EXHIBIT 1
Royal Group Technologies Limited
Press Release June 29th 2004
FORM 51-102F3
MATERIAL CHANGE REPORT
ITEM 1 NAME AND ADDRESS OF COMPANY
Royal Group Technologies Limited (the "Company")
1 Royal Gate Boulevard
Vaughan, Ontario
L4L 8Z7
ITEM 2 DATE OF MATERIAL CHANGE
June 29, 2004
ITEM 3 NEWS RELEASE
A press release was issued on June 29, 2004 in Toronto, Ontario and disseminated
across Canada by CCN Matthews.
ITEM 4 SUMMARY OF MATERIAL CHANGE
On June 29, 2004, Standard & Poor's Rating Services announced that it lowered
the ratings in both the Company's long-term corporate credit rating and its
senior unsecured debt rating by one notch to "BBB-". While the downgrade
reflects concerns surrounding the Company's operating profits over the past 18
months as well as the Company's liquidity position against comparable companies
in the same rating category, it does not trigger changes in the Company's
outstanding debts, save for an increase in the interest rates charged by the
banking syndicate under the Company's termed-out credit facilities.
ITEM 5 FULL DESCRIPTION OF MATERIAL CHANGE
Please see the press release attached hereto as Schedule "A".
ITEM 6 RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102
Not applicable.
ITEM 7 OMITTED INFORMATION
Not applicable.
ITEM 8 EXECUTIVE OFFICER
For further information, please contact:
Mark Badger
Vice President, Marketing and Corporate Communications
Tel: (905) 264-0701
Fax: (905) 264-0702
ITEM 9 DATE OF REPORT
July 6, 2004
SCHEDULE "A"
NEWS RELEASE TRANSMITTED BY CCNMatthews
[ROYAL GROUP TECHNOLOGIES LOGO]
FOR: ROYAL GROUP TECHNOLOGIES LIMITED
TSX, NYSE SYMBOL: RYG
JUNE 29, 2004 - 18:30 ET
ROYAL GROUP TECHNOLOGIES LIMITED RESPONDS TO STANDARD & POOR'S RATING ACTION
TORONTO, ONTARIO--(CCNMatthews - Jun 29, 2004)
Today Standard & Poor's Ratings Services ("S&P") issued a press release, stating
that it had lowered the ratings on both Royal Group's long-term corporate credit
rating and its senior unsecured debt rating by one notch to "BBB -". At the same
time, the ratings were removed from CreditWatch, with the outlook being stated
as "negative". Concerns surround the sufficiency of operating profits over the
past 18 months and the company's liquidity position as against comparable
companies in the same rating category.
Royal Group recognizes that while it is facing a challenging environment, it
continues to make progress with the implementation of strategies to turnaround
the Company, and is focused on further increasing profitability and free cash
flow. However, progress with these initiatives has been slowed during the past
few quarters by continuing high raw material costs, a stronger Canadian dollar
and excess capacity.
The lowering of the rating by S&P does not trigger changes in the Company's
outstanding debts, save for an increase in the interest rates charged by the
banking syndicate under the Company's termed-out credit facilities. The
annualized effect of the downgrade on interest expense will be approximately
$1.06 million pre-tax, or less than $0.01 per share after tax.
Royal Group is a manufacturer of innovative, polymer-based home improvement,
consumer and construction products. The Company has extensive vertical
integration, with operations dedicated to provision of materials, machinery,
tooling, real estate and transportation services to its plants producing
finished products. Royal Group's manufacturing facilities are primarily located
throughout North America, with international operations in South America, Europe
and Asia.
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 "expect", "should continue", "continue", "believe",
"anticipate", "estimate", "contemplate", "target", "plan", "budget", "may",
"will", "schedule" and "intend" or similar formulations. By their nature, these
forward-looking statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are inherently
subject to significant, known and unknown, business, economic, competitive and
other risks, uncertainties and other factors affecting Royal specifically or its
industry generally that could cause actual performance, achievements 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
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delays in achieving savings related to the cost reductions or revenues related
to sales price increases; the sufficiency of our restructuring activities,
including the potential for higher actual costs to be incurred in connection
with restructuring activities compared to the estimated costs of such actions;
the ability to recruit and retain qualified employees; the level of outstanding
debt and our current debt ratings; the ability to meet the financial covenants
in our credit facilities; 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; 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; adverse resolution of litigation, investigations, administrative and
regulatory matters, intellectual property disputes, and similar matters; 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 June 29, 2004 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.
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FOR FURTHER INFORMATION PLEASE CONTACT:
ROYAL GROUP TECHNOLOGIES LIMITED
RON GOEGAN
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(905) 264-0701
(905) 264-0702 (FAX)
OR
ROYAL GROUP TECHNOLOGIES LIMITED
MARK BADGER
VICE PRESIDENT OF MARKETING AND CORPORATE COMMUNICATIONS
(905) 264-0701
(905) 264-0702 (FAX)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be singed on its behalf by the
undersigned, thereunto duly authorized.
ROYAL GROUP TECHNOLOGIES LIMITED
Date: July 12, 2004 By: /s/ Douglas Dunsmuir
----------------------------------
Name: Douglas Dunsmuir
Title: President and Chief Executive Officer