ADT 2009 Annual Report Download - page 98

systems for 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. 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 cable tray systems, steel tubes, tiles, plates and other specialty formed steel products in South
America, Asia Pacific and EMEA. With 2009 net revenue of $1.4 billion, our Electrical and Metal
Products segment comprises 8% of our consolidated net revenue. In 2008 and 2007, net revenue
totaled $2.3 billion, or 11%, of our consolidated net revenue and $2.0 billion, or 11%, of our
consolidated net revenue, respectively.
The market prices of key raw materials such as steel and copper have a significant impact on the
segment’s operating results. In particular, we monitor the difference between what the Company paid
for these raw materials and the selling price charged to customers for the range of value-add products
manufactured from these raw materials. As a result, this segment maintains diligent focus on raw
material purchases, manufacturing processes, pricing and sales strategies.
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 and fence pipe. These steel
tube and pipe products are sold under the brand names Allied Tube & Conduit and Tectron Tube. In
addition, we manufacture various electrical support system products including strut channel, metal
framing, cable tray systems and associated fittings, sold under brand names Unistrut, PowerStrut, TJ
Cope and Acroba.
Electrical and Metal Products also design and manufacture pre-wired armored and metal-clad
electrical cable, flexible and non-metallic conduit, PVC and HDPE cable protection products, as well as
other fire stop products. These offerings are sold under the brand names AFC Cable Systems, Eastern
Wire and Conduit and Kaf-Tech.
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 95% of these products are sold through wholesale distribution to trade
contractors; the remaining 5% are sold to smaller contractors and homeowners through big-box home
improvement retailers. Distribution-based sales account for 75% of the total revenue for Electrical and
Metal Products segment.
The other major customer segment, representing approximately 25% of revenue, is the OEM
market. The steel tubes supplied by Electrical and Metal Products are ultimately used as a component
for OEM products in commercial or industrial end markets. Steel tubular products are sold direct to
OEMs or through metals distributors.
Competition
The market for electrical conduit and wiring and supports, fire protection and security products
and steel tubing includes a broad range of competitors. Our principal competitors range from national
manufacturers to smaller regional players. Our customers purchase from us because of the product
availability, breadth of product line and the premium quality of products.
6 2009 Financials