Exhibit 99.1
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
1 Royal Gate Boulevard
Vaughan, Ontario
L4L 8Z7
Item 2. Date of Material Change:
September 16, 2002
Item 3. Press Release:
On September 16, 2002 Royal Group Technologies Limited (the "Company")
issued a news release over Canadian News Wire.
Item 4. Summary of Material Change:
The Company has revised its earnings guidance for fiscal 2002. The
Company announced that it anticipates reporting fully diluted earnings
per share of $0.40 to $0.45 for the fourth quarter of fiscal 2002,
resulting in earnings per share for the fiscal year in the range of
$1.55 to $1.60. Previously, the Company's earnings guidance for fiscal
2002 was $1.65 to $1.70 per share.
Item 5. Full Description of Material Change:
See the attached press release dated September 16, 2002.
Item 6. Reliance of Section 75(3) of the Act:
N/A
2
Item 7. Omitted Information:
N/A
Item 8. Senior Officer:
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 18th day of September, 2002 at Vaughan, Ontario.
ROYAL GROUP TECHNOLOGIES LIMITED
BY: /s/ Vic De Zen
--------------------------------
Vic De Zen
Chief Executive Officer
PRESS RELEASE
FOR IMMEDIATE RELEASE -- SEPTEMBER 16, 2002
ROYAL GROUP'S WINDOW COVERINGS DIVISION DISAPPOINTS IN AUGUST
Toronto, Ontario -- Royal Group Technologies Limited (RYG: TSE, NYSE) announced
today that fully diluted earnings per share for the fourth quarter of fiscal
2002 are anticipated to be in the range of $0.40 to $0.45 per share, resulting
in earnings per share for the fiscal year in the range of $1.55 to $1.60.
Previous to today, Royal's earnings guidance for fiscal 2002 was $1.65 to $1.70
per share.
Royal attributed the expected shortfall in earnings entirely to its Window
Coverings Division. Company Chairman and C.E.O., Vic De Zen, commented that,
"the mix of sales to the ready-made segment of the market has become
unfavorable, resulting in significant losses in the Window Coverings Division in
August". Mr. De Zen noted that the Window Coverings Division had "performed as
expected in July". He added that, "new custom window covering programs being
rolled out nationally with leading window covering retailers are proceeding as
planned", noting that, "significant increases in window covering sales and
margins are expected to begin to emerge during the first quarter of fiscal 2003,
as our business transitions".
Royal commented that it will continue to generate free cash flow in the fourth
quarter, with an expectation of $100 to $105 million in free cash flow for the
entire fiscal year and capital expenditures within the previously forecast range
of $130 to $135 million. Royal continues to expect that the ratio of net debt to
total capitalization will be approximately 38% at the end of fiscal 2002, versus
41% last year. Royal will release financial results for the fourth quarter of
fiscal 2002 on November 19th.
Commenting on the outlook for 2003, Royal Group President Douglas Dunsmuir
stated that, "it is now prudent to expect that product mix in the ready-made
segment of our Window Covering Division will take us six months to correct". Mr.
Dunsmuir noted that, "a product by product review of ready-made window coverings
has been initiated, with an expanding team of Royal Management involved in the
review". Accordingly, Royal has
reduced its guidance for 2003 from $2.10 to $2.30 per share, to $1.90 to $2.10
per share.
Royal Group Technologies Limited 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's manufacturing facilities are primarily
located throughout North America, with international operations in South
America, Europe and Asia. Additional investment information is available on
Royal Group's web site at www.royalgrouptech.com in the "Investment Information"
section.
FOR FURTHER INFORMATION CONTACT:
Douglas Dunsmuir, President
or
Mark Badger, Vice President, Corporate Communications
PHONE: (905) 264-0701 FAX: (905) 264-0702
The information in this Press Release contains certain forward looking
statements with respect to Royal Group Technologies Limited, its subsidiaries
and affiliates. 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
construction activity, changes in product costs and pricing, an inability to
achieve or delays in achieving savings related to the cost reductions,
consolidation and restructuring programs, changes in product mix, the growth
rate of 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 developing
and introducing new products, failure to penetrate new markets effectively
(especially 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 and other risks described from time to time
in publicly filed disclosure documents and securities commission reports for
Royal Group Technologies Limited and its subsidiaries and affiliates. Statements
made in this press release are made as of September 16, 2002 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.