Milacron Reports Q4 & Year 2006 Results 1-for-10 Reverse Stock Split Proposed

CINCINNATI, OHIO, February 23, 2007...Milacron Inc. (NYSE: MZ) today reported a net loss in the fourth quarter of 2006 of $8.6 million, or $0.23 per diluted share, including $5.1 million in restructuring costs and $1.8 million in refinancing charges. This compared to net earnings in the fourth quarter of 2005 of $5.8 million, or $0.05 per diluted share, which included a $5.5 million tax benefit. Fourth quarter 2006 operating results were at the mid-point of the range of guidance issued in November.

Fourth quarter sales were $198 million, down from $217 million in the year-ago quarter. New orders were $203 million, compared to $212 million in 2005. The bulk of new orders came late in the quarter, which negatively impacted fourth quarter shipments.

Manufacturing margins in the quarter were 19.4%, comparable to the year-ago quarter, despite a $2 million writedown of inventory, which reduced the margin by a full percentage point.

Net cash used by operations during the quarter was $0.8 million compared to $3.3 million of cash provided by operations in the fourth quarter of 2005. At the end of the quarter, Milacron had $39 million in cash, up $3 million from the beginning of the quarter. The company had $41 million in borrowing availability under its new revolving credit agreement, signed in December, up from $36 million under the previous facility at the beginning of the quarter. Total liquidity, therefore, rose $8 million to $80 million at quarter-end.

Year 2006
Milacron’s net loss for the year was $39.7 million, or $1.02 per share, and included $17.4 million in restructuring costs and $1.8 million in refinancing charges. This compared to a net loss of $14.0 million, or $0.42 per share, in 2005, which included a $5.5 million one-time tax benefit as well as $1.5 million in after-tax restructuring costs. Sales in 2006 reached $820 million, up from $809 million in 2005. New orders were $828 million compared to $819 million in the prior year.

Manufacturing margins for 2006 were 18.5%, up from 18.0% in 2005, as improved pricing and cost reductions more than offset the effect of the $2 million inventory writedown.

Net cash used by operations for the year was $19.2 million compared to a net provision of cash of $9.2 million in 2005. The single largest factor in cash flow for the year was a $30 million advance contribution made to Milacron’s pension fund in September, 2006.

Annual Meeting Date Set; Reverse Stock Split Proposed
Milacron’s board of directors set May 2, 2007 as the date of the annual meeting of shareholders to be held at 9:00 a.m. EDT in the Cincinnati Museum Center at Union Terminal, 1301 Western Avenue, Cincinnati, Ohio 45203. March 9, 2007 was established as the record date for determination of shareholders entitled to notice of and to vote at the meeting. The board also approved a proposal for a one-for-ten reverse split of common stock with the objective of complying with minimum share price standards for listing on the New York Stock Exchange. The proposal will be detailed in the company’s proxy statement for approval by shareholders at the annual meeting.

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] New orders of $99 million were comparable to orders of $98 million in the fourth quarter of 2005. Sales, however, fell to $96 million from $107 million reflecting soft demand for injection molding equipment particularly from the automotive sector. Segment earnings (earnings before interest, taxes and restructuring charges) were $5.2 million, off from $6.2 million in the year-ago quarter, as the effects of lower shipping volumes were largely offset by improved pricing and operating efficiencies.

For the year 2006, new orders in this segment were $411 million, up 7% from $383 million in 2005. Sales also rose 7% to $402 million. Segment earnings were $17.1 million compared to $17.3 million in 2005, as benefits from higher volumes were offset by higher marketing costs, including the NPE-2006 triennial plastics exposition held in June and expanded international distribution for the extrusion systems business.

Machinery Technologies-Europe [machinery and related parts and services for injection molding and blow molding supplied from Europe] Fourth quarter new orders of $40 million and sales of $37 million were flat with those of the year-ago quarter despite favorable currency translation effects. This segment lost $0.6 million in the quarter compared to a loss of $0.8 million in the fourth quarter of 2005.

For the year, this segment’s new orders were $154 million, up $1 million from 2005, while sales were $153 million, up from $150 million. For 2006, the segment posted an operating loss of $4.9 million compared to a loss of $5.0 million a year ago.

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 fourth quarter of 2006 were $38 million compared to $44 million in the fourth quarter of 2005, reflecting declines primarily in North American markets. Cost cutting measures mitigated the decline in segment earnings, which fell to $0.8 million from $1.6 million in the year-ago quarter.

Sales in 2006 were $159 million, down from $173 million in the prior year. Segment earnings declined to $3.0 million from $3.9 million, as benefits of restructuring and other cost reductions offset most of the effects of lower volume.

Industrial Fluids [water-based and oil-based coolants, lubricants and cleaners for metalcutting and metalforming operations worldwide] Fourth quarter sales were $29 million compared to $30 million a year ago, as price increases and favorable currency translation effects were offset by lower shipping volumes. Segment earnings improved to $4.1 million from $3.6 million, thanks primarily to improved pricing.

Industrial fluid sales in 2006 were $117 million, up from $112 million in 2005, as price increases compensated for volume declines. Segment earnings improved to $10.8 million versus $8.7 million in 2005, reflecting improved pricing and operating efficiency.

Outlook

“Energy and resin prices have declined from historic highs and appear to be stabilizing,” said Ronald D. Brown, chairman, president and chief executive officer. “These trends should benefit plastics processors and, as their profitability improves, enable them to invest in new machinery to replace their aging equipment and increase productivity. At the same time, however, the health of processors supplying U.S. automakers and pressures from consolidation in that industry have dampened demand in a large segment of the market. Overall, we are cautiously optimistic with respect to 2007, as we believe economic fundamentals will continue to favor recovery in plastics processing industries worldwide.

“As for Milacron, we expect our first quarter 2007 results to be comparable to those of the first quarter a year ago, as benefits from our 2006 restructuring measures offset the effects of lower sales volumes in North America. We have implemented temporary cost reductions, primarily furloughs, to adapt to lower shipping volumes in the first half of the year in North America. For 2007 as a whole, we expect 4% to 5% top-line growth, much of it coming from emerging markets. This increase in overall volume, along with incremental restructuring benefits and other cost reductions, should lead to better operating results,” Brown said.

Conference Call Today
Milacron will hold an open investor conference call today at 1 p.m. Eastern Time, which can be accessed live at www.milacron.com. The dial-in number for those interested in asking questions is (913) 312-1298 or (800) 565-5442. A replay of the call will be available on this site as well as by phone from 4:00 p.m. ET on February 23 through midnight Friday, March 2. Replay phone numbers: (719) 457-0820 and (888) 203-1112; replay passcode: 2059284.

Note: Financial results in this release and accompanying tables are preliminary, unaudited and subject to change until Milacron files its Annual Report on Form 10-K with the Securities and Exchange Commission, which it expects to do on or before March 16, 2007.

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 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).