Milacron’s Q2 Results in Line with Guidance; Improvement Expected in Second Half

Company Intends to Prepay Pension Obligation

CINCINNATI, OHIO, August 3, 2006...Milacron Inc. (NYSE: MZ), a leading global supplier of plastics-processing technologies and industrial fluids, today reported second-quarter results in line with its May 1 guidance and provided positive guidance for the remainder of the year.  The company also announced it intends to contribute approximately $30 million to its pension fund next month, which is expected to have the effect of eliminating contribution requirements in 2007.

Consolidated Results
For the quarter ended June 30, 2006, Milacron incurred a net loss of $14.3 million, or $0.34 per diluted share, compared to a net loss of $3.8 million, or $0.11 per diluted share, in the second quarter of 2005. The most recent quarter included $8.8 million in restructuring charges with no tax benefit, as well as $3.2 million in expenses for exhibiting at the triennial international plastics trade show, NPE-2006.

Manufacturing margins in the second quarter improved to 19.1% from 18.1% in the year-ago quarter, primarily as a result of better pricing and cost-reduction initiatives.

Sales for the second quarter were $211 million, up slightly over last year’s $209 million.  New orders of $200 million, versus $214 million in 2005, were held back in part by the effect of NPE, which was held at the end of June.  Many buying decisions were delayed until the show, and most of the approximately $30 million in orders Milacron received at NPE are being confirmed and booked in the third quarter. Accordingly, the company is expecting solid year-over-year order growth in the third quarter.

Cash on hand at the end of the quarter was $42 million, and the company had approximately $36 million available for borrowing under its asset-based revolving credit facility.  Liquidity (cash plus borrowing availability) of $78 million was down from $86 million at the beginning of the quarter, partly due to almost $6 million in cash restructuring expenses as well as an inventory build of close to $6 million, which is expected to shrink in the third quarter.

“The two most encouraging accomplishments for Milacron during the quarter were our success at NPE and our progress in the restructuring of our plastics businesses,” said Ronald D. Brown, chairman, president and chief executive officer.

At NPE-2006, Milacron showcased a wide array of advanced technology and customer services for injection molding, blow molding, extrusion, mold components and hot runner systems, as well as rebuild/retrofit capabilities and other aftermarket products and services.  In addition to orders taken at the show, the company garnered a record number of highly qualified leads, which it is currently actively pursuing.  “At the show, we reinforced our leadership position in the industry as ‘the one-stop shop’ for plastics processing,” Brown said.

Milacron’s consolidation plan calls for streamlining the organization and reducing the overall cost structure, while allowing the company to work more closely with customers.  In total, the restructuring actions are expected to require approximately $13 million in cash, spread over 2006 and the first half of 2007, and to generate annualized cost savings of about $15 million, of which at least $4 million is expected to be realized in late 2006.

“We have made solid progress in the restructuring of our mold technologies and European machinery businesses over the past three months,” Brown added.  “This is a major step in our objective to return the company to profitability in 2007.”

Pension Funding
In anticipation of legislation extending current rules governing pension funding for 2006 and 2007 plan years, Milacron intends to make a voluntary contribution to its U.S. defined benefit plan of approximately $30 million in September 2006.  Credit for this pre-funding is expected to eliminate required contributions due in 2007, previously estimated at approximately $50 million, and potentially reduce contributions required in 2008.  Milacron intends to raise the bulk of the pre-payment amount through the liquidation of investments for non-qualified retirement plans for executives.  The company is also in the process of selling various non-core, non-operating assets such as land, facilities and equipment made redundant through current and previous consolidations.  In the short term, the amount could be supplemented by cash on hand and/or borrowing from the company’s revolving credit facility.

Dividends
No dividends were declared on Milacron common or preferred stock.  The company is accruing dividends on its 4% Cumulative Preferred Stock and on its 6% Series B Convertible Preferred Stock.  Milacron currently has outstanding: 60,000 shares of 4% Cumulative Preferred Stock, 500,000 shares of 6% Series B Convertible Preferred Stock, and approximately 51 million shares of common stock.

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)  Sales rose to $107 million, up 13% over the same period last year, boosted by higher shipments of injection molding machines.  Segment earnings declined slightly to $4.5 million from $4.9 million in the year-ago quarter, primarily due to $2.9 million in expenses related to NPE.  New orders fell to $93 million from $101 million, reflecting the NPE effect of deferring bookings to the third quarter.  As a result, third-quarter orders are expected to show significant improvement over both the prior quarter and the year-ago quarter.

Machinery Technologies-Europe (machinery and related parts and services for injection molding and blow molding supplied from Europe)  Demand in Western Europe held steady, as second-quarter new orders of $43 million were even with the year-ago quarter.  Sales of $40 million, however, were off from $42 million.  Lower sales volume and continued pricing pressure resulted in an operating loss of $1.2 million compared to a loss of $0.5 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 second quarter of $39 million declined from $44 million a year ago, reflecting softness in the North American market, particularly in the automotive, tool-and-die and moldmaking sectors.  A focus on cost reductions limited the decline in segment earnings to $0.3 million from $0.7 million a year ago.

Industrial Fluids (water-based and oil-based coolants, lubricants and cleaners for metalcutting and metalforming operations worldwide)  Improved pricing in North America and Western Europe and continued strong growth in emerging markets helped boost sales and earnings.  Sales were $29 million, up $1 million over the second quarter of 2005, while segment earnings of $2.9 million were up from $1.9 million a year ago.

Outlook

Milacron’s outlook remains positive.  Third and fourth quarter results are expected to show good sequential and year-over-year improvement, with a 4% to 5% sales increase projected for the year.  Looking further ahead, despite the dampening effect on capital spending exerted by high energy and resin costs, plastic part production in North America continues to rise and capacity utilization rates among plastics processors have also risen to very high levels – 90% plus in recent months.  Furthermore, the company’s sales outside its traditional markets of North America and Western Europe have been growing at a strong double-digit pace.  Assuming these conditions persist, continued 4% to 5% top-line growth appears reasonable for Milacron in 2007.  Greater sales volume, along with improved pricing and incremental restructuring benefits, should lead to better margins, which may be offset partially by higher material and energy costs as well as expenses associated with the implementation of a new ERP (enterprise resource planning) system.

“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 11:00 a.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 (213) 785-2437 or (866) 558-6338. A recording of the conference call will be available from 4:00 p.m. today through midnight August 10 on Milacron’s website or by phone: (719) 457-0820 or (888) 203-1112 and providing the access code: 5475157.

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).