Fourth Quarter 2016:
- 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.
Three Months Ended December 31, In millions (except per
share data) 2016 2015 Change
% Change(Constant Currency)
New orders $ 291.1 $ 298.9 (2.6 )% (1.1)% Sales $ 289.1 $ 306.3
(5.6 )% (4.1)% Operating earnings $ 8.8 $ 33.8 (74.0 )% Adjusted
EBITDA (1) 53.6 58.9 (9.0 )% % of sales 18.5 % 19.2 % -70 bps
Diluted EPS $ 0.02 $ 0.22 (90.9 )% Diluted adjusted EPS (1) $ 0.47
$ 0.48 (2.1 )% Cash flow from operations $ 55.4 $ 28.7 93.0 % Free
cash flow $ 29.2 $ 16.2 $ 13.0 Year Ended December 31, In
millions (except per share data) 2016 2015 Change
% Change(Constant Currency)
New orders $ 1,191.3 $ 1,174.6 1.4 % 2.9% Sales $ 1,166.7 $ 1,179.5
(1.1 )% 0.4% Operating earnings $ 105.6 $ 71.8 47.1 % Adjusted
EBITDA (1) $ 212.8 $ 213.4 (0.3 )% % of sales 18.2 % 18.1 % +10 bps
Diluted EPS $ 0.43 $ (0.65 ) NMF Diluted adjusted EPS (1) (2) $
1.51 $ 1.40 7.9 % Cash flow from operations $ 116.2 $ 23.0 405.2 %
Free cash flow $ 59.8 $ (14.3 ) $ 74.1 (1) See Non-GAAP
reconciliations included in the accompanying financial tables for
the reconciliation of each non-GAAP measure to its most directly
comparable GAAP measure. (2) Represents fully diluted earnings per
share for the year ended December 31, 2015 on a pro-forma basis;
calculation uses the total diluted shares for the year ended
December 31, 2016. NMF - Not Meaningful
“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.
Supplemental Guidance Information Capital
Expenditures ~$50 million Interest Expense (P&L) ~$43 million
Cash Interest (Cash Flow) ~$54 million Tax Provision (P&L) $30
to $34 million Cash Taxes (Cash Flow) $28 to $32 million Effective
Tax Rate ~27% Diluted Shares Outstanding ~72 million shares
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.
MILACRON HOLDINGS CORP.
CONSOLIDATED BALANCE SHEETS
December 31, 2016
(Unaudited)
December 31, 2015 (in millions) Assets
Current assets: Cash and cash equivalents $ 130.2 $ 67.5 Accounts
receivable, net 182.3 204.4 Inventories, net: Raw materials 81.3
81.1 Work-in-process 52.6 48.3 Finished products 115.6 109.5
Total inventories 249.5 238.9 Prepaid and other current
assets 46.3 38.6 Total current assets 608.3 549.4
Property and equipment, net 243.7 221.8 Goodwill 507.9 530.1
Intangible assets, net 341.8 380.1 Other noncurrent assets 20.3
14.9 Total assets $ 1,722.0 $ 1,696.3
Liabilities and shareholders’ equity Current liabilities:
Short-term borrowings $ 7.0 $ 7.4 Long-term debt and capital lease
obligations due within one year 0.3 0.4 Accounts payable 92.5 79.2
Advanced billings and deposits 52.7 39.7 Accrued salaries, wages
and other compensation 26.7 30.8 Accrued interest 13.9 13.9 Other
current liabilities 59.7 52.5 Total current
liabilities 252.8 223.9 Long-term debt and capital lease
obligations, less unamortized discount and debt 934.1 931.9
Deferred income tax liabilities 64.4 66.2 Accrued pension
liabilities 27.8 25.2 Other noncurrent accrued liabilities 8.0
8.2 Total liabilities 1,287.1 1,255.4 Shareholders’
equity: Preferred stock — — Common stock 0.7 0.7 Capital in excess
of par value 661.0 648.7 Retained deficit (68.9 ) (99.4 )
Accumulated other comprehensive loss (157.9 ) (109.1 ) Total
shareholders’ equity 434.9 440.9 Total liabilities
and shareholders’ equity $ 1,722.0 $ 1,696.3
MILACRON HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended December 31, Year
Ended December 31, 2016 2015
2016 2015 (in millions, except share and
per share data) Net sales $ 289.1 $ 306.3 $ 1,166.7
$ 1,179.5 Cost of sales 196.4 205.8 770.9
775.6 Manufacturing margins 92.7 100.5 395.8
403.9 Operating expenses: Selling, general and administrative
expenses 65.4 53.6 252.4 261.1 Amortization expense 7.8 8.6 31.3
35.9 Loss (gain) on currency translation 5.0 3.0 (3.3 ) 21.6 Other
expense, net 5.7 1.5 9.8 13.5
Total operating expenses 83.9 66.7 290.2
332.1 Operating earnings 8.8 33.8 105.6 71.8 Interest
expense, net 15.3 15.6 60.9 68.0 Loss on debt extinguishment —
— — 22.2 (Loss) earnings before income
taxes (6.5 ) 18.2 44.7 (18.4 ) Income tax (benefit) expense (7.6 )
2.7 14.2 20.4 Net earnings (loss) 1.1
15.5 30.5 (38.8 ) Weighted average
shares outstanding: Basic 67,845,658 67,037,866
67,504,065 59,925,776 Diluted 70,446,657
69,784,581 70,130,062 59,925,776
Earnings (loss) per share: Basic $ 0.02 $ 0.23 $ 0.45
$ (0.65 ) Diluted $ 0.02 $ 0.22 $ 0.43
$ (0.65 )
MILACRON HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
Year Ended December 31, 2016
2015 (in millions) Operating activities Net
earnings (loss) $ 30.5 $ (38.8 ) Adjustments to reconcile net
earnings (loss) to net cash provided by operating activities:
Depreciation and amortization 59.9 62.7 Unrealized (gain) loss on
currency translation of intercompany advances (1.6 ) 23.3
Amortization of debt issuance costs 3.8 4.0 Gain on termination of
post-retirement plan — (1.5 ) Loss on debt extinguishment — 8.4
Trademark impairment — 2.2 Other non-cash asset impairment 1.6 —
Non-cash stock-based compensation expense 5.3 20.8 Deferred income
taxes (8.6 ) (5.3 ) Changes in assets and liabilities: Accounts
receivable 16.2 (28.3 ) Inventories (16.0 ) (8.8 ) Prepaid and
other current assets (8.9 ) 2.0 Accounts payable 12.5 (3.1 )
Advanced billings and deposits 13.9 (17.1 ) Other current
liabilities 1.8 3.3 Other noncurrent assets 5.0 0.5 Other
noncurrent accrued liabilities 0.8 (1.3 ) Net cash provided
by operating activities 116.2 23.0
Investing activities
Purchases of property and equipment (57.3 ) (52.7 ) Proceeds from
disposals of property and equipment 0.9 1.6 Acquisitions, net of
cash acquired — (22.2 ) Net cash used in investing
activities (56.4 ) (73.3 )
Financing activities Proceeds
from issuance of long-term debt (original maturities longer than 90
days) — 806.3 Payments on long-term debt and capital lease
obligations (original maturities longer than 90 days) (0.8 ) (885.0
) Net decrease in short-term borrowings (original maturities of 90
days or less) — (1.1 ) Dividends paid — (144.6 ) Proceeds from
issuance of common stock — 294.0 Initial public offering issuance
costs — (21.3 ) Proceeds from exercise of stock options 7.0 0.4
Debt issuance costs — (7.1 ) Net cash provided by financing
activities 6.2 41.6 Effect of exchange rate changes on cash (3.3 )
(5.3 ) Increase (decrease) in cash and cash equivalents 62.7 (14.0
) Cash and cash equivalents at beginning of period 67.5 81.5
Cash and cash equivalents at end of period $ 130.2 $
67.5
MILACRON HOLDINGS CORP.
SALES BY BUSINESS SEGMENT
(Unaudited)
Three Months Ended December 31, Year
Ended December 31, 2016 2015 2016
2015 (in millions) Sales by segment: Advanced
Plastic Processing Technologies $ 160.1 $ 184.8 $ 663.9 $ 680.8
Melt Delivery and Control Systems 101.0 94.2 389.9 383.5 Fluid
Technologies 28.0 27.3 112.9 115.2 Total $
289.1 $ 306.3 $ 1,166.7 $ 1,179.5
MILACRON HOLDINGS CORP.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Three Months Ended December 31, Year
Ended December 31, 2016 2015 2016
2015 (in millions) Net earnings (loss) $ 1.1 $
15.5 $ 30.5 $ (38.8 ) Amortization expense 7.8 8.6 31.3 35.9
Currency effect on intercompany advances (a) 5.7 3.7 (1.6 ) 23.3
Organizational redesign costs (b) 18.2 5.9 32.9 21.7 Long-term
equity awards and shareholder fees (c) 1.9 (0.5 ) 7.1 22.9 Debt
costs (d) — — — 23.2 Acquisition integration costs (e) — 0.5 — 3.7
Professional services (f) 2.2 0.9 4.7 5.2 Business combination
costs (g) — 0.4 — 0.4 Fair market value adjustments (h) (0.1 ) —
0.2 — Annual effective tax rate adjustment (i) (5.8 ) — (3.4 ) —
Other (j) 1.8 (1.5 ) 4.0 0.7
Adjusted Net
Income $ 32.8 $ 33.5 $ 105.7 $ 98.2 Income tax expense (1.8 )
2.7 17.6 20.4 Interest expense, net 15.3 15.6 60.9 68.0
Depreciation expense 7.3 7.1 28.6 26.8
Adjusted EBITDA $ 53.6 $ 58.9 $ 212.8 $
213.4 (a) Non-cash currency effect on intercompany
advances primarily relates to advances denominated in foreign
currencies. The most significant exposure relates to the Canadian
dollar pursuant to intercompany advances associated with the
acquisition of Mold-Masters Luxembourg Holdings S.à r.l.
("Mold-Masters"). (b) Organizational redesign costs for the
three months ended December 31, 2016 primarily include $8.6 million
for termination costs as a result of eliminated positions, $4.7
million of costs related to relocating our facilities in Belgium,
Italy and Germany to the Czech Republic and $0.2 million of costs
related to the restructuring of Fluids in Europe. Organizational
redesign costs for the year ended December 31, 2016 primarily
include $13.3 million for termination costs as a result of
eliminated positions, $4.4 million of costs related to the shutdown
of facilities, $5.2 million of costs related to relocating our
facilities in Belgium, Italy and Germany to the Czech Republic and
$0.5 million of costs related to the restructuring of Fluids in
Europe. Organizational redesign costs in the three months ended
December 31, 2015 primarily included $1.0 million for termination
costs as a result of eliminated positions, $0.2 million of
severance, $0.7 million of one-time project costs related to the
restructuring of Fluids in Europe, $0.8 million of costs related to
the shutdown of facilities, and $2.2 million of costs related to
relocating our facility in Italy to the Czech Republic.
Organizational redesign costs in the year ended December 31, 2015
primarily included $9.3 million of costs related to relocating our
facilities in Italy and Belgium to the Czech Republic, $4.4 million
for termination costs as a result of eliminated positions, $3.7
million of costs related to the restructuring of Fluids in Europe,
and $1.4 million of costs related to the shutdown of facilities.
(c) Long-term equity awards and shareholder fees include the
non-cash charges associated with stock-based compensation awards
granted to certain executives and independent directors and a cash
advisory fee paid to CCMP in the three and twelve months ended
December 31, 2016 and 2015. The cash advisory payment to CCMP
ceased as of the effective date of our IPO. (d) Debt costs
incurred during the year ended December 31, 2015 included $22.2
million of debt extinguishment costs and $1.0 million of fees
related to the new senior secured term loan facility due September
2020 ("New Term Loan Facility"). (e) Acquisition integration
costs in year ended December 31, 2015 included a $0.4 million gain
for an adjustment to an accrued incentive payment and $1.7 million
of costs to introduce the integration and new branding of all
Milacron companies. In addition, acquisition integration costs in
the year ended December 31, 2015 included $1.9 million of costs
related to the Kortec, Inc. ("Kortec"), TIRAD s.r.o. ("TIRAD") and
Mold-Masters acquisitions for product line integration and other
strategic alignment initiatives. (f) Professional fees in
the three and twelves months ended December 31, 2016 included $2.2
million and $4.7 million of costs for strategic organizational
initiatives, respectively. Professional fees related to operational
efficiency, business development, and other one-time advisory
projects in the three months ended December 31, 2015 included $0.9
million of costs for strategic organizational initiatives.
Professional fees in the year ended December 31, 2015 included $2.8
million of fees for readiness initiatives associated with our IPO
and $1.9 million of costs for strategic organizational initiatives.
(g) Business combination costs relate to certain
professional, audit and other fees related to the acquisitions of
Mold-Masters, Kortec, TIRAD, and certain other smaller
acquisitions. (h) Non-cash fair market value adjustments in
the year ended December 31, 2016 relate to acquisition accounting
for the fair market value of inventory as part of our acquisition
of CanGen in the fourth quarter of 2015. (i) The annual
effective tax rate adjustment primarily includes the impact of
interim and intra-period tax expense and benefits that are expected
to reverse in subsequent periods as well as the tax benefit
associated with reconciling net earnings (loss) to Adjusted Net
Income. (j) Other costs for the year ended December 31, 2016
includes $1.4 million related to the impairment of certain software
licenses and the write-off of a $0.5 million non-trade receivable.
Other costs for the year ended December 31, 2015 included a $1.5
million non-cash gain related to the termination of a
postretirement medical benefit plan and a non-cash charge of $2.2
million related to the impairment of certain trademarks.
MILACRON HOLDINGS CORP
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Three Months Ended December 31, Year
Ended December 31, 2016 2015 2016
2015 (in millions) Operating earnings (loss):
APPT $ (1.6 ) $ 16.0 $ 34.9 $ 55.3 MDCS 18.4 18.0 91.4 52.1 Fluids
4.2 3.6 17.4 12.9 Corporate (12.2 ) (3.8 ) (38.1 ) (48.5 ) Total
operating earnings 8.8 33.8 105.6 71.8 Adjustments to operating
earnings: APPT Adjustments: Depreciation and amortization 5.3 5.0
20.3 19.9 Currency effect on intercompany advances (a) — — (0.1 ) —
Organizational redesign costs (b) 14.4 3.0 22.6 7.0 Acquisition
integration costs (e) — 0.3 — 1.2 Professional services (f) 0.5 —
0.6 0.2 Fair market value adjustments (h) — — 0.3 — Other (i) 1.6
— 3.0 2.2 Total APPT Adjustments 21.8
8.3 46.7 30.5 MDCS Adjustments: Depreciation and amortization 8.1
8.9 33.2 35.7 Currency effect on intercompany advances (a) 3.7 3.8
(3.0 ) 23.2 Organizational redesign costs (b) 2.2 1.1 5.2 8.3
Acquisition integration costs (e) — — — 1.7 Professional services
(f) — — 0.1 0.3 Fair market value adjustments (h) (0.1 ) — (0.1 ) —
Other (i) 0.3 — 0.4 — Total MDCS
Adjustments 14.2 13.8 35.8 69.2 Fluids Adjustments: Depreciation
and amortization 1.4 1.7 5.5 6.7 Organizational redesign costs (b)
0.4 1.3 1.0 5.0 Professional services (f) — — — 0.1 Other (i) (0.1
) — 0.5 — Total Fluids Adjustments 1.7 3.0 7.0
11.8 Corporate Adjustments: Depreciation and amortization 0.3 0.1
0.9 0.4 Currency effect on intercompany advances (a) 2.0 (0.1 ) 1.5
0.1 Organizational redesign costs (b) 1.2 0.5 4.1 1.4 Long-term
equity awards and shareholder fees (c) 1.9 (0.5 ) 7.1 22.9 Debt
costs (d) — — — 1.0 Acquisition integration costs (e) — 0.2 — 0.8
Professional services (f) 1.7 0.9 4.0 4.6 Business combination
costs (g) — 0.4 — 0.4 Other (i) — (1.5 ) 0.1 (1.5 )
Total Corporate Adjustments 7.1 — 17.7 30.1 Adjusted EBITDA: APPT
20.2 24.3 81.6 85.8 MDCS 32.6 31.8 127.2 121.3 Fluids 5.9 6.6 24.4
24.7 Corporate (5.1 ) (3.8 ) (20.4 ) (18.4 )
Total Adjusted
EBITDA $ 53.6 $ 58.9 $ 212.8 $ 213.4
(a) Non-cash currency effect on intercompany advances
primarily relates to advances denominated in foreign currencies.
The most significant exposure relates to the Canadian dollar
pursuant to intercompany advances associated with the acquisition
of Mold-Masters within the MDCS segment. (b) Organizational
redesign costs in the three months ended December 31, 2016 included
$4.6 million of costs related to relocating our facilities in
Belgium, Italy and Germany to the Czech Republic in APPT and MDCS
and $0.2 million of costs related to the restructuring of Fluids in
Europe. In the year ended December 31, 2016, organizational
redesign costs across all segments included $8.6 million for
termination costs as a result of eliminated positions.
Organizational redesign costs in the year ended December 31, 2016
included $4.4 million of costs related to the shutdown of
facilities in APPT, $5.1 million of costs related to relocating our
facilities in Belgium, Italy and Germany to the Czech Republic in
APPT and MDCS and $0.5 million of costs related to the
restructuring of Fluids in Europe. In the year ended December 31,
2016, organizational redesign costs across all segments included
$13.3 million for termination costs as a result of eliminated
positions. Organizational redesign costs in APPT in the three
months ended December 31, 2015 included $2.2 million of costs
related to relocating our facility in Italy to the Czech Republic
and $0.5 million of costs related to the shutdown of facilities.
Organizational redesign costs incurred in MDCS in the three months
ended December 31, 2015 included $0.5 million for termination costs
as a result of eliminated positions. Organizational redesign costs
incurred in Fluids during the three months ended December 31, 2015
included $0.9 million of one-time project costs related to
restructuring in Europe. Organizational redesign costs in APPT and
MDCS segments in the year ended December 31, 2015 included $4.3
million and $5.0 million for costs related to relocating our
facilities in Italy and Belgium to the Czech Republic,
respectively. As incurred at the respective segments,
organizational redesign costs in the year ended December 31, 2015
included $4.4 million for termination costs as a result of
eliminated positions. Organizational redesign costs for Fluids
during the year ended December 31, 2015 included $3.7 million of
severance and one-time project costs related to restructuring in
Europe. (c) Long-term equity options and shareholder fees in
Corporate included the non-cash charges associated with stock-based
compensation awards granted to certain executives and independent
directors and a cash advisory fee paid to CCMP in the three and
twelve months ended December 31, 2016 and 2015. The cash advisory
payment to CCMP ceased as of the effective date of our IPO.
(d) Debt costs incurred during the year ended December 31, 2015
included $1.0 million of fees related to the New Term Loan
Facility. (e) Acquisition integration costs for MDCS in the
year ended December 31, 2015 included a $0.4 million gain for an
adjustment to an accrued incentive payment and $1.8 million related
to the Kortec, TIRAD and Mold-Masters acquisitions for product line
integration and other strategic alignment initiatives. Both APPT
and Corporate acquisition integration costs for the year ended
December 31, 2015 included $0.7 million of one-time costs to
introduce the integration and new branding of all Milacron
companies, respectively. (f) Professional fees in the three
and twelves months ended December 31, 2016 included $2.2 million
and $4.7 million of costs for strategic organizational initiatives,
respectively. Professional fees incurred by Corporate in the three
months and year ended December 31, 2015 included $0.9 million and
$2.0 million of costs for strategic organizational initiatives,
respectively. In the year ended December 31, 2015, professional
fees incurred by Corporate also included $2.6 million of costs for
readiness initiatives associated with our IPO. (g) Business
combination costs for Corporate relate to certain professional,
audit and other fees related to the acquisitions of Mold-Masters,
Kortec, TIRAD, and certain other smaller acquisitions. (h)
Non-cash fair market value adjustments relate to acquisition
accounting for the fair market value of inventory as part of our
acquisition of CanGen in the fourth quarter of 2015. (i)
Other costs for APPT in the year ended December 31, 2016 includes
$1.4 million related to the impairment of certain software
licenses. Other costs for Fluids in the year ended December 31,
2016 includes the write-off of a $0.5 million non-trade receivable.
Other costs in APPT for the year ended December, 31 2015 included a
non-cash charge of $2.2 million related to the impairment of
certain trademarks. Other costs in Corporate for the three and
twelve months ended December 31, 2015 included a $1.5 million
non-cash gain related to the termination of a postretirement
medical benefit plan.
MILACRON HOLDINGS CORP.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Three Months Ended December 31, Year
Ended December 31, 2016 2015 2016
2015 (in millions, except per share data) GAAP
diluted earnings (loss) per share (a) $ 0.02 $ 0.22 $ 0.43 $ (0.55
) Amortization expense 0.11 0.12 0.45 0.51 Currency effect on
intercompany advances 0.08 0.05 (0.02 ) 0.33 Organizational
redesign costs 0.26 0.09 0.47 0.31 Long-term equity awards and
shareholder fees 0.03 (0.01 ) 0.10 0.33 Debt costs — — — 0.33
Acquisition integration costs — 0.01 — 0.05 Professional services
0.03 0.01 0.07 0.07 Business combination costs — 0.01 — 0.01 Fair
market value adjustments — — — — Annual effective rate adjustment
(0.08 ) — (0.05 ) — Other 0.02 (0.02 ) 0.06 0.01
Adjusted diluted earnings per share (a) $ 0.47 $ 0.48
$ 1.51 $ 1.40 (a) Represents fully
diluted earnings (loss) per share for the year ended December 31,
2015 on a pro-forma basis; calculation uses the total diluted
shares used for the year December 31, 2016 (70.1 million shares).
Source Code: MCRN-IR
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170223005512/en/
Milacron Holdings Corp.Media:Michael Ellis, 905-877-0185 ext.
354Michael_Ellis@milacron.comorInvestor Relations:Mac Jones,
513-487-5057Michael_Jones@milacron.com
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