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Lorberbaum: Optimism abounds in 2018

March 5/12, 2018: Volume 33, Issue 19

 

Long Beach, Calif.—To commemorate Abbey Carpet’s 60th anniversary convention, Jeff Lorberbaum, chairman and CEO of Mohawk Industries, was tapped as the keynote speaker. The selection was most appropriate given that Mohawk was an original supplier to the group.

Lorberbaum told the 500-plus members in attendance to focus on increasing their success, and his first piece of advice was to stop watching the news. “Every day we hear negative stories about how politicians are arguing, calling each other names. They’re focusing on [things] that have almost no impact on us. Guess what? Democracy is a really sloppy process. Don’t let all of the political noise distract you from the good things going on in our country. In every economic cycle there are good years and bad years. We’re currently not just in good years but in the right years. Despite the gloom and doom presented in the media, every day our economy is thriving. The Great Recession has become a distant memory. Our country is in the best shape it has been in for more than a decade. Ignore the bickering you hear in Washington. Private economists are talking about GDP growth of more than 3% this year—the first time we’ve seen that level of expansion in almost forever.”

Lorberbaum also believes the recently enacted tax cuts will add to the economy and boost our economic expansion. “With the new tax law, the average person will take home between $1,000 and $1,500 more in their monthly paycheck this year. No matter how they use the money and what you hear them talking about, all the money is going to benefit our economy. If they spend it they will create greater demand for goods and services. If they put it in the bank, the banks are going to loan more money. If they invest it in the stock market, then the people selling the stocks will have more money and spend it.

“Businesses—including yours—will pay much lower taxes this year. Some will invest it by expanding their businesses. Others will develop new products; some will put automation in; some are raising employee wages and benefits; and some are distributing dividends to their shareholders. It doesn’t matter. Consumers and businesses with more disposable income will create ripples through the economy and drive our growth through every sector, including our own.”

Lorberbaum then addressed the recently passed budget, which he said had to include $400 billion of additional spending this year on both parties’ priorities. “In the short term the higher government spending will further expand the economy and fuel consumption in every building category, including flooring.”

His optimism is shared by many. In fact, The Conference Board’s leading economic indicators have been rising for months and they’re forecasting strong future growth. “Consumer confidence is the highest it has been in two decades as people embrace a more positive view of our future—people just feel safer. They feel more economically secure. They’ve become comfortable making big purchases and taking on more debt. Robust job growth is forecast for all sectors this year as the work force expands and many people return back to the labor market who haven’t worked in years. Weekly unemployment claims are near record lows, which reinforces the growth we all expect. Finally, we’re actually seeing wage growth in the lower-paying jobs in our country, which is good. With inflation limited, the workers will use the higher wages to increase their purchases of everything.”

Lorberbaum turned to the stock market for more evidence of the optimism. “The stock market’s run over the past year has created significant wealth for individuals and inspired greater confidence in the future. Even people who only own stocks in 401(k) plans are seeing their balances rising and are more optimistic. If the recent market drops have undermined your confidence, take a deep breath and look at the bond market where the higher prices suggest growth in our country’s future. If you look outside the U.S., the global market is in the best shape it has been in, with simultaneous acceleration in the U.S., European and Asian economies.”

Then we have the housing market, which should create great opportunities in the years ahead. “By the best estimates, the flooring industry in 2017 grew about 4% and further growth is predicted by everyone this year. Flooring in the past is like the overall economy. As consumers deferred purchases, which resulted in significant pent-up demand that we expect to come through, the demand is translating to greater residential remodeling, with some predicting that 2018 will set a record for home renovation spending. Overall, the real estate industry is the healthiest it has been in 30 years. Interest rates are near historic lows and even when the Feds raise the interest rates in 2018, they will still be historically low.”

The biggest challenge in the real estate market today, he said, has been a shortage of homes for sale. “Rapidly increasing demand will spark new construction as well as remodeling across the country. Remodeling drags at about 60% of the total flooring sales and probably much more for those of you in this room. So increased activity would really benefit you and our industry. Right now, investments in remodeling is being influenced by two major factors. The first is rising home prices, which is building confidence for homeowners to update and address changing lifestyles in their homes and how to make it benefit themselves. New buyers of existing homes will also customize their purchase to suit their own taste. Renewed interest in remodeling is also being spurred by television prompting home renovation on every other show. HGTV and the DIY networks have built franchises around home remodeling and their websites and magazines along with everything else are teaching consumers that updating their floors creates a trendy and refreshed home.”

Lorberbaum also cited new home construction as yet another source for optimism. “As excited as I am about remodeling, I also see growth in new single-family home construction as another sign of a healthy year ahead of us. For years, single-family home construction lagged the historical averages. After the Great Recession, we saw an emphasis on multi-family properties, but the pendulum is now swinging once more to single-family home growth. New construction must accelerate to meet current demands as expanded household formations creates added pressure to the existing market. To meet that demand, the construction industry is finally finding ways to deal with a lack of developed land, as well as taking care of the labor shortage in new ways to build more homes.

“If you take all those factors into consideration, 2018 will be rich in opportunity. The most important fact I want you to take away is that in 2018 consumers have more confidence and are going to spend more money. Together we have to convince them that spending that money in your store on new flooring is the right thing to do.”

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Lorberbaum named to WFCA Hall of Fame

Dalton, Ga.—The World Floor Covering Association (WFCA) has named Jeffrey S. Lorberbaum, chairman and CEO of Mohawk Industries, to the organization’s Hall of Fame. Lorberbaum is the 47th inductee since the Hall of Fame was established in 1992. He will be joining a distinguished list of industry pioneers and leaders, including his parents, Shirley and Alan, who founded Aladdin Mills. Lorberbaum will be honored during a ceremony at The International Surface Event in Las Vegas, Jan. 31.

“I nominated Jeff because his leadership changed the industry while expanding Mohawk into all flooring products to create the largest flooring company in the world with numerous acquisitions, exponential global growth and ground-breaking financial returns for more than 20 years,” said Larry Nagle, WFCA Hall of Fame member, president of N.L. Nagle and founder of the Floor Covering Industry Foundation. “I look forward to honoring his influential impact on our industry and welcoming him into the Hall of Fame.”

After graduating from the University of Denver in 1976, Lorberbaum entered his family business as the company was expanding from bath and area rugs to broadloom carpet. Under his leadership, Aladdin Mills merged with Mohawk Industries in 1994, creating one of the largest flooring manufacturers in the country with revenues of more than $1 billion.

Durimg the remainder of the 1990s, Mohawk led the consolidation of the U.S. carpet and rug industry and began exploring the sale of hard surface products at the end of the decade. Mohawk foresaw the changing of consumer flooring preferences and shifted its strategy to provide all flooring types, which expanded their customers’ revenues and margins.

Mohawk’s acquisition of Dal-Tile in 2002 was the next major step in becoming a total flooring company that manufactured all soft and hard surface products. Dal-Tile’s market share grew rapidly under Lorberbaum with new investments to expand its manufacturing capabilities, sales organization and distribution network. Following multiple European acquisitions during this decade, ceramic has become the largest category within Mohawk’s product portfolio.

Today, Mohawk is one of the largest flooring manufacturers to offer ceramic, stone, carpet, rugs, laminate, wood, sheet vinyl, luxury vinyl tile (LVT) and countertops. While transforming the U.S. business, Lorberbaum built Mohawk into a significant international enterprise with more than 30% of the company’s revenues generated outside the U.S. With 38,000 employees, Mohawk sells products in more than 160 countries around the world with manufacturing operations in 16 nations.

For the WFCA, the combination of Lorberbaum’s leadership of Mohawk into a global flooring powerhouse, his transformative impact on the industry and his lasting influence on how people buy and sell flooring made him a natural choice for the Hall of Fame.

“Mohawk became a member of the WFCA in 2003, and, since then, I’ve had the pleasure of working closely with the company and Jeff,” said Scott Humphrey, CEO, WFCA. “He is a true visionary who has invigorated product innovation, enhanced customer results, shaped countless leaders and revolutionized the flooring industry. Jeff will be a great addition to the Hall of Fame.”

Lorberbaum has received a multitude of awards for his leadership and accomplishments during the course of his career. Recent honors include the 2016 Ernst & Young Lifetime Achievement Award for Entrepreneurship (SE Region); the 2016 Atlanta Business Chronicle Most Admired CEO Award (Manufacturing); the 2017 Leonardo International Prize, presented by the President of Italy for transformative investments in Italian industry; and the 2017 “Let Us Do Good” Award, presented by the Stephen Siller Tunnel to Towers Foundation, for his support of housing for severely wounded veterans.

 

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Lorberbaum presented with Leonardo International Prize by Italy’s president

Jeff Lorberbaum
Jeff Lorberbaum

Calhoun, Ga.—Mohawk Industries’ chairman and chief executive officer Jeff Lorberbaum was awarded the 2017 Leonardo International Prize by Italian President Sergio Mattarella during a March 2 ceremony at Rome’s historic Quirinal Palace.

Bestowed each year by Italy’s Leonardo Committee, the Leonardo International Prize spotlights individuals who have distinguished themselves by facilitating cultural and business partnerships between their native countries and Italy.

“I am honored to receive this award on behalf of our entire team,” Lorberbaum said. “This special recognition reflects the outstanding work being done throughout our company by thousands of talented, dedicated people. Everyone at Mohawk is delighted to be a part of the Italian business community, and I am grateful to the Leonardo Committee and President Mattarella for promoting an environment where businesses can flourish.”

In 2013, Mohawk Industries acquired the Marazzi Group, one of the leading international Italian-based ceramic manufacturers. During the past four years, the company has invested substantially in technology to create innovative products and expand production capacity at Marazzi’s three Italian facilities.

The award citation praised Mohawk Industries as “an example of how foreign investments can strengthen international competitiveness and the innovation of Italian companies.”

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Mohawk’s Lorberbaum honored as 2016’s Most Admired CEO

Jeff LorberbaumCalhoun, Ga.–For more than two decades, Jeff Lorberbaum, Mohawk Industries’ chairman and CEO, has consistently delivered outstanding results for shareholders, employees and customers. This year, Atlanta Business Chronicle recognized Lorberbaum’s exceptional leadership of the world’s largest flooring company by honoring him as 2016’s Most Admired CEO in the Manufacturing category.

Atlanta Business Chronicle announced its third-annual Most Admired CEOs during an exclusive event at the Georgia Aquarium on Aug. 25.

“I share this award with Mohawk’s 36,000 employees worldwide,” Lorberbaum said. “The success of any organization depends on each individual’s talent and commitment to excellence. I’m very proud of our team and our ability to deliver innovation, service, quality and value to our thousands of customers around the globe.”

During April and May, Atlanta Business Chronicle asked its readers for nomination of business leaders in 10 categories: banking and finance, commercial real estate, education, healthcare, hospitality, manufacturing, nonprofits, professional services, residential real estate and technology. The five CEOs who received the most nominations in each category were named finalists and were presented to the publication’s readership during June for voting.

Lorberbaum faced stiff competition in the manufacturing category. The four other finalists included two additional Fortune 500 CEOs—Steven Voorhees of WestRock Company and Martin Richenhagen of AGCO Corporation—and the leaders of two of the largest privately held companies in the U.S.—Dennis Love of Printpack and Stuart Thorn of Southwire.

“I was honored to be included among such an illustrious group of finalists in the manufacturing category,” Lorberbaum said. “I respect their success, and I appreciate the contributions that they’re making to our state’s economic development.”

Lorberbaum has served as CEO of Mohawk Industries since 2001, growing the company from a niche U.S. carpet manufacturer into a global flooring leader. Over the past 25 years, Mohawk has completed 35 acquisitions and built a world-class management team that brings industry-leading innovation and value to the marketplace. The company is a leading participant in every flooring category, including ceramic tile, carpet, hardwood, vinyl, laminate, stone and rugs. Mohawk operates manufacturing facilities in 15 countries and has leading positions in the U.S., Mexico, Europe, Russia and Asia Pacific.

Since the company’s initial public offering in 1992, Mohawk’s enterprise value has increased more than 50 times. The company has been a fixture on the Fortune 500 since 2000, was added to the S&P 500 in 2013 and this year was ranked as one of Forbes’ Best Large Employers in the U.S.

For his industry leadership and philanthropy, Lorberbaum was presented with Floor Covering News’ Lifetime Achievement Award in 2013 and earlier this year was honored by Ernst & Young as the Southeast Region Entrepreneur of the Year.

The Most Admired CEO Award winners will be profiled in the Friday, Aug. 26 issue of Atlanta Business Chronicle.

 

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Mohawk’s Lorberbaum honored with Lifetime Achievement award

Jeff Lorberbaum HeadshotDalton—As EY celebrated the 30th anniversary of its unique entrepreneurial awards program, Mohawk Industries’ chairman and CEO Jeff Lorberbaum became the first flooring industry leader honored with the prestigious Lifetime Achievement award in the Southeast U.S. Region.

Lorberbaum joined Mohawk Industries in 1994 after the company merged with Aladdin Mills, the carpet and rug company his parents founded here. Under his leadership as first CEO and then chairman and CEO, Mohawk has grown to become the world’s largest flooring company with 2015 sales of more than $8 billion and 34,000-plus employees worldwide.

“I began my career in a small family business, which has grown into a large public company, and the success of both depended on talented, dedicated people,” Lorberbaum said. “I’m here tonight because of thousands of individuals who create, sell and deliver innovative flooring products to our customers around the globe.”

The EY awards honor entrepreneurs who demonstrate excellence and extraordinary success in such areas as innovation, financial performance and personal commitment to their businesses and communities. Award winners are selected by a panel of independent judges, most of whom are past Regional Entrepreneur of the Year award winners.

EY, the world’s third largest professional services firm, pioneered the concept of recognizing entrepreneurs in 1986 when the company spotlighted business leaders in the Midwestern U.S. The awards program is now global in scope, and during the past three decades more than 10,000 emerging entrepreneurs have been recognized in 60 countries. The Lifetime Achievement awards more selectively honor those individuals who have delivered extraordinary success in the field of business.

Past Southeast Regional Lifetime Achievement honorees include CNN founder Ted Turner; Spanx founder Sara Blakely; Chick-fil-A founder Truett Cathy; and Home Depot co-founder Arthur Blank. With this regional honor Lorberbaum becomes one of the finalists for EY’s national Entrepreneur of the Year award.

The black-tie award ceremony was held on June 23 in Nashville’s award-winning Country Music Hall of Fame and Museum and attracted an audience of several hundred business leaders from across the region.

In his remarks, Lorberbaum explained his success was an extension of the important work of many people within Mohawk’s business and that even with the organization’s dramatic growth, he always views success as being “halfway there.”

He added, “Mohawk has become a successful business through the exceptional work of many people, but we remain dissatisfied with the status quo. For us, entrepreneurship is not about celebrating what we did yesterday; it’s the excitement about what we can achieve tomorrow.”

Lorberbaum expressed his gratitude for the EY honor but reinforcedthe Lifetime Achievement award only served as further motivation to continue the good work that has led to Mohawk’s growth and that has benefited the company’s customers around the world.

“All of us at Mohawk are proud of our past, but we’re more excited about our future,” he said. “We continue to invest in the business at record levels, drive innovation in all product categories and develop programs and services that help our customers succeed. We’ve made great progress, but we’re still only halfway there.”

He concluded his remarks by thanking Mohawk’s employees for their commitment to excellence, the company’s thousands of customers for their trust and support, and his family for their encouragement.

Winners of EY’s national Entrepreneur of the Year awards will be announced in November during the firm’s strategic conference in Palm Springs, Calif.

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Georgia Gov. Deal tours Mohawk facility

Georgia Gov. Nathan Deal addresses Mohawk employees during plant visit.
Georgia Gov. Nathan Deal addresses Mohawk employees during plant visit.

Calhoun, Ga. — Georgia Gov. Nathan Deal toured the Mohawk Flooring Center in Calhoun, visited with individuals to learn more about their roles in the business and spoke to a large group of employees about the importance of the flooring industry in the state of Georgia.

Gov. Deal began his visit with a discussion with Mohawk Industries CEO Jeff Lorberbaum and members of the company’s executive team. The governor reiterated his support of the industry and the importance it represents to the state’s economic well being.

Later, carpet segment president Brian Carson gave the governor a tour of the flooring center and then introduced him to a group of Mohawk employees. Carson highlighted Gov. Deal’s longstanding knowledge of the flooring industry and his support of Mohawk Industries.

This is not the governor’s first visit to Mohawk. Last year, Gov. Deal spoke at Mohawk facilities in Dalton, Summerville and Rome to highlight the company’s investments in new manufacturing technologies and the creation of jobs at those locations. Gov. Deal shared his perspective about his past four years in office. He added that in 2014, the state’s revenues have grown 5.71% over fiscal 2013, the result of an economic rebound that the governor linked to job creation.

“We’ve laid the proper foundation for continued job growth,” he said. “For the last 12 months, Georgia ranks number six in the country in terms of total new jobs, and most of the states ranked ahead of us are twice or three times larger.”

Gov. Deal recognized the importance of the flooring industry to Georgia’s economic recovery. “We’ve seen thousands of new jobs that have already come online or have been announced, and Mohawk has been involved in many of those expansions,” he added.

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Dal-Tile to build new tile manufacturing plant, distribution center in Tennessee

Screen Shot 2014-03-10 at 11.53.10 AMDallas — Dal-Tile announced plans to build a glazed porcelain and colorbody tile manufacturing plant and distribution center in Dickson, Tenn., near Nashville. The 1.4 million square foot plant is scheduled to open in late 2015 and will be the Dallas-based company’s 11th manufacturing facility in North America.

Dal-Tile president John Turner, Jr. announced the new plant at a news conference in Dickson with Mohawk Industries chairman and CEO Jeff Lorberbaum, Tennessee Gov. Bill Haslam, and other state and local officials.

“We’re extremely pleased to further expand our manufacturing capability to Dickson and the state of Tennessee, which will grow our leading position within the industry to meet customer demand,” Turner said. “By partnering with Dickson County and Tennessee state officials, we were able to find a perfect match for our manufacturing expansion needs and continue to provide the exceptional service our customers require.”

Turner said the Dickson plant will utilize the latest advanced decoration technology, including its Reveal Imaging capability, to produce innovative and stylish ceramic tile products; the plant will also have the flexibility to produce larger format and plank format tiles marketed through its five leading brands in North America: Daltile, American Olean, Marazzi, Ragno and Mohawk. The five brands are sold through Dal-Tile’s three primary distribution channels: home centers, independent distributors and company-owned stores.

The Dickson plant will have glazed porcelain capabilities, as well as technology to meet the need of the commercial market through technical color body products, plus in-line rectification and polishing to meet market requirements.

Dal-Tile products are used throughout new residential construction, residential remodeling construction and commercial construction. In 2013, Mohawk completed its acquisition of The Marazzi Group, a global leader in ceramic tile with worldwide brand recognition and operations in the U.S., Europe and Russia. Marazzi’s U.S. operations were integrated into Dal-Tile in 2013.

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Mohawk Q4 profit rises 77%

Screen Shot 2014-02-05 at 4.13.18 PMCalhoun, Ga. — Mohawk Industries took advantage of the improving construction market and recent acquisitions to boost its fourth quarter earnings from continuing operations by 77 percent over a year ago.

Mohawk said it earned $131 million, or $1.79 per share, from continuing operations in the final three months of 2013. Those results were 4 cents a share above analysts expectations and Mohawk CEO Jeff Lorberbaum said he expects the profit and sales gains to continue through 2014.

“Our fourth quarter results were better than projected primarily as a result of higher top-line growth in our U.S. ceramic business, a strong performance from our Pergo acquisition and lower interest expense due to an upgrade in our credit rating,” Lorberbaum said.

For all of 203, Mohawk earned $349 million, or $4.82 per share, on sales of $7.3 billion. Mohawk sales jumped 27 percent last year with most of the gains coming in Mohawk’s growing ceramic tile business. Mohawk bought the laminate makers Pergo and Spano in early 2013.

“We believe we are well positioned for both revenue and earnings growth in 2014,” Lorberbaum said. “Through investments in acquisitions and capital expenditures, productivity improvements and product innovation, we have positioned Mohawk for growth and improved profitability in all segments.”

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Carson named president of Mohawk Flooring; Turner to lead Dal-Tile

Calhoun, Ga. — Mohawk Industries announced today that effective January 2, 2012, Brian Carson will be appointed president of the Mohawk Flooring Business Unit and John “J.T.” Turner Jr. will be named president of the Dal-Tile Business Unit.

Carson joined Mohawk in 2006 after a 16-year career at Armstrong World Industries, where he held a number of senior leadership roles. Carson joined the Mohawk Flooring Business Unit as president of Hard Surfaces and was later promoted to vice president of operations for the division. In early 2011 he assumed his current role as the business unit’s COO.

Turner began his career with Dal-Tile in 1990, progressing through a series of leadership roles in sales, operations and general management throughout the business. In 2005, Turner was promoted to senior vice president of sales and served in that role until being appointed senior vice president of operations in 2008. Continue reading Carson named president of Mohawk Flooring; Turner to lead Dal-Tile