Milacron Narrows Loss in Third Quarter

Sales and Orders Stabilized; Balance Sheet Strengthened

CINCINNATI, OHIO, November 7, 2002...Milacron Inc. (NYSE: MZ) today announced that its loss from continuing operations - plastics technologies and industrial fluids - narrowed to $3.4 million before restructuring charges in the third quarter, down from $7.3 million in the third quarter a year ago and from $5.9 million in the second quarter this year on relatively steady sales and orders. During the third quarter, the company also reduced its debt net of cash by more than $300 million.

Third Quarter Net Earnings
Milacron had third quarter net earnings of $14.5 million, or $0.43 per share, which included an after-tax gain of $29.4 million, or $0.88 per share, on the sale of its Valenite insert cutting tool subsidiary. This compared to a net loss of $18.4 million, or $0.55 per share, in the third quarter of 2001.

Third Quarter Results From Continuing Operations
New orders from continuing operations - plastics technologies and industrial fluids - in the third quarter were $179 million, essentially flat after currency translation effects with $175 million a year ago. Sales were $173 million versus $176 million in 2001. The loss from continuing operations before restructuring charges was $3.4 million, or $0.11 per share, in the third quarter of 2002, compared to a loss of $7.3 million, or $0.22 per share, in the third quarter a year ago.

After-tax restructuring charges for continuing operations were $1.1 million, or $0.03 per share, in the third quarter of 2002, compared to $3.2 million, or $0.09 per share, in the year-ago quarter. In accordance with newly adopted accounting rules, amortization of goodwill is excluded from earnings in 2002 but had the effect of reducing third-quarter 2001 earnings from continuing operations by $1.9 million, or $.06 per share, after tax.

“We had a number of significant accomplishments in the third quarter,” said Ronald D. Brown, chairman and chief executive officer. “We completed two major divestitures and used the cash proceeds to reduce our debt and strengthen our balance sheet. Positive effects from our recent restructuring actions were reflected in improved operating results. And, through intensified focus on Lean and working capital management, we continued to achieve positive free cash flow in a difficult environment,” he said.

Manufacturing margins in the third quarter of 2002 were 18.2%, a substantial improvement from year-ago levels. Operating cash flow or EBITDA (earnings before interest, taxes, depreciation and amortization) before restructuring costs also improved significantly to $5.5 million from a negative $0.1 million in the third quarter last year. For the first three quarters of 2002, EBITDA before restructuring costs totaled $14.9 million, while net cash provided by operations including cash restructuring costs exceeded $22 million.

Proceeds from divestitures and cash generated from operations were used to reduce Milacron’s total debt net of cash to $182 million from $488 million at the beginning of the quarter. The company ended the quarter with $114 million in cash and only $42 million of debt borrowed under its $110-million revolving credit facility.

Segment Results
Plastics Technologies - New orders in the quarter of $154 million were flat with $151 million a year ago after adjusting for currency translation. Sales of $149 million were down $3 million from the reported third quarter of 2001 and down $8 million after adjusting for currency translation. Shipments of injection molding machines and related parts and services held steady while there were declines in blow molding machines, and mold bases primarily in Europe. Helped by restructuring measures implemented over the past year, profitability improved considerably. On a pre-tax operating basis before restructuring charges, the segment earned $0.6 million compared to a loss of $9.5 million in the year-ago quarter.

Industrial Fluids - New orders and sales of $25 million were flat with those of the third quarter a year ago after adjusting for currency translation. Pre-tax operating earnings were $3.4 million. This compared to $5.5 million in the third quarter of 2001, which, however, included favorable metalworking group adjustments. Excluding these adjustments, operating earnings in the third quarter of 2002 were slightly higher than the year-ago levels.

Discontinued Operations
In August, Milacron sold its North American metalcutting insert tool business, Valenite, to Sandvik for $175 million and its European and Indian metalcutting tool businesses, Widia and Werkö, to Kennametal Inc. for €188 million. Both sale prices remain subject to post-closing adjustments and related transaction costs. Milacron’s round tool and grinding wheel operations have also been classified as “discontinued,” reflecting the company’s intention to find strategic solutions for those businesses in the near future. In the third quarter, the round tool and grinding wheel businesses had after-tax operating losses of $2.9 million, or $0.09 per share, on $18 million in sales. Combined after-tax losses in the quarter from all discontinued operations - Valenite, Widia, Werkö, round tools and grinding wheels - were $10.4 million, or $0.31 per share, on sales of $70 million.

Pension Plan Assets
Financial market declines have reduced the asset value of Milacron’s primary U.S. defined benefit plan and will likely result in a non-cash charge to equity in the fourth quarter, which, if measured as of September 30, would be approximately $90 million after tax. The charge will have no effect on 2002 net income. Given the plan’s lower asset value, Milacron expects little or no pension income in 2003, compared to approximately $9 million in 2002. At the plan’s current funding level, the company will not be required to make any cash contribution before 2004, and, based on current projections, the 2004 contribution required would be less than $10 million.

Estimated Charge for Goodwill Impairment
As previously announced, in accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” Milacron will take a charge for goodwill impairment in 2002. The charge is now estimated between $200 million and $210 million before tax, or $155 million to $165 million after tax. The company intends to announce the specific charge, which is retroactive to the beginning of 2002, when it releases fourth quarter results in early 2003.

Outlook
“We have yet to see convincing signs of a recovery in our markets,” Brown said. “On the other hand, there has been no further deterioration either, as order rates have generally stabilized for the past several quarters. We remain committed to returning Milacron to profitability, even at these low levels of demand. Through continued cost cutting and efficiency improvements we still expect to approach break-even in the fourth quarter.

“Looking to 2003, we face a number of obstacles. In addition to continued low levels of capital spending due to the lingering recession in the manufacturing sector, the stock market remains depressed by economic and political uncertainties worldwide, which has contributed to declines in pension income and increased insurance costs among other things. While we can’t control these macro factors, we will concentrate on what we can control. We are currently finalizing plans for further cost reductions and consolidation of our manufacturing operations. And we continue to focus on better serving our customers through new products, enhanced services and faster response times - all of which go hand in hand with improved operating efficiency. Given these measures and their expected benefits, but assuming no strong economic recovery in the near term, at this time we believe 2003 will be a break-even year for Milacron.

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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First incorporated in 1884, Milacron is a leading global supplier of plastics-processing technologies and industrial fluids, with about 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).