Acquisition of Cincinnati Machine Activities Will Add Growth to UNOVA, Inc.

BEVERLY HILLS, Calif.--(BUSINESS WIRE)--Oct. 5, 1998--Following the completion of the acquisition of the Cincinnati Milacron machine tool group by UNOVA, Inc. (NYSE:UNA), Alton J. Brann, UNOVA's Chairman and CEO, commented on the benefits it brings to the California-based industrial technologies company.

"The acquisition of Cincinnati Milacron's machine tool operations adds a complementary business to our Industrial Automation activities that supports our growth expectations for UNOVA. Uncertainties, currently visible for the capital goods market, are reflected in the purchase price. As a result, we should be able to achieve returns for this new UNOVA division that solidly exceed our cost of capital.

"On a stand-alone basis, the $180 million acquisition of Cincinnati Machine, expected to generate more than $450 million in revenues in 1998, could add up to $0.10 per share to UNOVA's 1999 earnings," Brann said. "The accretion should expand in future years as we realize savings and economies of scale in our combined operations.

"In fact, a major portion of Cincinnati Machine's business is driven by factors other than the general capital goods spending cycle. Close to 30% of their revenues comes from the aerospace sector, where multi-year programs support continued growth. Another 12 to 15% is generated by the division's expanding, profitable parts and service activities," Brann continued. "Almost half of Cincinnati's activities, therefore, represents growing operations.

"Although the remaining revenues could be impacted by a general economic slowdown, the division participates in many diverse markets with partially offsetting trends," added Brann. "For example, we anticipate a weakening in our business with agricultural equipment makers and energy-related customers, while sales to European job shops continue to grow and the outlook for this industry segment remains solid.

"The Cincinnati acquisition also lessens our dependence on the automotive industry, and provides us with volume manufacturing capabilities and one of the best global distribution networks in the industry. All of these advantages will bring UNOVA additional growth opportunities upon which to build as we go forward," Brann concluded.

The Company's manufacturing systems business with the global automotive and diesel engine industries continues to enjoy a strong bookings trend. Including the acquisition of R&B Machine earlier this year, backlog by the end of August almost doubled since the end of 1997, supporting a positive outlook for UNOVA's IAS segment in the coming year.

Headquartered in Southern California, UNOVA is a leading industrial technologies company with global leadership positions in manufacturing systems for the automotive, aerospace and general metal working industries, and automated data collection, radio frequency identification, mobile computing and bar code systems for industrial, distribution, logistics and government applications.

Certain forward-looking statements in this release (as defined by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934) relate to matters that are not historical facts. They include, but are not limited to, statements about the demand for the Company's products and services, the Company's ability to profitably exploit new technologies acquired or developed, and the Company's ability to realize its intentions with respect to the future performance of operations being acquired. Such forward-looking statements involve and are dependent upon certain risks and uncertainties. These include, but are not limited to, the following which are beyond the Company's control: the presence of competitors with greater financial and other resources; technological changes and developments; regulatory uncertainties; worldwide political stability and economic conditions; operating risks associated with international activities; the risk that the Company's due diligence procedures may have failed to reveal undisclosed material information concerning acquired operations; and other risks and uncertainties described more fully in the Company's filings with the Securities and Exchange Commission.