CINCINNATI (July 18, 2:45 p.m. EDT) — Milacron Inc. booked orders for $26 million worth of plastics machinery at NPE 2003 in June, only about half the record $50 million generated at NPE 2000, the company told financial analysts July 17.
NPE 2003, which saw attendance drop 30 percent from the show three years earlier, “pretty much reflects the state of the industry in North America,” said Ronald Brown, Milacron's chairman and chief executive officer.
He said Milacron's strategy to forgo machinery and emphasize helping customers drew people to its booth at the June 23-27 show.
“We had a lot of traffic in our booth, however … that traffic was not necessarily due to strength in the industry, but we felt is was a very good strategy of showcasing solutions instead of machines,” he told analysts.
Meanwhile, Milacron apparently is ready to announce more cost-cutting moves, as it tries to return to profitability by the end of 2003. A news release announcing the conference call quoted Brown as saying the company will “take the necessary actions to reduce costs and resize our businesses to match current market conditions.” Brown said the company will announce specific actions when it releases second-quarter results July 29.
Brown gave no details about planned cuts in the July 17 call.
Milacron lost money in 2000 and 2001.
Brown said Milacron's orders for injection presses so far this year are flat, measured against 2002. Milacron's extruder orders are up about 30 percent. “The primary reason is, our focus is on extrusion of wood-flour products, or plastic lumber, which includes fencing and decking,” he said.
Milacron blow molding machine sales have increased 20 percent in North America and 30 percent in Europe, from the low levels in early 2002. Brown said business is rebounding from milk, juice and bottled water segments.
The D-M-E mold base business is down about 2 percent in the United States, better than the 7 percent decline of the overall market.
Brown said Milacron was hurt in late June, as the second quarter ended, as several customers asked to postpone shipments. Those delays, combined with harsh pricing pressure, hurt profit and prompted executives of the Cincinnati-based machinery maker to lower the second-quarter outlook.
Milacron now expects to report a pretax loss from continuing operations of about $10 million in the second quarter. That is about $3 million worse than the company anticipated.
Brown said government statistics show U.S. plastic part production remains flat.
The factory utilization rate at U.S. plastics processors has stayed at about 80 percent so far this year. The rate needs to get to 84 percent or higher to spur significant machinery buying, he said.
“So we've yet to see a rebound for our plastics processing customers,” he said.