Milacron’s Q4 Sales and Earnings Improve; New Orders up 9%

CINCINNATI, OHIO, May 1, 2006...Milacron Inc. (NYSE: MZ), a leading global supplier of plastics-processing technologies and industrial fluids, reported a net loss of $9.6 million, or $0.25 per share, in the first quarter ended March 31, 2006. This compared to a net loss of $9.1 million, or $0.22 per share, in the first quarter of 2005, as the benefits of higher sales were offset by increased material prices and other costs. First-quarter manufacturing margins of 16.6% were essentially even with a year ago.

Sales for the first quarter were $202 million, up 5% over the first quarter last year, while new orders rose 11% to $225 million, the highest level since the fourth quarter of 2000.

During the quarter Milacron continued to improve its working capital management, cutting primary working capital requirements to 22.3% of sales from 25.5% in the first quarter of 2005 (see table).  This helped the company generate a positive $4.3 million in net cash provided by operations compared to a use of cash of $6.2 million in the year-ago quarter.

Cash on hand at the end of the quarter was $45 million, and the company had approximately $41 million available for borrowing under its asset-based revolving credit facility, which was undrawn at the end of the quarter.  As a result, liquidity (cash plus borrowing availability) grew to $86 million.

“While the first quarter is typically our weakest of the year, we are encouraged by the strong level of new orders, many of which reflect improved pricing,” said Ronald D. Brown, chairman, president and chief executive officer. “This is the result of the execution of our growth initiatives as well as continued market recovery. The investment we have been making in new products, our expansion into faster-growing markets, our focus on improving customer support and growing our aftermarket businesses are all beginning to pay off,” he said.

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) Growing demand for injection, blow molding and extrusion equipment boosted sales to $94 million, up 8% over the same period last year.  New orders rose 20% to $114 million, resulting in a buildup in backlog of products with improved pricing.  Segment earnings, however, declined slightly to $1.4 million versus $1.9 million in the year-ago quarter, as modestly better pricing was offset by higher costs for materials and the pursuit of certain strategic initiatives including expanded global distribution and new product development.

Machinery Technologies-Europe (machinery and related parts and services for injection molding and blow molding supplied from Europe) Demand in Western Europe showed signs of improvement for both injection molding and blow molding machinery, as first-quarter new orders in this segment rose 14% to $40 million from $35 million in the first quarter of 2005 and sales of $36 million were up 6% despite unfavorable currency translation effects.  In local currencies, orders and sales rose 23% and 15%, respectively.  Continued pricing pressure prevented this segment from recuperating material cost increases, resulting in an operating loss of $2.4 million compared to a loss of $2.2 million a year ago.

For the year 2005, this segment’s new orders were $153 million compared to $155 million in 2004, while sales fell to $150 million from $167 million in 2004. Driven primarily by lower sales volumes, the segment posted an operating loss of $4.9 million compared to earnings of $1.9 million a year ago.

Mold Technologies (mold bases and related parts and services, as well as maintenance, repair and operating supplies for injection molding worldwide)  Sales in the first quarter of $44 million, essentially even with those of a year ago, were sluggish and lower than anticipated. Continued pricing pressures in Western European markets held back operating performance and segment earnings declined to $1.9 million 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) Improved pricing in both North America and Western Europe helped boost sales to $30 million, up 11% over the first quarter of 2005, and also contributed to segment earnings of $1.9 million versus $1.4 million a year ago. The improvement in earnings was significant considering that the first quarter of 2005 included almost $1 million in income from a one-time litigation settlement.

Restructuring Progress

Milacron’s consolidation of its global mold technologies and European machinery technologies businesses, announced in November 2005, are on schedule. After extensive discussions with the union and works council regarding the company’s injection molding machine manufacturing operation in Germany, the parties agreed to a plan to restructure the business based on a rationalized global product portfolio. These actions will streamline the organization and reduce the overall cost structure, while allowing the company to work more closely with customers. The works council is working with management to ensure the long-term success of this operation by making several concessions, including a reduction of up to 90 employees. At the same time, Milacron’s mold technologies segment is proceeding with its consolidation efforts in both North America and Europe to remodel its business to bring lower-cost, high-quality products to its customers. As previously noted, in total the restructuring actions are expected to require a cash cost of approximately $13 million, spread over 2006 and the first half of 2007, and to generate annualized cost savings of about $15 million, of which $3 million to $4 million will be realized in late 2006.

Outlook

“We look forward to showcasing a great number of the new products we have been developing at the upcoming National Plastics Exposition and International Manufacturing Technologies Show in June and September, respectively,” Brown said.

“Our plastics machinery businesses, on a global basis, have been growing backlog with better priced products, so we expect to see operating earnings in these segments improve in the second quarter. The consolidation activities in our European machinery and mold technologies segments will result in a charge of approximately $9 million to $12 million in the second quarter but will benefit these businesses later in the year and more so in 2007 and beyond.  Our industrial fluids business is developing new products and expanding its distribution, which we believe will help increase sales and operating earnings throughout the year.  Overall, with 4% to 5% top-line growth reasonably achievable, we see 2006 shaping up as a better year for Milacron than 2005,” he said.

Investor Conference Call

Today 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 or 800-810-0924. A recording of the conference call will be available from 4:00 p.m. today through midnight May 8 on Milacron’s website or by phone: 719-457-0820 or 888-203-1112 and providing the access code: 3075284.

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).