=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarter ended June 18, 1994
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from __________ to __________
Commission file number 1-8485
CINCINNATI MILACRON INC.
(Exact name of registrant as specified in its charter)
Delaware 31-1062125
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4701 Marburg Avenue
Cincinnati, Ohio 45209
(Address of principal executive offices)
(513)841-8100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [x] No [ ]
Number of shares of Common Stock, $1.00 par value, outstanding as
of July 25, 1994: 33,723,938
============================================================================
CINCINNATI MILACRON INC. AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheet 3
Consolidated Condensed Statement of Earnings 4
Consolidated Condensed Statement of Cash Flows 5
Notes to Consolidated Condensed Financial
Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II. OTHER INFORMATION
Item 6. (a) Exhibits 16
(b) Reports on Form 8-K 16
Signatures 17
Index to Exhibits 18
PART I. FINANCIAL INFORMATION
CINCINNATI MILACRON INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
(In millions)
June 18, January 1,
1994 1994
<S> <C> <C>
------- ---------
Assets
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . $ 15.7 $ 18.8
Notes and accounts receivable, less allowances
of $9.2 in 1994 and $7.9 in 1993. . . . . . . . . . . 190.8 188.3
Inventories
Raw materials . . . . . . . . . . . . . . . . . . . . 25.1 21.5
Work-in-process and finished parts. . . . . . . . . . 171.7 155.7
Finished products . . . . . . . . . . . . . . . . . . 67.1 70.0
------ ------
Total inventories . . . . . . . . . . . . . . . . . 263.9 247.2
Other current assets. . . . . . . . . . . . . . . . . . 31.4 29.3
------ ------
Total current assets. . . . . . . . . . . . . . . . . 501.8 483.6
------ ------
Property, plant and equipment . . . . . . . . . . . . . . 439.2 431.3
Less accumulated amortization and allowances for
depreciation. . . . . . . . . . . . . . . . . . . . . 255.4 247.3
------ ------
Property, plant and equipment - net . . . . . . . . 183.8 184.0
Other noncurrent assets . . . . . . . . . . . . . . . . . 64.4 62.0
------ ------
Total assets. . . . . . . . . . . . . . . . . . . . . $750.0 $729.6
====== ======
Liabilities and Shareholders' Equity
Current liabilities
Amounts payable to banks and current portion of
long term debt. . . . . . . . . . . . . . . . . . . . $ 48.5 $ 77.6
Trade accounts payable. . . . . . . . . . . . . . . . . 80.6 84.6
Advance billings and deposits . . . . . . . . . . . . . 53.0 36.9
Accrued and other current liabilities . . . . . . . . . 159.5 170.2
------ ------
Total current liabilities . . . . . . . . . . . . . . 341.6 369.3
Long-term accrued liabilities . . . . . . . . . . . . . . 127.7 128.6
Long-term debt and lease obligations. . . . . . . . . . . 144.4 107.6
------ ------
Total liabilities . . . . . . . . . . . . . . . . . . . 613.7 605.5
------ ------
Commitments and contingencies . . . . . . . . . . . . . . - -
Shareholders' equity. . . . . . . . . . . . . . . . . . .
Preferred shares. . . . . . . . . . . . . . . . . . . . 6.0 6.0
Common shares (outstanding: 33.6 in 1994 and 33.5
in 1993). . . . . . . . . . . . . . . . . . . . . . 287.3 284.8
Accumulated deficit . . . . . . . . . . . . . . . . . . (144.5) (151.2)
Cumulative foreign currency translation adjustments . . (12.5) (15.5)
------ ------
Total shareholders' equity. . . . . . . . . . . . . . 136.3 124.1
------ ------
Total liabilities and shareholders' equity. . . . . . . . $750.0 $729.6
====== ======
</TABLE>
See notes to consolidated condensed financial statements.
CINCINNATI MILACRON INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
(In millions, except per-share amounts)
12 Weeks Ended 24 Weeks Ended
------------------- -------------------
June 18, June 19, June 18, June 19,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
------- ------- ------- -------
Sales . . . . . . . . . . . . . . . . . $269.3 $236.6 $514.8 $455.9
Cost of products sold . . . . . . . . . 203.9 179.4 390.5 346.3
------ ------ ------ ------
Manufacturing margins . . . . . . . . 65.4 57.2 124.3 109.6
------ ------ ------ ------
Other costs and expenses
Selling and administrative. . . . . . 49.8 44.9 97.7 86.4
Other - net . . . . . . . . . . . . . 1.7 .5 2.9 1.4
------ ------ ------ ------
Total other costs and expenses. . . 51.5 45.4 100.6 87.8
------ ------ ------ ------
Operating earnings. . . . . . . . . . . 13.9 11.8 23.7 21.8
Interest
Income. . . . . . . . . . . . . . . . .5 .7 .9 1.1
Expense . . . . . . . . . . . . . . . (3.9) (4.1) (7.5) (8.8)
------ ------ ------ ------
Interest - net. . . . . . . . . . . (3.4) (3.4) (6.6) (7.7)
------ ------ ------ ------
Earnings before income taxes,
extraordinary item and cumulative
effect of changes in methods of
accounting. . . . . . . . . . . . . . 10.5 8.4 17.1 14.1
Provision for income taxes. . . . . . . 2.6 2.2 4.2 4.3
------ ------ ------ ------
Earnings before extraordinary item and
cumulative effect of changes in
methods of accounting . . . . . . . . 7.9 6.2 12.9 9.8
Extraordinary loss on early
extinguishment of debt. . . . . . . . - (4.4) - (4.4)
Cumulative effect of changes
in methods of accounting. . . . . . . - - - (52.1)
------ ------ ------ ------
Net earnings (loss) . . . . . . . . . . $ 7.9 $ 1.8 $ 12.9 $(46.7)
====== ====== ====== ======
Earnings (loss) per common share
Earnings before extraordinary
item and cumulative effect of
changes in methods of accounting. . $.23 $ .19 $.37 $ .32
Extraordinary loss on early
extinguishment of debt. . . . . . . - (.14) - (.14)
Cumulative effect of changes
in methods of accounting. . . . . . - - - (1.72)
---- ----- ---- ------
Net earnings (loss) . . . . . . . . . $.23 $ .05 $.37 $(1.54)
==== ===== ==== ======
Dividends per common share. . . . . . . $.09 $.09 $.18 $.18
Weighted average number of shares
and common share equivalents
outstanding (in thousands). . . . . . 33,989 32,827 34,002 30,433
</TABLE>
See notes to consolidated condensed financial statements.
CINCINNATI MILACRON INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(In millions)
12 Weeks Ended 24 Weeks Ended
-------------------- -------------------
June 18, June 19, June 18, June 19,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
------- ------- ------- -------
Increase (decrease) in cash and cash equivalents
Operating activities cash flows
Net earnings (loss) . . . . . . . . . $ 7.9 $ 1.8 $ 12.9 $(46.7)
Extraordinary loss on early
extinguishment of debt. . . . . . . - 4.4 - 4.4
Cumulative effect of changes in
methods of accounting . . . . . . . - - - 52.1
Operating activities providing
(using) cash
Depreciation. . . . . . . . . . . 6.6 6.3 12.9 12.0
Deferred income taxes . . . . . . .8 .6 1.8 1.4
Working capital changes
Notes and accounts receivable . (11.2) 4.5 1.3 22.4
Inventories . . . . . . . . . . (7.8) (4.6) (18.4) 1.9
Other current assets. . . . . . (2.0) 3.5 (1.7) 2.1
Trade accounts payable and
other current liabilities . . 8.6 (26.4) (2.4) (37.9)
(Increase) decrease in other
noncurrent assets . . . . . . .8 (.8) (1.8) (.2)
Increase (decrease) in long-term
accrued liabilities . . . . . . .1 (.9) (1.6) (.3)
Other - net . . . . . . . . . . . .4 (.6) (2.1) (1.4)
------ ------ ------ ------
Net cash provided (used) by
operating activities. . . . . 4.2 (12.2) .9 9.8
------ ------ ------ ------
Investing activities cash flows
Capital expenditures. . . . . . . . . (6.4) (3.7) (11.9) (6.6)
Net disposals of property, plant
and equipment . . . . . . . . . . . 1.0 4.9 2.3 13.6
Acquisition of Valenite . . . . . . . - - - (73.6)
Cash received on disposition
of subsidiary . . . . . . . . . . . .3 - 2.3 -
------ ------ ------ ------
Net cash provided (used) by
investing activities. . . . . . (5.1) 1.2 (7.3) (66.6)
------ ------ ------ ------
Financing activities cash flows
Dividends paid. . . . . . . . . . . . (3.1) (2.9) (6.2) (5.6)
Issuance of long-term debt. . . . . . - - 115.4 -
Repayments of long-term debt and
lease obligations . . . . . . . . . (.5) (60.2) (60.5) (60.3)
Increase (decrease) in amounts
payable to banks. . . . . . . . . . 3.0 (25.2) (48.0) 14.0
Net issuance of common shares . . . . .4 110.4 2.6 113.3
Redemption premium on early
extinguishment of debt. . . . . . . - (4.7) - (4.7)
------ ------ ------ ------
Net cash provided (used) by
financing activities. . . . . . (.2) 17.4 3.3 56.7
------ ------ ------ ------
Increase (decrease) in cash and
cash equivalents. . . . . . . . . . . (1.1) 6.4 (3.1) (.1)
Cash and cash equivalents at
beginning of period . . . . . . . . . 16.8 8.4 18.8 14.9
------ ------ ------ ------
Cash and cash equivalents at
end of period . . . . . . . . . . . . $ 15.7 $ 14.8 $ 15.7 $ 14.8
====== ====== ====== ======
</TABLE>
See notes to consolidated condensed financial statements.
CINCINNATI MILACRON INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
- - ---------------------
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments, including only normal recurring
adjustments except as indicated below, necessary to present fairly the company's
financial position, results of operations and cash flows.
The Consolidated Condensed Balance Sheet at January 1, 1994, has been derived
from the audited consolidated financial statements at that date.
The accounting policies followed by the company are set forth in the "Summary
of Significant Accounting Policies" note to the consolidated financial
statements included in the company's Annual Report on Form 10-K for the year
ended January 1, 1994, as amended by the company's Form 10-K/A relating thereto
dated July 8, 1994.
CUMULATIVE EFFECT OF CHANGES IN METHODS OF ACCOUNTING
- - -----------------------------------------------------
Effective January 3, 1993, the company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". This standard requires the
use of the liability method, under which deferred income tax assets and
liabilities related to cumulative differences between an entity's financial
reporting and tax basis balance sheets are recognized using expected future tax
rates. Previously, the company had used the deferred method, under which
deferred income tax assets and liabilities were based on historical differences
between financial reporting income and taxable income and recognized using
historical income tax rates.
The company's domestic operations also adopted Statement of Financial Accounting
Standards No. 106, "Employer's Accounting for Postretirement Benefits Other Than
Pensions", effective January 3, 1993. This standard requires that the expected
cost of postretirement benefits other than pensions, such as health care
benefits, that are provided to retirees be recognized on the accrual method
during the years that employees render service. The company provides health
care benefits to U.S. retirees and previously recognized the related cost as
these benefits were paid. Certain of the company's foreign operations also
provide postretirement health care benefits to their employees. The company
will adopt the standard for these operations in 1995.
The company recorded the cumulative effect (to January 2, 1993) of adopting
these standards as a charge to earnings in the first quarter of 1993, as
follows:
24 Weeks Ended
Charge to June 19, 1993
Earnings Per Common
(In millions) Share
------------- --------------
Cumulative effect (to January 2, 1993)
of changes in methods of accounting:
Income taxes. . . . . . . . . . . . $ (4.2) $ (.14)
Retiree health care benefits
(with no current tax effect). . . (47.9) (1.58)
------ ------
$(52.1) $(1.72)
====== ======
The new standard for accounting for income taxes imposes significant limitations
in the recognition of deferred tax assets related to future tax deductions
previously recognized for financial reporting purposes and to net operating loss
carryforwards. Because of these limitations, and because the company entered
1993 with a U.S. net operating loss carryforward of approximately $36 million,
no income tax benefit could be recognized on a net basis for the cumulative
effect of adopting the new accounting rules for postretirement health care
benefits.
ACQUISITIONS
- - ------------
On February 1, 1993, the company completed the acquisition of GTE Valenite
Corporation (Valenite) for $66 million in cash and $11 million of assumed debt.
Valenite is a leading producer of consumable industrial metalcutting products.
The acquisition, which was accounted for under the purchase method, was financed
principally through the sale of $50 million of accounts receivable and
borrowings under the company's committed revolving credit facility.
On November 8, 1993, the company completed the acquisition of Ferromatik, the
plastics injection molding machine business of Kloeckner-Werke AG, for DM 82.8
million (approximately $50 million) in cash and DM 10.6 million (approximately
$6 million) in assumed debt. Approximately $4 million of the cash purchase
price was subsequently refunded in a post-closing adjustment. The acquisition,
which is being accounted for under the purchase method, was financed primarily
through borrowings under the company's existing lines of credit, including its
committed revolving credit facility. Ferromatik, which is headquartered in
Germany, is one of the world's leading producers of injection molding machines
and is recognized for high-end technology and other specialty applications.
Unaudited pro forma sales and earnings information for the second quarter of
1993 and for the 24 weeks ended June 19, 1993, prepared under the assumption
that the acquisitions had been completed at the beginning of 1993, is as
follows:
(In millions, except
per-share amounts)
12 Weeks 24 Weeks
Ended Ended
June 19, June 19,
1993 1993
-------- --------
Sales . . . . . . . . . . . . . . . . . $263.6 $515.1
====== ======
Earnings before extraordinary item
and cumulative effect of changes
in methods of accounting. . . . . . . $ 5.7 $ 8.4
Extraordinary loss on early
extinguishment of debt. . . . . . . . (4.4) (4.4)
Cumulative effect of changes
in methods of accounting. . . . . . . - (52.1)
------ ------
Net earnings (loss) . . . . . . . . . . $ 1.3 $(48.1)
====== ======
Earnings (loss) per common share
Earnings before extraordinary item and
cumulative effect of changes in
methods of accounting . . . . . . . $ .17 $ .27
Extraordinary loss on early
extinguishment of debt. . . . . . . (.14) (.14)
Cumulative effect of changes
in methods of accounting. . . . . . - (1.72)
------ ------
Net earnings (loss) . . . . . . . . . $ .03 $(1.59)
====== ======
DISPOSITION OF SUBSIDIARY
- - -------------------------
In February, 1994, the company completed the previously announced sale of its
Sano business resulting in initial cash proceeds of $2.0 million. The remainder
of the approximately $7 million gross sales price, which is subject to post-
closing adjustments, is being received through the collection of trade
receivables and in varying installments through 1999.
INCOME TAXES
- - ------------
The company entered 1994 with a net operating loss carryforward of $19 million
for U.S. tax reporting purposes. The company also had net operating loss
carryforwards in certain non-U.S. jurisdictions. Under the accounting rules
adopted by the company in 1993, tax benefits related to the realization of net
operating loss carryforwards are applied as a reduction of the provision for
income taxes. As a result, the company's effective tax rate for the second
quarter of 1994 and the 24 weeks ended June 18, 1994, which includes provisions
for U.S. state and local and certain non-U.S. income taxes, is less than the
U.S. federal statutory rate of 35%.
In the second quarter of 1993 and the 24 weeks ended June 19, 1993, the
company's provision for income taxes consisted principally of U.S. state and
local and certain non-U.S. income taxes. Benefits from the realization of the
company's U.S. net operating loss carryforward had the effect of lowering the
effective tax rate. As a result, the company's overall effective tax rate was
less than the U.S. federal statutory rate.
LIABILITIES
- - -----------
The components of accrued and other current liabilities and long-term accrued
liabilities are shown in the following tables.
(In millions)
June 18, Jan. 1,
1994 1994
------- ------
Accrued and other current liabilities
Accrued salaries, wages and
other compensation. . . . . . . . . . . . . $ 31.7 $ 21.5
Consolidation reserve . . . . . . . . . . . . 28.8 38.7
Restructuring reserves. . . . . . . . . . . . 10.5 17.1
Accrued and deferred income taxes . . . . . . 22.1 23.6
Other accrued expenses. . . . . . . . . . . . 66.4 69.3
------ ------
$159.5 $170.2
====== ======
Long-term accrued liabilities
Accrued pension and other compensation. . . . $ 25.5 $ 24.1
Accrued postretirement health
care benefits . . . . . . . . . . . . . . . 45.2 46.9
Accrued and deferred income taxes . . . . . . 30.6 30.5
Other . . . . . . . . . . . . . . . . . . . . 26.4 27.1
------ ------
$127.7 $128.6
====== ======
LONG-TERM DEBT AND LEASE OBLIGATIONS
- - ------------------------------------
Long-term debt and lease obligations are shown in the following table.
(In millions)
June 18, Jan. 1,
1994 1994
------- ------
Long-term debt
8-3/8% Notes due 2004 . . . . . . . . . . . . $115.0 $ -
8-3/8% Senior Notes due 1997. . . . . . . . . - 60.0
12% Sinking Fund Debentures due 2010. . . . . 10.8 10.8
Industrial Development Revenue
Bonds due 2008. . . . . . . . . . . . . . . 10.0 10.0
Revolving credit facility . . . . . . . . . . 10.0 10.0
Other . . . . . . . . . . . . . . . . . . . . 8.9 8.8
------ ------
154.7 99.6
------ ------
Capital lease obligations
6-3/4% Bonds due 2004 . . . . . . . . . . . . 7.6 7.6
6-3/8% Bonds due 1994 - 1997. . . . . . . . . 3.4 3.4
6-1/2% Bonds due 1994 . . . . . . . . . . . . .4 .4
------ ------
11.4 11.4
------ ------
Total long-term debt and lease obligations. . . 166.1 111.0
Less current maturities . . . . . . . . . . . . (21.7) (3.4)
------ ------
$144.4 $107.6
====== ======
On March 16, 1994, the company completed a private financing involving the
placement of $115 million of 8-3/8% notes due 2004. The proceeds were used to
redeem at par the company's outstanding 8-3/8% Senior Notes due 1997 and to
repay borrowings under bank lines of credit. On July 8, 1994, the company
issued a prospectus offering to exchange the privately financed 8-3/8% Notes due
2004, for an equal principal amount of new 8-3/8% Notes due 2004 which have
substantially identical terms but which have been registered under the
Securities Act of 1993.
At June 18, 1994, $10.0 million of borrowings under the company's revolving
credit facility are included in long-term debt based on the expectation that
such amount will remain outstanding for more than one year.
At June 18, 1994, current maturities includes the Industrial Development Revenue
Bonds due 2008 and the 6-3/4% Bonds due 2004, both of which are expected to
become payable within one year due to the anticipated closure of the company's
two machine tool facilities in South Carolina.
LINES OF CREDIT
- - ---------------
At June 18, 1994, the company had formal and informal lines of credit with
various U.S. and non-U.S. banks of approximately $287 million, including
committed lines totaling $138 million. The committed lines include a $130
million revolving credit facility which imposes restrictions on total
indebtedness in relation to total capital (debt and equity). In July, 1994, the
facility was amended to reduce the restrictions on total indebtedness and to
extend its maturity date to July, 1996. Under the provisions of the amended
facility, the company's additional borrowing capacity would have totaled
approximately $100 million at June 18, 1994 as compared to $51 million prior to
the amendment.
SHAREHOLDERS' EQUITY
- - --------------------
On April 15, 1993, the company completed the issuance of an additional 5.175
million common shares through a public offering, resulting in net proceeds
(after deducting issuance costs) of $100.6 million. The proceeds of the
offering were used to redeem $60.0 million of the company's 12% Sinking Fund
Debentures due 2010 and to repay borrowings under revolving lines of credit and
other bank debt. The redemption of the 12% Sinking Fund Debentures due 2010
effective May 17, 1993 resulted in a pretax extraordinary loss on early
extinguishment of debt of $5.2 million ($4.4 million after tax) in the second
quarter of 1993. The pretax extraordinary loss included a cash call premium of
$4.7 million and the write-off of deferred financing fees of $.5 million.
CONTINGENCIES
- - -------------
Various lawsuits arising during the normal course of business are pending
against the company and its consolidated subsidiaries. In the opinion of
management, the ultimate liability, if any, resulting from these matters will
have no significant effect on the company's consolidated financial position or
results of operations.
SEGMENT INFORMATION
- - -------------------
The company has three business segments: plastics machinery, machine tools, and
industrial products. Financial information for each of these segments for the
second quarters of 1994 and 1993 and for the 24 weeks ended June 18, 1994 and
June 19, 1993 are presented below.
(In millions)
<TABLE>
<CAPTION>
12 Weeks Ended 24 Weeks Ended
--------------------- -------------------
June 18, June 19, June 18, June 19,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
------- ------- ------- -------
Sales
Plastics machinery. . . . . . . . . $121.4 $ 77.2 $217.7 $146.0
Machine tools . . . . . . . . . . . 67.2 77.9 136.0 161.5
Industrial products . . . . . . . . 80.7 81.5 161.1 148.4
------ ------ ------ ------
$269.3 $236.6 $514.8 $455.9
====== ====== ====== ======
Operating earnings (loss)
Plastics machinery. . . . . . . . . $ 9.7 $ 6.1 $ 16.7 $ 9.8
Machine tools . . . . . . . . . . . (.9) 1.6 (2.4) 4.0
Industrial products . . . . . . . . 8.2 7.3 15.1 13.7
Unallocated corporate expenses. . . (3.1) (3.2) (5.7) (5.7)
------ ------ ------ ------
$ 13.9 $ 11.8 $ 23.7 $ 21.8
====== ====== ====== ======
New orders
Plastics machinery. . . . . . . . . $134.2 $ 82.9 $239.9 $154.5
Machine tools . . . . . . . . . . . 85.9 70.1 161.7 145.8
Industrial products . . . . . . . . 81.5 78.9 166.5 146.6
------ ------ ------ ------
$301.6 $231.9 $568.1 $446.9
====== ====== ====== ======
Ending backlog. . . . . . . . . . . . . . . . . . . . . . . . $299.3 $273.1
====== ======
</TABLE>
Unallocated corporate expenses includes corporate research and development and
certain administrative expenses, including fees related to the sale of
receivables.
Earnings Per Share
- - ------------------
Earnings per common share are based on the weighted average number of common
shares and common share equivalents outstanding.
CINCINNATI MILACRON INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
RESULTS OF OPERATIONS
- - ---------------------
SALES
Sales in the second quarter of 1994 were $269 million, which represented a $33
million or 14% increase over the second quarter of 1993. The increase was
primarily attributable to a $44 million or 57% increase in plastics machinery
sales which more than offset an $11 million or 14% decrease in machine tools
sales. The plastics machinery sales increase was partially attributable to the
acquisition of Ferromatik on November 8, 1993, which accounted for about $20
million of the increase, and , more importantly, higher sales of U.S.-built
injection molding machines. Excluding the effect of the Ferromatik acquisition,
plastics machinery sales increased by more than 20%. The machine tools sales
decrease was primarily attributable to a $7 million decline in shipments of
systems to the aerospace industry that was partially offset by an increase in
shipments of Wolfpack-designed vertical machining centers. Sales of industrial
products decreased $1 million or 1% due to reduced sales of European cutting
fluids and the elimination of certain non-core product offerings at Valenite.
Sales for the 24 weeks ended June 18, 1994 were $515 million, which represented
a $59 million or 13% increase over the comparable period of 1993. The year-to-
date sales increase is primarily attributable to (i) a $72 million or 49%
increase in plastics machinery sales, which includes approximately $40 million
resulting from the acquisition of Ferromatik and increased sales of U.S. built
injection molding machines (ii) a $13 million increase in industrial products
sales resulting primarily from the inclusion of Valenite's sales for six periods
in 1994 versus five periods in 1993 and (iii) a $26 million or 16% decrease in
machine tools sales due to a decline in shipments of systems to the aerospace
industry.
Export sales were $34 million in the second quarter of 1994 and $61 million for
the 24 weeks ended June 18, 1994 compared to $23 million and $48 million in the
comparable periods of 1993. The increase in export sales is primarily
attributable to the increase in the plastics machinery segment.
NEW ORDERS AND BACKLOG
New orders for the second quarter of 1994 were $302 million, which represented
a $70 million or 30% increase over the second quarter of 1993. Orders for
plastics machinery increased $51 million or 62% which primarily reflects the
strong market for injection molding machines, a $17 million order from a Russian
greenhouse builder and the inclusion of Ferromatik's new orders of about $20
million. Excluding the Ferromatik acquisition, plastics machinery orders were
up by more than 35%. Machine tool orders increased $16 million or 23% due to
increased demand for Wolfpack-designed products, primarily UK-built vertical
machining centers. Orders for industrial products increased $3 million or 3%.
New orders for the 24 weeks ended June 18, 1994 were $568 million, which
represented a $121 million or 27% increase over the comparable period of 1993.
Orders for plastics machinery increased $85 million or 55% due principally to
increased demand for injection molding machines and the inclusion of
Ferromatik's new orders of almost $40 million. Machine tool new orders
increased $16 million or 11% due to a greater demand for Wolfpack-designed
products, primarily vertical machining centers. Orders for industrial products
increased $20 million or 14% due primarily to the timing of the Valenite
acquisition.
The backlog of unfilled orders was $299 million as of June 18, 1994 compared to
$273 million at the comparable date in 1993. The increase in backlog is
primarily attributable to the Russian order, the effect of the Ferromatik
acquisition, and greater demand for vertical machining centers, which offset
a decline in machine tool orders of systems for the aerospace industry.
MARGINS, COSTS AND EXPENSES
The consolidated manufacturing margin of 24.3% in the second quarter of 1994 is
virtually unchanged from the 24.2% in the comparable period of 1993, although
margins fluctuated somewhat within each of the company's business segments.
Margins for plastics machinery declined slightly compared to the second quarter
of 1993 but increased from the first quarter of 1994. Margins for machine tools
improved slightly due to increased utilization of the Birmingham, England plant
where vertical machining centers are manufactured. Margins for industrial
products increased slightly due to improved margins for Valenite products as a
result of paring back non-core product offerings.
Selling and administrative expense in the second quarter of 1994 and for the 24
weeks ended June 18, 1994 increased in connection with higher sales compared
with the same periods of 1993. Selling expenses as a percent of sales increased
modestly for the second quarter and the 24 weeks ended June 18, 1994 due to the
higher mix of Wolfpack-designed machines that are sold through distributors.
Administrative expense decreased for the second quarter of 1994 and the 24 weeks
ended June 18, 1994 due primarily to a reduction in outside professional
services.
Other expense-net includes primarily costs associated with the sale of accounts
receivable.
Interest expense-net was unchanged in the second quarter of 1994 compared with
the second quarter of 1993. Interest expense-net declined by $1.1 million for
the 24 weeks ended June 18, 1994 due to a reduced debt level in the first
quarter of 1994 compared to the first quarter of 1993 as a result of the sale
of 5.175 million additional common shares in April, 1993 and the subsequent
redemption of $60 million of 12 % Sinking Fund Debentures.
INCOME TAXES
The provision for income taxes in both 1994 and 1993 consists primarily of U.S.
state and local income taxes and non-U.S. income taxes in certain profitable
jurisdictions. U.S. federal income taxes are minimal in both periods because
benefits from the utilization of the company's net operating loss carryforwards
are applied as a reduction of the provision for income taxes. In 1994, the
company is also utilizing certain non-U.S. net operating loss carryforwards.
The company's effective tax rate is 25% for the 24 weeks ended June 18, 1994
compared to 30% for the comparable period in 1993. The lower effective tax rate
in 1994 results principally from benefits associated with the utilization of net
operating loss carryforwards in certain non-U.S. jurisdictions.
EARNINGS
Earnings before extraordinary item improved to $7.9 million, or $.23 per share,
during the second quarter of 1994 compared to $6.2 million, or $.19 per share,
in 1993. For the 24 weeks ended June 18, 1994, earnings before extraordinary
item and cumulative effect of changes in methods of accounting improved to $12.9
million, or $.37 per share, compared to $9.8 million, or $.32 per share, in
1993.
In the first quarter of 1993, the company adopted two new accounting standards
resulting in charges to earnings totaling $52.1 million, or $1.72 per share, for
the 24 weeks ended June 19, 1993. The first new standard, SFAS No. 109,
significantly changes existing methods of accounting for income taxes and
resulted in a charge of $4.2 million, or $.14 per share. The second standard,
SFAS No. 106, requires that certain postretirement benefits such as health care,
be accounted for on the accrual method. The adoption of this standard resulted
in a charge of $47.9 million, or $1.58 per share, to record the accrued
liability for retiree health care benefits. Because of the limitations on the
recognition of deferred tax assets under SFAS No. 109, no income tax benefit
could be recorded in connection with the adoption of SFAS No. 106. Except for
the cumulative effect, the new rules regarding postretirement medical benefits
did not significantly affect the company's earnings in 1994 or 1993, while the
new rules regarding income taxes had the effect of reducing the company's
effective tax rate in 1994 and 1993 due to the realization of net operating loss
carryforwards.
In the second quarter of 1993, the company reported an extraordinary charge of
$4.4 million after tax, or $.14 per share, related to the early extinguishment
of $60 million of 12% debentures.
Net earnings were $7.9 million, or $.23 per share, in the second quarter of 1994
compared to net earnings of $1.8 million, or $.05 per share, in the comparable
period of 1993 which includes the effect of the extraordinary charge. Net
earnings for the 24 weeks ended June 18, 1994 were $12.9 million, or $.37 per
share, compared with a net loss of $46.7 million , or $1.54 per share, for the
comparable period of 1993 which resulted from the aforementioned extraordinary
item and changes in methods of accounting that totaled $56.5 million.
CONSOLIDATION CHARGE
- - --------------------
In December, 1993, management adopted a plan to reduce machine tool
manufacturing capacity by consolidating U.S. machine tool manufacturing into
facilities in Cincinnati and accordingly recorded a charge of $47.1 million.
Production at the company's two machine tool facilities in Fountain Inn and
Greenwood, South Carolina is being phased out and the plants are expected to be
closed by year-end 1994. The consolidation addresses excess manufacturing
capacity created by two factors: the company's successful Wolfpack program,
which has significantly reduced the hours and floorspace required to manufacture
and assemble machine tool products; and the unusually steep recession in the
aerospace industry, which has dramatically lowered demand for the company's
advanced machine tool systems.
The consolidation plan includes a provision for the phase out of production in
South Carolina offset by a simultaneous ramp up of production in Cincinnati in
order to minimize the effect of the consolidation on 1994 sales. However, the
company is currently experiencing some temporary production delays during the
consolidation process that is currently estimated to cause a $10 million to $15
million reduction in 1994 sales of products previously manufactured in South
Carolina. There have been no material changes to the consolidation plan and the
company continues to believe that the consolidation will be completed in 1994.
Costs totaling $6 million during the second quarter of 1994 and $12 million for
the 24 weeks ended June 18, 1994 were charged against the consolidation reserve.
OUTLOOK
- - -------
The company expects the second half of 1994 to be stronger than the first half
of the year. The plastics machinery and industrial products businesses should
maintain a strong pace. While the machine tool consolidation will not be
completed until the fourth quarter, the company expects the group will benefit
from its higher backlog and improved efficiencies in the second half of the
year.
LIQUIDITY AND SOURCES OF CAPITAL
- - --------------------------------
Cash and cash equivalents decreased by $1 million during the second quarter of
1994 and decreased $3 million from $19 million at year-end 1993 to $16 million
at June 18, 1994. Total debt increased $3 million during the second quarter of
1994 and increased $8 million from $185 million at year-end 1993 to $193 million
at June 18, 1994.
During the second quarter, working capital increased by $8 million, but the
current ratio remained unchanged at 1.5. For the 24 weeks ended June 18, 1994,
working capital increased $46 million from $114 million at year-end 1993 to $160
million at June 18, 1994. This increase is due mainly to the issuance of long-
term debt and repayment of short-term debt, as described below.
Operating activities provided $4 million of cash in the second quarter of 1994
compared to $12 million utilized in the comparable period of 1993. Incremental
cash costs associated with the consolidation charge described above were not
significant during the first two quarters in 1994. For the 24 weeks ended June
18, 1994, operating activities provided $1 million of cash as compared to $10
million in 1993. For the 24 weeks ended June 19, 1993 operating activities
include net cash proceeds of $29 million related to the sale of certain U.S.
accounts receivable; comparable amounts for other periods presented are not
material.
Expenditures for new property, plant and equipment in the second quarter of 1994
and for the 24 weeks ended June 18, 1994 were $6.4 million and $11.9 million,
respectively, as compared to $3.7 million and $6.6 million in 1993. The $2.3
million of proceeds from the disposal of property, plant and equipment for the
24 weeks ended June 18, 1994 related primarily to the U.S. machine tool
consolidation. Proceeds from the disposal of property, plant and equipment
during the second quarter of 1993 of $4.9 million and for the year-to-date
period of $13.6 million relate primarily to the sale of surplus assets and the
sale and operating leaseback of certain manufacturing equipment. For all of
1994, the company expects to expend $38 million for property, plant and
equipment, including $7 million for the implementation of advanced manufacturing
technologies at Ferromatik and increasing the level of plant modernization at
Valenite.
The company had a number of short-term intercompany loans denominated in various
currencies totaling approximately $32 million at June 18, 1994 that are subject
to foreign exchange risk. The company also enters into various transactions,
in the ordinary course of business, for the purchase and sale of goods and
services in various currencies. The company hedges its exposure to currency
fluctuations related to short-term intercompany loans and the purchase and sale
of goods under firm commitments by entering into foreign exchange contracts to
minimize the effect of foreign currency exchange rate fluctuations related to
significant transactions.
On March 16, 1994, the company completed a private financing involving the
placement of $115 million of 8-3/8% Notes due 2004. The company used the
proceeds to repay short-term debt and redeem at par the company's $60 million
outstanding 8-3/8% Senior Notes due 1997. On July 8, 1994, the company issued
a prospectus offering to exchange the privately financed 8-3/8% Notes due 2004,
for an equal principal amount of new 8-3/8% Notes due 2004 which have
substantially identical terms but which have been registered under the
Securities Act of 1993.
At June 18, 1994, the company had committed lines of credit of approximately
$138 million with various U.S. and foreign banks. These committed lines include
a $130 million revolving credit facility which imposes restrictions on total
debt in relation to total capital (debt and equity). The company's ratio of
total debt to total capital was 59% at June 18, 1994 compared to 60% at March
26, 1994 and year-end 1993. In July, 1994, the company's $130 million revolving
credit facility was amended to reduce the restrictions imposed on total
indebtedness and to extend the maturity date of the facility to July, 1996.
Under the provisions of the amended facility, the company's additional borrowing
capacity would have totaled approximately $100 million at June 18, 1994 as
compared to $51 million prior to the amendment. Because the restrictions
imposed by the revolving credit facility relate to total indebtedness, the long-
term debt repayments due within one year will give rise to additional borrowing
capacity under the company's committed lines of credit. As a result,
utilization of these lines of credit to repay long-term debt will not reduce the
company's borrowing capacity.
The company believes that its cash flow from operations and available credit
lines are sufficient to meet its debt service and operating requirements,
including necessary capital expenditures, in the foreseeable future.
PART II. OTHER INFORMATION
CINCINNATI MILACRON INC. AND SUBSIDIARIES
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - -----------------------------------------
(a) Exhibits
Exhibit (4) - Instruments Defining the Rights of Security
Holders, Including Indentures
Exhibit (10) - Material Contracts
Exhibit (11) - Statement Regarding Computation of Earnings
Per Share - filed as a part of Part I.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended
June 18, 1994.
CINCINNATI MILACRON INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Cincinnati Milacron Inc.
Date: July 26, 1994 By:/s/Robert P. Lienesch
--------------- ---------------------
Robert P. Lienesch
Controller
Date: July 26, 1994 By:/s/Ronald D. Brown
--------------- ------------------
Ronald D. Brown
Vice President - Finance
and Chief Financial Officer
CINCINNATI MILACRON INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
EXHIBIT NO. PAGE NO.
- - ----------- --------
2 Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession - Not Applicable.
4 Instruments Defining the Rights of Security
Holders, Including Indentures.
4(a) 12% Sinking Fund Debentures due July 15, 2010
- Incorporated herein by reference to the
company's Registration Statement on Form
S-3 (Registration No. 2-98653).
4(b) 8-3/8% Notes due 2004
- Incorporated herein by reference to the
company's registration statement on Form S-4
(registration No. 33-53009).
4(c) Cincinnati Milacron Inc. hereby agrees to
furnish to the Securities and Exchange
Commission, upon its request, the
instruments with respect to the long-term
debt for securities authorized thereunder
which do not exceed 10% of the registrant's
total consolidated assets.
10 Material Contracts
- Incorporated herein by reference to the
company's annual report on Form 10-K for
the fiscal year ended January 1, 1994.
10.1 - Amendment Number Three, dated as of July 20,
1994 to the Amended and Restated Revolving
Credit Agreement dated as of January 28, 1993,
as amended and restated as of December 31, 1993,
among Cincinnati Milacron Inc., the Lenders
listed therein and Bankers Trust Company, as Agent.
- Filed herewith
11 Statement Regarding Computation of
Earnings per Share 19
18 Letter Regarding Change in Accounting
Principles - Not Applicable.
19 Report Furnished to Security Holders
- Not Applicable.
22 Published Report Regarding Matters Submitted
To Vote of Security Holders - Not Applicable.
23 Consents of Experts and Counsel - Not Applicable.
24 Power of Attorney - Not Applicable.
27 Financial Data Schedules - Not Applicable.
99 Additional Exhibits - Not Applicable.
EXHIBIT 10.1
[Conformed]
AMENDMENT NUMBER THREE, dated as of July 20, 1994
("Amendment") to the Amended and Restated Revolving Credit
Agreement dated as of January 28, 1993, as amended and restated
as of July 20, 1993, as amended by Amendment Number One, dated
as of October 26, 1993 and Amendment Number Two dated as of
December 31, 1993 and as amended hereby (the "Credit
Agreement"), among CINCINNATI MILACRON INC., a Delaware
corporation (the "Borrower"), the lenders listed on Schedule
2.1 thereto (each a "Lender" and collectively, the "Lenders")
and BANKERS TRUST COMPANY, a New York banking corporation
("BTCo"), as a Lender and as agent and collateral agent for the
Lenders (in such capacity, including its successors and
permitted assigns, the "Agent"). Capitalized terms used and
not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.
WHEREAS, the Borrower has requested that the Agent
and the Lenders amend certain provisions of the Credit
Agreement;
WHEREAS, the Agent and the Lenders have considered
and agreed to the Borrower's requests, upon the terms and
conditions set forth in this Amendment;
NOW, THEREFORE, in consideration of the foregoing,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
SECTION ONE - AMENDMENTS.
The Credit Agreement is amended as hereinafter
provided in this Section ONE, effective as of July 20, 1994
(the "Amendment Effective Date").
1.1. Amendment to Section 1 (Definitions) of the
Credit Agreement
(a) Section 1.1 shall be amended by adding the
following new definitions in appropriate alphabetical order:
"Amendment No. 3" shall mean Amendment Number Three dated
as of July 20, 1994 to this Agreement."
(b) Section 1.1 shall be further amended as follows:
<PAGE>
"Applicable Borrowing Margin" shall be amended by deleting
the definition in its entirety and replacing it with the
following:
"'Applicable Borrowing Margin' shall mean
(a) with respect to Eurodollar Loans, if the ratio of
Consolidated Total Indebtedness to the sum of (i)
Consolidated Total Indebtedness plus (ii) Consolidated
Tangible Net Worth, as evidenced by the compliance
certificate of the Borrower from the preceding quarter, is
(x) greater than or equal to 65.0%, 1.25% per annum, (y)
is less than 65.0% but greater than or equal to 60.0%,
1.00% per annum, (z) is less than 60.0% but greater than
or equal to 50.0%, .925% per annum, (xx) is less than
50.0% but greater than or equal to 45.0%, .75% per annum,
(yy) is less than 45.0% but greater than or equal to
40.0%, .40% per annum and (zz) is less than 40.0%, .35%
per annum; and
(b) with respect to Fixed CD Rate Loans, if the ratio
of Consolidated Total Indebtedness to the sum of (i) Con-
solidated Total Indebtedness plus (ii) Consolidated
Tangible Net Worth, as evidenced by the compliance
certificate of the Borrower from the preceding quarter, is
(x) greater than or equal to 65.0%, 1.375% per annum, (y)
is less than 65.0% but greater than or equal to 60.0%,
1.125% per annum, (z) is less than 60.0% but greater than
or equal to 50.0%, 1.05% per annum, (xx) is less than
50.0% but greater than or equal to 45.0%, .875% per annum,
(yy) is less than 45.0% but greater than or equal to
40.0%, .525% per annum and (zz) is less than 40.0%, .475%
per annum."
"Applicable Fee Percentage" shall be amended by
deleting the definition thereof in its entirety and replacing
it with the following:
"'Applicable Fee Percentage' shall mean, with respect to
the Facility Fee as defined in Section 2.13, if the ratio
of Consolidated Total Indebtedness to the sum of (i)
Consolidated Total Indebtedness plus (ii) Consolidated
Tangible Net Worth, as evidenced by the compliance
certificate of the Borrower from the preceding quarter, is
(x) greater than or equal to 65.0%, .50% per annum, (y) is
less than 65.0% but greater than or equal to 60.0%, .50%
per annum, (z) is less than 60.0% but greater than or
equal to 50.0%, .45% per annum, (xx) is less than 50.0%
but greater than or equal to 45.0%, .375% per annum, (yy)
is less than 45.0% but greater than or equal to 40.0%,
.25% per annum and (zz) is less than 40.0%, .20% per
annum."
<PAGE>
"Final Maturity Date" shall be amended by deleting
the definition thereof and replacing it with the following:
"'Final Maturity Date' means July 20, 1996 unless such
date is extended for one year; provided, however, that the
Borrower gives the Agent written notice no later than July
20, 1995 of its desire to extend the Maturity Date, which
extension shall be subject to the consent of each Lender
(other than a Defaulting Lender)".
1.2 Amendment to Section 2 (Amount and Terms of
Loans) of the Credit Agreement
Section 2.13 shall be amended by deleting the words
"based on the ratings of the Long Term Debt Issue from S&P and
Moody's,".
A new Section 2.16 shall be added as follows:
"2.16 Certain Computations
All interest, fees and other amounts accruing under
this Agreement on or prior to, or determined in respect of any
day accruing on or prior to, July 20, 1994 shall be computed
and determined as provided in this Agreement before giving
effect to Amendment No. 3."
1.3 Amendment to Section 5 (Affirmative Covenants)
to the Credit Agreement
Section 5.11 shall be amended to read as follows: "The
Borrower shall maintain, at all times, a ratio of Consolidated
Total Indebtedness to the sum of (i) Consolidated Total
Indebtedness plus (ii) Consolidated Tangible Net Worth not to
exceed (x) 69% during the period ending March 24, 1995, (y)
62.5% for the period commencing on March 25, 1995 and ending on
June 16, 1995, (z) 60.0% for the period commencing on June 17,
1995 and ending October 6, 1995, (xx) 57.5% for the period
commencing October 7, 1995 and ending March 23, 1996 and (yy)
55.0% thereafter".
1.4 Amendment to Section 6 (Negative Covenants) of
the Credit Agreement
Section 6.4 shall be amended by inserting after the
words "or the issuance of Securities" the words "and also
excluding redemptions and purchases of indebtedness for money
borrowed or Capital Leases related to the plants of the
Borrower or its affiliates located at Fountain Inn and
Greenwood, South Carolina in an aggregate amount not to exceed
$18,000,000".
<PAGE>
SECTION TWO - REPRESENTATIONS AND WARRANTIES.
The Borrower hereby confirms, reaffirms and restates
the representations and warranties made by it in Section 8 of
the Credit Agreement, as amended hereby, and all such
representations and warranties are true and correct in all
material respects as of the date hereof. The Borrower further
represents and warrants (which representations and warranties
shall survive the execution and delivery hereof) to the Agent
and each Lender that:
(a) The Borrower has the corporate power, authority
and legal right to execute, deliver and perform this Amendment
and has taken all actions necessary to authorize the execution,
delivery and performance of this Amendment;
(b) No consent of any person other than the
Requisite Lenders, and no consent, permit, approval or
authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental
authority is required in connection with the execution,
delivery, performance, validity or enforceability of this
Amendment;
(c) This Amendment has been duly executed and
delivered on behalf of the Borrower by a duly authorized
officer of the Borrower and constitutes a legal, valid and
binding obligation of the Borrower enforceable in accordance
with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditor's rights generally;
and
(d) The execution, delivery and performance of this
Amendment will not violate any requirement of law or
contractual obligation of the Borrower.
SECTION THREE - MISCELLANEOUS.
(a) Except as herein expressly amended, the Credit
Agreement and all other agreements, documents, instruments and
certificates executed in connection therewith, except as
otherwise provided herein, are ratified and confirmed in all
respects and shall remain in full force and effect in
accordance with their respective terms.
(b) All references to the Credit Agreement shall
mean the Credit Agreement as amended as of the Amendment
Effective Date, and as the same may at any time be amended,
amended and restated, supplemented or otherwise modified from
time to time and as in effect.
<PAGE>
(c) This Amendment may be executed by the parties
hereto in one or more counterparts, each of which shall be an
original and all of which shall constitute one and the same
agreement.
(d) THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.
(e) This Amendment shall not constitute a consent or
waiver to or modification of any other provision, term or
condition of the Credit Agreement. All terms, provisions,
covenants, representations, warranties, agreements and
conditions contained in the Credit Agreement, as amended
hereby, shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the date first above
written.
CINCINNATI MILACRON INC.
By: /s/ K. W. Mueller
Name: K. W. Mueller
Title: Treasurer
BANKERS TRUST COMPANY, as a
Lender and as Agent
By: /s/ Edward G. Bennett
Name: Edward G. Bennett
Title: Vice President
CREDIT LYONNAIS CHICAGO
BRANCH, as a Lender
By: /s/ Mary Ann Clemm
Name: Mary Ann Klemm
Title: Vice President
MIDLAND BANK plc, NEW YORK
BRANCH, as a Lender
By: /s/ Patricia E. Apelian
Name: Patricia E. Apelian
Title: Director
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as a Lender
By: /s/ Timothy S. Broadbent
Name: Timothy S. Broadbent
Title: Vice President
NATIONSBANK OF NORTH CAROLINA,
N.A., as a Lender
<PAGE>
By: /s/ Jay Johnston________
Name: Jay Johnston
Title: Vice President
NBD BANK, N.A., as a Lender
By: /s/ Gary C. Wilson_____
Name: Gary C. Wilson
Title: Vice President
PNC BANK, OHIO, N.A., as a Lender
By: /s/ David F. Knuth_____
Name: David F. Knuth
Title: Vice President
SOCIETY NATIONAL BANK, as a
Lender
By: /s/ Wayne K. Guessford_
Name: Wayne K. Guessford
Title: Vice President
STAR BANK, N.A., as a Lender
By: /s/ William J. Goodwin_
Name: William J. Goodwin
Title: Vice President
Exhibit 11
Cincinnati Milacron Inc. and Subsidiaries
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
(In thousands, except per-share amounts)
12 Weeks Ended 24 Weeks Ended
------------------- ------------------
June 18, June 19, June 18, June 19,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
------- ------- ------- --------
Net earnings (loss) . . . . . . . . . . $ 7,879 $ 1,740 $12,863 $(46,770)
Less preferred dividends. . . . . . . . (60) (60) (120) (120)
------- ------- ------- --------
Net earnings (loss) available
to common shareholders. . . . . . . $ 7,819 $ 1,680 $12,743 $(46,890)
======= ======= ======= ========
Primary
Average number of shares
outstanding . . . . . . . . . . . . 33,632 32,192 33,592 29,565
Add dilutive effect of
stock options based on
treasury stock method . . . . . . . 357 635 410 868
------- ------- ------- --------
Total . . . . . . . . . . . . . . . 33,989 32,827 34,002 30,433
======= ======= ======= ========
Per share amount . . . . . . . . $ .23 $ .05 $ .37 $ (1.54)
======= ======= ======= ========
Fully diluted (a)
Average number of shares
outstanding . . . . . . . . . . . . 33,632 32,192 33,592
Add dilutive effect of stock
options based on treasury
stock method. . . . . . . . . . . . 383 635 430
------- ------- -------
Total . . . . . . . . . . . . . . . 34,015 32,827 34,022
======= ======= =======
Per share amount . . . . . . . . $ .23 $ .05 $ .37
======= ======= =======
</TABLE>
(a) Fully diluted earnings per common share is not presented for the 24 weeks
ended June 19, 1993 because the effect would be anti-dilutive.
Note: This computation is required by Regulation S-K, Item 601, and is filed as
an exhibit under Item 6 of Form 10-Q.
