Milacron's Q1 Operating Results Show Year-Over-Year Improvement

CINCINNATI, OHIO, April 23, 2003...Milacron Inc. (NYSE: MZ) today reported continued progress in the first quarter of 2003 with stronger sales and new business levels as well as significant improvements in operating performance in the company’s machinery businesses in North America and Europe compared to the same period a year ago.

Sales and Earnings
First quarter 2003 sales of $190 million were up 20% versus a year ago, while new orders rose 10% to $187 million. Most of these improvements occurred in Milacron’s machinery businesses, in both North America and Europe, as spending by customers serving packaging, housewares, automotive and medical markets was significantly above year-ago levels, although about even with those of the fourth quarter of 2002. Favorable currency translation effects accounted for about half of the year-over-year sales and new order increases.

Boosted by successful cost-cutting and restructuring efforts as well as increased sales volumes, manufacturing margins in the quarter improved to 16.7% from 15.9%, despite a major negative swing in pension income compared to the first quarter of 2002. Including restructuring charges of $6 million, Milacron’s operating loss before interest and taxes was $5.1 million in the first quarter compared to a loss of $5.0 million a year ago. Results in the first quarter of 2003 had no benefit from royalty or pension income, which in the year-ago quarter were $4.5 million and $1.8 million, respectively. Operating earnings from continuing operations before restructuring charges were $0.9 million, compared to breakeven in 2002.

“We continue to build on the progress we made in 2002,” said Ronald D. Brown, chairman and chief executive officer. “Our improvement in margins and operating profit compared to the first quarter last year is a significant achievement, and it can be directly attributed to the hard work of our highly skilled people who have diligently executed major cost-cutting and efficiency-improvement programs for the past two years.”

Milacron’s net loss in the quarter of $8.3 million, or $.25 per share, included, on an after-tax basis, $4.8 million in restructuring charges and $0.7 million in losses from discontinued operations. This compared to a net loss of $200.8 million, or $6.01 per share, in the first quarter of 2002, which included a $187.7 million charge for goodwill impairment arising from the adoption of new accounting rules, as well as $3.1 million in after-tax restructuring costs and $6.1 million in losses from discontinued operations. Excluding restructuring and goodwill impairment charges, Milacron’s continuing operations narrowed their losses in the first quarter of 2003 to $2.8 million, down from $3.9 million a year ago.

Segment Results

Machinery Technologies-North America [machinery and related parts and services for injection molding, blow molding and extrusion supplied from North America and India]
New orders of $85 million in the first quarter were up 9% from a year ago, while sales of $88 million rose almost 30%. Increased orders were an indication of higher levels of spending in key markets, such as packaging, housewares, automotive and medical, compared to a year ago. Consolidation and rationalization efforts over the past several quarters helped this segment post $2.1 million in operating earnings excluding restructuring charges, up from $1.4 million in the year-ago quarter. In both quarters, this segment incurred $2.8 million in restructuring charges. The year-ago operating earnings, however, also included $4.5 million in royalty settlements.

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 quarter of $45 million were down $1 million. During the quarter, significant progress was made in implementing restructuring plans in both North America and Europe. As we closed operations and moved production to more efficient facilities, temporary inefficiencies led to a decline in operating earnings in the first quarter of 2003, to $0.3 million, excluding restructuring charges of $1.0 million. This compared to operating earnings of $2.5 million, excluding restructuring charges of $2.2 million, in the year-ago quarter.

Industrial Fluids [water-based and oil-based coolants, lubricants and cleaners for metalcutting and metalforming operations worldwide]
Sales of $25 million were up 12% from those of the first quarter a year ago thanks to increased business from automotive, appliances and industrial component markets, as well as favorable currency translation effects. Operating earnings fell slightly to $3.5 million from $3.8 million a year ago due to higher energy related costs.

Financial Flexibility
Milacron ended the first quarter with $82 million in cash. During the quarter the company made payments of approximately $24 million in post-closing adjustments associated with the divestitures of the company’s metalcutting tool businesses in 2002. Milacron expects to generate positive free cash flow through the remainder of 2003.

Milacron has no significant debt repayment obligations until March 15, 2004, at which time its revolving credit facility and $115 million of 8-3/8% public notes mature. The company continues to pursue a variety of available alternatives to refinance its short-term and long-term debt.

Outlook
“Given the seasonality of our businesses, we are likely to record a modest loss in the second quarter, comparable to that of the first quarter, but we expect to return to profitability in the second half of the year,” Brown said. “While we have noted recent signs of higher spending rates in some of our markets, it is unclear whether these increases will be sustained and lead to a strong recovery in the foreseeable future. Despite this uncertainty, however, Milacron remains committed to building on the progress we have made in the past several quarters. We will do so by focusing on our customers and by driving for operational excellence at all levels throughout our company,” he said.

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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 4,000 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).