Milacron Holdings Corp. reported first-quarter sales of $310 million, 8.8 percent above the first quarter a year ago, as the company prepares for NPE2018 and studies actions to try and offset new tariffs.
"Milacron started 2018 with a strong first quarter," CEO Tom Goeke said in a conference call with financial analysts April 26. He credited much of the growth to "emerging markets like China and India."
Net profit was $5.9 million. Milacron lost $24.6 million in the first quarter of 2017.
Orders dropped slightly compared to the year-ago first quarter. Milacron officials said it was a tough comparison with the 2017 first quarter, which had very good order rates. Goeke said first-quarter 2018 orders were "smooth and healthy" and that orders "continue to be solid."
He talked about the effect of NPE on orders industrywide: "When we come into a big trade show like that in North America, Q1 and Q2 are usually softer, and then it gets stronger in Q3 and 4," he said, citing customers who hold off on buying until they come to NPE to compare machinery.
NPE2018 is important for Milacron (Booth W2703), in large part because the company is launching the "Cincinnati" line of large tonnage injection presses, showing one with 2,250 tons of clamping force, in Orlando. Goeke said the Cincinnati — named in honor of Milacron's hometown — will be aimed at automotive and industrial markets, including appliances.
Milacron also will launch a new platform packaging machine coming from its plant in India. Other new products include a sequential electronic valve gate in a hot runner system geared toward large molds in automotive and appliance, he said.
Goeke said Milacron's long-term goal is to generate 75 percent of its sales mix from consumable items, like hot runners, mold bases, components and aftermarket business. In the first quarter the figure was 68 percent.
Bruce Chalmers, Milacron's chief financial officer, said the machinery manufacturer's backlog is about $300 million, a good chunk of that from aftermarket and consumables.
Sales went up in all three segments for the company based in Blue Ash, Ohio, a suburb of Cincinnati.
The machinery business, called Advanced Plastic Processing Technologies, generated sales of $161.9 in the first quarter, 3 percent higher than the year-ago period. Chalmers said Milacron is seeing continued strength in automotive, electronics and packaging.
The Melt Delivery & Control Systems unit, which includes hot runners, process control systems and mold bases and components, generated first-quarter sales of $116.5 million, up 14 percent from the first quarter of 2017. The growth was driven mainly by double-digit hot runner growth in the automotive, consumer goods and electronics segments, Chalmers said.
In remarks before taking questions from analysts, Goeke addressed the Trump administration's tariffs on steel and aluminum, as well as the tariffs against China's exports to the United States. China has responded with its own tariffs on some U.S. products.
Goeke said the company is facing "a $3 million headwind" from the steel and aluminum tariffs, mainly from the machinery segment, and company officials are looking at sourcing issues. On the China tariffs, officials are studying options to help mitigate the impact, he said.
An analyst asked how the tariffs will impact pricing of Milacron's products. Goeke said the company has been able to pass along some of the higher costs.
"Realistically, the tariffs are pretty much like a tax and everyone is confronted with the same thing. ... So really it's just inflation to a certain degree," Goeke said.
