Royal Group announces further progress with implementation of Management Improvement Plan
September 15 2006 - 6:30PM
PR Newswire (US)
TORONTO, Sept. 15 /PRNewswire-FirstCall/ -- Royal Group
Technologies Limited (RYG: TSX; NYSE) today announced its intention
to divest of additional non-core businesses and assets. The
non-core businesses include Royal Dynamics, which is an injection
molder of building products, as well as certain other business
units. The assets being divested of include excess real estate that
is being vacated as a result of the Company's manufacturing
operation consolidation program. Royal Group expects to generate
cash proceeds in the range of $30 to $40 million from these
divestitures. In a previous news release on August 15, 2006, Royal
Group indicated that it expects to generate total proceeds from
divestitures of $200 to $260 million in 2006. In the event of
successful execution of the foregoing divestiture decisions, Royal
Group can achieve proceeds in the high end of its range of
expectations. To date, Royal Group has generated proceeds of
approximately $190 million. During the third or fourth quarters of
2006, Royal Group intends to record a write down in the range of
$65 to $75 million in connection with the additional divestitures.
This write down represents the net of gains on some assets and
losses on others. Today's announcements are consistent with Royal
Group's previously announced four-part Management Improvement Plan,
embarked upon by the Company in mid 2005. Lawrence J. Blanford,
Royal Group's President and C.E.O., commented on today's
announcements saying, "we continue to evaluate opportunities to
focus Royal Group on those businesses that best leverage our
strengths, while at the same time taking actions to improve
manufacturing efficiency to help us achieve an appropriately scaled
manufacturing footprint." Royal Group advised that it continues to
take actions to reduce its manufacturing/warehouse footprint, with
one million square feet of space listed for sale in recent weeks.
Should Royal Group be successful in selling this real estate prior
to year-end, it would exceed its range of expected proceeds. Royal
Group also advised that it recently concluded the sale of its
window coverings operations in the Netherlands and Brazil. On
August 4, 2006 Royal Group's shareholders approved Georgia Gulf's
proposal to acquire all of its outstanding shares of Royal Group
for C$13.00 in cash per share pursuit to an arrangement agreement
that was publicly announced on June 9, 2006. Royal Group confirmed
that it continues working to conclude Georgia Gulf's previously
announced acquisition at Royal Group. Royal Group Technologies
Limited -------------------------------- Royal Group Technologies
is a leading producer of innovative, attractive, durable, and
low-maintenance home improvement and building products, which are
primarily utilized in both the renovation and new construction
sectors of the North American construction industry. Royal Group is
the recipient of several industry awards for product innovation.
The Company has manufacturing operations located throughout North
America in order to provide industry-leading service to its
extensive customer network. Additional investment information is
available on Royal Group's web site at
http://www.royalgrouptech.com/ under the "Investor Relations"
section. 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", "believe", "anticipate",
"suggest", "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 the
Company's actual performance, achievements and financial results to
differ materially from past results and from those expressed in any
forward-looking statements made by or on behalf of the Company.
These risks and uncertainties include the ongoing shareholder value
maximization process and its outcome including, without limitation,
the completion of the proposed plan of arrangement with Rome
Acquisition Corp., a wholly-owned subsidiary of Georgia Gulf
Corporation; the ongoing internal review and investigations by the
Audit Committee of the Board of Directors and its outcome; the
outcome of the ongoing investigations by the United States
Department of Justice, RCMP, OSC and SEC; the outcome of the
discussions with the SEC on the Company's historical disclosure;
the outcome of class action shareholders lawsuits against the
Company filed in the United States and Canada; fluctuations in the
level of renovation, remodelling and construction activity; changes
in product costs and pricing; an inability to achieve or delays in
achieving savings related to cost reductions or increases in
revenues related to sales price increases; the sufficiency of any
restructuring activities, including the potential for higher actual
costs to be incurred in connection with any restructuring
activities compared to the estimated costs of such actions; the
ability to recruit and retain qualified employees; the level of
Royal's outstanding debt and current debt ratings; Royal's ability
to maintain adequate liquidity and refinance its debt structure by
December 31, 2006, the expiry date of its current bank credit
facility; the Company's ability to complete the required processes
and provide the internal control report that will be required under
U.S. securities law in respect of fiscal 2006; the ability to meet
the financial covenants in Royal's credit facilities; changes in
Royal's 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 any litigation,
investigations, administrative and regulatory matters, intellectual
property disputes, or similar matters; changes in securities,
environmental or health and safety laws, rules and 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 September 15, 2006
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. DATASOURCE: Royal Group Technologies
Limited CONTACT: Mark Badger, Vice President of Marketing and
Corporate Communications, Royal Group Technologies Limited, Phone:
(905) 264-0701
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