Royal Laser Corp.
TSX : RLC

Royal Laser Corp.

March 27, 2008 08:49 ET

Royal Laser Corp. Implements Shareholder Rights Plan and Provides Business Update to Investors

TORONTO, ONTARIO--(Marketwire - March 27, 2008) - Royal Laser Corp. (the "Company") (TSX:RLC) announced today the adoption of a Shareholder rights plan (the "Rights Plan"). While the Company's normal practice is not to provide interim updates, it is pleased to provide investors with an update on its business in conjunction with this announcement.

Shareholder Rights Plan

The Rights Plan is designed to prevent a creeping takeover of the Company, which is the acquisition of control through progressive increase in ownership, without an offer to all shareholders. It ensures the fair treatment of Royal Laser's shareholders in any transaction involving a change of control of the Company and will provide the Board of Directors and Royal Laser's shareholders with adequate time to evaluate any unsolicited take-over bid and, if appropriate, to seek out alternatives to maximize shareholder value. The Toronto Stock Exchange has accepted notice for filing of the Rights Plan.

The Rights Plan will be implemented and will continue in effect until the annual meeting of Shareholders. It is Royal Laser's intention to seek shareholder approval to extend the Rights Plan at the annual meeting for a three year period thereafter. The Rights Plan is similar to other rights plans adopted by many Canadian corporations. Until the occurrence of certain specific events, the rights will trade with the common shares of the Company and be represented by certificates representing the common shares. The rights become exercisable only when a person, including any party related to it or acting jointly with it, acquires or announces its intention to acquire 20% or more of the outstanding shares of the Company without complying with the Permitted Bid provisions of the Rights Plan. Should a non-Permitted Bid be launched, each right would entitle each holder of common shares (other than the acquiring person and persons related to it or acting jointly with it) to purchase $200 worth of additional shares of the Company at the market price for $100.

It is not the intention of the Rights Plan to prevent take-over bids but to ensure their proper evaluation by the market. Under the Rights Plan, a Permitted Bid is a bid made to all shareholders for all of their shares on identical terms and conditions that is open for at least 60 days. If at the end of 60 days at least 50% of the outstanding shares, other than those owned by the offeror and certain related parties, have been tendered and not withdrawn, the offeror may take up and pay for the shares but must extend the bid for a further ten days to allow all other shareholders to tender.

CEO Bill Iannaci commented, "The adoption of the Rights Plan is designed to enable shareholders to benefit from the enhanced operating results that the Company is currently experiencing and to curtail opportunistic activity which may deprive shareholders of any resulting increase in value of the Company's shares. Venture Steel's new team has proven to be one of the strongest management teams in the industry by orchestrating a significant turnaround of our largest division."

Business Update

Operational Improvements:

During the two months ended February 29, 2008, the Company achieved consolidated revenues of approximately $49 million and gross margins of approximately 14%. These operational metrics are a significant improvement from the recently reported December 31, 2007 Q3 FY'08 financial results. We anticipate that the remainder of Q4 FY'08 results to be in line with the first two months of Q4 FY'08 for the reasons outlined below.

Strong Leadership and Fundamentals in the Steel Slitting Business:

The primary cause of these improved operational results is the improved performance in its largest division, the Venture Steel slitting business, which has one of the strongest management teams in the industry. The new team started in September 2007 and with the recent acquisition of Apogee Slitting Inc. (which took effect November 1, 2007) has provided increased sales contracts, improved gross margins, which in turn led to greater capacity utilization levels. Venture has improved performance of its supply chain, customer and supplier relations and inventory management. Going forward, as the consolidation of Venture Steel's operations facilities into two operations facilities is completed; Venture Steel anticipates cost rationalization and improvement to continue.

Continued Improvements in Other Divisions

We are pleased to report that there has been strong acceptance of the products produced and marketed by our Envyrozone Inc. division as shown by the recently announced CDN $9.0 million contract for recycling containers to be exported to the United Arab Emirates, as well as several new pending contracts, including a CDN $0.7 million contract with a major Canadian retailer. In addition, we are starting numerous pilot projects to capitalize on the "green" initiative. Each of our other divisions continues to show strong improvements in terms of additional contracts to fill capacity.

About Venture Steel Inc.

Venture Steel is a custom flat rolled steel processor specializing in all types and grades of hot rolled, cold rolled and coated steel. Venture Steel operates out of combined facilities totalling approximately 240,000 square feet located in the Greater Toronto Area of Ontario.

About Royal Laser Corp.

Royal Laser Corp., through its wholly-owned operating subsidiaries, services steel and manufactures custom wood and metal products targeted at the multi-billion dollar automotive, high-end retail in-store development industry, the OEM industrial products and construction industries, in Canada, the United States and overseas. Royal Laser Corp. employs state of the art industrial technology to process steel, fabricate custom and standardized wood and metal products, including robotic wood finishing lines, advanced laser-based computer-integrated manufacturing systems and advanced stamping presses. In addition to contract manufacturing services, Royal Laser provides value-added engineering and design services. The Corporation's common shares trade on the Toronto Stock Exchange under the symbol "RLC" and there are approximately 100 million shares outstanding.

For further information on the Corporation, please visit SEDAR at www.sedar.com or please contact:

To receive Company news by email, please contact info@royallaser.com and specify "Royal Laser news" in the subject line. The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Certain statements contained in this press release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and other factors, many of which are beyond our control, and are as discussed under the heading "Trends, Risks and Uncertainties" and in the Annual Information Form of Royal Laser dated June 27, 2007 and filed on SEDAR at www.sedar.com, as well as Royal Laser's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits will be derived therefrom. Except as required by law, Royal Laser Corp. disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained herein is expressly qualified by this cautionary statement.

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