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 CINCINNATI, Nov. 2 /PRNewswire/ -- Cincinnati Milacron Inc. (NYSE: CMZ) today reported a third-quarter net loss of $7.9 million, or $.23 per share, on sales of $301 million, compared to net earnings of $7.3 million, or $.26 per share, on sales of $226 million in the third quarter a year ago. Included in the loss was an $18.1-million non- recurring pre-tax charge taken to write down to net realizable value its Sano operation, a supplier of blown and cast plastic film systems. Without this one-time charge, after-tax operating earnings would have totaled $8.4 million, or $.25 per share, compared to $5.3 million, or $.19 per share, last year. Milacron also reported $269 million in consolidated new orders for the quarter, up from $225 million a year ago.
 "Our operating earnings before the one-time charge were the best overall for the company in many years," according to Daniel J. Meyer, chairman and chief executive officer. "And consolidated new orders continued to rise thanks to the addition of Valenite, our subsidiary for metalcutting tools, and to record high levels of demand for our plastics machinery. In fact, our plastics machinery group is well on its way to a record year in sales and new business," Meyer stated. "Our machine tool business, however, continued to be hurt by the deep recession in the aerospace industry.
 "Also during the quarter, we negotiated the purchase of Klockner's Ferromatik injection molding machine business, which will give us a strong European presence and will add $100 million in annual revenues in plastics machinery," Meyer said. [See separate release.] "And, looking for continued growth and profitability in this segment, we took a one-time charge to prepare our Sano subsidiary for sale."
 Sano Subsidiary Put Up For Sale
 Milacron announced today that it intends to sell its Sano subsidiary and is taking a pre-tax $18.1-million non-cash charge to earnings to write down this operation to net realizable value. The write-down consists of approximately $6 million in goodwill and intangibles related to Milacron's 1986 purchase of Sano and $12 million in adjustments to other assets and liabilities.
 "Our attempts to integrate Sano with our main extrusion business in Cincinnati have met with increasing difficulties, and it has become very clear that Sano just doesn't fit in," Meyer said. "In addition, Sano has been losing money -- more than $3 million so far this year -- and doesn't meet the criteria for a core business at Milacron, namely, a major global market with good long-term growth and profit potential. Specifically, in plastics machinery we've chosen to focus on the large international markets for key processing technologies: injection molding, extrusion and blow molding. This was the main motive behind our Klockner Ferromatik acquisition. We intend to operate Sano until we find a suitable buyer who can run it successfully as a niche business," Meyer stressed.
 Segment Results
 Machine Tools
 Sales in this segment were virtually flat compared to the year-ago quarter. Operating earnings and new business declined, however, due to the precipitous fall-off of orders from the aerospace industry, whose slump is much more acute than previously anticipated. "To avoid building unnecessary inventory in aerospace machine tool production, we cut back manufacturing activity significantly and began accelerating the implementation of stringent cost-cutting measures," stated Raymond E. Ross, president and chief operating officer. "These downsizing efforts, which will pay off in the longer run, together with lower sales volume, held back the group's earnings in the quarter," Ross explained.
 "The decline in new machine tool business is a distortion," Ross said, "because last year's third quarter included one of the largest orders in Milacron's history as well as a lot of business from discontinued product lines." The company's standard machine tool products are doing better this year than last, and Milacron remains committed to developing and introducing more new Wolfpack machine tools. "We're essentially on target for all Wolfpack product introductions and are encouraged by continued market penetration in this sluggish economy," he said.
 Plastics Machinery
 The company reported one of its best quarters ever for plastics machinery sales and new business, as this segment is well on its way to a record year in those categories in 1993. Demand has picked up especially for Milacron's high-tonnage injection molding machines, used by the automotive and appliance industries to make large parts.
 In a separate release today, Milacron announced it had purchased Klockner's Ferromatik injection molding machine business, including product lines, plant and distribution network, based in Germany. "The recession in Europe afforded us the opportunity to acquire the highly regarded Ferromatik business and puts us in an excellent position to profit from the eventual turn-around in that market," Ross said.
 Industrial Products
 Once again, this segment demonstrated good strength despite the ongoing recession in Europe, which held back profits for the company's Cimcool metalworking fluids operation in The Netherlands. The restructuring of the Valenite subsidiary for metalcutting tools is still running ahead of schedule, as this operation continues to contribute positively to the bottom line.
 Two New Directors Elected
 Two new members of the board of directors were elected today: Darryl F. Allen, chairman, president and chief executive officer of TRINOVA Corporation; and James E. Perrella, chairman, president and chief executive officer of Ingersoll-Rand Company.
 "With the acquisition of the Ferromatik business, the planned introduction of several new Wolfpack machines, and the excellent contribution of our plastic machinery group and Valenite subsidiary, we are optimistic about our prospects for the future," Meyer said. "We remain concerned, however, about the general weakness of the economic recovery in the U.S., the recession in Europe, and the deep downturn in the aerospace industry worldwide. In machine tools, we'll keep cutting costs and downsizing where appropriate, and, even though new business has picked up recently, we expect some softness in shipments and earnings in this area for the next quarter or two.
 "With orders, customer inquiries and quotation levels on the rise, however, we expect our machinery businesses (machine tools and plastics machinery) to be up 15 to 20% in the fourth quarter over last year. Longer term, we believe we are making solid progress in a difficult environment and that 1994 will show good improvement over 1993," Meyer concluded.
 16 Weeks Ended 16 Weeks Ended
 Oct. 9, 1993 Oct. 3, 1992
 Sales $300,707,000 $225,521,000
 Earnings (loss) Before
 Extraordinary Items
 $(7,811,000)(a) $5,322,000
 Per Share $(.23) $.19
 Extraordinary Item:
 Tax Benefit from Loss
 Carryforward --- $1,975,000
 Per Share --- $.07
 Net Earnings (loss) $(7,811,000) $7,297,000
 Per Share $(.23) $.26
 Average Weighted Common
 Shares Outstanding 34,019,000 27,531,000
 40 Weeks Ended 40 Weeks Ended
 Oct. 9, 1993 Oct. 3, 1992
 Sales $756,641,000 $571,136,000
 Before Extraordinary
 Items and Cumulative Effect
 of Accounting Changes
 $1,952,000(a) $9,207,000
 Per Share $.06 $.33
 Extraordinary Items:
 Loss on Early Extinguishment
 of Debt $(4,407,000) ---
 Per Share $(.14) ---
 Tax Benefit from Loss
 Carryforward --- $2,875,000
 Per Share --- $.10
 Cumulative effect of
 Accounting Changes $(52,125,000) ---
 Per Share $(1.64) ---
 Net Earnings (Loss) $(54,580,000) $12,082,000
 Per Share $(1.72) $.43
 Average Weighted Common
 Shares Outstanding 31,867,000 27,585,000
 Common Shares Outstanding
 At Quarter-End 33,516,000 27,440,000
 (a) Includes $18.1 million ($16.3 million after tax) charge for write-down of Sano business to net realizable value.
 -0- 11/2/93
 /CONTACT: Albert Beaupre of Cincinnati Milacron Inc., 513-841-7241/

CO: Cincinnati Milacron Inc. ST: Ohio IN: MNG SU: ERN

SH -- NY040 -- 9590 11/02/93 10:43 EST
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Publication:PR Newswire
Date:Nov 2, 1993

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