Consolidated Minerals, Inc. (CMI)

From Local Legacy to ESOP Success

 

Community and employee engagement pave a pathway to success for Florida’s Foremost Swimming Pool Plaster Manufacturer ESOP

Boasting a leading company model and providing an example of an Employee Stock Ownership Plan’s (ESOP) success story, Consolidated Minerals, Inc. (CMI) located in Leesburg, Florida, has managed to leverage the benefits of its ESOP structure in a way that secures its supply of both resources and quality employees.

The company’s leaders are focused on setting ambitious goals, diversifying product offerings, and exploring new market opportunities beyond the core pool construction industry and delivering the benefits of those successes back to the employee owners.

Equally crucial, CMI leadership is committed to employee engagement and development, striving to help every employee step into and enjoy their role as an owner in the ESOP.

This means regular, transparent communication with employees about the company’s performance and its role in their long-term success.

Operationally, efficiency and quality are also key for CMI.

Streamlining processes, leveraging vertical integration, and ensuring top-notch customer service differentiate this ESOP in the competitive pool construction market.

Additionally, its strong, reliable relationships with suppliers and partners are another vital factor in its performance. These partnerships are cultivated with the same care and attention as customer relationships, emphasizing the unique value of working with an employee-owned company.

Success for CMI looks like a blend of share price growth, employee satisfaction, and operational excellence.

It is reflected in a thriving business that exceeds its financial targets, has an engaged and motivated workforce, and has a reputation for delivering superior products and services.

A Company Seed Grown from a Local Icon’s Vision

Consolidated Minerals was founded in 1971 by F. Browne Gregg, a philanthropic entrepreneur and World War II veteran regarded as a local icon by the Leesburg community.

The company was later incorporated in 2001, and as Gregg’s health declined, he bequeathed CMI to the local Leesburg Hospital and Cornerstone Hospice upon his passing in 2014.

This transfer ensured that the company remained a community asset, even as discussions began to transition CMI to an Employee Stock Ownership Plan (ESOP).

In 2018, CMI’s journey to becoming a 100% employee-owned ESOP company was completed. This transition was meticulously planned, involving strategic discussions and financing agreements with the hospital and a local bank.

“One of the key points that Mr. Gregg focused on was a commitment to his community in Leesburg. So, one of the goals of the hospital and hospice was to keep it local, and the way to do that was to create an ESOP headquartered here in Leesburg,” explains CFO Shane Williams.

By June 2018, CMI had fully transitioned to an ESOP, marking a significant milestone in the company’s history. Even before 2014, the goal envisioned was to make every employee a part-owner, aligning their interests with the company’s success.

Since becoming an ESOP, CMI has seen tremendous growth.

During the pandemic, sales surged over 50% from pre-pandemic levels, driven by the increased demand in their industry. Fortunately, the company has its operational structure to thank for its performance, as it allowed CMI to supply the market at a pace fast enough to satisfy its demand.

CMI operates as a vertically integrated company, managing several subsidiaries that support each other through the supply chain. This integration not only streamlines operations but also enhances financial stability and growth.

“It’s a very cohesive business relationship… “We do a moderate amount of business and sales outside of our vertical integration, but the lion’s share of our revenue comes from the production output and successes of our subsidiaries,” CEO Blaine Johnson explains, noting how helpful CMI’s ESOP status has been to its partnerships in general.

It would be fair to say that CMI’s suppliers take particular pride and interest in working with the company and view its ESOP structure as a unique and engaging aspect of the company.

 

Leveraging the ESOP Structure

The ESOP structure has been a significant factor in CMI’s success.

Financially, the company’s performance has soared, with employee ownership driving daily investments in productivity, efficiency, and innovation resulting in increased equity and employee wealth.

The shared ownership model fosters a sense of unity and common purpose, which creates a unique and common thread among every employee, essential for sustaining growth and weathering inevitable market fluctuations.

Beyond that, CMI does a fantastic job of keeping employees motivated and engaged with its ownership model.

Critical to CMI’s ESOP success is its commitment to community and communication.

Internally, CMI has an ESOP committee responsible for crafting communications and planning events that promote employee ownership.

Annual stock reveal events and the month-long “ESOPtober” festivities are highlights that boost morale and reinforce the benefits of the ESOP. These events not only celebrate company achievements but also highlight the personal investment employees have in the company’s success.

CMI follows a 6-year plan to see its employees become fully vested in the ESOP, and thankfully, the company has been fortunate enough to report higher revenue each year. In fact, CMI’s stock has increased over 1,000% since its inception in 2018!

So, these events have become a powerful way for the company to both highlight the path ahead for new employees and yet also acknowledge older employees reaching the tail-end of their careers and more focused on retirement planning.

Externally, CMI promotes its ESOP status to suppliers and customers, emphasizing the benefits of dealing with an employee-owned company via multiple marketing methods like emails and even physical t-shirts.

Naturally, CMI’s approach resonates well with partners, enhancing the company’s reputation and fostering strong, stable relationships.

This is not just a marketing strategy but a testament to the company’s commitment to quality and service, as every employee having a vested interest in the company’s success is a strong indicator of the quality of service it will provide.

 

The ESOP Impact on Today and Tomorrow

Based on its results, CMI’s ESOP structure has certainly allowed it to deliver top-quality service and significantly impacted its recruitment and retention efforts.

Prospective employees are attracted to the idea of ownership and the long-term benefits it provides.

“The whole concept of being an owner… it’s impactful… it resonates. We’ve hired very good people promoting that ownership concept,” Johnson says, explaining that the ESOP’s benefits are even promoted to talented temporary employees to excite them about potentially coming on board full-time.

For existing employees, the ESOP structure has proven to be a powerful retention tool, offering a sense of stability and a tangible connection to the company’s success.

This dual benefit is particularly evident in the company’s high retention rates and the enthusiasm of its workforce.

However, out of all the benefits, the one that stands out the most has to be the financial benefits, specifically regarding the fact that CMI holds both an ESOP and traditional 401k plan for its employees.

So, while the majority of other ESOP companies abandon the 401k matching benefit for their employees, CMI has steadfastly maintained its 401(k) match from their ESOP inception, providing employees with dual equity and wealth building incentives and demonstrating a strong commitment to their financial well-being.

However, even with the traditional strong 401(K) plan, many CMI employees have seen their ESOP accounts grow substantially, often outpacing their 401(k) balances.

This growth underscores the financial viability and success of the ESOP model at CMI and further places the company in a unique category of its own, being one of the few companies that can still provide one of the largest financial incentives for traditionally structured companies as an add-on.

Looking ahead, CMI is focused on continued growth and expansion. The company is exploring new products and markets both within and outside the pool industry.

“We have invested significant money into our plants in the last three years, including equipment and robotics, and we continue to strategize on expanding our physical footprint as well, in addition to adding new product lines,” Johnson explains.

These recent capital investments in plant and equipment position CMI for future growth and operational excellence, and its strategic planning and commitment to innovation will drive CMI’s future, ensuring that it remains a competitive and thriving employee-owned company.

The future of Consolidated Minerals, Inc. as an ESOP company is bright.

With a strong foundation built on community values, employee ownership, and operational excellence, CMI is well-positioned to continue its trajectory of growth and success.

The company’s story is a testament to the power of shared ownership and the positive impact it can have on both employees and the broader community.

As CMI moves forward, it will undoubtedly continue to embody the founding spirit that has made it a local icon within Leesburg and a shining example of the benefits of employee ownership.

AT A GLANCE

Consolidated Minerals, Inc. (CMI)

What: A leading swimming pool interior finish and related products manufacturing  company that emphasizes employee engagement, transparent communication, operational efficiency, quality customer service, and strong supplier relationships.

Where: Leesburg, Florida, United States

Website: www.cmineralsinc.com/