Exhibit 99.1
Milacron Reports 9% Sales Gain in Second Quarter; Company Continues to Narrow
Loss
Business Editors
CINCINNATI--(BUSINESS WIRE)--Aug. 1, 2005--Note: Today, Monday,
August 1, at 1 p.m. EDT, Milacron will hold an open investor
conference call, which can be accessed live at www.milacron.com. The
dial-in number for those interested in asking questions is
913-981-4900. A replay of the call will be made available from 4:00
p.m. this afternoon through midnight Monday, August 8, on the
company's website or by phone: 719-457-0820, access code 7477391
Milacron Inc. (NYSE: MZ), a leading global supplier of
plastics-processing technologies and industrial fluids, reported a net
loss in the second quarter of $3.8 million, or $0.11 per share. This
reflects significant improvement over the second quarter of 2004 in
which the company had a net loss of $27.8 million, or $0.60 per share,
which included $14.6 million in refinancing costs and a non-cash
writeoff adding $6.4 million to interest expense. The 2005 second
quarter also compared favorably to the net loss of $9.1 million, or
$0.22 per share, incurred in the first quarter of this year. Sales for
the second quarter were $209 million, up 9% over both the year-ago
quarter and the first quarter. New orders of $215 million were up 7%
versus a year ago and 6% from the first quarter.
"We are maximizing our participation in the ongoing recovery of
the North American market for plastics machinery by continuing to
introduce new, advanced technology products and improving our customer
service and support," said Ronald D. Brown, chairman, president and
chief executive officer. "We also continue to aggressively expand our
presence in emerging markets, such as China and India, where growth
rates remain strong. These efforts have helped us increase sales and
new orders despite the current weakness in Western European markets.
At the same time, our recent actions to improve profitability -
including selective price increases and cost-reduction measures -
while successful, have not been sufficient to fully offset higher
material costs and increased expenses associated with product
liability insurance, pension and Sarbanes-Oxley compliance," he said.
During the second quarter Milacron continued to reduce primary
working capital (see calculation table), cutting it to 24.1% of sales
from 25.5% in the prior quarter. Cash at the end of the quarter was
$37 million, and the company had approximately $40 million available
for borrowing under its asset-based revolving credit facility, which
remains essentially undrawn. Milacron has reached an agreement with
its lenders amending the terms of this facility including, among other
things, the relaxation of minimum levels of adjusted EBITDA (earnings
before interest, taxes, depreciation and amortization) for the third
and fourth quarter. The full text of this amendment will be filed on
Form 8-K with the Securities and Exchange Commission.
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) Ongoing strength in
several markets, including packaging, building materials, medical
supplies and consumer goods, more than offset order deferrals by the
auto industry, as new orders in the quarter increased 16% to $101
million, up from $87 million in the second quarter of 2004. Sales rose
to $95 million, up 15% over the same period last year. Higher sales
volumes and cost reductions offset rising material and pension costs,
as segment earnings improved to $4.9 million versus $3.4 million in
the year-ago quarter and versus $1.9 million in the first quarter.
Machinery Technologies-Europe (machinery and related parts and
services for injection molding and blow molding supplied from Europe)
Demand in Western Europe remained soft, as second quarter new orders
in this segment declined to $43 million, from $46 million in the
second quarter of 2004. Sales of $42 million were essentially flat
with the year-ago period despite favorable currency translation
effects. New orders and sales, however, both increased by about 20%
over first quarter levels. For the second quarter, this segment had an
operating loss of $0.5 million, down from earnings of $1.3 million a
year ago, but an improvement over a $2.2 million loss in the first
quarter of 2005.
Mold Technologies (mold bases and related parts and services, as
well as maintenance, repair and operating supplies for injection
molding worldwide) Sales in the second quarter were $44 million, up
10% from $40 million a year ago. Segment earnings were $0.7 million
compared to an operating loss of $0.1 million in the second quarter of
2004. Pricing pressures in Western European markets and increased
insurance expense were the primary factors causing the drop in
earnings from $2.3 million in the first quarter of 2005.
Industrial Fluids (water-based and oil-based coolants, lubricants
and cleaners for metalcutting and metalforming operations worldwide)
Sales of $28 million were essentially flat with the second quarter a
year ago but up 4% from the first quarter of 2005.
Higher-than-projected material costs, along with increased insurance
costs for product liability, held back earnings to $1.9 million, which
declined from $3.4 million a year ago but were up from $1.4 million in
the first quarter.
Outlook "The North American recovery appears to be sustainable,
and we believe there is growing pent-up demand for more productive and
efficient equipment throughout the plastics processing industries,"
Brown said. "And while the pace of the recovery is slower than we had
anticipated, we are still experiencing significant improvement.
Outside of North America, Western Europe remains soft, but we are very
pleased with the rapid growth we are seeing in Asia. With the
exception of the continued rise in oil and material costs, most
economic fundamentals are positive, and we believe that once these
prices stabilize there is good potential for solid, sustained growth
in virtually all of our markets," he said.
The forward-looking statements above by their nature involve risks
and uncertainties that could significantly impact operations, markets,
products and expected results. For further information please refer to
the Cautionary Statement included in the company's most recent Form
10-Q on file with the Securities and Exchange Commission.
First incorporated in 1884, Milacron is a leading global supplier
of plastics-processing technologies and industrial fluids, with 3,500
employees and major manufacturing facilities in North America, Europe
and Asia. For further information, visit www.milacron.com or call the
toll-free investor line: 800-909-MILA (800-909-6452).
Milacron Inc. and Subsidiaries
Second Quarter 2005
- ----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
2005 2004 2005 2004
- ------------------------------------------ ---------------------------
Sales $208,802,000 $191,745,000 $401,117,000 $380,678,000
Loss from
continuing
operations (4,351,000) (27,971,000) (13,446,000) (43,964,000)
Per Share (a)
Basic (0.12) (0.60) (0.34) (1.06)
Diluted (0.12) (0.60) (0.34) (1.06)
Earnings (loss)
from
discontinued
operations 590,000 125,000 592,000 (477,000)
Per Share (a)
Basic 0.01 0.00 0.01 (0.01)
Diluted 0.01 0.00 0.01 (0.01)
Net loss (3,761,000) (27,846,000) (12,854,000) (44,441,000)
Per Share (a)
Basic (0.11) (0.60) (0.33) (1.07)
Diluted (0.11) (0.60) (0.33) (1.07)
Common shares
Weighted
average
outstanding
for basic
EPS (a) 47,600,000 46,476,000 47,560,000 41,705,000
Weighted
average
outstanding
for diluted
EPS (a) 47,600,000 46,476,000 47,560,000 41,705,000
Outstanding at
quarter end 49,797,000 35,666,000 49,797,000 35,666,000
(a) Shares used to compute loss per common share for 2004 have been
restated to reflect the effect of the rights offering completed in
2004.
- --------------------------------------------
Note: These statements are unaudited and subject to year-end
adjustments.
Consolidated Earnings
Milacron Inc. and Subsidiaries
Second Quarter 2005
- ----------------------------------------------------------------------
(In millions, except per-share Three Months Ended Six Months Ended
data) June 30, June 30,
----------------- ----------------
2005 2004 2005 2004
- ----------------------------------------------------- ----------------
Sales $ 208.8 $ 191.7 $ 401.1 $ 380.6
Cost of products sold 171.0 156.2 331.1 312.3
-------- -------- ------- --------
Manufacturing margins 37.8 35.5 70.0 68.3
Percent of sales 18.1% 18.5% 17.5% 17.9%
Other costs and expenses
Selling and administrative 33.7 30.8 67.2 61.7
Refinancing costs (a) - 14.6 - 21.0
Restructuring costs (b) 0.3 1.7 0.7 2.8
Other (income) expense - net 0.2 (0.1) (0.8) 1.3
-------- -------- ------- -------
Total other costs and
expenses 34.2 47.0 67.1 86.8
-------- -------- ------- -------
Operating earnings (loss) 3.6 (11.5) 2.9 (18.5)
Interest expense - net (c) (7.0) (15.3) (15.2) (23.2)
-------- -------- ------- -------
Loss from continuing operations
before income taxes (3.4) (26.8) (12.3) (41.7)
Provision for income taxes 1.0 1.1 1.2 2.2
-------- ------- ------- -------
Loss from continuing operations (4.4) (27.9) (13.5) (43.9)
Discontinued operations - net of
income taxes (d) 0.6 0.1 0.6 (0.5)
-------- ------- ------- -------
Net loss $ (3.8) $ (27.8) $ (12.9) $ (44.4)
======= ======== ======= ========
Loss per common share - basic and
diluted (e)
Continuing operations $ (0.12) $ (0.60) $ (0.34) $ (1.06)
Discontinued operations 0.01 - 0.01 (0.01)
-------- -------- ------- --------
Net loss $ (0.11) $ (0.60) $ (0.33) $ (1.07)
======== ======== ======== ========
(a) In the first quarter of 2004, represents costs incurred in
pursuing various alternatives to the company's March 12, 2004
refinancing of $200 million of debt and other obligations. In the
second quarter, represents costs that resulted from the
refinancing and recapitalization of the company.
(b) Represents costs related to initiatives to reduce operating and
administrative costs.
(c) In the second quarter of 2004, includes $6.4 million for the
write-off of a financial asset related to a beneficial conversion
feature that allowed the holders of convertible debt issued on
March 12, 2004 to acquire common shares on April 15, 2004 at $2.00
per share.
(d) In 2005, represents adjustments of reserves related to prior
divestitures. In 2004, reflects the presentation of Grinding
Wheels as a discontinued operation.
(e) The number of shares used to compute loss per common share data
for 2004 have been restated to reflect the effect of the 2004
rights offering which allowed shareholders to purchase additional
shares at a discounted price of $2.00 per share.
- -----------------------------------------------------
Note: These statements are unaudited and subject to year-end
adjustments.
Consolidated Balance Sheets
Milacron Inc. and Subsidiaries
Second Quarter 2005
- ----------------------------------------------------------------------
(In millions) June 30, June 30,
2005 2004
- ----------------------------------------------------------------------
Assets
Cash and cash equivalents $ 37.4 $ 42.0
Notes and accounts receivable-net 127.3 124.7
Inventories (a) 159.6 147.2
Other current assets 46.7 51.0
---------- ---------
Total current assets 371.0 364.9
Property, plant and equipment - net 116.0 131.4
Goodwill 83.8 83.1
Other noncurrent assets 111.6 120.7
---------- ---------
Total assets $ 682.4 $ 700.1
========== =========
Liabilities and shareholders' equity
Short-term borrowings and long-term debt due
within one year (b) $ 3.4 $ 6.7
Trade accounts payable and advance billings
and deposits 93.8 87.0
Accrued and other current liabilities 86.7 109.2
---------- ---------
Total current liabilities 183.9 202.9
Long-term accrued liabilities 243.5 229.8
Long-term debt 234.4 236.2
Shareholders' equity 20.6 31.2
---------- ---------
Total liabilities and shareholders'
equity $ 682.4 $ 700.1
========== =========
(a) The amount for 2004 has been restated due to a change in the
method of valuing certain inventories from the LIFO method to the
FIFO method.
(b) No borrowings were drawn against the revolving credit facility in
2005 or 2004. Outstanding letters of credit were $10.8 million in
2005 and $21.4 million in 2004.
- --------------------------------------------
Note: These statements are unaudited and subject to year-end
adjustments.
Consolidated Cash Flows
Milacron Inc. and Subsidiaries
Second Quarter 2005
- ----------------------------------------------------------------------
(In millions) Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2005 2004 2005 2004
- ---------------------------------------------------- ----------------
Increase (decrease) in cash and cash
equivalents
Operating activities cash flows
Net Loss $(3.8) $ (27.8) $(12.9) $ (44.4)
Discontinued operations - net of
income taxes (0.6) (0.1) (0.6) 0.5
Depreciation and amortization 4.6 5.1 9.1 10.4
Refinancing costs - 14.6 - 21.0
Restructuring costs 0.3 1.7 0.7 2.8
Working capital changes
Notes and accounts
receivable (a) (1.9) (1.6) 3.3 (31.6)
Inventories (2.4) 0.8 (11.4) 0.9
Other current assets (0.6) 5.1 2.0 (5.7)
Trade accounts payable 2.5 5.5 (2.1) 3.4
Other current liabilities (7.5) (8.6) (6.3) (8.7)
Deferred income taxes and other
- net 6.7 1.4 9.3 5.3
----- ------- ------ -------
Net cash used by operating
activities (2.7) (3.9) (8.9) (46.1)
Investing activities cash flows
Capital expenditures (1.8) (1.4) (3.3) (2.9)
Divestiture - 8.0 - 8.0
Other - net 1.9 (0.1) 2.1 0.2
----- ------- ------ -------
Net cash provided (used) by
investing activities 0.1 6.5 (1.2) 5.3
Financing activities cash flows
Issuance of long-term debt - 219.8 - 219.8
Repayments of long-term debt (0.4) (145.2) (4.2) (260.6)
Increase (decrease) in short-
term borrowings (0.3) (82.1) (10.5) 58.3
Debt issuance costs - (13.6) (0.6) (21.9)
Costs of 2004 rights offering - - (1.1) -
Dividends paid (1.5) (0.2) (3.1) (0.2)
----- ------- ------ -------
Net cash used by financing
activities (2.2) (21.3) (19.5) (4.6)
Effect of exchange rate
fluctuations on cash
and cash equivalents (1.5) (0.6) (2.2) (1.2)
Cash flows related to discontinued
operations - (0.7) - (4.2)
----- ------- ------ -------
Decrease in cash and cash
equivalents (6.3) (20.0) (31.8) (50.8)
Cash and cash equivalents at
beginning of period 43.7 62.0 69.2 92.8
------ ------- ------- -------
Cash and cash equivalents at end of
period $37.4 $ 42.0 $ 37.4 $ 42.0
===== ======= ====== =======
(a) In the six months ended June 30,2004, includes $33 million
representing the effect of the repayment of the amounts that were
previously sold on the receivables sale program.
- ----------------------------------------------------
Note: These statements are unaudited and subject to year-end
adjustments.
Segment and Supplemental Information
Milacron Inc. and Subsidiaries
Second Quarter 2005
- ----------------------------------------------------------------------
(In millions) Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2005 2004 (a) 2005 2004 (a)
- --------------------------------------------------- ----------------
Machinery technologies
North America
Sales $ 95.4 $ 83.2 $182.5 $ 160.5
Operating cash flow (b) 6.5 5.3 10.0 6.7
Segment earnings 4.9 3.4 6.8 2.8
Percent of sales 5.1% 4.1% 3.7% 1.7%
New orders 100.7 87.2 195.6 166.3
Machinery technologies
Europe
Sales $ 41.5 $ 42.4 $ 75.8 $ 84.9
Operating cash flow (b) 0.6 2.3 (0.6) 4.5
Segment earnings (loss) (0.5) 1.3 (2.7) 2.4
Percent of sales -1.2% 3.1% -3.6% 2.8%
New orders 42.7 45.7 78.1 85.7
Mold technologies
Sales $ 44.4 $ 39.9 $ 88.6 $ 83.2
Operating cash flow (b) 2.1 1.5 5.8 4.5
Segment earnings (loss) 0.7 (0.1) 3.0 1.3
Percent of sales 1.6% -0.3% 3.4% 1.6%
New orders 43.4 40.5 88.5 83.5
Eliminations
Sales $ (0.6) $ (1.5) $ (0.9) $ (1.9)
New orders (0.5) (1.0) (0.9) (2.3)
Total plastics
technologies
Sales $180.7 $ 164.0 $346.0 $ 326.7
Operating cash flow (b) 9.2 9.1 15.2 15.7
Segment earnings 5.1 4.6 7.1 6.5
Percent of sales 2.8% 2.8% 2.1% 2.0%
New orders 186.3 172.4 361.3 333.2
Industrial fluids
Sales $ 28.1 $ 27.7 $ 55.1 $ 53.9
Operating cash flow (b) 2.4 3.9 4.3 6.9
Segment earnings 1.9 3.4 3.3 5.9
Percent of sales 6.8% 12.3% 6.0% 10.9%
New orders 28.2 27.8 55.2 54.0
Total continuing
operations
Sales $208.8 $ 191.7 $401.1 $ 380.6
Operating cash flow (b) 8.5 9.9 12.7 15.7
Segment earnings 7.0 8.0 10.4 12.4
Refinancing costs (c) - (14.6) - (21.0)
Restructuring costs (d) (0.3) (1.7) (0.7) (2.8)
Corporate expenses (3.0) (2.9) (6.5) (6.2)
Other unallocated
expenses (e) (0.1) (0.3) (0.3) (0.9)
------ -------- ------ --------
Operating earnings
(loss) 3.6 (11.5) 2.9 (18.5)
Percent of sales 1.7% -6.0% 0.7% -4.9%
New orders 214.5 200.2 416.5 387.2
Ending backlog 99.2 97.7 99.2 97.7
(a) In 2004, reflects the presentation of Grinding Wheels as a
discontinued operation.
(b) Represents EBITDA (earnings before interest, income taxes,
depreciation and amortization) before refinancing costs and
restructuring costs.
(c) In the first quarter of 2004, represents costs incurred in
pursuing various alternatives to the company's March 12, 2004
refinancing of $200 million of debt and other obligations. In the
second quarter, represents costs that resulted from the
refinancing and recapitalization of the company.
(d) Represents costs related to initiatives to reduce operating and
administrative costs.
(e) Other unallocated expenses include financing costs including costs
related to the sale of accounts receivable prior to March 12,
2004.
- ----------------------------------------
Note: These statements are unaudited and subject to year-end
adjustments.
Reconciliation of Earnings to Operating Cash Flows
Milacron Inc. and Subsidiaries
Second Quarter 2005
- ----------------------------------------------------------------------
(In millions) Three Months Six Months
Ended Ended
June 30, June 30,
-------------- ---------------
2005 2004 2005 2004
- ---------------------------------------------------- ---------------
Machinery technologies North America
Segment earnings $ 4.9 $ 3.4 $ 6.8 $ 2.8
Depreciation and amortization 1.6 1.9 3.2 3.9
----- ------ ------ ------
Operating cash flow 6.5 5.3 10.0 6.7
Machinery technologies Europe
Segment earnings (loss) $(0.5) $ 1.3 $ (2.7) $ 2.4
Depreciation and amortization 1.1 1.0 2.1 2.1
----- ------ ------ ------
Operating cash flow 0.6 2.3 (0.6) 4.5
Mold technologies
Segment earnings (loss) $ 0.7 $ (0.1) $ 3.0 $ 1.3
Depreciation and amortization 1.4 1.6 2.8 3.2
----- ------ ------ ------
Operating cash flow 2.1 1.5 5.8 4.5
Total plastics technologies
Segment earnings $ 5.1 $ 4.6 $ 7.1 $ 6.5
Depreciation and amortization 4.1 4.5 8.1 9.2
----- ------ ------ ------
Operating cash flow 9.2 9.1 15.2 15.7
Industrial fluids
Segment earnings $ 1.9 $ 3.4 $ 3.3 $ 5.9
Depreciation and amortization 0.5 0.5 1.0 1.0
----- ------ ------ ------
Operating cash flow 2.4 3.9 4.3 6.9
Total continuing operations
Net Loss $(3.8) $(27.8) $(12.9) $(44.4)
Discontinued operations - net of
income taxes (a) (0.6) (0.1) (0.6) 0.5
Provision for income taxes 1.0 1.1 1.2 2.2
Interest expense - net (b) 7.0 15.3 15.2 23.2
Refinancing costs (c) - 14.6 - 21.0
Restructuring costs (d) 0.3 1.7 0.7 2.8
Depreciation and amortization 4.6 5.1 9.1 10.4
----- ------ ------ ------
Operating cash flow $ 8.5 $ 9.9 $ 12.7 $ 15.7
===== ====== ====== ======
(a) In 2005, represents adjustments of reserves related to prior
divestitures. In 2004, reflects the presentation of Grinding
Wheels as a discontinued operation.
(b) In the second quarter of 2004, includes $6.4 million for the
write-off of a financial asset related to a beneficial conversion
feature that allowed the holders of convertible debt issued on
March 12, 2004 to acquire common shares on April 15, 2004 at $2.00
per share.
(c) In the first quarter of 2004, represents costs incurred in
pursuing various alternatives to the company's March 12, 2004
refinancing of $200 million of debt and other obligations. In the
second quarter, represents costs that resulted from the
refinancing and recapitalization of the company.
(d) Represents costs related to initiatives to reduce operating and
administrative costs.
- -----------------------------------------------------
Note: These statements are unaudited and subject to year-end
adjustments.
Calculation of Primary Working Capital as a Percentage of Sales
Milacron Inc. and Subsidiaries
Second Quarter 2005
- ----------------------------------------------------------------------
(In millions) June 30, March 31,
2005 2005
- ----------------------------------------------------------------------
Total current assets $ 371.0 $ 379.6
Total current liabilities (183.9) (191.8)
------- -------
Working capital 187.1 187.8
Deduct:
Cash and cash equivalents (37.4) (43.7)
Notes receivable (6.7) (6.3)
Other current assets (46.7) (46.5)
Add:
Accounts receivable sold 4.9 4.1
Short-term borrowings and long-term debt due
within one year 3.4 3.7
Accrued and other current liabilities 86.7 99.2
------- -------
Primary working capital (a) $ 191.3 $ 198.3
======= =======
Sales for the four consecutive quarters ended
June 30, 2005 $ 794.7
=======
March 31, 2005 $ 777.6
=======
Primary working capital as a percentage of sales 24.1% 25.5%
======= =======
(a) Represents accounts receivable and inventories less trade accounts
payable and advance billings.
- -----------------------------------------------------
Note: These statements are unaudited and subject to year-end
adjustments.
Historical Information
- ----------------------------------------------------------------------
(In millions, except per-share data)
2003 (a)
----------------------------------------
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year
- ----------------------------------------------------------------------
Sales $190.2 $181.6 $170.2 $197.7 $739.7
Cost of products sold 158.2 149.6 138.6 157.4 603.8
Cost of products sold related
to restructuring - 3.8 - (0.5) 3.3
------- ------- ------- ------- --------
Total cost of products sold 158.2 153.4 138.6 156.9 607.1
------- ------- ------- ------- --------
Manufacturing margins 32.0 28.2 31.6 40.8 132.6
Other costs and expenses
Selling and administrative 30.2 34.3 30.7 33.8 129.0
Goodwill impairment charge - - 52.3 13.3 65.6
Refinancing costs - - 1.0 0.8 1.8
Restructuring costs 6.0 2.5 6.4 8.9 23.8
Other - net 0.7 1.6 (1.2) (1.4) (0.2)
------- ------- ------- ------- --------
Total other costs and
expenses 36.9 38.4 89.2 55.4 220.0
------- ------- ------- ------- --------
Operating earnings (loss) (4.9) (10.2) (57.6) (14.6) (87.4)
Interest expense - net (5.2) (5.8) (5.9) (6.1) (23.0)
------- ------- ------- ------- --------
Loss from continuing operations
before income taxes (10.1) (16.0) (63.5) (20.7) (110.4)
Provision (benefit) from
income taxes (2.5) 72.1 1.8 2.0 73.3
------- ------- ------- ------- --------
Loss from continuing
operations (7.6) (88.1) (65.3) (22.7) (183.7)
Discontinued operations - net
of income taxes
Loss from operations (b) (0.7) (3.0) (2.0) (0.7) (6.4)
Net gain (loss) on
divestitures - - - (0.8) (0.8)
------- ------- ------- ------- --------
Total discontinued
operations (0.7) (3.0) (2.0) (1.5) (7.2)
------- ------- ------- ------- --------
Net loss $(8.3) $(91.1) $(67.3) $(24.2) $(190.9)
======= ======= ======= ======= ========
Earnings (loss) per common share
Basic and diluted
Continuing operations $(0.21) $(2.41) $(1.78) $(0.62) $(5.02)
Discontinued operations (0.02) (0.08) (0.05) (0.04) (0.19)
------- ------- ------- ------- --------
Net loss $(0.23) $(2.49) $(1.83) $(0.66) $(5.21)
======= ======= ======= ======= ========
2004
---------------------------------------
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year
- ----------------------------------------------------------------------
Sales $188.9 $191.7 $180.5 $213.1 $774.2
Cost of products sold 156.1 156.2 144.6 169.7 626.6
Cost of products sold
related to
restructuring - - 1.7 (0.3) 1.4
------- ------- ------- ------- -------
Total cost of
products sold 156.1 156.2 146.3 169.4 628.0
------- ------- ------- ------- -------
Manufacturing
margins 32.8 35.5 34.2 43.7 146.2
Other costs and
expenses
Selling and
administrative 30.9 30.8 30.8 34.4 126.9
Goodwill
impairment charge - - - - -
Refinancing costs 6.4 14.6 0.4 - 21.4
Restructuring
costs 1.1 1.7 0.6 8.2 11.6
Other - net 1.4 (0.1) 0.5 1.1 2.9
------- ------- ------- ------- -------
Total other costs and
expenses 39.8 47.0 32.3 43.7 162.8
------- ------- ------- ------- -------
Operating earnings (loss) (7.0) (11.5) 1.9 - (16.6)
Interest expense - net (7.9) (15.3) (6.6) (7.5) (37.3)
------- ------- ------- ------- -------
Loss from continuing
operations before income
taxes (14.9) (26.8) (4.7) (7.5) (53.9)
Provision (benefit)
from income taxes 1.1 1.1 0.8 (5.6) (2.6)
------- ------- ------- ------- -------
Loss from continuing
operations (16.0) (27.9) (5.5) (1.9) (51.3)
Discontinued operations -
net of income taxes
Loss from operations (b) (0.6) (0.7) - - (1.3)
Net gain (loss) on
divestitures - 0.8 - - 0.8
------- ------- ------- ------- -------
Total discontinued
operations (0.6) 0.1 - - (0.5)
------- ------- ------- ------- -------
Net loss $(16.6) $(27.8) $(5.5) $(1.9) $(51.8)
======= ======= ======= ======= =======
Earnings (loss) per common
share
Basic and diluted
Continuing operations $(0.43) $(0.60) $(0.18) $(0.08) $(1.33)
Discontinued operations (0.02) - - - (0.02)
------- ------- ------- ------- -------
Net loss $(0.45) $(0.60) $(0.18) $(0.08) $(1.35)
======= ======= ======= ======= =======
2005
-----------------------
Qtr 1 Qtr 2 Year
- ----------------------------------------------------------------------
Sales $192.3 $208.8 $401.1
Cost of products sold 160.1 171.0 331.1
Cost of products sold related to restructuring - - -
------- ------- -------
Total cost of products sold 160.1 171.0 331.1
------- ------- -------
Manufacturing margins 32.2 37.8 70.0
Other costs and expenses
Selling and administrative 33.5 33.7 67.2
Goodwill impairment charge - - -
Refinancing costs - - -
Restructuring costs 0.4 0.3 0.7
Other - net (1.0) 0.2 (0.8)
------- ------- -------
Total other costs and expenses 32.9 34.2 67.1
------- ------- -------
Operating earnings (loss) (0.7) 3.6 2.9
Interest expense - net (8.2) (7.0) (15.2)
------- ------- -------
Loss from continuing operations
before income taxes (8.9) (3.4) (12.3)
Provision (benefit) from income taxes 0.2 1.0 1.2
------- ------- -------
Loss from continuing operations (9.1) (4.4) (13.5)
Discontinued operations - net of income taxes
Loss from operations (b) - - -
Net gain (loss) on divestitures - 0.6 0.6
------- ------- -------
Total discontinued operations - 0.6 0.6
------- ------- -------
Net loss $(9.1) $(3.8) $(12.9)
======= ======= =======
Earnings (loss) per common share
Basic and diluted
Continuing operations $(0.22) $(0.12) $(0.34)
Discontinued operations - 0.01 0.01
------- ------- -------
Net loss $(0.22) $(0.11) $(0.33)
======= ======= =======
(a) In the fourth quarter of 2004, the company elected to change its
method of accounting for certain inventories from the LIFO method
to the FIFO method, retroactive to the beginning of the year.
Financial results for 2003 have been restated to conform to the
2004 presentation. The effect was to increase net earnings by $.8
million in 2003.
(b) Reflects the presentation of Grinding Wheels and Round Tools as
discontinued operations.
Historical Segment and Supplemental Information
- ----------------------------------------------------------------------
(In Millions)
2003 (a)
---------------------------------------
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year
- ----------------------------------------------------------------------
Machinery technologies North
America
Sales $88.3 $74.7 $71.6 $86.6 $321.2
Operating cash flow (b) 4.6 0.8 3.2 8.2 16.8
Segment earnings (loss) (a) 2.1 (1.4) 1.3 6.1 8.1
New orders 84.9 83.5 74.4 82.0 324.8
Machinery technologies Europe
Sales $35.0 $38.9 $33.4 $43.7 $151.0
Operating cash flow (b) 0.3 (0.8) 0.6 2.4 2.5
Segment earnings (loss) (0.7) (1.8) (0.4) 1.5 (1.4)
New orders 33.3 38.8 36.9 44.5 153.5
Mold technologies
Sales $44.6 $43.0 $39.1 $42.0 $168.7
Operating cash flow (b) 2.0 1.8 1.8 2.9 8.5
Segment earnings (loss) 0.3 0.1 0.1 1.3 1.8
New orders 44.7 42.5 39.4 42.1 168.7
Eliminations
Sales $(3.0) $(1.3) $(0.3) $(0.8) $(5.4)
New orders (1.2) (1.4) (0.7) (1.0) (4.3)
Total plastics technologies
Sales $164.9 $155.3 $143.8 $171.5 $635.5
Operating cash flow (b) 6.9 1.8 5.6 13.5 27.8
Segment earnings (loss) (a) 1.7 (3.1) 1.0 8.9 8.5
New orders 161.7 163.4 150.0 167.6 642.7
Industrial
fluids
Sales $25.3 $26.3 $26.4 $26.2 $104.2
Operating cash flow (b) 4.0 4.2 5.2 4.3 17.7
Segment earnings 3.5 3.7 4.8 3.7 15.7
New orders 25.3 26.3 26.4 26.3 104.3
Total continuing operations (c)
Sales $190.2 $181.6 $170.2 $197.7 $739.7
Operating cash flow (b) 6.7 1.7 7.2 13.3 28.8
Segment earnings (a) 5.2 0.6 5.8 12.6 24.2
Goodwill impairment charges
(d) - - (52.3) (13.3) (65.6)
Refinancing costs (e) - - (1.0) (0.8) (1.8)
Restructuring costs (f) (6.0) (6.3) (6.4) (8.4) (27.1)
Corporate expenses (3.5) (3.7) (3.1) (4.0) (14.3)
Other unallocated expenses
(g) (0.8) (0.7) (0.6) (0.7) (2.8)
------- ------- ------- ------- -------
Operating earnings (loss) (5.1) (10.1) (57.6) (14.6) (87.4)
Percent of sales -2.7% -5.7% -34.1% -7.8% -11.8%
New orders 187.0 189.7 176.4 193.9 747.0
Ending backlog 74.7 85.4 91.7 92.0 92.0
2004
---------------------------------------
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year
- ----------------------------------------------------------------------
Machinery technologies North
America
Sales $77.3 $83.2 $77.2 $96.7 $334.4
Operating cash flow (b) 1.4 5.3 5.9 10.8 23.4
Segment earnings (loss) (a) (0.6) 3.4 4.1 9.1 16.0
New orders 79.1 87.2 80.3 90.5 337.1
Machinery technologies Europe
Sales $42.5 $42.4 $37.5 $44.6 $167.0
Operating cash flow (b) 2.2 2.3 0.8 0.8 6.1
Segment earnings (loss) 1.1 1.3 (0.3) (0.2) 1.9
New orders 40.0 45.7 36.3 33.0 155.0
Mold
technologies
Sales $43.3 $39.9 $39.6 $44.3 $167.1
Operating cash flow (b) 3.0 1.5 2.7 3.8 11.0
Segment earnings (loss) 1.4 (0.1) 1.1 1.9 4.3
New orders 43.0 40.5 39.5 44.8 167.8
Eliminations
Sales $(0.4) $(1.5) $(0.4) $(1.0) $(3.3)
New orders (1.3) (1.0) (0.2) (0.1) (2.6)
Total plastics technologies
Sales $162.7 $164.0 $153.9 $184.6 $665.2
Operating cash flow (b) 6.6 9.1 9.4 15.4 40.5
Segment earnings (loss) (a) 1.9 4.6 4.9 10.8 22.2
New orders 160.8 172.4 155.9 168.2 657.3
Industrial
fluids
Sales $26.2 $27.7 $26.6 $28.5 $109.0
Operating cash flow (b) 3.0 3.9 3.3 0.8 11.0
Segment earnings 2.5 3.4 2.8 0.5 9.2
New orders 26.2 27.8 26.6 28.5 109.1
Total continuing operations (c)
Sales $188.9 $191.7 $180.5 $213.1 $774.2
Operating cash flow (b) 5.8 9.9 9.6 12.8 38.1
Segment earnings (a) 4.4 8.0 7.7 11.3 31.4
Goodwill impairment charges (d) - - - - -
Refinancing costs (e) (6.4) (14.6) (0.4) - (21.4)
Restructuring costs (f) (1.1) (1.7) (2.3) (7.9) (13.0)
Corporate expenses (3.3) (2.9) (2.6) (3.1) (11.9)
Other unallocated expenses (g) (0.6) (0.3) (0.5) (0.3) (1.7)
------- ------- ------- ------- -------
Operating earnings (loss) (7.0) (11.5) 1.9 - (16.6)
Percent of sales -3.7% -6.0% 1.1% 0.7% -2.1%
New orders 187.0 200.2 182.5 196.7 766.4
Ending backlog 89.5 97.7 100.1 87.3 87.3
2005
-----------------------
Qtr 1 Qtr 2 Year
- ----------------------------------------------------------------------
Machinery technologies North America
Sales $87.1 $95.4 $182.5
Operating cash flow (b) 3.5 6.5 10.0
Segment earnings (loss) (a) 1.9 4.9 6.8
New orders 94.9 100.7 195.6
Machinery technologies Europe
Sales $34.3 $41.5 $75.8
Operating cash flow (b) (1.2) 0.6 (0.6)
Segment earnings (loss) (2.2) (0.5) (2.7)
New orders 35.4 42.7 78.1
Mold technologies
Sales $44.2 $44.4 $88.6
Operating cash flow (b) 3.7 2.1 5.8
Segment earnings (loss) 2.3 0.7 3.0
New orders 45.1 43.4 88.5
Eliminations
Sales $(0.3) $(0.6) $(0.9)
New orders (0.4) (0.5) (0.9)
Total plastics technologies
Sales $165.3 $180.7 $346.0
Operating cash flow (b) 6.0 9.2 15.2
Segment earnings (loss) (a) 2.0 5.1 7.1
New orders 175.0 186.3 361.3
Industrial fluids
Sales $27.0 $28.1 $55.1
Operating cash flow (b) 1.9 2.4 4.3
Segment earnings 1.4 1.9 3.3
New orders 27.0 28.2 55.2
Total continuing operations (c)
Sales $192.3 $208.8 $401.1
Operating cash flow (b) 4.2 8.5 12.7
Segment earnings (a) 3.4 7.0 10.4
Goodwill impairment charges (d) - - -
Refinancing costs (e) - - -
Restructuring costs (f) (0.4) (0.3) (0.7)
Corporate expenses (3.5) (3.0) (6.5)
Other unallocated expenses (g) (0.2) (0.1) (0.3)
-----------------------
Operating earnings (loss) (0.7) 3.6 2.9
Percent of sales -0.4% 1.7% 0.7%
New orders 202.0 214.5 416.5
Ending backlog 96.0 99.2 99.2
(a) In the fourth quarter of 2004, the company elected to change its
method of accounting for certain inventories from the LIFO method
to the FIFO method, retroactive to the beginning of the year.
Financial results for 2003 have been restated to conform to the
2004 presentation.
(b) Represents EBITDA (earnings before interest, income taxes,
depreciation and amortization) before refinancing costs and
restructuring costs.
(c) Reflects the presentation of Grinding Wheels and Round Tools as
discontinued operations.
(d) Represents charges to adjust the carrying value of goodwill in the
mold technologies segment.
(e) In 2003 and the first quarter of 2004, represents costs incurred
in pursuing various alternatives to the company's March 12, 2004
refinancing of $200 million in debt and other obligations. In the
second and third quarters of 2004, represents costs that resulted
from the refinancing and recapitalization of the company.
(f) Represents costs related to initiatives to reduce operating and
administrative costs.
(g) Other unallocated expenses include financing costs including costs
related to the sale of accounts receivable prior to March 12,
2004.
Updated: August 1, 2005
Note: The amounts below are approximate working estimates, around
which an even wider range of numbers could be used for financial
modeling purposes. These estimates, by their nature, involve a
great number of risks and uncertainties. Actual results may differ
as these risks and uncertainties could significantly impact the
company's markets, products, and operations. For further
information please refer to the Cautionary Statement included in
Item 2 of the company's most recent Form 10-Q on file with the
Securities and Exchange Commission.
Quarter Ended Year Ended
------------- ----------
(In millions) Sep. 30, Dec. 31,
2005 2005
- ----------------------------------------------------------------------
Projected profit & loss items
Sales (1) $197 - 211 $815 - 840
Total plastics technologies 170 - 180 705 - 720
Industrial fluids 27 - 31 110 - 120
Segment earnings
Total plastics technologies 3 - 5 17 - 23
Industrial fluids 1 - 3 7 - 10
Corporate expenses 3 - 4 12 - 13
Interest expense - net 7 - 8 29 - 31
Provision for income taxes 1 3 - 4
Restructuring costs less than 1 1
Earnings (loss) after tax (2) (10) - (3) (24) - (14)
Average shares outstanding - basic 47 - 48 47 - 48
Average shares outstanding - diluted 104 - 105 100 - 102
Projected cash flow & balance sheet items
Depreciation 4 - 5 18 - 20
Primary working capital - increase
(decrease) (3) (5) - 0 0 - 10
Cash pension contribution less than 1 2 - 3
Capital expenditures 5 - 7 12 - 14
Cash interest less than 1 27 - 28
Cash dividends 1.6 6
Cash taxes less than 1 less than 1
Cash restructuring less than 1 less than 1
1 Sales Includes increased sales over the same periods a year ago due
to the strengthening of the Euro of approximately $1 million and
$4 million in quarter ended Sept. 30, 2005, and year ended Dec.
31, 2005, respectively.
2 Earnings (loss) after tax Includes $3.2 million and $12.3 million of
expenses related to the U.S defined benefit plan in quarter ended
Sep. 30, 2005 and year ended Dec. 31, 2005, respectively (versus
$1.6 million and $6.4 million in quarter ended Sep. 30, 2004 and
year ended Dec. 31 2004, respectively).
Includes $1.2 million and $6.2 million of expenses related to
Sarbanes-Oxley compliance in quarter ended Sep. 30, 2005 and year
ended Dec. 31, 2005, respectively (versus $0.6 million and $2.0
million in quarter ended Sep. 30, 2004 and year ended Dec. 31,
2004, respectively).
3 Primary working capital = inventory + receivables - trade payables -
advance billings
Comments & explanations
Assumes quarter ended Jun. 30, 2005 foreign exchange rates (e.g.,
USD/EUR = 1.2124), and no further acquisitions, divestitures or
restructuring initiatives.
CONTACT: Milacron Inc.
Al Beaupre, 513-487-5918