Black & Decker 2010 Annual Report Download - page 30

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Low demand for new products and the inability to develop and introduce new products at favorable margins
could adversely impact the Company’s performance and prospects for future growth.
The Company’s competitive advantage is due in part to its ability to develop and introduce new products in a
timely manner at favorable margins. The uncertainties associated with developing and introducing new
products, such as market demand and costs of development and production, may impede the successful
development and introduction of new products on a consistent basis. Introduction of new technology may
result in higher costs to the Company than that of the technology replaced. That increase in costs, which may
continue indefinitely or until and if increased demand and greater availability in the sources of the new
technology drive down its cost, could adversely affect the Company’s results of operations. Market acceptance
of the new products introduced in recent years and scheduled for introduction in 2011 may not meet sales
expectations due to various factors, such as the failure to accurately predict market demand, end-user
preferences, and evolving industry standards. Moreover, the ultimate success and profitability of the new
products may depend on the Company’s ability to resolve technical and technological challenges in a timely
and cost-effective manner, and to achieve manufacturing efficiencies. The Company’s investments in produc-
tive capacity and commitments to fund advertising and product promotions in connection with these new
products could erode profits if those expectations are not met.
The Company’s products could be subject to product liability claims and litigation.
The Company manufactures products, configures and installs security systems and performs various services
that create exposure to product and professional liability claims and litigation. If such products, systems and
services are not properly manufactured, configured, installed, designed or delivered, personal injuries, property
damage or business interruption could result, which could subject the Company to claims for damages. The
costs associated with defending product liability claims and payment of damages could be substantial. The
Company’s reputation could also be adversely affected by such claims, whether or not successful.
The Company’s products could be recalled.
The Consumer Product Safety Commission or other applicable regulatory bodies may require the recall, repair
or replacement of the Company’s products if those products are found not to be in compliance with applicable
standards or regulations. A recall could increase costs and adversely impact the Company’s reputation.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
As of January 1, 2011, the Company and its subsidiaries owned or leased material facilities for manufacturing,
distribution and sales offices in 17 states and 16 foreign countries. The Company believes that its material
facilities are suitable and adequate for its business.
Certain properties are utilized by more than one segment and in such cases the property is reported in the
segment with highest usage.
17