Milacron's Q4 Loss of $.32 Per Share Before Charges in Line with Expectations; Cash Flow Very Strong in Quarter

Net Loss of $.66 Per Share Includes $.34 in Restructuring Charges

CINCINNATI, OHIO, February 12, 2002...Milacron Inc. (NYSE: MZ) today reported sales and new orders in the fourth quarter of 2001 comparable to those of the prior quarter, suggesting that the manufacturing recession in North America may have leveled off. The fourth-quarter loss from operations, excluding restructuring charges, was in line with the most recent guidance issued by the company and with analysts’ consensus estimates. Despite the loss and cash costs of restructuring, significant inventory reductions led to positive cash generation in the quarter.

Fourth Quarter 2001
Sales in the fourth quarter of 2001 were $306 million, down 21% from $389 million in the fourth quarter of 2000. New orders were $286 million, off 23%. The net loss of $21.9 million, or $.66 per share, included $11.3 million, or $.34 per share, in restructuring charges related to plant closings and employee reductions. Excluding restructuring charges, Milacron lost $10.6 million, or $.32 per share, in the quarter. In the fourth quarter of 2000, the company had net earnings of $22.0 million, or $.65 per share.

During the fourth quarter, Milacron reduced inventory by $52 million, resulting in a positive net cash flow from operations of $42 million and boosting its cash position to $110 million.

“All of our operations continued to be affected by severely depressed market conditions in North America as well as economic softening in Europe and parts of Asia,” said Ronald D. Brown, chairman, president and chief executive officer. “Facing these highly challenging conditions, people in both of our operating groups did an outstanding job of managing working capital and generating strong cash flow in the quarter,” he said.

Year 2001
For the year 2001, Milacron’s sales of $1.263 billion and new orders of $1.224 billion were each down about 20% from 2000 levels. The net loss for the year was $35.7 million, or $1.08 per share, of which $19.1 million, or $.57 per share, represented restructuring charges. Excluding restructuring charges, Milacron lost $16.6 million, or $.51 per share, in 2001. This compared to net earnings of $72.3 million, or $2.06 per share, in 2000.

“In response to these severe recessionary conditions and to enhance future profitability, we are taking major actions aimed at streamlining our overhead and reducing our overall cost structure,” Brown said. “At the same time, while continuing to emphasize innovative product development, we are aggressively implementing Six Sigma and lean manufacturing techniques throughout the company to improve operational excellence. We are determined to emerge from this downturn stronger and better positioned than ever to serve our customers,” he said.

Segment Results
Plastics Technologies Sales in the fourth quarter of 2001 were $165 million, down 26% from $222 million a year ago. New orders were $153 million, off 25%. Due in great part to major sales declines in its machinery businesses, the group incurred an operating loss of $10.2 million. This loss included a $4.6-million write-down of certain assets associated with the consolidation of European blow molding manufacturing operations. Operating earnings in the year-ago quarter were $22.8 million. For the year 2001, plastics technologies sales were $662 million, down 24% from 2000, while orders fell 25% to $629 million. For the year, the group’s operating loss was $9.9 million compared to operating earnings of $97.0 million in 2000.

Metalworking Technologies Sales in the quarter were $140 million, off 16% from $167 million in the year-ago quarter, and new orders declined 21% to $133 million. The group posted a slight operating loss of $1.1 million in the quarter, compared to operating earnings of $21.1 million in the year-ago period. For 2001, the group’s sales were $600 million, down 15% from 2000, while new orders fell 17% to $594 million. Operating earnings for the year fell to $19.9 million from $70.7 million a year ago.

Restructuring and Cost Cutting
Milacron is in the midst of a major restructuring program that specifies the closing of 14 small manufacturing plants and the elimination of about 1,150 jobs. Having begun this restructuring in the third quarter of 2001, the company significantly expanded the program in response to weakening markets in Europe and expects to complete the bulk of the actions by mid 2002. Charges for the entire program are projected to total approximately $38 million pre-tax, while cash costs are estimated at about $32 million. All told, the plan is expected to generate cost savings of more than $40 million annually.

Fourth-quarter restructuring activities included four plant closings, the elimination of more than 300 positions and cash costs of $9 million. For the year 2001, the restructuring program resulted in six plant closings, the elimination of a total of 480 jobs and cash costs of $10.5 million.

This restructuring program followed earlier cost-cutting measures taken in the first half of 2001, which included the elimination of 750 positions in North America and the consolidation of blow molding machine manufacturing operations in Europe.

Estimated Charge for Goodwill Impairment
Beginning in 2002, Milacron will apply new accounting rules for goodwill in accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.” While the full evaluation has yet to be completed, preliminary estimates of charges for goodwill impairment range from $180 million to $210 million before tax, or $140 million to $165 million after tax. The company intends to announce the specific charge, effective January 1, 2002, by mid year.

Outlook
“We believe the manufacturing recession in North America is beginning to bottom out,” C.E.O. Ron Brown said. “We are encouraged that, even though most markets remain depressed, the rate of decline has slowed considerably and several leading indicators have turned positive. On the other hand, we are concerned about further softening in Europe.

“Clearly, 2002 will be a challenging year. While we expect to show sequential quarter-to-quarter improvement, we anticipate continued operating losses in the first half. Looking further ahead, it’s important to realize that even if the North American economy begins to recover in mid year, many of Milacron’s businesses, especially plastics machinery, would probably not see significant increases in demand until 2003. So, for 2002 as a whole, assuming some gradual improvement in economic conditions, combined with the successful execution of our cost-cutting and restructuring plans, we believe we can return to profitability in the second half and break even for the year, excluding nonrecurring charges,” Brown said.

“I’m proud of the progress we’re making in improving our competitive position in a very difficult environment. Through Six Sigma and lean manufacturing training and initiatives, we are accelerating the investment in our employees to develop the best talent in the industries we serve. And we will continue to create new products and services to better serve our customers. With these actions and our focus to drive cash through better working capital management, we feel confident that we can enhance shareholder value over the long term,” he said.

Financial Statements (MS Excel file)
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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.

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Milacron Inc. (NYSE: MZ) is a world leader in plastics processing and metalworking technologies with major manufacturing facilities in North America, Europe and Asia and 10,000 employees worldwide. Plastics technologies include injection molding machines, blow molding equipment, extrusion systems and wear items, mold bases, mold-making equipment and mold components, as well as aftermarket and MRO (maintenance, repair and operating) parts and services. Metalworking technologies include carbide metalcutting inserts, tool holders, carbide and high-speed steel round tools, metalworking fluids, grinding wheels, and carbide die and wear parts. For further information, visit the company’s web site, www.milacron.com, or call the toll-free investor hot line: 800-909-MILA (800-909-6452).

Note: To access the open investor conference call live on 2/12 at 2:00 p.m. EST, go to www.milacron.com or dial (913) 981-5508. For the conference call replay from 2/12 to 2/19, go to www.milacron.com or dial (719) 457-0820 – passcode # 714620.