UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
Form 10-Q
________________
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019

OR
o
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 001-37458
___________________________
Milacron Holdings Corp.
(Exact name of registrant as specified in its charter)
___________________________
 
Delaware
 
 
 
80-0798640
(State or Other Jurisdiction of
Incorporation or Organization)
 
 
 
(I.R.S. Employer
Identification Number)
 
 
10200 Alliance Road, Suite 200
 
 
 
 
Cincinnati, Ohio 45242
 
 
(Address of principal executive offices, including zip code)
 
 
(513) 487-5000
 
 
(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     ý No     o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes     ý No     o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ý
 
Accelerated filer      ¨
 
Non-accelerated filer     ¨
 
Smaller reporting company     ¨
 
Emerging growth company   ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financing accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     o No     ý
At March 31, 2019 , there were 70,501,787 common shares, $0.01 par value per share, outstanding.
 




Milacron Holdings Corp.
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2019

TABLE OF CONTENTS
 
 
Page
 
 
 
 
 
 
 
 
PART I. FINANCIAL INFORMATION
 
ITEM 1.
Financial Statements
 
 
 
 
 
 
 
 
 
 
ITEM 2.
ITEM 3.
ITEM 4.
 
 
 
 
PART II. OTHER INFORMATION
 
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.
 
 
 


2



Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions contained in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Examples of forward-looking statements include, but are not limited to statements we make regarding (1) our belief that our cash and cash equivalents, cash flow from operations and borrowings under our asset-based revolving credit facility and other foreign lines of credit will provide us adequate cash to fund the operating needs, working capital, capital expenditure, debt service and other requirements for our business for the foreseeable future; (2) estimated capital expenditures for future periods; and (3) estimated cost savings and opportunities to drive margin improvements.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements, including the risk factors discussed in Item 1A. Risk Factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission ("SEC") on February 28, 2019. There may be other factors that may cause our actual results to differ materially from the forward-looking statements.

Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. We caution you therefore against relying on these forward-looking statements.

Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date on which we make it. Factors or events that could cause our actual operating and financial performance to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.


3



MILACRON HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
March 31, 2019
 
 
 
(Unaudited)
 
December 31, 2018
 
(in millions, except share data)
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
150.0

 
$
184.0

Accounts receivable, net
149.6

 
146.3

Inventories, net:
 
 
 
Raw materials
80.6

 
73.2

Work-in-process
52.1

 
46.7

Finished products
120.4

 
118.6

Total inventories, net
253.1

 
238.5

Prepaid and other current assets
47.5

 
49.1

Current assets held for sale
65.0

 
36.9

Total current assets
665.2

 
654.8

Property and equipment, net
208.2

 
215.7

Operating lease right-of-use assets
34.2

 

Goodwill
520.3

 
513.2

Intangible assets, net
291.0

 
292.7

Other noncurrent assets
25.4

 
29.1

Noncurrent assets held for sale

 
27.0

Total assets
$
1,744.3

 
$
1,732.5

Liabilities and shareholders’ equity
 
 
 
Current liabilities:
 
 
 
Short-term borrowings
$
3.1

 
$
5.8

Accounts payable
106.3

 
116.8

Advanced billings and deposits
43.6

 
38.9

Accrued salaries, wages and other compensation
22.1

 
24.0

Other current liabilities
67.1

 
66.0

Current liabilities held for sale
15.8

 
14.9

Total current liabilities
258.0

 
266.4

Long-term debt
824.3

 
829.0

Deferred income tax liabilities
57.5

 
57.5

Accrued pension liabilities
27.2

 
27.6

Operating lease liabilities
26.4

 

Other noncurrent accrued liabilities
13.9

 
25.2

Total liabilities
1,207.3

 
1,205.7

Shareholders’ equity:
 
 
 
Preferred stock - $0.01 par value, 50,000,000 shares authorized, none outstanding

 

Common stock - $0.01 par value, 500,000,000 shares authorized; 71,044,661 and 70,726,800 shares
 
 
 
issued as of March 31, 2019 and December 31, 2018, respectively, and 70,501,787 and
 
 
 
70,454,138 shares outstanding as of March 31, 2019 and December 31, 2018, respectively
0.7

 
0.7

Capital in excess of par value
698.1

 
693.5

Treasury stock - at cost; 542,874 and 272,662 shares as of March 31, 2019 and December 31, 2018,
 
 
 
respectively
(7.2
)
 
(3.5
)
Retained deficit
(29.3
)
 
(29.0
)
Accumulated other comprehensive loss
(125.3
)
 
(134.9
)
Total shareholders’ equity
537.0

 
526.8

Total liabilities and shareholders’ equity
$
1,744.3

 
$
1,732.5

See accompanying notes.

4



MILACRON HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions, except per share data)

Net sales
 
$
248.7

 
$
288.8

Cost of sales
 
163.9

 
188.9

Manufacturing margins
 
84.8

 
99.9

Operating expenses:
 
 
 
 
Selling, general and administrative expenses
 
54.1

 
62.1

Amortization expense
 
5.6

 
6.3

(Gain) loss on currency translation
 
(0.7
)
 
0.7

Other (income) expense, net
 
(0.1
)
 
7.6

Total operating expenses
 
58.9

 
76.7

Operating earnings
 
25.9

 
23.2

Interest expense, net
 
9.5

 
10.7

Loss on debt extinguishment
 

 
0.3

Other non-operating expenses
 
0.2

 
0.3

Earnings from continuing operations before income taxes
 
16.2

 
11.9

Income tax expense
 
7.0

 
5.4

Net earnings from continuing operations
 
9.2

 
6.5

Loss from discontinued operations (net of income taxes)
 
(10.0
)
 
(0.6
)
Net (loss) earnings
 
$
(0.8
)
 
$
5.9

 
 
 
 
 
Earnings (loss) per share:
 
 
 
 
Basic:
 
 
 
 
Net earnings from continuing operations
 
$
0.13

 
$
0.09

Loss from discontinued operations
 
(0.14
)
 
(0.01
)
      Net (loss) earnings
 
$
(0.01
)
 
$
0.08

 
 
 
 
 
Diluted:
 
 
 
 
Net earnings from continuing operations
 
$
0.13

 
$
0.09

Loss from discontinued operations
 
(0.14
)
 
(0.01
)
      Net (loss) earnings
 
$
(0.01
)
 
$
0.08

See accompanying notes.



5



MILACRON HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Net (loss) earnings
 
$
(0.8
)
 
$
5.9

Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation gain
 
11.1

 
26.6

Unrecognized post-retirement plan gain
 
0.1

 

Unrealized (loss) gain on hedging activities
 
(1.6
)
 
4.4

Total other comprehensive income, net of tax
 
9.6

 
31.0

Comprehensive income
 
$
8.8

 
$
36.9

See accompanying notes.

6



MILACRON HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
 
 
Common
Stock
(Shares)
 
Common
Stock
 
Capital In
Excess of
Par Value
 
Treasury Stock (Shares)
 
Treasury Stock
 
Retained
Deficit
 
Accumulated
Other
Comprehensive Loss
 
Totals
 
 
(in millions, except share data)
Balance at December 31, 2017
 
69,644,918

 
$
0.7

 
$
675.9

 

 
$

 
$
(70.5
)
 
$
(85.4
)
 
$
520.7

Stock-based compensation activity
 
732,789

 

 
5.5

 

 

 

 

 
5.5

Net earnings
 

 

 

 

 

 
5.9

 

 
5.9

Other comprehensive income, net of tax
 

 

 

 

 

 

 
31.0

 
31.0

Balance at March 31, 2018
 
70,377,707

 
$
0.7

 
$
681.4

 

 
$

 
$
(64.6
)
 
$
(54.4
)
 
$
563.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
 
70,726,800

 
$
0.7

 
$
693.5

 
(272,662
)
 
$
(3.5
)
 
$
(29.0
)
 
$
(134.9
)
 
$
526.8

Adjustment to adopt new lease accounting standard
 

 

 

 

 

 
0.5

 

 
0.5

Stock-based compensation activity
 
317,861

 

 
4.6

 

 

 

 

 
4.6

Purchase of treasury stock
 

 

 

 
(270,212
)
 
(3.7
)
 

 

 
(3.7
)
Net loss
 

 

 

 

 

 
(0.8
)
 

 
(0.8
)
Other comprehensive income, net of tax
 

 

 

 

 

 

 
9.6

 
9.6

Balance at March 31, 2019
 
71,044,661

 
$
0.7

 
$
698.1

 
(542,874
)
 
$
(7.2
)
 
$
(29.3
)
 
$
(125.3
)
 
$
537.0

See accompanying notes.

7



MILACRON HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Operating activities from continuing operations
 
 
 
Net (loss) earnings
$
(0.8
)
 
$
5.9

Loss from discontinued operations (net of income taxes)
10.0

 
0.6

Adjustments to reconcile net (loss) earnings from continuing operations to net cash (used in) provided by operating activities from continuing operations:
 
 
 
Depreciation and amortization
11.9

 
13.2

Unrealized (gain) loss on currency translation of intercompany advances
(1.7
)
 
0.2

Amortization of deferred financing costs
0.6

 
0.7

Loss on debt extinguishment

 
0.3

Non-cash stock-based compensation expense
3.3

 
2.7

Deferred income taxes
(1.2
)
 
1.1

Changes in assets and liabilities:
 
 
 
Accounts receivable
(3.0
)
 
3.2

Inventories
(13.7
)
 
(13.0
)
Prepaid and other current assets
1.1

 
(4.6
)
Accounts payable
(8.8
)
 
(1.9
)
Advanced billings and deposits
4.5

 
11.8

Other current liabilities
(7.2
)
 
(9.1
)
Other noncurrent assets
0.9

 
0.7

Other noncurrent accrued liabilities
(0.5
)
 
(0.1
)
Net cash (used in) provided by operating activities from continuing operations
(4.6
)
 
11.7

Investing activities from continuing operations
 
 
 
Purchases of property and equipment
(18.0
)
 
(7.2
)
Proceeds from disposals of property and equipment
0.2

 
8.0

Net cash (used in) provided by investing activities from continuing operations
(17.8
)
 
0.8

Financing activities from continuing operations
 
 
 
Payments on long-term debt and capital lease obligations (original maturities longer than 90 days)
(5.0
)
 
(25.0
)
Net decrease in short-term borrowings (original maturities of 90 days or less)
(2.8
)
 
(0.1
)
Proceeds from exercise of stock options
1.3

 
2.8

Purchase of treasury stock
(3.7
)
 

Net cash used in financing activities from continuing operations
(10.2
)
 
(22.3
)
Cash used in continuing operations
(32.6
)
 
(9.8
)
Cash used in discontinued operations
 
 
 
Operating cash flows
(2.6
)
 
(4.1
)
Investing cash flows
(0.2
)
 
(0.1
)
Total cash used in discontinued operations
(2.8
)
 
(4.2
)
Effect of exchange rate changes on cash
1.4

 
2.8

Decrease in cash and cash equivalents
(34.0
)
 
(11.2
)
Cash and cash equivalents at beginning of period
184.0

 
187.9

Cash and cash equivalents at end of period
$
150.0

 
$
176.7

See accompanying notes

8



MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2019 and December 31, 2018 and for the
Three Months Ended March 31, 2019 and 2018
1. Background and Basis of Presentation
Milacron Holdings Corp. (the "Company" or "Milacron") is a global leader in the manufacture, distribution, and service of highly engineered and customized systems used in the plastic technology and processing industry. The Company has a full-line product portfolio that includes hot runner systems, injection molding, blow molding and extrusion equipment and produces process control systems, mold bases and components and maintenance, repair and operating ("MRO") supplies for plastic processing equipment and fluid technology. The Company operates throughout the world and is headquartered in Cincinnati, Ohio.
The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles ("U.S. GAAP") for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the Condensed Consolidated Financial Statements for the interim periods. The interim period results are not necessarily indicative of the results to be expected for the full year. These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2019.
Recently Adopted Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be either classified as finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 also requires significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. The Company adopted ASU 2016-02 on January 1, 2019 using a modified retrospective method and the impact of that adoption is materially consistent with the balances recorded within the Company's Condensed Consolidated Balance Sheets as of March 31, 2019. There was no material impact to the Company's consolidated net (loss) earnings, shareholders' equity or cash flows. Under the modified retrospective approach, the Company did not adjust its comparative period financial information or make new lease disclosures for periods before the effective date. As permitted under ASU 2016-02, the Company also elected the package of practical expedients and will carry forward the assessment of whether contracts contain or are leases and the classification of leases.
In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) (ASU 2018-02). ASU 2018-02 allows for an entity to elect to reclassify from accumulated other comprehensive income (loss) to retained earnings the income tax effects on items resulting from what is commonly referred to as the U.S. Tax Cuts and Jobs Act of 2017 (the "Tax Act"). ASU 2018-02 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The Company has elected to not reclassify the stranded income tax effects of the Tax Act from accumulated other comprehensive income (loss) to retained earnings.

9

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. Background and Basis of Presentation (continued)

Lease Accounting Policy
The Company determines if an arrangement contains a lease at inception and recognizes ROU assets and liabilities associated with leases based on the present value of the future minimum lease payments over the lease term at the later of the commencement date of the lease or January 1, 2019 (the implementation date of ASU 2016-02). The Company uses its incremental borrowing rate at the commencement date in determining the present value of future payments for leases where the implicit rate cannot be readily determined. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. For leases that include residual value guarantees or payments for terminating the lease, the Company includes these costs in the lease liability when it is probable that we will incur them. ROU assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the Company's Condensed Consolidated Balance Sheets. Lease expense for short-term leases is recognized on a straight-line basis over the lease term.

Results for reporting periods beginning after January 1, 2019 are presented under Accounting Standards Codification ("ASC") 842, Leases ("ASC 842"), while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting treatment under ASC Topic 840, Leases .

Reclassifications
Certain amounts in the prior period Condensed Consolidated Financial Statements have been reclassified to conform to the current period's presentation specifically as it relates to assets and liabilities held for sale and disaggregated revenue.

2. Discontinued Operations
During the first quarter of 2019, the Company started a process to divest its blow molding business as it is no longer considered a strategic fit with the Company's long-term growth plan and operational objectives. This expected divestiture represents a strategic shift in the Company's business and, in accordance with U.S. GAAP, qualifies as a discontinued operation and the divestiture is expected to occur within one year. As a result, the operating results and cash flows related to the blow molding business have been reflected as discontinued operations in the Company's Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows for all periods presented, while the assets and liabilities that are expected to be sold have been reflected as assets and liabilities held for sale for the current and prior periods in the Company's Condensed Consolidated Balance Sheets. The financial information reported for the Company's Advanced Plastic Processing Technologies reporting segment exclude the activity from the blow molding business due to the expected divestiture.

10

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. Discontinued Operations (continued)

The assets and liabilities of the blow molding business that have been classified as held for sale in the Company's Condensed Consolidated Balance Sheets are comprised of the following:
 
March 31, 2019
 
December 31, 2018
 
(in millions)
Accounts receivable, net
$
8.8

 
$
6.5

Inventories, net:
18.7

 
19.3

Prepaid and other current assets
1.0

 
1.5

Property and equipment, net
16.4

 

Operating lease right-of-use assets
1.2

 

Goodwill
0.6

 

Intangible assets, net
0.8

 

Current assets held for sale
$
47.5

 
$
27.3

 
 
 
 
Property and equipment, net
$

 
$
25.3

Goodwill

 
0.6

Intangible assets, net

 
1.1

Noncurrent assets held for sale
$

 
$
27.0

 
 
 
 
Accounts payable
$
5.3

 
$
6.1

Advanced billings and deposits
6.1

 
5.6

Accrued salaries, wages and other compensation
1.5

 
1.9

Other current liabilities
1.7

 
1.3

Operating lease liabilities
1.2

 

Current liabilities held for sale
$
15.8

 
$
14.9

As a result of the Company's decision to sell its blow molding business, the Company recognized an $8.5 million non-cash adjustment to write-down the net book value of one its facilities located in Europe which is classified as held for sale as of March 31, 2019 and December 31, 2018. The facility was written down to fair value less estimated costs to sell based on a quoted market price, a level two measurement under the fair value hierarchy. The facility's assets are recorded within the Company's Advanced Plastic Processing Technologies segment and the adjustment to net book value is recorded within loss on discontinued operations within the Company's Condensed Consolidated Statements of Operations. The value of the facility is classified within current assets held for sale in the accompanying Condensed Consolidated Balance Sheets.
The following table presents a consolidation of the captions within the Company's Condensed Consolidated Statements of Operations for the loss from discontinued operations attributable to the blow molding business for the three months ended March 31, 2019 and 2018.
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Loss from discontinued operations attributable to blow molding business
 
 
 
Net sales
$
21.5

 
$
21.6

Cost of sales
18.7

 
17.6

Selling, general and administrative expenses
3.1

 
4.0

Amortization expense
0.4

 
0.5

Gain on currency translation

 
(0.5
)
Other expense
8.9

 
0.1

Pretax loss from discontinued operations
(9.6
)
 
(0.1
)
Income tax expense
0.4

 
0.5

Loss from discontinued operations
$
(10.0
)
 
$
(0.6
)

11

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. Revenue
The following table provides information about disaggregated revenue by primary geographical and end markets, and includes a reconciliation of the disaggregated revenue with reportable segments. During the first quarter of 2019, the Company refined the end market classification of certain customers in each segment and as a result, the end market classification in the comparative period has been reclassified to conform with the current period presentation.
 
Three Months Ended March 31, 2019
 
Advanced
Plastic
Processing
Technologies
 
Melt
Delivery
and Control
Systems
 
Fluid
Technologies
 
Total
 
(in millions)
Primary geographical markets:
 
 
 
 
 
 
 
North America
$
74.1

 
$
36.2

 
$
12.6

 
$
122.9

Europe
6.2

 
28.3

 
11.4

 
45.9

China
0.9

 
21.0

 
2.5

 
24.4

India
32.3

 
3.9

 
0.2

 
36.4

Other
5.9

 
10.6

 
2.6

 
19.1

Total
$
119.4

 
$
100.0

 
$
29.3

 
$
248.7

 
 
 
 
 
 
 
 
End markets:
 
 
 
 
 
 
 
Automotive
$
23.4

 
$
23.3

 
$
6.2

 
$
52.9

Packaging
13.7

 
11.8

 

 
25.5

Consumer goods
16.2

 
17.6

 
1.4

 
35.2

Electronics
8.0

 
4.8

 
1.0

 
13.8

Medical
6.6

 
8.1

 
0.2

 
14.9

Construction
20.0

 
0.4

 

 
20.4

Custom molders and other
31.4

 

 

 
31.4

Mold makers and other

 
30.8

 

 
30.8

Job shops and other

 

 
9.1

 
9.1

Distributors
0.1

 
3.2

 
11.4

 
14.7

Total
$
119.4

 
$
100.0

 
$
29.3

 
$
248.7



12

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. Revenue (continued)

 
Three Months Ended March 31, 2018
 
Advanced
Plastic
Processing
Technologies
 
Melt
Delivery
and Control
Systems
 
Fluid
Technologies
 
Total
 
(in millions)
Primary geographical markets:
 
 
 
 
 
 
 
North America
$
80.3

 
$
35.8

 
$
12.8

 
$
128.9

Europe
16.6

 
33.2

 
12.6

 
62.4

China
5.0

 
32.1

 
2.8

 
39.9

India
31.4

 
3.8

 
0.3

 
35.5

Other
7.0

 
11.6

 
3.5

 
22.1

Total
$
140.3

 
$
116.5

 
$
32.0

 
$
288.8

 
 
 
 
 
 
 
 
End markets:
 
 
 
 
 
 
 
Automotive
$
21.6

 
$
29.1

 
$
6.8

 
$
57.5

Packaging
22.6

 
12.0

 
0.1

 
34.7

Consumer goods
14.9

 
21.8

 
1.4

 
38.1

Electronics
11.3

 
9.1

 
1.8

 
22.2

Medical
4.3

 
7.6

 
0.2

 
12.1

Construction
25.3

 
0.4

 

 
25.7

Custom molders and other
40.1

 

 

 
40.1

Mold makers and other

 
34.0

 

 
34.0

Job shops and other

 

 
8.9

 
8.9

Distributors
0.2

 
2.5

 
12.8

 
15.5

Total
$
140.3

 
$
116.5

 
$
32.0

 
$
288.8

We receive payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to receive consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract.
Significant changes in the contract liabilities balances are as follows:
 
Three Months Ended March 31, 2019
 
Three Months Ended March 31, 2018
 
(in millions)
Balance at beginning of period
$
38.9

 
$
52.4

Additional advanced billings and deposits received
71.8

 
93.3

Revenue recognized
(66.5
)
 
(80.5
)
Foreign currency translation adjustments and other
(0.6
)
 
(0.5
)
Balance at end of period
$
43.6

 
$
64.7

Sales, value-add, and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The expected costs associated with our base warranties and field service actions are recognized as expense when the products are sold.
The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. As permitted by ASU No. 2014-09, Revenue from Contracts w ith Customers , the Company does not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, and (2) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

13

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. Goodwill and Other Intangible Assets
The following table summarizes the changes in the Company’s goodwill, by reportable segment, for the three months ended March 31, 2019 :
 
Advanced
Plastic
Processing
Technologies
 
Melt
Delivery
and Control
Systems
 
Fluid
Technologies
 
Corporate
 
Total
 
(in millions)
Balance at December 31, 2018
$
35.0

 
$
431.3

 
$
46.9

 
$

 
$
513.2

Foreign currency translation adjustments

 
7.1

 

 

 
7.1

Balance at March 31, 2019
$
35.0

 
$
438.4

 
$
46.9

 
$

 
$
520.3

There were no goodwill impairment charges during the three months ended March 31, 2019 and 2018 .
The following table summarizes the Company’s other intangible assets at March 31, 2019 :
 
Gross
Amount
 
Accumulated
Amortization
 
Net
Amount
 
(in millions)
Intangible assets subject to amortization:
 
 
 
 
 
Trademarks
$
36.2

 
$
20.5

 
$
15.7

Technology
112.4

 
55.8

 
56.6

Customer relationships
215.1

 
133.9

 
81.2

Total intangible assets subject to amortization
363.7

 
210.2

 
153.5

Trademarks, not subject to amortization
137.5

 

 
137.5

Total
$
501.2

 
$
210.2

 
$
291.0

The following table summarizes the Company’s other intangible assets at December 31, 2018 :
 
Gross
Amount
 
Accumulated
Amortization
 
Net
Amount
 
(in millions)
Intangible assets subject to amortization:
 
 
 
 
 
Trademarks
$
35.7

 
$
19.6

 
$
16.1

Technology
110.9

 
53.0

 
57.9

Customer relationships
213.7

 
130.7

 
83.0

Total intangible assets subject to amortization
360.3

 
203.3

 
157.0

Trademarks, not subject to amortization
135.7

 

 
135.7

Total
$
496.0

 
$
203.3

 
$
292.7

Consolidated amortization expense related to intangible assets subject to amortization was $5.6 million and $6.3 million for the three months ended March 31, 2019 and 2018 , respectively.
5. Income Taxes
An estimated annual effective tax rate is used to determine the quarterly provision for income taxes. The effective rate is based on various factors including expected annual income, statutory tax rates, tax planning strategies in the various jurisdictions in which the Company operates, permanent items, valuation allowances against deferred tax assets and the ability to utilize tax credits and net operating loss carryforwards. Subsequent recognition, derecognition and measurement of uncertain tax positions are separately recognized in the quarter in which the underlying transaction or event occurs which causes variability in the effective tax rates from quarter to quarter.

14

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Income Taxes (continued)

The effective rate for each period differs from the U.S. federal statutory income tax rate due to the mix of earnings by jurisdiction and the effect of transaction costs and business combination accounting adjustments that do not provide tax benefits. The valuation allowances also cause volatility in the effective rate as they reduce deferred tax assets in jurisdictions which lack sufficient positive evidence regarding the ability to utilize the assets and no tax benefit or expense is recognized for losses or income incurred in those jurisdictions.
At December 31, 2018, the Company had estimated U.S. net operating loss carryforwards totaling $107.3 million , which are scheduled to expire beginning in 2029. As of December 31, 2018, the Company had determined that it has experienced multiple ownership changes under Internal Revenue Code Section 382 in prior years. During the year ended December 31, 2018, the Company completed a formal study and determined the usage of the Company's U.S. net operating losses are limited due to ownership changes that occurred in 2015 and 2017. The annual limitation did not increase U.S. cash taxes or income tax expense.

In accordance with ASC 740, Income Taxes , the Company records interest and penalties associated with uncertain tax positions within income tax expense in the Company's Condensed Consolidated Statements of Operations. The Company does not have a material liability recorded for interest and penalties related to uncertain tax positions for any period presented.
6. Debt
Debt for the Company consists of the following:
 
March 31, 2019
 
December 31, 2018
 
Principal
 
Unamortized Discount and Debt Issuance Costs
 
Net
 
Principal
 
Unamortized Discount and Debt Issuance Costs
 
Net
 
(in millions)
Senior secured term loan facility due September 2023
$
832.5

 
$
8.2

 
$
824.3

 
$
837.5

 
$
8.7

 
$
828.8

Borrowings under other lines of credit
3.1

 

 
3.1

 
5.8

 

 
5.8

Capital lease obligations and other

 

 

 
0.3

 

 
0.3

Total debt
835.6

 
8.2

 
827.4

 
843.6

 
8.7

 
834.9

Less current portion
(3.1
)
 

 
(3.1
)
 
(5.9
)
 

 
(5.9
)
Total debt less current portion
$
832.5

 
$
8.2

 
$
824.3

 
$
837.7

 
$
8.7

 
$
829.0

On February 28, 2018, the Company made a voluntary $25.0 million principal payment on the senior secured term loan facility due September 2023 ("2017 Term Loan Facility"). As a result of the transaction, the Company recognized a loss on debt extinguishment of $0.3 million for the three months ended March 31, 2018 related to the write-off of deferred financing costs associated with the Company's 2017 Term Loan Facility.
7. Employee Benefit Plans
The Company sponsors three noncontributory defined benefit pension plans for certain non-U.S. employees and retirees. One plan covers certain employees in the United Kingdom and the other two plans cover certain employees in Germany. The service cost was $0.1 million for the three months ended March 31, 2018 and is included in cost of sales and selling, general and administrative expenses in the Company's Condensed Consolidated Statements of Operations. The other components of net periodic pension costs totaled $0.2 million and $0.3 million for the three months ended March 31, 2019 and 2018 , respectively, and are included in other non-operating expenses in the Company's Condensed Consolidated Statements of Operations.

15

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. Net Earnings Per Share
The following is a reconciliation of the numerator and denominator of the basic and diluted net earnings per share ("EPS") computations:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
 
(in millions, except common share and per common share amounts)
Numerator:
 
 
 
 
Net earnings from continuing operations
 
$
9.2

 
$
6.5

Denominator:
 
 
 
 
Denominator for basic EPS–weighted-average common shares
 
69,996,588

 
69,215,457

Dilutive effect of stock-based compensation arrangements
 
1,176,893

 
2,307,869

Denominator for diluted EPS–adjusted weighted-average common shares
 
71,173,481

 
71,523,326

 
 
 
 
 
Basic EPS from continuing operations
 
$
0.13

 
$
0.09

Diluted EPS from continuing operations
 
$
0.13

 
$
0.09

The diluted EPS calculation for the three months ended March 31, 2019 and 2018 excludes the effect of 1.1 million and 0.9 million outstanding stock options, respectively, as their effect is anti-dilutive. The diluted EPS calculation for the three months ended March 31, 2019 and 2018 excludes the effect of 0.5 million and 0.2 million outstanding performance stock units, respectively, as the performance criteria has not yet been achieved.
9. Stock-based Compensation
On March 1, 2019, the Company granted 0.3 million performance stock units and 0.8 million restricted stock units under the 2015 Equity Incentive Plan. The performance stock units contain a three -year performance period with a performance target based on adjusted EBITDA margin and free cash flow conversion and possible payouts ranging from 50% to 200% of the target awards. The restricted stock units vest in equal annual increments over two or three years .
10. Derivative Financial Instruments
In the normal course of business, including the purchasing of materials and selling of products, the Company is exposed to certain risks related to fluctuations in foreign currency exchange rates. The Company uses foreign currency forward contracts to manage risks from these market fluctuations. The Company is also exposed to certain risks related to fluctuations in interest rates and uses interest rate swaps to manage risk from these market fluctuations. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and monitors the credit ratings of these institutions.
Foreign Currency Forward Contracts
The Company currently hedges its risk relative to fluctuations in the Canadian dollar, Euro and Japanese yen for forecasted cash outflows denominated in these currencies. The Company had foreign currency forward contracts denominated in these currencies outstanding with notional amounts totaling $34.3 million at March 31, 2019 . There were no foreign currency forward contracts outstanding at December 31, 2018 . As of March 31, 2019 , all of the Company’s outstanding instruments mature within the next nine months .
The Company’s derivative instruments discussed above are designated as cash flow hedges and the fair value of these derivative instruments was $0.2 million at March 31, 2019 and is included in prepaid and other current assets in the Company's Condensed Consolidated Balance Sheets.

16

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. Derivative Financial Instruments (continued)

The Company also enters into derivative instruments (forwards) to economically hedge the impact of fluctuations in the Indian rupee. During the three months ended March 31, 2019 , the Company recognized losses of $0.2 million related to the changes in fair value of these derivative instruments not designated as hedges. These gains and losses are recognized immediately within the Company's Condensed Consolidated Statements of Operations and are classified within (gain) loss on currency translation. The fair value of these derivative instruments not designated as hedges was insignificant at March 31, 2019 .
Interest Rate Swap Agreements
The Company is exposed to changes in interest rates on its variable rate debt. In order to manage this risk, on February 16, 2017, Milacron LLC, a wholly-owned subsidiary of the Company, entered into two interest rate swap transactions effective for a four-year period beginning January 31, 2018 with a total notional amount of $400.0 million . The interest rate swaps are intended to manage the Company's interest rate risk by fixing the interest rate on a portion of the Company's debt outstanding under the 2017 Term Loan Facility that was previously subject to a floating interest rate equal to 1-month LIBOR plus a credit spread. The swaps provide for the Company to pay a fixed rate of 2.062% per annum on such portion of the outstanding debt in exchange for receiving a variable interest rate based on 1-month LIBOR. The effect is a synthetically fixed rate of 2.062% plus the loan spread for the term and debt hedged.    
The Company designated these interest rate swaps as cash flow hedges of floating rate borrowings and expects the hedge to be highly effective in offsetting fluctuations in the designated interest payments resulting from changes in the benchmark interest rate. The gains and losses on the designated interest rate swaps will offset losses and gains on the transactions being hedged. The fair value of the interest rate swaps is calculated by taking into consideration current interest rates and the current creditworthiness of the counterparties or the Company, as applicable. The effective portion of changes in the fair value of the interest rate swaps is reflected as a component of accumulated other comprehensive loss and recognized as interest expense, net as payments are paid or accrued. The remaining gain or loss in excess of the cumulative change in the present value of the future cash flows of the hedge item, if any (i.e. the ineffective portion), is recognized as interest expense, net during the current period. During the three months ended March 31, 2018, the Company recorded $0.1 million of hedge ineffectiveness in earnings.
Cross-Currency Interest Rate Swap
In November 2018, the Company entered into a cross-currency interest rate swap agreement that will mature on September 28, 2023, with an aggregate notional amount of $85.8 million to manage foreign currency risk by effectively converting a portion of the Company's variable rate U.S. dollar-denominated debt, including the monthly interest rates thereunder, to fixed rate Euro-denominated debt of €75.0 million. This cross-currency interest rate swap agreement is designated as a hedge of a portion of our net investment in Euro-denominated foreign operations to reduce foreign currency risk associated with the investment in these operations. Changes in the value of these items resulting from fluctuations in the underlying exchange rates to U.S. dollar exchange rates are recorded as foreign currency translation adjustments within accumulated other comprehensive loss.
The following table provides the effect of the Company’s foreign currency forward contracts, interest rate swaps and cross-currency interest rate swaps designated as cash flow hedges on the Company’s Condensed Consolidated Financial Statements for the three months ended March 31, 2019 and 2018 :
Type of instrument:
Gain (Loss)
Recognized in OCI
on Derivative
(Effective Portion)
 
Gain (Loss)
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
 
(in millions)
Three Months Ended March 31, 2019
 
 
 
Foreign exchange contracts
$
0.3

 
$

Interest rate swaps
$
(3.5
)
 
$
0.5

Cross-currency interest rate swaps
$
2.3

 
$
0.5

Three Months Ended March 31, 2018
 
 
 
Foreign exchange contracts
$
(0.2
)
 
$

Interest rate swaps
$
5.8

 
$


17

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. Derivative Financial Instruments (continued)

All gains (losses) that are reclassified from accumulated other comprehensive loss into income (effective portion) are classified in (gain) loss on currency translation or cost of sales within the Company's Condensed Consolidated Statements of Operations. The gain (loss) recognized related to the ineffective portion of the foreign exchange contracts was immaterial for all periods presented.
Fair Value Measurements
The Company estimates the fair value of its financial instruments utilizing an established three-level hierarchy. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows:
Level 1–Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2–Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial statements.
Level 3–Valuation is based upon other unobservable inputs that are significant to the fair value measurements.
The classification of fair value measurements within the established three-level hierarchy is based upon the lowest level of input that is significant to that measurement. The fair values of the Company’s derivative instruments were measured using valuations based upon quoted prices for similar assets and liabilities in active markets (Level 2) and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts. There were no transfers between the three levels of the fair value hierarchy during any period presented. The derivative assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 were as follows:
 
Balance Sheet Location
Total
 
Level 1
 
Level 2
 
Level 3
 
 
(in millions)
March 31, 2019
 
 
 
 
 
 
 
 
Foreign currency forward contracts (asset position)
Prepaid and other current assets
$
0.2

 
$

 
$
0.2

 
$

Interest rate swap agreements (asset position)
Prepaid and other current assets
$
1.3

 
$

 
$
1.3

 
$

Interest rate swap agreements (liability position)
Other current liabilities
$
0.1

 
$

 
$
0.1

 
$

Cross-currency interest rate swap agreements (asset position)
Prepaid and other current assets
$
2.1

 
$

 
$
2.1

 
$

Cross-currency interest rate swap agreements (asset position)
Other noncurrent assets
$
0.1

 
$

 
$
0.1

 
$

Cross-currency interest rate swap agreements (liability position)
Other current liabilities
$
0.4

 
$

 
$
0.4

 
$

Cross-currency interest rate swap agreements (liability position)
Other noncurrent accrued liabilities
$
0.9

 
$

 
$
0.9

 
$

December 31, 2018
 
 
 
 
 
 
 
 
Interest rate swap agreements (asset position)
Prepaid and other current assets
$
1.9

 
$

 
$
1.9

 
$

Cross-currency interest rate swap agreements (asset position)
Prepaid and other current assets
$
1.9

 
$

 
$
1.9

 
$

Interest rate swap agreements (asset position)
Other noncurrent assets
$
2.5

 
$

 
$
2.5

 
$

Cross-currency interest rate swap agreements (liability position)
Other current liabilities
$
0.3

 
$

 
$
0.3

 
$

Cross-currency interest rate swap agreements (liability position)
Other noncurrent accrued liabilities
$
2.1

 
$

 
$
2.1

 
$


18

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. Accumulated Other Comprehensive Loss
The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss:
 
Foreign
Currency
Translation
 
Unrecognized
Post-
Retirement
Plan Losses
 
Derivative
Financial
Instruments
 
Total
 
(in millions)
Balance at December 31, 2017
$
(78.3
)
 
$
(7.2
)
 
$
0.1

 
$
(85.4
)
Other comprehensive income (loss) before reclassifications
26.6

 
(0.1
)
 
4.4

 
30.9

Amounts reclassified from accumulated other comprehensive loss

 
0.1

 

 
0.1

Other comprehensive income
26.6

 

 
4.4

 
31.0

Balance at March 31, 2018
$
(51.7
)
 
$
(7.2
)
 
$
4.5

 
$
(54.4
)
 
 
 
 
 
 
 
 
Balance at December 31, 2018
$
(132.5
)
 
$
(5.2
)
 
$
2.8

 
$
(134.9
)
Other comprehensive income (loss) before reclassifications
11.1

 

 
(0.8
)
 
10.3

Amounts reclassified from accumulated other comprehensive loss

 
0.1

 
(0.8
)
 
(0.7
)
Other comprehensive income (loss)
11.1

 
0.1

 
(1.6
)
 
9.6

Balance at March 31, 2019
$
(121.4
)
 
$
(5.1
)
 
$
1.2

 
$
(125.3
)
The following table summarizes the reclassifications out of accumulated other comprehensive loss during the three months ended March 31, 2019 and 2018 :
 
Classification
 
Three Months Ended March 31,
 
of Expense
 
2019
 
2018
 
 
 
(in millions)
Unrealized pension and post-retirement obligations:
 
 
 
 
 
Adjustment of pension and post-retirement obligations
(a)
 
$
(0.1
)
 
$
(0.1
)
Tax benefit
(c)
 

 

Adjustment of pension and post-retirement obligations, net of tax
 
 
(0.1
)
 
(0.1
)
Derivative financial instruments:
 
 
 
 
 
Loss on derivative financial instruments
(b)
 
1.0

 

Tax benefit
(c)
 
(0.2
)
 

Loss on derivative financial instruments, net of tax
 
 
0.8

 

Total reclassifications from accumulated other comprehensive loss
 
 
$
0.7

 
$
(0.1
)
(a)
Amount is included in the calculation of pension cost within other non-operating expenses in the Company's Condensed Consolidated Statements of Operations.
(b)
Amount is included in cost of sales and (gain) loss on currency translation in the Company's Condensed Consolidated Statements of Operations.
(c)
These amounts are included in income tax expense in the Company's Condensed Consolidated Statements of Operations.

19

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


12. Warranty Reserves
A reserve for estimated warranty costs is recorded at the time of sale of machinery and parts and is periodically adjusted to reflect actual experience.
The following table summarizes changes in the Company’s warranty reserves for the periods indicated. Accrued warranty reserves are included in other current liabilities in the Company's Condensed Consolidated Balance Sheets:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Balance at beginning of period
 
$
8.7

 
$
9.7

Warranty expense
 
2.5

 
3.9

Warranty claims paid
 
(3.3
)
 
(3.7
)
Foreign currency translation adjustments
 
0.1

 
0.1

Balance at end of period
 
$
8.0

 
$
10.0

13. Restructuring and Facilities

2019 Actions
During the three months ended March 31, 2019 , the Company entered into an agreement to purchase a manufacturing facility located in Baden-Baden, Germany which was previously leased by the Company. The purchase price was €6.8 million , or approximately $7.8 million . In connection with this transaction, the Company has committed to a plan to sell the facility with the intention of entering into a corresponding new lease agreement. As of March 31, 2019, this facility met the held-for-sale criteria set forth in U.S. GAAP, resulting in the classification of $8.0 million of property and equipment as held-for-sale. No adjustment to book value was recognized during the three months ended March 31, 2019 and the book value of the facility is classified within current assets held for sale in the Company's Condensed Consolidated Balance Sheets. The Baden-Baden, Germany facility is reported within the Melt Delivery and Control Systems segment.

2018 Actions
In connection with the Company's organizational redesign initiatives in Europe, the Company has committed to a plan to sell its facility located in Malterdingen, Germany. As of March 31, 2019 and December 31, 2018, this facility met the held-for-sale criteria set forth in U.S. GAAP, resulting in the classification of $9.5 million of property and equipment as held-for-sale. No adjustment to book value was recognized during the three months ended March 31, 2019 and the book value of the facility is classified within current assets held for sale in the Company's Condensed Consolidated Balance Sheets. The Malterdingen, Germany facility is reported within the Advanced Plastic Processing Technologies segment.
2016 Actions
On September 30, 2016, the Company's wholly-owned subsidiary Ferromatik Milacron GmbH entered into an agreement with its local works council setting forth a restructuring plan related to its manufacturing facility in Malterdingen, Germany whereby certain operational functions will be shifted to the Company's operations in the Czech Republic, United States and India. During the three months ended March 31, 2018, the Company identified additional employees to be included within the Company's existing restructuring plan. During the three months ended March 31, 2018, the Company recorded severance expense of $6.4 million related to this restructuring plan which is included within other expense, net in the Company's Condensed Consolidated Statements of Operations. Substantially all of these costs resulted in cash expenditures and were substantially complete by March 31, 2019. As the employees were required to render service in order to receive the termination benefits, the associated liability and expense were recognized ratably over the future service period. At December 31, 2018, the total remaining liability related to this plan was $8.3 million and is included in other current liabilities in the Company's Condensed Consolidated Balance Sheets.

20

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. Leases
We have operating leases primarily for manufacturing facilities, offices, vehicles, and certain equipment. Leases with an initial term of 12 months or less are not recorded on the Company's Condensed Consolidated Balance Sheets with lease expense for these leases recognized on a straight-line basis over the lease term. Our leases have remaining lease terms of 1 year to 13 years , some of which may include options to extend the leases for up to 20 years , and some of which may include options to terminate the leases within 1 year . Operating lease expense for the three months ended March 31, 2019 was $3.0 million while financing and short-term lease expenses were insignificant.
Supplemental cash flow information for the three months ended March 31, 2019 are as follows (in millions):
Cash paid for amounts included in the measurement of lease liabilities:
 
     Operating cash flows from operating leases
$
3.0

 
 
Right-of-use assets obtained in exchange for lease obligations:
 
     Operating leases
$
3.5

Supplemental balance sheet information related to leases at March 31, 2019 are as follows (in millions, except remaining lease term and discount rate):
Operating Leases:
 
     Operating lease right-of-use assets
$
34.2

 
 
     Other current liabilities
$
7.9

     Operating lease liabilities
26.4

          Total operating lease liabilities
$
34.3

 
 
Weighted-Average Remaining Lease Term (in years):
 
     Operating leases
6.56

 
 
Weighted-Average Discount Rate:
 
     Operating leases
5.16%
At March 31, 2019, the maturities of operating lease liabilities are as follows (in millions):
2019 (excluding the three months ended March 31, 2019)
$
7.8

2020
8.5

2021
6.5

2022
4.9

2023
3.8

Thereafter
11.8

     Total lease payments
43.3

Less: Imputed interest
(9.0
)
     Total
$
34.3


21

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14 Leases (continued)

At December 31, 2018, future minimum lease commitments under non-cancelable operating leases as determined prior to the adoption of ASC 842 were as follows (in millions):
2019
$
8.9

2020
6.2

2021
4.4

2022
3.5

2023
2.5

Thereafter
2.9

Future minimum leas commitments
$
28.4


22

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. Business Segment Information
The Company’s operations are principally managed based upon the products that are produced and are comprised of three operating segments, which are the same as the Company’s reportable segments: Advanced Plastic Processing Technologies, Melt Delivery and Control Systems, and Fluid Technologies. The factors for determining the Company’s reportable segments include the manner in which management evaluates performance combined with the nature of the individual business activities. The Company evaluates the performance of its segments based on net sales and operating earnings. Operating earnings includes net sales to third parties, related cost of sales and operating expenses directly attributable to the segments. Operating earnings for each segment excludes items that are of a non-operating nature or are of a corporate or functional governance nature. Costs excluded from segment operating earnings include interest expense, income taxes and various corporate expenses such as transaction costs associated with the acquisition of certain businesses, stock-based compensation expense and other separately managed general and administrative costs. The effects of intersegment transactions have been eliminated.
The following table summarizes total assets by segment:
 
March 31, 2019
 
December 31,
2018
 
(in millions)
Advanced Plastic Processing Technologies
$
492.6

 
$
482.3

Melt Delivery and Control Systems
1,054.1

 
1,030.6

Fluid Technologies
149.3

 
145.3

Corporate
48.3

 
74.3

Total assets
$
1,744.3

 
$
1,732.5

The following table summarizes long-lived assets, net by segment:
 
March 31, 2019
 
December 31,
2018
 
(in millions)
Advanced Plastic Processing Technologies
$
98.2

 
$
82.1

Melt Delivery and Control Systems
113.4

 
109.6

Fluid Technologies
23.3

 
17.7

Corporate
7.5

 
6.3

Total long-lived assets, net
$
242.4

 
$
215.7

The following tables summarize segment information:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Net sales to external customers:
 
 
 
 
Advanced Plastic Processing Technologies
 
$
119.4

 
$
140.3

Melt Delivery and Control Systems
 
100.0

 
116.5

Fluid Technologies
 
29.3

 
32.0

Total net sales to external customers
 
$
248.7

 
$
288.8


23

MILACRON HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. Business Segment Information (continued)

 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Operating earnings (loss):
 
 
 
 
Advanced Plastic Processing Technologies
 
$
12.1

 
$
2.7

Melt Delivery and Control Systems
 
18.4

 
26.7

Fluid Technologies
 
5.4

 
6.0

Corporate
 
(10.0
)
 
(12.2
)
Total operating earnings
 
$
25.9

 
$
23.2

Capital expenditures:
 
 
 
 
Advanced Plastic Processing Technologies
 
$
6.3

 
$
2.2

Melt Delivery and Control Systems
 
11.0

 
4.1

Fluid Technologies
 
0.7

 
0.6

Corporate
 

 
0.3

Total capital expenditures
 
$
18.0

 
$
7.2

Depreciation and amortization:
 
 
 
 
Advanced Plastic Processing Technologies
 
$
2.7

 
$
3.3

Melt Delivery and Control Systems
 
7.8

 
8.5

Fluid Technologies
 
1.0

 
1.1

Corporate
 
0.4

 
0.3

Total depreciation and amortization
 
$
11.9

 
$
13.2

The following tables summarize net sales to external customers and long-lived assets, net by country:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Net sales to external customers:
 
 
 
 
United States
 
$
103.0

 
$
108.4

China
 
24.4

 
39.9

India
 
36.4

 
35.5

Rest of World
 
84.9

 
105.0

Total net sales to external customers
 
$
248.7

 
$
288.8

 
March 31, 2019
 
December 31, 2018
 
(in millions)
Long-lived assets, net:
 
 
 
United States
$
76.5

 
$
63.3

China
53.0

 
48.4

India
42.0

 
37.9

Czech Republic
18.9

 
18.7

Canada
26.9

 
29.0

Rest of World
25.1

 
18.4

Total long-lived assets, net
$
242.4

 
$
215.7


24



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
For an understanding of the significant factors that influenced our results, the following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this report. This management’s discussion and analysis should also be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on February 28, 2019.
Overview
Milacron Holdings Corp. ("Milacron", the "Company", "we", "us" or "our") is a global leader in the manufacture, distribution, and service of highly engineered and customized systems within the plastic technology and processing industry. We serve this market through the following three segments:
Advanced Plastic Processing Technologies (“APPT”);
Melt Delivery and Control Systems (“MDCS”); and
Fluid Technologies (“Fluids”).
Our APPT segment designs, manufactures and sells plastic processing equipment and systems, which include injection molding, blow molding, extrusion and auxiliary systems along with the related parts and service, whereas our MDCS segment designs, manufactures and sells hot runner and process control systems, mold bases and components, and sells maintenance, repair and operating (“MRO”) supplies. Hot runner systems are designed for each product a customer manufactures on an injection molding machine. Our Fluids segment is a global manufacturer of synthetic and semi-synthetic lubricants and coolants.
We are the only global company with a full-line product portfolio that includes hot runner systems, injection molding, blow molding and extrusion equipment. We maintain strong market positions across these products, as well as leading positions in process control systems, mold bases and components, MRO supplies and fluid technology.
Milacron has strong brand recognition with over 150 years of continuous operations. With products sold in over 100 countries across six continents, our established and market-driven global footprint is well-positioned to benefit from continued robust industry growth in both developed and emerging markets. Our breadth of products, long history, and global reach have resulted in a large installed base of plastic processing machines and hot runner systems.
Our strategy is designed to maximize revenue from consumable products across the life of a machine, while offering plastic technology solutions to a broad customer base. Management estimates that the value of available consumables revenue across the life of a machine is one to four times the cost of a machine. This strategy has shifted our revenue and earnings model to be more heavily weighted towards consumables, which comprise the majority of revenue from our plastic processing related APPT and MDCS segments on a combined basis. The consumables portion of our APPT and MDCS segments consists of: (1) machine aftermarket parts and service which are required annually, (2) hot runner systems and mold bases which are required each time new plastic parts are designed and existing plastic parts are redesigned, and (3) upgrades and overhauls which occur as customers decide to improve the performance or extend the life of their machines. Upon a customer’s decision to replace a machine, we can repurchase the existing machine and sell it as a certified pre-owned machine. All of our sales in our MDCS and Fluids segments are considered to be consumable and, when combined with our APPT consumable product lines, consumables accounted for 67% of total fiscal 2018 sales and 73% of our sales for the three months ended March 31, 2019 . We believe this percentage will increase as we capture more of our customers’ spend on consumable products through our lifecycle sales approach.
Our customers consist of many blue-chip and Fortune 500 companies including OEMs, molders and mold-makers. Our customer base covers a wide range of end market applications including packaging, automotive, medical, construction, consumer goods and electronics. Our sales are geographically diversified, with 49% in North America, 18% in Europe, 10% in China, 15% in India and 8% in the rest of the world for the three months ended March 31, 2019 .
Global population growth, coupled with continued urbanization, increased purchasing power and improved lifestyle in emerging markets has resulted in greater demand for a broad range of finished plastic products in many segments of the economy, including automotive, construction and consumer products. We believe that our strong global presence positions us well to capture a portion of this growth. Milacron has made significant investments in China and India in order to capitalize on the projected growth rates of the plastic business in these markets. We plan to continue to expand our manufacturing capabilities while also increasing our technical, marketing and sales efforts. We also continue to strategically reorganize our manufacturing base in order to shift resources to high growth geographic markets.

25



Discontinued Operations
During the first quarter of 2019, the Company started a process to divest its blow molding business as it is no longer considered a strategic fit with the Company's long-term growth and operational objectives. This expected divestiture represents a strategic shift in Milacron's business and, in accordance with United States generally accepted accounting principles ("U.S. GAAP"), qualifies as a discontinued operation and the divestiture is expected to occur within one year. As a result, the operating results and cash flows related to the blow molding business have been reflected as discontinued operations in the Company's Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows for all periods presented, while the assets and liabilities that are expected to be sold have been reflected as assets and liabilities held for sale for the current and prior periods in the Company's Condensed Consolidated Balance Sheets. The financial information reported for the Company's Advanced Plastic Processing Technologies reporting segment exclude the activity from the blow molding business due to the expected divestiture.
Key Drivers of our Businesses
Milacron’s strategy is focused on growing revenue and operating profits through selective initiatives that leverage our market position, geographic footprint and core competencies. Management expects, in the near term, profitability will be driven by both revenue growth and margin expansion. Management expects that revenue growth will come from underlying market growth in our key segments, geographic expansion of certain product lines, continued penetration of hot runners and incremental share gain from new products. New products are focused on solidifying our current market position, expanding our addressable market and expanding the market through the introduction of technology that displaces other materials, primarily metal and glass. Operating margin expansion is expected to result from active cost reduction initiatives focused on leveraging our geographic footprint that will allow us to consolidate manufacturing capacity, sales offices and call centers on a regional basis, and shift certain back-office functions from a decentralized local structure to a low-cost country global shared service center model.
Advanced Plastic Processing Technologies
The key factors affecting our APPT segment results include demand for plastic processing machinery, raw material inputs and cost structure.
Demand. Increased demand in the plastic processing machinery industry is expected to be driven by the overall expected rise in plastic processing, increasing equipment age and continuing advances in technology, such as the shift to higher-end equipment as plastic processors seek to reduce their operating costs and produce higher quality products. With 62% of APPT sales for the three months ended March 31, 2019 occurring in North America, demand is also impacted by customers bringing manufacturing operations back to North America.
Raw Material Inputs. Steel, which we source both directly and indirectly through our component suppliers, is the primary material used in our products. We do not enter into derivative financial instruments to hedge our commodity price risk and currently do not have a significant number of long-term supply contracts with key suppliers. In order to secure our supply needs, we have developed a global network of reliable, low-cost suppliers.
Cost Structure. Our APPT segment is focused on optimizing our global manufacturing and back-office infrastructure to maximize operating efficiencies and minimize fixed cost structure.
Melt Delivery and Control Systems
The key factors affecting our MDCS segment results include demand for hot runner systems and hot halves, mold bases, components, raw material inputs and cost structure.
Demand. Consistent with historical periods, according to a August 2017 Interconnection Consulting report, the hot runner market is expected to grow faster than the overall global economy based on macro-economic drivers involving product life cycles, demographics, technology conversion and greater use of plastic. Demand within the hot runner market is driven more by the frequency of product design changes and model refreshes than by end product volume, because hot runner systems are typically custom ordered for each new product mold, representing a critical factor in the market’s resiliency during economic cycles.
Raw Material Inputs. Steel is the primary raw material input for our MDCS segment. Although long-term contracts with steel suppliers are not typical, our business has purchase order commitments for a portion of our annual spend of higher-volume grades of steel. These purchase orders extend an average of three to six months, with prices negotiated annually. This allows us to forecast our costs in the MDCS segment and, given the short lead time between the initial request for a quotation and the finalized design, we have historically been able to pass along price changes, accordingly.

26



Cost Structure. Our MDCS segment is focused on controlling its cost structure by increasing best-cost country sourcing in addition to establishing comprehensive operations in India for applications engineering and the consolidation of several back-office support functions within our shared services center.
Fluid Technologies
The key factors affecting our Fluids segment results include demand for metalworking fluids and raw material inputs.
Demand. Demand for industrial fluids is closely tied to demand for metal products, which are produced on metalworking machinery through cutting, stamping and other processes. As industrial production and demand for metalworking machinery grows, manufacturers will require increased amounts of high-quality coolants, lubricants and cleaners to maximize productivity and extend the life of equipment and tooling. Market trends indicate higher technology fluids demand due to environmental and health concerns and as more exotic metals become more prevalent.
Raw Material Inputs. Many of the raw materials in our industrial fluids are derivatives of petroleum or natural gas. As a result, fluctuations in commodity-based pricing may impact the cost of these materials. We manage the impact of raw material cost increases through sales pricing adjustments, but we may be impacted by a delay in implementing these adjustments throughout our distribution network. In addition, due to the specialty nature of our products, some of our raw materials have few sources, and we may be impacted by disruptions to supply. Where possible, we seek alternative sources and, in some situations, we are able to reformulate product with alternative materials without impacting performance, environmental, or health and safety features.
New Orders and Backlog
New orders represent the value of incoming purchase orders received for a period of time that may or may not have been shipped during the period. New orders in the first three months of 2019 were $275.3 million , a decrease of $33.2 million , or 10.8% , compared to $308.5 million in the first three months of 2018 . Excluding $9.8 million of unfavorable effects of foreign currency movements, new orders decreased 7.6% compared to the prior year period. New orders were primarily impacted by declines in our equipment businesses in North America and Europe and our hot runner businesses in China and Europe. End market declines were primarily driven by the packaging, electronics, consumer goods and construction end markets.
Backlog represents the value of unfilled orders as of the applicable date. These unfilled orders are supported by a valid purchase order and price, terms and credit have been approved by us. Our backlog of unfilled orders at March 31, 2019 was $226.7 million , an increase of $27.5 million from December 31, 2018 and a decrease of $25.8 million from March 31, 2018 . Excluding $0.9 million of favorable effects of foreign currency movements, backlog increased 13.4% compared to December 31, 2018 . The increase in our backlog at March 31, 2019 compared to December 31, 2018 is predominantly driven by our equipment business in North America. Excluding $6.2 million of unfavorable effects of foreign currency movements, backlog decreased 7.8% compared to March 31, 2018 . All of our backlog is expected to be filled within the next twelve months and there are no seasonal or other aspects of the backlog that would impact our ability to fill the orders.
Backlog of confirmed orders for equipment within the APPT business is tracked on a monthly basis. Lead times can vary significantly depending on the type and size of machine. Backlog within our MDCS businesses is relatively stable, as mold bases and hot runner systems have a short lead time from receipt of order to shipment with a global average of six to eight weeks; whereas spare parts sales of standard products are typically in stock and shipped with very little lead time. We do not track backlog in our Fluids segment as most orders are filled with minimal lead time.
Executive Overview
For the first three months of 2019 , we reported sales of $248.7 million , operating earnings of $25.9 million and net earnings from continuing operations of $9.2 million . This compares to sales of $288.8 million , operating earnings of $23.2 million and net earnings from continuing operations of $6.5 million for the first three months of 2018 . Excluding $9.9 million of unfavorable effects of foreign currency movements, sales decreased 10.5% compared to the prior year period. We generated  $41.0 million  in Adjusted EBITDA, or 16.5% of sales, during the first three months of 2019 compared to $53.6 million in Adjusted EBITDA, or 18.6% of sales, during the first three months of 2018 .
Advanced Plastic Processing Technologies
For the three months ended March 31, 2019 , APPT generated $119.4 million in sales, operating earnings of $12.1 million and $14.7 million in Adjusted EBITDA, or 12.3% of sales, before corporate expenses, compared to  $140.3 million in sales, operating earnings of $2.7 million and $16.2 million in Adjusted EBITDA, or 11.5% of sales, before corporate expenses, in the same period of  2018 . Excluding $3.8 million of unfavorable effects of foreign currency movements, sales decreased 12.2% compared to the prior year period.

27



Melt Delivery and Control Systems
For the three months ended March 31, 2019 , MDCS generated $100.0 million in sales, operating earnings of $18.4 million and $25.8 million in Adjusted EBITDA, or 25.8% of sales, before corporate expenses, compared to  $116.5 million in sales, operating earnings of $26.7 million and $38.2 million in Adjusted EBITDA, or 32.8% of sales, before corporate expenses, in the same period of  2018 . Excluding $4.6 million of unfavorable effects of foreign currency movements, sales decreased 10.2% compared to the prior year period.
Fluid Technologies
For the three months ended March 31, 2019 , Fluids generated $29.3 million in sales, operating earnings of $5.4 million and $6.4 million in Adjusted EBITDA, or 21.8% of sales, before corporate expenses, compared to  $32.0 million in sales, operating earnings of $6.0 million and $7.1 million in Adjusted EBITDA, or 22.2% of sales, before corporate expenses, in the same period of  2018 . Excluding $1.5 million of unfavorable effects of foreign currency movements, sales decreased 3.8% compared to the prior year period.
Liquidity
In the three months ended March 31, 2019 , cash decreased $34.0 million primarily as a result of capital expenditures, a $5.0 million voluntary payment on the senior secured term loan facility due September 2023 ("2017 Term Loan Facility") as well as the purchase of treasury stock. Operating activities from continuing operations used $4.6 million of cash in the first three months of 2019 compared to generating $11.7 million of cash in the same period of 2018 . The decrease was primarily driven by an increase in working capital. Investing activities from continuing operations used $17.8 million of cash in the first three months of 2019 primarily due to capital expenditures, including the purchase of a manufacturing facility located in Baden-Baden, Germany which was previously leased by the Company. Financing activities from continuing operations used $10.2 million of cash in the first three months of 2019 primarily as a result of our $5.0 million voluntary principal payment on the 2017 Term Loan Facility as well as the purchase of treasury stock.
Cash on hand at March 31, 2019 was $150.0 million , and we had approximately $78.1 million available for borrowing under our asset-based and other credit facilities.
Results of Operations
Comparison of the Three Months Ended March 31, 2019 and 2018
The following table summarizes the results of operations for the three months ended March 31, 2019 and 2018 :
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Net sales
 
$
248.7

 
$
288.8

Cost of sales
 
163.9

 
188.9

Manufacturing margins
 
84.8

 
99.9

Operating expenses:
 
 
 
 
Selling, general and administrative expenses
 
54.1

 
62.1

Amortization expense
 
5.6

 
6.3

(Gain) loss on currency translation
 
(0.7
)
 
0.7

Other (income) expense, net
 
(0.1
)
 
7.6

Total operating expenses
 
58.9

 
76.7

Operating earnings
 
25.9

 
23.2

Interest expense, net
 
9.5

 
10.7

Loss on debt extinguishment
 

 
0.3

Other non-operating expenses
 
0.2

 
0.3

Earnings from continuing operations before income taxes
 
16.2

 
11.9

Income tax expense
 
7.0

 
5.4

Net earnings from continuing operations
 
9.2

 
6.5

Loss from discontinued operations (net of income taxes)
 
(10.0
)
 
(0.6
)
Net (loss) earnings
 
$
(0.8
)
 
$
5.9


28



We may refer to net sales or other historical financial information on a “constant currency basis,” which is a non-GAAP financial measure. These references to constant currency basis do not include operational impacts that could result from fluctuations in foreign currency rates. To provide information on a constant currency basis, the applicable financial results are adjusted based on a simple mathematical model that translates current period results in local currency using the comparable prior year period’s currency conversion rate. This approach is used for countries where the functional currency is the local country currency. This information is provided so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby facilitating period-to-period comparisons of business performance. Constant currency information is not recognized under United States generally accepted accounting principles ("U.S. GAAP"), and should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP.
Net Sales
For the three months ended March 31, 2019 , sales were $248.7 million compared to $288.8 million for the three months ended March 31, 2018 , a decrease of $40.1 million , or 13.9% . Excluding $9.9 million of unfavorable effects of foreign currency movements, sales decreased 10.5% , on a constant currency basis, compared to the prior year period. Sales were impacted by declines in our equipment businesses in North America and Europe and our hot runner businesses in China and Europe, partially offset by growth in our equipment business in India. End market declines were primarily driven by the packaging, electronics and custom molders end markets.
The following table sets forth our sales by segment for the three months ended March 31, 2019 and 2018 :
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Sales by segment:
 
 
 
 
Advanced Plastic Processing Technologies
 
$
119.4

 
$
140.3

Melt Delivery and Control Systems
 
100.0

 
116.5

Fluid Technologies
 
29.3

 
32.0

Total sales
 
$
248.7

 
$
288.8

Advanced Plastic Processing Technologies
Sales for the APPT segment for the three months ended March 31, 2019 were $119.4 million compared to $140.3 million for the three months ended March 31, 2018 , a decrease of $20.9 million , or 14.9% . Excluding $3.8 million of unfavorable effects of foreign currency movements, sales decreased 12.2% , on a constant currency basis, compared to the prior year period. Regionally, sales were impacted by declines in North America and Europe, partially offset by growth in India. End market declines were primarily driven by the packaging, construction and custom molders end markets, partially offset by growth in the automotive, consumer goods and medical end markets.
Melt Delivery and Control Systems
Sales for the MDCS segment for the three months ended March 31, 2019 were $100.0 million compared to $116.5 million for the three months ended March 31, 2018 , a decrease of $16.5 million , or 14.2% . Excluding $4.6 million of unfavorable effects of foreign currency movements, sales decreased 10.2% , on a constant currency basis, compared to the prior year period. Regionally, sales were impacted by declines in China and Europe, partially offset by growth in North America and India. End market declines were primarily driven by the automotive, consumer goods and electronics end markets, partially offset by growth in the medical end market.
Fluid Technologies
Sales for the Fluids segment for the three months ended March 31, 2019 were $29.3 million compared to $32.0 million for the three months ended March 31, 2018 , a decrease of $2.7 million , or 8.4% . Excluding $1.5 million of unfavorable effects of foreign currency movements, sales decreased 3.8% , on a constant currency basis, compared to the prior year period. Regionally, sales were impacted by declines in all major regions. End market declines were primarily driven by the electronics and distributor end markets.
Cost of Sales
Cost of sales for the three months ended March 31, 2019 was $163.9 million compared to $188.9 million for the three months ended March 31, 2018 , a decrease of $25.0 million , or 13.2% . The decrease is primarily due to a decline in sales volumes.

29



Manufacturing Margins
Our manufacturing margin (or gross margin) for the three months ended March 31, 2019 was $84.8 million compared to $99.9 million for the three months ended March 31, 2018 , a decrease of $15.1 million , or 15.1% . The manufacturing margin as a percent of sales for the three months ended March 31, 2019 was 34.1% compared to 34.6% for the three months ended March 31, 2018 . The decrease in manufacturing margin is primarily related to a decrease in sales volumes within the Company's higher margin segments, MDCS and Fluids, when compared to the prior year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended March 31, 2019 were $54.1 million compared to $62.1 million for the three months ended March 31, 2018 , a decrease of $8.0 million , or 12.9% . The decrease is primarily related to reductions in structural salary costs, selling costs associated lower sales volumes, certain discretionary costs and favorable foreign currency translation effects.
Amortization Expense
Amortization expense related to intangible assets for the three months ended March 31, 2019 was $5.6 million compared to $6.3 million for the three months ended March 31, 2018 , a decrease of $0.7 million , or 11.1% . The decrease is primarily related to accelerated amortization methods on certain intangible assets subject to amortization as well as favorable foreign currency translation effects.
(Gain) loss on Currency Translation
The gain on currency translation for the three months ended March 31, 2019 was $0.7 million compared to a loss of $0.7 million for the three months ended March 31, 2018 , resulting in a favorable change of $1.4 million . The change primarily relates to the non-cash translation impact on intercompany advances related to the Canadian dollar, the Euro and the Czech koruna within the MDCS and Corporate segments.
Other (Income) Expense, Net
Other (income) expense, net for the three months ended March 31, 2019 was income of $0.1 million compared to expense of $7.6 million for the three months ended March 31, 2018 , an improvement of $7.7 million . The costs recognized within other expense, net in 2018 primarily relate to severance and other related costs incurred in connection with our restructuring plan at our Malterdingen, Germany facility.
Operating Earnings
Operating earnings for the three months ended March 31, 2019 were $25.9 million compared to $23.2 million for the three months ended March 31, 2018 , an increase of $2.7 million , or 11.6% . The increase is primarily related to a reduction in selling, general and administrative expenses and the wind-down of our restructuring plan at our Malterdingen, Germany facility.
Interest Expense, Net
Interest expense, net for the three months ended March 31, 2019 was $9.5 million compared to $10.7 million for the three months ended March 31, 2018 , a decrease of $1.2 million , or 11.2% . The decrease are primarily due to a reduction in our weighted-average indebtedness as the Company made a total of $100.0 million in voluntary principal payments in 2018.
Loss on Debt Extinguishment
Loss on debt extinguishment was $0.3 million for the three months ended March 31, 2018 . The loss on debt extinguishment in 2018 relates to the write-off of deferred financing costs associated with the Company's incremental voluntary principal payments made on the 2017 Term Loan Facility.
Other Non-Operating Expense
Other non-operating expense was $0.2 million for the three months ended March 31, 2019 compared to $0.3 million for the three months ended March 31, 2018 . Other non-operating expense includes certain components of net periodic pension cost including interest costs, expected return on plan assets and amortization of actuarial gains and losses.

30



Income Tax Expense
Income tax expense for the three months ended March 31, 2019 was $7.0 million compared to $5.4 million for the three months ended March 31, 2018 , an increase of $1.6 million . Income tax expense for all periods was primarily due to earnings in jurisdictions paying cash taxes or where utilization of deferred tax assets was not offset by reversal of valuation allowances.
Loss from discontinued operations
Loss from discontinued operations for the three months ended March 31, 2019 was $10.0 million compared to $0.6 million for the three months ended March 31, 2018 , an increase of $9.4 million . The increase in the loss is primarily related to $8.5 million of expense to write down the net book value of one of the Company's manufacturing facilities in the Czech Republic which is classified as held for sale.
Non-GAAP Financial Measures
We prepare our financial statements in conformity with U.S. GAAP. To supplement this information, we also use the following non-GAAP financial measures: Adjusted EBITDA, Adjusted Net Income, Pro forma Net Sales and Pro forma New Orders. 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 income 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 in this Quarterly Report on Form 10-Q 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.

31



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 advances, organizational redesign costs, long-term equity awards, 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 income 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.
Pro forma Net Sales
Pro forma Net Sales is defined as net sales excluding net sales directly attributable to certain product lines which have been discontinued or eliminated through plant closures. We present Pro forma Net Sales to facilitate comparisons of reported net sales from period to period. We believe the presentation of Pro forma Net Sales enhances our investors’ overall understanding of the financial performance of our business. You should not consider Pro forma Net Sales as an alternative to net sales, determined in accordance with U.S. GAAP, as an indicator of operating performance.
Pro forma New Orders
Pro forma New Orders is defined as new orders excluding orders directly attributable to certain product lines which have been discontinued or eliminated through plant closures. We present Pro forma New Orders to facilitate comparisons of reported new orders from period to period. We believe the presentation of Pro forma New Orders enhances our investors’ overall understanding of the financial performance of our business. You should not consider Pro forma New Orders as an alternative to new orders as an indicator of operating performance.
The following is a reconciliation of net earnings (loss), the most comparable U.S. GAAP measure, to Adjusted Net Income and to Adjusted EBITDA:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Net (loss) earnings
 
$
(0.8
)
 
$
5.9

Loss from discontinued operations (net of income taxes)
 
10.0

 
0.6

Amortization expense
 
5.6

 
6.3

Currency effect on intercompany advances (a)
 
(1.6
)
 
0.5

Organizational redesign costs (b)
 
1.1

 
12.0

Long-term equity awards (c)
 
3.2

 
2.8

Debt costs
 

 
0.3

Professional services (d)
 
0.7

 
1.7

Tax adjustments (e)
 
0.9

 
(2.7
)
Other
 

 
0.5

Adjusted Net Income
 
19.1

 
27.9

Income tax expense (e)
 
6.1

 
8.1

Interest expense, net
 
9.5

 
10.7

Depreciation expense
 
6.3

 
6.9

Adjusted EBITDA
 
$
41.0

 
$
53.6


(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 and the Czech koruna pursuant to intercompany advances within the MDCS and Corporate segments, respectively.

(b)
Organizational redesign costs in the three months ended March 31, 2018 primarily included $8.1 million for termination costs as a result of eliminated positions.

(c)
Long-term equity awards include the charges associated with stock-based compensation awards granted to certain members of management and independent directors in the three months ended March 31, 2019 and 2018 .

32




(d)
Professional fees in the three months ended March 31, 2019 and 2018 included $0.7 million and $1.7 million , respectively, of costs for strategic organizational initiatives.

(e)
Tax adjustments primarily include the tax expense (benefit) associated with reconciling net (loss) earnings to Adjusted Net Income and reflects the impact to the quarterly tax provision utilizing the annual effective tax rate recomputed with anticipated tax rate reductions that have not been recognized for U.S. GAAP purposes as the Company is awaiting regulatory approval. The reductions have historically been approved although there are no guarantees that the regulatory authorities will accept the Company's applications.



The following table provides a reconciliation of operating earnings, the most comparable U.S. GAAP measure, to Adjusted EBITDA for each of our segments:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
(in millions)
Operating earnings (loss):
 

 

APPT
 
$
12.1

 
$
2.7

MDCS
 
18.4

 
26.7

Fluids
 
5.4

 
6.0

Corporate
 
(10.0
)
 
(12.2
)
Total operating earnings
 
25.9

 
23.2

Other non-operating expenses
 
(0.2
)
 
(0.3
)
Adjustments to operating earnings:
 

 

APPT Adjustments:
 

 

Depreciation and amortization
 
2.7

 
3.3

Organizational redesign costs (b)
 
0.1

 
9.9

Professional services (d)
 

 
0.1

Other
 

 
0.5

Total APPT Adjustments
 
2.8

 
13.8

MDCS Adjustments:
 


 


Depreciation and amortization
 
7.8

 
8.5

Currency effect on intercompany advances (a)
 
(1.0
)
 
1.7

Organizational redesign costs (b)
 
0.6

 
1.3

Total MDCS Adjustments
 
7.4

 
11.5

Fluids Adjustments:
 

 

Depreciation and amortization
 
1.0

 
1.1

Total Fluids Adjustments
 
1.0

 
1.1

Corporate Adjustments:
 

 

Depreciation and amortization
 
0.4

 
0.3

Currency effect on intercompany advances (a)
 
(0.6
)
 
(1.2
)
Organizational redesign costs (b)
 
0.4

 
0.8

Long-term equity awards (c)
 
3.2

 
2.8

Professional services (d)
 
0.7

 
1.6

Total Corporate Adjustments
 
4.1

 
4.3

Adjusted EBITDA:
 


 


APPT
 
14.7

 
16.2

MDCS
 
25.8

 
38.2

Fluids
 
6.4

 
7.1

Corporate
 
(5.9
)
 
(7.9
)
Total Adjusted EBITDA
 
$
41.0

 
$
53.6

 
(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 and the Czech koruna pursuant to intercompany advances within the MDCS and Corporate segments, respectively.

(b)
Organizational redesign costs in the three months ended March 31, 2018 included $7.9 million for termination costs as a result of eliminated positions in APPT.

(c)
Long-term equity awards in Corporate include the charges associated with stock-based compensation awards granted to certain members of management and independent directors during the three months ended March 31, 2019 and 2018 .


33



(d)
Professional fees incurred by Corporate in the three months ended March 31, 2019 and 2018 included $0.7 million and $1.6 million of costs for strategic organizational initiatives, respectively.
The following is a reconciliation of net sales, the most comparable U.S. GAAP measure, to Pro forma Net Sales:
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Net sales
$
248.7

 
$
288.8

Adjustments to net sales (a)
(0.6
)
 
(9.2
)
Pro forma Net Sales
$
248.1

 
$
279.6

(a)
Adjustments to net sales include net sales directly attributable to certain product lines which have been discontinued or eliminated through plant closures. Adjustments for the periods presented include our European Injection equipment and Systems businesses.
The following is a reconciliation of APPT net sales, the most comparable U.S. GAAP measure, to APPT Pro forma Net Sales:
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Net sales - APPT segment
$
119.4

 
$
140.3

Adjustments to net sales (a)
(0.6
)
 
(9.2
)
Pro forma Net Sales - APPT segment
$
118.8

 
$
131.1

(a)
Adjustments to net sales include net sales directly attributable to certain product lines which have been discontinued or eliminated through plant closures. Adjustments for the periods presented include our European Injection equipment and Systems businesses.
The following is a reconciliation of new orders, the most comparable U.S. GAAP measure, to Pro forma New Orders:
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
New orders
$
275.3

 
$
308.5

Adjustments to new orders (a)
(1.5
)
 
(8.3
)
Pro forma New Orders
$
273.8

 
$
300.2

(a)
Adjustments to new orders include new orders directly attributable to certain product lines which have been discontinued or eliminated through plant closures. Adjustments for the periods presented include our European Injection equipment and Systems businesses.
Liquidity and Capital Resources
Our primary source of liquidity is cash generated from operations and availability under our senior secured asset-based revolving credit facility (the "ABL Facility") and other foreign credit facilities. At March 31, 2019 , we had cash and cash equivalents of $150.0 million , of which $19.0 million was held in the U.S. and $131.0 million was held by subsidiaries outside of the U.S. However, if such amounts were repatriated to the U.S., additional taxes would likely need to be accrued and paid depending on the source of the earnings remitted. For amounts we plan to repatriate, appropriate taxes have been accrued and we currently have no plans to repatriate any additional amounts for which U.S. taxes would need to be accrued.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Tax Act") was signed into law and it institutes fundamental changes to the taxation of multinational corporations. The Tax Act reduces the corporate tax rate to 21%, repeals the alternative minimum tax, limits the interest deduction, enhances the expensing of capital investments, implements a dividend exemption system, eliminates the deferral of foreign earnings, provides a minimum tax on low-taxed foreign earnings and new measures to deter base erosion. The Company does not expect the Tax Act to have a material impact on our cash flows until existing U.S. net operating losses are utilized.

34



At March 31, 2019 , we had $62.1 million of availability under our ABL Facility and $16.0 million of availability under other credit facilities. Our primary cash requirements are for working capital, operating expenses, capital expenditures and scheduled payments of principal and interest. We may from time to time seek to retire our outstanding debt. Such events, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
During the three months ended March 31, 2019 , we used $34.0 million of cash compared to using $11.2 million in the three months ended March 31, 2018 . During the first three months of 2019 , cash was used primarily for capital expenditures, a $5.0 million voluntary payment on the 2017 Term Loan Facility as well as the purchase of treasury stock. During the first three months of 2018 , cash was used primarily for our $25.0 million voluntary principal payment on the 2017 Term Loan Facility.
We believe that our current level of operations, our cash and cash equivalents, cash flow from operations and availability under our ABL Facility and other foreign lines of credit will provide us adequate cash to fund the operating needs, working capital, capital expenditure, debt service and other requirements for our business for the foreseeable future. Our ability to make scheduled payments of principal or interest on, or to refinance, our indebtedness or to fund working capital requirements, capital expenditures and other current obligations will depend on our ability to generate cash from operations. Such cash generation is subject to general economic, financial, competitive and other factors that are beyond our control. We have unused availability, subject to certain terms and conditions and other limitations, of $78.1 million under these lines of credit.
The following table shows our statements of cash flows for the three months ended March 31, 2019 and 2018 :    
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Statements of cash flow data
 
 
 
Net cash (used in) provided by operating activities from continuing operations
$
(4.6
)
 
$
11.7

Net cash (used in) provided by investing activities from continuing operations
(17.8
)
 
0.8

Net cash used in financing activities from continuing operations
(10.2
)
 
(22.3
)

Cash (used in) provided by operating activities from continuing operations
Operating activities from continuing operations for the three months ended March 31, 2019 used $4.6 million of cash compared to generating $11.7 million for the three months ended March 31, 2018 . The decrease was primarily driven by an increase in working capital.
Cash (used in) provided by investing activities from continuing operations
Investing activities from continuing operations for the three months ended March 31, 2019 used $17.8 million of cash compared to generating $0.8 million of cash for the three months ended March 31, 2018 . The decrease is due mainly to an increase in capital expenditures. Additionally, during the three months ended March 31, 2018 , the Company received proceeds of $8.0 million from the sale of certain manufacturing equipment in the Company's Advanced Plastic Processing Equipment segment which did not occur during the three months ended March 31, 2019 .
Cash used in financing activities from continuing operations
Financing activities from continuing operations for the three months ended March 31, 2019 used $10.2 million compared to using $22.3 million for the three months ended March 31, 2018 . During the three months ended March 31, 2019 , cash was primarily used for our $5.0 million voluntary principal payment on the 2017 Term Loan Facility as well as the purchase of treasury stock. During the three months ended March 31, 2018 , cash was primarily used for our $25.0 million voluntary principal payment on the 2017 Term Loan Facility. This use of cash was partially offset by proceeds generated from the exercise of stock options.
Total debt, excluding unamortized discount and debt issuance costs, was $835.6 million at March 31, 2019 compared to $843.6 million at December 31, 2018 . Total debt at March 31, 2019 mainly represented $832.5 million outstanding on the 2017 Term Loan Facility, while the ABL Facility was undrawn except for letter of credit issuances.

35



Description of the 2017 Term Loan Facility
On February 15, 2017, we entered into the $947.0 million 2017 Term Loan Facility, pursuant to a term loan agreement, among Milacron Holdings Corp., Milacron LLC, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The 2017 Term Loan Facility matures on September 28, 2023. The 2017 Term Loan Facility is secured by a first-priority lien on substantially all of the Company and guarantors’ assets other than accounts receivable, inventory, and other certain assets. The 2017 Term Loan Facility is also secured by a second-priority lien on all of the assets of the Company, Milacron LLC and the guarantors that secure the ABL Facility. The interest rate applicable to the 2017 Term Loan Facility is, at our option, equal to either (a) a base rate determined by the reference to the highest of (1) the prime commercial lending rate publicly announced by the administrative agent of the 2017 Term Loan Facility as the “prime rate” as in effect on such day, (2) the federal funds effective rate plus 0.50% , and (3) the LIBOR rate determined by reference to the cost of funds for Eurodollar deposits for an interest period of one month, plus 1.00% or (b) a LIBOR rate (which shall be no less than 0.00% ) determined by reference to the costs of funds for Eurodollar deposits for the specified interest period, as adjusted for certain statutory reserve requirements. The applicable margins for borrowings are (i) 2.00% with respect to base rate borrowings and 3.00% with respect to LIBOR borrowings, subject to compliance with a total net leverage ratio of greater than 3.50 to 1.00 and (ii) 1.75% with respect to base rate borrowings and 2.75% with respect to LIBOR borrowings, subject to compliance with a total net leverage ratio not to exceed 3.50 to 1.00 . The following amounts will be applied to repay the 2017 Term Loan Facility, subject to certain thresholds, carve-outs and exceptions: (i) 100% of the net cash proceeds of any incurrence of debt by us and certain of our subsidiaries, (ii) 100% of net cash proceeds of any non-ordinary course sale or other disposition of assets by us or certain subsidiaries and (iii) 50% of our excess cash flow, subject to certain reductions.
On November 8, 2017, the Company re-priced the 2017 Term Loan Facility. The applicable margins for borrowings are now (i) 1.75% with respect to base rate borrowings and 2.75% with respect to LIBOR borrowings, subject to compliance with a total net leverage ratio of greater than 3.50 to 1.00 and (ii) 1.50% with respect to base rate borrowings and 2.50% with respect to LIBOR borrowings, subject to compliance with a total net leverage ratio not to exceed 3.50 to 1.00. No other terms of the facility were changed.
Description of the ABL Facility
On April 30, 2012, we entered into the ABL Facility with Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Barclays Bank PLC, as joint lead arrangers and bookrunners which was amended and restated on March 28, 2013. The ABL Facility has a five-year term, bears interest at a floating rate and provides for an aggregate principal amount of $70.0 million of loans under the U.S. sub-facility thereunder and for an aggregate principal amount of $30.0 million of loans under the Canadian sub-facility thereunder, each subject to a borrowing base and other limitations. We have the right at any time to request up to $20.0 million of additional commitments. The existing lenders under the ABL Facility are not under any obligation to provide such additional commitments, and any increase in commitments is subject to customary conditions precedent. On March 17, 2014, we exercised our right to increase the U.S. sub-facility of the ABL Facility by $10.0 million to $80.0 million and decrease the Canadian sub-facility by $10.0 million to $20.0 million. The covenants and other terms of the ABL Facility were not changed. On October 17, 2014, the ABL Facility was amended and restated to add a $25.0 million German sub-facility and the term was reset to mature on February 14, 2019 or October 17, 2019 subject to the satisfaction of certain conditions on or prior to February 14, 2019. The covenants and other terms of the ABL Facility were not materially changed. On May 15, 2015, the credit agreement governing the ABL Facility was amended and restated to, among other things, conform certain terms to the credit agreement governing the New Term Loan Facility. On April 27, 2018, the ABL Facility was amended and restated to reduce each of the applicable margins in determining the interest rates on loans by 0.50% per annum, reduce the unused line fee by 0.125% per annum, extend the maturity date to April 27, 2023 and reallocate $5.0 million of availability under the ABL Facility from the German sub-facility to the U.S. sub-facility. The covenants and other terms of the ABL Facility were not significantly changed. We had approximately $32.0 million of letters of credit outstanding as of March 31, 2019 .
The obligations under the ABL Facility are secured, subject to certain exceptions, by substantially all of the assets of the borrowers and the assets of the guarantors under such facility. In addition, the ABL Facility includes certain customary negative covenants that, subject to exceptions, limit the ability of the borrowers and their restricted subsidiaries to incur additional indebtedness, pay dividends or certain other distributions on the Company’s capital stock, repurchase the Company’s capital stock, prepay subordinated indebtedness, incur liens on assets, make certain investments or other restricted payments, engage in transactions with affiliates, sell certain assets, merge or consolidate with or into other companies and alter the business that the Company conducts.
Description of Other Debt
At March 31, 2019 , we had $3.1 million of borrowings under certain lines of credit and discounting programs. We also had approximately $2.1 million of outstanding letters of credit and other commitments related to these facilities at March 31, 2019 .

36



Critical Accounting Policies and Estimates

We prepare our Condensed Consolidated Financial Statements in accordance with U.S. GAAP, and in doing so, we have to make estimates, assumptions and judgments affecting the reported amounts of assets, liabilities, revenue and expenses, as well as the related disclosure of contingent assets and liabilities. We base our estimates, assumptions and judgments on historical experience and on various other factors we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our Condensed Consolidated Financial Statements, which, in turn, could change our results from those reported. We evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis.

There have been no material changes in our critical accounting policies from those previously included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on February 28, 2019.
Recently Issued Accounting Pronouncements

For information on recent accounting pronouncements, see Note 1 to the Company's Condensed Consolidated Financial Statements appearing in Part I, Item 1. of this Quarterly Report on Form 10-Q.


37



Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
We are exposed to financial market risks associated with foreign currency exchange rates, interest rates, commodity prices and credit risk. In the normal course of business and in accordance with our policies, we manage these risks through a variety of strategies, which may include the use of derivative financial instruments to hedge our underlying exposure. We do not use derivative instruments for speculative or trading purposes and we have policies and procedures in place that monitor and control their use.
Foreign Currency Exchange Rate Risk
We operate in international markets and, accordingly, our competitiveness and financial results are subject to foreign currency fluctuations where revenues and costs are denominated in currencies other than the U.S. dollar. In fiscal 2018 and during the three months ended March 31, 2019 , approximately 59% of our sales from continuing operations were attributable to our operations outside of the United States. Approximately 54% of sales in fiscal 2018 were denominated in currencies other than the U.S. dollar, whereas a significant portion of our fixed costs, including payments made on our ABL Facility and our 2017 Term Loan Facility are denominated in U.S. dollars. Our earnings could be materially impacted particularly by movement in the exchange rate between the Canadian dollar, the Euro, the Chinese yuan renminbi, the Indian rupee and the U.S. dollar.
We occasionally use foreign currency forward exchange contracts to hedge our exposure to adverse changes in foreign currency exchange rates related to known or expected cash flow exposures arising from international transactions. At March 31, 2019 and December 31, 2018 , we had $37.6 million and $6.5 million, respectively, notional amount of forward exchange contracts outstanding with remaining maturities of up to nine months. As of March 31, 2019 , the net fair value asset of financial instruments with exposure to foreign currency risk was $0.2 million. As of December 31, 2018 , the net fair value asset of financial instruments with exposure to foreign currency risk was $0.3 million. The fair value of these financial instruments would hypothetically decrease by $4.0 million and $0.4 million as of March 31, 2019 and December 31, 2018 , respectively, if the U.S. dollar were to appreciate against all other currencies by 10% of current levels.
Our investments and loans to our foreign operations create additional foreign currency exposure. In November 2018, we entered into a cross-currency interest rate swap agreement that will mature on September 28, 2023, with an aggregate notional amount of $85.8 million to manage foreign currency risk by effectively converting a portion of the Company's variable rate U.S. dollar-denominated debt, including the monthly interest rates thereunder, to fixed rate Euro-denominated debt of €75.0 million. This cross-currency interest rate swap agreement is designated as a hedge of a portion of our net investment in Euro-denominated foreign operations to reduce foreign currency risk associated with the investment in these operations. In addition to managing foreign currency exchange rate risk, the interest rate swap component of this transaction also manages interest rate risk for the Company by fixing the interest rate on a portion of the Company's debt outstanding under the 2017 Term Loan Facility that was previously subject to a floating interest rate equal to 1-month LIBOR plus a credit spread. The interest rate swap provides for the Company to pay a fixed rate of 0.05% plus the loan spread for the term and debt hedged. Changes in the value of these items resulting from fluctuations in the underlying exchange rates to U.S. dollar exchange rates are recorded as foreign currency translation adjustments within accumulated other comprehensive income (loss).
Interest Rate Risk
We are primarily exposed to interest rate risk through our ABL Facility, 2017 Term Loan Facility and other foreign lines of credit. Interest on our ABL Facility accrues, at our option, at either (i) LIBOR plus a margin of 1.25% to 1.75% per annum, based on availability or (ii) the highest rate of (a) the prime rate, (b) the federal funds rate plus 0.50% per annum, or (c) LIBOR plus 1.00% per annum, plus a margin of 0.25% to 0.75% per annum, based on availability. Interest on the 2017 Term Loan Facility accrues, at our option, equal to either (i) the published LIBOR rate, plus a margin of 2.50% (if our total net leverage ratio is less than or equal to 3.50 to 1.00) or 2.75% (if our total net leverage ratio is greater than 3.50 to 1.00) per annum or (ii) the greater of (1) the prime rate, (2) the federal funds rate plus 0.50% per annum, (3) published LIBOR rate plus 1.00% or (4) 2.00% per annum, plus 1.50% (if our total net leverage ratio is less than or equal to 3.50 to 1.00) or 1.75% (if our total net leverage ratio is greater than 3.50 to 1.00) per annum. In no event will the LIBOR rate be less than 0.00% at any time. We currently estimate that our annual interest expense on floating rate indebtedness would increase by approximately $3.5 million for each 1.00% increase in interest rates.

38



In order to manage this risk, on February 16, 2017, Milacron LLC, a wholly-owned subsidiary of the Company, entered into two interest rate swap transactions effective for a period of four years beginning January 31, 2018 with a total notional amount of $400.0 million . The interest rate swaps are intended to manage the Company's interest rate risk by fixing the interest rate on a portion of the Company's debt outstanding under the 2017 Term Loan Facility that was previously subject to a floating interest rate equal to 1-month LIBOR plus a credit spread. The swaps provide for the Company to pay a fixed rate of 2.062% per annum on such portion of the outstanding debt in exchange for receiving a variable interest rate based on 1-month LIBOR. The effect is a synthetically fixed rate of 2.062% plus the loan spread for the term and debt hedged.
In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Financing Rate ("SOFR") is the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. The Company has material contracts that are indexed to USD-LIBOR and is monitoring this activity and evaluating the related risks.    
Commodity Risk
We have direct and indirect exposure to certain commodities, principally steel and steel-based components. We typically do not enter into derivative financial instruments to hedge our commodity price risk and we do not currently have long-term supply contracts with key suppliers. While future movements of steel costs are uncertain, we respond to this volatility in a number of ways, including strategic steel purchases and customer price adjustments.


39



Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Management, with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our CEO and CFO concluded that, as of March 31, 2019 , our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

Except as set forth below, during the quarter ended March 31, 2019 , we did not make any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended March 31, 2019, we implemented a new lease accounting system and process in response to the adoption of ASU No. 2016-02, Leases (Topic 842) , effective January 1, 2019. These implementations resulted in a material change in a component of our internal control over financial reporting.
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Various lawsuits arising during the normal course of business are pending against us and our consolidated subsidiaries. We are vigorously defending these claims and believe we have reserves and insurance coverage sufficient to cover potential exposures.
While, in the opinion of management, the liability resulting from these matters will not have a significant effect on our consolidated financial position, results of operations or liquidity, the outcome of individual matters cannot be predicted with reasonable certainty at this time.
ITEM 1A. RISK FACTORS
For a discussion of our potential risks and uncertainties, see the information in Item 1A. Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on February 28, 2019.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during the first quarter of 2019 or from March 31, 2019 through the date of filing this Quarterly Report on Form 10-Q.
Issuer Purchases of Equity Securities
In November 2018, we announced that our Board of Directors approved a share repurchase program, under which we may repurchase up to an aggregate amount of $125.0 million of our outstanding equity securities over a two-year period. The timing of share purchases pursuant to the program is dependent upon certain factors, including but not limited to, market conditions and prices, available funds and alternative uses of capital. The repurchase program may be carried out through open-market purchases, block trades, negotiated private transactions and pursuant to a trading plan adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934.

40



The Company's share repurchase activity for each of the three months in the quarter ended March 31, 2019, was as follows:
Period
 
Total Number of Shares Purchased
 
Average Price Paid Per Share
 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
 
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
 
 
(in millions, except share and per share data)
January 2019
 
75,126

 
$
13.29

 
75,126

 
 
February 2019
 
134,903

 
$
14.06

 
134,903

 
 
March 2019
 
60,183

 
$
13.27

 
60,183

 
 
Total
 
270,212

 
$
13.69

 
270,212

 
$
117.8

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.

41



ITEM 6. EXHIBITS
The following is an index of the exhibits included in this report:
Exhibit Number:
 
 
10.1*
10.2*
10.3*
10.4*
31.1
31.2
32.1**
101.0
The following materials from Milacron Holdings Corp.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Financial Statements.
 
 
*Filed herewith pursuant to Item 601(b)(10)(iii)(a) of Regulation S-K. Ms. An-Heid and Messrs. Jue and Miller became named executive officers during the reporting period covered by this Quarterly Report on Form 10-Q.
**The certifications attached as Exhibit 32.1 accompanying this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.


42



SIGNATURE
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.
 
 
 
 
 
Milacron Holdings Corp.
 
 
 
Date: May 2, 2019
By:
/s/  BRUCE CHALMERS  
 
 
Bruce Chalmers
 
 
Chief Financial Officer


43


Exhibit 10.1
EMPLOYMENT AGREEMENT

BETWEEN:
MOLD-MASTERS (2007) LIMITED
hereinafter called the "Company"
-and-
Ling An-Held
hereinafter called the "Employee"
WHEREAS the Company and the Employee (hereinafter, the "Parties") had an ongoing employment relationship for their mutual benefit; since the 8th day of January, 1991.
AND WHEREAS the Parties have agreed to enter this Employment Agreement to formalize in writing the terms of employment of the Employee in the position of President, Mold-Masters Asia;
AND WHEREAS the Parties agree that this Employment Agreement shall supersede and replace any and all previous Employment Agreements or Contracts which have been executed within the Mold-Masters group of Companies;
NOW THEREFORE the Parties agree as follows concerning the terms and conditions of their revised employment relationship:
1    RECITALS FORM PART OF AGREEMENT
1.1
The parties agree that the recital clauses outlined above are true and correct and form a part of this Employment Agreement.
2    APPOINTMENT AND DUTIES
2.1
The Company agrees to employ the Employee to perform, and the Employee agrees and undertakes to perform, the duties and responsibilities of President, Mold-Masters Asia, and such other duties and responsibilities as may be requested of the Employee by the Company from time to time.
2.2
The Employee understands and agrees that the Company may reduce, expand or otherwise modify the Employee's duties and responsibilities, as necessary, during the employment relationship between the Employee and the Company.
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2.3
The Employee agrees and undertakes to use the Employee's best efforts and to devote such attention, energy, skill and time as is necessary to satisfactorily fulfill all of the duties and responsibilities of the President, Mold-Masters Asia and to fulfill all duties and responsibilities assigned to the Employee by the Company from time to time. Accordingly, the Employee further understands and agrees not to accept other employment, including part-time employment, that is in conflict with, or that could reasonably be anticipated to otherwise interfere with, the Employee's ability to fulfill the Employee's duties, obligations and responsibilities to the Company.
1 4 '
2.4
The Employee acknowledges and agrees that the terms of this Employment Agreement apply to the Employee with respect to Mold-Masters (2007) Limited, and also with respect to its associated, affiliated, related and subsidiary companies (hereinafter collectively referred to, including Mold-Masters (2007) Limited, as the "Mold-Masters Group"). Therefore, the Employee agrees that any direction, instruction, order or request made to the Employee by or on behalf of any company within the Mold-Masters Group shall be deemed hereby to have been made to the Employee by the Company.
2.5
The Employee undertakes and agrees to abide by all of the Company's rules, practices and procedures set forth in the Company's Employee Handbook, as amended from time to time, a copy of which will be made available to the Employee online. Further, the Employee acknowledges and agrees that it is the Employee's duty to review the same and be familiar therewith.
3    EFFECTIVE DATE
3.1
The Parties agree that this Employment Agreement shall be effective as of and from the January 1 st , 2013, which date shall be referred to as the "Effective Date" of this Employment Agreement.
4    CONSIDERATION
4.1
In consideration of the Employee's agreements and undertakings contained in this Employment Agreement, and in consideration of the Employee's promise to comply with all of the duties, obligations and responsibilities set forth in this Employment Agreement, the Company shall employ the Employee and pay to the Employee the salary set out in Article 5 of this Employment Agreement, and shall make available to the Employee the benefits set out in Article 6 of this Employment Agreement, all of which may be amended and modified from time to time as set forth in this Employment Agreement.
5    COMPENSATION
5.1
The gross salary payable to the Employee shall be $ Two Hundred Sixty-Three Thousand, Three Hundred and Sixty-Two Dollars and Forty-One Cents ($263,362.41) (CDN) per annum, payable in equal bi-weekly installment to the Employee by automatic direct deposit, less all applicable statutory withholdings and remittances required by law. The Employee understands and agrees that any change(s) to the Employee's remuneration hereunder, once accepted by the Employee, shall not otherwise affect the application of this Employment Agreement.
5.2    The Parties agree that the Employee will receive a performance review annually.
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5.3
The Employee understands and agrees that the Employee's salary is a confidential matter between the Employee and the Company and the Employee covenants that the Employee will not disclose the details of the Employee's remuneration to any other person employed by the Company. Further, the Employee agrees to maintain any information of which the Employee becomes aware regarding the remuneration of any other Employee of the Company, however such information may have been obtained by Employee, in the strictest of confidence and hereby undertakes to neither discuss nor disclose such information with or to any other person for any reason.
5.4     Expenses:     The Parties understand and agree that the Employee may incur expenses in
connection with the performance of the Employee's duties under this Employment Agreement. The Company will reimburse the Employee for the Employee's actual expenses reasonably incurred, in accordance with the Company's expense reimbursement procedures and practices in effect from time to time, provided that the Employee delivers to the Company, in a timely fashion, appropriate written accounts and receipts or other verifying documentation in respect thereof.
6    BENEFITS
6.1     Group Insurance Benefits:     The Company shall pay the premiums to allow the Employee to
be eligible to participate in the Company's Group Insurance Benefits Program in effect from time to time, subject to the terms and conditions of group insurance contract(s) between the Company and its Insurer(s), including all terms and conditions related to the Employee's eligibility to participate therein. The Parties acknowledge and agree that all benefits will be provided in accordance with the formal plan documents or policies and any issues with respect to entitlement to, or payment of any benefits will be governed by the terms of such documents or policies.
6.2
The Employee understands and agrees that the Company retains the right to change the insurance carrier for any and all Group Insurance Plans, and to alter the terms and conditions of any and all group insurance plans, but will only do so after having provided the employee with advance notice.
6.3     Vacation:     The Employee understands and agrees that the following specific terms and
conditions are applicable to the Employee's annual vacation entitlement:
The Employee further understands and agrees that the Company's "vacation year" commences on the first (1st) day of January and ends on the thirty-first (31st) day of December, annually.
The Employee will be entitled to twenty-five (25) days of vacation and, vacation pay for such vacation leave will be calculated by the Company based on ten percent (10%) of the gross wages paid to the Employee from the Effective Date of this Employment Agreement up to and including December 31. In the event this employment agreement is terminated, vacation will be pro-rated based on the effective date of termination. Any portion of this pro-rated vacation which is unused will be paid to the employee on their final pay, as a lump sum. Any portion of this pro-rated vacation which has been used in excess of the pro-rated amount will be deducted from the employee's final pay.
6.4
The Employee understands and agrees that the Company reserves the right to schedule vacations when conditions allow, and that all vacation leave must be approved well in advance by the Employee's Direct Manager.
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7    TERMINATION
7.1
The Parties understand and agree that the Employee's employment pursuant to this Employment Agreement, may be terminated in the applicable manner, and in the circumstances, specified below:
a)
by the Employee, at any time during the Employee's employment, for any reason, on the provision of at least four (4) weeks' advance written notice to the Company. The Employee understands that the Company may waive such notice, either in whole or in part, and will have the right to terminate the Employee's employment at any time during the applicable notice period. Should the Company exercise its right to terminate the Employee's employment during the applicable notice period, then the Employee's entitlement to compensation and benefits under this Employment Agreement shall cease on the date that the Company exercises such right;
b)
by the Company, at any time, in its sole discretion, without any notice or pay in lieu thereof, for cause. For the purposes of this Employment Agreement, "cause" includes, without limitation, the following:
i)
unsatisfactory performance;
ii)
time theft;
iii)
dishonesty;
iv)
insubordination;
v)
serious misconduct;
vi)
a false statement on either the Employee's resume or employment application;
vii)
any material breach of the provisions of this Employment Agreement by the
Employee, as determined in the Company's sole discretion;
viii)
any willful or reckless violation of an established company rule contained in the Company's Employee Handbook, or, of which the Employee has been otherwise apprised;
ix)
paying, offering or promising to pay, or authorizing payment to any third party, public or private, in order to secure an improper benefit. Accepting or soliciting such payment. "Payment" includes making bribes or kickbacks, as well as conferring a financial or any other advantage, whether tangible or intangible (e.g. gifts, entertainment, travel expenses, charitable donations, political contributions, hiring an individual or relative, or other preferential treatment in reference to the company), and in some jurisdictions may also include so-called "facilitating payments"; or
x)
any other act, omission or circumstance recognized by law as cause for termination.
c)
subject to Article 7.4 and subject to Article 7.7 by the Company, at any time in its absolute discretion and for any reason other than for cause, upon providing the Employee with:
i)
all payments or entitlements to which the Employee is entitled pursuant to the Ontario Employment Standards Act, 2000 as amended, including notice of termination or, at the Company's option, pay in lieu of notice, and severance pay, if applicable. Severance pay will be calculated using the employee's current base salary, only, and will not include additional payments made to the employee.
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ii)    further, in exchange for the covenants in Article 8 and Article 9, the Company
shall provide four (4) additional weeks of notice for each fully completed year of continuous employment, up to a maximum of seventy (70) additional weeks. Notice under the Ontario Employment Standards Act, 2000 as amended, and the four weeks additional notice for each year of completed service may be provided by actual working notice or pay in lieu of notice or any combination of working notice and pay in lieu of notice. Additional notice will be calculated using the current base salary, only, and will not include additional payments made to the employee.
7.2
All payments contemplated under this Article 7 will be calculated on the basis of the Employee's annual base salary as of the date the Employee receives notice of termination. Payments under a bonus plan or any other forms of additional compensation will not be considered part of the annual base salary.
7.3
During the statutory notice period under the Ontario Employment Standards Act, 2000 as amended, the Company agrees to continue to pay its share of the premiums to continue the Employee's coverage, under Company's Group Insurance Benefits Program, excluding long-term disability insurance, group life insurance, accidental death and dismemberment insurance and out of province medical coverage, for the period of notice contemplated under Article 7.1.
7.4
The Employee understands and agrees that the provision of advance written notice or pay in lieu of such notice by the Company to the Employee shall not prevent the Company from alleging cause for the termination.
7.5
Upon the termination of the Employee's employment pursuant to this Employment Agreement, however caused, the Employee covenants and undertakes to immediately return to the Company in good condition all Company property including, without limitation all: Confidential Information as that term is defined in Article 8 hereof; keys, access cards, security cards and similar items; original Company documents, and all copies thereof, which are in the Employee's care or possession or which are then under the Employee's control, without retaining any part(s) thereof and without making or retaining any copies or duplicates thereof; Company credit cards; Company Intellectual Property as that term is defined in Article 9 hereof; Company equipment; and, files and other material of every nature and kind created or used by the Employee in connection with the Employee's employment under this Employment Agreement.
7.6
Upon the termination of this Employment Agreement, however caused, the Employee further agrees to provide all reasonable assistance and cooperation to the Company in order to assist the Company to obtain access to, possession and control of, all Company property, in the Employee's possession or under the Employee's control.
7.7
The Parties agree that the Company shall have the right to temporarily lay off the Employee, within the meaning of the Ontario Employment Standards Act, 2000, as amended, when the Company determines that business circumstances so require. Further, the Parties understand and agree that a temporary layoff within the meaning of the Ontario Employment Standards Act, 2000, as amended shall not constitute a termination for the purposes of this Article 7 of this Employment Agreement or for the purposes of the common law of employment.
8    CONFLICTS OF INTEREST, NON-SOLICITATION AND CONFIDENTIAL INFORMATION
8.1     Non-Competition:     The Employee covenants that, during the term of this Employment
Agreement and for a period of one (1) year immediately following the termination hereof, however caused, the Employee will not, directly or indirectly engage or participate in any business within the geographical areas for which the Employee has direct responsibility hereunder and which is in
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competition with the Company's business and the products or services offered by the Company specific to the Hot Runner / Injection Tooling for Pre-form Molding Industry systems and controls technology in Canada, without the prior written consent of the Company.
8.2     Non-Solicitation:     The Employee shall not, without the prior written consent of the
Company, during the period of employment, and for a period of one (1) year after the termination of the employment relationship between the Company and the Employee, however caused, either directly or indirectly, individually or in conjunction with any other association, corporation, entity, organization, partnership, person or syndicate, whether as agent, consultant, director, Employee, officer, partner, principal, or shareholder or in any other manner whatsoever:
a)
except for the benefit of the Company and during the course of the Employee's employment, at any time, solicit or accept any business from or the patronage of, or render any services to, sell to, or contract or attempt to contract with, any association, corporation, entity, organization, partnership, person or syndicate who is or was a customer, or active prospective customer of the Company within a period of two (2) years prior to the termination of this Employment Agreement, however caused;
b)
induce or attempt to persuade any person providing employment, consulting, marketing or other services to the Company to not provide, or to cease to provide, such services to the Company;
c)
solicit for employment, employ or otherwise retain Employees of the Company (other than Employees who have ceased to be employed by the other Party prior to the date of the solicitation); or,
d)
engage in any act or activity which would interfere with or harm any business relationship the Company may have with any investor, customer, employee, principal or supplier.
8.3     Confidential Information:     The Employee acknowledges and agrees that as the President,
Mold-Masters Asia, the Employee will be employed by the Company in a fiduciary capacity which requires that the Employer must be able to rely on the Employee to perform all duties and responsibilities under this Employment Agreement with the utmost of confidentiality, candour and good faith, and with absolute trust in the course of carrying out, performing and fulfilling the Employee's fiduciary duties and responsibilities under this Employment Agreement the Employee will have access to, and will be entrusted with detailed and highly confidential information relating to the Company and other members of the "Mold-Masters Group," all of which shall hereinafter be referred to as "Confidential Information".
8.4
For purposes of this Employment Agreement, "Confidential Information" shall mean and include all information or material disclosed to or known by the Employee as a consequence of the Employee's employment or engagement by the Company, including without limitation third party information that the Company treats as confidential and any information disclosed to or developed by the Employee or embodied in or relating to the Works of the Employee as defined in Article 9 of the Employment Agreement. The Confidential Information includes, but is not limited to, the following types of information and other information of a similar nature, whether or not reduced to writing: all financial information including accounting practices, records, and statements and including all information relating to any financial arrangements made by, or entered into by, any member of the Mold-Masters Group; administrative practices; analyses, business plans and policies and future business plans and policies; business records; business relationships including those with suppliers and others; computer hardware and software; correspondence; creations; customer lists including identities of customers and prospective customers, identities of individual contacts at business entities which are customers or prospective customers, and their respective preferences, businesses or habits; data; designs;





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developments; drawings and sketches; concepts; specifications; research; "know-how"; product information and reports; business methods; production or merchandising systems or plans; operations; employment and labour relations practices and policies; information regarding employees; formulae; Hot Runner / Injection Tooling for Pre-form Molding Industry systems and controls technology; ideas; information from external and internal sources; inventions, marketing, notes and strategies; pricing and sales information; methods; processes; programs; reports; results; techniques; technology used by the Company; and trade and business secrets. Notwithstanding the foregoing, information publicly known that is generally employed by the trade at or after the time the Employee first learns of such information, other than as a result of the Employee's breach of this Employment Agreement, or generic information or knowledge which the Employee would have learned in the course of similar employment or work elsewhere in the trade, shall not be deemed part of the Confidential Information.
8.5
The Employee will, both during the Employee's work for the Company and thereafter, hold in confidence and not directly or indirectly reveal, report, publish, disclose or transfer any of the Confidential Information to any person or entity, or utilize any of the Confidential Information for any purpose, except in the course of the Employee's work for the Company for the Company's sole benefit. Also, the Employee will not remove, reproduce, summarize or copy any Confidential Information except as expressly required by the Company to enable the Employee to perform the Employee's duties, and the Employee will return immediately to the Company all Confidential Information in the Employee's possession or control, including duplicates, when the Employee leaves its employ or whenever the Company may otherwise require that such Confidential Information be returned.
8.6
The Employee will not knowingly use for the benefit of or disclose to the Company any confidential information of any of the Employee's former employers or of any other third party or otherwise knowingly infringe any proprietary right of any third party. The Employee represents and warrants that no contract or agreement between or among the Employee and any third party will interfere in any manner with the Employee's complete performance of the Employee's duties to the Company or with the Employee's compliance with the terms and conditions hereof.
8.7
The Employee acknowledges that the provisions set out in this Article 8 of the Employment Agreement are necessary and reasonable to protect the Company's Confidential Information and goodwill, that the Confidential Information is unique, and that the loss or disclosure of the Confidential Information will cause the Company irreparable harm for which it will have no adequate remedy at law. Therefore, the Company shall be entitled to obtain, without posting any bond, and the Employee agrees not to oppose a request for, interim and permanent injunctive relief and other equitable relief to prevent a breach or continued breach of these provisions of the Employment Agreement, as well as an accounting of all profits and benefits that arise out of such violation, which rights and remedies shall be cumulative in addition to any other rights or remedies to which the Company may be entitled in law. The Employee acknowledges that these provisions of the Employment Agreement shall be specifically enforceable in accordance with their terms.
8.8
Notwithstanding any other provision of this Employment Agreement this Article 8 shall survive the termination of this Employment Agreement, however caused.
9    INTELLECTUAL PROPERTY
9.1
In this Employment Agreement the term "Works" shall mean and include: (i) any inventions, trade secrets, ideas, original works of authorship or any other form of intellectual property that the Employee conceives, develops, discovers or makes in whole or in part during the Employee's employment or engagement by the Company which relate to the Company's business or the
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Company's actual or demonstrably anticipated research or development, (ii) any inventions, trade secrets, ideas, original works of authorship or any other form of intellectual property that the Employee conceives, develops, discovers or makes in whole or in part during or after the Employee's employment or engagement by the Company which are made through the use of any of the Company's equipment, facilities, supplies, trade secrets or time, or which result from any work the Employee performs for the Company, and (iii) any part or aspect of any of the foregoing. The Employee hereby agrees to disclose to the Company full particulars of the Works, and hereby undertakes and agrees to maintain at all times adequate and current written records pertaining thereto, which records also shall be, and shall remain, the sole and exclusive property of the Company. All Works shall belong exclusively to the Company whether or not fixed in a tangible medium of expression. Without limiting the foregoing, to the maximum extent permitted under applicable law, all Works shall be deemed to be "works made for hire", and the Company shall be deemed to be the author thereof.
9.2
If and to the extent any Works are determined not to constitute "works made for hire," or if any rights in the Works do not accrue to the Company as a work made for hire, the Employee hereby irrevocably assigns and transfers to the Company, to the maximum extent permitted by law, all right, title and interest in the Works, including but not limited to all copyrights, trademarks, industrial designs, design patents, patents, topographies, mask works, trade secret rights, and other proprietary rights in or relating to the Works. Without limiting the foregoing, the Employee hereby irrevocably assigns and transfers to Company all economic rights to the Works, including without limitation the rights to reproduce, manufacture, use, adapt, modify, publish, distribute, sublicense, publicly perform and communicate, translate, lease, import and otherwise exploit the Works.
9.3
The Employee shall have no right to exercise any economic rights to the Works. Without limiting the foregoing, the Employee will not have the right to and will not reproduce, adapt, modify, publish, distribute, sublicense, publicly perform or communicate, translate, lease, import or otherwise exploit the Works, except as expressly authorized by the Company.
9.4
The Employee expressly acknowledges and agrees that the Employee wishes to remain anonymous and not to have the Employee's name or any pseudonym used in connection with the Works.
9.5
The Employee hereby waives in whole any moral rights the Employee may have with respect to the Works, including but not limited to the right to the integrity of the Works, the right to be associated with the Works as its author by name or under a pseudonym and the right to remain anonymous.
9.6
The Employee hereby approves any and all modifications, uses, publications and other exploitation of the Works that the Company or any successor or transferee thereof may elect to make, and the Employee expressly agrees that no such modifications, uses, publications or exploitations will or may cause harm to the Employee's honor or reputation. The Employee agrees that no modification, use or publication of the Works by the Company or any successor or transferee thereof will be deemed to constitute a distortion or mutilation of the Works.
9.7
The Employee acknowledges and agrees that the Company alone shall have the exclusive right to apply for, prosecute and obtain any and all copyrights, trademarks, industrial designs, design patents, patents, topographies, mask works, and any other registrable proprietary rights in or relating to the Works in any and all jurisdictions of the world. The Employee hereby agrees, both during the term of this Employment Agreement and thereafter, to execute and demand any such applications, transfers, assignments and other documents which the Company may deem necessary or desirable for the purpose of vesting in, or assigning to, the Company all title to the
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Works, and for the purpose of applying for, prosecuting and obtaining registrations for any and all copyrights, trademarks, industrial designs, design patents, patents, topographies, mask works and any other registrable proprietary rights in or relating to the Works in any and all jurisdictions of the world, as applicable. The Employee further hereby undertakes and agrees to cooperate and assist and to cause its representatives to cooperate and assist in every way possible in the prosecution of any such applications, and the Employee hereby acknowledges that this agreement to cooperate and assist in the prosecution of any such applications shall continue notwithstanding the termination of this Employment Agreement.
9.8
The Company shall have the unrestricted right to transfer and convey any or all of the Company's rights in or relating to the Works to any person or entity.
9.9
This Employment Agreement is not intended and shall not be interpreted to assign to or vest in the Company any of the Employee's rights in any inventions developed entirely on the Employee's own time without using the Company's equipment, supplies, facilities, or trade secret information, except for those inventions that either relate at the time of conception or reduction to practice of the invention to the Company's business or the actual or demonstrably anticipated research or development of the Company, or result from any work the Employee performed for the Company.
9.10
The Employee acknowledges and agrees that, in the event of the Employee's violation of any of the provisions of this Article 9, then, the Company shall be entitled to obtain, without posting any bond and the Employee agrees not to oppose a request for, interim and permanent injunctive relief and other equitable relief to prevent a breach or continued breach of these provisions of the Employment Agreement as well as an accounting of all profits and benefits that arise out of such violation, which rights and remedies shall be cumulative in addition to any other rights or remedies to which the Company may be entitled in law. The Employee acknowledges that these provisions of the Employment Agreement shall be specifically enforceable in accordance with its terms.
9.11
The Employee acknowledges, agrees and understands that the provisions of Article 8 and of this Article 9, and the Employee's agreement to same, are of the essence of this Employment Agreement and constitute a material inducement to the Company to enter into this Employment Agreement and that the Company would not have entered into this Employment Agreement, nor provided the additional notice in Article 7.1(c), without such inducement.
9.12
The Employee agrees that the provisions of Article 8 and this Article 9 shall be construed independently of any other provision of this Employment Agreement, and the existence of any claim or cause of action by the Employee against the Company, whether predicated on this Employment Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the provisions of Article 8 or of this Article 9;
9.13
Notwithstanding any other provision of this Employment Agreement this Article 9 shall survive the termination of this Employment Agreement, however caused.
10    PRIVACY
10.1
The Employee understands and consents that the Company may collect use or disclose personal information about the Employee as required for those purposes necessary for the conduct and administration of the employment relationship and pensions and benefits administration ("Employee Personal Information"). Examples of these purposes include, but are not limited to:
recruitment, promotion, training or career development;
contact of next of kin in event of emergency;
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employment administration;
'4 •
pensions and benefits administration;
work planning and management;
provision of references to potential employers, financial institutions, or educational establishments;
performance development reviews and other performance assessments, appraisals, etc.; and
photographs used for identification cards, management reports or associate announcements.
10.2
The Employee understands and agrees that the Company may disclose the Employee's Personal Information to a third party or administrator, for the purpose of administering the Employee's employment relationship with the Company and consents to such disclosure.
11    NOTICES
All notices pursuant to or in connection with this Employment Agreement shall be given by one of the following methods: delivery by hand; or courier service. Notices shall be deemed received from the date the hand delivery or courier message is delivered to the applicable locations described below. All such notices shall be addressed, as applicable, to a party at its address as shown below:
(a)
The Company: Mold-Masters (2007) Limited
233 Armstrong Avenue
Georgetown, Ontario
L7G 4X5
(b)
The Employee: Ling An-Heid
1072 Truman Ave.
Oakville, ON
L6H 1Y6
11.2
The Employee understands and agrees that it is, and shall remain, the Employee's sole responsibility to keep the Company informed and up-to-date with respect to any changes that may from time to time be made to the information set forth in Article 11.1(b) above.
12    SEVERABILITY
12.1
In the event that any provision or part of this Employment Agreement shall be deemed void or invalid by an authority of competent jurisdiction, then, that provision or part shall be deemed to be severed from the Employment Agreement and the remaining provisions or parts of this Employment Agreement shall remain in full force and effect. Without limiting the foregoing, if any provision of this Employment Agreement shall be determined, under applicable law, to be overly broad in duration, geographical coverage or substantive scope, such provision shall be deemed narrowed to the broadest term permitted by applicable law and shall be enforced as so narrowed.
13    AMENDMENT
13.1
This Employment Agreement shall not be amended or modified in any manner except by an instrument in writing signed by each of the Parties, or as otherwise contemplated by this Employment Agreement.
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14    ENTIRE AGREEMENT
14.1
This Employment Agreement constitutes the entire agreement between the Parties. Any and all previous Employment Agreements, written or oral, expressed or implied, between the Parties, relating to the Employee's employment are terminated and cancelled.
15    SATISFACTION OF ALL CLAIMS
15.1
The Employee agrees to accept the notice, pay in lieu of notice and severance pay if applicable, and benefits as stipulated in Article 7.1(c) in full and final settlement of all amounts owing to the Employee by the Company on termination, including any payment in lieu of notice of termination, and any and all entitlement the Employee may have under any applicable statute and any rights which the Employee may have at common law and the Employee hereby waives any claim to any other payments or benefits from the Company. In agreeing to the terms set out in this Employment Agreement, the Employee specifically agrees that upon receipt by the Employee, of the entitlements specified herein, this Article 15 shall constitute a full and final release, by the Employee, of any employment related claims arising out of the termination of the Employee's employment. Further, the Employee agrees to deliver to the Company all appropriate resignations from all offices and positions with the Company, if, as and when requested by the Company upon termination of the Employee's employment.
16    WAIVER
16.1
No waiver of any right under this Employment Agreement shall be deemed to have occurred unless contained in writing signed by the Party charged with such waiver, and no waiver of any right arising from any breach or failure to perform shall be deemed to be a waiver of any future right arising under this Employment Agreement.
17    INTERPRETATION OF THE AGREEMENT
17.1
The Parties acknowledge and agree that the language used in this Employment Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and the Employment Agreement shall be interpreted without regard to any presumption or other rule requiring interpretation of the Employment Agreement more strongly against the Party causing it to be drafted; and,
17.2
The Parties acknowledge and agree that all headings used in the text of this Employment Agreement are for ease of reference only and the Parties specifically intend and agree that the headings shall not be used for the purposes of interpretation of the Employment Agreement.
18    INDEPENDENT LEGAL ADVICE
18.1
The Parties acknowledge and agree that they have each had the opportunity to obtain independent legal advice in connection with this Employment Agreement and the execution hereof and each of the Parties further acknowledges and agrees that it has read, understands and agrees with, all of the terms hereof and that it executes this Employment Agreement voluntarily and in good faith.
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19    COMPLIANCE WITH GOVERNING LAWS
19.1
This Employment Agreement shall be construed in accordance with the laws of the Province of Ontario, and the Federal laws applicable therein, and the parties agree to attorn to the jurisdiction of the Ontario Courts.
20    COUNTERPARTS
20.1
The Parties agree that this Employment Agreement shall be executed by the Parties on the dates, and at the places specified below, and shall be executed in two (2) counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF the Company has caused this Employment Agreement to be executed
on its behalf in the Town of Georgetown, Ontario, this 20 th day of December 2012.

/s/ Susan Malcolmson
 
MOLD-MASTERS (2007) LIMITED
 
 
 
Susan Malcolmson
 
/s/ Connie Bender
 
 
Name: Connie Bender
Witness: Signature, Name and Address
 
Title: VP Global Human Resources

IN WITNESS WHEREOF the Employee has executed this Employment Agreement on her own behalf in the Town of Georgetown, Ontario, this 20 th day of December 2012.

/s/ Connie Bender
 
/s/ Ling An-Heid
 
 
 
Connie Bender
 
Ling An-Heid
 
 
 
Witness: Signature, Name and Address
 
 









Mold-Masters (2007) Limited - Employment Agreement Page 12




Exhibit 10.2

EMPLOYMENT CONTRACT FOR MANAGING DIRECTOR
1. THE UNDERSIGNED:
1.1     CIMCOOL INDUSTRIAL PRODUCTS B.V. a private limited Liability Company having its
registered office at Schiedamsedijk 20 in Vlaardingen, represented by [Robert McKee/Ronald D. Brown] as a member of the Company's supervisory board, hereinafter referred to as 'the Company';
and
1.2     Mr. Gerrit Jue residing at Dijkstraat 10, 3961 AA Wijk bij Duurstede, The Netherlands,
hereinafter also to be referred to as 'the Managing Director';
2. WHEREAS;
on September 1, 2000 , the Company entered into an employment contract with Mr. Gerrit Jue for an indefinite period of time, hereinafter to be referred to as the 'Former Employment Contract';
in connection with the retirement of the current Statutair Directeur (" Managing Director") appointed pursuant to the Company's Articles of Association), the Company intends to appoint Mr. Gerrit Jue to the position of Managing Director (Statutair Directeur);
Mr. Gerrit Jue will be appointed as a Managing Director (Statutair Directeur) according to the Company's Articles of Association in a Shareholders Resolution dated July 21, 2003, and by way of signing this Managing Director's contract, accepts this appointment;
by way of this Managing Director's Contract, the parties wish to amend and add a number of the employment conditions contained in the Former Employment Contract in the context of Mr. Gerrit Jue's appointment as Managing Director (Statutair Directeur);
in this Employment Contract terms and conditions of the Collective Bargaining Agreement Metalektro ( - CAO Metalektros) and the Cimcool Industrial Products B.V. employee policies booklet ("Bedrijfsregelingenboek")will be followed; and
this Employment Contract will replace the Former Employment Contract entirely as of June 1, 2003, with due consideration of the existing conditions and the service years according to the existing contract and the original employment date being September 1, 2000.
HAVE AGREED AS FOLLOWS:







3. Terms of the contract of employment
3.1    The contract of employment will commence on June 1, 2003, and is entered into for an
indefinite period of time and will terminate by operation of law on the date on which Managing Director reaches the legal retirement age.
3.2    The Company will follow the terms and conditions as set out in the Collective Bargaining
Agreement for the Metal and Electro Technical Industry 2002/2004 ("CAO Metalektro") and the Cimcool Industrial Products B.V. employee policies booklet ("Bedrijfsregelingenboek"). The Company will follow the modifications of the CAO Metalektro regarding the above terms and conditions.
3.3    With regard to determining the service years the original employment date as per the Former
Employment Contract , being September 1, 2000, shall be regarded as the employment date.
3.4    Any terms and conditions specifically agreed in this employment contract will supersede any
of the general conditions set out in the collective bargaining agreement (CAO) or the Cimcool Industrial Products B.V. employee policies booklet.
1. Notice
4.1
Either party may give written notice terminating the present contract of employment as of the end of each calendar provided that the employee will. provide 6 months notice and the Company will provide 12 months notice.
2. Position, rights and duties

5.1
The Managing Director will hold the position of Managing Director for the Company appointed under the Company's Articles of association. All the powers and commercial policy of the Company, with the exception of the powers described in the Company's Articles of Association which are reserved for the shareholders in general meeting, have been delegated to the Managing Director.
5.2
As Managing Director he will be responsible for the total Company his primary focus will be Marketing and Sales, Engineering and Research & Development. The Managing Director will report to the supervisory board and on an operational level to the President of Industrial Fluids.
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5.3
As Managing Director, he will have all the rights and obligations imposed on or granted to the Managing Director, as laid down in the Company's Articles of Association.
The fixed base salary is paid in twelve equal monthly installments.
 

5.4
The Managing Director covenants that he is prepared, on mutual agreement, to perform duties other than those that are considered his usual duties, if such performance may be reasonably expected from him.
5.5
Without the Company's prior written consent the Managing Director will, during his employment term, not perform any other work for pay or for no consideration, alone or with other persons, directly or indirectly, establish or conduct a business that is competitive with the Company's business in whatever form, or take any financial interest in or perform work gratuitously or for remuneration for such a business. This prohibition does not include normal private investment activities.
5.6
The Managing Director covenants that, at the Company's request and on mutual agreement, he will be willing to perform work for a Company affiliated with the Company.
5.7
The Managing Director will not be obliged to travel to places and or countries that are affected by war, catastrophe or are otherwise under threat. This will also apply in case of non-covering by the insurance policies.
6. Working hours and work place
6.1
The normal working week will run from Monday to Friday. The normal working hours amount to 40 hours a week, in conformity with the valid terms and conditions of the Collective Bargaining Agreement Metalektro MAO Metalektro').
6.2    The Managing Director will perform his work at the Company's offices located in Vlaardingen.
6.3
The Managing Director is prepared to work overtime and travel outside the normal working hours whenever a proper performance of his duties so requires. With respect to said overtime, an annual compensation of one month's salary will be paid in December of each year.





3. Salary
7.1
As of June 1, 2003 the Managing Director will be entitled to a fixed base salary of EUR 130.000 per annum.






The net monthly salary is transferred into a bank account, designated by Managing Director, on or around the 25th of every month.
7.2
The annual fixed base salary is increased by a holiday allowance of 8 %, the net amount to be transferred into the aforementioned bank account in June of each year together with the monthly salary payment referred to in 7.1.
8. Additional remuneration
8.1
The Managing Director will receive a signing bonus of 15,000 Euro, payable with the first paycheck reflecting the new salary stated in 7.1 above, following the signing of this Employment Contract.
8.2
The Managing Director will participate in the parent Company's incentive plan, known as the "Milacron Inc. Short Term Incentive Plan". Participation in this Plan has to be confirmed by the Company for each given year. Details of this Plan and the computation of bonus payment shall each year be determined by the Shareholders and be submitted by the President of Industrial Fluids. Under this Plan the Managing Director will be entitled to a bonus that may range from 0% to 40% of the gross annual base salary (as mentioned in Article 7 of this employment contract). The granting of the bonus is at the Company's discretion. The Managing Director can in no event lay claim to a bonus that has not yet been granted. The granting of a bonus in any given year or during several years will not create entitlement for any subsequent years.
9.    Holidays
9.1
Managing Director shall be entitled to a minimum of 25 days' holiday per holiday year on full pay. Extra leave may be granted with the approval of the General Meeting of Shareholders or the chairman of the Supervisory Board. These provisions shall apply for the full term of the contract of employment.

9.2    The holiday year commences on May 1 and terminates on April 30 in any given year.
10.    Additional functions and sidelines
10.1 The Managing Director will inform the Company in good time of any additional functions or his proposed acceptance thereof (whether incidental or more permanent). If and to the extent additional functions could prejudice the Company's interests, the Company may prohibit the employee from undertaking such additional functions or make this conditional on compliance with certain conditions.





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10.2 Furthermore, the Managing Director must refrain from using any of the Company facilities, such as telephones, faxes, copiers or office supplies, in respect of the activities prohibited pursuant to this Article.
11. Expense allowances
11.1 Travel expenses and other necessary expenses incurred by the Managing Director in the furtherance of the Company's business and to properly perform his tasks shall be reimbursed to the Managing Director provided that this compensation may be provided tax free.
11.2
With respect to travelling, the Milacron Travel Accident Plan is applicable, of which the Managing Director declares to have received a copy.
11.2 With respect to travelling, the Company will provide travel insurance for the Managing Director's personal belongings.
12.    Telephone and data connection
12.1 The Company will reimburse the Managing Director for a mobile telephone, connection subscription and the costs of use, exclusively for business purposes.
12.2 The Company will compensate the Managing Director for the costs of business use on his private telephone according to the fiscally allowed reimbursements for private telephone connections.
12.3 The Company will reimburse the cost of a data connection to his private address and the use thereof.
13.    Company car

13.1 The Company will provide the Managing Director with a Company car according to the Milacron Car Policy, of which the Managing Director declares to have received a copy. All the costs connected with the use of this car shall be for the Company's account. The Managing Director may also use this car for private purposes, all the costs connected with the private use shall also be for the Company's account. On termination of the contract of employment, irrespective of the way in which this is effected, the Managing Director must return the car to the Company at the end of the employment contract.
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13.2 The value of the private use as determined by the Dutch income tax law will be subject to personal income taxes. These personal income taxes will be borne by the Managing Director.
14. Pension
14.1
The Company will provide pension insurance for the Managing Director based on the general terms and conditions, with the exception of the maximum salary, of the Metalworking Industrial Pension Fund ("Stichting Bedrijfspensioenfonds voor de MetaalElektro") as per December 2002.
14.2 The pension insurance premium will be fully borne by the Company.
15.    Health Insurance
15.1
The Managing Director will be entitled to participate in the collective health insurance taken out by the' Company with CZ Zorgverzekeraar provided he fulfils the relevant conditions. The Managing Director declares to have received a copy of the conditions of that insurance and accepts the content thereof. The insurance premiums will be borne by the Managing Director (50%) and the Company (50%). The Managing Director authorizes the Company to withhold the contribution payable by him according to the applicable wage tax requirements. The Company will arrange for payment of the full premium to the insurance Company.
16.    Incapacity to work and disability insurance
16.1
The Company will provide disability insurance in favor of the Managing Director for the event when the Managing Director's illness or incapacity for work exceeds a period of twelve months. The Company will bear the cost for this supplementary disability insurance while it remains effective. Under the terms of this supplementary disability insurance the Managing Director will, in the event of total disablement, receive a monthly benefit equivalent to 70% of his most recent monthly salary (Including holiday allowance) less benefits payable under the Sickness Benefits Act or Disablement Benefits Act, or any benefits which may supersede these.

17.    Accident insurance
17.1 The Company will take out insurance on behalf of the Managing Director which guarantees a benefit in the event of permanent physical injury or death if the Managing Director is involved in an accident in the course of or outside his employment. The Company will pay the premium for this insurance in full.
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18.    Death benefit
18.1
In the event of the death of the Managing Director his dependants will receive a sum equivalent to three months' salary, not including the salary payable in the month in which the employee died. Payment of the Death benefit will take place in the month following the month of death. Dependants will be deemed to be:
a)
the surviving spouse, if the deceased and his spouse had not been permanently separated at the time of his death;
b)
in the absence of the person described under a., the children or other descendants of the Managing Director in the same proportion to which they are entitled to his estate.
19.    Liability insurance
19.1 The Company undertakes to take out insurance covering the liability of executive and non-executive directors (a 'BCA' insurance) with a maximum cover of EUR 20 million (with an annual indexation) per event in favor of the Managing Director.
The Company will pay the premiums stipulated by the insurer for the above insurance regularly on the due dates for as long as the Managing Director remains in the Company's employment. If the Managing Director discovers that he may be held liable in connection with his position as managing Director of the Company, or of any affiliated Companies, the Managing Director will immediately report this to the Company and adhere to the instructions of the Company, its insurer, or its advisors and provide for all information and documents.
20.    Confidentiality clause
20.1 Neither during the term of the employment contract nor upon termination thereof may the Managing Director inform any third party in any form, directly or indirectly, of any particulars concerning or related to the business conducted by the Company or its affiliated companies. This is including but not limited to technical, financial and business information and models, names of potential clients or partners, proposed transactions, reports, plans, market prognoses, computer software, databases, data, technical knowledge or other confidential proprietary information concerning the Company's business, which the Managing Director could reasonably have known were not intended for third parties, regardless of whether such information includes any reference to its confidential nature or ownership and regardless of how the Managing Director learned of the particulars.

20.2 Other than for the benefit of the Company and within the scope of the normal work, the Managing Director may also not copy, compile, merge, assemble or process information, products or systems of the Company or disassemble, reproduce or decompile the source code o
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the computer software included in those products or systems or attempt to deduce the source code of such software in any other manner.
20.3 Contrary to the provisions of section 7:650(3) and 7:650(5) of the Dutch Civil Code, the Managing Director will forfeit a penalty equivalent to his gross monthly salary for three months if he breaches the provisions of subclauses 1 and 2 above, as well as a penalty of EUR 2,000 for every day on which such a breach continues after Managing Director has been notified of such breach by registered letter without prejudice to the Company's right to claim compensation for the losses it has actually incurred instead of a penalty.
21. Intellectual property rights
21.1
All intellectual property rights, including but not limited to patent rights, design rights, copyrights and related rights, database rights, trademark rights and chip rights, ensuing, in the Netherlands and abroad, from the work performed by the Managing Director under his employment contract and during a period of one year after termination thereof, will be exclusively vested in the Company. The Managing Director may not independently disclose, multiply, use, manufacture, bring on the market or sell, lease, deliver or otherwise trade, offer on behalf of any third party, or commission the registration of the results of his work.
21.2 Insofar as the rights specified hereinafter are not vested in the Company by operation of law on the grounds of the employment contract between the parties, the Managing Director covenants that he will transfer and, insofar as possible, hereby transfers to the Company any intellectual property rights of any nature in or arising from work performed (inventions made) by the Managing Director in the discharge of his duties, both in the Netherlands and abroad.
22.    Indemnification
22.1 The Company will grant the Managing Director damages or compensation if and insofar the employment contract with the Managing Director is terminated before his legal retirement age (currently 65 years ), for a reason other than the reasons mentioned below:
a.
an urgent reason as defined in Article 7:678 of the Dutch Civil Code;
b.
a weighty reason under Article 7:685 of the Dutch Civil code that constitutes an urgent reason as defined in Article 7:678 of the Dutch civil code;
The compensation described below shall also be payable if the contract of employment is terminated on the managing Director's initiative, provided that the Managing Director can reasonably demonstrate that it cannot be expected from him in all reasonableness to
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stay with the Company

22.2    If the situation described in Article 22.1 arises, the Company will grant the Managing
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Director compensation in the amount of two years salary. Salary means the last-earned gross base salary under this employment contract including the pension premiums as mentioned in article 14 of this Agreement, the holiday allowance referred to in Article 7, and the value of private use of the car referred to in Article 13 , to be fixed annually at the sum computed for income tax purposes, less any amounts received pursuant to Article 4 "Notice Period". The Company therefore is entitled to pay the contractual notice in lieu of notice to the Managing Director and shall deduct this amount in full from the contractual compensation due to the Managing Director referred to in this clause. This Article 22 therefore will not entitle the Managing Director to claim the notice period in addition to the contractual compensation.
22.3    The manner of payment of the amount shall be at the Managing Director's discretion,
provided that from a tax perspective it remains within the acceptable limits. In the event the Managing Director wishes to receive the payment for a future right to periodical payments ("stamrecht") within the meaning of Article 11 (1) (g) of the Dutch 1964 Wages and Salaries Tax Act ("Wet op de Loonbelasting 1964") or for an annuity ("Lijfrente"), he will provide the Company timely with the required
documents on the basis of which the Company can establish — prior to payment — that such payment without any deduction of taxes is allowed in accordance with Dutch Tax Laws.
23. Return of Property
23.1 At the end of the employment contract, the Managing Director will be obliged to immediately return to the Company all property belonging to the Company, including materials, documents and information copied in any form whatsoever, articles, and keys. The Managing Director will also be obliged to return the Company car that may have been made available to the Managing Director within the framework of his position, together with the accompanying keys, papers (vehicle registration certificate) and other accessories.





23.2 Notwithstanding the provisions of Article 7:650(3), (4) and (5) of the Dutch Civil Code, if the Managing Director fails to return any of the items as referred to in paragraph 1 of this Article, the Company has the right to claim compensation.
24.    Final provisions






24.1 This employment contract and the appendices will be governed by the laws of the Netherlands.
24.2 Any amendments or additions of this employment contract must be agreed and signed by both parties in writing in order to be effective.
24.3 If provisions of this employment contract should be void, invalid or unfeasible this will not have an impact on the validity of the other provisions. The void, invalid or unfeasible provision then shall be replaced, on mutual agreement, by another valid and feasible provision leading as close as possible to the same (economic and legal) result.
24.4 This contract shall supersede all previous contracts between the parties with exception of the seniority.
Drawn up in duplicate originals and signed in Vlaardingen on August 15 th , 2003,





/s/ Robert McKee
Mr. Robert McKee
President Industrial Fluids

/s/ Gerrit Jue            Mr. Gerrit Jue
Managing Director

/s/ Ronald Brown
Mr. Ronald Brown
Chairman & CEO




Exhibit 10.3
ASSIGNMENT AGREEMENT

The undersigned,
1.
Cimcool Industrial Products B.V., a private limited liability company under the laws of the Netherlands, having its registered and business offices in the Netherlands (3134 KK) Vlaardingen at the Schiedamsedijk 20, in this matter legally represented by Ronald M. Krisanda, hereinafter referred to as "Employer";
2.
Milacron LLC, a private limited liability company under the laws of Delaware having its registered office and maintaining a place of business in the United States of America, 10200 Alliance Road, Suite 200, Cincinnati, Ohio 45242, in this matter legally represented by Thomas J. Goeke, hereinafter referred to as "Milacron";
and
3.
Mr. GERRIT HE, residing in the Netherlands, (3961 AA) Wijk bij Duurstede, at the Dijkstraat 10, hereinafter referred to as "Employee";
hereinafter jointly referred to as the "Parties".
WHEREAS:
A.
Employee is employed by Employer in the role of Managing Director under the applicable Articles of Association (the "Employment");
B.
Employer and Milacron are affiliates and they belong to the same group of companies;
C.
The Parties discussed Milacron's intention to appoint a Global President Cimcool and they considered Employee to carry out this role under continuation of his Employment with Employer and his role as Managing Director of Employer;








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D.
Employer and Employee have agreed to a temporary assignment of Employee to Milacron to provide services in the role of Global President Cimcool (the "Assignment");
D.
The Parties wish to enter into this three-party assignment agreement, hereinafter referred to as the "Agreement", to confirm in writing the terms and conditions of the Assignment
HAVE AGREED AS FOLLOWS:
4.
General Description and Workplace
1.1. Employer realizes the Assignment by temporarily assigning Employee to Milacron, effective as of the date stated below.
1.2. Employee will habitually perform the Assignment from the Employer's offices in the Netherlands, but the Assignment will also require regular travel (e.g. to Milacron in the United States of America). Travel time will not qualify as work time.
5.
Position during the Assignment
2.1. Under the Assignment, Employee will carry out the position of Global President Cimcool for Milacron. In connection therewith, Employee undertakes to discharge all the duties assigned by law, Employer and Milacron (on behalf of Employer), in accordance with the rules, regulations and procedures laid down in law and Milacron/Employer policies, as well as the general rules, regulations and instructions that Employer and Milacron may adopt from time to time.
2.2. Employee reports his activities under the Assignment to the person so decided by Employer (further to indication by Milacron).
2.3. During and regardless of the Assignment, Employee will continue his role as Employer's Managing Director. Employee confirms that he is willing and able to accept additional workload resulting from the Assignment.






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3
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2.4. The Parties do not foresee an unreasonably high work pressure resulting from the Assignment. They anticipate that Employee performs his Managing Director activities for Employer and the Assignment during a full time work week of 40 hours, notwithstanding that reasonable overtime will be required from time to time considering the very senior level of the work activities concerned.
2.5. Employee covenants that he shall also perform duties other than those which are considered his usual duties, if such performance may be reasonably expected from him.
2.6. Employee remains an employee of Employer throughout the duration of the Assignment. During the Assignment the terms and conditions of employment between Employer and Employee continue, save and except as otherwise required by law, agreed to in this Agreement or agreed or otherwise to between Employer and Employee.
3.     Term and Termination
3.1. The Assignment is entered into for an initial temporary duration of 12 months. The Assignment will renew automatically thereafter for subsequent 12 month periods, save and except if the Assignment is terminated earlier. Upon termination of the Assignment and/or the Employment between Employer and Employee, this Agreement will automatically terminate.
3.2. The Assignment may be terminated by any of the Parties, upon providing 1 month's written notice to the other Parties.
3.3. In derogation of article 3.2 above, the Assignment may be terminated by Milacron and/or Employer with immediate effect in case of Employee's gross misconduct, violation of this Agreement or any other reason for immediate termination.





3.4. In any event, the Assignment will terminate with immediate effect on the date on which:






4
(a)
Milacron informs Employer that they no longer wish to rely on Employee's services in the role of Global President Cimcool;
(b)
the Employment between Employer and Employee ends.
4.     Consideration for Assignment
4.1. Employer will pay Employee an amount of EUR €2,500 (including 8% holiday allowance) gross per month, as consideration for the Assignment (and notwithstanding his regular wages under the Employment). After subtracting any required deductions or withholdings, the net amount will be paid into Employee's bank account as part of his monthly remuneration.
4.2. During the Assignment the Employee's bonus eligibility under his bonus program with Employer increases from a 40% to a 50% maximum of the combination of his base salary under the Employment Agreement and his consideration under this Assignment Agreement. The granting of a bonus (and the percentage thereof) will, at all times, remain at Employer's discretion. Employee can in no event lay claim to a bonus that has not yet been granted. The granting of a bonus in any given year or during several years will not create a precedent for any subsequent years. The tax and social security consequences of participation in a bonus program or the granting of a bonus will be at Employee's expense. If Employer grants a bonus, Employee will receive the gross bonus, less all deductions and withholdings required by law, on the condition that Employee is actively employed by Employer on the date of bonus payment and actively performing the Assignment.
4.3. Employee covenants that he will work overtime outside the normal working hours whenever a proper performance of his duties so requires. Remuneration for such overtime activities is factored into Employee's base salary and the additional consideration under article 4.1 above. No additional remuneration for overtime will be paid.
4.4. Payments made to Employee by Milacron under this Agreement, are payments made on behalf of Employer.






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5.     Rechargeable rights
5

5.1. Employer will recharge to Cimcool Industrial Products LLC (or other intercompany entities as appropriate) the costs that they incur for the Assignment of Employee (including the consideration under article 4.1 above and the costs related to the increase of maximum bonus eligibility under article 4.2 above (the "Rechargeable Rights")).
5.2. The Rechargeable Rights incurred by Employer shall be accumulated and, to the extent that these Rechargeable Rights relate to the Assignment, be charged to Milacron in accordance with the arm's length principle. Employer will add a 5% mark-up to the Rechargeable Rights charged to Milacron.
5.3. When charging the Rechargeable Rights to Milacron, Employer shall compound the aggregate amount either during a financial year or during a shorter period, as Employer may deem appropriate.
5.4. After having determined the amount of the Rechargeable Rights, Employer, shall issue an appropriate invoice to Milacron with a reference to this Agreement and a description of the Rechargeable Rights that are recharged.
5.5. The maturity of the invoices shall be within (thirty) 30 days after the date of their issue. The payment of the invoices shall be made in Euros.
6. Full Time Commitment / Sidelines
6.1. The Assignment and Employment require Employee's full time commitment. Therefore Employee must refrain from undertaking any sideline activities or holding any sideline positions or additional posts, whether or not for consideration, unless Employer provided prior written permission in writing.
1. Confidentiality
7.1. During the term of this Agreement and thereafter, other than for the benefit of

5






6
Milacron within the scope of the Assignment, Employee will not disclose to any third party in any form, directly or indirectly, any information about or related to: (i) any confidential information or Know-How (as defined below) of which Employee became aware in the performance of the Assignment or during the term of this Agreement; (ii) any particulars concerning or related to the business conducted by Milacron, Employer and/or companies affiliated with Milacron and/or Employer; or (iii) any other particulars of which disclosure to third parties can potentially impair the interests of Milacron, Employer and/or any company affiliated with Milacron and/or Employer, regardless of whether such information includes any reference to its confidential nature or ownership and regardless of how Employee learned of the information/particulars. This restriction shall apply without limit regarding time, but shall cease to apply to information or knowledge which is currently or shall come (otherwise than by a breach of this article) into the public domain.
7.2. "Know-How" is defined as any and all trade secrets, secret formulas, inventions, designs, standards, results, technical and other data and information, processes, methods, draft materials and business methods and any and all related information, knowledge, details, commercial practices and improvements.
7.3. Other than for the benefit of Milacron within the scope of the Assignment, Employee will not copy, compile, publish, merge, assemble or process information, products or systems of Milacron, Employer or any company affiliated with Milacron and/or Employer or disassemble, reproduce or decompile the source code of the computer software that is included in those products or systems or otherwise available on the premises of Milacron, Employer or any company affiliated with Milacron and/or Employer or attempt to deduce the source code of such software in any other manner.
7.4. Employee understands that, if he breaches this article or any other provision of this Agreement (including provisions that survive this Agreement), Milacron and/or Employer may sustain irreparable injury and may not have an adequate remedy at law. As a result Employee agrees that, in the event of any breach of this article or any other provision of this Agreement, Milacron and/or Employer may, in addition to any other remedies available to them, bring an action or actions for injunction,






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specific performance or both, and have entered a temporary restraining order, preliminary or permanent injunction, or order compelling specific performance.

8.     intellectual Property Rights
8.1. All intellectual property, however arising, whether registered or unregistered, including, but not limited to (a) inventions, discoveries, patents (including reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof), (b) trademarks, trade names, corporate names, trade dress, designs and other similar designations of source, sponsorship, association or origin, together with the goodwill connected with the use of and symbolized by any of the foregoing, (c) works of authorship, expressions, designs and design registrations, whether or not copyrightable, (d) databases, software and firmware (including data files, source code and object code), chips and integrated circuits, internet domain names, websites and related content, and (e) Know-How (as defined in clause 2 of the Confidentiality Article above), together with all registrations, applications and renewals for any of the foregoing, whether solely or jointly conceived, created, developed, reduced to practice, or otherwise made by Employee (or caused by Employee to be conceived, created, developed, reduced to practice or otherwise made) (all of the foregoing, "Intellectual Property"), including all worldwide right, title and interest in and to all of the foregoing (including all copyright, moral and neighbouring rights and rights of privacy and publicity), and any other similar proprietary rights ("Intellectual Property Rights"), ensuing in the Netherlands or abroad, during the term of this Assignment or thereafter, from or in the course of the work performed by Employee during the Assignment, do and will exclusively vest in Milacron. To the extent that such Intellectual Property and Intellectual Property Rights cannot vest in Milacron, then they do and will exclusively vest in Employer.
8.2. Insofar as any Intellectual Property and Intellectual Property Rights are not vested in Milacron or Employer by operation of law, Employee will hold in trust for the sole right and benefit of Milacron, and hereby assigns and transfers such Intellectual Property and Intellectual Property Rights to Milacron, which transfer is hereby accepted by Milacron. If transfer to Milacron is not possible, Employee will hold in trust for the sole right and benefit of Employer, and hereby assigns and





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8
transfers such Intellectual Property and Intellectual Property Rights to Employer, which transfer is hereby accepted by Employer. If and insofar as it is potentially impossible to transfer up front any future Intellectual Property Rights, Employee covenants that Employee will transfer those rights to Milacron or Employer respectively should Milacron and/or Employer respectively so demand and that Employee will sign any and all documents and perform such further acts at Milacron's or Employer's expense as may be reasonably necessary to effect that assignment and transfer in a timely manner.
8.3. Insofar as any Intellectual Property or Intellectual Property Rights are incapable of being assigned and transferred from Employee to Milacron or Employer, Employee hereby grants Milacron and Employer the exclusive, royalty-free, worldwide, perpetual right and license, with the right to grant sublicenses, in and to such Intellectual Property and Intellectual Property Rights in the broadest sense, which right and license is hereby accepted by Milacron and Employer.
8.4. Insofar as personality rights or moral rights vest in Employee, for example within the meaning of Section 25 of the Dutch Copyright Act (in Dutch: "Auteurswet"), Employee hereby waives all such worldwide rights in favor of Milacron and Employer to the extent permitted by law, including but not limited to the rights referred to in Section 25(1Xa), (b) and (c) of the Dutch Copyright Act (such as the right to have one's name stated and the right to object to changes in the work), and including the right to the integrity of the work, the right to be associated with the work as its author/co-author by name or under a pseudonym and the right to remain anonymous.
8.5. Employee will promptly disclose to Milacron and Employer all Intellectual Property and Intellectual Property Rights that ensue from work done during the Assignment and/or that are in any way relevant to the creation, protection and/or enforcement of the Intellectual Property and Intellectual Property Rights.
8.6. During the term of this Assignment and thereafter, Employee will perform all acts that are necessary to register the Intellectual Property Rights in Milacron's and/or Employer's name with any competent authority in the world.






8






9
8.7. Employee hereby grants Milacron and Employer an irrevocable power of attorney to represent Employee with respect to the transfer and registration of the Intellectual Property Rights.
8.8. Employee acknowledges that the consideration and/or pecuniary allowance that Employee receives under the Assignment is adequate consideration, and includes equitable compensation, for the assignment and transfer of Intellectual Property and Intellectual Property Rights under this Agreement, including the equitable compensation referred to in Section 12(6) of the Dutch Patents Act of 1995 (in Dutch: "Rijksoctrooiwet 1995").
8.9. During the term of this Agreement and thereafter, Employee shall not use the Intellectual Property and Intellectual Property Rights or the ensuing results, including but not limited to the documents in which they are recorded, for his own benefit or for any purpose other than the performance of the Assignment.
8.10. This Article governing the Intellectual Property Rights will survive the termination of this Agreement.
9. Violation
9.1. Without prejudice to any further statutory or other rights that Milacron and/or Employer may have by law, a breach of any of the Clauses contained in Articles 6 through 8 will qualify as good reason for Employer and/or Milacron to terminate the Assignment with immediate effect. Furthermore, such violation may result in Employer taking disciplinary action against Employee, which, depending on the circumstances, may include (immediate) termination of the Employment between Employer and Employee.
1.      Data Protection  
10.1. Milacron and Employer process personal data relating to the Employee within the framework of performing the Assignment and/or provisions ensuing from or in relation to the Agreement and/or the Employment between Employer and the Employee.
9
 






10
10.2. Milacron and Employer process the Employee's personal data for the purpose of personnel records, including management of the Employee's activities, for the purpose of payroll records, including making payments to the Employee and implementing applicable employment conditions, all of the foregoing in the broadest sense, and to comply with statutory obligations, including calculating, recording and paying taxes and contributions for the Employee.
10.3. For the purposes listed above and provided that Milacron and/or Employer have a legitimate interest in doing so — for instance with a view to a proposed merger or acquisition — Milacron and Employer may also transfer the Employee's personal data to third parties (including accountants, lawyers and advisers) and other companies affiliated with Milacron and/or Employer, which may be located in other countries, both inside and outside the European Union.
10.4. Milacron and Employer process the personal data in a proper and careful manner. Furthermore, appropriate technical and organisational measures are taken to sufficiently safeguard personal data and to preserve the confidential nature of the Employee's personal data, regardless of whether such data are processed in the European Union or elsewhere.
10.5. The Employee is entitled to contact Milacron and Employer with a reasonable request to review, correct, supplement, delete or block the Employee's personal data. Furthermore, the Employee must promptly notify Milacron and Employer of any changes in the personal data.
11.     Company Documents. Company Equipment
11.1. Employee is obliged to exercise due care in handling any company documents, in any form whatsoever, and any company equipment made available to him during the Assignment.
11.2. Per the end of this Agreement, Employee will be obliged to return all company documents (including all copies) and company equipment related to his activities under the Assignment, to Milacron in good condition. Furthermore, Employee will be obliged to return such company property at an earlier time, should Milacron






10






11
and/or Employer so demand, for example in the event of occupational disability or non-active service for other reasons.
12. Changes
12.1. Milacron and Employer are authorized to amend the terms and conditions contained in this Agreement and/or deriving from and/or related to any other arrangement between the Parties, without explicit consent of Employee, if and insofar as they (either jointly or separately) have a weighty interest in doing so that is of such a nature that Employee's interests, insofar as they are harmed by the amendment, in all reasonableness and fairness must yield to the interest of Milacron and/or Employer.
1. General Provisions
13.1. The Parties do not envision in any way entering into or creating an employment agreement between Employee and Milacron either de jure or de facto. Milacron's involvement with Employee in relation to the Assignment shall be executed on behalf of Employer who, at all times during this Agreement, shall remain Employee's sole employer.
13.2. This Agreement contains the entire agreement and all arrangements made between the Parties and supersedes all prior agreements, arrangements, undertakings and statements made by (any of) the Parties regarding the Assignment.
13.3. Any amendment or addition to this Agreement must be confirmed by the Parties in writing, notwithstanding article 12 above. No waiver by Milacron and/or Employer of any provision hereof or of any breach of this Agreement shall be effective or binding unless such waiver is in writing, and any such waiver shall not limit or affect the rights of Milacron and/or Employer with respect to any future breach.
13.4. If any part of this Agreement is found to be illegal or otherwise unenforceable by any court of competent jurisdiction, that part will be severed from this Agreement and the remainder will remain in full force and effect.

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12
 






13.5. This Agreement and the resulting Assignment are governed by the laws of the Netherlands.
13.6. The Parties irrevocably agree that the courts of the Netherlands shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement and/or the resulting Assignment.

As agreed on September 22, 2016.






.V.    Mil.    LLC




















Appendix I
[Defined Contribution Plan]






ADDENDUM TO THE EMPLOYMENT AGREEMENT

THE UNDERSIGNED:
I. Cimcool Industrial Products B.V., a private limited liability company having its registered office and maintaining a place of business at Schiedamsedijk 20 in Vlaardingen, Netherlands (the 'Employer'), lawfully represented by its Supervisory Board Member, Mr. Ronald M. Krisanda;
AND
2. Gerrit Jue, residing in the Netherlands at 3961 AA Wijk bij Duurstede, at the Dijkstraat 10, (the 'Employee');
The Employer and Employee together are referred to as "the Parties".
WHEREAS:
a.)
The Employee entered into an employment contract with the Employer on I September 2000. The Employee currently holds the position of Managing Director, or Director, for Milacron B.V. Milacron Nederland B.V., Cimcool Industrial Products 13.V., Cimcool Europe B.V. and its branches, and Cimcool Polska;
b.)
Simultaneously with this Addendum, the Employee is entering into an amendment to his Employment Contract in which he will take the global role of President, Cimcool Industrial Products;
c.)
Parties agreed upon a target pension scheme (in Dutch: streefregeling) by means of an Addendum to the employment contract dated June 24, 2004 and Pensioenbrief beschikbare premie dated June 6, 2004 (the 'Target Scheme'), which Target Scheme is executed by Avero Achmea;
d.)
Given new Dutch fiscal regulations (in Dutch: Wet Witteveen) this Scheme is no longer fiscally compliant per December 31, 2014.

AGREE AS FOLLOWS:






6.
Parties agree on the termination of the Employee's Target Scheme per September 30, 2016. Consequently the Target Scheme will be closed for any future pension accrual as per October 1, 2016.
7.
Parties agree upon a new pension plan, i.e. a defined contribution plan (in Dutch: beschikbare premieregeling) per October 1, 2016 during continued employment with Employer as advised and introduced by Adviesgroep Combined. The costs of this new pension plan will be borne by the Employer. All rights and obligations with respect to the new pension plan are laid down in the defined contribution plan, as amended from time to time, a copy of which is attached as Appendix 1.
8.
The Employer may amend the new pension plan— and, consequently, the pension agreement — without the Employee's consent if and insofar as it has a weighty interest in doing so that is of such a nature that the Employee's interests, insofar as they are harmed by the amendment, in all reasonableness and fairness must yield to the Employer's interest.

4.
The Employer shall fulfill its pension obligations under the Target Scheme on the grounds of the Dutch Pension Act ("Pensioenwet"). This includes payment of assumed 'back services' in relation to the closed Target Scheme related to the period 13 August 2003 till September 30, 2016 in the amount of EUR 308,009.31 gross (Appendix 2). Parties envisage to have payment of the assumed 'backservice' of EUR 308,009.31 gross into the closed Target Scheme or any other pension plan. If such payment into the Target Scheme or any other pension plan will not be tax facilitated under the current Dutch tax regulations, this (remaining) gross amount will be paid in cash to the Employee after withholding all necessary taxes and social security premiums. For administrative reasons, the parties envisage to have this matter settled by October 31, 2016 at the latest.
1.
Parties agree upon a final discharge clause stipulating that the Employer (and its affiliates) and the Employee will have no further obligations to each other on the basis of the (closed) Target Scheme and the Parties will grant each other full and final discharge in this respect.







6.
This Addendum constitutes the entire agreement and understanding between the Parties with respect to its subject matter and replaces and supersedes all prior agreements, arrangements, undertakings or statements regarding such subject matter.
Ronald M. Krisanda Supervisory Board Member
Employee
2.
This Addendum shall be governed by and construed in accordance with the laws of the Netherlands.
Thus agreed upon and executed in duplicate. Cimcool Industrial Products B.V.





Exhibit 10.4



SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this " A greement") is made and entered into by and between Milacron LLC , a Delaware corporation (the " Company " ) and Mark Miller (t he " E mployee") on the last signature date se t forth below (the " Effective Date ").

WHEREAS, the Company desires to provide the Employee with certain severance benefit rights , and the Employee agrees to certain restrictive covenants with respect to the Company, s ubject to the term s and conditions of this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.    D efin itions.



because :
(a)

Termination for " Cause " means termination of the Employee's employment


(i)      the Employee has committed a deliberate and premeditated act against the interests of the Company including, without limitation : an act of fraud , embezzlement, misappropriation or breach of fiduciary duty against the Company, including , but not limited to , the offer, payment , solicitation or acceptance of any unlawful bribe or kickback with respect to the Company's busine ss; or

(ii)      the Employee has been convicted by a court of competent jurisdiction of , or pleaded guilty or nolo contendere to , any felony or any crime involving moral turpitude ; or

(iii)      the Employee has failed to perform or neglected the material dutie s incident to hi s employment or other engagement with the Company on a regular basis, and such refusal or failure shall have continued for a period of twenty (20) days after written notice to the Employee specifying such refusal or failure in reasonable detail; or

(iv)      the Employee has been chronically absent from work (excluding vacat ions , illnesses , Disability or leave s of absence approved by the Company); or

(v)      the Employee has refused, after explicit written notice , to obey any lawful resolution of or direction by the Board which is consistent with the duties incident to hi s employment or other engagement with the Company and such refusal continues for more than twenty (20) days after written notice is given to the Employee specifying s uch refusal in reasonable detail ; or

(vi)      the Employee has breached any of the material terms contained in this Agreement , any employment agreem e nt , non-competition agreement, confide ntial i ty agreement or si milar type of agreement to which the Employee is a party; or

(vii)      the Employee has engaged in (x) th e unlawful use (including being under the influence) or posse ss ion of illegal drugs on the Company ' s premises or (y) habitual drunkenness o n the Company's premi ses.












Any termination of employment by the Co mpan y for Cause shall be communicated b y a written notice to the Employee which shall set fm1h , in reasonable detail , the fa c ts and circumstances th at provide a basi s for termination of the Employee 's e mpl oy ment. The failur e b y the Company t o set forth any fa ct or ci r c um s tan ce w hi c h co ntribute s to a s howin g of Ca use shall not wa i ve any right of th e Company her e under or preclude the Company from a sse rtin g s uch fact or circumstance in e nforcin g the Co mpan y's ri g ht s hereunder. Any voluntary t e rmination of employment b y the Employee in anti c ipation of an involuntary termin a tion of the Employee's employment fo r Cause shall be deemed t o be a termination for "Ca use ."

(b) Re s i g nati o n fo r " Good R easo n " m ea n s t er minati on of employment b y th e Employee becaus e of the occurrence of any of the following events:

(i)      th ere i s a material reduction in th e E mpl oyee’s th en - curre nt a nnual ba s e salary (" Base S alary"), other than a reducti o n of n ot greater than t e n per ce nt (10 %) applicable to the Company's Employees generally , unl ess agreed to in writing b y the Employee;

(ii)      ther e i s a material reduction in th e E mplo yee's authorit y , duties , or responsibilities as the Co mpan y's Corporate Vice President, Chief Human Resources Officer ; or

(iii)      th e Employee is required t o r e lo ca t e to a di ffe rent princip a l place of bu s ine ss that i s l oca ted m o re than 100 mil es away fr o m th e Company's headquarters in C in c inn a ti , Ohio.

In the event of exis t e nc e of gro unds that would c on s titut e Good R easo n as co ntemplated in su b sec ti o n s (i), ( ii ) or (iii) a bo ve, s uch grounds s hall co n s titute Good Reason only if th e E mplo yee provide s written noti ce to th e Company of th e facts whi c h c onstitute th e g round s within 90 day s fo llowin g the Employee 's initial knowledge of t he grounds and the Co mp a n y thereafter fai l s to c ur e s u ch gro und s within 30 bu si n ess d ays following it s r ecei pt of such n otice (o r , in t h e eve n t that such gro unds cannot be co rre c t ed within such 30-day p e riod , th e Company h as not taken all reasonable s t e p s within s uch 30-day p e ri o d to correc t s uch g r o und s as promptly as p rac ti ca bl e th e reaft er).

2 .
Severance   Benefit   s .
 
(a)
Termination for   Ca u se;   R esig n a ti o n   Without Good   R easo n .
If the
E mplo yee in c ur s a " Se p ara tion from Serv i ce" within t h e m ea nin g of Section 409A of t h e Int ernal R eve nue Co de of 1986, as amended (the " C ode " ) , by r easo n of the Co mpan y's termination of the Employee 's emplo y ment for Ca u se, o r if t he Employee resigns fro m hi s e mpl oyment other than for Good R easo n , t h e E mplo yee shall b e entitled only to p ayment of any unpaid Bas e Sa l ary thr o u g h an d includin g th e date of t e rmination or r esig nati o n , any ann ual bonus earned, but unpaid , fo r the yea r imm e diately pr ece din g th e yea r in which the termination dat e occ u rs (w hi c h unpaid annual bonus amount sha ll b e p ai d in accor dan ce w ith Sec tion 3(b)), and any other amo un ts or b e n efi t s required t o b e paid or pro v id e d b y law o r und e r any plan , pro gra m , poli cy or practice of the Compa n y (s u ch ot her amounts o r ben e fit s b e in g referred to co ll ective l y as th e " O th er Acc ru e d Co mpen sa tion and Ben efi t s "). Exce pt as se t forth in thi s s ub sec ti on (a), the Employee s h a ll h ave







no further right to re ceive any other c omp e nsation or benefit s after such t e rminati on or re signa tion of employment.

(b) Termination without Cause; Resignation for Good Reason.

(i)      If the Empl oy ee incur s a " Separation fr o m Service " w ithin the m ea nin g of Section 409A o f the Co de , b y rea so n o f th e Com p a n y's termination of t h e Employee 's empl oy ment without Cause, or if the Employee resign s from his emplo y ment for Good Reason , the Employee s hall be e ntitled to the fo llowin g:

(A)      an amount e qual to 18 month s' Bas e Salary , pa ya ble in equal in s tallment s over a period of 18 month s;

(B)      subject to the Employee' s timely election of continuation cove rage under the Consolidated Omnibus Budget Re c on ci liation Act of 1 985, as a mend ed ("C OBRA " ) , an amount e qual to the full premium amount (determined as of th e date of te1mination on a pre-tax ba s is) for continued coverage under the Company's h ea lth plan pur s uant to COBRA, for the Employee, and , to the extent that th e Employee i s providin g coverage for hi s s pouse or eli g ible dep e ndent s as o f the termination date , for such indi v idual s; provided , that the Employee shall be respon sib le for any income ta x liability associated therewith , if any; provided , further, that the Company' s o bli gat i o n to pay s u c h premiums shall cease immediately upon the earlier of the expiration of the sta tutory COBRA period and the date th e E mploy ee be co m es eligible for coverage under any other gro up h ea lth pl an (as an employee or otherwise) as d efi ned for purposes of CO BRA or Medicar e; and

(C)      to th e extent pro v id e d in the Milacron Bonus Plan for such yea r , a pro rata annual bonus for th e year in which the date of te1mination occurs, w hich annual b o nus s h a ll b e ba sed on ac tu a l performan ce a nd paid at th e sa m e time that b o nu ses are paid to other Employees ge n e rally during th e year following th e year in wh i c h the dat e of termination occurs; and

(D)
any Other A cc rued Co mp ensat ion an d Benefits.

(ii)      Th e paym e nt s and benefits provid ed und er Section s 2(b)(i)(A) and 2(b)( i)(B ) s hall co mmen ce on the fir st payroll date fo ll ow in g the 60t h day afte r th e Employee 's termination of employment. The Co mp a n y s h a ll not be re quir e d to m ake the p a yment s and provide th e b e nefit s pro v ided fo r und e r Sections 2( b )( i )(A) through 2( b )(i)(C) unle ss the Employee executes a nd d e liver s to the Company, within 60 da ys following the Employee ' s termination of e mpl oy ment , a re lea se s ub sta nti a ll y in the form a ttach e d hereto as Exhibit A (provided , if ne cessary, such r e l ease m ay be upd ated a nd r evise d t o reflect c han ges in law to achieve it s intent) and th e rele ase has b ecome effect i ve and irre voca ble in its entirety in s u c h 60-day p e ri o d . Th e E mplo yee ' s failure or refusal t o sig n the r e l ease (or th e E mpl oyee's revocation of s u c h release in acco rdan ce wi th a ppli ca bl e laws ) will re s ult in th e fo rfeitur e of the paym en t s and ben e fit s und er Sections 2( b )(i)(A) through 2( b )(i)(C).







(iii)      If, following a termination of emp l oyment without Cause or a resignation for Good Reason , the Employee breaches the provision s of Sections 3 through 9 hereof or breaches any provision set forth in the executed copy of the general release of claims, the Employee shall not be eligible, as of the date of such brea c h , for the payments and benefits described in Sect i on 2(b )(i)(A)-(C), any and all ob li gations and agreements of the Company with respect to s uch payments shall thereupon cease, and the Company shall be entitled to reco ve r (and the Employee shall reimb ur se the Company for) any sev erance payment s previously made to the Emp l oyee pursuant to Section 2(b)(i)(A)-(C).

(c) Termination Due to Death or D isability. The Employee's employment with the Company shall terminate automatically on the Employee's death . In the event of the Employee's Disability (as defined h erein) , the Company sha ll be ent itl ed to termina t e hi s emp l oyment. In the event of the Emp l oyee ' s death or if the Employee incur s a " Separat i on from Service" wit hin the meaning of Section 409A of the Code by reason of the Employee's Disability, th e Company sha ll pay to the Employee (or his estate, as applicable), the Employee's Base Salary through and including the date of termination and any Othe r Accrued Compensation and Benefits. For purpose s of t hi s Agreement, " Disability " means a ph ysica l or mental di sa bility or infirmity of the Employee that prevents the normal performance of s ubstantially all his duties for a pe1iod in excess of 90 consecutive days or for more than 180 days in an y consecutive 12 - month period. Evidence of such physical or mental di sa bility or infirmity s h all be certified by a ph ys ician licensed to practice in the state of residence of the Emp l oyee, which physician is mutuall y agreeable to the CEO and the Emp loyee. If there is no agreemen t on the se lecti on of the physician, then the CEO s h a ll select one physician and the Employee sha ll select one phy s i cian, and the two physicians shall attempt to mutually agree upon s uch physical or mental disability or infirmity. If the two physicians cannot agree, then the two physicians shall jointly select a third phy s ician , whose opi ni on on such physica l or mental di sa bility or infirmity shall contro l.

(d) Resignation from Directorships and Officership s . The termination of the E mpl oyee's employment for a n y reason sha ll const itut e the Employee 's resignation from ( i ) any director , officer or emp l oyee position the Employee has with the Company or any of its subsidiaries and (ii) all fid u ciary po si tions the Emp lo yee holds with respect to any employee benefit plans or trusts established by the Company; provided, that in the event the Employee ' s employmen t is terminated fo ll ow in g the Employee's successfu l comp leti o n of the Employee's ro l e, as reasonably determined by the Board in it s sole discretion , then he will not be req uired to resign as a member of the Board unless otherwise determined by the Company. The Employee agrees that this Agreement sha ll serve as written notice of resignation i n thi s circ um s tance.

(e) Section 280G " Parachute Payme n ts" . Notwithstanding any provision of this Agreement to the contra r y, if the Employee b ecomes entitled to payments and / or benefit s provided by thi s Agreement or any ot h er amounts in the nature of compensation, whether a lon e or together w ith other payment s or benefit s that the Employee receives or reali zes or is then entitled to recei ve or realize from the Company or any of its affiliates or any other person whose actions result in a change of ownership or effective co ntrol of the Company, and such payments and / or benefit s wo uld constitute an "ex ce ss parachute payment " w ithin the meaning of Section 280G of the Code, such payment s and / or benefit s will be reduced (the " 280G Reduction " ) to the extent necessary so that no portion of the Emp l oyee's payments or benefit s will be sub ject to the excise tax imposed by Section 4999 of the Code or any interest or penaltie s are in curred by the Employee







with respect to such excise tax. Any 280G Reduction pursuant to this paragraph s hall be effectuated by reducing the payments and benefits hereunder in the following order: (A) any severance payments due pursuant to Section 2, with later payments being reduced first , (B) the waiver of accelerated vesting of equity awards, with awards having a later vesting date being reduced first , (C) the benefit continuation pursuant to Section 2 and (D) all other payments or benefits , with later payments being reduced first. All determinations r e quired to be made under this Section 2(e), including the assumptions to be utilized in arri vi ng at such determination, shall be made by an outside nationally recognized accounting film selected by the Company or th e Board, in its reasonable discretion (the " Acc o unting Finn " ) , which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days of the receipt of notice from the Employee that there has been a payment hereunder , or such earlier time as is requested by the Company. In the event that the Accounting Firm is se r vi ng as accountant or auditor for the individual , entity or group effecting the change of ownership or effective control of the Company, the Company shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm sh all then be referred to as th e Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm shall be binding upon the Company and the Employee.

(f) No Further Rights. Except as explicitly pro v ided in this Section 2 , the Employee shall ha ve no rights under this Agreement to receive any compensation or benefits after termination or resignation of employment.

3. Confidentiality.

(a) Confidential Information.

(i)      Definitions. For purposes of Sections 3 through 9 , the terms set forth below shall have the following meanings :

" Bu s i ness " mean s manufacturing , desi g nin g, di s tributin g, marketing o r selling pla s tics manufacturing equipment, pla s tics manufa ctu rin g eq uipm ent components including hot runn e r systems , mold components or aftermarket part s or services, or industrial machining chemicals, or any other business engaged in by the Company or any of its s ubsidiaries within twelve (12) months prior to the Employee 's termination of employment by or other serv ice to the Company or any of its subsidiaries.

" C onfidential Information” mean s the bu s iness and financial records , customer and s upplier lists , busine ss contacts, contracts, trade secrets, confidential methods of operations of the Company and its affiliates and other related information , as s uch exists from tim e to time durin g the Employee 's employment by or other service to the Co mp any o r any of its su b s idiarie s.

" Customer " means any Per son who :

(ii)      ha s been a customer of the Co mpan y at any time durin g the o n e year period prior to the termination of the Employee's em ploym e nt ; or







(iii)      has evidenced an intention in writing to purchase Products from the Company at any time during the one year period prior to the termination of the Employee ' s employment,

(iv)      and with whom the Employee had any dealings, directly or indirectly , or about whom the Employee had confidential information, during the Employee's employment.

" Person " means any natural person , corporation, division of a corporation , partnership, trust, joint venture, association, film, company , estate or unincorporated organization.

" Products " means the products of the Business (i) manufactured by the Company within the twelve (12) month period immediately preceding the date of this Agreement (ii) manufactured by the Company during the Employee's employment (iii) manufactured by the Company in the twelve (12) months following termination of the Employee ' s employment in the normal course of operating , maintaining and expanding the business and (iv) any products that are substitutes for or competitive with the products referred to in clauses (i) , (ii) and (iii).

(b) Confidentiality . The Employee recognizes and acknowledges that the Confidential Infom1ation constitutes valuable, special and unique assets of the Company and its affiliates , access to and knowledge of which are essential to the performance of the duties of the Employee hereunder. The Employee acknowledges that such Confidential Info1mation is not generally known in the trade and that such Confidential Information provides the Company and its affiliates with a competitive edge in its industry. In that regard , the Employee acknowledges and agrees that the Company and its affiliates have taken and are taking reasonable steps to protect the confidentiality of , and legitimate interest in , the Confidential Information . The Employee therefore agrees that he will not , during his employment , or after termination of his employment , disclose any of such Confidential Information to any Person for any reason or purpose whatsoever except in connection with the pe1fonnance of his duties to the Company and its affiliates , nor shall he make use of any such Confidential Information for his own purposes or for the benefit of any Person except the Company and its affiliates. Confidential Information shall not include an y information which is or becomes publicly known through no action or inaction of the Employee. Notwithstanding the foregoing , in the event that the Employee is requested or required , in connection with any proceeding by or before a governmental authority, to disclose Confidential Information, the Employee will give the Company prompt written notice of such request or requirement so that the Company or its affiliates may seek a protective order or other appropriate relief. In the event that such protective order or other remedy is not obtained or the Company waives the right to seek such an order or other remedy , the Employee may , without liability hereunder furnish only that portion of the Confidential Information which the Employee is legally required to disclose . Notwithstanding anything herein to the contrary , nothing in this Agreement shall (i) prohibit the Employee from making reports of possible violations of federal law or regulation to any governmental agency or entit y in accordance with the provisions of and rules promulgated under Section 21 F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002 , or of an y other whistleblower protection provision s of state or federal







law or regulation, or (ii) requir e notifi ca tion or prior approv al by the Com pan y of an y reporting described in clau se (i).

(c) Confidentiality of A greement. Th e Employee agrees that , exce pt as ma y be r e quired by appli ca ble law or legal proce ss , he s hall not disclos e the te1ms of thi s Agreement to any person or entity o ther than th e Employee's accountants , financial advisors , attorneys o r s pou se , provided that such accountants, financial a dvisor s , attorn eys and s pouse ag ree not to di sclose the terms of this Agre e ment to any other p erso n or entity except as may be r e quired b y applicable law or legal proce ss.

(d) Exclus i ve P roperty.     The Employee confirms that all Confidential Information i s and s hall r e main the exclu s ive property of the Company o r an y of it s subsidiaries or affiliate s (collectively , the " Company G roup") . All busine ss reco rd s, paper s and documents k ep t or made by the Emplo ye e r e l a ting to the bu s in ess of the Compan y Group shall be a nd remain th e prop e rt y of the Company Group . Upon the r e quest and at th e ex pen se of th e Company Group , the Employee shall promptly mak e all disclosure s , ex ecu te all in st rument s a nd p a p e rs and perforn1 all acts reasonably neces sa ry to ves t and confirm in the Company Group, fully and completely, all right s c reated or co ntemplated b y this Section 3.

4. Noncompet ition . While e mployed or at any time during the eighteen (18) months following termination of the Employee's emp l oy men t, for w hate ve r rea so n and whether vo lunt ary or in vo luntary , the Emplo yee shall not in any m a nner w hatsoe ve r (other than a holdin g of l ess than two p e rcent (2%) of th e shares of a company li s t e d o n a pub li c s t oc k exchange in Ca nada or th e U nit e d States of America ) wit hin No rth America , e i ther indi vi duall y or in p art nership or jointly or in conj un ction with a ny other P e r so n :

(a) dir ec tl y, or indir ect l y, c arry o n , engage in or be co n ce rned w ith or in terested in any business that manufactures , se ll s or distributes the Products ;

(b) dir ect ly , or indire ct l y, assist (as principal , beneficiary , director, shareholder , partner , nominee , ex ecut or , trustee , agent , se rv a n t, employee , independ e nt contractor , s uppli er , co nsultant , l e nd e r , g uarantor , finan c ier or in any o ther ca pa c it y wha te ver) a n y P erson to carry on , e n gage in o r b e co n ce rn e d w ith or interested in any bu s in ess th at manufactures , sells or di str ibut es the Produ c t s; or

(c) h ave a n y dir ec t or indire ct interest or concern (as principal, ben eficiary , dire ctor , s hareholder , pa1tner, nominee , executor, truste e, agent , serva nt , e mpl oyee , co n s ult ant , independent co nt racto r or in a n y other capac it y whatever) in or with a n y P erso n , if any part of the act i v iti es of s uch Person co nsi s t s of a n y bu s in ess th at m a nu fact ur es , se lls or distribut es th e Products.

5. Non-So li c it atio n . Whi l e e mploy ed or at any tim e during the e i gh t ee n (18) months following termination of th e Employee ' s e mpl oy ment , fo r w h a te ve r re ason and w h ether vo lunt ary o r in vo lunta ry, th e Emp l oyee shall not in any m a nn er wha t soever, e ith er indi v idu a ll y or in partn ers hip or j o intly or in conjunction w ith a ny o ther P e rson :

(a) dir ec tl y , o r indirectly so li cit a n y C u s tom er ;







(b) directly , or indirectly assist (be it as principal, beneficiary , servant, director , shareho ld er, partner, nominee, exec ut or, tru stee, agent, emp l oyee , independent contractor, supp li er, cons ult ant, lend er, financier or in any other ca pacity whatever) any Person directly or indirectly to solicit any C u stomer; or

(c) h ave any direct or indirect interest or co n cern (be it as principal, beneficiary , director , s hareh older, partner , nominee , executor , trustee , agent, servant, employee , consultant, ind e pend ent contractor, s upplier , cre ditor or in any other capacity w hat eve r , other than a holding of less than t wo percent (2%) of the sha r es of a company li sted on a public stock exchange in Canada or the United States of America) in or with any Person if any of the activities of which Person consists of sol ic iti ng any C u stomer ,

if s uch so li c it ation is, directly or indirectly, intended to result in a sale of any Produ cts t o s u c h Cus tom er within North Ame ri ca.

6. Non-Solicitation of Employees. While employed or at any time during t h e e i g hteen (18) months following t e rminati on of hi s e mploym e n t , fo r whatever reason and whet h er vol unta ry or involuntary , th e Employee s h a ll not , directly or indirectl y, hire , solicit or induce to perform serv ic es , or attempt to sol i cit or induce to perform services (as an employee , consultant or o th erwise) any individuals who a r e emp l oyees of th e Company or tak e a n y actions whic h are intended to persuade any s uch emp lo yee to leave t he emp l oy of the Company, without the prior written consent of the Co mp any. T hi s sect ion sha ll not app l y to so li citations made genera ll y t o individuals t hr oug h publi c media and w hi ch are not spec ifi ca ll y targeted at e mploye es of the Company .

7. Nond i s paragement. T h e Emp l oyee shall not at any time , dir ec tly or indirectly , ora ll y, in writing or through any medium , disparage , d efame or assail the reputation, integrity or professionalism of the Company or any of its affi li ates , officer s, director s, employees or shareho ld e r s. Notwit h stand in g the fo r egoing , thi s prohibition doe s n ot apply to s tatement s made in the course of sworn testimony in adm ini strative, judicial or arbitral proceedings.

8. Return of Documents and P roperty. Upo n the termination of hi s employme n t or at s u ch ot h er time that the Company m ay requ es t , the Emp l oyee s hall forthwith return and deliver to th e Company , and s hall not retain , any origina l s or copies of, any books , papers or pri ce li s t s of th e Company, c u sto mer li sts , fil es, books of acco un t , notes and other documents and data or other writings, tape s or records of the Company ma int ained by or in th e pos sessio n of the Employee (and a ll of th e same are hereby acknowledged and agreed to be t h e property of t h e Company).

9. In ve ntions and Pat e n ts. The Employee her eby assigns to the Company all right , titl e and interest to a ll patents a nd pat e nt applications , all inventions, innov at ion s, improvements, developments, methods, designs , ana l yses , drawings , reports and a ll s imil ar or related information (in each case whether or not patentabl e), all copyrights and copyrightable works, all trade secrets , confidential information a nd know -h ow , and all other intellectual property rights that bot h (a) are conceived, reduced to practice, developed or made by th e Employee while employed b y the Co mpan y or any of it s s ub s idiarie s and (b) either (i) r e late to the Company ' s o r any o f it s s ubsidiaries ' actual or antic ip ated business , research and development or existing or







future p ro duct s or se rvice s, or (ii) are co nceived , reduced to pra c ti ce , developed or made using any equipment, s uppli es, facilitie s, assets o r re sources of the Co mpan y o r any of it s s ub s idiari es ' ( in c ludin g but n ot limit ed t o, an y intell ec tual property rights) ( " Work Produ c t") . The Employee shall pr o mptly disclose s uch Work Product t o the Co mpany and, at the Co mpan y ' s ex p e n se, perform all actions reas o nably r e qu este d b y t h e Company (whether durin g o r a fter the per i od of employment) t o es tabli s h and confirm the Co mpan y's ow ner s hip thereof (inc lu d in g , w ith out limita t i o n , a ss i g nments , co nsents , powers o f a ttorney , applications and oth e r instruments).



Company that:

l 0.     C ovenants R easo nabl e. The Employee acknowledges an d agree s with the


(a) the cove nant s in this Agre e ment are reasonable in the circumstances and are nec essa r y to protect th e Com pan y;

(b) the Employee is being provided with the opportunity to receive a s ub s tanti a l finan c i a l benefit as a re s ult of thi s Agreement ;

(c) the cove nant s of the Employee contained in this Agreement we r e a material inducem e nt for the Company to enter into thi s Agr ee ment and the exec ution a nd d e li ve ry of this Agreement i s a condition to the Company's ob ligation s pur s uant to this Agreement; and

(d) th e br eac h b y s uch Employee of a ny of th e pro v i s i o n s of this Agreement would ca use ser i o u s and irreparable harm to the Company which could not adequately b e compensated for in damag es.

I I .     Certain Remedi es .

(a) Forfeiture / Payment O bligations. In the e ve nt the Employee fai l s to co mpl y with Sections 3 through 9, other than any isolated , in s ubstanti a l and inadvertent fai lur e, the Emplo yee agrees that he will forfeit any amounts not already paid pursuan t to Section 2(b )( i )(A
(C) of thi s Agreement and the Company shall b e entitled to re cover (and t h e E mpl oyee s h all b e reimbur se the Co mpan y for) a ny severance pa y ment s pr ev iously made to t h e Em pl oyee pursuant to Se ct ion 2(b)(i)(A)-(C).

(b) Injun ct i ve R el i e f. Without int e nding to limit the remedies available to the Co mp a n y Group , includin g, but not limited t o, that set forth in Section II (a) hereof, t h e Employee agrees that a bre ac h of any of the covenants co ntained in Sections 3 through 9 of thi s Agreement ma y r es ult in m a t e rial and irr epara bl e injury to the Company Group for which th e r e i s n o a dequ ate rem e d y a t law , th a t it w ill n o t be po ss ibl e to m eas ure dam ages for s u c h injuries precisely a nd that, in th e eve nt of s uch a brea c h or threat thereof, any member of the Co mp a n y Gro up s h a ll be entitled to seek a temp orary restraining order or a pr e liminar y or perm a n e nt injun c t ion, or b ot h , without bond or o ther se c urity , re s trainin g th e E mplo yee from e ng ag in g in activ i ties prohibit ed by the covenant s contained in Sections 3 thr o ugh 9 of this Agreement or suc h ot h er relief as m ay be requir e d s pecifi ca lly to enforce any of the covenants contained in thi s Agreement. Such injuncti ve r e lief in any court s hall be available to th e Co mpan y Gro up in lieu of, or prior t o o r pending determination in , a n y ar bitr atio n proceeding.












12.      Defense of Claims. The Employee agrees that , during the Term, and for a period of six years after termination of the Employee ' s employment , upon request from the Company , the Employee will reasonably cooperate with the Company in the defense of any claims or actions that may be made by or against the Company that affect the Employee ' s prior areas of responsibility, except if the Employee ' s reasonable interests are adverse to the Company in such claim or action. The Company agrees to promptly pay in advance or reimburse the Employee for, as requested by the Employee, all of the Employee ' s reasonable travel and other direct costs and expenses incurred , or to be reasonably incurred , to comply with the Employee ' s obligations under this Section 12, including, but not limited to , legal costs and expenses.

13.      Source of P ayments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid in cash from the general funds of the Company , and no special or separate fund shall be established , and no other segregation of assets shall be made, to assure payment. The Employee shall have no right , title or interest whatsoever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such 1ight shall be no greater than the right of an unsecured creditor of the Company.

14.      Section 409A of the C ode. This Agreement is intended to be exempt from or comply with the requirements of Section 409A of the Code, and shall be interpreted and construed consistent with that intent. Notwithstanding any other provision of this Agreement , to the extent that the right to any payment (including the provision of benefits) hereunder provides for the " deferral of compensation" within the meaning of Section 409A(d)(1) of the Code , if the Employee is a " Specified Employee " within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Employee's " Separation from Service " within the meaning of Section 409A(a)(2)(A)(i) of the Code (the " Separation Date") , then no such payment shall be made or commence during the period beginning on the Separation Date and ending on the date that is six months following the Separation Date or, if earlier, on the date of the Employee ' s death. The amount of any payment that would otherwise be paid to the Employee during this period shall instead be paid to the Employee on the fifteenth day of the first calendar month following the end of the period.

15.
Nonassignability; Binding Agreement.

(a) By the E mployee. This Agreement and any and all rights , duties , obligations or interests hereunder shall not be assignable or delegable by the Employee .

(b) By the C ompany. This Agreement and all of the Company ' s rights and obligations hereunder shall not be assignable by the Company except as incident to a reorganization, merger or consolidation , sale or transfer of all or substantially all of the assets or the business of the Company . Upon any such assignment , the Company shall no longer have any rights or obligations under this Agreement.

(c) Binding E ffect. This Agreement shall be binding upon , and inure to the benefit of, the parties hereto , any successors to or assigns of the Company and the Employee' s heir s and the personal representat i ves of the Employee ' s estate.







16.      Withholdin g. An y paym e nt s mad e o r b e n efi t s p rovi d e d t o th e Em pl oyee under thi s Agre e ment s hall b e r e duced by any a pplicable wi t hh o ldi ng t ax e s or o th e r a mount s r e quir e d t o b e withheld b y law o r co ntra c t.

17.      A mendm e nt; W a i ver. Thi s Agre e m e nt m ay not b e modi fie d , am e nd e d or wa i v ed in a n y m a nner , exce pt b y an in s trum e nt in w ritin g s ign e d b y b ot h p a rti es h e r e t o. Th e
w a i ve r b y ei ther p a rt y of co mpli a n ce with a n y pro v i s ion o f thi s Ag r e em e nt b y th e o th e r p a tt y s h a ll not o perate o r be c o n s trued as a w a iv e r of a n y oth e r pro v i s i o n of thi s Agr ee ment , o r of an y s ub s equ e nt br eac h b y s u c h part y of a pro v i s i o n o f thi s Ag r ee m e nt.

18.      G ove rning Law and Forum . Th e E mpl oyee and th e C o mpan y ag r ee th at thi s A g r ee m e nt a nd all m a tter s o r i ss u es a ri s in g o ut o f or r e l a tin g to th e E mpl oyee's e mpl oyme nt w ith th e Co mp a n y s hall b e gove rn e d b y th e l aws o f th e S t a te of D e l awa r e a ppli ca bl e t o co ntr ac t s e ntered int o and p e rform e d entir e l y ther e in . An y ac ti o n t o e nfor ce thi s Ag r ee me nt s hall b e brou g ht so l e l y in th e s tat e or federal c ourt s lo c at e d i n th e C it y o f C in c inn at i , Oh io.

19.      Su rv ival of C ert a in Pro v i s ion s . U nl e ss ex pr ess l y pro v id e d o th erw i se , th e ri g ht s and o bli ga ti o n s se t fo rth in thi s Ag r e em e nt s h a ll s urvi ve any t ermina ti o n or ex p ira ti o n of thi s Agr ee ment.

20.      E ntire A g ree m e nt ; S uper se de s Pr ev iou s Agreemen t s . T hi s Ag r ee m ent co nt a in s th e e nti re ag r ee m e nt a nd under s t a ndin g of th e p a ttie s h e r e t o with re s p ec t t o th e m a tt e r s cove r e d h e r e in , a nd s up e rs e d es a ll pri o r or co ntemp o ran eo u s negot i a ti o n s , co mm i tm e nt s, ag r e em e n ts a nd wri tin gs wi th res p ec t t o t h e s ubj ec t m atter h e r eof, a ll s u c h ot h e r n egot i ations , co mmitm e nt s, a g r ee m e nt s a nd wr itin gs s h a ll ha ve no furth e r for ce o r effect, a nd th e part ies t o a n y s u c h oth e r n ego ti a tion , co mmitm e nt , a gree m e nt o r w ritin g s h a ll h ave n o fur th e r r ig ht s or o bli ga ti o n s th e r e under.

2 1 . C ount e rp a rt s . Thi s Ag r ee m e nt m ay b e exec u te d b y ei th e r of t h e pa rt ies h ere t o in co unt e rp a rt s, eac h of w h ic h sha ll b e d ee m e d t o b e a n or i g in a l , bu t all suc h co unt e rp a r ts s h a ll to ge th e r c o n s titut e o n e a nd th e sa m e in s trum e nt.

22. H ea din g s. T h e h ea din gs of sec ti o n s h ere in are in cl u ded so l e l y for co n ve ni e n ce o f refe r e n ce a nd s h a ll n o t co nt ro l th e m ea nin g o r in te rpr e tati on of any of th e p rovis i ons of thi s Ag r ee m e n t.

23. No ti c e s . A ll noti ces o r c ommuni ca t io n s h e r e und e r sha ll b e in wr i t in g , a ddr esse d as fo ll ows:

T o th e C omp a n y:

Mil ac ron L LC
l 0 2 00 Alli a n ce R oa d , Su it e 2 00 C in ci nn a ti , O H 4 52 4 2
Attn . : Th o m as Goeke
E m a il : t o m _ goe k e @ m i l acro n .co m Facs imil e : (5 1 3) 4 87 - 5086









To the Employee at his la st residence shown on the records of th e Company.


All such notices shall be concl u sively deemed to be received and s hall be effective
(i) if sent b y hand deli ve r y or nationally recogni ze d courier , upon receipt or (ii) if sent by elec troni c mail or facsimile, upon receipt by the sender of such tran s mission.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK







IN WITNESS WHEREOF , the Company has caused this Agreement to be signed by its offi c er pursuant to the authority of it s Board , and the Employee has executed thi s Agre e ment , as of the last signature date set forth b e low .









MILACRON LLC            
By : /s/ Tom Goeke
Name : Tom Goeke
Title: President and Chief Executive Officer

By: /s/ Bruce Chalmers
Name: Bruce Chalmers
Title: Chief Financial Officer


EMPLOYEE

/s/ Mark Miller
Name : Mark Miller
Dated: February 1, 2019




Exhibit 31.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Thomas Goeke, certify that:
 
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2019 of Milacron Holdings, Corp.:
 
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
 
 
 
Date: May 2, 2019
By:
/s/    THOMAS GOEKE
 
 
Thomas Goeke
 
 
President and Chief Executive Officer




Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Bruce Chalmers, certify that:
 
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2019 , of Milacron Holdings Corp.:
 
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 
 
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
 
 
 
Date: May 2, 2019
By:
/s/    BRUCE CHALMERS       
 
 
Bruce Chalmers
 
 
Chief Financial Officer




Exhibit 32.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
Each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Milacron Holdings Corp. (the “Company”), that, to his knowledge, the Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2019 , fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company. This written statement is being furnished to the Securities and Exchange Commission as an exhibit to such Form 10-Q. A signed original of this statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
 
 
 
 
 
Date: May 2, 2019
By:
/s/    THOMAS GOEKE      
 
 
Thomas Goeke
 
 
President and Chief Executive Officer
 
 
 
Date: May 2, 2019
By:
/s/    BRUCE CHALMERS        
 
 
Bruce Chalmers
 
 
Chief Financial Officer