Milacron Q2 Sales and Segment Earnings in Line with Guidance; Outlook Positive as New Orders Increase

CINCINNATI, OHIO, July 30, 2004...Milacron Inc. (NYSE: MZ) today reported a net loss of $27.8 million, or $0.64 per share, in the second quarter of 2004 on sales of $192 million. The loss included $14.6 million in refinancing costs and $1.7 million in restructuring costs, as well as a one-time non-cash writeoff which added $6.4 million to interest expense. In comparison, in the second quarter of 2003 the company had sales of $182 million and a net loss of $91.3 million, or $2.72 per share, which included $6.3 million in after-tax restructuring costs, a $3.0 million after-tax loss from discontinued operations and a $70.8 million writedown of deferred tax assets.

Second quarter 2004 sales and segment earnings were within the range of the guidance issued by Milacron in April. New orders in the second quarter of 2004 were $200 million, up 5% over the second quarter of 2003 and up 7% over the first quarter of this year, as the backlog of unshipped orders grew by $8 million. The company also reaffirmed its positive outlook for the rest of the year.

Before interest, taxes, restructuring and refinancing costs, earnings from continuing operations in the second quarter of 2004 improved significantly to a $4.8 million profit from a $4.0 million loss in the second quarter of 2003. (See reconciliation table.

Cash used by operating activities in the most recent quarter was $3.9 million, which included a $10.4 million annual interest payment on the company's Eurobonds, since retired. Milacron continued to reduce its primary working capital, cutting it to 21.8% of sales, down almost five full percentage points from 26.5% in the third quarter last year. A major contributor to this gain was the ongoing implementation of Lean manufacturing techniques, which led to higher year-over-year inventory turns in each of the company's operations.

"The second quarter was significant for Milacron in many respects," said Ronald D. Brown, chairman, president and chief executive officer. "Importantly, we completed major refinancing transactions that have provided us with a much stronger capital structure. Our new orders in the quarter exceeded $200 million for the first time in over three years. We completed the sale of our grinding wheel business, the last of our discontinued metalworking operations, and we concluded the bulk of our company-wide operational restructuring activities. This means we are now able to devote all our energies to what we are known for, namely providing our customers around the world with the best in technology and service."

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)  Stronger demand in several key markets - packaging, construction, automotive, medical and consumer goods - led to new orders of $87 million, up from $83 million in the second quarter of 2003, while sales rose to $83 million, up 11% over the same period last year.  This increased sales volume, together with cost-savings from restructuring actions and favorable one-time items of about $1 million, helped improve segment earnings, despite higher pension costs, to $3.4 million, compared to a segment loss of $1.6 million in the year-ago quarter.

Machinery Technologies-Europe  (machinery and related parts and services for injection molding and blow molding supplied from Europe)  Demand for Milacron's European-built machinery was primarily export driven and grew significantly, reflecting strength in packaging, consumer goods and medical markets.  Second quarter new orders in this segment were $46 million, an 18% jump over the second quarter of 2003, while sales rose 9% to $42 million.  Almost $2.5 million of the increases in new orders and sales were the result of favorable currency translation.  Helped by higher sales volumes and recent cost-cutting measures, segment earnings improved to $1.3 million compared to a loss of $1.8 million in the year-ago quarter.

Mold Technologies  (mold bases and related parts and services, as well as maintenance, repair and operating supplies for injection molding worldwide)  Sales in North America were relatively flat with those of the second quarter of 2003, but, despite higher insurance costs, profitability improved as a result of earlier restructuring measures.  Continued weakness in European mold-making markets, which have shown double-digit declines year to date in 2004, accounted for an overall drop in segment sales in the second quarter to $40 million from $43 million a year ago.  Also, highly competitive pricing in Europe precluded passing on increases in raw material costs, especially for steel.  As a consequence, this segment reported an operating loss of $0.1 million in the quarter, compared to operating earnings of $0.1 million in 2003.

Industrial Fluids  (water-based and oil-based coolants, lubricants and cleaners for metalcutting and metalforming operations worldwide)  Sales of $28 million were up from $26 million in the second quarter a year ago, reflecting strong auto production and increasing industrial activity in North America, as well as favorable currency translation of European sales.  Segment earnings declined to $3.4 million from $3.7 million a year ago, primarily as a result of higher insurance and pension costs.

Outlook

"Our outlook for 2004 remains positive, as the manufacturing sector of the economy continues to rebound," Brown said. "Capacity utilization rates of U.S. plastics processors reached 83.7% in June. This is the highest level in almost four years, which bodes well for our machinery businesses. Our backlog is up 14% from year-ago levels, our pipeline of probable new machine orders continues to grow and pricing is beginning to stabilize despite the somewhat dampening effect from an overhang of used machines that have recently come onto the market.

"Sales in our non-machinery businesses - plastics supplies, mold components and services, as well as industrial fluids - have also begun to pick up in North America, as many of our customers' end markets have begun to strengthen. While Western Europe is showing slow growth in 2004, Eastern European markets are expanding, and Asian markets, particularly China and India, continue to grow at a rapid pace. Our new business in these areas reflects that growth, validating our strategy to increase our presence in developing markets. Year to date, we've had sales in excess of $80 million outside our traditional U.S. and Western European markets, a double-digit increase over the first half of last year.

"As demand continues to grow, we are beginning to see some improvement in pricing for our products, which, on the whole, should offset rising raw material costs. Higher sales volumes in the second half of the year should also help us realize the full benefit of our recent restructuring actions and enable us to return to profitability in the fourth quarter," Brown concluded.

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-K 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 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).

Note: At 1 p.m. EDT on 7/30, 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 p.m. on 7/30 through midnight on 8/6 at www.milacron.com or dial-in at (719) 457-0820 or (888) 203-1112: access code 107530.