nadian Company Press Release
RYG 1997-12-03 (provided courtesy of ISDN Wire Service)
ROYAL GROUP TECHNOLOGIES ACHIEVES A 29 PER CENT YEAR
AND YEAR INCREASE IN NET EARNINGS FOR ITS FISCAL YEAR
ENDED 1997
WOODBRIDGE, ONTARIO--
Royal Group Technologies achieves a 29% year over year
increase in net earnings for its fiscal year ended 1997
Royal Group Technologies Limited (TSE/NYSE/ME: RYG) announced its fiscal
fourth quarter and year end results for the period ending September 30, 1997
today:
Net Sales Net Earnings
$000 $000 $ per share
Latest Year Ago Latest Year Ago Latest Year Ago
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3 months ended
September 30 258,612 215,034 34,186 28,191 0.42(1) 0.35(2)
Year ended
September 30 848,741 675,092 97,499 75,705 1.21(3) 0.98(4)
(1) Based upon 82,075,394 shares. (2)Based upon 80,271,786 shares.
(3) $1.19 on a fully diluted basis. (4)$0.96 on a fully diluted basis.
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All figures are expressed in Canadian dollars and are calculated in
accordance with Canadian GAAP. Earnings per share for the year ended
September 30, 1997 are reduced by $0.04 on a US GAAP adjusted basis due
primarily to the purchase of stock options for cancellation.
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Net sales advanced 20% over the comparable quarter last year, or $43.6
million, resulting in year over year growth of 26%. The growth was driven
by unit volume increases across the Group, particularly in the Building
Technologies Group. Royal's non-Canadian sales rose to 64% of total sales
compared to 61% last year. This increase reflects Royal's strategy of growing
in the U.S. and abroad through acquisitions and start-ups, such as Plastic
Trends in Michigan (Pipe), Ariostea and Amut in Italy (Support), Royal Crown
in Indiana (Custom Profile), and the Building Technologies Group globally.
Vic De Zen, Chief Executive Officer and President of Royal Group, said "Sales
gains came from Canadian and US core market growth and market share gains,
the further roll out of recent products in these markets, and the growth in
Building System sales internationally." "Our development of the Building
Technologies Group and Support Group continues as we pursue our expansion
plans. Royal's significant investments in new or expanded capacities in
plants and equipment across the Group position it to achieve further sales
gains."
EBITDA increased to $68.9 million or 26.7% of net sales, from $58.9 million
or 27.4% for the comparable quarter last year, resulting in a fiscal year
EBITDA margin of 24.8%, compared to 24.7% last year. Net earnings increased
21% to $34.2 million or 13.2% of net sales, from $28.2 million or 13.1% for
the comparable quarter last year, resulting in a fiscal year net earnings of
$97.5 million or 11.5% of sales, up 29% from $75.7 million or 11.2% of sales
last year. Margins as a percentage remained virtually unchanged. Margins
reflect improvements in material costs and in other manufacturing costs,
including operating synergies realised with Royal's investments in its
Support Group. The costs associated with the manufacture and distribution of
products from the Building Technologies Group also declined as a percentage
of those sales. Future sales growth across the Group are expected to
considerably increase utilization of recently added capacity in plants,
equipment and personnel.
Vic De Zen commented that "Royal's profits grow in step with its sales as we
develop opportunities for additional sales while continuing control of the
cost structure." "Significant investments in the Building Technologies Group
and Support Group together with continued development of the core Building
Products will provide both advances in sales in 1998 as well as improved cost
structures. Recently, commercial production of building systems and custom
profiles started in Argentina and Colombia and we expect China to start very
soon." "We focus on manufacturing vinyl building products and we continually
review start-up and acquisition opportunities. We are prepared for further
gains in sales, having added significant capacities this year, particularly
in the last quarter. We are expanding in our existing markets and carefully
developing in new markets, our costs are under control, and our technological
know-how is always improving!"
Vic added "Royal has a strong balance sheet, with debt leverage at 30%.
Furthermore, proceeds were received in November on the issue of shares under
Royal's stock option plan, and funds were advanced to Royal upon completion
of a private placement of term debt in the U.S. Today, Royal's $400 million
syndicated bank credit facilities are unused, and with strong profits and
cash flows, we can easily finance further growth at favorable financial
costs."
Royal Group Technologies Limited is one of North America's largest extruders
of vinyl building products, with extensive vertical integration. Its Building
Products Group focuses on custom profiles (windows & doors, fencing &
decking, garage doors), vertical window blinds, siding, pipe and related
products. Its Building Technologies Group focuses on The Royal Building
System(TM) (for residential, commercial, industrial and institutional
purposes) and product lines derived from the System including foundations,
garages and sheds. Royal's manufacturing facilities are primarily located in
North America, with additional facilities in Argentina, China, Colombia, and
Italy.
-30-
For more information (905) 264-0701
Gary J. Brown, Executive V.P. & Chief Financial Officer
Royal Group Technologies Limited
A French translation of this press release and copies of Financial Statements
and Supplementary Financial Information will be available upon request.
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