ADT 2007 Annual Report Download - page 102

Our Safety Products businesses utilize a worldwide network of sales offices and operate globally
under various trade names, including Scott, Ansul, Grinnell, SoftwareHouse, American Dynamics, DSC
and Bentel.
Competition
Competition for the manufacture and sale of our products is based on specialized product capacity,
breadth of product line, price, training and support and delivery. The principal competitors are
specialty products manufacturing companies based in the United States, with other smaller competitors
in Europe and Asia.
Electrical and Metal Products
Our Electrical and Metal Products segment designs, manufactures and sells galvanized steel tubing
and pipe products, as well as cable products, including pre-wired electrical cables, and electrical support
and metal framing systems. In North America, our Allied Tube & Conduit business is a leading
manufacturer of electrical steel conduit, and our AFC Cable Systems division is a leading manufacturer
of steel and aluminum pre-wired electrical cable. Electrical and Metal Products also manufactures and
sells steel tubes, tiles, plates and other specialty formed steel products in Brazil. With 2007 net revenue
of $2.0 billion, our Electrical and Metal Products segment comprises 11% of our consolidated net
revenue. In 2006 and 2005, net revenue totaled $1.9 billion and $1.8 billion, respectively, which
represents 11% of our consolidated net revenue in both years.
The market prices of key raw materials such as steel and copper have a significant impact on the
segment’s operating results. The segment’s operating margins are significantly affected by steel and
copper spreads which are the difference between what the company paid for these raw materials and
the selling price charged to customers for the range of products manufactured from these raw
materials.
Strategy
We intend to maintain our market position in key end markets by continuing to take advantage of
our low-cost manufacturing base, technical leadership and brand recognition. We also plan to increase
our product offerings to address opportunities in specific industries, such as comprehensive metal
framing solutions for the non-residential construction industry. In our tubular products business, we
intend to diversify into new OEM markets and offer complementary products in our existing markets.
Services and Products
Electrical and Metal Products designs and manufactures galvanized steel tubing and pipe products
that include electrical conduit, fire sprinkler pipe, light gauge steel tube, fence pipe and automotive
tubular components. These steel tube and pipe products are sold under the brand names Allied Tube &
Conduit, Century Tube and Tectron Tube.
We also design and manufacture cable products including pre-wired armored and metal-clad
electrical cable as well as flexible and non-metallic conduit. These cable products are sold under the
brand names AFC Cable Systems, Eastern Wire and Kaf-Tech. In addition, we manufacture various
electrical support system products including strut channel and cable tray systems and associated fittings,
sold under the brand names Unistrut and TJ Cope.
Customers
The majority of the products manufactured by Electrical and Metal Products are used by trade
contractors in the construction and modernization of non-residential structures such as commercial
office buildings, institutional facilities, manufacturing plants and warehouses, shopping centers and
multi-family dwellings. Nearly 90% of these products are sold through wholesale distribution to trade
contractors; the remaining 10% of sales are sold to smaller contractors and homeowners through home
improvement retailers.
10 2007 Financials