annual brochure 2016 · 2017-08-23 · 3 marmon holdings, inc. selected financial data (u.s. gaap...

ANNUAL BROCHURE 2016

Marmon Retail & Highway Technologies Company

Marmon Food, Beverage & Water Technologies Company

Marmon Engineered Components Company

Marmon Energy Services Company

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Marmon Holdings, Inc., part of Berkshire Hathaway Inc., is a global, diversified industrial organization. Marmon comprises four autonomous companies consisting of 16 diverse, stand-alone business sectors, and about

175 independent manufacturing and service businesses. These four companies and their respective sectors are:

Marmon Overview

n Distribution Services & Construction ProductsServing a broad range of industries with products including specialty metal pipe, tubing, and beams; construction fasteners; and electrical wire products.

n Tubing, Fittings & Industrial ProductsSupplying copper and aluminum tubing and fit-tings for markets including plumbing, HVAC/R, automotive, and construction; aluminum and brass fittings and forgings for many commercial and industrial applications; and adhesives primarily for automotive and aerospace applications.

n Safety ProductsProviding gloves and other protective wear for markets including foodservice, automotive, and general industry; portable lighting equipment for mining and safety markets; and overhead electrification equipment for mass transit systems.

n Rail Products & Services and Intermodal ContainersServing the energy, chemical, petrochemical, agricultural, and transportation markets with products and services including railroad tank cars and intermodal tank containers.

n Engineered Products & ServicesProviding the transportation, energy, and other industries with products, services, and technologies including sulfur processing, steel tank heads and cylinders, bi-modal railcar movers, and wheels, axles, gears, and related products.

n Crane ServicesSupplying mobile cranes, operators, and lift engineering services primarily to the energy, mining, petrochemical, and construction markets.

n Engineered Wire & CableProducing electrical and electronic wire and cable for energy-related markets as well as transit, aerospace, defense, communication, and other industrial applications.

n Retail Food TechnologiesProducing food preparation equipment primarily for quick-serve restaurants as well as other commercial and institutional environments.

n Restaurant & Catering TechnologiesSupplying professional cooking and refrigeration equipment for high-end restaurants as well as the hospitality and catering markets.

n Beverage TechnologiesSupplying beverage dispensing and cooling equipment, and related products to brand owners and foodservice retailers.

n Water TechnologiesProducing water treatment equipment for residential, commercial, and industrial applications.

Marmon Engineered Components Company — 2016 Revenues $1.747 billion

Marmon Energy Services Company — 2016 Revenues $2.843 billion

Marmon Food, Beverage & Water Technologies Company — 2016 Revenues $1.230 billion

UTLX Company

n Retail ScienceDelivering retail marketing solutions to brands and retailers that are driven by shopper insights and include merchandising displays, in-store digital merchandising, retail environments, and marketing programs.

n Retail Store EquipmentSupplying display fixtures, shopping carts, and related services for retail stores, as well as material handling carts and automation equipment for many industries.

n Retail ProductsSupplying extension cords, air compressors, and other products through the home center channel, as well as work gloves and socks sold at retail.

n Highway TechnologiesServing the heavy-duty highway transportation industry with flatbed, drop-deck, and other trailers; truck and trailer components including fifth wheels, wheel-end and undercarriage products, and fenders; and truck modification services.

n Vehicle SolutionsProviding the light-duty vehicle aftermarket with engine and suspension products including clutches, fuel pumps, engine and transmission mounts, brake hydraulics, and related components.

Marmon Retail & Highway Technologies Company — 2016 Revenues $1.605 billion

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Marmon Holdings, Inc.Selected Financial Data (U.S. GAAP Basis)

(dollars in millions) 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Revenues $7,425 $7,770 $7,982 $6,972 $7,163 $6,913 $5,963 $5,062 $6,919 $6,904 $6,933 $5,605

Operating Income* $1,444 $1,472 $1,407 $1,201 $1,163 $1,018 $855 $751 $977 $951 $884 $556

Operating Income % 19.5% 18.9% 17.6% 17.2% 16.2% 14.7% 14.3% 14.8% 14.1% 13.8% 12.8% 9.9%

Total Assets $13,318 $12,388 $11,720 $10,614 $9,910 $9,027 $8,249 $7,755 $7,390 $8,079 $7,708 $7,758

Shareholders’ Equity** $7,301 $8,928 $8,217 $7,516 $6,854 $6,065 $5,393 $4,840 $4,311 $5,037 $4,486 $4,495

*Excludes interest income and interest expense **Excludes noncontrolling interests

By the Numbers

n Four companies comprising 16 business sectors

n About 175 independent business units

n Operations in more than 20 countries

n More than 350 manufacturing, distribution, and service facilities

n About 19,000 employees worldwide

n Founded in 1953 by brothers Jay and Robert Pritzker

n Berkshire Hathaway acquired Marmon in 2008

A Energy, Mining & Petrochemical 27%

B Construction & HVAC 18%

C Retail Stores & Restaurants 16%

D Industrial 10%

E Heavy-Duty Vehicles (OEM & Aftermarket) 10%

F Consumer 6%

G Transportation Providers 5%

H Food & Agriculture 4%

I Aerospace & Military 2%

J Construction & Agricultural Equipment 1%

K Other 1%

End Markets (% of 2016 revenues)

A North America 85%

B Europe 7%

C Pacific Rim 6%

D Other 2%

Geographic Markets (% of 2016 revenues)

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B

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Marmon is our kind of company.Warren Buffett, Chairman & CEO, Berkshire Hathaway Inc.

Marmon in 2016 again set a new record for operating income margin (19.5 percent), a tribute to our outstanding managers and workforce worldwide and their application of Marmon’s 80/20 business model.

This achievement is even more impressive considering the confluence of strong economic headwinds that resulted in Marmon’s first year of declining revenues and operating income (4.4 and 1.9 percent, respectively) since 2009.

These headwinds, which began in 2015, included the recession in oil/gas and other natural resources, and continued weakness in many of Marmon’s key industrial end-user markets, e.g., construction and agricultural equipment. We enter 2017 facing the additional factors of the continued strong dollar and the sharp decline in transportation, including rail and heavy-duty truck, both of which are major Marmon end-user markets. Although the worst effects of these headwinds appear to have eased, the trajectory of the recovery in these markets is difficult to gauge.

While Marmon managers have decisively reduced overhead costs where needed in down markets, like those today, we are not merely marking time until these markets recover. Rather, we are aggressively pursuing profitable growth opportunities through both innovation and acquisition across Marmon’s diverse portfolio of products, services, technologies, and geographies.

Acquisitions, a critical element of our 80/20-driven success, have been an ever-present part of Mar-mon’s DNA since the company’s founding in 1953. Almost every existing Marmon business was acquired during the 55 years of Pritzker family ownership and the last nine years under Berkshire Hathaway. Along with our rising innovation suc-cess, acquisitions breathe new life into our orga-nization and stimulate greater growth.

Under our 80/20 dictates, we map our major markets to find “sweet spots” that offer both growth potential and attractive profitability. Often, the largest growth segment of a market offers the lowest profitability. For example, in the water treatment market, a stock market favorite, the municipal water treatment segment is growing rapidly, but profit margins are low. In railcars, the tank car leasing segment is attractive in both growth and margins, but the market map tells us the freight car leasing market is not as attractive. We also use these comprehensive market maps to identify bolt-on acquisitions to build the needed platforms. We did this successfully in 2007 with our KX Technologies acquisition to provide a much-needed proprietary product boost in our residential water treatment business. KX has provided profitable growth that we could not have achieved with internal developments alone. We did it again early in 2016 with the addition of a freight car repair business to complement our already successful tank car repair network.

The key to a successful acquisition program is sustaining the growth of the acquired business for a long period, not just the first year’s accretion. We never buy to achieve such one-time synergies often touted on Wall Street. We strongly believe our 80/20 market mapping discipline greatly improves our long-term acquisition track record. While such a discipline has always existed at Marmon, in these days of higher acquisition valuation multiples, our market maps must be accurate to protect us against paying for only one-time growth and the undesirable Marmon value dilution that would follow due to a lack of sustainable growth.

Now and again we hit the growth jackpot with bigger acquisitions, e.g., TransUnion in 1981 and IMI’s beverage dispensing and merchandising equipment business in 2014. Such deals encompass multiple attractive businesses on our market maps. TransUnion brought to Marmon many of our best businesses including Union Tank Car, EcoWater, Sterling Crane, and Robertson fasteners, to name but a few. IMI brought to us Cornelius, which stood out on our beverage and food equipment market map and has led to a substantial bolt-on acquisition program to supplement our existing Prince Castle food equipment offering.

While we constantly look to land another “big fish,” such catches occur infrequently. However, reinvesting our substantial Marmon cash flow is critical to sustaining our long-term growth. In that spirit, we continue to get better at flushing out more opportunities with our market maps, which are now updated more often and backed by the certainty of more market research.

In summary, our acquisition appetite is enhanced because of our good acquisition track record and the use of our comprehensive 80/20 business model, which greatly facilitates the integration of a bolt-on acquisition in a disciplined and expeditious way.

We believe our success with such bolt-on and larger acquisitions, together with the benefits of Marmon’s rapidly emerging innovation culture, will produce the profitable growth necessary to satisfy our customers’ wants, our employees’ needs, and our shareholders’ return expectations. Profitable new growth, whether internal or spawned by acquisition, is the perfect antidote to the inherent cyclicality in many of our businesses. Such growth ensures our long-term success in serving all of our constituencies while also creating a vibrant atmosphere that motivates our valued employees.

Our bolt-on and larger acquisition success has, accordingly, increased nicely in recent years as a result of paying much more attention to these internally developed and more current market maps. Evidencing this success, we acquired eight bolt-on businesses

in 2016 that fit well on our market maps and will produce nicely profitable annualized revenues of about $270 million. The following pages provide more specific examples and testimonials on how each of our four Marmon Operating Companies use 80/20 market maps to successfully run their businesses.

Frank S. PtakChairman & CEO, Marmon Holdings, Inc.

John J. GoodyVice Chairman, Marmon Holdings, Inc.

Kenneth P. FischlVice Chairman, Marmon Holdings, Inc.

Marmon Review and Outlook

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Despite continued strong headwinds across most of our core end markets, Marmon Energy Services Company posted another

record year. These results were made possible by the talented and dedicated leaders of our business units and sectors who thrive in our 80/20 culture. Our managers constantly analyze relevant data, monitor key end markets, and embrace the ever-changing realities regarding both their internal capabilities and core customer needs. Thus, they consistently make smart decisions and create impactful growth strategies.

Our 2016 performance was driven primarily by our Rail Leasing business. The momentum of our core 109,000-railcar lease fleet and the 2015 acquisition of 25,000 tank cars from General Electric were the greatest contributors to the increase in operating income. Our core Railcar Repair business also performed extremely well with a 28 percent improvement in operating income through growth in both internal and third-party repair work.

Of special note was the outstanding performance of our Engineered Wire & Cable Sector, which increased operating income despite revenues falling by 9 percent. Facing severe slowdowns and pricing pressure in several key end markets, the Sector and business leadership teams used market mapping to focus resources on high-value opportunities while applying other 80/20 tools to de-emphasize lower-value business and cut costs. As a result, the Sector improved its contribution margin by 360 basis-points and added critical sales and engineering staff while cutting low-value fixed costs for a net overhead savings of nearly 4 percent. The net result was an operating income improvement of 7 percent. This is 80/20 working at its best!

Our largest corporate initiative to enhance our culture and drive more sound growth strategies is the requirement that all units prepare market maps for their businesses. Through this exercise, we have surfaced several highly strategic acquisitions, some of which were completed in 2016. In January, we added the GE Rail Repair network, which will allow us to further grow our third-party work beyond tank cars as well as enhance our overall tank car repair network for both internal and third-party customers. Mid-year, we purchased United Crane Hire in Western Australia, giving our Freo business access to a territory that

has been unavailable for years along with potential entry to some large key accounts. Late in the year, we purchased Zephir, a leading manufacturer of railcar movers in Italy. Zephir is a “hand in glove fit” for our successful Trackmobile business where we are the North American market leader but lacked the understanding and technology needed for globalization.

The Rail Leasing market has been falling since late 2014. However, our record results were achievable due to the momentum of our multi-year lease portfolio. This is nothing new as we have repeatedly experienced the positive and negative effects of this leasing momentum over the many economic cycles of the past. Understanding this fact, our Rail Leasing business continually manages our portfolio exposure to provide some measure of insulation for periods of weak demand. In 2017, we anticipate overall lower earnings tied to our Rail Leasing business, where new transactions and renewals will reflect the realities of current market pricing. While we are cautiously optimistic that this down cycle has bottomed and is starting to bounce back, it will take some time for lease rates to recover.

Regardless of market cycle, we will never cease to drive the continuous development of our 80/20 culture. In 2017, we will hone the preliminary insights gained using market mapping to form the basis of larger sustainable growth strategies through innovation, new market entry, and/or acquisitions. Of course, providing our customers with practical and cost effective solutions is always our overriding objective. None of this can happen without a strong, steady supply of talent and a growth-oriented business culture that challenges and rewards that talent. Accordingly, attracting and retaining the next generation workforce is always a high priority.

I could not be more proud to lead this exceptional group of people and truly believe that over the coming years even I will be surprised by the growth and success they bring to us.

Roger W. ShoresPresident & CEOMarmon Energy Services Company

A Energy & Mining 46%B Petrochemical & Chemical 21%C Industrial 11%D Transportation Providers 8%E Food & Agriculture 8%F Aerospace & Military 3%G Construction 2%H Other 1%

A North America 87%B Europe 3% C Pacific Rim 8%D Other 2%



A

C

D

EF G H

B

A

CD

B

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Marmon Energy Services Company

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U.S.-based Union Tank Car (UTLX) and Canada-based Procor together constitute North America’s leading lessor, manufacturer, and maintainer of railroad tank cars. Their combined fleet of 134,000 railcars primarily serves the chemical, petrochemical, and agricultural industries. UTLX manufactures tank cars at two facilities in the U.S.

Rail Products & Services and Intermodal ContainersMarmon Energy Services Company

The 2016 addition of GE Rail Repair enhanced Marmon Rail’s repair and maintenance network, the largest in North America. UTLX and Procor operate repair facilities throughout the U.S. and Canada as well as providing on-site service at customer locations. In addition to bolstering Marmon’s overall tank car repair capabilities, the GE Rail Repair shops will enable Marmon to expand its repair work beyond tank cars to include other types of railcars.

UTLX opened a tank car retrofit facility in 2016 (below and right). The new plant is specifically equipped and staffed to upgrade existing tank cars to meet the latest government safety standards for transporting flammable liquids.

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Railserve is North America’s largest provider of in-plant rail switching and associated services, using its own locomotives and employees to safely move railcars within industrial sites. Railserve crews also coordinate the movement of raw materials from the point of receipt to the point of production to the point of departure, including the loading/unloading of bulk solids and bulk liquids. Here, a Railserve employee loads plastic pellets into a hopper car. Through its Ameritrack business unit, Railserve also offers rail track construction, repair, and inspection services.

Railserve’s safety innovations include the Railserve Emergency ACTion (REAct) transmitter, which attaches to crew members’ safety vests and enables them to remotely stop Railserve locomotives at the push of a button.

EXSIF Worldwide is the world’s leading lessor of intermodal tank containers for the global transportation, distribution, and storage of bulk liquids, chemicals, and gases. The fleet of more than 47,000 containers includes a wide range of equipment types, specifications, and capacities.

The Railserve LEAF® (Lower Emissions and Fuel) gen-set locomotive is an efficient and environmentally-friendly locomotive for use in industrial rail yards.

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Trackmobile® manufactures mobile railcar movers for in-plant and rail yard switching and spotting. More than 10,000 Trackmobiles are in operation worldwide.

Enersul provides customers globally with services, equipment, and technology for processing and distributing sulfur. In addition to operating sulfur forming and handling plants on behalf of customers worldwide, Enersul offers project management and after-sales service.

Penn Machine products include wheels, axles, gears, and wheelsets (pictured) for the mass rail transit market, traction gears and pinions for locomotive maintenance, and assorted gears for mining and other industrial uses.

Uni-Form Components provides custom-fabricated steel tank heads, cones, and cylinders used in the petrochemical, rail transportation, aerospace, hydrocarbon processing, and oil and gas industries. The company’s flanging machines can produce tank heads up to 300 inches in diameter and up to 9 inches thick.

Engineered Products & ServicesMarmon Energy Services Company

In late 2016, Marmon acquired Zephir, a leading European manufacturer of mobile railcar movers and industrial towing tractors. With the addition of the Italy-based company, Marmon has the world’s largest railcar mover production capability and offers the greatest variety of units for rail customers in all industrial segments.

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Marmon’s fleet includes conventional truck and crawler cranes, hydraulic cranes, all-terrain and rough-terrain cranes, and boom trucks as well as self-propelled modular transporters (right) capable of moving vessels weighing up to 1,600 tons.

Marmon Crane Services owns and operates more than 1,000 mobile cranes—one of the world’s largest such fleets—primarily serving the energy, natural resource, construction, and industrial markets.

Freo Group, Marmon’s crane company in Australia, expanded in 2016 with the acquisition of United Crane Hire in Western Australia. The acquisition, part of a growth strategy driven by market mapping for the Australian crane business, increases Freo’s fleet and strengthens its position in the region.

Marmon’s global crane business originated in Western Canada with Sterling Crane, which has grown to serve customers throughout Canada and the U.S. In addition, Marmon Crane Services today includes Freo Group in Australia and a joint venture, Astha Sterling Crane, in India.

Crane Services Marmon Energy Services Company

Marmon offers rapid deployment of a versatile crane fleet and skilled operators, and works closely with its customers to safely and dependably execute carefully-engineered lifts.

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The Energy & Industrial Products Group supports the oil and gas, nuclear power, and transit markets with products designed for harsh environments. For example, RSCC Wire & Cable custom packages its Exane® power, control, and instrumentation cables for the top drive service loops used on drilling rigs and platforms.

The Military/Aerospace Solutions Group serves the aerospace, defense, communication, and other markets requiring exacting standards. The group’s highly engineered products are exemplified by Marmon Aerospace & Defense cables for mission-critical applications such as rocket launches.

The Power/Utility & Applied Sensor Solutions Group primarily serves electric utilities with ultra-dependable overhead and underground power distribution products. These include the Hendrix® aerial cable system from Marmon Utility, which consists of covered conductor supported by a high strength messenger in a compact triangular configuration. It has earned a reputation for withstanding the effects of ice, snow, and wind storms, downed tree branches, and even toppled utility poles.

Engineered Wire & Cable Marmon Energy Services Company

RSCC Wire & Cable is the only U.S. cable manufacturer with more than 40 years of continuous service to the nuclear utility industry. Its broad line of nuclear-qualified products includes medium-voltage power cables; low-voltage control, power, and instrumentation cables; and specialty high temperature, data, fiber, and circuit integrity cables.

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Marmon Engineered Wire & Cable businesses offer a comprehensive line of Gardex® armored cables for oil and gas, mining, utility, and other markets where cable is exposed to extreme conditions. Gardex products from Dekoron include hybrid fiber optic/copper data and instrumentation cables as well as ruggedized Cat 5e cables designed for Ethernet communication and applications in hazardous locations.

nEngineered Wire & CablePower/Utility & Applied Sensor Solutions

Marmon UtilityHendrix Aerial Cable SystemsHendrix Underground Cable SystemsHendrix Molded ProductsKerite Cable ServicesKerite Power Cable

TE Wire & CableComposite ProductsOEM & Sensor ProductsMetallurgy Products

CCPI (United Kingdom)

ComtranData Communications CablePremise Telephone CableSecurity/Access Control Cable

Dekoron/UnithermOil & Gas ProductsUtility & Power Products

Military/Aerospace Solutions

Harbour IndustriesMilitary Specification ProductsAerospace Wiring ProductsElectronic Hook-up WiringAerospace Data Products (IFE)High Performance Coaxial ProductsCommunications Products

Harbour Industries (Canada)Industrial Wire & Cable ProductsOil & Gas Products

Marmon Aerospace & Defense

KITCO Fiber Optics

Energy & Industrial Products

RSCC Wire & CableExane® ProductsIndustrial & Flexible Cable ProductsMetal Clad ProductsPump CableNuclear Utility Products

Dekoron Wire & CablePetrochemical ProductsShale Gas ProductsPower Generation ProductsIndustrial Products

Radiant-RSCC Specialty Cable (India)

Cable USAIndustrial ProductsMilitary ProductsFine Wire ProductsAerospace & Airframe ProductsU.S. Navy Shipboard Products

Supply & Support

Gendon Polymer ServicesInsulating & Jacketing CompoundsRubber & Polymeric Products

Owl Wire and Cable

Innovation & Technology Center

UTLX Company

nRail Products & Services Union Tank Car Company

UTLX LeasingUTLX ManufacturingUTLX Repair Shop & Field Services

Procor LimitedProcor LeasingProcor Repair Shop & Field Services

RailserveRailserve Switching & TransloadingRailserve LEAF ® LocomotiveAmeritrack

Intermodal Containers

EXSIF WorldwideEXSIF ChinaEXSIF RussiaLindenau Full Tank Services GmbH

nEngineered Products & Services

EnersulEnersul OperationsEnersul Technology

Penn Machine CompanyPenn TransitPenn Locomotive

TrackmobileTrackmobile ManufacturingTrackmobile Aftermarket Parts

Uni-Form Components

Zephir (Italy)

nCrane ServicesSterling Crane Canada

Eastern CanadaCentral CanadaWestern CanadaOil Sands

Sterling Crane U.S.

Freo Group (Australia)

Astha Sterling Crane (India)

Electronic cables developed by Marmon Engineered Wire & Cable businesses enhance fire safety for the public, industrial workers, and emergency responders. These cables, which will withstand direct exposure to 2,000-degree flames, are designed to gain precious time for the operation of critical systems such as emergency lighting in a transit tunnel, fire pump controllers in a high-rise building, or emergency shutoff valves in a petrochemical plant.

Marmon Energy Services CompanyBusinesses

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All business sectors within Marmon Engineered Components Company performed at a high level in 2016 despite

significant challenges including depressed metal prices, volume erosion in many of our main markets, and a strong dollar. Our Industrial Products Sector posted record high operating income and return on sales, while our Tubing & Fittings Sector achieved its highest-ever profit margin. Our Metals Distribution/Services & Wire Products Sector recorded a respectable profit margin, with several of its business units achieving record margins.

We owe our progress to a fine group of managers and employees who put Marmon’s 80/20 business model into practice. One of the key items in our 80/20 toolbox is market mapping, which we use to recognize and target market segments and niches that are attractive to us. These internally-developed maps also help us to position our products and services to meet the needs and wants of our target customers. As we reexamined our market maps in 2016, we found many bright spots within our key growth platforms that are providing solid revenue growth. More important, equipping these platforms with the necessary resources has positioned us for even stronger future growth.

The Tubing & Fittings Sector advanced its heating and cooling platform growth by continuing to proliferate its highly profitable RLS high-pressure refrigeration press fittings in both existing and new markets. Introduction of the RLS technology is transforming this Sector from just a supplier of commodity copper tubing into a provider of innovative, distinctive solutions that set it apart from the competition.

In November 2016, we acquired Coilmaster Corporation, a premier manufacturer of custom heat exchanger coils for the commercial refrigeration OEM and replacement markets. Our plan to incorporate the RLS technology into Coilmaster products will create exciting opportunities to participate in new markets while enhancing profitability and taking Coilmaster’s product performance to the next level.

The Industrial Products Sector performed well in 2016. Western Builders Supply (WBS), which was acquired in 2015, exceeded financial objectives and Tucker Safety Products, a 2014 acquisition, attained the highest return on sales within the Engineered Components Company. Both of these acquisitions are fine examples of the value of market mapping. Each has given its group (Construction Fasteners for WBS;

Safety Products for Tucker) fresh momentum to sell adjacent products to existing and new customers, innovate, and expand geographically.

The Metal Distribution/Services & Wire Products Sector in 2016 continued to be negatively affected by declining steel prices and weak end-user market conditions that have plagued us since 2015. On a positive note, new segmentation based upon market mapping and realignment of resources has positioned the Bushwick business to become a highly effective distributor of construction steel products. Future Metals, a very profitable business that provides tubular metal products to the aerospace OEM and aftermarket, is currently the “sweet spot” within this Sector. A new platform, using Future Metals’ market maps, will offer a more complete supply chain solution through the combination of core tubular products and tube connectors and fittings. Our market maps have identified several potential acquisitions of aerospace fluid and gas component manufacturing and distribution companies, one or more of which we expect to come to fruition in 2017.

As with Coilmaster, we will use our market maps to identify complementary companies for acquisition. These highly-focused additions allow both our existing and new businesses to benefit from each other’s adjacent product and technology innovations, distribution channels, and geographic presence. As complementary businesses join the fold, we often find that one thing leads to another, resulting in the whole being greater than the sum of its parts. While bolt-on acquisitions are vital, we also are looking for potential larger acquisitions as platforms for major growth.

To take greater advantage of our many opportunities, we recently reorganized our Company into three primary groups— Distribution Services & Construction Products, Tubing, Fittings & Industrial Products, and Safety Products—as reflected on the following pages. With a mantra of “growth and innovation through sound leadership,” our Company has come a long way since it was formed four years ago. We have lofty goals for 2017 and beyond, and I am optimistic and excited about our ability to meet or surpass them.

E.L. (Woody) PetchelPresident & CEOMarmon Engineered Components Company

A Construction & HVAC 54%B Industrial 18%C Vehicle Manufacturers & Aftermarket 7%D Construction & Agricultural Equipment 5%E Aerospace & Military 5%F Transportation Providers 2%G Energy, Mining & Petrochemical 1%H Other 8%

A North America 96%B Europe 3% C Pacific Rim 1%



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Marmon/Keystone is a leading wholesale distributor of specialty pipe, tubing, and related products in steel, aluminum, and alloys for a wide variety of industries and customers. The company’s North American network of metal service centers, which are established near customers, allow for more personal service and next-day delivery within a 150-mile radius on 98 percent of orders.

Future Metals serves the global aerospace industry with tubing, extrusions, bar, and sheet products made from stainless steel, aluminum, titanium, and nickel alloys.

Marmon/Keystone offers customers who need finished or semi-finished parts, rather than raw stock, more than 150 services such as machining, honing, drilling, threading, and fabrication. At some locations, laser tube cutting machines are used to precisely produce parts with slots, holes, and mitered ends.

Distribution Services & Construction Products Marmon Engineered Components Company

Continued

Marmon/Keystone’s internally-developed software program allows employees and customers to easily access and track up-to-the-minute information about order status and other account history.

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Penn Aluminum produces drawn aluminum tubing and extruded aluminum shapes for the construc-tion, automotive, appliance, medical, and other markets.

Nylok’s patented fastener coatings are used for the self-locking, self-sealing, and protection of fastener threads. Primary markets include the global automotive and aerospace industries.

Cerro Fabricated Products supplies custom-machined aluminum and brass forgings to the construction, energy, recreation, and other industries.

Cerro Wire manufactures copper electrical wire for interior wiring in residential, commercial, and industrial buildings. Selling its products through wholesale electrical distributors and retail outlets, the company focuses on meeting the needs of electrical contractors.

Distribution Services & Construction Products continued


Tubing, Fittings & Industrial Products

Robertson, Atlas Bolt & Screw, Pan American Screw, and Western Builders Supply (WBS) serve the construction, industrial, and other markets with a wide variety of fasteners. WBS, which joined Marmon in 2015, sells its fasteners through lumberyards, home centers, and farm and ranch supply businesses under the Big Timber® brand. Among Pan American’s products is the patented Mantis® deck clip system, which creates a fastener-free decking surface. The hidden clips attach decking boards to the joists, leaving the tops untouched by any hardware.

Bushwick Metals supplies the structural fabrication, construction, and industrial markets with a broad line of products including steel beams. Bushwick also provides cut and fabricated rebar used to reinforce concrete.

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Cerro Linesets are used in heating and air-conditioning installations, while Cerro Industrial Tube provides copper tube used in a variety of markets.

Cerro Plumbing Tube manufactures copper tube used in residential and commercial plumbing.

Anderson Fittings supplies brass fittings and forgings for commercial and industrial applications. Cerro EMS produces non-ferrous forgings (not pictured), both as-forged and machined, using conventional as well as fully automated equipment for a wide range of industries.

RLS® offers press-to-connect copper and aluminum fittings engineered for high-pressure refrigeration lines used in the air conditioning and refrigeration industries. The patented RLS fittings eliminate the need to manually braze aluminum or copper joints, a difficult and time-consuming process. Benefits include reduced installation time, lower total installed costs, greater consistency, and significantly improved safety by eliminating the need for an open flame.

The HVAC/R Group of the Tubing, Fittings & Industrial Products Sector expanded in 2016 with the acquisition of Coilmaster, a leading manufacturer of heat exchanger coils, fluid coolers, and remote air-cooled condensers for the OEM and replacement markets. Coilmaster’s products help meet the growing demand for efficient, cost effective heat transfer solutions.

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Koehler-Bright Star provides specialized portable lighting equipment including flashlights, high-intensity spotlights, battery-powered cap lamps, batteries, and charging equipment used in environments such as mining, public safety, fire, utility, and industrial safety.

nDistribution Services & Construction Products

Steel Service

Marmon/Keystone U.S.

Marmon/Keystone Canada

Marmon/Keystone Mexico

Aerospace Products

Future Metals

Construction Products

Bushwick Metals

Atlas Bolt & ScrewAtlas Bolt & Screw (Shenzhen)

Pan American Screw

Western Builders Supply

RobertsonRobertson (Jiaxing)

Wire Products

Cerro Wire

nTubing, Fittings & Industrial Products

Plumbing

Cerro Plumbing Tube

Anderson Fittings

Cerro E.M.S. (United Kingdom)

HVAC/R

Cerro Industrial Tube

Cerro Linesets

Coilmaster

RLS® Press Fittings

Industrial Products

Cerro Fabricated Products

Nylok

Penn Aluminum International

nSafety Products Wells Lamont Industrial

Jomac (Canada)

Procoves (France)

Tucker Safety Products

Koehler-Bright Star

IMPulse

IMPulse supplies overhead electrification equipment for mass transit systems. Recent innovations include a quick-lock cantilever system whose structural capabilities meet customer requirements for performance, ease of installation, and a visually appealing end product. The patented system (pictured in Toronto) features an internal pipe design that reduces product weight while still supporting the loads required of today’s infrastructure designs. A special outside groove allows for easy on-site adjustment, saving the customer time and money.

Safety Products Marmon Engineered Components Company

U.S.-based Wells Lamont Industrial and Tucker Safety Products, Canada-based Jomac, and France-based Procoves manufacture and market gloves, mitts, hot pads, sleeves, aprons, and other protective wear for markets including foodservice, automotive, and general industry. Pictured are a firefighter glove from Procoves, a protective sleeve from Wells Lamont, and the new QuicKlean™ pre-curved, four-finger gloves from Tucker. Designed for commercial kitchens, the Tucker gloves can be washed and sanitized without losing the protective qualities of the company’s proprietary VaporGuard® barrier. The construction reduces hand fatigue and increases roomy comfort while providing effective insulation against burns.

Marmon Engineered Components Company Businesses

17

Marmon Food, Beverage & Water Technologies Company enjoyed a successful 2016, our first full year as an

autonomous Company. The four business sectors that make up our Company collectively achieved record revenues and income. Credit for these all-time best results goes to the strong leadership teams and dedicated employees in our sectors and business units globally. As always, we are grateful to our valued customers for relying on us to provide innovative product and technology solutions.

Led by strong competitive positions in the foodservice equipment and residential water treatment markets, and boosted by strategic acquisitions, our businesses overcame the impact of an unfavorable currency translation and continued headwinds in certain key end markets. Deep application of Marmon’s 80/20 business model, including the use of market maps, has sharpened our focus on investing in the best growth opportunities in both existing and new businesses. Highly-selective acquisitions completed in 2016 have opened avenues for substantial, sustainable growth.

Two successful 2016 acquisitions in Italy formed a strong foundation for a new business sector, Marmon Restaurant & Catering Technologies. First, we acquired Angelo Po, a leader in professional cooking and refrigeration equipment for the high-end restaurant market. The addition of Angelo Po significantly expands our foodservice product and technology portfolio, our presence in Europe, and our growth opportunities globally. Next, we acquired the assets of Dominioni, whose commercial pasta products complement Angelo Po’s products. Serving the restaurant, hospitality, and catering markets, its innovative equipment solutions help meet the growing demand for fresh food.

Our Retail Food Technologies Sector achieved record revenue through high penetration in the quick-service restaurant market, particularly in North America. This Sector has also grown appreciably in the European market, focusing on the key countries where our customers are expanding and investing in store renovation. In 2016, we further enhanced product innovation, helping our customers solve their most critical issues including operational costs, equipment reliability, food quality, and safety.

Our Beverage Technologies Sector experienced modest growth in 2016. Its European segment was limited by end-market customer mergers and consolidation, which slowed demand. However, the Sector’s

Asia-Pacific segment experienced solid growth by expanding its local market share, while its core North American segment grew thanks to resegmentation and refocusing of the business. A steady stream of innovation in this Sector has enhanced our product portfolio, gaining recognition by key customers and enabling consumer engagement and interaction through products such as our newly-launched beverage dispenser digital platform.

Finally, our Water Technologies Sector had an exceptional year. The Sector achieved record income through excellent growth in Asia-Pacific markets and numerous customer successes in all of its operating groups. Continuous innovation, long a hallmark of this Sector, allowed Water Technologies to compensate for a slump in industrial water projects tied to the decline in oil and gas prices. Market mapping has served this Sector well, as exemplified by the 2014 acquisition of India-based Filtrex Technologies. Filtrex’s array of drinking water purification products substantially broadened our water technologies portfolio. Our superior and patented technologies for removing lead and other heavy metals from water supplies are gaining momentum in all markets we serve and will enable further advancement in our key segments.

We foresee a positive 2017 for our Company despite some possible softness in the North American restaurant market, where key indicators began to signal a slowdown in the latter part of 2016. The numerous new platforms we have launched in every one of our sectors, coupled with the integration of the acquisitions we completed last year, have strengthened our competitive position. Guided by our 80/20 principles and market maps, we will further invest in the operating efficiencies, innovation, acquisitions, and other initiatives with the highest potential for long-term profitable growth.

I am extremely proud of what our outstanding management team and employees worldwide accomplished during the past year. Our people are our greatest strength, and I expect them to achieve even more in 2017. Thanks to them, our future looks very bright.

Fabrizio ValentiniPresident & CEOMarmon Food, Beverage & Water Technologies Company

A Retail Stores & Restaurants 59%B Consumer 23%C Energy, Mining & Petrochemical 8%D Industrial 6%E HVAC 1% F Other 3%

A North America 64%B Europe 16% C Pacific Rim 16%D Other 4%



A

C

DF

B

A

B

C

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Silver King provides refrigerated food holding cabinets and preparation tables, freezers, and other commercial products including milk and cream dispensers.

Prince Castle designs and produces food preparation equipment for the world’s leading quick-serve and casual-dining restaurants as well as other commercial and institutional markets. Equipment includes high-speed contact toasters, hot food holding cabinets, contact grills, steamers, timers, and related products.

Saber King is a modular food-cutting system that saves labor, improves safety, and maximizes space by allowing users to effi ciently slice all types of produce on a single device. Interchangeable blade cartridges can slice, dice, and chop, for example, a full head of lettuce or four tomatoes at a time.

Retail Food TechnologiesMarmon Food, Beverage & Water Technologies Company

19

Restaurant & Catering TechnologiesMarmon Food, Beverage & Water Technologies Company

Closely following the acquisition of Angelo Po, Marmon acquired the assets of another Italian business, Dominioni Punto & Pasta, whose products complement those of Angelo Po. The newly-created Marmon Pasta Solutions produces Dominioni-branded professional pasta equipment for the restaurant, hospitality, and catering markets, as well as for high-volume pasta manufacturers. Models are designed for varying capacity of many pasta types including fresh and dry pasta, pasta with filling, dough-kneading machines, dough dividers, gnocchi, lasagna, and ready meals.

The 2016 acquisition of Italy-based Angelo Po expanded the product portfolio and global profile of Marmon’s foodservice business. It also formed the foundation of Marmon’s new Restaurant & Catering Technologies Sector. Angelo Po supplies professional cooking and refrigeration equipment to customers including restaurants, caterers, hotels, cafeterias, hospitals, and schools in Europe, Asia, and North America. Its products include an array of modular cooking lines, food preparation tables, and combination ovens/blast chillers.

Sagi, a subsidiary of Angelo Po, specializes in the design and production of professional refrigeration equipment. Products include blast chillers and other cold storage appliances for restaurants as well as refrigerated display cases for a variety of retailers and caterers.

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Beverage TechnologiesMarmon Food, Beverage & Water Technologies Company

Cornelius serves global brand owners and foodservice retailers with a broad line of dispensing and cooling equipment for soft drinks, beer, ice, juice, tea, and frozen beverages. Its global footprint encompasses operations and customers in the Americas, Europe, the Middle East, and Asia.

The Refresh Pro unit from Cornelius can dispense up to 20 beverage brands with more than 3,000 unique drinks available when combined with four of the eight on-board flavor shots. The touch screen that controls the unit also plays marketing content linked to the beverage choice.

Cornelius provides a variety of still and sparkling water dispensers with either integral or remote water carbonators, and built-in filtration systems.

Display Technologies supplies point-of-purchase equipment and develops in-store merchandising solutions for clients in the global foodservice and beverage markets. For example, the company’s Visi-Slide™ on-shelf management system is the industry standard for single-serve beverage organizers. Angled shelves use gravity to keep product at the front of the cooler.

Trade Fixtures manufactures merchandising displays, bins, and dispensing systems for the bulk foods sections of supermarkets and foodservice retailers worldwide. For example, the H2Optimized™ unit allows consumers to create their own purified, enriched water to fit their specific preferences. Using a touchscreen, shoppers can select sparkling or still water and add a vitamin/mineral enhancement and flavor before dispensing the water into a bottle or jug.

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Water TechnologiesMarmon Food, Beverage & Water Technologies Company

Continued

India-based Filtrex Technologies, acquired in 2014, brought significant patented filtration technologies to Marmon’s water treatment portfolio and continues to play a key role in the development and introduction of innovative drinking water purification products. Filtrex products include molded carbon blocks, filter sub-assemblies, and cartridges with carbon block or activated carbon. The company’s new reverse osmosis (RO) system uses its new Variable Drain Flow Restrictor (VDFR) technology. This innovation reduces RO system wastewater by 50 percent, a critical need in areas where water is scarce.

Marmon Water Technologies provides residential drinking water systems globally to remove lead, other heavy metals, industrial pollutants, chemicals, pharmaceuticals, and chlorine taste and odor. Products incorporate the latest in extruded carbon block technology as well as the patented Fibrillated Adsorbent Cellulose Technology (FACT®) from KX Technologies to improve the safety, taste, and smell of drinking water. FACT employs thin fibers to create filters that remove lead and other contaminants in both pressurized and non-pressurized applications. Examples include, clockwise from top left, filtration systems for school drinking fountains; prefiltration for point-of-use reverse osmosis systems; filters for countertop carafes; and point-of-entry filtration systems used in convenience stores, truck stops, quick-service restaurants, and other commercial environments to purify water not only for dispensing, but also for cooking and washing.

EcoWater is among the world’s leading producers of residential water softeners and related equipment. Products are sold under the EcoWater name through an international dealer network as well as under licensed brands available at leading retailers. EcoWater’s HydroLink Plus® technology allows a homeowner to remotely monitor and manage water use, and the system alerts users when softener salt is needed or when potential issues are detected.

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nRetail Food TechnologiesPrince Castle

Prince Castle China

Saber King

Silver King

Catequip & Cat’Serv (France)

Epuro (France)

nRestaurant & Catering Technologies

Angelo Po (Italy)

Marmon Pasta Solutions/Dominioni (Italy)

Sagi (Italy)

nBeverage TechnologiesCornelius

Cornelius Americas

Cornelius Asia-Pacific

Cornelius Europe-Middle East

3Wire Group

Display Technologies

Trade Fixtures

nWater TechnologiesNorth America Retail Water Products

EcoWater Systems Retail Products

KX Technologies Retail Products

North America Professional Products

EcoWater Europe

Marmon Water Asia

Kunshan EcoWater Systems

Marmon Product Development Center (Singapore)

Residential Water Filtration Products

KX Technologies Filtration Products

KX Technologies Research & Development

Filtrex Technologies (India)

Aqua Works (India)

Industrial Filtration

Graver Technologies Adsorbents

Graver Technologies Utilities

Graver Technologies Industrial Filter

Graver Technologies Liquid Filter

Industrial Water

Ecodyne Equipment

Ecodyne Aftermarket

Graver Water Systems Equipment

Graver Water Systems Aftermarket

Industrial Heat Exchangers

Ecodyne Heat Exchangers Aftermarket

Ecodyne UET Heat Exchangers

Industrial Gears

Amarillo Gear

Amarillo Gear Service

Amarillo Wind Machine

Water Technologies continued


Graver Technologies produces industrial water filters to remove trace contaminants and purify process water and other fluids and gases.

Ecodyne Limited provides industrial water treatment systems for markets including power generation, oil and gas, and chemical.

Marmon Food, Beverage & Water Technologies Company Businesses

Graver Water’s reverse osmosis systems (below) are engineered to economically supply demineralized water for industrial plants without the need for hazardous chemicals. The systems reduce dissolved contaminants by removing minerals, particles, and organic impurities.

Ecodyne Heat Exchangers produces modular, standardized air-cooled heat exchangers for industrial applications.

Amarillo Gear serves the air-cooled steam condenser market with parallel shaft gearboxes (right) used in the power generation, chemical, and process cooling industries. The company also makes right angle fan drives for cooling towers found in power and petrochemical plants and industrial pump drives used in applications including fire protection, municipal water, and flood control systems. Its Global Gearbox (far right) is designed for heat transfer applications that require higher torque ratings in a smaller package.

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The businesses of Marmon Retail & Highway Technologies Company proved themselves in 2016. Falling end-market

demand for our highway products and an ever-changing retail space tested their fortitude. However, enabled by the focus and nimbleness of our 80/20 business model, they acted decisively to meet the challenging market dynamics. As a result, while our Company’s revenues dropped significantly from 2015, our operating income margin remained respectable.

Sharp declines in the oil, gas, agriculture, and raw material markets in 2016 affected our largest Sector, Highway Technologies, including all 13 of its North American business units. Industry-wide, Class 8 truck orders plunged 36 percent from 2015, taking a huge toll on our OEM businesses. Even our heavy-duty aftermarket businesses, where end-market demand is typically more stable, felt the impact of declining freight volumes. Our market-focused managers, industry veterans well versed in the cyclicality of the highway transportation space, acted proactively to size our businesses to the new demand levels. Additionally, we took the opportunity to revamp our businesses for developing market and competitive pressures. For example, the highly-cyclical flatbed trailer market required a more variable cost base. Using the 80/20 toolbox, our managers were able to shutter and list for sale a number of trailer factories while actually expanding capacity.

The retail evolution continues to affect our merchandising businesses. As changing consumer patterns and online shopping wreaked havoc on brick and mortar stores, our large retail customers shifted resources from new store openings and remodels to e-commerce opportunities. This is an ideal scenario for 80/20 market mapping, allowing us to find attractive niches even in shrinking markets. Our Retail Store Equipment Sector, with a primary focus on grocery retailers, has done an excellent job of deemphasizing our traditional store equipment businesses of wire, sheet metal shelving, and shopping carts—instead focusing on products that save the retailer money. To help our customers address rising distribution, labor, and food spoilage costs, we have developed product lines centered on improving store operations. For example, our engineered logistic carts and product organizers provide a clear payback to the retailer. While improving store efficiencies, these products are also sharp-looking displays,

enhancing the shopper experience that is so critical to retail. These businesses have grown at a more than 20 percent revenue CAGR for the last three years, and we expect the trend to continue.

We have grouped our businesses to take advantage of product and market opportunities, using market maps as guides. Our Retail Science Sector is a collection of merchandising businesses producing custom displays that trigger a purchase at retail by better engaging the consumer. This is another retail niche that is thriving as brick and mortar stores seek ways to attract shoppers and transact sales. Producing custom fixtures and furniture can be complex and simplifying our products and businesses, an 80/20 principle, is our managers’ focus in 2017.

Not all market trends have been against us. Increasing annual miles driven and average vehicle age (now nearing 12 years) are fueling our highest growth Sector, Marmon Vehicle Solutions. This group of businesses focuses on the light-vehicle aftermarket serving both the “do it for me” and “do it yourself” segments through various channels. Careful mapping of the market opportunities has defined our business focus and directed us to several attractive areas. We have identified a number of product areas where we can innovate, simplifying the repair installation process. After identifying motor mounts as a “sweet spot” for us, in 2016 we purchased the assets of DEA Products, a motor mount supplier to wholesale channels. Not only did we exceed our first year pro-forma targets for this bolt-on acquisition, our new Marmon Ride Control business earned “Supplier of the Year” honors from a major automotive aftermarket retailer.

Thanks to our management team, we met the challenges of 2016 by quickly adapting to the market conditions and mapping out the best product niches. I expect our Company to achieve significant progress in 2017 by innovating in the right spaces and solving our valued customers’ problems, all led by our skillful Marmon managers and their employees around the world.

Mark A. CarrierPresident & CEOMarmon Retail & Highway Technologies Company

Marmon Retail & Highway Technologies Company

A Heavy-Duty Vehicles (OEM & Aftermarket) 39%B Retail Stores & Restaurants 27%C Construction & HVAC 16%D Consumer 9%E Transportation Providers 6%F Other 3%

A North America 86%B Europe 10% C Pacific Rim 2% D Other 2%



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Commercial Zone Products designs and manufactures site furnishings for retail and convenience stores, service stations, restaurants, and hotels. Products include recycling and waste containers, cigarette disposal receptacles, and more.

The Retail Science Sector develops retail merchandising solutions for global brands and retailers, with a focus on markets including transportation, cosmetics, and consumer electronics. Its Computer Aided Virtual Environment technology (CAVE) allows retailers to experience, test, and refine designs—and see what their customers will see—without the cost of expensive prototyping.

Retail Science Retail Store EquipmentMarmon Retail & Highway Technologies Company

Unarco is North America’s leading designer and manufacturer of shopping carts for retail stores. The company produces both metal and plastic carts.

DCI-Artform creates marketing programs and products for a variety of retail settings including automobile showrooms. The company’s digital displays provide a personalized shopping experience for consumers, a sales tool for the auto dealership, and an informational pipeline for the OEM about customer needs and preferences.

U.K.-based Sloane Retail Solutions and U.S.-based L.A. Darling and Streater produce merchandising displays and shop-in-shop concepts that help retailers attract and interact with consumers, thus stimulating sales.

Cannon Equipment designs and produces carts for use in storage, stocking, material handling, and distribution applications. CannonCarts™ are employed in a variety of industries, including e-commerce, grocery, retail, automotive, and government.

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Retail Store Equipment Retail Products

Unarco’s Tight-Nest™ shopping carts save valuable retail space by fitting closer together, without sacrificing any basket capacity. The design also lowers freight cost. Unarco is now applying the same principles to larger model carts.

Marmon Retail Electrical Products serves consumers with electrical products sold through home improvement stores and other retail outlets. Products include the Flexzilla® Pro extension cord, a kink-free, high-visibility power cord engineered to remain flexible even in cold weather. The lighted indicator end, glow-in-the-dark stripe, and grounded plug enhance safety.

Wells Lamont Retail supplies many styles of work, garden, and general purpose gloves, and work socks sold in more than 15,000 home improvement, hardware, and other retail stores across the U.S.

Cannon also produces automation equipment used in the dairy, bakery, and other industries. Products include palletizers, conveyance and casing equipment, and a new pallet checker (below). The automated pallet inspection station identifies and segregates damaged pallets before they can be used, thus preventing product loss and damaged packaging while improving production line efficiency.

Campbell Hausfeld manufactures a broad range of air compressors, tire inflators, paint sprayers, pressure washers, and related products sold through home improvement centers and other retail stores. Its six-gallon and eight-gallon air compressors are designed to minimize noise while still providing ample power.

Retail Space Solutions provides self-facing merchandising systems to grocery and other retailers worldwide. Its SpaceDriver® display system improves merchandising aesthetics, reduces in-store labor, and helps shoppers easily locate and select shelved products. Patented flexible features allow for a single tray design to accommodate various

types of merchandise and styles of packaging. For example, a

patent-pending mechanism enables heavy glass items to move safely forward when the consumer removes a product, a feature historically not found

in the industry.

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Highway TechnologiesMarmon Retail & Highway Technologies Company

Fontaine fifth wheels are used to safely and efficiently couple trucks and trailers. With Fontaine’s Clean-Connect™ technology, the fifth wheel no longer requires grease to lubricate between the top plate surface and the trailer coupling plate, eliminating the associated labor costs, materials, and downtime.

TSE Brakes produces air brake actuators and undercarriage brake service parts for heavy-duty vehicles. Products include the UltraLife-Disc™ actuator (below) with a reduced-profile port system that improves ground clearance and reduces weight. This product also features the Visi-Chek® brake stroke indicator, which alerts operators to potential braking concerns before they go out on the road.

Marmon-Herrington provides axles, transfer cases, and other severe-duty drivetrain products such as this extreme heavy-duty front drive axle for use in vocational all-wheel drive applications.

Fontaine Modification adapts heavy and medium-duty trucks for a wide range of applications for customers including manufacturers, dealers, and fleets. For example, Fontaine supports waste management companies and municipalities by providing sit-down, dual-drive modifications on many commercial truck models.

Fontaine Spray Suppression provides fenders and other spray suppression products under the Hogebuilt (below), Fleetline, and Nu-Line brands.

Fontaine Platform Trailers manufactures heavy-duty flatbed and drop-deck trailers in all-aluminum and aluminum and steel models. Fontaine Heavy Haul/Military Products supplies a variety of trailers for rugged duty including the Fontaine Traverse® model with hydraulic tail.

Webb Wheel Products manufactures brake drums, rotors, and hubs for heavy and medium-duty trucks and trailers. Focusing its innovation efforts on improving heat transfer efficiency, Webb’s Vortex® brake drums with CRT® (Cool Running Technology) last up to 25 percent longer than other brake drums, even in the toughest class 6, 7, and 8 truck and trailer applications. Webb also offers a complete line of automatic slack adjusters designed to optimize braking performance and component life.

nRetail ScienceDCI-Artform North America

DCI-Artform Europe

Commercial Zone Products

L.A. Darling

Sloane Retail Solutions (United Kingdom)

Store Opening Solutions

Streater

nRetail Store Equipment Eden (United Kingdom)

Eden Europe (Czech Republic)

Leader Metal Industry (Asia)Commercial/Industrial ProductsRetail Fixture Products

Retail Space Solutions

Cannon Equipment

Unarco IndustriesUnarco Industries China

nRetail ProductsCampbell Hausfeld

Marmon Retail Electrical Products

Wells Lamont Retail

nHighway TechnologiesHeavy-Duty & Aftermarket Components

Fontaine Fifth Wheel North America

Fontaine Fifth Wheel Europe

Webb Wheel Aftermarket

Webb Wheel OEM Trailer

Webb Wheel OEM Specialty Truck

Webb Wheel Brake Adjusters

TSE Brakes

Transportation Equipment

Fontaine Platform Trailers

Fontaine Heavy Haul/Military Products

Fontaine Floor Technologies

Transportation Products & Services

Fontaine Modification

Fontaine Spray Suppression

Triangle Suspension Systems

Marmon-Herrington

Sisu Axles (Finland)

nVehicle SolutionsPerfection Brands

National Brands

Retail Brands

Perfection Mexico

Marmon Ride Control

Marmon Ride Control Mexico

MRC Chassis

Marmon Retail & Highway Technologies Company Businesses

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Vehicle SolutionsMarmon Retail & Highway Technologies Company

Marmon’s Vehicle Solutions Sector supplies specialty engine and suspension parts for the automotive aftermarket, serving the largest national retailers and auto repair specialists in the U.S. and Mexico and, ultimately, the consumer. Products include Perfection clutches, fuel pumps, brake hydraulics, and related components.

Mass air flow sensors from Perfection (below) are used to determine the mass flow rate of air entering a fuel-injected internal combustion engine. The air mass information is necessary for the engine control unit to balance and deliver the correct fuel mass to the engine.

The Vehicle Solutions Sector expanded in 2016 via the acquisition of the assets of DEA Products, a motor mount supplier. The newly-formed Marmon Ride Control business provides a variety of engine and transmission mounts through the same channels as Perfection. During its first year in existence, Marmon Ride Control was named “Supplier of the Year” by a leading automotive aftermarket retailer.

181 West Madison Street, 26th Floor Chicago, Illinois 60602-4510Phone 312-372-9500 Fax 312-845-5305 www.marmon.com© 2017 Marmon Holdings, Inc.

The Forest Stewardship Council® (FSC®) Chain of Custody certification means that from the forest to the printer, this paper was produced following the most sustainable practices available.

Marmon Holdings, Inc. derives its name from the Marmon Motor Car Company (1902-1933). While we never made automobiles, we are proud to associate ourselves with the company’s heritage of excellence.

As with other early automobile manufacturers, Marmon’s need to test the limits of what its cars could do led it down the road—or, more precisely, onto the track—of car racing. Automotive engineers often doubled as test drivers. One such full-time engineer and part-time racecar driver was Marmon’s Ray Harroun.

On May 30, 1911, Harroun drove the Marmon Wasp to victory in the first Indianapolis 500 race. While the car’s name came from its color scheme and the shape of its tail, its place in racing history came from the winning strategy devised by Harroun and his Marmon team.

In the early days of racing, the cars were all two seaters, with a “riding mechanic” on board to alert the driver when other cars were coming up from behind and trying to pass. Marmon engineers determined that if they built a single seater they could save the weight

of a second person while creating a narrower and more streamlined body.

The lack of a riding mechanic in the Marmon car raised safety concerns among other racing teams. However, Harroun remembered having seen a horse-drawn wagon equipped with a pole with a mirror on it. Soon, a 3-inch by 8-inch mirror was mounted atop the Wasp’s cowling, believed to be the first rearview mirror on an automobile. Problem solved? Not exactly. Harroun later confided: “To tell you the truth, it shook so badly I couldn’t see a damn thing anyway.”

More significant to the race’s out-come was Marmon’s strategy regarding tire life. Blown tires were common and the related downtime was significant. The Marmon team determined that while cars could run at average speeds of 80 miles per hour or faster, if they ran at 75 miles per hour or slower the tire life could be doubled.

On race day in 1911, the Wasp made just four pit stops, all to change its right rear tire, and had no blowouts. Meanwhile, the second-place car stopped 11 times and needed 14 tires changed. The Wasp’s winning average

speed was 74.6 miles per hour, exactly as planned.

Marmon’s data-driven, highly-disciplined approach worked. The Marmon team combined innovation, differentiation, and an intense focus on what mattered most to winning. In the Marmon of today, we call that 80/20.

While the Marmon Motor Car Company did not survive the Great Depression, the Marmon business name continued when Walter Marmon cofounded a new company called Marmon-Herrington to produce a wide range of all-wheel drive vehicles. By the early 1960s, Marmon-Herrington made heavy-duty axles and transfer cases and was one of a dozen industrial businesses owned by the Pritzker family of Chicago. In 1964, the Marmon name was adopted for the growing group of companies.

More than half a century since adopting the Marmon name and more than a century since Ray Harroun drove the Wasp to victory, Marmon Holdings is still growing. Thanks to the strength of our 80/20 business model and the quality of our people, we are still winning, too.

Driven by 80/20 — in 1911

annual brochure 2016 · 2017-08-23 · 3 marmon holdings, inc. selected financial data (u.s. gaap...

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