Register
Forgot your password?
Skip Navigation Links
ABOUT US
REQUEST RESIN
RESEARCH
SUPPORT CENTER
CONTACT US
Milacron Holdings Corp. Reports Fourth Quarter & Full Year 2016 Results
CINCINNATI, Feb 23, 2017 (BUSINESS WIRE) -- Copyright Business Wire 2017

--Sales of $289.1 million decreased 4.1% on a constant currency basis (-5.3% organic, 1.2% acquisition)

--Operating earnings (GAAP) were $8.8 million; Adjusted EBITDA (non-GAAP) of $53.6 million, or 18.5% of sales

--Diluted EPS (GAAP) of $0.02; Diluted adjusted EPS (non-GAAP) of $0.47

--Cash flow from operations of $55.4 million drove free cash flow of $29.2 million, a $13.0 million increase versus$16.2 million in the prior year

--Full Year 2016:

--Sales of $1,166.7 million increased 0.4% on a constant currency basis (-1.3% organic, 1.7% acquisition)

--Operating earnings (GAAP) were $105.6 million; Adjusted EBITDA (non-GAAP) of $212.8 million, or 18.2% of sales

--Diluted EPS (GAAP) of $0.43; Diluted adjusted EPS (non-GAAP) of $1.51

--Cash flow from operations of $116.2 million drove free cash flow of $59.8 million, a $74.1 million increase versus $(14.3) million in the prior year

Milacron Holdings Corp. ("Milacron") (NYSE:MCRN), a leading industrial technology company serving the plastic processing industry, today announced financial results for the fourth quarter ended December 31, 2016.

"We closed the fourth quarter on a strong note at the upper end of our adjusted EBITDA guidance range, a great achievement considering the mixed industrial dynamics that persisted throughout the year," said Milacron Chief Executive Officer, Tom Goeke. "Despite these challenging economic conditions, we remained committed to solid operating execution and increased our backlog by nearly 7 percent versus the prior year. Our MDCS segment delivered nearly double digit constant currency sales growth in the quarter, driven by continued growth in hot runners and our Fluid Technologies segment grew 6 percent on a constant currency basis. Our APPT segment continues to be challenged by weakness in the North American industrial markets which more than offset significant growth across all other regions. We are committed to continued investment in this business and building out our aftermarket field service organization and parts fulfillment to better support our customers.

For the full year, we achieved modest constant currency sales and order growth in an uncertain commercial environment and continued to incrementally improve EBITDA margins. Structurally, we accomplished much of what we intended to with our manufacturing transition to the Czech Republic, plant expansions in India and China and the framework remains intact for 2017. We delivered on our promise of $17 million in cumulative cost reductions for the year through our SG&A cost alignment and continued manufacturing optimization in the Czech Republic. We believe we are well positioned to deliver our strategic goal of $35 million in cumulative cost reductions by 2018.

We also delivered significant free cash flow improvement of $74.1 million over the previous year. As we have previously stated, this is an area that continues to provide opportunities as we work through our restructuring initiatives and we will continue to take the necessary actions to meaningfully strengthen our balance sheet. Our recently completed debt refinancing also provides the company an improved capital structure and impactful annual interest savings.

Looking ahead to 2017, we remain cautious given the global economic uncertainty and will closely monitor customer behaviors for signs of recovery. With or without a sustainable recovery, we will continue to execute our strategic fundamentals, which includes building out our APPT field service organization, growing our consumables, furthering the optimization of our global manufacturing footprint and positioning our company for growth."

Fourth Quarter Results

For the fourth quarter of 2016, sales of $289.1 million decreased 5.6% from sales of $306.3 million in the same period a year ago. Excluding the unfavorable effects of currency movements, sales for the fourth quarter decreased 4.1% versus the prior year period. Operating earnings for the fourth quarter of 2016 decreased 74.0% to $8.8 million compared to operating earnings of $33.8 million in the prior year period. Adjusted EBITDA for the fourth quarter of 2016 decreased 9.0% to $53.6 million, or 18.5% of sales, compared to Adjusted EBITDA of $58.9 million, or 19.2% of sales, in the year ago period. Net earnings totaled $1.1 million, or $0.02 per basic and diluted share in the fourth quarter of 2016 compared to a net earnings of $15.5 million, or $0.23 and $0.22 per basic and diluted share, respectively, in the prior year quarter. Adjusted Net Income totaled $32.8 million in the fourth quarter of 2016 compared to Adjusted Net Income of $33.5 million in the prior year period.

Full Year Results

For the year ended December 31, 2016, sales of $1,166.7 million decreased 1.1% from sales of $1,179.5 million in the same period a year ago. Excluding the unfavorable effects of currency movements, sales for the year ended December 31, 2016 rose 0.4% over the prior year period. Operating earnings for the year ended December 31, 2016 increased 47.1% to $105.6 million compared to operating earnings of $71.8 million in the prior year period. Adjusted EBITDA for the year ended December 31, 2016 decreased 0.3% to $212.8 million, or 18.2% of sales, compared to Adjusted EBITDA of $213.4 million, or 18.1% of sales, in the prior year period. Net earnings totaled $30.5 million, or $0.45 and $0.43 per basic and diluted share, respectively, for the year ended December 31, 2016 compared to a net loss of $38.8 million, or a loss of $0.65 per basic and diluted share, in the prior year period. Adjusted Net Income totaled $105.7 million for the year ended December 31, 2016 compared to Adjusted Net Income of $98.2 million in the prior year period.

Segment Results

Advanced Plastic Processing Technologies (APPT)

Sales for the fourth quarter of 2016 were $160.1 million compared to $184.8 million in the same period a year ago. Excluding $1.6 million of unfavorable effects of currency movements, sales decreased 12.5% compared to the prior year period. Operating earnings for the fourth quarter of 2016 decreased 110.0% to a loss of $1.6 million compared to operating earnings of $16.0 million in the prior year period. Adjusted EBITDA in the fourth quarter decreased 16.9% to $20.2 million, or 12.6% of sales, from Adjusted EBITDA of $24.3 million, or 13.1% of sales, in the prior year period.

For the year ended December 31, 2016, sales were $663.9 million compared to $680.8 million in the same period a year ago. Excluding $7.4 million of unfavorable effects of currency movements, sales decreased 1.4% over the prior year period. Operating earnings for the year ended December 31, 2016 decreased 36.9% to $34.9 million compared to operating earnings of $55.3 million in the prior year period. Adjusted EBITDA for the full year decreased 4.9% to $81.6 million, or 12.3% of sales, from Adjusted EBITDA of $85.8 million, or 12.6% of sales, in the prior year period.

Melt Delivery & Control Systems (MDCS)

Sales for the fourth quarter of 2016 were $101.0 million compared to sales of $94.2 million in the same period a year ago. Excluding $2.0 million of unfavorable effects of currency movements, sales increased 9.3% compared to the prior year period. Operating earnings for the fourth quarter of 2016 increased 2.2% to $18.4 million compared to operating earnings of $18.0 million in the prior year period. Adjusted EBITDA in the fourth quarter increased 2.5% to $32.6 million, or 32.3% of sales, from Adjusted EBITDA of $31.8 million, or 33.8% of sales, in the prior year period.

For the year ended December 31, 2016, sales were $389.9 million compared to sales of $383.5 million in the same period a year ago. Excluding $6.6 million of unfavorable effects of currency movements, sales increased 3.4% over the prior year period. Operating earnings for the year ended December 31, 2016 increased 75.4% to $91.4 million compared to operating earnings of $52.1 million in the prior year period. Adjusted EBITDA for the full year increased 4.9% to $127.2 million, or 32.6% of sales, from Adjusted EBITDA of $121.3 million, or 31.6% of sales, in the prior year period.

Fluid Technologies (Fluids)

Sales for the fourth quarter of 2016 were $28.0 million compared to sales of $27.3 million in the same period a year ago. Excluding $0.9 million of unfavorable effects of currency movements, sales increased 5.9% compared to the prior year period. Operating earnings for the fourth quarter of 2016 increased 16.7% to $4.2 million compared to operating earnings of $3.6 million in the prior year period. Adjusted EBITDA in the fourth quarter decreased 10.6% to $5.9 million, or 21.1% of sales, from Adjusted EBITDA of $6.6 million, or 24.2% of sales, in the prior year period.

For the year ended December 31, 2016, sales were $112.9 million compared to sales of $115.2 million in the same period a year ago. Excluding $3.2 million of unfavorable effects of currency movements, sales increased 0.8% compared to the prior year. Operating earnings for the year ended December 31, 2016 increased 34.9% to $17.4 million compared to operating earnings of $12.9 million in the prior year period. Adjusted EBITDA for the full year decreased 1.2% to $24.4 million, or 21.6% of sales, from Adjusted EBITDA of $24.7 million, or 21.4% of sales, in the prior year period.

Additional Financial Information

Milacron ended the fourth quarter of 2016 with cash and cash equivalents of $130.2 million and total debt of $953.3 million resulting in net debt of $823.1 million and a net total leverage ratio of 3.9x.

During the fourth quarter of 2016, as a result of changing the ownership structure of our German subsidiaries, the Company can elect to file a consolidated German tax return. This tax planning strategy, which had not been previously available until the fourth quarter of 2016, provides significant positive evidence for the future utilization of the deferred tax assets of the newly formed consolidated group. As a result, the Company recognized an $8.5 million income tax benefit related to the reversal of valuation allowances previously recorded against the deferred tax assets of one member of the group. This contributed $0.12 to our fully diluted adjusted earnings per share for the fourth quarter of 2016.

2017 Outlook

Milacron forecasts 0% to 2% organic sales growth in 2017, which is in line with current market conditions. Adjusted EBITDA is forecasted to be between $219 million and $225 million. Free Cash Flow before restructuring is forecasted to be between $95 million and $105 million.

Conference Call

Milacron will host a conference call to discuss its fourth quarter 2016 financial results at 8 a.m. Eastern Time on February 23, 2017. The live webcast of the call can be accessed at the Milacron Investor Relations website at http://investors.milacron.com, along with the company's earnings press release and related presentation materials. The U.S. dial-in for the call is 1-877-407-8037 (1-201-689-8037 for non-U.S. callers). A replay of the conference call will be available until March 9, 2017 at 11:59 p.m. Eastern Time, while an archived version of the webcast will be available on the Milacron Investor Relations website for 90 days. The U.S. dial-in for the conference call replay is 1-877-660-6853 (1-201-612-7415). The replay access code is 13655247.

Website Information

We routinely post important information for investors on the Investor Relations section of our website, http://investors.milacron.com. We intend to use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

About Milacron

Milacron is a global leader in the manufacture, distribution and service of highly engineered and customized systems within the plastic technology and processing industry. Milacron is the only global company with a full-line product portfolio that includes hot runner systems, injection molding, blow molding and extrusion equipment.

Forward-Looking Statements

This press release contains forward-looking statements. The words "believe," "expect," "anticipate," "plan," "intend," "should," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although forward-looking statements reflect management's good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date the statements are made. Except as required by law, Milacron undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to demand for our products being significantly affected by general economic conditions, any decline in the use of plastic, the competitiveness of the industries in which we operate and the financial resources of our competitors, our ability to successfully develop and implement strategic initiatives to increase cost savings and improve operating margins and the other risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 2, 2016, and other SEC filings, copies of which are available free of charge on our website at investors.milacron.com.

Non-GAAP Financial Measures

We prepare our financial statements in conformity with United States generally accepted accounting principles ("U.S. GAAP"). To supplement this information, we also use the following non-GAAP financial measures: Adjusted EBITDA and Adjusted Net Income. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.

Adjusted EBITDA

Adjusted EBITDA represents net earnings (loss) before interest expense, taxes, depreciation and amortization, as further adjusted for the other items reflected in the reconciliation table set forth below. Adjusted EBITDA is a measure used by management to measure operating performance. Adjusted EBITDA is not a presentation made in accordance with U.S. GAAP, is not a measure of financial condition or profitability, and should not be considered as an alternative to net earnings (loss) determined in accordance with U.S. GAAP or operating cash flows determined in accordance with U.S. GAAP or any other performance measure derived in accordance with U.S. GAAP and should not be construed as an inference that our future results will be unaffected by unusual non-recurring items. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not include certain cash requirements such as interest payments, tax payments, debt service requirements and certain other cash costs that may recur in the future.

We view Adjusted EBITDA as a key measure of our performance. We present Adjusted EBITDA not only due to its importance for purposes of our credit agreements but also because it assists us in comparing our performance across reporting periods on a consistent basis as it excludes items that we do not believe are indicative of our core operating performance. Our management uses Adjusted EBITDA:

-- as a measurement used in evaluating our consolidated and segment-level operating performance on a consistent basis;

-- to calculate incentive compensation for our employees

-- for planning purposes, including the preparation of our internal annual operating budget;

-- to evaluate the performance and effectiveness of our operational strategies; and

-- to assess compliance with various metrics associated with our debt agreements.

We believe that the inclusion of Adjusted EBITDA is useful to provide additional information to investors about certain material non-cash items as well as items considered to be one-time or non-recurring to the operations of the business. While we believe these financial measures are commonly used by investors to evaluate our performance and that of our competitors, because not all companies use identical calculations, this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies and should not be considered as an alternative to performance measures derived in accordance with U.S. GAAP. Adjusted EBITDA is calculated as net earnings (loss) before income tax expense, interest expense, net, depreciation and amortization further adjusted to exclude other items as reflected in the reconciliation table below.

In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses such as those used in calculating Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by usual or non-recurring items. Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only supplementary.

Adjusted Net Income

Adjusted Net Income measures our operating performance by adjusting net earnings (loss) to exclude amortization expense, non-cash currency effect on intercompany loans, organizational redesign costs, long-term equity awards and shareholder fees, acquisition integration costs, professional services and certain other non-recurring items. Management uses this measure to evaluate our core operating results as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the core operations of the business, but includes certain items such as depreciation, interest expense and interest tax expense, which are otherwise excluded from Adjusted EBITDA. We believe the presentation of Adjusted Net Income enhances our investors' overall understanding of the financial performance and cash flow of our business. You should not consider Adjusted Net Income as an alternative to net earnings (loss), determined in accordance with U.S. GAAP, as an indicator of operating performance.

Adjusted Earnings Per Share

Adjusted Earnings Per Share is defined as Adjusted Net Income divided by diluted weighted average shares outstanding. We believe Adjusted Earnings Per Share is useful to investors because it measures our operating performance, on a per share basis, by adjusting net earnings (loss), on a per share basis, to exclude amortization expense, non-cash currency effect on intercompany loans, organizational redesign costs, long-term equity awards and shareholder fees, acquisition integration costs, professional services and certain other non-recurring items. We believe the presentation of Adjusted Earnings Per Share enhances our investors' overall understanding of the financial performance and cash flow of our business. You should not consider Adjusted Earnings Per Share as an alternative to earnings per share, determined in accordance with U.S. GAAP, as an indicator of operating performance.

Source Code: MCRN-IR

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170223005512r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170223005512/en/

SOURCE: Milacron Holdings Corp."> Privacy Statement | Copyright © 2017 The Plastics Exchange. LLC. | Patent Protected | All Rights Reserved.