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July 29, 2014 — For Immediate Release
Discusses How ESOPs Can Help Other Small Business Owners
Southampton, PA — Congressman Mike Fitzpatrick visited NewAge Industries last month to hear about the workings of an ESOP company directly from its employee-owners. NewAge, a 60-year-old manufacturer of plastic and rubber tubing, high purity Single-Use fluid transfer systems for the biopharmaceutical industry, and RFID products, employs over 100 people. The Congressman, who represents Pennsylvania’s 8th congressional district in the southeastern part of the state, took part in a town hall style meeting to discuss the benefits of ESOP (Employee Stock Ownership Plan) companies and their potential to help other Pennsylvania businesses.
NewAge team members from several departments and with various levels of seniority, job responsibilities and length of employment—from two to twenty-five years—took part. They discussed the mindset of being an owner and not just an employee. The group displayed a thorough understanding of how their day-to-day decisions affect the future of everyone in the company.
"The ESOP has given us a new view on retirement," said Jeff Johnson, Director of Software Solutions and a 23-year employee. "Many of us have talked about how the balances in our ESOP retirement accounts have outpaced our 401(k)s. And the 401(k) plan has been around for over twenty years. The ESOP is only eight years old."
"Retirement security is a big issue," stated Congressman Fitzpatrick. "We’re living longer, and healthcare is getting more expensive. If you’re trying to retire on Social Security alone, it’s going to be difficult. Very few companies offer pensions today, and that’s another reason why ESOPs are an important option."
NewAge’s ESOP benefits the company and its employee-owners both before and after retirement. Before retirement, the plan helps generate a pride-of-ownership culture, where each team member recognizes the value of every customer. Employee-owners understand that a customer is not merely a company name and an account number; there’s a person behind each inquiry and order. Knowing this makes everyone more conscious of the actions they take to keep a customer well satisfied.
Team members receive an annual statement showing their ownership in the company in shares and dollars. David Greer, Director of Information Systems and an ESOP trustee, 23 years, noted that "Everyone looks at that statement and says ‘I’m going back to work!’" It’s quite an incentive for doing one’s job well.
Marty Golin, Technical Sales Representative, 11 years, looks forward to retiring in two years. Golin commented that although he has increased his 401(k) contributions since his children have graduated college and his expenses have subsequently lessened, years of less-than-ideal contribution amounts are a challenge to overcome.
"The ESOP will mean the difference between struggling and not struggling when I retire," said Golin.
NewAge’s employee-owners feel that ESOP retirement plans can be a good option for Pennsylvania businesses. When previously employed at other companies, some current NewAge team members experienced the sale and subsequent dissolution of those companies. Other current employee-owners work with companies whose owners are aging, and there’s concern that the leadership teams of those companies simply haven’t considered an ESOP as a viable business transition.
"The owners of many small companies are unaware that they have this opportunity to receive money from the sale of their company while keeping the company intact," said Cathy Wallace, Director of Purchasing and Materials, 25 years. "The owners may simply sell the company to a competitor, venture capitalist or multi-national firm, putting their employees and American jobs at great risk."
"The best way to take care of a company’s employees during a sale is to make sure the employees themselves own the business, not somebody else," added the Congressman. "There’s a real opportunity to use NewAge as an example and say ‘Look how well it’s working, and it can work for you, too.’ Let’s make it easier for ESOPs to be created and beneficial to transition ownership to employees."
"It’s our responsibility to teach team members and other businesses about the value of ESOPs," stated Ken Baker, CEO. "Yes, it’s more complex than selling a company outright. But the benefits—continued business operations, stability, employee loyalty, retirement earnings, maintaining American jobs—far outweigh the intricacies."
Wallace added, "We’re able to compete as an American manufacturer because we have an ESOP strategy. We’re all business owners, and we’re heavily invested in the future of NewAge."
"You’re obviously very proud of this company," said Congressman Fitzpatrick, "and you should be."
For more information on NewAge Industries, its ESOP and its successes, contact the Fluid Transfer Specialists® at NewAge Industries, Inc., 145 James Way, Southampton, PA 18966; phone 800-506-3924 or 215-526-2300; fax 800-837-1856 or 215-526-2190; e-mail: email@example.com; or visit www.advantapure.com/esop.htm.
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About AdvantaPure and NewAge Industries
AdvantaPure, a division of NewAge Industries, specializes in clean products for the pharmaceutical, biomedical, food, beverage, chemical, and cosmetic industries. All products are manufactured, stored, and shipped using the cleanest methods possible to ensure unsurpassed product purity.
In business since 1954, NewAge Industries is a manufacturer and fabricator of thermoplastic and thermoset tubing and hose, and a supplier of fittings and clamps. The company offers one of the broadest product lines of tubing, hose, and fittings in the U.S., and its custom extrusion and fabrication services are unrivaled. In 2006, NewAge Industries initiated an ESOP (Employee Stock Ownership Plan) for the benefit of both its employees and customers.