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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 18, 1998
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THE GEON COMPANY
(Exact name of registrant as specified in charter)
Delaware 1-11804 34-1730488
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Geon Center, Avon Lake, Ohio 44012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 440-930-1001
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
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The Geon Company announced that it will consolidate its compounding
operations with the closing of two manufacturing plants and the partial closing
of two additional plant sites. The affected facilities, located in Canada and
the United States, are part of the former Synergistics Industries Ltd.
operations that Geon acquired in late 1997.
Item 7(c). Financial Statements, Pro Forma Financial Information and Exhibits
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Exhibit 99.1 Press Release of November 18, 1998 announcing the restructure of
compounding assets.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE GEON COMPANY
By \s\ Gregory L. Rutman
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Secretary
Dated November 20, 1998
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EXHIBIT 99.1
GEON RESTRUCTURES COMPOUNDING ASSETS TO REDUCE COSTS
CLEVELAND, OHIO - November 18, 1998 - The Geon Company (NYSE: GON) announced
today that after a year of careful study, it will consolidate its compounding
operations with the closing of two manufacturing plants and the partial closing
of two additional plant sites. The affected facilities, located in Canada and
the United States, are part of the former Synergistics Industries Ltd.
operations that Geon acquired in late 1997.
Geon said the consolidation will improve productivity and customer service and
will produce estimated savings of $6 million in 1999 and $14 million annually
thereafter. Geon expects to incur pre-tax charges of $12 million in
fourth-quarter 1998 and $11 million in the first quarter of 1999 to cover the
costs of employee separation, reorganization and asset disposals and writedowns.
Cumulatively, the charges approximate $0.60 per share and include non-cash asset
writedowns totaling $9 million pre-tax.
"Following the acquisition of Synergistics, our compound operations business
group undertook a comprehensive assessment of virtually all our manufacturing
asset configurations, with a focus on providing high-quality products and
services to our customers at competitive prices," said Thomas A. Waltermire,
president and chief operating officer. "The group concluded that we should close
two plants and reduce our production at two others. The products made at these
sites will be transferred to other plants utilizing existing capacity."
The plants to be closed are in Lindsay, Ontario, Canada, where approximately 65
employees will be affected, and Conroe, Texas, where approximately 105 employees
will be impacted.
Compound manufacturing will be reduced in Orangeville, Ontario, affecting 35 to
40 employees, and in St. Remi de Napierville, Quebec, Canada, affecting 30 to 35
employees. Plasticizer manufacturing at both Orangeville and St.
Remi will continue.
In total, about 250 employees will be affected, including a small number of
administrative employees at the former Synergistics headquarters in Mississauga,
Ontario. The closings will begin in January of 1999, with completion expected by
June 30.
Geon's rationalization of compound operations will leave it with 13 compound
plant sites, including two new locations that it plans to acquire in conjunction
with its proposed transaction with Occidental Chemical Corporation (OxyChem), a
subsidiary of Occidental Petroleum Corporation (NYSE: OXY). Geon and OxyChem
announced in June 1998 their intention to form a joint venture, combining their
vinyl mass and suspension resin businesses and related raw material operations.
In addition, Geon will acquire polyvinyl chloride (PVC) compounding and film
production assets in Burlington, New Jersey, and a PVC compounding plant in
Pasadena, Texas. Completion of the transaction is expected in early 1999.
Closure of the Conroe site will commence at that time.
The joint venture is one in a series of strategic steps Geon is taking to
reposition itself as a company with a focus on polymer compounding and services.
In the past 12 months, Geon has acquired four complementary businesses with
sales of nearly $400 million.
The Geon Company is a leading North American-based polymer service and
technology company with operations in PVC compounds and other value-added
products and services, as well as in PVC resins. Headquartered in Avon Lake,
Ohio, The Geon Company and its subsidiaries currently employ over 2,400 people
and have 24 manufacturing plants in the United States, Canada, England and
Australia and joint ventures in the United States, England, Australia and
Singapore. Geon recorded revenues of $1.25 billion for the year ended December
31, 1997. Information on the Company's products and services, as well as news
releases, EDGAR filings, Form 10-K, 10-Q, etc. is available on the Internet at
http://www.geon.com.
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