Milacron LLC executives on Aug. 11 reported increased sales and “substantial margin improvement” in the second quarter of 2015 — during the Cincinnati-based machinery manufacturers' first financial report since the company went public on the New York Stock Exchange on June 25.
Milacron reported second quarter sales of $301.3 million, up 1.8 percent from sales of $295.9 million in the year-ago period. But that sales gain was 8.2 percent after excluding unfavorable currency impacts that totaled $18.8 million in the second quarter.
In a second-quarter conference call with financial analysts, CEO Tom Goeke and Chief Financial Officer Bruce Chalmers painted a picture of a global company — balanced between machinery and “consumables” of hot-runners and controls, mold bases, aftermarket parts and services and metal cutting fluids. Consumables account for 61 percent of total sales last year, Goeke said. New machinery generated 39 percent of total sales.
Goeke and Chalmers said the long-term goal is delivering 5 percent in annual organic sales growth and generating more than 20 percent of growth from new products. Another goal: 20-plus percent EBITDA margin (earnings before interest, taxes, depreciation and amortization), from cost-cutting actions that will happen over the next several years.
For the first half of 2015, Milacron generated sales of $580.5 million, which was up less than 1 percent from the year-earlier first half but a gain of 5.6 percent, after excluding $35.4 million of unfavorable currency effects.
The company had a net loss of $43.1 million in the first half.
Milacron is including numbers for adjusted net income — a measurement that removes some non-recurring items such as amortization expenses, debt costs acquisition integration costs and shareholder fees — and that totaled $24.6 million for the second quarter, up from $11.7 million in the second quarter of a year before.
“We are pleased with the strong revenue growth and substantial margin improvement we achieved in the second quarter,” Goeke said. “These results are a testament to our strategy and reflect our leading position in markets with strong fundamentals, and our lifecycle sales approach.”
Goeke said Milacron has initiatives in place to cut run-rate costs by 30 percent. The company has already achieved $8 million toward that goal, he said.
And, he said, “We continue to seek tuck-in acquisitions to grow our consumables business.”
Milacron reported the Advanced Plastic Processing Technologies business — which includes machinery and aftermarket business, generated $169.9 million in the second quarter and $321.3 million for the first half of 2015, both increases from a year ago. Equipment sales were strong in North America, Europe and India. Aftermarket parts and service also showed strong growth, the company said.
“We've had very good progression throughout the year and throughout the quarter with our order book,” Goeke told analysts.
The Melt Delivery and Control Systems segment reported $101.8 million in second-quarter sales, down 3.2 percent from the year-ago quarter, but a gain of 4.6 percent adjusted for constant currency revenue. For the first half of 2015, sales were $201 million, flat compared to the year-ago timeframe but up 6.3 percent adjusted for currency. Sales were driven by growth in all geographic regions for hot runners, mold assemblies and spare parts. Automotive, consumer goods and medical were particularly strong, officials said.
Fluid Technologies had $29.6 million on sales in the second quarter.
Milacron's IPO raised about $265 million, which the company used to pay down debt from its term loan and an asset-based lending facility. Both of those debt instruments were part of a debt restructuring done by the company.
Milacron is owned by CCMP Capital Advisors LLC, which continues to own a majority of the common stock after the IPO. Also, underwriters partially exercised an option to buy additional shares on July 29, Chalmers said.
Milacron had an IPO target price of $20 per share. The stock closed Aug. 10 at $15.58.
