ADT 2010 Annual Report Download - page 95

totaled $1.4 billion, or 8%, of our consolidated net revenue and $2.3 billion, or 12%, 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, the difference between amounts paid for these raw materials
and the selling price charged to customers for the range of value-add products manufactured from
these raw materials significantly impacts operating results. 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 designs and manufactures 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 the 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. Principal competitors range from national
manufacturers to smaller regional players. Customers purchase from Electrical and Metal Products
because of the product availability, breadth of product line and the premium quality of products.
Safety Products
Our Safety Products segment designs, manufactures and sells fire suppression, electronic security
and life safety products, including fire suppression products, breathing apparatus, intrusion, security,
access control and video management systems. In addition, Safety Products manufactures products
installed and serviced by ADT Worldwide and Fire Protection Services. With 2010 net revenue of
$1.5 billion, our Safety Products segment comprises 9% of our consolidated net revenue. In 2009 and
2008, net revenue totaled $1.5 billion, or 9%, of our consolidated net revenue and $1.9 billion, or 10%,
of our consolidated net revenue, respectively.
2010 Financials 7