To all, RYG looking good,
Wednesday February 11, 1:08 pm Eastern Time
Company Press Release
Royal Group Technologies Limited Continues to Achieve
Target Growth Numbers with First Quarter Operating
Margin and Earnings Increases of 24% and 26%
Respectively Over Comparable Quarter Last Year
TORONTO, Ontario--(BUSINESS WIRE)--Feb. 11, 1998--Royal Group Technologies Limited
(TSE/NYSE/ME: RYG) announced its fiscal 1998 first quarter results today:
Net Sales Net Earnings
$000 $000 $ per share
Latest Year Ago Latest Year Ago Latest Year Ago
---------------- --------------------------------------
3 months
ended
Dec. 31 211,435 174,492 19,394 15,434 0.24(1)(3) 0.19(2)(3)
(1) Based upon 82,418,113 shares.
(2) Based upon 80,309,586 shares.
(3) No change on a fully diluted basis.
The above figures are expressed in Canadian dollars and are
calculated in accordance with Canadian GAAP. Earnings per share for
the three months ended December 31, 1997 and a US GAAP adjusted
basis, using 1.4089 as the average US$/Cdn$ exchange rate for the
period, are US$ 0.17
Net sales grew 21% over the comparable quarter last year, or $36.9 million. The increase was due
to unit volume growth across the Building Products Group, the increasing sales in the Building
Technologies Group from the building systems and storage sheds, and acquisitions of the latter part
of fiscal 1997. Royal's foreign (non-Canadian) sales grew to 70% of total sales compared to 65%
for the same three month period last year. Sales in the united States were 60% of total sales, up
24% from the same quarter last year, and sales in Mexico and other markets were 10%. These
increases reflect Royal's continuing emphasis on the United States and abroad through acquisitions
and start-ups, and continued global expansion of the Building Technologies Group.
Vic De Zen, President and Chief Executive Officer of Royal Group, said: ''Market share gains in
the United States and abroad, and the continuing rollout of the Building System, particularly the
storage shed, resulted in sustained growth in our sales. While the industry experienced some
softness in sales prices in custom profiles, it was expected, and we continue to anticipate strong
sales and margins during the coming quarters. We also continue to invest significantly in our Building
Technologies Group and our Support Group as our global expansion unfolds, positioning Royal to
capture further sales gains.''
EBITDA increased to $48.8 million from $39.3 million, being 23.1% of net sales compared to
22.5% for the same quarter last year. Net earnings increased 26% to $19.4 million from $15.5
million, being 9.2% of net sales compared to 8.8% for the same quarter last year. These increases
as a percentage of sales are primarily reflective of raw material cost reductions.
Absorption in other manufacturing costs and selling, general and administrative expenses on a unit
basis continues as volumes increase, particularly in the Building Technologies and Support Groups.
Future sales growth across the Group is expected to further increase utilization of recently added
capacity in plants, equipment and personnel.
Vic De Zen remarked that ''our margins continue to increase while absorbing significant costs
associated with our growth. Our global expansion plans focus on manufacturing vinyl building
products, and our Building Technologies Group should experience even stronger growth this year.
Production has started in certain foreign countries, with Argentina being particularly promising, and
our storage shed product is in significant demand. In North America, we are also still investing
heavily in plant and equipment capacities and technological know-how necessary to support Royal
Group's growth plans. This controlled investment will help to ensure that we are able to meet the
demands of the distributors and users of our products.'' Vic added, ''Our focus on cost and margins
proves itself in bottom line results, and our technological know-how is always improving!''
Vic stated, ''During the quarter, Royal completed its second placement of term debt providing the
company with financial flexibility and opportunity to grow. Royal's debt leverage is 31% and its
$400 million syndicated bank credit facilities are unused. Royal also completed a placement of
shares largely derived from the exercise of stock options by management and employees. This
placement provided increased liquidity and market awareness of Royal.'' Vic also added, ''We
continue to look for acquisition and start-up opportunities that obtain new products or markets
geographically where we can add Royal Group's synergistic values. And we continue to ensure the
strength of our balance sheet to meet the demands and opportunities in our markets.''
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.
Note: A French translation of this press release and copies of Financial Statements and
Supplementary Financial Information are available upon request.
Contact:
Royal Group Technologies Limited
Gary J. Brown, Executive V.P. and Chief Financial Officer
(905) 264-0701
More Quotes and News:
Royal Group Technologies Ltd (NYSE:RYG - news;
Montreal:RYG.M - news)
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