Milacron reports Q3 loss

Milacron Inc., Cincinnati, OH, reported sales in the third quarter of 2001 were $295 million, down 25% from $394 million in the third quarter of 2000. New orders fell 24% to $290 million from $380 million. Low sales volumes, underutilization of assets and restructuring costs led to a net loss in the quarter of $18.4 million, compared to net earnings of $18.5 million, in the third quarter a year ago.


'During the quarter, we continued to focus on factors within our control, namely working capital management, restructuring and operating efficiency,' said Ronald D. Brown, Milacron's chairman, president and CEO. 'Despite depressed demand, we reduced inventory by $23 million, allowing us to generate approximately $20 million of net cash from operating activities.


'We made good progress in executing the restructuring plan we announced in July, closing some of our smaller facilities and consolidating production into our larger plants. We trimmed overhead significantly and implemented increasingly stringent cost-control measures. And we continued to make structural and process improvements to the way we run our businesses. We're using Six Sigma and lean manufacturing tools throughout our operations, which we believe will benefit us not only during this downturn but also when the recovery comes,' Brown said.



Year-to-date consolidated results


For the first nine months of 2001, Milacron's sales were $957 million, down 20% from $1.195 billion in the same period last year. New orders fell to $938 million from $1.181 billion in 2000. Year to date in 2001, the company has had a net loss of $13.8 million, including $7.8 million in after-tax restructuring charges. This compared to net earnings of $50.3 million for the first three quarters of 2000.



Metalworking Technologies


Sales were $144 million in the third quarter, down from $181 million in 2000. The year-ago quarter included $8 million in sales from the group's now-divested European industrial magnets business, while sales in the most recent quarter were reduced by about $3 million by adverse currency translation. Excluding the effects of currency translation and the divestiture, the group's sales declined by 15%, primarily as a result of lower production rates in the automotive industry and most other metalworking sectors in North America. Segment operating earnings fell to $1.3 million from $17.2 million in the year-ago quarter.


For the first three quarters of 2001, the metalworking group's sales were $460 million, down 15% from $543 million in 2000. About half of the decline was the result of the divestiture ($26 million) and adverse currency translation ($15 million). Excluding these two factors, year-to-date sales were off about 8% from 2000. Operating earnings in the first nine months totaled $21.0 million compared to $49.6 million in the same period last year.


In the third quarter, Milacron closed and consolidated small manufacturing operations in its metalworking and plastics groups, incurring pre-tax charges of $12.6 million.