MiTek®

A Global Success Story

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MiTek®

1981-2011

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DDEDICATIONEDICATION

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Every successful project needs a champion. That individual with those rare qualities to “muster

the troops” to achieve the goal. For this project, that individual was Terry Nicholson.

December 6, 2011 was a dark day at MiTek as we learned of the untimely passing of Terry the

day before. As leader of MiTek’s software group, his vision and passion were unwavering. Whether

he pushed, prodded, cajoled or, on occasion, showed his temper, he had that uncanny knack to get

the most from his staff; making the process a win for him and for MiTek. Building on the success

of many before him, he brought a new vision for software at MiTek, and the result was

SAPPHIRE™, our flagship software solution.

As the driving force behind the creation of this history project, he spent over a year – much of

it in secret as the initial plan was to make it a surprise to Gene Toombs upon his retirement – before

joining in the decision to bring Gene on board to add his insight into the wonderful history of

MiTek’s past thirty years. Using the same skills he did in crafting SAPPHIRE™, Terry went to

MiTek staff around the world to get their input on our history, all in an effort to make this effort

the very best it could be. It was in mid-November that Terry finished the section covering MiTek’s

software history, telling the author that it was complete. Though he was with MiTek for only four

years, Terry had the respect and admiration of everyone he touched.

It is for his passion, vision, commitment, humor and intensity that he will be remembered and

for which we dedicate this book to him.

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What began as a brief overview of the history of MiTek has grown intoa comprehensive review of a remarkable company and its people. I lookupon Paul Cornelsen as the creator of this unique company and feel blessedto have been approached by him and then persuaded to give up a successfulcareer as an officer of a Fortune 500 company and accept the challenge tojoin a small organization with a chance to lead it into the future.

MiTek began as a small player in an industry that filled a unique positionsupplying engineered fasteners, machinery and software to the globalbuilding components business. Through many acquisitions and aggressiveorganic growth, the business became the industry leader: and for the last20-plus years highly profitable despite the global economies of the world.

The recognition of software as the key to growth enabled MiTek to obtain and keep its leadership. Thatand the ability to recruit and retain some outstanding people who, through dedicated hard work, neverlooked back and always kept the customer first in all that we did.

The highlight to this story is, of course, the sale of 90% of the company to Warren Buffett in July2001. Warren’s agreement to allow many of our management team to own 10% of the company mademany of our team wealthy over time and provided an ownership mentality, which I believe is the key tosuccess. His belief and trust in our management team enabled us to make 34 acquisitions in 10 years,allowing for rapid and profitable growth that was instrumental in our success. Working for Warren istruly an honor and having one of the world’s most savvy businessmen as your advisor makes coming towork each day exciting and fun. I have often said that after working in this environment the only way toleave is to be ready to retire, as you could not work for anyone else.

As I wind down my nearly 23 years with MiTek I look back with pride on what we have accomplishedbut also feel that the future for the company is even brighter. I will stay involved as an advisor andChairman Emeritus, but I leave confident that the team we have in place will be more successful than Iwas, making now the right time to move on.

I owe thanks to many people, starting with my family who put up with my many absences yet werealways there for me. Thanks to all of our dedicated MiTek associates around the world who have mademy work and personal life a great experience. Good luck to all and always keep moving forward.

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F U L F I L L I N G T H E V I S I O N

In working with some terrific people at MiTek in the development of this work, it struck me in the way

they viewed the company. The Truss Industry is a fairly unique niche. Consequently, those who work in this

industry do so for extended periods. With MiTek being the final resting place of many companies, it is not

surprising that many view the company through shaded lenses. Yet, to a person, they all recognize that the

strength of MiTek is in this unique mix of talent, drawn from outstanding companies across the globe. From

the interviews I conducted, it may be said that each of these earlier organizations lacked the key element needed

to have survived in a very turbulent industry. They lacked the one ingredient found in the individuals who

guided MiTek to its current position. They lacked a strong sense of vision.

Ultimately, the story of the birth, growth and eventual market leadership of MiTek is quite remarkable. In

essence, it is about two men with a strong grasp of their business, and the industry into which they were selling.

It is also about how each envisioned how the organization they were leading – and in many ways, these were

two very different companies – could become the industry leader. Just as remarkable, the two men – Paul Cor-

nelsen and Gene Toombs – could not be more different; yet, they each had that one trait that is common in

uncommon men: a clear sense of purpose and an unwavering determination to their chosen path. Cornelsen,

a financial and operational wiz, was as sharp as a tack in brushing aside the peripheral to see what needed to

be done and then finding the right person for the task. However, unlike many of his mold, he had a boldness

in his approach, which enabled him to trust those selected for the task, asking only their loyalty and their best

effort to achieve the targeted goal. However, Cornelsen also knew that his time at the helm was short. Conse-

quently, he developed a splendid end-game, one that was designed to enable MiTek to not just survive, but to

be well positioned to take advantage of opportunities as they arose.

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A U T H O R ’ S F O R E W O R D

Toombs, on the other hand, is more of an instinctive leader; the type of man you would want in your corner

during a tough 15-round fight. He could gauge the competition, see their weakness, predict their attack, then

counterpunch with the best. Affable, confident and self-assured, Toombs seemed to be able to do a gut-check

at the right moment to predict the slightest change in the market. Even when things were not going as planned

– as some did at times – he never wavered from his belief that he was leading MiTek down the proper path.

It was the combination of these two individuals, one following the other, that makes MiTek most unique

in the business world. As different as they are, there is a unique bond between them that will never be broken.

Each can look upon the other as contributing to the success of the other, much as a coach enjoys the success

of his quarterback, while the player’s accomplishments help validate the coach’s game plan.

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T H E W O R L D W I D E L E A D E R

There is no doubt that MiTek is the worldwide leading supplier in the Structural Building Components

Industry. Whether for connector plates, software or automated machinery, MiTek has the products and services

to get the job done for the customer.

However, it was not always that way. There was a time when MiTek, viz. Hydro-Air, was not the leader,

but merely the pretender. Certainly it was not due to the lack of effort; but others in the field produced better

machinery, lower cost plates, better software and had some of the best people in the industry. So, how did the

MiTek we see today rise out of the rubble to the top of the industry? Was it done by mere chance? Or was it

due to the genius of those leading the company who saw the opportunities available, identified the best and

brightest within and outside of the organization, and, in reality, understood the key vision necessary to grab

the brass ring?

To an extent, as it must be for any great organization to come together in such a manner, the stars had to

be in alignment. The two key players in the formation of MiTek – Paul Cornelsen and Walter Moehlenpah –

were each in a transition period in their careers when their paths crossed. Had Cornelsen not left Ralston

Purina when he did, and, had he not previously been on the board of Boatmen’s Bank, what would MiTek look

like today? In addition, had Moehlenpah not had the financial struggles at that exact moment, which caused

him to relinquish control of Hydro-Air, would Cornelsen have moved on to other ventures? Finally, had

Cornelsen not brought in Gene Toombs to dispose of an unprofitable business – something he did successfully –

would Cornelsen have been able to see those qualities in Toombs that would enable him to take MiTek forward?

Certainly, a lot of luck – plus good timing – played a role in the MiTek of today.

In many respects, MiTek has been not unlike a professional sports team that brings in the right players at

the right time to achieve something special; in effect, MiTek found its all-stars. However, unlike teams that

may have that one special season, MiTek has enjoyed its success for more than 20 years.

In overcoming the many challenges faced in those early days of the 1980s, the MiTek of today is stronger,

more flexible and financially sound, with product offerings born out of the industry’s best solutions, from some

of its top minds.

With the upcoming retirement of Gene Toombs, certainly MiTek will be entering its third phase. Whereas

Cornelsen fought to save a struggling, nearly bankrupt company, he gathered key resources – people, products

and infrastructure – to position it for the future. And while Cornelsen was at the end of his career ready to

hand the reins over to a younger individual, Toombs joined at just the right moment, with a strong vision for

growth and expansion, to take what Cornelsen had assembled and allow it to blossom.

In the past 20-years or so that Toombs has led MiTek he has allowed the talents of those around him to

shine, further solidifying MiTek’s position as an industry leader. Certainly there have been a few moments

where things might have gone better, but, as with any successful organization, a few failures now and then are

good for the soul as you learn from those mis-steps and are often better prepared to take additional steps

forward.

As MiTek enters the first half of 2012 – in its third phase – Toombs can walk through the door knowing

that he has positioned MiTek exceptionally well for the future.

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T A B L E O F C O N T E N T S

SSECTIONECTION OONENE - 1981 - 1993- 1981 - 1993 BBUILDINGUILDING THETHE FFRAMEWORKRAMEWORK

CHAPTER ONE . . . . . . . . . .HYDRO-AIR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

CHAPTER TWO . . . . . . . . .CORNELSEN AT THE HELM . . . . . . . . . . . . . . . . . . . . . . .27

CHAPTER THREE . . . . . . . .MOVING ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53

SSECTIONECTION TTWOWO - 1994-2011- 1994-2011 GGROWTHROWTH & L& LEADERSHIPEADERSHIP

CHAPTER FOUR . . . . . . . . .EARLY CONSOLIDATION . . . . . . . . . . . . . . . . . . . . . . . . .59

CHAPTER FIVE . . . . . . . . . .THE ORACLE OF OMAHA . . . . . . . . . . . . . . . . . . . . . . . .69

CHAPTER SIX . . . . . . . . . . .PLANNED GROWTH . . . . . . . . . . . . . . . . . . . . . . . . . . . .79

CHAPTER SEVEN . . . . . . . .INNOVATION FOR TODAY’S CUSTOMERS . . . . . . . . . . . . .87

CHAPTER EIGHT . . . . . . . .INTERNATIONAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113

CHAPTER NINE . . . . . . . . .THE FUTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137

CHAPTER TEN . . . . . . . . . .ACQUISITIONS & CORPORATE MANAGEMENT . . . . . . .141

CHAPTER ELEVEN . . . . . . .TEN-YEAR BERKSHIRE HATHAWAY ANNIVERSARY . . . .147

CHAPTER TWELVE . . . . . . .INDUSTRY CHRONOLOGY . . . . . . . . . . . . . . . . . . . . . . .153

INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .166

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T I M E L I N E O F E V E N T S

Cornelsenconsults atHydro-Air

1981 1983 1985 1987 1989 1991 1993

Cornelsen acquiresHydro-Air from theMoehlenpah family Carlos Rionda named

President of Gang-Nail

Joint Venture withBowater to purchaseGang-Nail

Tom Manenti namedPresident of Gang-Nail

Toombs sells WoodProducts Company toLouisiana-Pacific

Cornelsen sells hisinterest in MiTekto Bowater.

MiTek acquires interestin On-Line Data

Hydro-Air acquiresPanel Clip Company

Gene Toombsjoins MiTek

Hydro-Air and Gang-Nail merge as MiTekIndustries, Inc.

The Bemax acquisition,including A.C.E.S., iscompleted

Toombs namedChairman,President andCEO of MiTek

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S E C T I O N O N E

BBUILDINGUILDING THETHE FFRAMEWORKRAMEWORK

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HYDRO-AIR MARK 8 MONOPRESS “C” CLAMP

C H A P T E R O N E

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HHYDROYDRO-A-AIRIR

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WWALTERALTER MMOEHLENPAHOEHLENPAH

Walter Moehlenpah was a graduate engineer out of the

University of Wisconsin. A talented individual, having

survived the dog-days of The Great Depression, his fortunes

began to change with the coming of the Second World War.

By early 1942, the 34-year-old Moehlenpah and his wife

made a living making shell casings for artillery shells.

Continuing to design – he was more of an inventor than true

engineer – in the days following the end of the War they

began creating connectors unrelated to the housing industry.

By 1958, he formed Moehlenpah Engineering Inc. as a

Vickers hydraulics distributor at 1210 South Vandeventer

Avenue in mid-town St. Louis. However, with the continuing

growth in home construction, he returned to his inventor-

role in the hopes of developing products needed in the

industry. In that area, he would make a significant

contribution to the residential housing market.

TTHEHE TTRUSSRUSS PPLATELATE

A. Carroll Sanford is generally credited with inventing the metal truss plate. His design had integral teeth,

but required supplemental nailing. Consequently, while this design did make the assembly of trusses somewhat

easier, it remained a heavily manual process.

In 1955, John Calvin “Cal” Jureit, a professional engineer from Miami, Florida, patented the Gang-Nail

Connector, the first punched tooth truss plate that required no supplemental nailing. His plates were pressed

into lumber using a concrete vertical hydraulic press and steel table precision jigs. For the next dozen years or

WALTER MOEHLENPAH

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so, Jureit’s plates were the industry standard.

In 1962, while calling on a division of Boise Cascade, Moehlenpah

seized on the idea to enter the construction business. His initial product

was to market machines that would be used by the fast-growing truss

industry. He organized Hydro-Air Engineering specifically for this

business. The Hydro-Air name itself reflected the machinery roots of the

company: “Hydro” for hydraulics, and “Air” for pneumatic or air-

operated machinery.

For the next several years, Moehlenpah’s firm built equipment for

the industry. At the same time, the inventor side of him examined the

components used in the assembly process. Focusing on the connector plate, in 1968, he developed a new type

of plate, one that differed slightly from the Jureit or Gang-Nail plate. Moehlenpah hoped that this variance in

design would enable him to compete with the Gang-Nail plate. When Moehlenpah applied for a patent for

his plate, a legal battle ensued. In the

end, as part of a very risky

demonstration, Moehlenpah attached

fishing weights to his plate,

demonstrating its strength, and

providing the key differentiation

between his and Jureit’s design.

Moehlenpah’s design broke Jureit’s hold

on the industry, enabling Hydro-Air to

become a key player in the expanding

truss industry.

JOHN “CAL” JUREIT

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EEARLYARLY SSOFTWAREOFTWARE DDEVELOPMENTEVELOPMENT

As early as 1968, Hydro-Air began investing in computer systems specifically for truss design. That year,

Hydro-Air purchased an IBM 1130 computer with 4,000 bytes of memory. Using Fortran, they wrote their

own programs, which were stored on stacks of IBM cards. The individual truss jobs were keypunched onto

additional IBM cards (7 cards for each job) and loaded into card readers along with the program cards. By the

early 1970s, more complex truss jobs were analyzed using IBM’s STRESS program. While this program was

an improvement, it required designers to literally “count nails” to derive the design. In 1972, Hydro-Air

installed its truss program on

a General Electric mainframe

computer, allowing

manufacturers across the

country access to the

program via remote

terminals. This enabled

customers to select from

dozens of standard designs, or

enter a special geometry.

From 1974-78, additional

enhancements were made to

automate the more complex

designs and provide more accurate member cutting.

In 1978, Hydro-Air invested almost a million dollars in a DEC VAX11/780 computer, which greatly

expedited truss analysis. Jobs were entered via a remote terminal, replacing the key punch and card reader.

However, despite this advancement in computing power, much of the actual method used to generate the

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certified data continued to remain a manual

and tedious process. Customers would send

in their data and the Hydro-Air technical

service representatives would record their

information on forms and then pass it on to

the engineering department. The engineers

would pour over the information, verify the

data and develop the required specifications.

This information was then given to the data

input staff who keyed the data into the VAX.

The printout was passed to the drafting

department who generated detailed

drawings and models. These drawings and

models were then presented to the customer. It was time consuming and costly. However, it was necessary if

Hydro-Air was to provide the certification seals that customers needed for their projects.

In other situations, where customers had competent engineering staff, they continued to pay for computer

time on the Hydro-Air system to perform their own validation of the data. However, the majority of truss

manufacturers did not have engineering staffs, plus, the Hydro-Air software, while adequate, was not a real

competitive advantage for the business.

TTHEHE BBUSINESSUSINESS OFOF TTHEHE BBUSINESSUSINESS

Most companies competing in the truss industry were dominated by structural engineers. It was their slide-

rule based calculations that determined how trusses were to be assembled and, in effect, how buildings were

constructed both for roof and floor truss engineering.

A number of companies focused on single aspects of the business – connector plates, for example – while

WALTER MOEHLENPAH AT A HYDRO-AIR MEETING

others manufactured the machinery and jigs used to

assemble the trusses. Moehlenpah used its

engineering capability to attract customers to use

their plates and machines by providing the required

engineering specifications for their projects and

having Moehlenpah engineers certify the design. At

the same time, the Hydro-Air business was

manufacturing the machines and plates to satisfy

these requirements. It seemed to be a good match;

and for years it was both successful and quite

profitable. As late as 1979, Moehlenpah was doing

over $50 million in annual sales. However, by 1981,

the company was in trouble. Through a series of

acquisitions and over-aggressive customer service, the profits had been eroded. In addition, Walter made large

capital purchases of an airplane and a boat that further diluted profits. By 1981, sales were only $22 million,

with the company experiencing a negative cash flow for over eighteen months.

A key factor in the decline of Moehlenpah / Hydro-Air was Walter’s reluctance to make key investments

in software – an item that was becoming a major factor in customer decisions on which products to purchase.

At the same time, his chief competitor, Gang-Nail, was spending heavily on software. And while Gang-Nail

had machinery that was well-respected in the industry, Hydro-Air’s products seemed inferior by comparison.

Despite a cadre of quality staff in engineering and sales, Hydro-Air seemed doomed.

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A HYDRO-AIR “C” CLAMP PRESS

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C H A P T E R T W O

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CCORNELSENORNELSEN ATAT THETHE HHELMELM

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Born in Wellington, Kansas, a small farm community south of the “big city” of Wichita, Paul Cornelsen

rose to the highest levels of corporate America: as Vice Chairman and Chief Operating Officer at pet food

giant Ralston Purina. Along the way he headed divisions across the country and, more importantly, across

Europe, South America and Australia. Little did he know at the time how important each of these roles would

be in the future.

RRETIREMENTETIREMENT

On September 30, 1981, after several years of wrangling among the top executives at Ralston as to who

would take the top spot following Hal Dean’s retirement, Cornelsen decided that his time at Ralston needed

to come to an end. With that decision, he turned in his keys and retired. However, in the case of someone

with Cornelsen’s vast experience, retirement from one company only opened up opportunities at many others!

At age 57, Cornelsen was far from ready to “retire” in the normal sense. Offers came from a family-owned

business in Mexico; a privately-owned St. Louis candy company; and a large mass-merchandiser. Each felt that

Paul’s vast experience would benefit their organizations.

OOPPORTUNITYPPORTUNITY

In late 1981, Don Brandon, Chief Executive at Boatmen’s Bank - one of the Boards Cornelsen had served

on – called Paul. Brandon asked Paul if he remembered a company named Hydro-Air. Cornelsen did indeed

remember the firm. Brandon had often noted that this little St. Louis engineering firm was a shining example

of entrepreneurship. Headed by Walter Moehlenpah, they had about $40 million in sales and a $5 million line

of credit, which they hardly used. However, Brandon’s call was much different this time. Hydro-Air was in

serious trouble. “They have gone to pieces,” Brandon told Cornelsen. “If something isn’t done soon, we are going to

have to foreclose.” Boatmen’s did not want to be associated with having to foreclose on the firm so Brandon

wanted Cornelsen to meet with Walter Moehlenpah to see what might be done. As a favor to Brandon, Paul

agreed to meet with Moehlenpah.

Cornelsen arranged a meeting with Walter Moehlenpah and his outside board members, which included

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local businessman Fred Wacker.

After a brief discussion with Walter, it was immediately apparent that Brandon

had not overstated the situation. Moehlenpah was in serious trouble. It was also

obvious that the directors were each embarrassed that the situation had gotten so far

out of hand.

Walter was adamantly opposed to Cornelsen being engaged. Almost immediately

he told Paul, “I don’t want you here but I have to let you come in and talk to us to satisfy the

bank.” Paul immediately knew where the real problem with Hydro-Air was, and

he knew that solving it would not be easy.

At the conclusion of the meeting, Cornelsen told the group that he would take

on a 60-day project to review the company’s operations, provided they paid him in advance. Another provision

was that he was to have complete access to all company records and staff. The group told him they would give him

their answer within thirty-days. As Cornelsen left the meeting, he fully expected never to hear from them again.

He traveled to Mexico to continue his work with a business there when he received a frantic call from Fred

Wacker. They had been told by the bank that they had to get someone to analyze the business immediately or

Boatmen’s was going to bring suit against them, forcing Hydro-Air into Chapter 11. Wacker further told Paul

that they would agree to all of his terms if he would begin immediately.

Starting with the U.S. operations, he found Hydro-Air’s two facilities – Earth City and Baltimore – in good

shape. He moved on to Canada and then Europe, carefully examining each of their operations. Overall, the

operations were adequate, though bloated in some instances. In addition, some of the managers were, in his

opinion, not up to the task. Upon his return to the U.S., he delivered his report to the full Hydro-Air board,

telling them that if they could find the right person with both U.S. and international experience, and were

prepared to give that person a substantial ownership position and have the Moehlenpah family withdraw from

the business, it might have a chance to succeed. While Paul’s analysis was accurate, he deeply believed that it

was this final point that would spell doom for the company: Walter would never agree to give up ownership of

his company!

PAUL CORNELSEN

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CCOMINGOMING AABOARDBOARD

Within a few days, Fred Wacker once more contacted Cornelsen. “Paul, we want you to come back and take

over the company. We will make any kind of a deal necessary to do it. Just come back and let us talk before the bank shuts

us down.” Paul and his wife, Floy, talked at length about the offer. In the end, Floy convinced Paul that he

would be happier running something than being a consultant. He told Floy that he would give himself five

years to turn things around. After that, he would find a way to move on.

Paul laid out for the Hydro-Air board his demands: he would become Chief Executive of the company;

the family members would have to give up any position of employment with the company; the Board of

Directors had to be reorganized; the By-Laws had to be re-written; and there had to be a third-party financial

control prohibiting the majority shareholders from forcing a dividend. A key player in the final negotiations

was Charles (Gene) Dapron – an extremely talented attorney from Armstrong, Teasdale – who was the attorney

for Walter Moehlenpah.

On at least three occasions, Paul felt an agreement was at hand; only to have Walter back out at the last

minute. Each time, Dapron would counsel Moehlenpah and one obstacle or another would be resolved.

Ultimately, at the rate the company was going, Cornelsen was their last hope if they were ever to see a dime

from a sale. Finally, at the end of May 1982, the deal was completed.

CCREATINGREATING AA NEWNEW VVISIONISION

Cornelsen’s first official day was June 1, 1982. Arriving at the tired brick two-story structure on south

Vandeventer Avenue that served as Hydro-Air’s headquarters, Paul hoped for a smooth transition: but did not

expect one. Rather than take an office on the first floor with Walter, Paul cleaned up an old empty office on

the second floor and began to enact his plan to make Hydro-Air profitable. One of his first acts was to eliminate

items that were of little value to a company that was bleeding cash. The first of these was the firm’s Beechcraft

Baron airplane. Cornelsen contacted Armand Hinkle, chief of Ralston’s aviation group, and asked him to help

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sell the plane. In addition he sent lay-off notices to the firm’s two pilots – while at the same time asking Hinkle

to help find them new positions. The second item was a boat moored on the Mississippi. Ultimately, he was

able to sell both assets and eliminate those expenses from the bottom line.

With these issues out of the way, Cornelsen had to tackle some of the larger issues that had caused the

financial upheaval at Hydro-Air. Two of the issues were internal: the overhead on the new 60,000 sq. ft.

manufacturing facility and offices in Earth City, and the rent on the Creve Coeur office. Perhaps more

significant was the housing recession that began in the early 1980s. With Hydro-Air’s focus on the residential

market – and a 50% drop in sales as a result of the housing decline – Cornelsen had some very difficult issues

to address to make Hydro-Air profitable once again.

Cornelsen’s first post-acquisition conflict with Walter came on his third day on the job. Walter, knowing

full well that Cornelsen had grounded the plane and laid-off the pilots, told Paul he was taking the plane to a

customer site in Kansas City. While the

ensuing clash nearly ended with a

physical confrontation, in the end,

Walter relented, realizing that the

company was now Paul’s and that he

would have to learn to deal with that

reality.

One of the main obstacles that

needed to be overcome was the old way

of thinking that existed at Hydro-Air.

Cornelsen believed that there were a

number of good, reliable and SENIOR MANAGERS AT THE 1988 BUSINESS PLANNING MEETING

SEATED: PAUL CORNELSEN. STANDING L-R: BARRY GRIFFIN, HERB MCCURDY, RICK GRODSKY, MIKE CONFORTI, HUGO DU PREEZ.

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competent people within the organization. However, they had become accustomed to having Walter make all

the decisions, never being put into a position to do any creative thinking. Cornelsen knew that for the new

organization to grow and to be effective, the staff needed to start becoming more independent. For insight

into the company, Cornelsen turned frequently to Herb McCurdy, the Chief Financial Officer under

Moehlenpah for Hydro-Air. McCurdy provided key insight into the company that was valuable as Cornelsen

began to make decisions impacting the future of the firm.

RRIGHTINGIGHTING THETHE SSHIPHIP

Cornelsen knew that if the company was going to begin to be profitable, he needed to visit various

operations and ensure that they were on-board with his plans. He visited England first, where they were

reasonably profitable, before moving on to France and Germany. The British group had been hoarding cash

in advance of a capital spending project. He persuaded them to hold off on this, enabling them to repatriate

the funds to the U.S. parent. Moving on to France, he closed one of the two stamping operations and replaced

the French Board with an old ally from his Purina days. In Germany, he took away some of the perks available

to the staff and told them that they had to run the business on cash flow, while removing their ability to borrow

money from the bank. In Australia, he was able to remove the Board, have the Managing Director tender his

resignation,and put himself in as sole Director. Each of these moves had the effect of infusing cash into the

U.S. parent at a critical time, enabling Hydro-Air Engineering to stay afloat.

Upon his return to St. Louis, Cornelsen found that McCurdy had followed through on Paul’s request to

move his office from Vandeventer into the same building in Creve Coeur that housed the Hydro-Air business.

Shortly after this, Cornelsen also consolidated the Vickers distributorship, moving them into the same facility

as their warehousing.

Another key move was the removal of the plant manager at the Earth City manufacturing facility. The

once-profitable operation was now only rolling out inferior products compared to the competition, and at

33

prices that did not cover material costs. Cornelsen was able to eliminate many of these unprofitable agreements

as he began to formulate how to turn this portion of the business around.

After eighteen months at the helm, things finally began to turn for the better. Cornelsen had stopped the

bleeding and for the first time in years, Hydro-Air was in a positive cash flow, even booking a small profit.

TTHEHE BBIRTHIRTH OFOF MMIITTEKEK - 1986- 1986

Moving away from the Moehlenpah name was necessary if the company was to

move forward. While the Hydro-Air name was well known in the industry, its image

had been tarnished with the decline in the Moehlenpah business. Cornelsen felt that

the business needed a new identity. Paul’s Administrative Assistant, Judy Schroeder,

was key in how this next step came to pass. Judy was discussing the need to create a

new corporate identity with her son. She was explaining to him that the company was

a technology company: not high tech and not low tech, but right in the middle. He

suggested calling the company the Middle Technology Company. When Judy shared

this with Paul, he immediately grasped the concept, but felt that a shorter name was

needed. With that, MiTek was born.

TTHEHE SSOFTWAREOFTWARE VVISIONISION

By late 1982, having been in charge for several months, Cornelsen began to understand the intricacies of

the business and, more importantly, where Hydro-Air could position itself to make money. Like most

companies in the truss business, Hydro-Air was staffed with very competent structural engineers who could

supply customers with the specifications requested for their projects. In addition, Hydro-Air would tell

customers that if they “build to our design” and use our plates, Hydro-Air would guarantee the performance.

However, the existing Hydro-Air software - the DEC FORTRAN solution - was a run-of-the-mill truss

program when compared to others in the industry. Expensive to maintain, difficult for customers to use, and

lacking specific functionality, it was ranked in the middle among the 15 or so competitors in the market. A

JUDY SCHROEDER

CORNELSEN’S LONG-TIME

ADMINISTRATIVE ASSISTANT

34

new direction was needed if Hydro-Air was to move to the top of the ladder among truss suppliers.

Cornelsen envisioned a new and dramatically different way for computers, and their related software, to

be utilized within the industry. He understood that whoever had the best software could “own” the industry.

Cornelsen felt that by developing a proprietary software solution that could be used by his customers to validate

the calculations – and with a guarantee by Hydro-Air tied to the use of their products and design – that this

would give Hydro-Air the competitive edge he was looking for in the market.

This was, of course, the opposite of the direction Moehlenpah had been taking the company in software.

While he had invested heavily in hardware, the Hydro-Air software remained inferior to most of the

competition. To Cornelsen, if software drove increased sales of plates and machinery, Hydro-Air needed to

improve its position.

Then again, Cornelsen felt that just improving what was currently being used was not necessarily the

solution. He believed that MiTek needed to find the differentiation to make them unique in the market. He

spent many restless nights struggling over this, trying to find the key to the business. Finally, in late 1983 it

occurred to him that what MiTek needed to do was to develop a program – not merely use computers as

expensive calculators – where customers could easily enter their data and get the results they needed for the

project. In addition, the program needed to run on the new personal computers.

TTHEHE MMOEHLENPAHOEHLENPAH’’SS EXITEXIT THETHE BUSINESSBUSINESS

Under the original agreement when Cornelsen purchased Moehlenpah Engineering from the family,

Walter, his sons Donn and Arlo and their sister, Jocelyn, remained on the board. The family was eager to cash

out of the business, while Cornelsen had to ensure that the company had sufficient cash to close the transaction.

In 1985, Mellon Bank was brought in to perform an evaluation of the business. While the children were willing

to sell, Walter remained opposed. However, with some gentle persuasion from his attorney, and with the help

of his wife Virginia, he finally relented. With the business valued at approximately $9.5 million, less debt of

about $3.8 million, and the family holding 60% of the shares, the basis for the buy-back was completed. In

January 1986, an agreement was reached and MiTek bought back all the outstanding Moehlenpah family shares.

35

TTHEHE OONN-L-LINEINE DDATAATA EEXPERIMENTXPERIMENT

There was one company that appeared to have an edge in software. A Dallas firm – On-Line Data, Inc. –

was generally considered to have the best software in the industry. Owned by Dan and Camilla Hurwitz – both

graduate engineers in mathematics from Washington University in St. Louis – they were primarily software

programmers who offered their applications to truss manufacturers through computer timesharing. In addition,

they also had an engineering systems department that provided design services to truss

manufacturers. From all indications, On-Line had positioned themselves quite well to

take advantage of the growth in the housing construction market.

In the fall of 1983, Cornelsen approached On-Line to see if they might be capable

of adapting their software for Hydro-Air’s use. In order to share proprietary

information, Cornelsen purchased a 42% minority interest in On-Line. Next, he went

to Steve Cabler, a young engineer (today, Senior Vice President of Engineering and

Technical Services at MiTek) who had been with the company for about six years and

asked him to move to Dallas to see if there could be a marriage of the two businesses.

At the same time, Cornelsen moved much of the St. Louis engineering work to the On-

Line engineering department in Dallas. From an operational perspective, having

engineering close to software development made a great deal of sense.

Although this all seemed to make sense, what was not immediately apparent at the time was that having

the engineering service function controlled by a group separate and distinct from the sales group, and with

Hydro-Air holding only a minority position within the company, eventually created service difficulties.

To rectify this the engineering group was moved back to St. Louis to be close to the sales and management

team so the two could work together to deliver better service to customers during challenging times when

customer retention was critical.

Despite some initial success, it became apparent that Hydro-Air’s minority investment in On-Line would

not yield the results desired.

STEVE CABLER

HIS TIME IN DALLAS IN THE

MID-1980S AT ON-LINE DATA

CONVINCED CORNELSEN OF

THE NEED TO DEVELOP

CUTTING EDGE SOFTWARE.

36

By 1990, Cornelsen sold his interest back to Hurwitz for the same price. Despite this setback, the Hydro-

Air development and engineering teams had gained much knowledge from the relationship through the years,

eventually putting all of this into “game-changing” software products that would position MiTek as a leading

software development organization.

By early 1987, with the On-Line situation clearly not working as intended,

Cornelsen was more determined than ever to create the “game-changing” software

solution he envisioned. Cornelsen had a strong supporter in Cabler, now back from

Dallas, who remained enthusiastic about the concept of a program that would take

the engineer’s knowledge and place it into the computer.

TTHEHE BBIGIG GGAMBLEAMBLE

In April 1987, Dave McQuinn joined Hydro-Air in the software development

group. With a degree in computer science, McQuinn was atypical from most of

those currently developing software within the industry: namely, he was not an

engineer. This enabled him to look at the company’s software from a different

perspective. In the years to come, this would prove invaluable as Hydro-Air – and later MiTek – sought to

change the direction of software within the industry.

Cornelsen tasked McQuinn to develop a truss software solution that could run on a Personal Computer:

a PC. As odd as that may seem to us today – in 2011 – asking McQuinn to accomplish this in 1987 was a bit

of a leap of faith. PC’s of that day were slow, green-screen models, mostly running only DOS, or early versions

of Windows – the first version of Windows was formally released in November 1985. Yet, Cornelsen had a

strong belief that PC’s would expand and he was determined, with the help of McQuinn’s development group,

for MiTek to be ahead of the curve on this issue. McQuinn believed that a Windows-based solution would

allow users to use a mouse to click their way through tasks, such as laying out a truss. Furthermore, Windows

1.0 enabled users to run multiple applications simultaneously; something that was unheard of before then.

When Cornelsen allowed McQuinn to approach Microsoft about becoming a Windows Beta site, it set

DAVE MCQUINN

HE WAS INSTRUMENTAL IN SETTING

THE LONG-TERM IT STRATEGY FOR

MITEK SOFTWARE

37

the stage for future software development. This move was significant as MiTek

became an early adopter of the Windows environment in the truss industry,

enabling it to acquire many customers looking to team-up with an industry leader.

After attending a Microsoft Developer Conference, McQuinn literally picked up

the Windows Beta software and brought it back to St. Louis, where he and his

team began the process of developing the Windows product.

Over the next two years, with the help from a number of key individuals, and

a lot of trust that it could succeed, MiTek realized its goal.

A BA BREAKTHROUGHREAKTHROUGH: R: RUNNINGUNNING ONON AA PCPC

While the Windows development continued, McQuinn had another issue to deal with: finding a method

of taking the Hydro-Air PowerCalc FORTRAN code and making it run on a PC. After researching several

options, McQuinn found a FORTRAN compiler product for DOS – referred to as Leahy FORTRAN – that

could take the existing million lines of code and enable it to run on a PC. At the time, the maximum memory

for a PC was only 640K! This meant that the compiler had to take a large

amount of data and condense it to only 640K. This is somewhat akin to stuffing

five pounds of material into a one pound container. However, through clever

programming, the project was successful, enabling the Hydro-Air PowerCalc

product to run on a PC. Though the software was still being marketed as a time-

share solution, at least for Hydro-Air’s customers, the hardware platform was

now much more affordable.

This was a huge advancement for Hydro-Air, enabling the company to

provide PC’s and software to its customers, and thus gain significant market

share in the truss plate business. McQuinn recalls how he satisfied customer

orders during that period. With check in hand, he jumped into his car and drove

to the Forsythe Computers warehouse in Brentwood. Once there, he loaded his

THE “C” PROGRAMMING LANGUAGE

BOOK USED BY THE MITEK

SOFTWARE DEVELOPMENT GROUP AS

THEY MOVED AWAY FROM FORTRAN IN

THE DEVELOPMENT OF MITEK 2000.

38

car with the IBM 80286’s needed for the customer order. He drove back to MiTek, unpacked the computers,

and loaded PowerCalc on each one. After testing each one, he repacked them and shipped them on their way.

All a customer had to do was turn on the computer and it was pre-loaded and ready to begin running

PowerCalc. Customers were quite impressed with this process.

Despite the development of the PC solution, the Hydro-Air software itself had not been improved. The

development team had been able to extend the life of the software after being ported to the PC, but it continued

to lack the much-needed functionality to be ranked among the industry’s top software products.

For the next several years – 1988-91 – McQuinn’s group worked to improve the ease of use of the software,

while educating the sales force on how to position the software in the sales cycle. It was also during this time

that several outside factors began to influence how Hydro-Air’s customers would use the software, and the

manner in which architects began changing how they looked at truss configuration.

M&A AM&A ACTIVITYCTIVITY - T- THEHE GGANGANG-N-NAILAIL MMERGERERGER

In the midst of the drive to develop a new software solution, a new and

significant opportunity arose. For some time, Cornelsen had been toying

with the idea of acquiring their largest competitor, Gang-Nail. As noted

earlier, Cal Jureit’s patent on the truss plate was perhaps the single-most

important event in the truss industry as it changed the way every company

did business. Walter Moehlenpah’s breaking of the patent was another

huge event, however, it only enabled other firms to enter the fray. While

Gang-Nail and Hydro-Air were the largest firms in the industry, a number

of smaller firms competed quite well in niche areas.

Gang-Nail was twice the size of Hydro-Air, but not very profitable. Redland, PLC, an old, respected British

firm specializing in roof tiles and related products, was their parent company. Looking to expand into the U.S.

market, they acquired Gang-Nail in 1978. Cornelsen believed that since Redland had a lot of money tied up

in a company not considered part of their core business, they might be interested in listening to offers.

PPOWEROWERCCALCALC SSOFTWAREOFTWARE

THIS WAS THE BRAND NAME FOR THE

HYDRO-AIR TRUSS DESIGN PROGRAM

THAT WAS MARKETED FROM 1988 TO1995. ORIGINALLY WRITTEN IN

FORTRAN, THIS IS THE CODE THAT WAS

CONVERTED TO RUN ON EARLY IBMXT PC’S IN 1987. A CHARACTER-

BASED SOLUTION, IT WAS NOT

INTERACTIVE AND DID NOT HAVE A

GRAPHICAL USER INTERFACE (GUI).

39

However, in order to accomplish that, MiTek would have to go deep into debt, something he was not prepared

to do. It was at that time that fate played a role in the process.

In late March 1987, Carlos Rionda, president of

Gang-Nail, contacted Cornelsen and asked him if he

would meet with David Lyon, Managing Director of

Redland, in New York, for a very private meeting.

Over breakfast, Lyon proposed that Redland buy

MiTek and merge it with Gang-Nail. Cornelsen

would become CEO of the merged organization.

Lyon told Cornelsen that there was some concern

within Gang-Nail over MiTek’s minority interest in

On-Line Data, causing senior management to reach

out and approach Hydro-Air on the idea of a merger. Of course, to Cornelsen, this was the very reason Hydro-

Air was working hard on developing new software, in an effort to acquire new customers at Gang-Nail’s

expense! However, Cornelsen knew many of the key Gang-Nail management and was concerned that the new

attitude and entrepreneurship that now existed within MiTek might not survive under a merger as proposed

by Lyon.

Later that day, as Lyon was preparing to fly back to England, Cornelsen made a bold move. Instead of

telling him he would consider his offer, he told him that he was proposing that MiTek buy Gang-Nail. Since

Redland was also considering selling-off Gang-Nail, Cornelsen’s proposal was not dismissed. Lyon told him

he would take the idea back to his board for consideration.

As Cornelsen began discussions with his four key executives and MiTek’s general counsel Gene Dapron –

all of whom were in favor of moving the process forward – he received a call from Lyon. He told Cornelsen

that he was leaving Redland and moving to Bowater, another English firm, as Chief Executive. More

importantly, he wanted to continue the discussions to see if Bowater could be involved in the discussions with

Hydro-Air to buy Gang-Nail from Redland.

1988 POST-MERGER MEETING IN HILTON HEAD BETWEEN THE

HYDRO-AIR AND GANG-NAIL TEAMS. (L-R) ART SORDO, CLAUDE LACASSE, TOM MANENTI, MIKE CONFORTI

Cornelsen flew to London and met with Lyon at Bowater. MiTek would own 51% of the new company

and Bowater 49%. However, they did not know what the final numbers would be for the Gang-Nail acquisition,

as that needed to be settled with Redland. Finally, in November 1987, all parties gathered in Chicago for a

meeting where everyone hoped an agreement could be reached. After hours of discussion and a few last minute

posturing by attorneys for Redland, an agreement was reached. MiTek now owned Gang-Nail, with Bowater

a 49% owner in the new company.

CCULTURALULTURAL SSHOCKHOCK

Creating the merger on paper was quite different from bringing it to life on the street. Many customers

identified themselves as “Gang-Nail” or “Hydro-Air” and went so far as to not allowing the other rep on their

premises. In certain markets there was outright distrust and dislike for each other. In addition, customers used

their relationship with Hydro-Air or Gang-Nail as competitive advantages when selling to their customers.

What would happen to that with this new alignment?

Cornelsen and the MiTek Board decided not to attempt a merger of brands and names immediately. Instead,

both companies would operate under the MiTek corporate umbrella, creating the “Blue” and “Green”

Companies: Blue for Gang-Nail and Green for Hydro-Air. It even went the additional steps of having this

reflected on company business cards with the blue color that continued to be painted

on the Gang-Nail plates. This had the effect of reducing the angst many customers

were feeling, while beginning the consolidation efforts.

One of the first areas where consolidating took place was in the back-end of the

business, those areas that were not directly involved with customer contact, while

allowing the customer-facing areas to continue as before. With the two companies

continuing to operate independently, the initial savings in these areas were small,

though overall, neither business suffered significant customer losses; in fact, both

gained a few in the process. Cornelsen knew that without a complete merger, the

real savings sought as part of the merger could never be realized. However, in the

40

MIKE MCMANUS

THIS FORMER MONSANTO

EXECUTIVE WAS BROUGHT ON

BOARD BY CORNELSEN TO REFEREE

THE ISSUES THAT AROSE DURING

THE MITEK BLUE-GREEN

MARKETING PERIOD.

first year, over $2 million was saved through the combined purchasing of steel

alone. As the new engineering software was being developed additional

savings were soon-to-be realized. Things were beginning to fall into place.

Internationally, the issues were perhaps even more unique. While Hydro-

Air had an international presence in certain markets, their overall

effectiveness was poor in many European markets. On the other hand, Gang-

Nail was the de facto standard in a number of overseas markets. Each of these

issues would have to be addressed on a country-by-country basis. No one

believed it would be easy.

PPOSTOST-M-MERGERERGER SSOFTWAREOFTWARE MMEETINGSEETINGS

In mid-1988, shortly after the Gang-Nail and Hydro-Air merger was completed, a series of meetings were

held to discuss the future software direction. At one of the meetings, McQuinn approached Cornelsen with a

bold proposal: rather than try and “make” the current FORTRAN solution work, the company needed to

move in a different direction. It needed to rewrite the software. McQuinn

recalls his meeting with Cornelsen.

“He was not really hard to convince. Deep down, Paul knew that software was

the key to what we were doing. He just wanted to know two things: how long would

it take to get the product to market and what would it cost?”

At a subsequent meeting, held between the development groups from

Hydro-Air and Gang-Nail, the topic was which direction to adopt for the

future software development. There were at least three options: first, use

either the Hydro-Air or the Gang-Nail products as the primary solutions;

second, combine the best of both and go to market with a revised product;

and third, take a new direction entirely with a different programming model.

From appearances, there seemed to be little difference between the

41

JACK CASPER

THE FORMER GANG-NAIL CFOREMAINED IN THAT CAPACITY WITH

MITEK FOLLOWING THE MERGER.

REORGANIZATIONREORGANIZATION

AS PART OF A 1989

REORGANIZATION, CORNELSEN

FORMED THE NORTH AMERICAN

METAL GROUP, CONSISTING OF:

GANG-NAIL SYSTEMS, USA•

HYDRO-AIR ENGINEERING•

PANEL CLIP, USA•

GANG-NAIL CANADA•

MITEK MANUFACTURING, USA•

MITEK METALS RESEARCH•

ENGINEERING SYSTEMS•

DEVELOPMENT UNIT

“back-end” of either solution: both were written in FORTRAN; both had

a good, loyal customer following; and each lacked the more advanced

functionality, which was beginning to enter the market. One key difference

was the hardware platform. Gang-Nail’s AutoTruss ran on the Sun

MicroSystems, a UNIX-based solution on expensive Sun Workstations.

On the other hand, Hydro-Air had already taken steps to move PowerCalc

to the PC, a much more cost-effective hardware option that customers

seemed to prefer.

At the initial meeting, as one might expect, each software team viewed

their approach as solid. However, McQuinn, leader of the Hydro-Air team,

was formulating a totally fresh approach to the issue. Rather than attempt to combine the two FORTRAN-

based solutions, his vision was to do a complete rewrite in the C programming language. The Gang-Nail team

leader, Miguel Tellechea, had another vision; his desire was to keep the Gang-Nail AutoTruss program as it

stood and use it moving forward.

A factor in these discussions was likely based upon the perspective each group had going into the meeting.

Traditionally, most industry software – among all companies – was developed or designed by engineers.

Consequently, they were comfortable with a software language like FORTRAN, which was the standard in

that industry – though beginning to lose a following among the rising young software development teams

taking hold across the country. McQuinn, on the other hand, was coming at the issue from a computer science

perspective. His objective was to find the best solution for the task. While the Gang-Nail team did have a

good, solid product, the decision to move away from both of the FORTRAN-based solutions was in the best

interest of the newly combined company.

Beyond that, McQuinn had several factors to consider; first, what operating system was best for this new

software product. There were several to consider: O/S2 from IBM, Windows from Microsoft, DOS or

Macintosh. In the end, the mouse functionality and graphical capability of the Windows solution, along with

42

AAUTOUTOTTRUSSRUSS® S® SOFTWAREOFTWARE

THE MIAMI-DEVELOPED TRUSS

DESIGN PROGRAM FROM GANG-NAIL,IT WAS IN USE FROM THE LATE 1970SUNTIL THE MID-1990S. LIKE HYDRO-AIR’S POWERCALC, IT WAS GEARED

TOWARD ENGINEERING USERS.THOUGH BRIEFLY PORTED TO RUN ON

A PC IN THE LATE 1980S, THE HIGH

COST OF THE HARDWARE REQUIRED TO

RUN AUTOTRUSS, ALONG WITH THE

SOFTWARE ARCHITECTURE, LED TO

THE EVENTUAL ABANDONMENT OF

AUTOTRUSS AS A VIABLE PLATFORM.

the price of the PC’s on which it would run, was what sealed the deal. McQuinn’s instincts were also a significant

factor, and it paid off.

Cornelsen and his new key executive, Gene Toombs, discussed this approach, and once they made the

decision to proceed things moved quickly. McQuinn and his team of three programmers began to create the

new C-based product. Within a week, they completed the basic design and began to prototype the solution.

Within six months, they were showing the new product to groups at internal meetings. Finally, in April 1992,

they released the first version – MiTek2000 – to customers.

Over the next several years, the existing FORTRAN programmers were trained in writing C, as McQuinn’s

team continued to enhance the software, turning it into the premier solution in the market.

EEXITXIT SSTRATEGYTRATEGY

By 1990, having stayed nearly three years past his original “retirement” date that he had promised Floy,

Cornelsen began to consider who would succeed him in running the organization. The Bowater agreement

contained a five-year buyout option, lending additional credence that a succession strategy needed to be put

into place.

43

L-R: PAUL CORNELSEN, GENE TOOMBS, TOM MANENTI AND

ERIC PRIESTLEY, MANAGING DIRECTOR OF REXAM U.S.A.

Following the completion of the merger,

Cornelsen persuaded a number of key Gang-

Nail executives to stay with the new

organization. Carlos Rionda agreed to continue

running Gang-Nail, while Jack Casper became

the new MiTek CFO. Arturo Sordo remained

on-board after receiving assurances from

Cornelsen that he would give him an

opportunity to run the combined U.S.

Operations, while another key individual, Barry

Griffin, remained in charge of the Great Britain

operations. Cornelsen anticipated that the new

senior executive to run the combined companies would likely come from Gang-Nail, as they were the larger

and had the more seasoned staff. However, to his dismay, this did not materialize. Despite their individual

talents, when it came to leading the new organization Cornelsen did not believe that anyone showed great

promise. Consequently, he began to think more and more about looking outside of the organization.

TTHEHE MMANAN FFROMROM BBOISEOISE

As a member of Algonquin Golf Club, Cornelsen had been an occasional golfer, enjoying the company of

a broad group of friends and associates. One of the group had brought a young man out to play on a few

occasions and Cornelsen had met him several times. His name was Eugene Toombs. A vice president of Sonoco,

the packaging company, Toombs had also worked for Boise Cascade. As he moved up the corporate ladder

with Sonoco, they planned to have him move to their corporate headquarters in Hartsville, South Carolina.

Toombs was not entirely thrilled with the move, and began to see if other options were available to him.

Upon hearing of the news, Cornelsen contacted Toombs and invited him to lunch. Toombs had a terrific

44

DAVE MCQUINN (SEATED) DEMONSTRATING FEATURES OF THE NEW

MITEK2000 SOFTWARE TO SENIOR MANAGEMENT. (STANDING L-R) ART SORDO, GENE TOOMBS MIKE CONFORTI.

reputation as an outstanding salesman and leader. He was blessed with that rare quality whereby, when he

entered a room, he seemed to take control of the situation. He had charisma and an outgoing, smart personality.

While Cornelsen was obviously impressed, he wanted to see how sharp Toombs really was.

Over lunch they discussed many points, but finally, it came down to one thing that was critical for

Cornelsen: did Toombs have the insight and forthright attitude so important to him? Cornelsen asked Toombs

one final question: “What are your weaknesses?” Paul had a good idea of what the answer SHOULD be from

his discussions with those who knew Toombs; but he wanted to see what Gene had to say. To his credit, his

response was right on. He knew exactly where he could improve, what his business weaknesses were and what

was needed to complement them. Paul knew immediately he had his man.

However, rather than create a long term marriage, both agreed to give the position a “test period.” Paul

would have some specific tasks for Gene to carry out. If they proved successful, Gene would have the option

to continue in a senior position or to

resign. In either case, there was a

handsome bonus in it for Gene if he succeeded in this trial period. Toombs

officially joined MiTek in October 1989.

Toombs’ initial task was to take responsibility for the Wood Products

Division and make it profitable, or at least reduce the losses it was taking. At

the same time, he was to position the division to be sold. Over the next year,

Gene made contact with several prospective buyers before coming to terms

with Louisiana Pacific in July 1990. In addition, it was for a price better than

what it had been appraised for as part of Gang-Nail.

Following on this success, Paul appointed Gene head of U.S. and Canadian operations. Furthermore, he

began to accompany Paul on his international trips, providing Gene the opportunity to better understand the

global business. Cornelsen was setting the stage for the next significant step, the complete merger of the

businesses.

45

GENE TOOMBS

PPREPARATIONREPARATION MEETSMEETS OOPPORTUNITYPPORTUNITY

For decades, architects designed buildings – commercial as well as

residential – with a triangular design. However, the existing software within

the truss industry did not lend itself to improved productivity or

comprehensiveness in the design. By the late 1980s, architects were not

just designing simple truss configurations; they were designing complex

roofscapes: challenging the very heart of the truss design industry.

With the focus on hipped roofs, skylights, vaulted ceilings, attic room

spaces, turrets and other designs, architects began looking at how wood fit

together to form a virtually infinite variety of shapes rather than the

traditional triangle design. This required new, innovative software to match

the new design characteristics. Likewise, truss manufacturers needed

software that would design entire roof systems, not just individual truss

components.

Like other companies in the truss industry, early on in this cycle,

Hydro-Air had no valid solution for this new approach. The Hydro-Air

solution, like most others, remained a 2D solution. It would be a few years before MiTek would be able to

move beyond this limitation and begin to dominate the market.

In the fall of 1990, just before the merger of Hydro-Air and Gang-Nail under the MiTek logo, Toombs

had an epiphany. While he instinctively knew that software was important, it was not until then that he

understood the true value of owning the best software in the business. He went from being a believer to being

its strongest proponent.

46

TTHEHE BBEMAXEMAX AACQUISITIONCQUISITION: : A.C.E.S.A.C.E.S.

During the late 1980s, Bemax was selling a low-cost connector plate into the

market. However, it was not the plate that brought customers to Bemax; it was their

industry-leading A.C.E.S. 3D layout program. Most truss software developers,

including MiTek, continued to produce programs that displayed the layout in a 2D

format.

In addition, although PowerCalc was a fine product, it was primarily a roof-truss

solution. Early versions did not even address floor trusses! On the other hand, the

three-dimensional A.C.E.S. solution could model the entire house, a real breakthrough.

When customers compared the A.C.E.S. solution with others in the market, they were

willing to overlook the quality of the Bemax plate to get their hands on the software.

This situation did not escape the keen eye of the Toombs-led MiTek management team.

While initially viewed as an annoyance - since MiTek plates were clearly superior

- as Bemax continued to make inroads into the market as a result of their software, it seemed that a new

approach was needed. Aware that one of the owners had a Cuban background - as did MiTek Vice President

Art Sordo - Cornelsen asked Sordo to make the initial overture. However, despite their common heritage, this

approach did not prove successful. Not willing to back off, Cornelsen asked Jack Casper and Toombs to take

the lead. It was clear that MiTek needed the Bemax solution to become part of the MiTek2000 product.

Based in New Jersey, Bemax was owned by three individuals: Bernie Boilen, Max Diego and Mehmet

Ilter. Bemax was focused on their software and related services, while producing and selling connector plates

almost as an after-thought. Ilter’s son, John, along with his college friend Gilles Beauchacourt, were a pair of

young, sharp engineering graduates from the University of Miami who had developed the 3D product that

was getting all the attention. The Bemax owners had formed a separate software company – A.C.E.S. (Advances

Computing Engineering Specialties) – where the two college buddies continued to write and improve their

software product, also called A.C.E.S.

47

BARRY GRIFFIN

IN MAY 1989, GRIFFIN ASSUMED

THE ROLE AS COO OF THE

NORTH AMERICAN METAL GROUP.WHILE CORNELSEN HOPED GRIFFIN

WOULD DEVELOP TO LEAD THE

ENTIRE ORGANIZATION,HE EVENTUALLY RETURNED

TO ENGLAND.

In 1990, Cornelsen sent McQuinn to Miami to view the software and report back. McQuinn was very

impressed with what he saw. However, he viewed its value to MiTek in terms of the time it would take to

develop a similar product internally. Certainly, purchasing the product would save years of development time.

It remained for Cornelsen to determine the right purchase price. With Casper

and Toombs now negotiating with Bemax, it appeared that it would not be

long before A.C.E.S. would bear the MiTek logo.

Finally, in April 1991, Casper and Toombs struck a deal with Bemax.

However, the agreed upon price was somewhat higher than had been

previously discussed. Nevertheless, it was presented to Cornelsen for his

approval. In something of an unusual move for Cornelsen, he agreed to the

Bemax acquisition, even at a price that was viewed at the time as having been

over-paid. However, as time has proved, the Bemax purchase not only saved

significant and valuable development time, it proved to be one of the most

significant acquisitions in MiTek’s history. It was this purchase that marked the beginning of the market

consolidation strategy that propelled MiTek to the forefront of the industry.

MMANAGINGANAGING TTHEHE CCUSTOMERUSTOMER BBASEASE

As Cornelsen continued to evaluate the existing staff, he knew that there might be people outside of MiTek

who could help the company. One of these was a former president of Hydro-Air under Walter, Mike Conforti.

Cornelsen’s admin, Judy Schroeder, had worked for Conforti, so Paul asked her to contact him on his behalf.

After a series of wary meetings, Conforti returned to MiTek, heading up the Hydro-Air division. With many

customers still wary about Cornelsen, the hiring of Conforti was of significant benefit to MiTek. Conforti was

well respected within the industry, not just by existing customers, but also by many non-customers. His presence

at MiTek, leading the Hydro-Air subsidiary, provided the stability customers were looking for, causing many

to continue with a “business as usual” approach to MiTek.

48

MIKE CONFORTI

RETURNED TO MITEK TO HEAD

THE HYDRO-AIR DIVISION IN 1990.

EEXPANDINGXPANDING SSALESALES

Between 1981-84, Hydro-Air had a very competent sales force. They

could talk truss fabrication in great detail and were well respected by their

customers. However, many of them looked at the customer as “theirs” and

not as Hydro-Air’s. Cornelsen tried to change this mentality by putting whom

he viewed as a strong person in place as sales manager. However, just the

opposite occurred. With all of the changes taking place within the company,

a small group among the sales staff, unhappy with the anticipated changes,

began causing customer issues to arise. As a man who demanded trust and

loyalty, Cornelsen immediately made a change, moving a young sales

engineer, Dick Marriott (now President of MiTek USA), into the role as sales

manager over half the country. Marriott continued in this role for the next

year, before leaving the company in 1984. However, he would return to MiTek

in 1989, making his mark on the organization for the next twenty-plus years.

In 1991, when Toombs took over the new MiTek, he formed new Eastern, Central and Western divisions.

While the Western division was based in Sacramento, the Eastern and Central remained headquartered in St.

Louis. The goal of this reorganization was to allow more frequent one-on-one contact with customers, making

the MiTek sales team more aware of local market issues and in a better position to address them. In addition,

each division was staffed with its own team of engineering, design, technical support and sales. Tom Manenti

headed the Eastern division, Mike Conforti led the Central division, while John Hurder was over the Western

Division. In addition, each division staff was further trained on AutoTruss and PowerCalc, the two design

software programs currently marketed to customers, while work continued on the next generation software,

MiTek 2000, which was introduced in early 1992.

49

AARTRT SSORDOORDO

SORDO’S TIME AT MITEK WAS

PUNCTUATED BY SEVERAL

ACTIVITIES THAT PROVED

VERY BENEFICIAL TO MITEK.THE FIRST WAS HIS

INVOLVEMENT WITH THE

A.C.E.S. SOFTWARE

ACQUISITION, WHICH

PROVIDED SUBSTANTIAL

ENHANCEMENTS TO THE

EXISTING SOFTWARE

PRODUCTS. THE SECOND WAS

THE CONSOLIDATION OF THE

MANUFACTURING UNITS INTO

THE EARTH CITY FACILITY.

TTHEHE BBESTEST OFOF BBOTHOTH CCOMBINEDOMBINED INTOINTO OONENE

With this slogan, a new era began in 1991 as Hydro-Air and Gang-Nail

began the formal merger. In an aggressive 90-day campaign, they set about

combining literature, selling organizations and the marketing promotion under

the MiTek brand. The best of Gang-Nail and Hydro-Air were presented to the

market. This consolidation simplified manufacturing and warehousing, while

enabling engineering to provide more value-add to MiTek customers.

Toombs was heavily involved in planning this new rollout, and its success

further assured Cornelsen that his instincts about Gene were justified. Just before the rollout was announced,

Cornelsen made another announcement; he named Toombs President and Chief Operating Officer of the

corporation.

BBREATHINGREATHING RROOMOOM

The latter half of 1990 saw the economy fall into a recessionary period as the oil market spiked and the

Savings & Loan crisis was in its early stages. This carried over into 1991 as markets continued to fall and the

housing market slump continued. However, the sale of the Wood Products Division placed a large cash infusion

into MiTek, enabling the company to make key acquisitions that would have significant, long-term impact on

the organization.

TTRANSITIONRANSITION

During the last few years of Cornelsen’s tenure, he and Toombs spent a great deal of time strategizing over

what was needed for MiTek to move ahead of the competition. After naming Toombs president and COO in

1991, a great deal of their time together was determining the future strategic direction. With much greater

input from Toombs, Cornelsen began to turn more of this phase of the business over to Toombs; knowing that

in the end, it would be Toombs and not he, who would guide MiTek in the future.

50

DICK MARRIOTT

During the final years of Cornelsen’s time as Chairman, it was Toombs

who began to structure the acquisition plans that he and Cornelsen had

discussed previously. Ultimately, this was a good partnership as Toombs

had the energy and drive to undertake the ambitious programs, while

Cornelsen began to look toward the day when he would step aside for good.

With Cornelsen’s retirement, Toombs became CEO on January 1, 1993.

BBESTEST PPRACTICESRACTICES

In 1995, the first joint meeting of Hydro-Air and Gang-Nail

production groups met to discuss tool and die technology. Meeting in

Miami, FL., key production, tool and die, and management joined together

in a common goal: to find the best method of producing high quality plates.

This was a significant milestone as this was the first time that the

combined companies got together to review the existing tool and die technology to make connector plates and

determine the best direction for MiTek tooling going forward. There were many philosophies and approaches,

and the team worked for some time to come up with the best technology for MiTek connector plate tooling;

technology that, for the most part, is still in use today. As new connector plate companies were acquired over

the years, the best practices approach that came out

of the 1995 meeting were put into place for each

new company. It was this consistent methodology

that serves MiTek well as it produces what is

believed to be the best tooling and the best

connector plates in the industry.

51

A GA GREATREAT BBACKFIELDACKFIELD

DURING MANY OF THE DISCUSSIONS

WITH TOOMBS, CORNELSEN

FREQUENTLY NOTED HOW WELL THEIR

PERSONALITIES COMPLEMENTED EACH

OTHER. PAUL WAS THE CONSUMMATE

OPERATIONS AND NUMBERS GUY, WHILE

TOOMBS WAS MOST COMFORTABLE

WHEN IN FRONT OF CUSTOMERS.

CORNELSEN REFERRED TO THIS

SITUATION AS “MR. INSIDE AND MR.

OUTSIDE,” REMINISCENT OF THE GREAT

1940S ARMY RUNNING BACK TANDEM

OF GLEN DAVIS AND DOC BLANCHARD,

BOTH HEISMAN TROPHY WINNERS.

EEARLYARLY SSOFTWAREOFTWARE TTIMELINEIMELINE

1983 JOINT PROJECT WITH ON-LINE DATA

1987 MERGER OF HYDRO-AIR AND GANG-NAIL

1988 PORT POWERCALC SOFTWARE TO A PC

1989 ADOPTION OF WINDOWS 1.0

1991 ACQUISITION OF BEMAX / A.C.E.S.

1992 RELEASE OF MITEK2000

1996 MITEK BUSINESS APPLICATION (MBA) RELEASED

1998 MITEK VIRTUAL PLANT (MVP) RELEASED

52

C H A P T E R T H R E E

3MMOVINGOVING OONN

54

Under the terms of Cornelsen’s

agreement with Bowater, following the fifth

anniversary of the Gang-Nail merger, Bowater had the

right to become majority shareholders. Conversely,

Cornelsen and the other members of the Class A

Voting Trust could have requested that Bowater buy

them out anytime after the third anniversary, however,

no one wanted to exercise that option. Under terms of

the agreement, a Bowater Call for the stock would

value it at 100%, while if the option was exercised by

members of the Voting Trust, the stock would have a

lower value. The only caveat was that Bowater had to

be able to acquire 80% of the voting shares. That meant that Cornelsen was bound to sell his shares, while

other MiTek shareholders sold their shares as well. Another key part of the agreement was that Bowater had

to operate MiTek as a separate entity for at least five years.

In August 1992, Bowater informed Cornelsen that

they would be exercising their option on or shortly after

October 1992. They wanted to proceed with having the

appraisal of the business take place. Cornelsen selected

A.G. Edwards to perform the appraisal. A.G. Edwards

completed their appraisal in September 1992. The price

was established. Following a series of due diligence

reviews, a closing date of January 1, 1993 was set.

Bowater completed the purchase of 100% of the

outstanding shares of MiTek. Considering that theirPAUL AND FLOY CORNELSEN VIEWING ONE OF THE GIFTS

THEY WERE PRESENTED AS THEY TOURED EACH MITEK

FACILITY PRIOR TO HIS RETIREMENT IN 1993.

55

original investment in MiTek was $26 million, and the company had grown to a valuation of about $240 million,

it had to be one of the best investments they ever made.

For his part, Cornelsen had mixed feelings leaving the company he had spent ten years developing and

growing. He knew that he had an excellent management team in place, so there were no doubts in that area.

He had invested much in MiTek and he and Floy were now ready to enjoy their well-deserved retirement.

Cornelsen was also shrewd enough to know that when individuals have a vested interest in the organization

they will perform better. Part of his legacy is that he negotiated stock options for a number of key MiTek senior

managers, ensuring their long-term commitment to the company. In the end, this may be one of his lasting

legacies at MiTek.

In an odd twist of fate, just a little over a month after Cornelsen sold his interest in MiTek to Bowater,

Walter Moehlenpah passed away at the age of 85.

INVITATION TO THE RETIREMENT RECEPTION FOR PAUL CORNELSEN

56

T I M E L I N E O F E V E N T S

Diamond MachineryAcquisition

1994 1998 2001 2005 2007 2009 2011

MiTek becomes a BerkshireHathaway company.

Tom Manentipromoted to Presidentof MiTek Industries

MiTek acquires theKoskovich Company

Tom Manenti returnsto MiTek as Presidentand COO

MiTek introducesSAPPHIRE™Software

Remaining 50% of RexamNew Zealand acquired

MiTek forms joint venturewith Aegis Metal Framing

MiTek has operationson five continents

Dick Marriott promoted toPresident of MiTek Industries

MiTek hasoperations onsix continents

1 9 9 4 - 2 0 1 1

Gene Toombs announceshe is stepping down asPresident and CEO,remains as Chairman

MiTek acquires Tee-LokCorporation and AegisMetal Framing, LLC.

Tom Manentipromoted toPresident and CEO

S E C T I O N T W O

GROWTHGROWTH & & LEADERSHIPLEADERSHIP

58

C H A P T E R F O U R

4EEARLYARLY CCONSOLIDATIONONSOLIDATION

60

With the ascension of Gene Toombs as President and Chief Operating Officer

in 1991, and then CEO in 1993, it was not long before MiTek began to implement

a new product strategy that would set the tone for the future. Since Cornelsen knew

that he was bound by agreement to leave at a designated time, most of his decisions

focused on growing shareholder value for MiTek. That meant taking calculated risks,

while foregoing the more risky ventures, regardless of how potentially profitable

they might appear. However, Toombs was under no such constraints. His time at

MiTek was not pre-defined. Consequently, he set upon a bold, aggressive path, which

he believed would better position MiTek for the future.

IINDUSTRYNDUSTRY SSITUATIONITUATION

In the mid-1990s, there were two events taking place within the industry; both

of which needed to be addressed if MiTek wanted to assume a leading industry

position.

1996 SENIOR MANAGEMENT TEAM

L-R: STEPHEN FRAY (AUSTRALIA), RICHARD POOLE (NEW ZEALAND), TOM MANENTI,TREVOR JENKINS (ENGLAND) GENE TOOMBS, DICK MARRIOTT, ART SORDO, ANDY HYDE, CLAUDE LACASSE (CANADA), HUGO DU PREEZ (SOUTH AFRICA)

GENE TOOMBS

CHAIRMAN OF MITEK, INC.

61

First, there was a considerable amount of

consolidation taking place within the industry. Small

truss companies were being acquired by regional

organizations, who in turn were being acquired by still

larger national firms. Toombs reasoned that by

addressing the needs of the national organizations,

MiTek products would become the standard for their

entire company at each level.

Secondly, and for some time, Toombs realized that

the plate and machinery business remained highly

fragmented. Among the competition in the market was

a very diverse set of suppliers. Some produced quality plates; others produced inferior plates at low cost; others

supplied plates and machinery; still others produced inferior plates with good software, while others were

simply the low cost supplier to the market. How was MiTek to compete in this environment to become the

market leader?

Doing what he had always done, Toombs began visiting customers and non-customers to get from them

- first hand - the issues they faced and their thoughts about MiTek and the competition.

When visiting non-customers, he was impressed with the loyalty they felt toward their suppliers, especially

when it came to software. Often, the plates these firms supplied were inferior to MiTek’s products - many even

showed signs of rust - however, they were willing to accept this because of the ease of use of the software that

came with the plates. While some programs offered were only layout programs, a few were faster, with better

features, and often less expensive than what MiTek was offering.

On the other hand, when Toombs visited MiTek customers they expressed their loyalty to the organization,

but would add that they were aware of what the competition was offering and that they believed MiTek needed

to step up with more competitive products. Clearly, there was work to be done.

THE “BLUE-RIBBON” CONNECTOR PLATES

CCOURSEOURSE OFOF AACTIONCTION

Toombs surmised that there were two courses of action to address these smaller software and plate

organizations: he could attempt to drive the price down and remove them as competition; or he could make

an offer to buy them. While the first might be less expensive, it did not get MiTek what they wanted most

from the situation - the customer base.

Consequently, his plan consisted of two approaches: MiTek would begin to consolidate the industry by

bringing the best products and services into the fold through strategic acquisitions. Then, by evaluating where

each product fit within the overall strategic software plan, MiTek would keep what was useful and move the

remaining assets into a maintenance mode. Gradually he hoped that customers who came to MiTek as part of

the acquisitions would see that MiTek products, software and services were superior and move in that direction.

Secondly, knowing that software was a key to differentiation, he began to formulate plans to become the

leading provider in the market. However, rather than look at software as merely one of the business tools

available to the company, Toombs saw it as the key component to the company’s future, leading with it at every

opportunity.

The implementation of the strategy began with a targeted acquisition

approach focused on key competitors. Beginning with Bemax and Interlock

in 1991, these were followed by Truss Connectors of America (TCA) in 1992.

Of these three, the Bemax acquisition - and the A.C.E.S. software - which

was highlighted earlier, ultimately provided the most benefit to MiTek.

With a firm belief that MiTek must have the industry’s best software, from

1994 to 2011 MiTek remained focused on finding niche players with

successful products and/or services and targeted them for acquisition. The

aim of this being that the total solution offered by MiTek would bring the

62

BBEINGEING A GA GOODOOD SSUPPLIERUPPLIER

“WHAT WE WANT (OUR

EMPLOYEES) TO DO IS BASICALLY

UNDERSTAND THE CUSTOMER’S

BUSINESS FROM A SENSE OF HOW

YOU WOULD BE A GOOD SUPPLIER

TO THEM. IN PARTICULAR, WE

WANT THEM TO FEEL THE

CUSTOMER’S PAIN IF THE

SOFTWARE IS NOT CORRECT.”

GENE TOOMBS

APRIL 2006

highest value to its customers, while providing them the best long term solution for increased business activity

and longevity.

Another issue that needed to be addressed was that many customers, as noted previously, considered

themselves Gang-Nail or Hydro-Air customers. Even though the two former-rivals were now a single company

made little difference to them. Furthermore, although connector plate manufacturing – whether for Gang-

Nail or Hydro-Air – was consolidated in the same facilities, customers wanted to feel that their particular

“brand” remained unique to them. To satisfy this “brand ownership” among customers, a blue-stripe was placed

on Gang-Nail plates indicating their intended target customers. However, other issues arose among the

customer base that would be less easy to address.

Gang-Nail had frequently positioned their customers as “franchisees;” as though they had a guarantee to

an exclusivity with the product in their area. Being the talented salespeople they are, the MiTek sales force

began to persuade truss distributors to drop their

“other” plate and software business and begin using

MiTek’s. This upset a number of Gang-Nail and

Hydro-Air customers who believed that their

market area was being infringed. While not

wanting to upset existing customers, this strategy

was necessary if MiTek’s plate business was to grow.

POSITIONINGPOSITIONING

Toombs believed that having the combination

of the best products and the best software to

support MiTek’s customers would serve the

business best moving forward. As everyone would

63

THE EARTH CITY MANUFACTURING OPERATION IN THE MID-90S

come to know, this approach was not just an accurate

assessment; it was the key to becoming THE industry

leader.

In the final years of Cornelsen’s tenure, he, along

with Toombs, made strategic acquisitions that fit into the

MiTek family. The Bemax, A.C.E.S., and Interlock Steel

acquisition in 1991 and the 1992 TCA purchase helped

MiTek consolidate the plate business, further

strengthening the company’s role as the market leader.

With Toombs playing a key role in this strategy, it was

becoming clear that MiTek would become the 900-pound gorilla in the room before long.

Over the next several years, additional acquisitions took place in Australia, Europe, Africa, Canada and in

the U.S., as the strategy took a global approach to the industry.

When Cornelsen stepped aside in January 1993, Toombs continued looking for companies to fill-out the

MiTek product offering. The first acquisition in the post-Cornelsen era was Diamond Machinery Corporation

of Lansing, Michigan in 1994. A manufacturer of roller gantry systems, this product line was needed to

complete the MiTek assertion that it was a full-line solution for the industry. In 1998, Hughes Manufacturing

was targeted for acquisition and rolled into MiTek. Then in 2000, the remaining 50% of RexamNew Zealand,

was finalized.

During this period, MiTek was essentially in a “who do we buy next mode.” Executive sessions focused on

finding organizations that would be a good fit within the product strategy model, while not “bogging” down

the company by requiring a lot of fixing. By focusing on the core competency of MiTek, everyone’s eye

remained on the ball, ensuring that each subsequent acquisition would fit nicely into the big picture.

64

MITEK’S BOOTH AT THE 2009 BCMC SHOW

CUSTOMER FIRSTCUSTOMER FIRST

Toombs’ personality – along with his salesmanship and leadership skills – took him out of the executive

suite and right to the customer’s doorstep. An avid golfer, and someone who easily made the rounds at customer

receptions and who seemed to make any room seem smaller as he entered, Toombs had one driving goal with

his approach to customer service at MiTek: make the customer Number One!

With this principle clearly part of the MiTek philosophy, Toombs created the Customer Summit events.

Toombs would gather key MiTek staff – sales, software and engineering – to meet with customers at their site.

The focus of these meetings was to review customer needs, understand the issues impacting their business and

discover what they looked to MiTek to provide. In doing this, MiTek was able to get closer to each customer

and in the process develop systems and products to meet their needs. With the MiTek team sitting “on the

same side of the table” with the customer team, strong bonds and relationships were forged which ultimately

benefited both organizations.

Another key customer event was the Customer Appreciation Dinners, which took place annually at the

BCMC (Building Component Manufacturers Conference) show. From its early beginnings in 1990, within

two years, invitations to this event became among the most sought-after of all industry gatherings. It was this

customer-centric approach, driven by Toombs and melded into the entire organization, which may prove to

be his strongest and most lasting legacy.

REXAMREXAM

With the acquisition strategy moving forward, MiTek’s software development group continued to roll-out

industry-leading products. It seemed as though MiTek’s path was clear and that little stood in its way to

significant growth. Suddenly, a storm cloud appeared on the horizon, one which threatened to knock the legs

right from underneath the business. By 1995, Bowater, PLC had gone through a reorganization and had

renamed itself Rexam. As part of this new marketing effort, its Board had decided to return to their core

business: packaging products. The MiTek business - while very profitable - was clearly on the outside of this

65

model. From 1996 to 1999, Rexam divested itself of the majority of its non-core businesses, leaving only MiTek

and TBS Engineering in its Building and Engineering sector.

All of this had come as no surprise to Toombs and CFO Ron Burkhardt. As they attended numerous Rexam

meetings where the discussion turned to one or more of Rexam’s former divisions, which no longer fit with

the new corporate model and was placed on the auction block, they often wondered when the next name

mentioned would be MiTek’s.

However, the problem for Rexam - and MiTek - was that MiTek was very profitable; and while Rexam

wanted to divest itself, there were few takers willing to pay enough cash for the business. A few made offers of

stock transfers and the like, but in each instance, a deal could not be worked out to everyone’s satisfaction. As

a result, MiTek was placed in a limbo position: they knew Rexam wanted to sell the company, while at the same

time Rexam was not willing to authorize funds to continue the acquisition strategy. Delaying the continued

implementation of this key business approach might seriously harm MiTek’s future. One example of this took

place in 1999 involving Tee-Lok. Toombs approached Rexam regarding the Tee-Lok acquisition, which he

believed was critical to MiTek. However, with MiTek continuing to pour profits into the Rexam coffers, they

were reluctant to give Toombs the go-ahead.

While this frustrated MiTek’s

management, it enabled it to focus on another aspect of the acquisition

strategy: the consolidation of key multi-site component manufacturing

organizations. With a number of these now becoming significant MiTek customers, the business continued to

expand. While a number of larger competitors scoffed at this strategy, with many actually encouraging MiTek

to continue down this path (which they viewed as a poor business strategy), MiTek continued to be blessed by

a strong market vision, enabling it to invest in these areas well in advance of their future success. And, with

few exceptions, this strategy proved to be a key differentiator in which organizations would eventually succeed.

66

When viewing this period in MiTek history – when there was much uneasiness, along with significant

doubt about what MiTek would look like as a business following the anticipated sale - it was the ability of

MiTek’s senior management and Gene Toombs’ leadership to recognize where and when to invest in

technology, acquisitions and people before the competition – and to do so with an uncompromising attitude –

which likely made the difference as to where MiTek is positioned today.

67

68

C H A P T E R F I V E

5TTHEHE OORACLERACLE OFOF OOMAHAMAHA

From 1999 to 2001 Rexam continued to shop MiTek to prospective buyers. Potential suitors loved the fact

that MiTek continued to show good profitability; however, the deal being structured by Rexam either soured

them, or they lacked the cash to make the transaction happen. One strong prospect appeared in early 2001,

which everyone thought would finally be the one to make things happen. However,

despite everyone’s best efforts this deal also went by the wayside. Toombs and CFO

Ron Burkhardt were keenly aware of the situation they were in: constrained by Rexam

from making key acquisitions, which they viewed as necessary to long-term growth.

Their frustration became more evident each time they sat to consider another option.

Each knew that the “right” owner for MiTek was out there in the market. They had to

find some way to locate them. It was at this point that the hand of fate came forward.

While on a plane, Toombs happened to be reading an article in the February 19,

2001 issue of Fortune Magazine titled “The Value Machine” about Berkshire

Hathaway and its founder, Warren Buffett. In the article, Buffett noted that there were

six criteria necessary for any company they acquired. As Toombs read further, he realized

that each of Buffett’s criteria applied to MiTek. As he continued reading the article, Toombs had an epiphany

of sorts; perhaps Berkshire Hathaway might be interested in

acquiring MiTek!

When he returned, Toombs and Burkhardt met to discuss

if such a call might even be accepted by the man referred to

as the “Oracle of Omaha.” Believing that there was little risk

in the attempt, Toombs first contacted Rexam CEO Rolf

Borjesson, sending him a copy of the Fortune article and

suggesting that they attempt to arrange an introduction to

Buffett. Borjesson, though surprised by the move, had an

idea. Toombs’ initial reaction was to attempt to find an

70

MITEK CFORON BURKHARDT

ONE CAN ONLY IMAGINE WHAT WARREN BUFFETT

MUST HAVE THOUGHT WHEN HE OPENED

MITEK’S PACKET OF INFORMATION, ALONG WITH

A BUBBLE-WRAPPED CONNECTOR PLATE.

intermediary who would make the introduction

of MiTek to Buffett. Borjesson told Toombs that

he had just the individual in mind to make the

call into Buffett: Toombs! With that, Borjesson

gave the plan his blessing.

Calling upon his excellent salesmanship,

Toombs called Buffett’s office and spoke briefly

with his Administrative Assistant, gaining

valuable information in the process. Essentially,

put your information in writing and send it to

Buffett’s office. Toombs now had the information he needed to put together a presentation for Mr. Buffett.

Toombs set about drafting a letter to Buffett, while Burkhardt gathered the necessary documents to be

included in the packet. After they were satisfied that they had pulled together the proper information and were

preparing to send it off, Toombs had another idea: suggesting that they include a connector plate in the packet.

In doing their research, Toombs knew that Buffett was an investor in Gillette and that he likely would

understand the razor/razor blade analogy, with MiTek’s software being the razor. Toombs surmised that if this

did not get Buffett’s attention, nothing would. Burkhardt wrapped the plate carefully, even including a note to

beware of the sharp edges and sent it - along with the packet - off to Berkshire Hathaway’s Nebraska offices.

The letter was dated March 26, 2001.

In the early part of April, while vacationing in Florida, Toombs’ secretary, Barb Wilson, called and left a

message that Warren Buffett had called. Toombs was amused at first, believing that his staff was playing a joke

on him. When he called back and spoke to Barb, she assured him that indeed, Warren Buffett had called. The

connector plate had gotten his attention. Buffett wanted to learn more about the man and the company that

sent him a connector plate.

71

(LEFT) WARREN BUFFETT, CHAIRMAN OF BERKSHIRE HATHAWAY

AND MITEK CHAIRMAN, GENE TOOMBS

Toombs returned Buffett’s call and they spoke for some time. As Toombs and Buffett spoke, it was evident

that MiTek was of interest to the Omaha native, though as was his style, he continued to downplay his level of

interest. They ended up talking for over an hour about the business and about Gene’s vision for MiTek. Just

as important to Buffett, he asked Gene a number of

personal questions; about his family, where he was

educated and his other executive positions. Finally, he

asked a very important question: Would the current

MiTek management team stay? To each of these Gene

answered very candidly; and yes, he believed the MiTek

team would stay. Buffett would later relate that within

the first few minutes of their discussion, he felt that there

was a strong synergy present and he knew he wanted to

bring MiTek into the fold. True to form, once Buffett

makes up his mind, it did not take long for things to come

together. In addition, Buffett requested Toombs send a

packet of information to Charlie Munger, Vice Chairman

of Berkshire Hathaway, as Warren knew that Charlie had

some experience in building and engineering.

After some brief due diligence and two visits to MiTek by some Berkshire Hathaway staffers – along with

a team of accountants from Buffett’s outside accounting firm – a purchase price was established for MiTek;

though it was considerably below the original price Toombs initially presented to Buffett.

Toombs, who acted as an intermediary between Berkshire Hathaway and Rexam, presented the price to

Rexam, only to have the figure rejected. Rexam countered that MiTek had just purchased Hardy Frames and

they believed that this deal had not been considered in Buffett’s offer. With Rexam anxious to make the deal –

but also willing to hold out for a better price – they presented their counter offer to Toombs to take back to

72

WWARRENARREN BBUFFETTUFFETT’’SSSSIXIX IINVESTMENTNVESTMENT PPRINCIPLESRINCIPLES ININ 20012001

1. LARGE PURCHASES (AT LEAST $50 MILLION OF PRE-

TAX EARNINGS, UNLESS THE BUSINESS WILL FIT

INTO ONE OF OUR EXISTING UNITS)

2. DEMONSTRATED CONSISTENT EARNING POWER

(FUTURE PROJECTIONS ARE OF NO INTEREST TO US,

NOR ARE “TURNAROUND” SITUATIONS)

3. BUSINESSES EARNING GOOD RETURNS ON EQUITY

WHILE EMPLOYING LITTLE OR NO DEBT

4. MANAGEMENT IN PLACE (WE CAN’T SUPPLY IT)

5. SIMPLE BUSINESSES (IF THERE’S A LOT OF

TECHNOLOGY WE WON’T UNDERSTAND IT)

6. AN OFFERING PRICE (WE DON’T WANT TO WASTE

OUR TIME OR THAT OF THE SELLER BY TALKING,

EVEN PRELIMINARILY, ABOUT A TRANSACTION WHEN

PRICE IS UNKNOWN)

Berkshire Hathaway. Essentially, include the Hardy Frame acquisition in the price

and a deal could likely be completed. This put Toombs in the unenviable position

of having to call Buffett and tell him that his initial price needed to be adjusted -

upwards. Toombs was able to gain Buffett’s agreement that even at the higher

price, the deal made sense. Buffett, going against one of his sacred principles –

never renegotiating the previously agreed-to price – accepted Rexam’s revised

terms.

This exchange set its own unique mark in the Berkshire Hathaway history: it

is believed to be only the second time that Buffett agreed to renegotiate an offer previously submitted, showing

the high esteem with which MiTek was held.

Following Rexam’s approval, the deal was ready to be made. All that was needed was to ink the forms and

MiTek would join the Berkshire Hathaway family. A July 31 closing was established.

On July 26, Toombs faxed Buffett a detailed outline of his visit to MiTek. Not long after the note was sent,

Buffett faxed back his reply to Gene’s plans: “We’re in for everything! The schedule sounds great and all of us are

looking forward to next Tuesday!”

On July 30, the Berkshire Hathaway lawyers in California and the Rexam attorneys began a day-long

session to seal the acquisition. However, as time pressed on, the process slowed. Nevertheless, by mid-evening

the documents were completed and an agreement was met. All that was left was the formal wire transfer of

funds, which was to take place early the following day.

Toombs and Burkhardt, along with senior staff, had made plans to celebrate at dinner that evening.

However, as the session continued to back up, the dinner plans also were delayed. Finally, not really sure when

things would conclude, Burkhardt sent out for K.C. Masterpiece ribs. It would be a dinner not long forgotten.

The next morning, Gene arrived at Spirit of St. Louis Airport to await Buffett’s arrival. As Buffett’s

Gulfstream taxied to the gate, Toombs felt a surge of emotion come over him. As Buffett emerged from the

plane, the two hugged on the tarmac. Also on the plane were Buffett’s Administrative Assistant and and two

73

A TA TRUSSRUSS WWHATHAT??

DURING THE DISCUSSIONS WITH

BUFFETT, TOOMBS REFERRED TO

THE CONNECTOR PLATE AS A TRUSS

PLATE. UPON HEARING THIS,

BUFFETT COMMENTED, “I

THOUGHT TRUSSES WERE

SOMETHING THAT OLD MEN WORE!”

others that he brought along. The three of them jumped into a waiting

limousine to take them on a day-long tour of St. Louis, plus a little

shopping.

Meanwhile, Buffett and Toombs made the short trip to MiTek’s

Chesterfield offices, where Warren quickly settled into his role as the

new owner of MiTek. He toured the offices, greeting everyone and

taking-in the moment. All MiTek headquarters’ associates met with

him and he obliged by having his photo taken with each of them. After

some brief remarks to the assembled staff in the training center, Buffett

moved through the group, shaking hands and posing for additional

photos. To a person, they found him friendly, engaging and a genuinely

warm individual.

Later, a number of the senior management team joined Gene and

Warren for lunch in a conference room. When lunch was concluded, an overview of MiTek’s business was

presented, along with a financial review, and a demonstration of MiTek’s software. The last item of the day

was a discussion around pending acquisitions.

Traditionally, Buffett has a very hands-off approach to his businesses. He concludes that he would not

have taken them on if they were not talented, so why would he interfere at a later stage? One of the purposes

of Buffett’s visit was to discuss two pending acquisition proposals. Tee-Lok and Aegis Metal Framing had been

on the radar for months and were viewed as key acquisitions for future growth. Burkhardt and Toombs had

prepared a neat 3-ring binder filled with details on the companies, the dollars involved, the market potential

and the acquisition process. They placed the binder in front of Buffett. As he opened it, he casually thumbed

through the pages. Closing the binder he asked, “Do you expect me to read all this? Is there a last page?” Buffett

turned to Toombs, took a sip of his Cherry Coke, and said, “Do you want to do this deal?” Toombs replied, “Yes.”

To which Buffett countered, “OK, I’m in, let’s go!”

74

YYOUOU’’RERE NOTNOT ATAT THETHE LLIBRARYIBRARY??

GENE TOOMBS WAS IN BALTIMORE TO PLAY

GOLF WITH A CUSTOMER. HE HAD JUST

ARRIVED AT THE COURSE AND WAS TAKING

HIS BAG FROM HIS CAR WHEN HIS CELL

PHONE RANG. IT WAS WARREN BUFFETT.

“GENE, I’VE GOT A QUESTION ABOUT THE

DOCUMENTS YOU SENT OVER YESTERDAY.

SAY, WHERE ARE YOU?” TO WHICH GENE

REPLIED; “I’M IN BALTIMORE AT A GOLF

COURSE.” WARREN RESPONDED, “I KNEW I

LIKED YOU. MOST GUYS WOULD TELL ME

THEY’RE AT THE LIBRARY OR SOMETHING,

BUT WOULDN’T TELL ME THEY ARE OUT

PLAYING GOLF!”

With the day complete, all that was left was for the ladies to

rejoin Warren for dinner. Gene had arranged for Warren and his

entourage to dine at Morton’s – Warren is a lover of fine steak –

before heading to the airport for the short trip back to Omaha.

At the Berkshire Hathaway 2002 Annual Meeting, a summary

of acquisitions completed in 2001 was presented to shareholders.

Below is what Warren noted about the MiTek acquisition.

“A few days before last year’s annual meeting, I received a heavy

package from St. Louis, containing an unprepossing chunk of metal whose

function I couldn’t imagine. There was a letter in the package, though,

from Gene Toombs, CEO of a company called MiTek. He explained that

MiTek is the worlds’s leading producer of this thing I’d received, a

“connector plate,” which is used in making roofing trusses. Gene also said that the U.K. parent of MiTek wished to sell

the company and that Berkshire seemed to him the ideal buyer. Liking the sound of his letter, I gave Gene a call. It took

me only a minute to realize that he was our kind of manager and MiTek our kind of business. We made a cash offer to

the U.K. owner and before long had a deal.

Gene’s managerial crew is exceptionally enthusiastic about the company and wanted to participate in the purchase.

Therefore, we arranged for 55 members of the MiTek team to buy 10% of the company, with each putting up a minimum

of $100,000 in cash. Many borrowed money so they could participate.

As they would not be if they had options, all of these managers are true owners. They face the downside of decisions

as well as the upside. They incur a cost of capital. And they can’t ‘reprice’ their stakes: What they paid is what they live

with.

Charlie (Munger) and I love the high-grade, truly entrepreneurial attitude that exists at MiTek, and we predict it

will be a winner for all involved.”

75

CCLOSELOSE, , NONO MATTERMATTER WHATWHAT!!

AS BERKSHIRE HATHAWAY ANDMITEK WORKED

THROUGH THE ACQUISITION PROCESS, A

NUMBER OF LETTERS, FAXES AND PHONE CALLS

WERE EXCHANGED, SOME WITH RATHER

AMUSING SIDEBARS.

ONE SUCH NOTE WAS SENT FROM WARREN

BUFFETT TO GENE TOOMBS IN APRIL 2001. IN

PART IT READ: “THERE WILL BE NO FINANCING

CONTINGENCIES IN OUR CONTRACT – IT WILL CLOSE

IF THERE’S NUCLEAR WAR, IF THE DOW GOES TO

1,000 OR IF IT’S DISCOVERED THAT ALAN

GREENSPAN HAS FLED TO ARGENTINA, TAKING THE

GOLD OF FT. KNOX WITH HIM.”

Over the past decade since the acquisition, MiTek has called upon Buffett, on select occasions, to assist in

some very targeted customer marketing. In each instance, Buffett has not been just willing to assist, but goes

out of his way to make sure that the specific project is handled in the best manner possible.

2001-2012: A2001-2012: ASS A A BBERKSHIREERKSHIRE HHATHAWAYATHAWAY CCOMPANYOMPANY

In the 10+ years MiTek has been part of Berkshire Hathaway, it is evident that the marriage of the two

organizations has been good for both. From the perspective of Berkshire, it’s probably best to let Buffett’s own

words tell of their take on the success of the acquisition.

In his annual Letter to Shareholders in 2006, Buffett referred to MiTek

on several occasions: each with specific comments on how an organization

like MiTek has not only been a good fit for Berkshire, but continues to

deliver. “Charlie and I love it when we can acquire businesses that can be placed

under managers...who have already shown their stuff at Berkshire. MiTek, for

example, has made 14 acquisitions since we purchased it in 2001, and Gene

Toombs has delivered results from these deals far in excess of what he had predicted.

In effect, we leverage the managerial talent already with us by these tuck-in deals.

We will make many more.”

Later in the same 2006 Letter to Shareholders, Buffett provided a brief

summary of MiTek and the degree of success generated for Berkshire in

the first five years following the acquisition.

MiTek, a manufacturer of connectors for roof trusses at the time we purchased

it in 2001, is developing into a mini-conglomerate. At the rate it is growing, in

fact, “mini” may soon be inappropriate. In purchasing MiTek for $420 million,

we lent the company $200 million at 9% and bought $198 million of stock, priced at $10,000 per share. Additionally,

55 employees bought 2,200 shares for $22 million. Each employee paid exactly the same price that we did, in most cases

borrowing money to do so.

76

MMIITTEKEK’’SS “T“TUCKUCK-I-INN” D” DEALSEALS

WARREN BUFFETT IS A GREAT BELIEVER

IN ACQUIRING COMPANIES THAT FIT

NICELY WITHIN AN EXISTING

STRUCTURE. IN MITEK’S FIRST FIVE

YEARS WITH BERKSHIRE, 14

ACQUISITIONS WERE MADE, WITH EACH

FITTING VERY NICELY WITHIN THE

MITEK BUSINESS MODEL, WHILE

PROVIDING SIGNIFICANT VALUE TO

BERKSHIRE. THIS EARLY SUCCESS

ENABLED TOOMBS TO CONTINUE TO

SEEK OUT ADDITIONAL ACQUISITIONS -

20 ADDITIONAL PURCHASES SINCE 2006

– WHICH HAVE LED TO CONTINUED

GROWTH AND PROFITABILITY. IN ALL,

34 ACQUISITIONS...AND MORE TO COME!

And are they ever glad they did! Five years later, MiTek’s sales have tripled and the stock is valued at $71,699 per

share. Despite its making 14 acquisitions, at a cost of $291 million, MiTek has paid off its debt to Berkshire and holds

$35 million of cash. We celebrated the fifth anniversary of our purchase with a party in July. I told the group that it

would be embarrassing if MiTek’s stock price soared beyond that of Berkshire “A” shares. Don’t be surprised, however, if

that happens (though Charlie and I will try to make our shares a moving target).

During these past 10 years as part of Berkshire, Buffett has been, as Toombs noted in his Introduction, a

significant advisor to him and MiTek. Whether it was during the periodic business reviews in Omaha or a

golfing excursion with some of Buffett’s closest friends, Toombs – and along with him MiTek – continued to

benefit from the trust and confidence Buffett has rightfully placed in the MiTek management team.

77

BEING PART OF BERKSHIRE HATHAWAY HAS

ADDITIONAL BENEFITS, APART FROM THE

FINANCIAL STABILITY OFFERED BY BERKSHIRE’SRESOURCES. TOOMBS HAS JOINED BUFFETT

AND GATES SEVERAL TIMES AT AUGUSTA

NATIONAL GOLF CLUB. THESE PHOTOS ARE

FROM A 2008 OUTING. (LEFT-RIGHT) TOOMBS,MICROSOFT CHAIRMAN BILL GATES, WARREN

BUFFETT, MICROSOFT CEO STEVE BALLMER,PAUL ANDREWS, CEO OF TTI (ANOTHER

BERKSHIRE COMPANY)

ABOVE L-R: STEVE BALLMER, GENE TOOMBS AND BILL GATES.

78

C H A P T E R S I X

6PPLANNEDLANNED GGROWTHROWTH

BBEYONDEYOND TTHEHE CCOMFORTOMFORT ZZONEONE

During 2005 and 2006, with over two million housing starts nationwide, MiTek’s strong position in the

residential housing market, bolstered by the acquisitions of the previous years, began to pay huge dividends.

With the company’s strong focus in its core competency – residential construction – there seemed little need

to think about going outside MiTek’s strength. However, by 2007, as the economy began to experience the

beginnings of the current downturn – and with housing starts at a third of the 2005 levels – Toombs and the

management team sensed that it might be the right time to move beyond MiTek’s traditional markets.

However, this would not be the first time MiTek had looked to move outside of the residential market. In

1992, MiTek made its first step into the non-residential construction market by forming a light gauge steel

construction division. This turned into a joint venture with Dietrich (a division of Worthington Steel) in 2002.

MiTek acquired Dietrich’s interest in 2009 to gain 100% ownership of the business. By 2001, Toombs had

seen that another of MiTek’s sister companies within Rexam – TBS Engineering – had the type of business

that would fit nicely into a diversification model. With the Berkshire Hathaway acquisition underway, Toombs

briefly considered bringing this to Buffett’s attention. However, not wishing to do anything to jeopardize the

pending MiTek acquisition, he decided to wait. However, this pushed the diversification concept to the

forefront for future planning.

Following the Berkshire Hathaway merger, Toombs once more focused on shoring up MiTek’s core

business with strategic industry acquisitions – beginning with Tee-Lok – in early 2002. However, he continued

to keep a watchful eye on businesses that showed promise as a fit for his diversification strategy.

80

RESIDENTIAL

CONSTRUCTIONNON-RESIDENTIAL

CONSTRUCTION

DIVERSIFIED

INDUSTRIES

BUSINESS UNITS:

MiTek IndustriesHardy Frame

BUSINESS UNITS: BUSINESS UNITS:

100% OF REVENUES 0% OF REVENUES 0% OF REVENUES

M I T E K – G L O B A L M A R K E T S S E R V E D I N 2 0 0 2

The first acquisition that fit this model was TBS Engineering in June 2003, followed in January 2004 with

Tekmax, Inc., which fit into TBS. Both companies were highly successful, and profitable, in the battery industry.

Next among the diversification acquisitions was Hohmann & Barnard in May 2008, then Blok-Lok, Ltd., and

TMI Custom Air in October 2008. Blok-Lok fit nicely within Hohmann & Barnard, while TMI would become

its own segment within MiTek. In January 2009, the acquisition of the remaining portion of Aegis was

completed, followed in April 2009 by the purchase of SidePlate Systems, and in November 2009, Heat Pipe

Technologies came into the MiTek fold. The business segment was further strengthened by the Hohmann &

Barnard acquisition of Dur-O-Wal in April 2010 and then in April 2011, with their purchase of Sandell Industries,

Inc. In between these purchases, Rush Air in October 2010 came aboard under TMI, and then Battery Technology

Group – under the TBS Engineering umbrella – was completed in March 2011. Finally, the United Steel Products

(USP) purchase, also in March 2011, while within the residential construction arena, is both a retail and

distribution product - an area outside of MiTek’s traditional business model.

Where MiTek had been 95% focused on residential construction less than a decade earlier, by 2012, a full

30% of MiTek’s revenue was now from non-traditional market areas. This intentional diversification strategy

has enabled MiTek to continue to get “a leg up” in other areas and markets, such as the retail market with the

USP acquisition, that would have been unheard-of previously.

81

RESIDENTIAL

CONSTRUCTIONNON-RESIDENTIAL

CONSTRUCTION

DIVERSIFIED

INDUSTRIES

BUSINESS UNITS:

MiTek IndustriesUnited Steel ProductsHardy FrameZone FourSimpad

BUSINESS UNITS:

Aegis Metal FramingH&B/SandellTMI Custom AirSideplate SystemsHeat Pipe Technology

BUSINESS UNITS:

TBS Engineering

70% OF REVENUES 25% OF REVENUES 5% OF REVENUES

M I T E K – G L O B A L M A R K E T S S E R V E D I N 2 0 1 1

Utilizing this “product line extension” approach has enabled MiTek to offer a diverse range of products

and services for non-residential customers. The new portfolio addresses business segments in commercial,

institutional and industrial markets:

Structural

Masonry anchoring systems, flashing, waterproofing and vapor barrier products.•

Pre-fabricated cold formed steel trusses and wall panels.•

Structural steel frame connection technology for wind, earthquake, blast and progressive collapse•

applications.

Mechanical

Engineered custom air handling equipment for rigorous healthcare and industrial applications.•

Heat pipe technology for advanced dehumidification and energy recovery.•

A brief overview of these diversified businesses will provide insight into how they will continue to benefit

MiTek for years to come.

AAEGISEGIS MMETALETAL FFRAMINGRAMING

In 1992, the lumber market was in a tailspin. MiTek looked to diversify outside of

their traditional residential market. The metal frame industry - catering to commercial,

hospitals, education and the military - was targeted. A relationship was developed with the Dietrich company,

owned by Bill Dietrich. Over the next ten years, MiTek was, at various times, a customer of Dietrich and, at

other times, a competitor. In February 2002, MiTek formed a Joint Venture with W.D. Ventures, Inc.

(Dietrich), which by then had been sold to Worthington Industries, Inc. Later, in early 2009, MiTek acquired

the remaining share of Aegis, bringing it completely into the MiTek family.

The Aegis name came out of a discussion between Tom Valvo, President of Aegis, and the then-president

of Dietrich, Ed Ponko. Aegis was the legendary name for the shield of Zeus, the mythological greek god.

Referring to the shield as a protector, it was a fitting name to how the metal framing business is viewed in

construction.

82

TBS ETBS ENGINEERINGNGINEERING

As noted previously, TBS, like MiTek, was part of the Rexam

organization in 2001. With TBS reporting to Toombs, he knew

how profitable TBS was for Rexam. Less than two-years after the Berkshire Hathaway acquisition, Toombs

convinced Buffett that the acquisition of TBS – though clearly out of MiTek’s core area – would be an excellent

financial investment for the company. Results over the past 8 years have proven him right. With TBS being

the leading manufacturer of automated machinery for the battery industry, OEM suppliers to the major car

producers – Ford, Honda, BMW, Fiat – use one or more TBS products for processing their batteries. In

addition, most medium to large Uninterruptible Power Supply (UPS) systems in operation worldwide, use cells

that have been produced on TBS machinery. Based in the U.K., with a plant in Oregon, TBS continues to be

the industry leader in the battery machinery industry.

HHOHMANNOHMANN & B& BARNARDARNARD

The May 2008 acquisition of Hohmann & Barnard, a Long Island, New York-based company with three-

generations of experience serving the architectural, design and building

community as a leading manufacturer of reinforcement and anchoring systems for

masonry and stone, brought to MiTek the ability to broaden its product offering

beyond the truss industry. The broad line of H&B anchoring and flashing products enables MiTek to expand

its product offering into masonry, brick and concrete solutions for residential and commercial applications.

TMI CTMI CUSTOMUSTOM AAIRIR SSYSTEMSYSTEMS

Since 1982, TMI has been providing engineered solutions ranging from the rigorous extremes of

government research facilities to the health concerns surrounding the indoor air

quality of our nation’s hospitals. In addition to pre-piped and wired custom units,

TMI also provides complete factory assembled mechanical penthouses. Also part of

TMI is Rush Air, Inc. Rush Air provides custom pumping systems and chilled water

systems for commercial, industrial and institutional clients.

83

SSIDEIDEPPLATELATE SSYSTEMSYSTEMS

Since 1995, SidePlate has helped deliver hundreds of successful and

cost-efficient projects for the US Government, Military, Higher Education

and National Health Care Industry for wind, earthquake, blast and progressive collapse design environments.

SidePlate provides steel connection technology to help engineers design strong structural steel buildings with

open floor plans that are predictably fast and economical to construct with minimum foundation cost and steel

tonnage. These benefits are repeatedly realized because:

Stiffened connection system permits use of lighter beams and columns.•

Connections are prefabricated in the fab shop shortening construction schedule.•

No Complete Joint Penetration (CJP) welding, which equals no UT inspection.•

Diagonal bracing is eliminated thereby providing architectural freedom.•

HHEATEAT PPIPEIPE TTECHNOLOGYECHNOLOGY

HPT is the leading manufacturer of custom engineered heat pipe systems for the

commercial, institutional and industrial markets to facilitate energy recovery and advanced

dehumidification. HPT’s patented products are used in HVAC systems and are installed in

both new equipment and on-site retrofit. For over a quarter of a century, HPT has led the way with

revolutionary products that save energy and reduce indoor humidity for better indoor Air Quality.

UUNITEDNITED SSTEELTEEL PPRODUCTSRODUCTS

The acquisition of USP Structural Connectors from Gibraltar Industries in

March 2011 marked a significant expansion of MiTek’s capability to supply

structural framing and bracing solutions to satisfy critical aspects of wood-

framed structures in the residential and light commercial industry. USP’s product line is sold through

professional distribution centers, national building material supply companies, structural building component

manufacturers, and in home centers across North America. Based in Burnsville, Minnesota, USP has

maintained complete engineering and manufacturing capability to support builders, contractors and

professional designers.

84

SSUMMARYUMMARY

Since being acquired by Berkshire Hathaway, MiTek has:

Freedom to run the business to maximize shareholder value•

Financial wherewithal to grow the business via•

Acquisitions and•

Investments in software and production capabilities•

In addition, the Berkshire Hathaway name has opened doors to:

Major customer prospects and executives and•

Acquisition candidates.•

THETHE ACQUISITIONACQUISITION BYBY BBERKSHIREERKSHIRE HHATHAWAYATHAWAY HASHAS MADEMADE MMIITTEKEK AA FARFAR BETTERBETTER COMPANYCOMPANY

85

86

C H A P T E R S E V E N

7IINNOVATIONNNOVATION FORFOR TTODAYODAY’’SS CCUSTOMERUSTOMER

88

SOFTWARE AS A KEY BUSINESS DIFFERENTIATOR SOFTWARE AS A KEY BUSINESS DIFFERENTIATOR

As early as the late 1960s, organizations that had the vision to understand the impact software would have

on business began to develop strategies to take advantage of this new opportunity. However, for decades -

through the early 1990s for certain - most companies saw software as a collection of stand-alone programs;

most did not see the value in integration. To be fair, even most commercial software development companies

failed to see beyond the standalone program approach to the market.

While Walter Moehlenpah saw the value in having a computer make and validate the computations for

the engineering design, his vision stopped there. Paul Cornelsen understood that having the best software in

the industry, not just for computations but also for the layout, would put Hydro-Air – and later MiTek – in a

unique position.

However, Gene Toombs grasped the true potential of quality software. Toombs realized that software

would become the reason that customers would select MiTek over the competition. Providing programs to

support not just engineering and layout, but also management and production

needs, would give MiTek’s customers the competitive advantage needed to make

their business more efficient and more profitable. Quality software from MiTek

would become THE key business differentiation between MiTek and the

competition, and this differentiation, Toombs envisioned, would enable MiTek to

win the market!

Over the next several years, MiTek would continue to refine its software

development strategy. However, it would not be until 2008, when Toombs brought

Terry Nicholson out of the Enterprise Software Industry that the concept of a

completely integrated, modular suite of software in an end-to-end solution would materialize. Coming out of

the supply chain software market, Nicholson understood that integration within the software suite – and across

the supply chain – was the key to unleashing the true power of software within a market.

In the years leading up to Nicholson's hiring, his predecessor, Paul Pinsky, had made significant advances

“SMARTSCREEN”FOR CYBER SAW IN 1996

89

in software development at MiTek, introducing software engineering processes such as the Agile development

methodology, and creating Product Management and Software Quality Assurance groups within the MiTek

software team. All of these processes were already well founded in the software industry itself. But in cottage

industries like the component manufacturing industry, these processes were generally not part of their

development cycle.

THE EARLY APPROACH: AN ENGINEERING FOCUS THE EARLY APPROACH: AN ENGINEERING FOCUS

In the early days of the Hydro-Air software development, the focus was developing the best software needed

for the market at that time. That meant engineering software. The goal was to develop the best application

possible to apply the calculations needed to ensure that the structure being designed would perform as desired.

Little or no thought was given regarding the

overall design or layout of the structure.

This would come years later as CAD

systems came more into vogue. By the early

1980s, Hydro-Air sought-out the best

software available to drive down the costs

while improving functionality. Moving from

a mainframe-based, time-sharing solution to

a PC solution was a key advancement.

However, as noted previously, using the

same code – but on another hardware

platform - made it accessible to more customers, but did not improve the overall functionality.

The Gang-Nail / Hydro- Air merger in 1987 was driven, in part, by the concern of both companies that

the other was about to gain an edge in the software development area. Hydro-Air’s early partnering with On-

Line Data was done, in part, with the hope of gaining an advantage over the superior Gang-Nail solution; and

in the process, gain market share. On the flip-side, Gang-Nail approached Hydro-Air about a buyout as they

MITEK 2000 SCREEN FROM 1996

feared that a Hydro-Air merger with On-Line

would enable them to steal Gang-Nail customers!

It was as if all the stars were aligned at that exact

moment.

When Cornelsen informed Lyon that, instead

of accepting the proposed buyout, he would

attempt to purchase Gang-Nail, it turned the

industry upside down. Who could predict what

might have taken place over the past 24 years had

the reverse occurred and Cornelsen had accepted

Gang-Nail’s offer?

Nevertheless, the merger of the two organizations was beset with its own set of issues. Gang-Nail remained

committed to their FORTRAN solution running on a SUN platform. Since Gang-Nail was also in the business

of leasing SUN hardware to their customers - and they were so successful with this, that they were the single

largest SUN reseller in the country - they were reluctant to change their code or platform. However, with a

base price for the hardware around $30,000, small and medium size companies were effectively locked out

from using the software. The Hydro-Air approach, moving to a PC-based solution, was more viable, even with

their less than spectacular software.

For several years following the merger

in 1987, the Hydro-Air development team,

working at a feverish pace, produced

MiTek2000, with the initial release taking

place in 1992. It was a major leap forward

for the customer base, incorporating both

engineering and layout in one solution.

90

MITEK TEAM WITH BILL GATES AT MICROSOFT IN 2006.(L-R) DAVE MCQUINN, GATES, GENE TOOMBS, PAUL PINSKY

TRUSSFRAMER 3D SECTION VIEW

MANAGEMENT SOFTWARE - THE MBA STORY MANAGEMENT SOFTWARE - THE MBA STORY

Shortly after the release of MiTek 2000 Engineering and Layout in the early 1990s, MiTek customer’s

began asking for "management" software – enabling them to keep track of customers, orders, schedules,

invoices, and materials. Most customers used some standard accounting software

to handle general ledger, accounts payable, accounts receivable and payroll. Still

others used an outside bookkeeper to do these basic accounting functions. At the

time it was difficult, if not impossible, to find an "off the shelf" system for order

management, production scheduling, and inventory that was configurable enough

to handle the peculiarities of truss manufacturing. Clearly, they were looking to

MiTek to help them with a solution.

Unlike traditional bill-of-material

manufacturing, trusses are

manufactured more closely aligned

with job-shop manufacturing

methods. To meet this need, MiTek

embarked on its third major component of the MiTek 2000 suite:

MiTek's Business Application or MBA.

Given this new requirement McQuinn asked newly acquired

Engineer Gilles Beauchacourt to become the project manager for

the MBA component. Gilles had come to the U.S. from his native

France to study Civil Engineering at the University of Miami.

Following graduation, he joined the Bemax organization as a lead

software developer, working on the A.C.E.S. software application.

Gilles studied the requirements of the truss manufacturing industry

and ended up recommending that MiTek utilize Microsoft Project

91

WWHATHAT’’SS IINN A NA NAMEAME??

AS THE SAPPHIRE™ PROJECT BEGAN IT

ORIGINALLY HAD THE INTERNAL WORKING NAME

OF THE “FUSION PROJECT.” HOWEVER, IT WAS

DETERMINED THAT A DIFFERENT NAME WAS

NEEDED BEFORE INTRODUCING THE PRODUCT

TO THE MARKET. IN 2009, WHILE SENIOR VICE

PRESIDENT OF GLOBAL SOFTWARE TERRY

NICHOLSON WAS PRESENTING THE PRODUCT TO

MITEK’S INTERNAL GROUPS HE FREQUENTLY

ASKED THOSE PRESENT IF THEY HAD

SUGGESTIONS FOR A PRODUCT NAME.

FOLLOWING SUCH A MEETING IN THE UK,

SENIOR SOFTWARE ARCHITECT PAUL DAVIS

CONTACTED NICHOLSON AND SUGGESTED

SAPPHIRE™. AFTER BOUNCING THE NAME

OFF OTHER KEY STAFF, WHO EACH THOUGHT IT

WAS A TERRIFIC IDEA, THE SAPPHIRE™ NAME

WAS OFFICIALLY ADOPTED.

TERRY NICHOLSON

SENIOR VICE PRESIDENT OF

SOFTWARE OPERATIONS 2008-11

as the main component of the "Management System". Microsoft Project was a sophisticated (for the time)

application that could schedule work across multiple resources (such as saws and truss tables) and do a good

job of balancing workloads and predicting delivery dates. However, this approach was rejected by MiTek

management as being insufficient to handle the larger problem of truss order management and invoicing.

As a result, it was decided that MiTek would write a management application program from scratch.

McQuinn knew that a relational database was needed, and he was also committed to making it run on the same

hardware and operating system that MiTek offered for truss layout and design (i.e. Windows). There was only

one database management system available for Windows at the time - FoxPro – so MiTek acquired a copy and

began an evaluation. Not long after, FoxPro became the development environment and database manager for

the MBA program. McQuinn assigned the project to Oguz Tuna Yildirim, one of the

A.C.E.S. programmers who had been developing the A.C.E.S. DOS-based Wall

Panel program before the MiTek acquisition. Tuna, a native of Turkey, had

been recruited to the A.C.E.S. company shortly before MiTek acquired Bemax and

A.C.E.S. in 1991.

Tuna learned FoxPro, interviewed customers extensively, and was solely responsible for the design and

implementation of the first version of MBA. The software had great versatility; it could import the material

requirements (lumber and plates) from the truss design files, produce an invoice, and had a rudimentary

scheduling module. With development complete, MBA was marketed as an add-on to the core MiTek 2000

program, requiring an additional licensing fee. MBA was so successful – and so important in assisting MiTek

customers improve their market position – that the market share of the program grew from zero to over 50%

over the next decade. Today, it is still running order management and production functions of the business for

most MiTek customers.

PRODUCTION SOFTWARE - THE MVP STORYPRODUCTION SOFTWARE - THE MVP STORY

In October of 1997, one of MiTek's closest customers – Boozer Lumber, located in South Carolina –

approached Art Sordo at the BCMC show in Nashville. They had recently enlisted the services of an industrial

92

engineer named Ed Buck to improve their manufacturing productivity. Buck

analyzed the truss manufacturing process and had a vision of how

manufacturing could be improved and controlled through more formal

manufacturing systems and automation.

While most of the information needed to run Boozer’s manufacturing

was being delivered to the shop floor via stacks of paper, no electronic devices

(terminals or computers) were found on the factory floor. Buck's vision for

Boozer would require a significant investment in technology and software.

Art Sordo and Boozer’s Bob Jones struck a deal at the BCMC show:

Boozer would provide the industrial engineering and factory environment

necessary for MiTek to develop a factory management system. For its part,

MiTek would provide the required programming resources. The end result would be a manufacturing system

that Boozer could use exclusively for a specific time period. At the end of the exclusivity period, MiTek would

be free to market the system to other truss manufacturers.

Initially, the internal name of the system was Real Time Factory Management or RTFM. The MiTek

marketing department later changed the name to MiTek's Virtual Plant or MVP. Assigned to lead the project

for MiTek was Mike McMahon. Having grown up in the truss industry, McMahon had worked a variety of

jobs in truss plants from Nebraska to Illinois to Florida. During the two-year development period, McMahon

divided his time between his home office in Florida and Boozer’s truss plant in Columbia, S.C. The MVP

system came on-line at Boozer in 1999. After the exclusivity agreement had passed, MiTek implemented MVP

to additional plants across the U.S., steadily adding locations each year as the capabilities of the program

continued to grow.

eeFRAMEFRAME – 3D BEGINS IN EARNEST– 3D BEGINS IN EARNEST

In the late 1990s the MiTek 20/20 layout program – which was the Windows conversion of the

Bemax/A.C.E.S. program – had become well established within the MiTek customer base for layout of roof

93

OOUTSTANDINGUTSTANDING PPERFORMANCEERFORMANCE

IN HIS 2005 LETTER TO

SHAREHOLDERS, WARREN BUFFETT

ADDRESSED THE SOARING COST OF

STEEL IN 2004. “BY DECEMBER,

STEEL COSTS AT MITEK WERE

RUNNING 100 PERCENT OVER A YEAR

EARLIER. AND MITEK USES 665

MILLION POUNDS OF STEEL EVERY

YEAR. NEVERTHELESS, THE

COMPANY CONTINUES TO BE AN

OUTSTANDING PERFORMER.”

trusses in a 3D model. Still, some customers only used the 3D layout program for difficult structures and often

entered trusses one at a time in the truss design program, while floor trusses were almost always entered directly

into the design program. About 20% of MiTek customers also built wall panels in addition to trusses, with

MiTek providing a separate wall panel layout program that provided material take-off and construction

drawings necessary to manufacture interior and exterior wall panels. For most manufacturers, having a wall

panel program separate and distinct from the roof layout program was not a major problem as the two

businesses were typically operated as separate units. However, there was some duplication of work between

the two programs – especially in the area of describing the plan view of the structure.

However, computer technology, memory and CPU processing, was becoming powerful enough to consider

a single “whole house” program – one that would layout floor systems, wall panels and roof systems in a single

program and with a single digital model. This was the beginning of Building Information Modeling (BIM) –

although the industry would not use this acronym for several years.

The MiTek implementation of the “whole house” concept was created by merging the MiTek 20/20 Layout

program with the wall panel program into a single executable program. This program was named eFrame. To

accomplish this, MiTek developers took the best software design aspects of the Windows roof layout program –

menus, user interface, plane solving – and added the wall panel objects to the overall object model. The key

developers of eFrame were Peter Emsley and Steve Wyman – software engineers who had started in the U.K.

office and relocated to the U.S. headquarters in the late 1990s. They were able to produce, in a relatively short

period of time, an eFrame program that became the dominant 3D modeling software for roof layout, floor

layout and wall panels. eFrame replaced earlier products, from which it was derived, and continues to be the

production software used by many of the MiTek customers today.

The development of eFrame proved the concept of a whole house software package: that it was technically

feasible and that the marketplace would adapt to this new paradigm. But there was one more major piece of

functionality that MiTek wanted to implement beyond eFrame: Whole-house load transfer and design.

In 2001, the eFrame application was transferred to the OptiFrame joint venture project. The intellectual

94

property, as well as engineers Emsley and Wyman, were moved to Denver. As part of the joint venture, eFrame

was further developed and became the benchmark product for the next generation of whole house software:

OptiFrame / TrussFramer / SAPPHIRE™ Structure. But that’s another story!

TTHEHE OOPTIPTIFFRAMERAME JJOINTOINT VVENTUREENTURE - N- NEXTEXT GGENERATIONENERATION SSOFTWAREOFTWARE

In 2001, MiTek and TrusJoist Macmillan came together to form a joint venture with the goal of developing

the next generation of software for the residential housing industry.

The vision of this venture was to create a single, fully integrated, whole-house design program that would

be used by each group involved in the supply chain: architect, builder, engineer, lumber yard and the MiTek

Component Manufacturer. The joint venture resulted in the creation of a separate company located in Denver,

Colorado, OptiFrame Software. Each partner in the joint venture – MiTek and TrusJoist – provided staff,

software and funding for the new company. With this, the quest for the next generation, whole-house design

software began.

As news of the joint venture became public, and the whole-house design concept was announced, the

phones at OptiFrame began ringing furiously as customers, vendors and suppliers sought to take advantage of

this radical approach to the market. Clearly, the joint venture had found a significant need in the marketplace.

Unfortunately, it would take several years before OptiFrame would have a software solution ready for the

market.

Despite the premature press release for the

software, the project began to move forward

as the housing industry began to grow at an

unprecedented rate.

In October of 2007, the OptiFrame

software was finally ready for introduction into

the market. The original joint venture

agreement stipulated that there were to be

95

three versions of the new program. Javelin for iLevel customers – who had acquired TrusJoist – TrussFramer

for MiTek customers, and RealStructure from OptiFrame for joint customers of MiTek and iLevel. As these

programs made their way into the market, they were heralded as nothing short of revolutionary. While other

similar programs stopped with the engineer, the OptiFrame solutions incorporated the best of all of the

industry standard CAD programs, with the addition of a focus on the details required to actually make the

components and build the house! No sooner were these programs released to the market than a list of new

features requested by customers began to pour in to OptiFrame, keeping the development team busy for years

to come.

One premise of the joint venture was that the partners had to agree on any and all work performed by the

developers at OptiFrame. For the first several years this was an easy task. But as time went on and the program

developed, achieving this mutual agreement became increasingly more difficult. Consequently, in November

2008, the joint venture was dissolved with each partner taking the source code as it existed at the time, along

with half of the development team and half of the office staff. Essentially, each was free to continue development

as they saw fit. In the end, the OptiFrame joint venture was a clear success as it delivered to each partner a

world-class piece of software from which each could move forward.

A NA NEWEW SSOFTWAREOFTWARE MMODELODEL

As noted earlier, the hiring of SVP Terry Nicholson in 2008 marked a dramatic turn in the evolution of

MiTek software. Coming from the Enterprise Software Industry – and in particular the supply chain market –

Nicholson understood that integration of each software function was the key to unleashing the true power of

the MiTek solutions. Building on what his predecessor Paul Pinsky had begun – SQA, Product Management

Process and Agile Methodology – Nicholson was able to quickly develop a strategic software plan to bring

MiTek solutions to the marketplace in near record time.

As previously stated, software development in Europe took another path. Recognizing the need for a

product to meet the specific needs of Western Europe, the United Kingdom and Scandinavia, MiTek eventually

acquired CSC (Construction Software Center), a Swedish software firm well qualified to produce software for

96

the truss industry. This “dual software” approach, while not the ideal situation when approaching the market

from a global perspective, was likely inevitable, given the nature of doing business in Europe and their penchant

to do business with European firms.

However, the SAPPHIRE™ Suite, the most advanced software yet seen in the market, has been widely

received by the industry. With features similar to what is offered by commercial software programs, the

SAPPHIRE™ Suite is available to all MiTek customers.

TTHEHE SSECRETECRET PPROJECTROJECT

In 2005 with the OptiFrame project in full swing,

Pinsky and his team realized that MiTek’s management

program, MBA, was showing its age both technically

and from a feature perspective. Consolidation had taken

place in the industry and had occurred among many of

MiTek's customers resulting in multi-facility

component manufacturers and several large national

footprint businesses that required a level of capability

never envisioned when MBA was first developed. It was

determined that it was time to start on the next generation solution, just as had been done with the Optiframe

joint venture. However this time MiTek would do it alone. And there would be no press release until the

software was ready. In fact, the project would be a closely kept secret.

The first priority was assembling an international team of MiTek management software experts. This group

was based in MiTek’s Chesterfield office and for the first several years the team worked on the collection of

requirements from around the globe. This new management program would be a true global piece of software,

meeting the needs of all MiTek business units around the world.

Another early task was the development of a technical framework (based on the latest Microsoft

technologies) that could support an extensible program. Such a technology capability was required if the

97

SAPPHIRE™ IN THE RESIDENTIAL SUPPLY CHAIN

program was to be truly extensible. Also, the technical capabilities of most

customers was accelerating at an increasing rate, and it was the software

team’s vision that this next generation management program should be as

future-proof as possible.

It was in 2008, when Nicholson joined MiTek as head of software, that

the wisdom of this decision was proven. Nicholson adjusted the course of

the new management program from being a single, extensible program to

becoming a modular software suite – the SAPPHIRE™ Suite – with a new management program as one of

the suite’s modules: SAPPHIRE™Management.

Building on the processes Pinsky had introduced, it was the ease with which the technical framework

adapted to this adjustment that convinced the team that their technical approach was solid, perhaps passing

the first test of future proofing. With this confidence

the software team continued forward with the

development of the industry’s first truly integrated

software suite, one that would meet the requirements

of the day and beyond.

As this history is being written, the

SAPPHIRE™ Suite is entering its beta test period

with a variety of MiTek customers. With ongoing

deep-dive meetings investigating the rich

functionality and the high-degree of configurability of the SAPPHIRE™Management and the SAPPHIRE™

Suite, the development of the next generation of software for the component manufacturer is rounding the

final turn and is headed for the finish line.

So, where will MiTek software go from here? The rest of the Residential Supply Chain perhaps!

98

EEXTENSIBLEXTENSIBLE SSOFTWAREOFTWARE

A SOFTWARE DESIGN PRINCIPLE THAT

TAKES INTO ACCOUNT FUTURE

GROWTH. THIS IS THE ABILITY TO

ADD NEW FUNCTIONALITY WITHOUT

HAVING TO MAKE MAJOR CHANGES TO

THE BASIC SOFTWARE STRUCTURE.

MITEK SAPPHIRE™ SUITE

99

SAPPHIRESAPPHIRE™ SSOFTWAREOFTWARE SSUITEUITE

SAPPHIRE™ StructureSAPPHIRE™ Management

SAPPHIRE™ Materials

SAPPHIRE™ Viewer

SAPPHIRE™ Portal

SAPPHIRE™ Reporting

SAPPHIRESAPPHIRE™ ININ THETHE SSUPPLYUPPLY CCHAINHAIN

SAPPHIRE™ ReviewerSAPPHIRE™ SupplierSAPPHIRE™ Specifier

BBUSINESSUSINESS MMANAGEMENTANAGEMENT

MiTek Job Summary

MiTek MBA

MiTek Link

MiTek WorkFlow

InfoStar Database

CCOMPONENTOMPONENT DDESIGNESIGN

MiTek Engineering

OnLine Plus Engineering

PPRODUCTIONRODUCTION MMANAGEMENTANAGEMENT

MiTek CyberSort

MiTek JigSet

MiTek MVP

MiTek MVPWalkthrough

MiTek ShopNet

OnLine Plus Job Manager

SSTRUCTURALTRUCTURAL FFRAMINGRAMING

eFrame Layout

eFrame Panel

Power Tools

OnLine Plus Layout

100

MMIITTEKEK SSOFTWAREOFTWARE SSOLUTIONSOLUTIONS

WIREFRAME ILLUSTRATION CREATED USING SAPPHIRE™ STRUCTURE

EEUROPEUROPE

TrussCon

RoofCon

MiTek 20/20

FFUTUREUTURE EEUROPEANUROPEAN

SSOFTWAREOFTWARE

Pamir

AASIASIA-P-PACIFICACIFIC/A/AFRICAFRICA

MiTek 20/20

Optiflow

101

1983 JOINT PROJECT WITH ON-LINE DATA.

1987 ADOPTION OF WINDOWS 1.0.

MITEK PURCHASES GANG-NAIL. GANG-NAIL’S SOFTWARE – AUTOTRUSS – IS A SUN-BASED (OS)

FORTRAN SOLUTION.

1988 POWERCALC IS PORTED TO THE PC.

POWERCALC RELEASED AS A FORTRAN-BASED TRUSS DESIGN PROGRAM RUNNING ON A DOS/PC.

AUTOTRUSS IS RELEASED FOR THE PC. IT REMAINS FORTRAN-BASED, BUT IS CONVERTED TO RUN

UNDER DOS ON A PC.

1991 MERGER OF HYDRO-AIR AND GANG-NAIL.

MITEK ACQUIRED BEMAX AND A.C.E.S., A DOS-BASED PRODUCT. THE PRODUCT CONSISTS OF A.C.E.S.

LAYOUT AND A.C.E.S. ENGINEERING.

INTERLOK STEEL IS ACQUIRED BY MITEK. THEIR ILS SOFTWARE PROGRAMS ARE PHASED-OUT.

1992 A.C.E.S. IS RELEASED TO MITEK CUSTOMERS.

MBA (MITEK BUSINESS APPLICATION) FIRST RELEASED.

MITEK 2000 ENGINEERING IS RELEASED.

MITEK 2000 V.1, RUNNING UNDER MICROSOFT WINDOWS 3.0, IS RELEASED.

1993 A.C.E.S. LAYOUT IS CONVERTED TO WINDOWS. THE PRODUCT BECOMES MITEK 2000 LAYOUT.

1995 MITEK2000 IS CONVERTED TO 32-BIT FORMAT RUNNING UNDER WINDOWS 95.

MITEK2000 ENGINEERING IS RELEASED GLOBALLY. BASE PRODUCT IS CUSTOMIZED AND RELEASED IN

EUROPE, SOUTH AFRICA, AUSTRALIA AND NEW ZEALAND.

1996 MITEK2000 IS RE-BRANDED MITEK 20/20.

MITEK BUSINESS APPLICATION (MBA) IS RELEASED.

1998 MITEK EUROPE ACQUIRES CSC SOFTWARE OF SWEDEN.

1999 MITEK VIRTUAL PLANT (MVP) VERSION ONE IS RELEASED.

2000 EFRAME IS RELEASED. THIS IS THE FIRST MERGER OF THE WINDOWS WALL PANEL WITH THE A.C.E.S. ROOF

LAYOUT PROGRAMS.

2001 MITEK ACQUIRES TEE-LOK. THE TEE-LOK SOFTWARE IS PLACED IN MAINTENANCE MODE.

2002 MITEK 20/20 RELEASED.

2006 MITEK BUSINESS ACTIVITY (MBA) IS CONVERTED TO RUN ON A MICROSOFT SQL DATABASE.

2007 MITEK TRUSSFRAMER, DEVELOPED BY OPTIFRAME SOFTWARE, IS RELEASED.

2010 MITEK SAPPHIRE™ SUITE IS RELEASED.

2011 MITEK SAPPHIRE™ MANAGEMENT / SAPPHIRE™ SUITE BEGINS BETA PROCESS

MMIITTEKEK SSOFTWAREOFTWARE TTIMELINEIMELINE

TTHEHE MMACHINERYACHINERY BBUSINESSUSINESS - P- PLUGGINGLUGGING HHOLESOLES

When combining Gang-Nail’s and

Hydro-Air’s machinery plants, Cornelsen

brought together the industry’s best hydraulic

fabricating machines, however, he still lacked

the best sawing equipment and roller

fabricating machines.

In 1989, the gap in the saw business closed

when Cornelsen combined the Gang-Nail

Idaco International and the Hydro-Air-

DePauw Hex Cut capabilities to produce the

Easy Set Saw. This was the first game-

changing MiTek

machine that set the tone for future machinery development. To ensure additional

reliability, the Easy Set Saws were developed with the Giddings & Lewis hardware

and software platform, used in CNC machines around the world and recognized as

the standard in the industry. Also in the 1990s, the plant ramped up from one saw

every other month in production to one saw a week; completing over 300 Easy Sets,

making it easily the most successful machine in the history of the truss business up to

that point. Filling the gap that existed in the roller equipment area took a few more

years, but by 1994, the target company had been identified. The purchase of Diamond

Machinery that year enabled MiTek to position itself as a full-service machinery

supplier for the first time. With these products now in place the MiTek sales team

seized the moment, as they were able to sell entire plants all of their equipment needs,

filling the growing demand for plant automation within the industry.

102

THE FIRST MITEK COMPUTER CONTROLLED SAW, THE EASY SET

BOB LEPOIRE

SENIOR VICE PRESIDENT

THE ACQUISITION OF HIS

COMPANY, DIAMOND

MACHINERY, WAS A HUGE LEAP

FORWARD FOR MITEK IN THE

MACHINERY BUSINESS.

Toward the end of the 1980s, with the Easy Set evolution in full swing, the need

for computer control of this device became apparent. In 1989, Easy Set 2000 was

released to the market, followed by the Easy Set 3000 in 1992 and the Easy Set 4000,

MiTek’s first fully automated saw, in 1994. Each of these utilizing Giddings and Lewis

computer controls. This advancement in computer control took the proven technology

of the Easy Set platform and lowered the setup time from 4 minutes to only 15 seconds,

further solidifying MiTek’s position as the leader in the machinery business.

DDIAMONDIAMOND MMACHINERYACHINERY

The acquisition of Diamond Machinery marked a significant milestone in MiTek’s

history. Prior to this, MiTek was unable to market itself as a “one-stop-shop” for all

things in the truss industry; the reason for this is that it lacked a roller gantry machine.

When MiTek went searching for a company to bring into the fold, the Michigan firm

seemed to fit the bill. Founded and owned by a former

Michigan State graduate, Bob LePoire, Diamond brought

significant innovation to the machinery business. LePoire

continually looked for ways to drive down the production

cost by the better utilization of technology. Some of his innovative solutions

continue to lead the industry to this day. In the end, bringing the Diamond

Machinery products into the MiTek family completed the product mix.

CCYBERYBER SSAWAW

The development of the new Cyber Saw in 1996, marked an upturn in the

manufacturing division. Beginning with Art Sordo’s vision for a new saw, he

assembled an outstanding team, led by Jose Andrade, Manufacturing

Engineering Manager, with outstanding support from individuals such as Randy

103

BILL WATSON

HIRED BY PAUL CORNELSEN IN

MARCH 1998 AS DIRECTOR OF

HUMAN RESOURCES, BILL HAS

THE DISTINCTION OF BEING THE

FIRST MITEK EMPLOYEE HIRED

FOLLOWING THE 1987 MERGER

WHO DID NOT WORK FOR EITHER

HYDRO-AIR OR GANG-NAIL

IN 1992, HE TOOK ON

RESPONSIBILITY AS DIRECTOR OF

MANUFACTURING FOR THE

EARTH CITY FACILITY, HOLDING

THAT POSITION UNTIL 2000.

GENE TOOMBS IVSENIOR VICE PRESIDENT

OPERATIONS

UNDER HIS LEADERSHIP, THE

MANUFACTURING BUSINESS

CONTINUES TO LEAD IN

INNOVATION AND PRODUCTIVITY.

Mabery and Bryan Stieglitz, as an

entirely new computer controlled

system was developed, supported by

leading-edge technology and software.

Featuring a touch screen display and

self diagnostic maintenance screens –

so important to many MiTek

customers – the new saws quickly

exceeded customer expectations upon

their installation. With 22 axes, each computer-controlled, the Cyber saw was clearly on the cutting edge of

truss technology.

The Cyber Saw developed into a series, with additional products becoming part of the line. These included

the Smartset and Smartset Pro saws. Saws continued to be sold at a fast pace with the 100th Cyber Saw

delivered to a Canadian customer in April 1999, while unit number 200 shipped in July 2000, just 15 months

later! In 2001, the 200th saw in the series was delivered to a customer in Jamestown, California, for one of

their new plants. In addition, June 2000 also marked a milestone in the RoofGlider product, with the 100th

unit shipped to a customer in Wisconsin. Introduced

in 1998, the RoofGlider was the first trackless roof

truss roller system in the industry. Units have been

shipped throughout the U.S., Hawaii, as well as

Europe, Australia and Canada. MiTek manufacturing

continued to produce new and better products year

after year. In the roller gantry area, MiTek sold more

roller gantry systems in less time than anyone else in

the industry. The Cyber Saw series are in place

104

THE ROOFGLIDER TEAM CELEBRATING THE DELIVERY OF THE 100TH UNIT.

THE SMARTSET PRODUCTION TEAM IN 1996

across the U.S., Canada, Australia, Europe and Japan.

At the 2000 BCMC show, MiTek - as was generally the situation – took center stage as they introduced

new machinery and software solutions to its customers. The first of these, the MiTek JackRabbit™ Coil Fed

Joint Assembly Machine, offered

touchscreen setup and controls, making it

the fastest, easiest, and most efficient way to

produce open end jack trusses. It was also at

this event where MiTek 20/20

“PerfectVision”™ was announced as the

replacement for MiTek 2000.

PPLATELATE MMANUFACTURINGANUFACTURING

Midwest connector manufacturing

moved from Earth City, MO to Columbia,

105

THE NEW CYBER SAW, INTRODUCED IN 1996, WAS THE MOST

TECHNOLOGICALLY ADVANCED PIECE OF CUTTING EQUIPMENT AT THE

TIME. DEVELOPED BY AN OUTSTANDING PROJECT TEAM, THIS POSITIONED

MITEK AS A LEADER IN COMPUTER-CONTROLLED CUTTING TECHNOLOGY.

THE CYBER SAW PROJECT TEAM IN 1996 THIS TEAM PRODUCED THE FIRST SAW SHIPPED TO FRANCE.

THE CYBER SAW SOFTWARE

DEVELOPMENT TEAM:L-R: RODGER KELLEY, BILL HOWARD,JOSE ANDRADE, MIKE BOUCKAERT,

BOB LEPOIRE, JIM CARROLL, BRIAN STIEGLITZ

MO, in 1995, mainly to free up space for machinery production at the Earth City facility. In addition, the

move enabled connector manufacturing to double the size of their operation, allowing them to keep up with

increasing demand. However, by mid-2008, with the housing market in decline – resulting in the

underutilization of the Fountain Lakes machinery facility – and an expiring lease on the Columbia, MO plant,

the decision was made to move the plate stamping operation back to the St. Louis area. With a strong workforce

already located at Fountain Lakes, and the facility owned by MiTek, the decision was made to consolidate both

operations at Fountain Lakes in July 2009, which is normally a slow production month. However, a sudden

rise in demand for connector plates that summer saw MiTek’s three other plants (Tampa, Phoenix and Edenton)

step forward and fill the void created by the lack of production at Columbia. The move went off as planned

and by the winter of 2009, the presses were back up and running.

In 1999, the connector manufacturing site in Phoenix also looked to expand their operations as they moved

and doubled their space as well. Then in June 2001, the Miami stamping operation relocated to a new facility

in Tampa. The 300-mile move offered a significant increase in space, allowing the plant to operate more

efficiently and make more effective use of plant resources. Nearly double the size of the Miami facility – 100,000

sq. ft. compared to just 55,000 sq. ft. – the new space allowed

the addition of additional stamping presses, a new slitting line

and plenty of storage for steel coils. Furthermore, barge

traffic down the Mississippi was able to make the move to

Tampa much easier, enabling shipments to travel by water,

rail and highways to meet customer demand.

The acquisition of Tee-Lok in January 2002 added their

plate stamping operation – based in Edenton, North

Carolina – to the MiTek family. The addition of this fourth

facility to the connector plate business enhanced MiTek’s

ability to meet customer demand for high-quality plates.

106

U.S. AND CANADIAN STAMPING PLANT MANAGERS IN 2002(FRONT L-R): BILL ANDERSON (EDMONTON), JOSE IBARRA

(TAMPA), MARCELINO MARTINEZ (TAMPA), ANDREA

SAFFLES (PHOENIX), GORDON CARTER, SR. (CANADA)GORDON CARTER, JR. (CANADA), IAN MARSH. (BACK) JACKBAER (PHOENIX) BOB LEPOIRE (ST. LOUIS) GREG FINN

(COLUMBIA), TODD ASCHE (COLUMBIA).

KKEYEY AACQUISITIONSCQUISITIONS

On January 16, 2003, the acquisition of Production

Conveyor Systems, LLC (PCS) of Columbia, Missouri

was announced. A leading supplier of wall panel

machinery and material handling systems, PCS became

part of the newly-formed wall panel division. This

acquisition enabled MiTek to offer customers a full

spectrum of wall panel solutions.

Another key production component arrived at MiTek

in June 2003 with the acquisition of Calgary-based Pacific

Automation, Ltd. Specializing in designing and building

manufacturing equipment for the roof truss industry

worldwide, Pacific Automation had a solid reputation within the component manufacturing community.

In December 2004, one of MiTek’s fiercest’s competitors, The Koskovich Company, also saw it move into

the MiTek family. Besides bringing a quality line of automated component cutters into the MiTek product mix,

the Koskovich staff brought some of the best in driving a high level of customer satisfaction. Founded by Jerry

Koskovich in 1973, the Rochester, Minnesota company provided consulting and engineering services to housing

and building authorities, along with third party inspections for truss manufacturers.

In 2006, the expansion of the manufacturing division continued with the acquisition of Robbins

Engineering in January. Located in Tampa, FL., Robbins was a diverse organization, offering a complete line

of connector products, truss manufacturing and material handling equipment, truss design and plant

management software, and also provided licensed professional engineering services. Under MiTek, the plan

was for Robbins to continue to operate as a separate company, maintaining its brand, software, engineering

support services, and manufacturing facilities. Nevertheless, changes in market demand caused the eventual

closure of all of the former Robbins operations, except for the software and engineering units.

107

2011 MANUFACTURING LEADERS

(FRONT L-R): GENE TOOMBS IV (ST. LOUIS), RYAN COOK (AEGIS

EDENTON), JOSE IBARRA (TAMPA), GORD CARTER (CANADA),DAVE BECKEL (ST. LOUIS). (REAR) DENNIS SCHIEFFER (MITEK

MACHINERY), JUSTIN NEIL (CANADA), JIM HUFF (TMI), GREG

FINN (ST. CHARLES), MARK PHELPS (EDENTON) FRED POWERS

(EDENTON), SKIP KNOLLE (PHOENIX), TODD ASCHE

(CHESTERFIELD), KEN JURGENSMEYER (HEAT PIPE)

Also in 2006, the machinery production group moved into a new 177,600 sq. ft. quarters. Located in the

Fountain Lakes area of St. Charles, Missouri, the multi-purpose facility combined industrial equipment

manufacturing, research and development, and training. This new facility provided MiTek with the resources

to develop and produce the next generation of building component machinery. Just as important was the new

state-of-the-art training center, enabling customers to take full advantage of the software suite, along with the

operation and maintenance of MiTek’s full range of equipment.

Finally, the acquisition of the remaining Aegis business in 2008, saw the entire metal framing operation

relocate to the Edenton, NC facility in 2009. This move, accomplished in record time, allowed Aegis to

continue to exceed customer order requirements.

MMANUFACTURINGANUFACTURING EENHANCEMENTSNHANCEMENTS

While MiTek has continued to play a leading role in all areas of manufacturing and production in the

industry, it has also played a key role in the development of new, innovative products, which have served MiTek’s

customers well. Some of these industry innovations have been:

Virtek laser projection in 1993•

Slotted top tables with Tekset jigging in 1996•

MatchPoint PLANX automated jigging in 2006•

Each of these helped increase productivity at truss assembly stations. For example, the Virtek laser

projection system reduced setup and changeover up to 70%, while the addition of the Tekset Puck made precise

placement of boards onto the table much easier. However, the gains were not limited to reduced setup; lead

time and labor costs were also reduced as a result of these innovations. For customers not looking to add Virtek

to their operation, or where lack of space does not allow the addition of an additional table to their production,

adding MatchPoint PLANX to their existing table will provide significant production improvements. In many

instances, PLANX showed a 50-65% reduction in setup. When combined with Virtek, setup time was lowered

from 15-20 minutes down to less than a minute!

108

109

MMIITTEKEK HHISTORYISTORY OFOF IINNOVATIONNNOVATION

110

Year Connectors Software Machinery Specialty

1989 EasySet®1000EasySet2000

1990 Floor Truss Stacker

1991 T-Plate

1992 MiTek 2000® Engineering

EasySet3000

1993 MiTek LayoutMiTek Wall Panel

EasySet4000Virtek®

1994 High-Strength Plate Horizontal Stacker

1995 MiTek Cyber Sort™ Cyber® Saw

1996 MiTek PlateEasy Pak®

MiTek MBA™ Slotted Top Tablesw/Virtek & Tekset

Stabilizer®Winclip

1997 MiTek Jigset™ RailRider™HammRR press™

Eliminator™

1998 SmartSet®SmartSet® ProRoof Glider

Power Band RR™

1999 JackRabbit® Alternating PosiStrut®webs

2000 MiTek eFrame®MiTek Link™

Trimmable Posi machine

Trim-It™ Trusses

111

Year Connectors Software Machinery Specialty

2001 Banded Pack

2002 MiTek™ 20/20 SuiteMiTek MVP™

MiTek eWorkFlow

Cyber®A/T, PCS

2003 Hardy Frame®Aegis Metal Framing

2004 MT Plates RoofTracker® ChemStar RR

2005 Omni Miser®

2006 MiTek ShopNet™ Servo Omni®PLANX

2007 MiTek TrussFramer® Omni Miser® 2 Multi-Brace™Improved Stabilizer

2008 MiTek University SpeedBlok™

2009 SAPPHIRE™ Structure

2010 SAPPHIRE™ ViewerSAPPHIRE™ Portal

2011 M18SHS SAPPHIRE™ Suite (beta)SAPPHIRE™ Management (beta)

SAPPHIRE™ Reviewer

New Hinge Plate

MMIITTEKEK HHISTORYISTORY OFOF IINNOVATIONNNOVATION

112

CCOUNTRIESOUNTRIES WHEREWHERE MMIITTEKEK HASHAS OOPERATIONSPERATIONS

CCOUNTRIESOUNTRIES WHEREWHERE MMIITTEKEK HASHAS MMANUFACTURINGANUFACTURING OOPERATIONSPERATIONS

C H A P T E R E I G H T

8IINTERNATIONALNTERNATIONAL

IINTERNATIONALNTERNATIONAL BBUSINESSESUSINESSES

With offices on six continents, MiTek has an enviable international presence. With technical support, sales,

customer service, warehousing and manufacturing strategically positioned across the globe, the MiTek team is

prepared to support any customer, anytime and anyplace!

The International Group operates with three distinct Business Units: Canada, Europe and Asia-Pacific/

Africa. Each of these areas face unique challenges in their respective markets. Some mature markets, such as

Western Europe, Canada, Australia and New Zealand have a long, established history in the use of connector

plates in the wood truss industry. Others - in particular those in Eastern Europe, and parts of Southeast Asia

and China – are now just being exposed to the intricacies of structural wood solutions. As a result, the manner

and approach taken will vary greatly. Nevertheless, MiTek’s International business remains strong, productive

and profitable.

Most recently, the 2010 reacquisition of the Gang-Nail, Ltd. business in Sao Paulo, Brazil, brought MiTek’s

presence to South America, a locale it had been absent from since 1989 when it sold the business to the then-

current management team at Gang-Nail.

Of particular note is the long tenure of many staff members within each area;

many have been with their organization for 25 years or more. In addition, many

joined the organization in the Hydro-Air or Gang-Nail days, when these two

goliaths battled for supremacy amidst the then-crowded connector plate market.

MMIITTEKEK CCANADAANADA IINCNC..

Led by Mike Sandbrook, President of MiTek Canada, a 40-year-veteran of

the business, the MiTek name has come to represent the very finest in structural

wood components and software. Having worked his way up from junior designer,

to engineer, sales and now senior management, Sandbrook has a solid perspective on the business, enabling

him to lead his 120-person team by example.

114

MIKE SANDBROOK

PRESIDENT, MITEK CANADA

As Automated Building Components (the Miami-based parent of Gang-Nail) they were the first company

in Canada to make connector plates under the Gang-Nail brand. A few years later, when the name was changed

to Gang-Nail Canada, they operated out of a 4,500 sq. ft. facility in Toronto. Today they have a 100,000 sq. ft.

facility on the outskirts of Toronto (Bradford, Ontario) from which they strive to meet the growing demands

of their customers. Besides the Toronto-area facility–which is also the primary manufacturing facility for all of

Canada–there are engineering and warehousing operations in Montreal (Quebec), Edmonton and Calgary

(Alberta), and Vancouver (British Columbia).

While the majority of the Canadian population resides within 100 miles of the United States-Canada

border, it is the logistical issues of transporting material over such a broad area–often with very demanding

climate and temperature changes–that presents the biggest challenges to the Toronto team. Add to that the

intense snowfall, similar to what is seen in northern Europe, and one can see how this places further demands

on the MiTek Canada Team as their designs are exposed to maximum load conditions on a frequent basis.

Over the past several years, two key acquisitions were made which shored-up the product line while adding

customers. The first, in 2003, was Pacific Automation, a machinery operation. The second, in 2006, was Jager

Industries, a plate manufacturer. Jager’s plate history goes back to the early Hydro-Air days with Walter

115

THE CANADIAN HEADQUARTERS IN BRADFORD, ONTARIO.

Moehlenpah. Since Moehlenpah had little interest in doing business in Canada directly, Jager became a licensee

of their plates, selling the Hydro-Air brand across Canada. In 2006, Jager – and their customers – became part

of the MiTek family. There is also another interesting story that arose out of the Jager acquisition. Jager had

licensed software from Robbins for use in their operation. Toombs contacted Robbins to get permission for

MiTek to continue to use the Robbins On-Line Plus software at Jager. After giving their approval, they asked

Toombs: “Ok, that’s settled; so when do you want to buy Robbins?” Six weeks later, the Robbins acquisition was

completed.

With MiTek’s expertise, MiTek Canada plays a significant role when working with government

organizations looking to establish or revise construction codes. In particular, MiTek has a number of staff on

the Truss Plate Institute of Canada, which makes annual recommendations to the Canadian Wood Council on

Codes and Standards.

While the Canadian business continues to be successful, the geography of the country presents many

opportunities for smaller producers to gain a foothold in select markets. Nevertheless, for MiTek Canada, it

will continue to be the strength of the MiTek SAPPHIRE™ Software that will keep customers in the fold as

they can rely upon MiTek to provide them with the most up-to-date products and solutions for their business.

116

EEUROPEANUROPEAN OOPERATIONSPERATIONS

Like his Canadian counterpart, Syd Griffiths has been part of the truss industry for

most of his adult life. Now entering his 37th year with MiTek, Syd can still recall his first

meeting with Paul Cornelsen; it was in the tool room in 1984 during one of Cornelsen’s

early visits to the United Kingdom. At the time, they were manufacturing plates under

license to Hydro-Air, and were very well run and quite profitable. To quote Cornelsen:

“The British operation was doing very well. In fact, they had embarked on a capital spending

program to bolster their market presence. However, in the interest of the entire company, I asked

them to hold off in order to shore up the rest of the Hydro-Air operations. Without this, Hydro-Air might have died!”

DDIVESTITUREIVESTITURE

Following the Hydro-Air purchase by Cornelsen, and the subsequent merger in 1987 of Gang-Nail and

Hydro-Air, the situation came under the watchful eye of the Monopolies and Mergers Commission (today the

Competition Commission) in the United Kingdom (UK). In 1984, Hydro-Air maintained a 31% market share

with Gang-Nail at 32% and three other companies making up the remaining 37%. However, the acquisition

of BevPlate by Hydro-Air in 1985 grew their

share to 47% by 1986, with Gang-Nail

hovering around 30% and the others at 23%.

With the 1987 proposed merger, the

combined MiTek organization would have a

76% market share. This raised more than a

few eyebrows.

Those arguing the pros and cons of the

merger presented interesting viewpoints.

Competitors felt MiTek would lower prices

117

SYD GRIFFITHS

GROUP MANAGING

DIRECTOR EUROPE

THE EUROPEAN HEADQUARTERS IN WEST MIDLANDS, UNITED KINGDOM.

in an attempt to drive them out of business. Customers felt the merger would give

MiTek too much control, allowing them to raise prices at will. For their part, the

Commission wanted MiTek to adopt a number of different business functions to

keep the companies separate – in effect, eliminating the benefits of the merger. In

the end, the Commission entered its order in July 1988, giving MiTek three months

to divest the Gang-Nail UK group. In early 1989, Gang-Nail UK became part of

Eleco, who recently divested the business.

Despite this initial setback, the MiTek business across the UK, Western Europe

and Scandinavia began to grow. However, there were several areas that needed to be

addressed before it could establish itself as the industry leader. Following the 1987 merger, MiTek was looking

for a way to better position Hydro-Air across the continent. As a result of the 1988 divestiture of Gang-Nail,

the two organizations continued to compete furiously in Europe. One key advantage that Gang-Nail had was

their software; it was significantly better than anything Hydro-Air had to offer at the time. However, on the

positive side, the software was developed by an independent Swedish company, CSC (Construction Software

Center), under license to Gang-Nail. CSC was founded in Skellefteå, Sweden in 1976 and specialized in

software for truss producers. In 1991, they were the first to introduce software for the construction industry

based upon the new Windows environment. After Hugo Du

Preez was appointed Group Director over Europe and

Africa, he believed that the acquisition of this company

would be just the edge needed to take the lead. Over the

next several years, Du Preez made a number of overtures to

CSC attempting to purchase the business. His persistence

paid off in 1998, when MiTek acquired the business. Yet,

there did remain one issue; CSC remained under contract

to support the Gang-Nail software, which they continued

118

MITEK OFFICES IN RIIHIMÄKI, FINLAND

HUGO DU PREEZ

FORMER GROUP MANAGING

DIRECTOR, EUROPE &AFRICA, ENDED HIS 25-YEARCAREER WITH MITEK IN

2007.

to do. However, when customers saw what had taken

place, it convinced many of them to move from Gang-

Nail to Hydro-Air. At the same time, component

manufacturers that had been on the fence regarding an

acquisition made their decision and joined the MiTek

family. This was a significant coup for the region as the

MiTek dominance in the European market was now

taking hold.

MMIITTEKEK EEUROPEUROPE TTODAYODAY

Today the European operation has 10 operating businesses in 8 different countries with 2 in Sweden. This

includes units in France, UK, Germany, Finland, Scandinavia (Norway, Sweden and Denmark), Czech

Republic, Poland, Romania and Russia. In addition, there are four manufacturing sites supporting customers

from Great Britain to Russia. These are in the UK (supporting France and Germany), Sweden, Finland and

the Czech Republic.

To address the nationalistic situation present across Europe, MiTek has country-specific Managing

Directors and customer service groups in each major country, consisting of technical support, sales for plates

and machinery and warehouse. In addition, each location is staffed with local individuals, all the more capable

of dealing with issues within that specific country.

While MiTek has been focused for years on Western Europe, over the last decade it has made great inroads

into many of the former Soviet Union states, as well as the Baltic States. A good example of this is the joint

venture that has been in place in Romania over the past five years, as well as the work being done in Latvia,

Lithuania, Estonia and other nations in that area.

While there are certainly many challenges dealing across Europe–language, code differences, labor

situations, national differences, just to name a few–MiTek has been quite successful in bridging these areas to

maintain its position as the premier supplier in the wood truss component market.

119

MITEK FRANCE OFFICES IN CRETEIL, A PARIS SUBURB

PPLANTINGLANTING SSEEDSEEDS FORFOR THETHE FFUTUREUTURE

An example of how MiTek has been at the forefront of establishing building standards has been the initiative

with a number of former Soviet Union states. Code and Compliance in these areas was virtually non-existent.

Seizing this as an opportunity to get it right the first time, MiTek undertook a project to work with government,

universities, architects, construction firms, distribution companies and trade schools to give back to the industry.

From lecturing at universities and writing syllabuses, to hands-on-training, MiTek staff shares with these groups

the knowledge gained regarding stress details, load bearing, wall-panel and truss construction, and a host of

industry-specific knowledge. While this has certainly helped MiTek to grow the business, it has also proved

beneficial for the recipients who enter the market better prepared to provide proven construction solutions.

In addition, this group of individuals is also better equipped to influence government regulations, ensuring

that homes and buildings will be constructed with the latest, most advanced and safest procedures available.

However, like other MiTek Groups across the globe, the European efforts do not stop at their borders.

Following the civil unrest in the former Soviet Republic of Georgia, MiTek supplied material for the

120

1) Germany

2) Austria

3) Hungary

4) Greece

5) Switzerland

6) Croatia

7) Slovenia

8) Romania

9) Bulgaria

10) Moldavia

11) Bosnia

12) Italy

13) Cypress

14) Georgia

15) United Kingdom

16) Belgium

17) Spain

18) France

19) Corsica

20) Guadeloupe

21) Finland

22) Martinique

23) Reunion

24) Ireland

25) Latvia

26) Morocco

27) Netherlands

28) Russian Federation

29) Kazakhstan

30) Ukraine

31) Belarus

32) Slovakia

33) Czech

34) Poland

35) Sweden

36) Norway

37) Denmark

38) Estonia

39) Lithuania

40) Guiana

41) Mauritius

CCOUNTRIESOUNTRIES SSUPPLIEDUPPLIED FROMFROM THETHE EEUROPEANUROPEAN AAREAREA

construction of over 300 homes. In early 2010, following the

devastating earthquake in Haiti, MiTek worked with a German

customer to supply products to rebuild a number of facilities in

that country. More recently, there have also been inquiries from

aid groups doing work in Afghanistan asking for MiTek support

to build structures damaged by the war in that part of the world.

This approach follows the well-used MiTek motto: we will

support anyone, anywhere it is needed.

SSOFTWAREOFTWARE

Across Europe, the Eurocodes, developed in 1990 provide the basis for structural design. Eurocode 5 (EC5)

is the section that addresses Timber buildings and their engineering. However, individual nations are free to

adopt their own Annexes to the code, allowing for country-specific rules. This, of course, provides challenges

when designing software to be used across an area such as Europe. Currently, MiTek’s TrussCon and RoofCon,

developed by CSC, are the major products in use in Europe, with the exception of the UK and the Czech

Republic, which are the primary users of MiTek 20/20.

The European predisposition for products developed within its borders has clearly been a factor in the

acceptance of the TrussCon and RoofCon products and MiTek 20/20. The 1998 acquisition of CSC, which is

among the leading software development firms in Eurocode5 (EC5), continues to provide additional benefits

to MiTek Europe as it is currently developing its latest product offering, the next generation software known

as Pamir. Named for the mountain range in Asia, which is often referred to as “the roof of the world,” it is

anticipated that Pamir will be the best 3D Layout Program, with integrated truss design, compliant with EC5,

positioning it “on top of the world!”

TTOPSOPS ININ CCUSTOMERUSTOMER SSERVICEERVICE

Most companies want to be good at servicing their customers. MiTek wants to be the industry’s best! An

example of this approach took place in 2004, when there was a steel crisis in the UK. Griffiths met with Gene

121

MITEK-SUPPLIED TRUSS PLANT IN BUCURESTI, ROMANIA

Toombs to discuss what options they had to service their UK customers. The plan they came up with was not

only bold, it was amazing. The staff began to contact transfer companies as part of a plan to use airplanes to

transport steel from the US to the UK to satisfy customer needs. While the anticipated shortage never

materialized, it shows the extent to which MiTek would go to keep customers happy.

GGROWTHROWTH

Since 1994, MiTek Europe has made 16 key acquisitions across Europe to fill-out the product line. This

includes companies in a variety of areas, all vital to MiTek’s goal of continuing to be a full-service provider to

its customers.

Despite the worldwide recession, the European Group continues to perform well. They maintain a strong

market share in many key countries, while branching out to new nation-states in need of the variety of services

available from the worldwide leader.

SSUMMARYUMMARY

What is MiTek Europe about:

• It has a strong customer focus.

• It wants to be known as a company that treats its employees as part of a team.

• It has employees who give the company tremendous loyalty, many with the company over 25 years.

• It is a company where “The Customer is King” is not just a slogan; it’s a way of doing business.

Often a story says a lot about how a company conducts business. On one occasion, Gene Toombs was

visiting the UK and was in the middle of a meeting. The staff was gathered in the room, listening intently.

Partway through the presentation the phone began to ring. No one moved. It rang again. Once more, no one

moved. It rang an additional two times. Whereupon Gene stopped speaking and said to the collective group,

“Well, I guess we just lost a customer!” From that moment on, the company has never let the phone ring

more than three times before answering!

122

MMIITTEKEK AASIASIA-P-PACIFICACIFIC ANDAND AAFRICAFRICA

A veteran of MiTek for more than two decades, Stephen Fray, Executive Chairman of

MiTek Asia-Pacific and Africa, has seen many changes in the Asia-Pacific and African

markets through the years.

Today, as MiTek looks to expand further into developing nations in Asia ie: Vietnam,

Thailand and China, it faces challenges specific to those countries. While continuing to

make inroads into China and maintaining its strong ties to Japan, MiTek remains

committed to its business relationships in Australia, New Zealand and South Africa,

including some of the East African nations now eager to adopt new methods of construction,

particularly steel-framed construction.

Some of the inherent issues faced by MiTek in these regions relate to language, regulation, government,

culture, and existing building methods, along with significant manufacturing and logistical concerns.

Nevertheless, over the past decade each of these hurdles has been reviewed, a solution formulated, an approach

put into place, with new customers and products resulting from the efforts.

The population density in countries like China and India make them potentially very attractive markets for

MiTek - but breaking into some of these has been far from easy. Prospects in the African continent are also very

promising, but they too have unique needs that MiTek must address if they are to be successful in these markets.

Typical of a strong MiTek team approach, existing customers have not suffered while new customers see

the value brought to the table under the MiTek brand.

EEARLYARLY OORGANIZATIONRGANIZATION - M- MIITTEKEK AAUSTRALASIAUSTRALASIA: A: ANN EEDUCATIONDUCATION

MiTek Australia had a somewhat disjointed beginning, with humble origins that would do little to herald

the burgeoning success of the region today - and the future growth potential on its door step. From the

beginning there was no history of prefabrication, no product champion, and no converts. Australian builders –

and the people who lived in their buildings in the 1960s – had to be convinced that prefabrication was both

sound and sensible since there was no precedent. Consequently, the early years were very much about growing

123

STEPHEN FRAYEXECUTIVE CHAIRMAN

MITEK ASIA-PACIFICAND AFRICA

the market through education and changing perceptions.

MiTek was originally formed by a consortium of Australian timber merchants

in 1963 and began trading as Automated Building Components (Aust.) Pty. Ltd.

providing Gang-Nail timber connectors and engineering design services to roof

truss fabricators under license. In 1970, Automated Building Components (Aust.)

Pty. Ltd. was acquired by Automated Building Components Inc. of Miami, Florida.

Then, in the same year, the Australian company purchased a 75% interest in Timber

Engineering Company Pty. Ltd. (TECO), which manufactured numerous timber

connectors for supply to the building products industry. Later, in 1979, British-based

Redland, PLC, acquired A.B.C., Inc. in Australia and changed its name to Gang-Nail

Australia Ltd in 1987. The Gang-Nail organization continued to have a strong brand

presence through most of the 1980s. When Gang-Nail was acquired by MiTek in 1987,

it merged the Hydro-Air product line with Gang-Nail. However, the Gang-Nail brand

was such a strong presence that it continued to be called Gang-Nail Australia until

2000, when it became MiTek Australia Ltd.

NNEWEW LEADERSHIPLEADERSHIP: : AA NEWNEW ERAERA

Shortly after MiTek acquired Gang-Nail, Paul Cornelsen

sought to find the right person to lead the new organization.

While the early Hydro-Air organization had a presence in

Australia, it was not the business model Cornelsen believed

would enable it to succeed. After an extensive search for the new

leader of the organization, Cornelsen interviewed Stephen Fray.

Immediately, Cornelsen knew he had found his man. However,

with the existing state of the organization, Fray also knew he

had much work to do to set the business on the right path.

124

THE ABBOTSFORD GANG-NAIL PRODUCTION

FACILITY, LOCATED IN MELBOURNE, AUSTRALIA, IN THE EARLY 1970S.

JOHN TADICH

FORMER TECHNICAL SERVICESMANAGER, PAUL CORNELSEN

SELECTED HIM TO LEAD THE NEW

ORGANIZATION AFTER THE 1987MERGER UNTIL STEPHEN FRAYJOINED MITEK. FOR THE NEXT

20-YEARS, HE WOULD HELP TO

DEVELOP A NUMBER OF

INNOVATIVE PRODUCTS, SUCH AS

POSISTRUT, TRUSSSPACER, I-BEAM HANGER AND THE

MITEK LINTEL.

The first few years in the Australian market were tumultuous in many ways. Structural changes,

organizational changes – even a review of what MiTek was offering as a business and the products it delivered –

all went under the microscope. From a national perspective, the company appeared disjointed, so one of the

first steps Fray initiated was to introduce a Profit Center approach to MiTek's operations, with State Managers

appointed to take responsibility for their own markets. Although populated by fewer people than the state of

Texas, the geographical expanse of Australia is enormous in comparison. An obvious aspect of MiTek's core

business is customer service. Handing responsibility over to State Managers - and establishing a dedicated

team of Fabricator Support Managers (FSM) in each region – was pivotal to this process. While MiTek is the

foremost supplier of connector plates, the company is also a software developer and a service-oriented business.

This would become paramount as the company grew and prospered. In the end, Melbourne would remain the

sole manufacturing facility and the main location for the Australian offices, as it is today.

Another area of immediate concern was the product range offering - it had to be rationalized. There were

product segments overlapping, and other products that were either not profitable or not consistent with the

levels of quality MiTek espoused. These had to go, along with many of the retail hardware products of the

business. The logistical implications of a country as expansive as Australia – in terms of delivery of products –

can be daunting. In the early days there was no accurate method of tracking product placement or ensuring

125

THE AUSTRALIAN HEADQUARTERS IN MELBOURNE, VICTORIA.

stock was consistently available. It was a case of either fix the retail builders

hardware side of the business, or go back to what MiTek knew best. Fray

made the decision to consolidate rather than confuse! The decision to focus

on the prefabrication business was also made with MiTek’s fabricators in

mind. Structural (engineered) building products were still very much in

demand and with the distribution of these products coming primarily

through MiTek's licensed fabricators it gave them another source of

revenue, all the while promoting an early version of the “whole-house”

concept that is in place today.

In summary, the key changes made were:

Establish a profit-center mentality•

Appoint and empower State Managers •

Rationalize product range •

Focus on the core business •

Fray’s impact on the business started to deliver positive results virtually from day one. Within a few years,

the business had made a clear shift with MiTek now focusing the bulk of their efforts on truss fabricators, with

an emphasis on connector plates, accessories and, more importantly, the outstanding MiTek software. Backed

by a new emphasis on customer support and service

MiTek now had the foundations in place for strong

growth.

While Fray’s impact on the building industry

will continue to be pivotal, his growing international

responsibilities illustrated the need to designate a

new manager for the day to day operations of the

Australian business. In 2010, Andrew Bricknell,

formerly Manufacturing and Machinery Manager,

was promoted to General Manager of MiTek

126

ANDREW BRICKNELL

MANAGING DIRECTOR

MITEK AUSTRALIA

THE AUSTRALIAN MANAGEMENT TEAM IN 1992.

Australia and subsequently to Managing Director in 2011. With his 25-years experience in production

engineering and plant management, Bricknell is highly qualified to lead the Australian team in the future.

JJAPANAPAN

Japan has been a key market for years, but their highly regulated business environment has made growing

the business difficult. One of MiTek greatest achievements was gaining regulatory approval for its products with

certification by the Japanese Government's Ministry of Construction - the NINTEI recognition was a huge

step forward.

MMALAYSIAALAYSIA & & THETHE SE ASE ASIANSIAN REGIONREGION

MiTek Asia Sdn. Bhd. has been supplying products and services into the region for over 30 years. An office

was established in Kuala Lumpur (Malaysia) along with one in Singapore, which would enable further expansion

into Asia. Whilst manufacturing of metal plates and engineered structural products

was still based in Australia, having these satellite offices enabled sales and support

staff to deal more easily with local customers. In 1996, MiTek received government

approval to establish a wholly owned manufacturing facility in Malaysia after two

years of negotiation with the Malaysian Government. At that time, Fray recruited

Gan Poh Thuan, a very competent and experienced business manager to lead the

Asian operations. Gan has played an integral role in developing the Asian

operations from their modest beginnings to a well established foothold for MiTek

in these markets.

The company has grown strongly over the years and through its Licensed

Fabricators supplies around two-thirds of the prefabricated roof trusses used in the Malaysian market. Apart

from Malaysia, the company also has a network of Licensed Fabricators in the Philippines, South Korea, China,

Singapore, Brunei and Sri Lanka and exports from the Malaysian manufacturing operation represent an

important part of its sales. Vietnam is also a growing region.

127

GAN POH THUAN

GENERAL MANAGER

MITEK ASIA

CCHINAHINA

With many of MiTek's prospective customers in developing

countries like China having had little experience with timber

engineering codes, a training facility was established in Shanghai

to educate young engineers, designers and architects. Bringing in

50 participants at a time, the classes focus on wood construction,

including timber engineering advances, floor and roof trusses.

When countries such as China begin to establish more stringent

building codes, individuals with a solid foundation in what a company like MiTek can provide will be more

knowledgeable about the timber construction process. Unlike most western countries, China's residential

structures are dominated by concrete construction. In fact, China uses roughly 40% of the cement in the world.

Timber engineering education is vital in the early days of establishing a market in countries where wood

structures may not be perceived favorably. Exposing young designers, architects and engineers to the benefits

128

MiTek South AfricaSouth Africa•Botswana•Kenya•Lesotho•Mauritius•Mozambique•Namibia•Nigeria•Swaziland•Zimbabwe•Zambia•

MiTek AustraliaAustralia•Japan (as well as MiTek Asia)•

MiTek New ZealandNew Zealand•Papua New Guinea•Fiji and other Pacific Islands•

MiTek Asia (Malaysian based)Malaysia•Singapore•Thailand•Philippines•Thailand•Vietnam•China•Japan•South Korea•Taiwan•Sri Lanka•

CCOUNTRIESOUNTRIES SSUPPLIEDUPPLIED BYBY THETHE AASIASIA-P-PACIFICACIFIC GGROUPROUP

MITEK’S MALAYSIAN OFFICE

of wood construction will pay dividends in the future as they look to create more dynamically

shaped structures.

SSOUTHOUTH AAFRICAFRICA & E& EASTAST AAFRICANFRICAN NNATIONSATIONS

There are several offices and warehouses in South Africa with the major regional

operation in Cape Town and another (including manufacturing) in the South African Head

Office in Johannesburg. Various neighboring countries are also beginning to embrace timber

prefabrication - and MiTek is leading the way. However, a strong interest in steel framing in

recent years has led MiTek to provide steel solutions as well, and this segment of the business has grown quickly

and is spreading to many of the East African countries particularly Kenya where MiTek has a joint venture

with the SAFAL group of companies.

SSOUTHOUTH AAFRICAFRICA

The history of the MiTek African operation was established via the pathways of two companies: Gang-

Nail and Hydro-Air. The first founding company, Gang-Nail, started out as Automated Building Components

(ABC), the original name for the company which provided Gang-Nail connectors under license from early

1965. The founders - Mike Dryden and Gordon Tromp –

formed the company with a loan from Calvin and Bill Jureit,

who fronted the startup funds - without any security - and

on the basis of a handshake. Dryden and Tromp would

become the first two African Managing Directors of the

original company – Gang-Nail.

The company proved to be so successful that within the

first two years of operation, the Jureit loan was repaid in full,

providing a solid foundation for the start of this first African

company.

129

2011 SOUTH AFRICAN MANAGEMENT TEAM

BACK L-R: ELIAS MONARENG, ROLY ADAMS, STEPHEN FRAY,STEWART MURRAY, ANDRE BELCHER. FRONT: MIKE NEWHAM,

SIMON CLARKE, HERMAN LOMBARD

STEWART MURRAY

MANAGING DIRECTOR

SOUTH AFRICA

In July 1971, Alweca Timbers (Pty.) Ltd was established, becoming the founding company for what would

become Hydro-Air. This new organization quickly established itself as an alternative to the Automated Building

Components product offering. It was not long before the two companies dominated the African market. In

1974, Alweca Timbers was renamed H.P.A. Holdings (Pty.) Ltd. Then in 1981, H.P.A. was renamed Hydro-

Air South Africa (Pty.) Ltd.

In 1979, British-based Redland PLC acquired the Gang-Nail business. However, this did little to stop the

growth of the Gang-Nail business as Hydro-Air and Gang-Nail continued to control the market for the next

several years. In 1987, when Paul Cornelsen orchestrated the acquisition of Gang-Nail from Redland, the

merger of Hydro-Air and Gang-Nail began.

In 1973, when Gordon Tromp visited the Chevy Chase, Maryland, based Timber Engineering Company

(Pty.) Ltd, he negotiated an arrangement that established the South African Agency. This culminated in the

introduction in South Africa of the Builders Suite of products, following the Gang-Nail-Australia model, which

occurred around the same time that Gang-Nail-Rhodesia (today Zimbabwe) was established.

TTRANSITIONRANSITION

Under the guidance of Managing Directors Martin Venter, and his successor Hugo Du Preez, Hydro-Air

grew very quickly, establishing itself as a capable alternative to Gang-Nail. Following the 1987 merger both

organizations continued to dominate the market until the formation of MiTek South Africa (Pty.) Ltd in 1988.

Following the untimely death of Venter in 1984, Du Preez was appointed Managing Director of the South

African organization. He later began to rationalize operations under the MiTek banner, eliminating the

competition between the two market brands that were each fighting to establish their separate credos. He was

able to successfully join the strengths of the two different camps into an all-for-one strategy.

Du Preez’s success was rewarded with his promotion as head of the combined European and African

companies, becoming Group Managing Director of Europe and Africa and relocating to Birmingham, England

in 1996.

130

131

Hugo decided to retire from the business in 2007. Following Du

Preez’s departure, General Manager Stewart Murray was promoted

to Managing Director. A fifteen-year employee, Murray had a

strong, well-balanced background with the company, making him

exceedingly well qualified for his new role. The South African

company became part of the Asia-Pacific group as a mature, well-

established company that continues to enjoy significant market share.

MMANAGINGANAGING CCHANGEHANGE

The major challenge faced through the 1990s was the emergence of new competitors, and the retention of

market share. The obstacles to this approach came from existing customers looking to protect their product

brand and not wanting to allow competitors access to the MiTek 20/20 software and services provided by the

MiTek South Africa (Pty.) Ltd. group of software professionals.

One way of overcoming this challenge was put forth by Gene Toombs and the MiTek

international management team. This involved the evaluation and acquisition of competitors that were deemed

to be useful and productive to the MiTek team. Using this approach, three acquisitions, Trussdata, Twinaplate

and HiTech Nail Plate, were successfully completed over a nine-year period, helping to keep MiTek’s significant

market share for years to follow.

The problem of a sustainable and reliable timber supply in South Africa came shortly after the much-

publicized Crickmay Report, warning that there was a problem in the near term with structural timber access.

In response to this, MiTek South Africa launched the Ultra-Span light gauge steel (LGS) range of product

as a solution to the pending South African structural timber shortage on the back of MiTek (U.S.), which had

already established the product in the U.S. market. Despite initial skepticism, and the slow pace with which it

was accepted, many African countries eventually adopted the Ultra-Span product as an alternative to standard

timbers. Eventually, this generated entry into over 16 different countries by MiTek South Africa, while creating

the opportunity for a joint venture with the SAFAL group of companies in Nairobi, Kenya.

MITEK PLANT IN GAUTENG, SOUTH AFRICA

With the MiTek 20/20 program providing a solution for both Timber and Light Gauge Steel, and the

acceptance of alternative material like LGS, the African migration to the more comprehensive SAPPHIRE™

software solution has been slow. Nevertheless, SAPPHIRE™ is viewed as the future direction for MiTek South

Africa.

NNEWEW ZZEALANDEALAND

Gang-Nail was established in New Zealand in 1967 under a joint venture agreement between a local

businessman and Gang-Nail Systems Inc. in the United States. By the mid-1970s, the Lumberlok Builders

Hardware product line was added, followed by Bowmac, which supplied heavy galvanized steel hardware

products, in 1985. In 2001, MiTek acquired the remaining portion of the business, bringing the entire

organization into the MiTek family as part of the Asia-Pacific group reporting to Stephen Fray.

MiTek enjoys a strong market share in New Zealand, with major customers in

both the trade and retail sides of the business. Today, the MiTek portion of the

business represents one-third of the total, with Builders Hardware representing the

remaining two-thirds. One reason for this is the strong presence of both the

Lumberlok and Bowmac brands being specified on most building plans for Building

Code Compliance.

New Zealand is a large timber provider and exporter with the use of timber in

construction throughout New Zealand quite widespread. Consequently, MiTek is

focused on providing total solutions to designers and engineers, a key driver and

success formula for the New Zealand business. The training and education success for designers has been

achieved through the wide distribution of high quality technical literature, in conjunction with training seminars

and engineering support from the Auckland and Christchurch offices. Another aspect of this success has been

the performance of the MiTek 20/20 software. The combination of these factors has enabled MiTek to capture

much of the connector business, firmly entrenching MiTek in the residential construction market.

132

RICHARD POOLE

MANAGING DIRECTOR

NEW ZEALAND

In addition, with the New Zealand Building

Code (standard) requiring many on-site timber

jointing solutions, MiTek took a leadership

position by providing a number of very

successful solutions with innovative new

products, coupled with engineering design

loadings and clear installation instructions. The

end result has been a rapid rise in the Builders

Hardware side of the business, particularly in the stainless steel product range, a requirement in high corrosion

areas such as exposure to sea salt.

To ensure that MiTek products continually meet and exceed quality standards, MiTek’s New Zealand team

works closely with local authorities (councils) whose job it is to ensure that what is built on site is what is presented

on the plans and specifications. It is this attention to detail that will continue to keep MiTek products as those

most frequently specified when high-quality solutions are needed.

Another area that has shown significant improvement for MiTek has been in the Farm Building Sector. With

New Zealand being a world leader in dairy exports, there is a growing need for covered yards and other farm

buildings to increase the use of the already precious available land, and MiTek stepped forward with innovative

solutions. Following several years of experimentation with a range of cost effective timber buildings using

cantilevered poles and rafters or trusses to form roof supports, MiTek has seen significant growth in this sector

and has become the “go to” organization in this market.

MiTek’s New Zealand fabricators now enjoy the very best business tools available, keeping them a step ahead

of the competition. The full release of MiTek SAPPHIRE™ is eagerly awaited by MiTek’s customers as they

look to widen the gap even further with their competitors.

Although New Zealand is a relatively small market, the significant market penetration achieved by the MiTek

organization is second to none. This speaks to the Kiwi business way; no matter what the odds, the pioneering

spirit within the country will find a way to achieve success.

133

THE NEW ZEALAND OFFICES IN AUCKLAND

SSOFTWAREOFTWARE ANDAND BEYONDBEYOND

Over the years the MiTek Australian engineers and software developers have played a crucial on-going role in

the development of software – and software customization – for particular markets. More recently many of

the Australian developers have also been heavily involved in the new generation software suite of programs

called MiTek SAPPHIRE™, and MiTek 20/20 before that. This is very important as MiTek ventures into a

new era of software leadership. Software will continue to drive nearly every aspect of a prefabrication plant in

the future - so SAPPHIRE™ is a huge step forward. The introduction of Building Information Modeling

(BIM), full 3D Viewing and closer software ties to the building industry are all part of the future for MiTek

software and a critical development path for the MiTek Group. As part of Warren Buffett's Berkshire Hathaway

group, MiTek in the Asia Pacific and African region is a global leader and will continue to show leadership in

all aspects of design and construction in the building industry.

BBUSINESSUSINESS GGROWTHROWTH

While Australia, New Zealand and South Africa are heavily dominated by MiTek products, the growth

potential in the other areas is high. The Group sees two main paths for growth in the future:

1. Organic

Growing market share in existing markets•

Development of new products•

The expansion of MiTek metal products used in housing construction•

2. Through Geographic expansion

China•

India•

Other Asian and African developing countries•

China and India promise the most potential for growth, given their population and the present state of

their housing markets. However, this will require a long term strategy so patience is paramount. Unlike other

areas, acquisitions have not been a significant part of the strategy. While there have been some acquisitions in

134

the past, local competition laws make this growth option difficult.

Growth in new products and the emphasis to maximize the number of

MiTek products in every housing start is a major emphasis. These

include products designed to improve on-site safety as this as

become a popular focus for the building industry. The MiTek

TrussSpacer is one such product, earning the coveted Housing

Industry Association (HIA) Jim Sweeney Industry Innovation

Award for 2003. Marketed as a “safety first product” it

has gained wide acceptance by the trade in the Australian

market. The aim is to see more innovative products such

as this in the future.

135

STAFF CELEBRATING THE LAST DAY IN MITEK AUSTRALIA’SMELBOURNE KNOXFIELD OFFICE IN 2002, BEFORE MOVING TO

NEW FACILITIES IN DANDENONG.

MITEK AUSTRALIA’S MANAGEMENT GROUP, WITH THEIR

PARTNERS, CELEBRATING THE RETIREMENT OF

BARRY HULCOMBE, JOHN TADICH AND ROGER HUTTON IN 2007.

A YOUNG STEPHEN FRAY WITH THE

1994 MOST INNOVATIVE NEW PRODUCTAWARD FOR POSISTRUT, PRESENTED BY

THE HOUSING INDUSTRY ASSOCIATION.

THE HOUSING INDUSTRY

ASSOCIATION JIMSWEENEY INNOVATION

AWARD FOR 2003 FOR THE

TRUSSSPACER PRODUCT.

136

C H A P T E R N I N E

9TTHEHE FFUTUREUTURE

138

As I write this, the new housing construction market in the U.S. is atits lowest point in more than 65 years. To say our industry and our cus-tomers have and continue to face unprecedented challenges is a gross un-derstatement. Since the housing industry began its decline in late 2006,MiTek under the leadership of Gene Toombs has made the necessarychanges and investments to keep MiTek well-positioned as we continueto navigate our way through this period and prepare for the future.

MiTek has not mortgaged its future. In fact, we have been intentionalin the development and deployment of key products, systems and servicesfor our core businesses while diversifying where it has made sense. Westand at the ready to weather the climate and remain prepared for the in-evitable turnaround…whenever that should occur.

The key is our people. We have smart, creative folks who are dedicated to their work. They love cus-tomers and take pride in turning out quality products. As we go about our daily routines it’s importantthat we all embody MiTek’s core values: Integrity…first and foremost, demonstrating a Passion for ourCustomers, Teamwork throughout the organization, being and acting as Empowered People, always dis-playing a Passion for Excellence, staying Relationship-Driven both internally and externally, and beingOwnership-Minded when it comes to our roles within MiTek.

When asked what my vision is for MiTek, I simply answer that our customers need to feel beyond ashadow of doubt that they simply love doing business with MiTek. Period. In addition, we need for ourown people to feel the same way…that they love working here, and are fully engaged day in and day outto serve our customers.

I’m bullish about our future…as a company, as an economy and as a nation. To quote the man whowrote the foreword to this book, “The best is yet to come”. With that in mind I’m thankful to my pred-ecessors who are responsible for MiTek’s success to this point and I’m excited for all MiTek Associates asI have the privilege to lead them into the future.

140

C H A P T E R T E N

10AACQUISITIONSCQUISITIONS &&

CCORPORATEORPORATE MMANAGEMENTANAGEMENT

August 1953 Formation of Hydro-Air, Inc.

September 1954 Name change from Hydro-Air, Inc. to Hydro-Air Engineering, Inc.

June 1978 Formation of Moehlenpah Industries, Inc. (new corporate parent)

March 1979 Merger of Hydro-Air Engineering, Inc. with and into Moehlenpah Industries, Inc.

June 1982 Paul Cornelsen purchases stock of Moehlenpah Industries, Inc. (parent of Hydro-

Air Engineering, Inc.) and becomes President and Chief Executive Officer.

April 1986 Name change from Moehlenpah Industries, Inc. to MiTek Industries, Inc.

July 1986 The Panel Clip Company

November 1987 MiTek Industries, Inc. and Bowater Industries PLC purchase Gang-Nail Systems

Inc. with Bowater acquiring option to purchase MiTek’s ownership interest in five

years.

February 1989 Sale of Lumberlok Corporation to Desco Corporation

July 1990 Sale of MiTek Wood Products, Inc. to Louisiana Pacific Corporation

December 1990 Merger of Hydro-Air Engineering, Inc. into Gang-Nail Systems, Inc., with name

change of Gang-Nail Systems, Inc. to MiTek Industries, Inc. (First use of MiTek for

operating company)

April 1991 The Bemax Companies, including Advanced Computer Engineering Specialties, Inc.

(A.C.E.S.)

October 1991 Interlock Steel Company

December 1992 Truss Connectors of America

January 1993 Rexam Inc. (former Bowater Industries PLC) exercises option and acquires sole

ownership of MiTek, Inc., (and subs). Paul Cornelsen resigns.

February 1994 Diamond Machinery Corporation

March 1996 Trussdata

July 1998 Hughes Manufacturing, Inc.

January 1999 Twinaplate

March 2000 Rexam New Zealand (was Gang-Nail Building Systems)

April 2000 B&Z Technology, Ltd.

March 2001 Hardy Frame, LLC

July 2001 Berkshire Hathaway Inc. purchases MiTek, Inc. (and subsidiaries) from Rexam Inc.

November 2001 Formation of Optiframe Software, LLC, joint venture with Weyerhaeuser Co.

January 2002 Tee-Lok (Metal Plate Connectors and software)

April 2002 Formation of Aegis Metal Framing, LLC, joint venture by MiTek and W.D. Ventures,

Inc. (Dietrich)

142

SSIGNIFICANTIGNIFICANT BBUSINESSUSINESS AACTIVITYCTIVITY / A/ ACQUISITIONSCQUISITIONS - 1953-2011- 1953-2011

January 2003 Production Conveyor Systems, Inc.

February 2003 WalPlus, LLC

June 2003 TBS Engineering

June 2003 Pacific Automation, Ltd.

June 2004 Castor Products S.A.R.L.

January 2004 Tekmax, Inc.

January 2004 Soro Stansewerk

December 2004 The Koskovich Company

August 2005 Sale of MiTek Zimbabwe (Private) Ltd.

March 2006 Erup-Trus Aps

March 2006 Morgan Sheet Metal, Inc.

May 2006 Jager Building Systems

June 2006 Robbins Engineering, Inc.

December 2006 SiteStream Software Limited

April 2008 Wolff Systems Ltd. (Hitech Nailplate Ltd.)

May 2008 Hohmann & Barnard, Inc.

July 2008 Buildsoft

July 2008 Aginco

August 2008 Simpad LLC

October 2008 Blok-Lok, Ltd.

October 2008 TMI Custom Air Systems/Miller Sage, Inc.

January 2009 Aegis (60% not owned)

January 2009 CompuTrus

March 2009 NexCoil (50% not owned)

April 2009 SAFAL MiTek joint venture formed

April 2009 SidePlate Systems, Inc.

October 2009 Zone Four

November 2009 Heat Pipe Technologies

April 2010 Dur-O-Wal Division of Dayton Superior Corp. by Hohmann &Barnard.

June 2010 Eleco Bauprodukte GmBH

August 2010 Dissolution of OptiFrame Software LLC

October 2010 Rush Air

October 2010 Gang-Nail Brazil (South America)

March 2011 Battery Technology Group (Under TBS Engineering)

March 2011 United Steel Products Inc.

April 2011 Sandell Industries, Inc. acquired by Hohmann & Barnard, Inc.

143

MMIITTEKEK EEXECUTIVEXECUTIVE TTEAMEAM - 2011- 2011

Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Gene Toombs III

President and Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tom Manenti

Executive Vice President and Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . .Ron Burkhardt

Vice President and General Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Joe Carr

Vice President of Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Bonnie Daniels

Corporate Vice President of Strategy and Business Development . . . . . . . . . . . . . . . .Chris Hollander

Senior Vice President Global Software & Technology . . . . . . . . . . . . . . . . . . . . . . . . .Terry Nicholson

Senior Vice President of MiTek, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Gene Toombs IV

President of MiTek U.S.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dick Marriott

President of United Steel Products and Hardy Frame . . . . . . . . . . . . . . . . . . . . . . . . . .Maged Diab

President of MiTek Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Mike Sandbrook

President of Aegis Metal Framing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tom Valvo

Executive Chairman of MiTek Asia-Pacific and Africa . . . . . . . . . . . . . . . . . . . . . . . .Stephen Fray

Group Managing Director of MiTek Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Syd Griffiths

Managing Director of TBS Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Lawrence Gardiner

144

MMIITTEKEK LLOCATIONSOCATIONS

CCORPORATEORPORATE

MiTek Industries Inc.14515 North Outer FortySuite 300Chesterfield, MO 63017314-434-1200

AASIASIA-P-PACIFICACIFIC

MiTek Australia Ltd.Head Office46 Monash Drive,Dandenong South, 3175Melbourne, VictoriaPO Box 4336Dandenong South,Victoria 3164Phone : (03) 8795 8888

CCANADAANADA

Canadian Head Office100 Industrial Rd.Bradford, ON L3Z 3G7800-268-3434905-952-2900

EEUROPEUROPE

MiTek Industries LtdGrazebrook Industrial ParkPeartree Lane, Dudley,West Midlands, UK DY2 0XWTel: (01384) 451400

MMIITTEKEK SSUBSIDIARIESUBSIDIARIES/D/DIVISIONSIVISIONS

• Aegis Metal Framing• Blok-Lok, Ltd.• Buildsoft• CompuTrus, Inc.• Hardy Frame• Heat Pipe Technology• Hohmann and Barnard• SidePlate® Systems• TBS Engineering, LTD• TMI• United Steel Products

WWORLDWIDEORLDWIDE MMIITTEKEK OOPERATIONSPERATIONS

Australia BrazilCanadaCzech RepublicFinlandFranceGermanyMalaysiaNew ZealandPoland RomaniaRussiaSouth AfricaSwedenTurkeyUnited KingdomUnited States

145

146

WARREN BUFFETT CELEBRATING THE TENTH ANNIVERSARY OF THE

MITEK ACQUISITION ON AUGUST 1, 2011 AT MITEK’S CHESTERFIELD OFFICES.

KNEELING: LAURIE GARDINER, CHRIS HOLLANDER, DICK MARRIOTT.STANDING (L-R): TOM MILLER, JOE CARR, TERRY NICHOLSON, BONNIE DANIELS,

GENE TOOMBS IV, RON HOHMANN SR., SYD GRIFFITHS, STEPHEN FRAY, TOM MANENTI, WARREN BUFFETT, JOE KANNAPELL, GENE TOOMBS, BOB LEPOIRE,

MAGED DIAB, TOM VALVO, RON BURKHARDT, MIKE SANDBROOK, JULIE RING.

C H A P T E R E L E V E N

11TTENEN-Y-YEAREAR BBERKSHIREERKSHIRE HHATHAWAYATHAWAY

AANNIVERSARYNNIVERSARY PPARTYARTY

148

WARREN BUFFETT MAKES A POINT

DURING DINNER AS GENE TOOMBS

(LEFT) AND OTHERS LISTEN INTENTLY.

WARREN BUFFETT (CENTER) FLANKED BY

GENE TOOMBS IV (LEFT) AND GENE TOOMBS.

149

(L-R) GENE TOOMBS, WARREN BUFFETT, TOM MANENTI

WARREN BUFFETT (WITH KNIFE)SLICES THE ANNIVERSARY CAKE,MARKING THE 10TH ANNIVERSARY

OF THE BERKSHIRE HATHAWAY

ACQUISITION OF MITEK.

150

WARREN BUFFETT

WITH CFO RON BURKHARDT.

WARREN BUFFETT, AS IS HIS CUSTOM,WHISPERS “SWEET STOCK TIPS” TO

HUMAN RESOURCES VICE-PRESIDENT

BONNIE DANIELS.

151

ANDAND TIMETIME FORFOR AA LITTLELITTLE FUNFUN AA FEWFEW MONTHSMONTHS LATERLATER......

AN AVID LOVER OF BASEBALL, BUFFETT RETURNED TO ST. LOUIS IN OCTOBER AND JOINED TWO OF

HIS FAVORITE TEAMMATES AS THE CARDINALS WON THEIR 11TH WORLD CHAMPIONSHIP.

152

C H A P T E R T W E L V E

12IINDUSTRYNDUSTRY CCHRONOLOGYHRONOLOGY

The truss shape has been in use since man has used pieces of logs and then, centuries later, sawn lumber.

In modern times, the first light wood frame trusses were built on the construction site using nailed boards or

plywood gusset plates at the joints. Use of these early trusses offered longer spans, more cheaply, than un-

trussed lumber, but took a long time to build on the construction site. However, joining trusses together to

provide strength and reliability continued to be an issue until midway of the twentieth century. Ultimately, it

was left to men like Cal Jureit, and then Walter Moehlenpah, to use their skill and creativity to develop

solutions, which would spawn our industry.

1943 Walter Moehlenpah founds Hydro-Air Engineering in his garage. It produced connector plates

not related to the wood truss industry.

1952 A. Carroll Sanford, founder of Sanford Industries, invented the metal truss plate with integral teeth

called the Gri-P-Late. This plate required supplementary nailing. This marked the beginning of

the wood roof truss industry.

1955 Sanford’s Gri-P-Late issued the first Engineered Bulletin for his product by the Architectural

Standards Division of the Federal Housing Administration on July 13.

J. Calvin Jureit, founder of Gang-Nail Systems Inc., creates and patents the Gang-Nail plate, the

first metal punch-tooth connector plate for trusses that did not need supplemental nail fastening.

The plates were pressed with a massive concrete-filled vertical hydraulic press onto lumber

positioned into precision jigs on steel tables.

1958 Klaisler Manufacturing Co. opened its doors as one of the first truss roller manufacturers.

Walter Moehlenpah founds Moehlenpah Engineering Inc., a Vickers hydraulics distributor located

at 1210 South Vandeventer in mid-town St. Louis

1959 One of the first franchise truss plants, Gang-Nail Truss Company, is founded by A.V. Munson in

Visalia, CA. Gang-Nail franchises are established across the United States, typically at family-

owned lumber yards.

1961 Patent #3,011,226, for a Toothed Gussett Plate is awarded to Philip Menge, and assigned to Troy

Steel Corporation.

1962 Hydro-Air Engineering, Inc. is formed by Walter Moehlenpah to market machinery to the

emerging truss market. The name reflected the machinery roots of the company: Hydro, from

“hydraulic” and Air, from “pneumatic” or air-operated machinery.

CCHRONOLOGYHRONOLOGY

154

1966 While calling on a local Boise Cascade operation, Moehlenpah has the idea to enter the truss plate

business.

1968 Gang-Nail Company becomes Automated Building Components, Inc. (ABC) and is publicly traded

on the American Stock Exchange. Walter Moehlenpah’s Hydro-Nail plate breaks the Jureit (Gang-

Nail) patent in a risky courtroom strength test using fishing weights. Patent #3,417,651 issued to

Walter G. Moehlenpah for a Connector Plate.

1972 Both Hydro-Air and Gang-Nail provide truss manufacturers with truss design services using

teletype terminals and computer time sharing services. On-Line Data, Inc., created by truss plant

owner and operator Dan Hurwitz, P.E., is one early example of this timesharing service. ABC

acquires Idaco Engineering Co., a saw company based in Oakland, CA.

1973 Carlos Rionda develops the “hinge plate” for Gang-Nail Systems solving the transportation height

limitations and allowing for hi-pitch roofs for modular applications.

1975 Patent to Moehlenpah for the “Apparatus for Fabricating Wood Structures” #3,866,530

1977 Mike Conforti hired as President of Hydro-Air.

1978 ABC sold to British firm Redland-Brass Corporation for $27 Million. Bill Jureit, Cal’s brother,

leads the Gang-Nail business until his retirement in 1985. Redland concentrates on large-scale

growth in the United States.

1980 Gang-Nail acquires the Bowman Company, based in Seattle, Washington.

1980s Gang-Nail makes several Canadian acquisitions.

1982 Paul Cornelsen, Chairman and CEO, acquires Hydro-Air Engineering from the Moehlenpah

family. He forms the parent company, MiTek Industries, Inc.

MiTek acquires DePauw Saw Company.

MiTek takes a 42% interest in software company On-Line Data, Inc.

1984 Gang-Nail enters the Engineered Wood Products business (EWP), manufacturing I-joists at its

former Charlottesville, VA truss plant and importing LVL from Finland.

1985 Upon the retirement of Bill Jureit, Carlos Rionda named president of Gang-Nail.

Jerry Koskovich introduced the first automated component saw to the industry.

155

Gang-Nail establishes a manufacturing facility in Wilmington, NC for its engineered wood

products business.

1986 Hydro-Air acquires The Panel Clip Company, from Robert J. Lytle of Birmingham, MI.

1987 MiTek forms a joint venture with Bowater, PLC, a British company, for the acquisition of Gang-

Nail. Bowater has a 49% stake in the Joint Venture. However, Cornelsen has a 51% voting right

in the venture.

1988 MiTek positions the Wood Products division as a separate company with Carlos Rionda as

President.

Tom Manenti succeeds Carlos Rionda at Gang-Nail as VP & General Manager.

1989 Gene Toombs hired as President of MiTek Wood Products, Inc., succeeding Carlos Rionda.

With the MiTek Wood Products company struggling, Toombs is given the choice to either turn

the Wood Products Company around or find a buyer.

Tom Manenti succeeds Carlos Rionda as president of Gang-Nail Systems.

Stephen Fray hired as Group Managing Director of MiTek Australia.

MiTek sells its 42% interest in On-Line Data, Inc. back to the original owners.

1990 Toombs negotiates a deal with Louisiana-Pacific Corporation for them to acquire the MiTek

Wood Products Company.

1991 Hydro-Air and Gang-Nail operating companies merged and renamed as MiTek Industries, Inc.

In a reorganization, Dick Marriott is named Vice President of the Western Division, Tom

Manenti Vice President of the Eastern Division and Mike Conforti as Sr. Vice President of

Specialty Division. Cornelsen names Gene Toombs President & Chief Operating Officer of

MiTek Industries, Inc.

MiTek acquires Bemax Corporation and its A.C.E.S. layout software. A.C.E.S. is an engineering

and software company associated with Bemax.

MiTek acquires Interlock Steel Company in Hermitage, PA.

1993 Per a prior agreement, Cornelsen sells his interest in MiTek to Bowater. Gene Toombs becomes

Chairman, President and Chief Executive Officer of MiTek, Inc.

Walter G. Moehlenpah dies at age 85.

156

157

1994 MiTek acquires Diamond Machinery Company in Lansing, Mi, a manufacturer of roller gantry

systems. Bob LePoire is the owner.

Mike Conforti was inducted into the WTCA Hall of Fame in 1994.

1997 MiTek’s Australian subsidiary, Gang-Nail Australia Ltd., acquires the truss connector division of

Stanley-Bostitch Pty Ltd. Engineering Services Company (ESCO) is renamed The Koskovich

Company.

1998 Mike Conforti retires.

Ron Burkhardt joins MiTek as Vice President and Chief Financial Officer.

2000 Tom Manenti appointed Executive Vice President of MiTek Industries, Inc. In addition, he is

inducted into the WTCA Hall of Fame. During his acceptance speech, Manenti dedicated the

award to Mike Conforti who is gravely ill. Conforti passes away during Thanksgiving weekend.

Hugo Du Preez is promoted to Group Managing Director over MiTek’s Europe and Africa

businesses.

2001 MiTek acquires the 50% of Gang-Nail New Zealand it did not own.

MiTek acquires Hardy Frame of Ventura, CA.

Berkshire Hathaway acquires a 90% equity stake in MiTek.

Claude Lacasse retires and Mike Sandbrook is promoted to President of MiTek Canada. Stephen

Fray promoted to Group Managing Director over MiTek Asia-Pacific businesses.

Optiframe Software, LLC becomes a joint venture of Trus Joist (Division of Weyerhaeuser) and

MiTek, Inc. Optiframe is formed to create a fully integrated whole-house design package. The

MiTek eFrame Layout program marks the beginning of a new era in component design layout

software. The objective is to provide MiTek customers with the industry's best solution to whole-

house software. The MiTek eFrame layout program is the first step in this process.

2002 MiTek acquires Tee-Lok Corporation of Edenton, NC., a high-volume connector plate stamping

operation.

Aegis Metal Framing, LLC is formed as a joint venture of Dietrich Metal Framing and MiTek.

Aegis markets a complete line of metal framing products, including the Ultra-Span® truss system,

a full line of TradeReady® products, and a full range of structural wall framing products and

accessories.

158

2003 MiTek acquires WalPlus+ Software.

MiTek acquires Production Conveyor Systems, LLC. Production Conveyor Systems engineers

machine solutions for applications involving all makes and models of component manufacturing

production equipment. It also offers complete wall panel manufacturing systems.

As part of a diversification strategy, MiTek acquires TBS Engineering, LTD, located in the UK.

TBS manufactures equipment used to make lead-acid batteries.

MiTek acquires Pacific Automation, LTD, a company located in Calgary, Canada, that designs and

manufactures truss assembly equipment.

2004 Tom Manenti promoted to President of MiTek Industries, Inc., U.S.A.

MiTek acquires long-time equipment competitor, The Koskovich Company.

Continuing its diversification efforts, MiTek acquires Tekmax, Inc., a company that expands TBS

Engineering’s product line.

2005 The 50th Anniversary of the Gang-Nail connector plate is celebrated. Cal Jureit (inventor of the

Gang-Nail connector plate) passes away at the age of 87. He assisted in the development of the

Truss Plate Industry and held over 60 patents in his lifetime.

MiTek now has operations on five continents, employing over 2000 associates, with over 350 in

the St. Louis area.

2006 Tom Manenti receives the Bowman Industry Enthusiast Award for his service to the industry.

Hardy Frame acquires Morgan Sheet Metal, Inc. the manufacturer of the Hardy Frame product

line.

MiTek Canada, Inc. acquires the connector plate division of Jager Building Systems, a Calgary-

based manufacturer and distributor of connector plates and engineered wood products.

MiTek acquires Robbins Engineering of Tampa, FL. Robbins offers a complete line of connector

products, truss manufacturing and material handling equipment, truss design and plant

management software, and also provides licensed professional engineering services.

MiTek opens a 177,600 square foot multi-use facility in St. Charles, MO. It will serve as a

Manufacturing, R&D and Training Center. It will be known as the Fountain Lakes Facility.

159

2007 Hugo Du Preez retires and is replaced by Syd Griffiths as Managing Director MiTek Europe.

Dick Marriott is promoted to Executive Vice President of MiTek Industries, Inc., with responsibility

for the field sales force and the machinery business. Joe Kannapell is promoted to Senior Vice

President, with responsibility for a number of MiTek’s sales managers. Gregg Renner is promoted

to Vice President of Marketing. His responsibilities include management of the Sales Services

Group.

2008 Tom Manenti retires to devote time to volunteer organizations.

Terry Nicholson joins MiTek as Vice President of Software Operations.

The OptiFrame joint venture with Weyerhaeuser is dissolved.

Expanding the company’s diversification efforts, MiTek acquires Hohmann & Barnard, Inc. A

company headquartered in Long Island, N.Y., H&B designs, markets and manufacturers connector

products for the masonry industry.

MiTek Australia acquires Buildsoft Pty Ltd, a software company that provides estimating and

material take-off programs.

MiTek France acquires Aginco, a direct competitor in the connector products business and the

manufacturer of a line of builder’s products.

Hohmann & Barnard acquires Blok-Lok, a Canadian competitor located in Toronto.

MiTek acquires TMI Custom Air Systems and Miller Sage, companies located in Flint, MI. TMI

designs and manufacturers large custom air handling systems while Miller Sage provides installation

service.

Dick Marriott promoted to President of MiTek Industries, Inc.

Ron Burkhardt promoted to Executive Vice President of MiTek, Inc.

2009 MiTek Industries, Inc. acquires CompuTrus, a competitor located in California. Computrus develops

truss design software and manufactures connector plates.

MiTek acquires full ownership of Aegis Metal Framing LLC from joint venture partner Dietrich

Metal Framing. Aegis becomes a wholly owned division of MiTek.

SAFAL MiTek Ltd. joint venture formed to provide cost effective roof building solutions in Kenya.

Expanding its diversification efforts, MiTek acquired SidePlate, an engineering company located

in California that designs steel frame construction products; Zone Four, another company located

in California that holds patents on hold-down products; and Heat Pipe Technologies, a company

based in Florida involved in passive heat technologies.

Gene Toombs brings Tom Manenti out of retirement to become President and COO of MiTek,

Inc.

2010 Hohmann & Barnard acquires their competitor, Dur-O-Wall.

MiTek Germany acquires Eleco Bauprodukte GmbH, a subsidiary of Eleco, Plc. Eleco

Bauprodukte GmbH is a competitor of MiTek Germany.

TMI Custom Air acquires Rush Air, Inc., thereby expanding their air-handling product line.

MiTek enters into a joint venture with Gang-Nail Do Brasil Industraia E Commercio Ltda whereby

MiTek acquires a 70% ownership interest in the company. With this investment, MiTek expands

its global operations to six continents.

2011 Gene Toombs steps down as President and CEO and is followed by Tom Manenti.

MiTek SAPPHIRE™ Suite beta process begins.

TBS Engineering expands its product line with the acquisition of Battery Technology Group

(BTG) from Teck Metals Ltd. BTG is located in Toronto, Canada, and changes its name to Battery

Technology Solutions.

Andrew Bricknell is promoted to Managing Director, MiTek Australia Ltd.

Hohmann & Barnard acquires Sandell Industries, located in Schenectady, New York. Sandell has

a product line comparable to H&B’s.

In March, MiTek acquires United Steel Products, a leading manufacturer of structural connectors

primarily for residential construction.

In July, MiTek celebrated its 10th Anniversary as a Berkshire Hathaway company.

Paul Cornelsen passes away at the age of 88 on December 27.

2012 Gene Toombs becomes Chairman Emeritus and Senior Advisor. Tom Manenti succeeds him as

Chairman and CEO.

160

162

IINDEXNDEX

AA

A.C.E.S.: 16, 47- 49, 51, 62, 64, 91-93, 101, 142, 156

Adams, Roly: 129

Aegis Metal Framing: 56, 74, 81-82, 108, 111, 142-145,

157-159

Alweca Timbers (Pty.) Ltd: 130

Andrade, Jose: 103, 105

Andrews, Paul: 77

Asche, Todd: 106-107

Automated Building Components: 115, 124, 129-130,

155

Automated Building Components (Aust.) Pty. Ltd.: 124

AutoTruss: 42, 49, 101

BB

Baer, Jack: 106

Ballmer, Steve: 77

Banded Pack: 111

BCMC Show: 65

Beckel, Dave: 107

Belcher, Andre: 129

Bemax: 16, 47-48, 62, 91-93, 101, 142, 156

Berkshire Hathaway: 56, 70-77, 80-85, 134, 142, 147,

149, 157, 160

Blok-Lok: 81, 143, 145, 159

Boozer Lumber: 92-93

Borjesson, Rolf: 70, 71

Bowater: 16, 39-40, 43, 54-55, 65, 142, 156

Bowmac: 132

Brandon, Don: 28

Bricknell, Andrew: 126-127, 160, 166

Buffett, Warren: 7, 70-77, 93, 146-151, 161

Buffett’s Six Investment Principles in 2001: 72

Burkhardt, Ron: 66, 70-71, 73-74, 144, 146, 150, 157,

159, 166

CC

Cabler, Steve: 35, 36, 166

Carr, Joe: 144, 146, 166

Carroll, Jim: 105

Carter Jr., Gordon: 106-107

Carter Sr., Gordon: 106

Casper, Jack: 41, 44, 47-48

Clarke, Simon: 129

Conforti, Mike: 31, 39, 44, 48-49, 155-157

Connector plate sent to Warren Buffett: 70

Construction Software Center (CSC): 96, 101,118, 121

Cook, Ryan: 107

Cornelsen, Floy: 30, 43, 54-55

Cornelsen, Paul: 7, 10, 12, 28-29, 31, 43, 55, 64, 88, 103,

117, 124, 142, 155, 166

Customer Summit Events: 65

Cyber Saw: 88, 103, 104, 105

DD

Daniels, Bonnie: 144, 146, 150

Dapron, Gene: 30, 39

Diab, Maged: 144, 146

Diamond Machinery: 56, 64, 102-103, 142, 157

Dietrich: 80, 82, 142, 157, 159

Du Preez, Hugo: 31, 60, 118, 130-131, 157, 159, 166

Dur-O-Wall: 81, 143, 160

163

EE

Early Software Timeline: 51

Easy Set: 102

EasySet3000: 110

EasySet4000: 110

eFrame: 93-95, 100-101, 110, 157

Emsley, Peter: 94

FF

Finland: 118-120, 155

Finn, Greg: 106-107

France: 32, 91, 105, 119-120, 145, 159

Fray, Stephen: 60, 123-126, 129, 132, 135, 144, 146,

157, 166

GG

Gang-Nail: 16, 20-24, 38-46, 51, 54, 63, 89-90, 101-

103, 114-119, 124, 142-143, 154-160

Gang-Nail Australia: 124

Gang-Nail-Rhodesia: 130

Gardiner, Laurie: 144, 146

Gates, Bill: 77, 90

Griffin, Barry: 31, 44, 47

Griffiths, Syd: 117, 144, 146, 159, 166

HH

Hardy Frame: 72, 81, 111, 142, 144, 145, 157, 158

Heat Pipe Technology: 81, 82, 84, 145

HiTech Nail Plate: 131

Hohmann & Barnard: 81, 83, 143, 159-160

Hohmann Sr., Ron: 146

Hollander, Chris: 144, 146

Howard, Bill: 105

Huff, Jim: 107

Hurwitz, Dan and Camilla: 35, 155, 166

Hyde, Andy: 60

Hydro-Air: 12, 16, 18-19, 21-24, 28-42, 46-51, 63,

88-90, 101-103, 114-119, 142, 154-156

Hydro-Air Engineering: 21-23, 41, 142, 154-155

II

Ibarra, Jose: 106, 107

Interlock Steel Company: 62, 64, 142, 156

JJ

Jager Building Systems: 115, 143, 158

Javelin: 96

Jureit, Bill: 129, 155

Jureit, J. Calvin: 20-21, 129, 154

Jurgensmeyer, Ken: 107

KK

Kannapell, Joe: 146, 159, 166

Kelley, Rodger: 105

Klein, Mike: 166

Knolle, Skip: 107

Koskovich Company, The: 56, 107, 143, 155-158

LL

Lacasse, Claude: 39, 60, 157

LePoire, Bob: 102-106, 146, 157, 166

Lombard, Herman: 129

Louisiana Pacific: 45, 142

Lumberlok Builders Hardware: 132, 142

Lyon, David: 39-40, 90

164

MM

Manenti, Tom: 16, 39, 43, 49, 56, 60, 139, 144, 146, 149,

151, 156-161, 166

Marriott, Dick: 49-50, 56, 60, 144, 146, 156, 159, 166

Martinez, Marcelino: 106

McCurdy, Herb: 31-32

McMahon, Mike: 93

McManus, Mike: 40

McQuinn, Dave: 36-38, 41-44, 48, 90, 92, 166

Miller, Tom: 146

MiTek 20/20: 93-94, 100-101, 105, 111, 121, 131-132

MiTek 2000: 37, 43-44, 47, 49, 89-92, 101, 103

MiTek South Africa (Pty.) Ltd.: 131

MiTek Wood Products: 45, 50, 142, 156, 161

MiTek's Business Application (MBA): 91-92, 97, 100-101,

110

MiTek's Name: 33

MiTek's Virtual Plant (MVP): 92-93, 100-101, 111

Moehlenpah Engineering Inc.: 20, 34, 154

Moehlenpah, Walter: 12, 20, 23, 28-32, 34, 38, 55, 88,

115, 154-155

Munger, Charlie: 72, 75

Murray, Stewart: 129, 131, 166

NN

Neil, Justin: 107

New Zealand: 56, 60, 64, 101, 114, 123, 128, 132-134,

142, 145, 157

Newham, Mike: 129

Nicholson, Terry: 5, 88, 91, 96, 144, 146, 159, 166

OO

On-Line Data: 16, 35, 39, 89-90, 101, 155, 156

On-Line Plus: 116

Optiframe Software: 94-97, 101, 142-143, 157, 159

PP

Phelps, Mark: 107

Pinsky, Paul: 88, 90, 96-98

PLANX: 108, 111

Ponko, Ed: 82

Poole, Richard: 60, 132

PowerCalc: 37-38, 42, 47, 49, 51, 101

Powers, Fred: 107

Priestley, Eric: 43

RR

RealStructure: 96

Redland PLC: 38-40, 124, 130, 155

Reichensperger, Scott: 166

Renner, Gregg: 159, 166

Renouf, Michael: 166

Rexam: 43, 56, 64-66, 70-73, 80, 83, 142

Ring, Julie: 146

Rionda, Carlos: 16, 39, 44, 155-156

Robbins Engineering: 107, 116, 143, 158

RoofCon: 100, 121

RoofGlider: 104

RoofTracker: 111

Rush Air, Inc.: 81, 83, 143

SS

SAFAL: 129, 131

Sandbrook, Mike: 114, 144, 146, 157, 166

Sanford, A. Carroll: 20, 154

SAPPHIRE™: 56, 91, 95, 97-101, 111, 132-134, 160

165

Schieffer, Dennis: 107

Schroeder, Judy: 33, 48

ShopNet: 100, 111

SidePlate Systems: 81, 84, 143

Simpad: 81, 143

Sordo, Art: 39, 44, 47, 49, 60, 92-93, 103

South Africa: 60, 101, 123, 128-132, 134

Stieglitz, Brian: 104-105

TT

Tadich, John: 124, 135

TBS Engineering: 66, 80-81, 83, 143-145, 158, 160

Tee-Lok: 56, 66, 74, 80, 101, 106, 142, 157

Tekmax, Inc.: 81, 143, 158

Tekset Puck: 108

Thuan, Gan Poh: 127

Timber Engineering Company Pty. Ltd.: 124, 130

TMI Custom Air Systems: 81, 83, 143, 145, 159

Toombs IV, Gene: 103, 107, 144, 146, 148, 166

Toombs, Gene: 5, 10-13, 16, 43-51, 56, 60-68, 70-77,

80, 88, 90, 103, 107, 116, 121-122, 131, 139, 144, 146,

148-149, 151, 156, 160-161, 166

Tromp, Gordon: 129, 130

Truss Connectors of America: 62

TrussCon: 100, 121

Trussdata: 131, 142

TrussFramer: 90, 95, 96, 101, 111

Twinaplate: 131, 142

UU

United Kingdom: 96, 117, 120, 145

United Steel Products: 81, 84, 143, 144-145, 160

VV

Valvo, Tom: 82, 144, 146, 166

Venter, Martin: 130

Vickers hydraulics: 20, 32, 154

Virtek: 108, 110

WW

Wacker, Fred: 29, 30

WalPlus+: 143, 158

Watson, Bill: 103, 166

Wyman, Steve: 94

ZZ

Zone Four: 81, 143, 160

166

I would like to thank the following individuals who contributed to the success of this book. For some, it was

recalling events decades-old. For others, it was assisting to locate key information required to provide complete and

accurate information.

First, to Tom Manenti and Terry Nicholson for their leadership and vision to put this history together. Next, to

Gene Toombs III, the driving force behind the reason MiTek is where it is today. My thanks to Paul Cornelsen, Dave

McQuinn, Steve Cabler, Gregg Renner, Mike Klein, Gene Toombs IV, Bob LePoire, Joe Kannapell, Dick Marriott,

Joe Carr, Ron Burkhardt, Hugo Du Preez, Stewart Murray, Stephen Fray, Mike Sandbrook, Andrew Bricknell, Scott

Reichensperger, Syd Griffiths, Michael Renouf, Dan Hurwitz, Tom Valvo and Bill Watson. Each shared their own

unique perspective on MiTek, providing a balanced view of the company’s history.

On a more personal note, when dealing with the individuals above, as well as the entire support team throughout

MiTek’s offices with which I had contact, it is easy to see why MiTek is not only such a great organization, but one

in which the employees at each level of the organization work hard to keep it the best in the industry. My hat goes

off to each of you.

Obviously, the untimely passing of Terry Nicholson near the end of this project was most distressing. Terry’s

leadership throughout the project was a key factor in its overall success. He will be missed professionally and

personally by many at MiTek, and by the author as well.

Jim Healey

AACKNOWLEDGMENTSCKNOWLEDGMENTS

2012 © MiTek

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