Milacron's (MCRN) Q1 Earnings Beat, Revenues Miss Estimates

Milacron Holdings Corp. MCRN delivered adjusted earnings per share of 27 cents in the first quarter, surpassing the Zacks Consensus Estimate of 26 cents. On a year-over-year basis, earnings plunged 30.8%.

Including one-time items, the company reported earnings per share of 13 cents in the reported quarter, jumping 44.4% from the year-ago quarter’s reported figure of 9 cents.

Operational Update

Milacron’s revenues fell 13.9% year over year to $248.7 million during the first quarter. Revenues also missed the Zacks Consensus Estimate of $280 million. Excluding unfavorable impact of currency movements, organic revenues decreased 10.5% from the prior-year quarter’s reported tally. New orders in the reported quarter declined 10.8% year over year to $275.3 million.

Cost of sales during the January-March quarter went down 13.2% year over year to $164 million. Gross profit decreased 15% year over year to $84.8 million. Gross margin came in at 34.1% during the first quarter compared with the year-ago quarter’s 34.6%.

Selling, general and administrative expenses slipped 13% year over year to $54 million. Adjusted EBITDA went down 23.5% to $41.0 million in the first quarter from $53.6 million in the prior-year quarter. Adjusted EBITDA margin shrunk 210 bps to 16.5% in the quarter.

Milacron Holdings Corp. Price, Consensus and EPS Surprise

Milacron Holdings Corp. Price, Consensus and EPS Surprise | Milacron Holdings Corp. Quote

Segmental Results

Advanced Plastic Processing Technologies: Net sales declined 15% year over year to $119.4 million. Excluding $3.8 million of unfavorable impact of currency movements, sales dropped 12.2% from the prior-year quarter. Adjusted EBITDA was down 9.3% year over year to $14.7 million.
 
Melt Delivery and Control Systems: Net sales dipped 14% year over year to $100 million. Excluding unfavorable impact of currency movements of $4.6 million, sales decreased 10.2% from the prior-year period. Adjusted EBITDA plummeted 32.5% year over year to $25.8 million.
 
Fluid Technologies: Sales for the reported quarter slipped 8.4% year over year to $29.3 million. Sales dipped 3.8% from the year-ago period, excluding $1.5 million of unfavorable currency-movement impact. Adjusted EBITDA was $6.4 million, down from the prior year’s $7.1 million.

Financial Update

Milacron reported cash and cash equivalents of $150 million at the end of the first quarter, down from $184 million witnessed at the end of 2018. Net cash used in operating activities were $4.6 million during the three-month period ended Mar 31, 2019, compared with cash inflow of $11.7 million reported in the comparable period last year.  Long-term debt was $824 million as of Mar 31, 2019, compared with $829 million as of Dec 31, 2018.

Shares of Milacron have dipped around 21.3% in the past year compared with the industry’s decline of 4.9%.

Zacks Rank and Key Picks

Milacron currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Industrial Products sector are DMC Global Inc. BOOM, Lawson Products, Inc. LAWS and DXP Enterprises, Inc. DXPE, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

DMC Global has an estimated earnings growth rate of 77.3% for the ongoing year. The company’s shares have soared 80.3%, in the past year.

Lawson Products has an impressive expected earnings growth rate of 102.5% for the current year. The stock has appreciated 44.4% in a year’s time.

DXP Enterprises has a projected earnings growth rate of 21.6% for 2019. The company’s shares have gained 15.7%, over the past year.

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