EXHIBIT 1
MATERIAL CHANGE REPORT
PURSUANT TO
SECTION 85(1) OF THE SECURITIES ACT (BRITISH COLUMBIA)
SECTION 118(2) OF THE SECURITIES ACT (ALBERTA)
SECTION 84(1) OF THE SECURITIES ACT (SASKATCHEWAN)
SECTION 75(2) OF THE SECURITIES ACT (ONTARIO)
SECTION 73 OF THE SECURITIES ACT (QUEBEC)
SECTION 81(2) OF THE SECURITIES ACT (NOVA SCOTIA)
SECTION 76(2) OF THE SECURITIES ACT (NEWFOUNDLAND)
Item 1. Reporting Issuer:
Royal Group Technologies Limited (the "Company")
1 Royal Gate Boulevard
Vaughan, Ontario
L4L 8Z7
Item 2. Date of Material Change:
January 29, 2003
Item 3. Press Release:
A press release was issued by the Company on January 29, 2003 in
Vaughan, Ontario. A copy of the press release is attached to this
report as schedule "A".
Item 4. Summary of Material Change:
The Company announced that its commercial paper rating of R-1
(low) with a negative trend has been downgraded by Dominion Bond
Rating Service Limited ("DBRS") to R-2 (high) with a stable
trend, and that its medium term note rating has been changed from
A (low) with a negative trend to BBB (high) with a stable trend.
The Company will offer to buy back its outstanding commercial
paper.
Item 5. Full Description of Material Change:
See the press release dated January 29, 2003 attached to this
report as schedule "A".
2
Item 6. Reliance of Section 75(3) of the Act:
Not applicable.
Item 7. Omitted Information:
Not applicable.
Item 8. Senior Officer:
For further information, please contact:
Mark O. Badger
Vice President, Corporate Communications
Tel: (905) 264-0701
Fax: (905) 264-0702
Item 9. Statement of Senior Officer:
The foregoing accurately discloses the material change referred
to herein.
Dated this 31st day of January, 2003 at Vaughan, Ontario.
ROYAL GROUP TECHNOLOGIES LIMITED
BY:
----------------------------------------
Scott Bates
Corporate Secretary
SCHEDULE "A"
PRESS RELEASE
FOR IMMEDIATE RELEASE,
JANUARY 29, 2003
ROYAL GROUP COMMENTS ON RATING DOWNGRADES BY DBRS
Royal Group Technologies Limited (RYG: TSX, NYSE) announced today that its
commercial paper rating of R-1 (low) with a negative trend has been downgraded
by DBRS to R-2 (high) with a stable trend, and that its medium term note rating
has been changed from A (low) with a negative trend to BBB (high) with a stable
trend.
Given that the commercial paper market for R-2 paper in Canada is virtually
non-existent, Royal Group will offer to buy back its outstanding commercial
paper. With approximately $135 million outstanding on the Company's $700 million
syndicated bank line, Royal will easily absorb the $340 million in commercial
paper outstanding on January 27, 2003. The change of the borrowings and rating
will cost Royal about 50bps (0.50%) more per annum on the currently issued
commercial paper.
Royal will not be offering to buy back its Medium Term Notes, which mature April
2010.
DBRS commented that Royal has, "growing free cash flow, largely due to its
declining capex requirements" and "an acceptable liquidity position". Royal's
funded debt to total capitalization ratio remained at 38% at December 31, 2002.
Free cash flow (being cash from operations, adjusted for working capital changes
and after deducting capital expenditures) for fiscal 2002 was 117 million.
Royal Group will report financial results for the first quarter of fiscal 2003,
ended December 31, 2002, on Wednesday, February 12th, 2003 at 10:00 AM Toronto
Eastern Time. The conference call will be web cast simultaneously and in its
entirety through the Investor Relations section of Royal's Web site,
www.royalgrouptech.com The first quarter earnings release and supplemental
financial information will be available on the site prior to the conference
call.
For further information contact:
Ron Goegan, Chief Financial Officer
OR
Mark Badger, Vice President, Corporate Communications
Phone: (905) 264 0701 Fax: (905) 264 0702
The information in this document contains certain forward-looking statements
with respect to Royal Group Technologies Limited, its subsidiaries and
affiliates. These statements are often, but not always made through the use of
words or phrases such as "expects", "should continue", "believes",
"anticipates", "estimated" and "intends" or similar formulations. By their
nature, these forward-looking statements involve known and unknown risks,
uncertainties and other factors affecting Royal specifically or its industry
generally that could cause actual performance and financial results to differ
materially from those contemplated by the forward-looking statements. These
risks and uncertainties include fluctuations in the level of renovation,
remodeling and construction activity,
changes in product costs and pricing, an inability to achieve or delays in
achieving savings related to the cost reductions, or revenues related to sales
price increases, consolidation and restructuring programs, changes in product
mix, the growth rate of the markets into which Royal's products are sold, market
acceptance and demand for Royal's products, changes in availability or prices
for raw materials, pricing pressures resulting from competition, difficulty in
developing and introducing new products, failure to penetrate new markets
effectively (particularly markets in developing countries), the effect on
foreign operations of currency fluctuations, tariffs, nationalization, exchange
controls, limitations on foreign investment in local business and other
political, economic and regulatory risks, difficulty in preserving proprietary
technology, changes in environmental regulations, currency risk exposure and
other risks described from time to time in publicly filed disclosure documents
and securities commission reports of Royal Group Technologies Limited and its
subsidiaries and affiliates. In view of these uncertainties we caution readers
not to place undue reliance on these forward-looking statements. Statements made
in this document are made as of January 29, 2003 and Royal disclaims any
intention or obligation to update or revise any statements made herein, whether
as a result of new information, future events or otherwise.