EXHIBIT 1
Royal Group Technologies Limited
Press Release July 7th 2004
FORM 51-102F3
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MATERIAL CHANGE REPORT
ITEM 1 NAME AND ADDRESS OF COMPANY
Royal Group Technologies Limited (the "Company")
1 Royal Gate Boulevard
Vaughan, Ontario
L4L 827
ITEM 2 DATE OF MATERIAL CHANGE
July 7, 2004
ITEM 3 NEWS RELEASE
A press release was issued on July 7, 2004 in Toronto, Ontario and disseminated
across Canada by CCN Matthews.
ITEM 4 SUMMARY OF MATERIAL CHANGE
On July 6, 2004, Dominion Bond Ratings Services ("DBRS") issued a press
release stating that it had lowered the rating on the Company's Medium-Term
Notes by one notch to "BBB". At the same time, the trend was changed to Stable,
from Negative. Concerns cited surround the decline in profitability in recent
years.
The lowering of the rating by DBRS will not have any impact on the Company's
interest expense beyond that caused by the rating action of Standard & Poor's
Ratings Service on June 29, 2004 (see the Company's Material Change Report dated
July 6, 2004), nor will it trigger any changes in the Company's outstanding
debts.
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.
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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 19, 2004
SCHEDULE "A"
NEWS RELEASE TRANSMITTED BY CCNMatthews
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[ROYAL GROUP TECHNOLOGIES LIMITED LOGO]
FOR: ROYAL GROUP TECHNOLOGIES LIMITED
TSX, NYSE SYMBOL: RYG
JULY 7, 2004 -- 13:17 ET
ROYAL GROUP TECHNOLOGIES LIMITED RESPONDS TO DBRS' RATING ACTION
TORONTO, ONTARIO -- (CCNMatthews - Jul 7, 2004) -- Yesterday, Dominion Bond
Ratings Services ("DBRS") issued a press release stating that it had lowered the
rating on Royal Group Technology Limited's (RYG:TSX, NYSE) Medium-Term Notes by
one notch to "BBB". At the same time, the trend was changed to Stable, from
Negative. Concerns cited surround the decline in profitability in recent years.
As stated in its response to the rating action by Standard & Poor's Ratings
Service ("S&P") last week, Royal Group recognizes that it is facing a
challenging environment and that its progress with turn-around initiatives has
been slowed during the past few quarters by continuing high raw material costs,
a stronger Canadian dollar and excess capacity. However, Royal continues to make
progress with the implementation of its turn-around strategies, and its focus on
further increasing profitability and free cash flow.
DBRS noted in their press release that Royal Group's BBB rating and stable trend
is supported by a "reasonable financial risk profile, as free cash flow
generation has benefited from sharply reduced capital spending and working
capital restraint in recent years." Royal remains committed to these strategies.
The lowering of the rating by DBRS will not have any impact on the Company's
interest expense beyond that caused by the rating action of S&P last week, nor
will it trigger any changes in the Company's outstanding debts.
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
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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
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 July 7, 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)