. The ultimate proceeds from the sale will be based on
a closing balance sheet of MTG as of September 26, 1998,
which has not been finalized at the time of this filing.
(c) Represents accruals for costs and expenses relating to
or arising from the sale of the machine tools segment
including the relocation of the company's corporate
headquarters, severance and termination benefits, a pension
plan curtailment loss, transaction costs and certain other
incremental costs that would not have been incurred on an
ongoing basis.
MILACRON INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Six months ended June 30, 1998
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Divestiture
Historical Historical Pro Forma Milacron
Milacron MTG (a) Adjustments less MTG
------------ ----------- ------------ ------------
Sales $ 968.0 $(241.0) $ - $ 727.0
Cost of products sold 720.1 (193.4) - 526.7
--------- ------- ------ ---------
Manufacturing margins 247.9 (47.6) - 200.3
Other costs and expenses
Selling and administrative 168.2 (38.2) - 130.0
Minority shareholders' interests
in earnings of subsidiaries 1.1 - - 1.1
Other - net 9.7 (1.1) (.7)(c) 7.9
--------- ------- ------ ---------
Total other costs and expenses 179.0 (39.3) (.7) 139.0
Operating earnings 68.9 (8.3) .7 61.3
Interest
Income .9 - - .9
Expense (15.2) - 5.4 (d) (9.8)
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Interest - net (14.3) - 5.4 (8.9)
--------- ------- ------ ---------
EARNINGS BEFORE INCOME TAXES 54.6 (8.3) 6.1 52.4
Provision for income taxes 16.1 (3.0) 2.4 (e) 15.5
--------- ------- ------ ---------
EARNINGS FROM
CONTINUING OPERATIONS 38.5 (5.3) 3.7 36.9
Discontinued operations
Discontinued MTG operations - 5.3 (b) - 5.3
Loss on sale - (34.6)(b) - (34.6)
--------- ------- ------ ---------
Total discontinued operations - (29.3)(b) - (29.3)
NET EARNINGS $ 38.5 $ (34.6) $ 3.7 $ 7.6
========= ======= ====== =========
Earnings per common share
Continuing operations
Basic $ .98 $ .94
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Diluted $ .96 $ .92
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Net earnings
Basic $ .98 $ .19
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Diluted $ .96 $ .18
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Weighted average number of
common shares and common
share equivalents
outstanding
Basic 39,178
Diluted 39,723
See Notes to Pro Forma Consolidated Statement of Earnings.
MILACRON INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 30, 1998
(IN MILLIONS)
Certain pro forma adjustments relating to the sale are based
on the preliminary cash proceeds of $180 million received on
the date of closing. The ultimate selling price will be
adjusted for the change in the net asset value of MTG from
June 30, 1998, to September 26, 1998, as well as for other
post-closing adjustments, including the results from the
performance of physical inventory counts. The results of
these adjustments will affect the proceeds from the sale.
As a result, the ultimate effect of the transaction may
differ from the pro forma adjustments presented herein and
described in the accompanying notes.
(a) The amounts in the "Historical MTG" column are derived
from the unaudited results of operations for the machine
tools segment for the six months ended June 30, 1998.
(b) Represents the reclassification of MTG's results of
operations to discontinued operations as a result of the
sale of the machine tools segment. The sale of the machine
tools segment was effective September 26, 1998, therefore
the pro forma statements as of June 30, 1998, do not reflect
the operations of the business up to the date of sale.
(c) Reduction of financing fees previously incurred in
connection with the sale of MTG receivables to an
independent third party.
(d) Reduction of interest expense of $5.4 million. The
proceeds from the sale of MTG are assumed herein to be
utilized to repay bank borrowings and other debt.
(e) Expense for income taxes of $2.4 million associated
with the divestiture pro forma adjustments based on the
company's pro forma effective tax rate.
MILACRON INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED DECEMBER 27, 1997
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DIVESTITURE
HISTORICAL HISTORICAL PRO FORMA MILACRON
MILACRON MTG (a) ADJUSTMENTS LESS MTG
----------- ---------- ----------- ---------
Sales $ 1,896.7 $(458.0) $ - $ 1,438.7
Cost of products sold 1,424.8 (373.0) - 1,051.8
--------- ------- ------ ---------
Manufacturing margins 471.9 (85.0) - 386.9
Other costs and expenses
Selling and administrative 329.3 (69.4) - 259.9
Minority shareholders' interests
in earnings of subsidiaries 4.3 - - 4.3
Other - net 11.2 (1.1) (1.4)(c) 8.7
--------- ------- ------ ---------
Total other costs and expenses 344.8 (70.5) (1.4) 272.9
--------- ------- ------ ---------
Operating earnings 127.1 (14.5) 1.4 114.0
Interest
Income 2.4 - - 2.4
Expense (28.9) - 10.9 (d) (18.0)
--------- ------- ------ ---------
Interest - net (26.5) - 10.9 (15.6)
--------- ------- ------ ---------
EARNINGS BEFORE INCOME TAXES 100.6 (14.5) 12.3 98.4
Provision for income taxes 20.0 (3.0) 5.0 (e) 22.0
--------- ------- ------ ---------
EARNINGS FROM
CONTINUING OPERATIONS 80.6 (11.5) 7.3 76.4
Discontinued operations
Discontinued MTG operations - 11.5 (b) - 11.5
Loss on sale - (34.6)(b) - (34.6)
--------- ------- ------ ---------
Total discontinued operations - (23.1)(b) - (23.1)
NET EARNINGS $ 80.6 $ (34.6) $ 7.3 $ 53.3
======== ======= ====== =========
Earnings per common share
Continuing operations
Basic $ 2.03 $ 1.92
========= =========
Diluted $ 2.01 $ 1.91
========= =========
Net earnings
Basic $ 2.03 $ 1.34
========= =========
Diluted $ 2.01 $ 1.33
========= =========
Weighted average number of
common shares and common
share equivalents
outstanding
Basic 39,583
Diluted 39,956
See Notes to Pro Forma Consolidated Statement of Earnings.
MILACRON INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 27, 1997
(IN MILLIONS)
Certain pro forma adjustments relating to the sale are based
on the preliminary cash proceeds of $180 million received on
the date of closing. The ultimate selling price will be
adjusted for the change in the net asset value of MTG from
June 30, 1998, to September 26, 1998, as well as for other
post-closing adjustments, including the results from the
performance of physical inventory counts. The results of
these adjustments will affect the proceeds from the sale.
As a result, the ultimate effect of the transaction may
differ from the pro forma adjustments presented herein and
described in the accompanying notes.
(a) The amounts in the "Historical MTG" column are derived
from the unaudited results of operations for the machine
tools segment for the fiscal year ended December 27, 1997.
(b) Represents the reclassification of MTG's results of
operations to discontinued operations as a result of the
sale of machine tools segment.
(c) Reduction of financing fees previously incurred in
connection with the sale of MTG accounts receivable to an
independent third party.
(d) Reduction of interest expense of $10.9 million. The
proceeds from the sale of MTG are assumed herein to be
utilized to repay bank borrowings and other debt.
(e) Expense for income taxes of $5.0 million associated
with the divestiture pro forma adjustment based upon the
company's pro forma effective tax rate.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Milacron Inc.
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(Registrant)
By: /s/ Ronald D. Brown
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Ronald D. Brown
Senior Vice President -
Finance and
Administration and
Chief Financial
Officer
Date: October 19, 1998
MILACRON INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
The following Exhibits are included with this Form 8-K.
Exhibit
Number Description of Exhibit
2.1 Purchase and Sale Agreement between UNOVA,
Inc., UNOVA Industrial Automation Systems,
Inc. and UNOVA UK Limited on the one part
and Cincinnati Milacron Inc. on the other
part dated August 20, 1998 (Schedules and
exhibits have been omitted pursuant to Item
6.01(b)(2) of Regulation S-K. Such schedules
and exhibits are listed and described in the
purchase and Sale Agreement. The Registrant
hereby agrees to furnish to the Securities
and Exchange Commission upon its request any
or all of such omitted schedules and exhibits.)
2.2 First Amendment to Purchase and Sale Agreement
between UNOVA, Inc., UNOVA Industrial Automation
Systems, Inc. and UNOVA UK Limited and
Cincinnati Milacron Inc. dated October 2, 1998.
(Schedules and exhibits have been omitted pursuant
to Item 6.01(b)(2) of Regulation S-K. Such schedules
and exhibits are listed and described in the Purchase
and Sale Agreement. The Registrant hereby agrees to
furnish to the Securities and Exchange Commission upon
its request, any or all of such omitted schedules and
exhibits.)
99.1 Press release of Registrant on sale of MTG.
99.2 Press release of Registrant on share repurchase
and name change.