Black & Decker 2011 Annual Report Download - page 15

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FORM 10-K
PART I
ITEM 1. BUSINESS
General
The Stanley Works (“Stanley”) was founded in 1843 by Fredrick T. Stanley and incorporated in 1852. In March of 2010, Stanley
completed a merger (“the Merger”) with the Black & Decker Corporation (“Black & Decker”). Black & Decker is recognized
worldwide for its strong brand names and a superior reputation for quality, design, innovation and value. Management believes the
Merger represented a transformative event bringing together two highly complementary companies with iconic brands, rich business
histories and common distribution channels, yet minimal product overlap. The Merger also enabled a global offering in hand and
power tools, as well as hardware, thus enhancing the Company’s value proposition to customers. In connection with the Merger,
Stanley changed its name to Stanley Black & Decker Inc. (“the Company”).
The Company is a diversified global provider of power and hand tools, mechanical access solutions (i.e. automatic doors, commercial
and residential locking systems), electronic security and monitoring systems and products and services for various industrial
applications with 2011 consolidated annual revenues of $10.4 billion. The Company is continuing to pursue a diversification strategy
that involves industry, geographic and customer diversification to foster sustainable revenue, earnings and cash flow growth. The
Company has four growth platforms: security (both electronic and mechanical), engineered fastening, infrastructure and healthcare
solutions. The Company intends to focus on organic growth across all of its businesses, with the majority of acquisition-related
investments being within the four growth platforms. Finally, approximately 51% of the Company’s annual revenues are generated in
the United States in 2011, with the remainder largely from Europe, Latin America, and Canada.
Execution of this diversification strategy has entailed approximately $4.6 billion of acquisitions since 2002 (aside from the Merger)
and increased brand investment, enabled by strong cash flow generation. The September 2011 acquisition of Niscayah Group AB
(“Niscayah”) for a total purchase price of $984.5 million and the July 2010 purchase of CRC-Evans Pipeline International (“CRC-
Evans”) for $451.6 million demonstrate this strategy. Niscayah is one of the largest access control and surveillance solutions providers
in Europe. Niscayah’s integrated security solutions include video surveillance, access control, intrusion alarms and fire alarm systems,
and its offerings include design and installation services, maintenance and repair, and monitoring systems. The acquisition expands
and complements the Company’s existing electronic security offerings and further diversifies the Company’s operations and
international presence. CRC-Evans is a full line supplier of specialized tools, equipment and services used in the construction of large
diameter oil and natural gas transmission pipelines both on and offshore. CRC-Evans also sells and rents custom pipe handling and
joint welding and coating equipment used in the construction of large and small diameter pipelines. The acquisition of CRC-Evans
served to establish the beginning of the infrastructure platform whereby the Company can provide tools and services to a new set of
high growth, high margin end markets and channels.
At December 31, 2011, the Company employed approximately 44,700 people worldwide. The Company’s principal executive office is
located at 1000 Stanley Drive, New Britain, Connecticut 06053 and its telephone number is [phone].
Description of the Business
The Company’s operations are classified into three reportable business segments, which also represents its operating segments:
Construction & Do-It-Yourself (“CDIY”), Security, and Industrial. The Company’s consolidated financial statements include Black &
Decker’s results of operations and cash flows from March 13, 2010. All segments have significant international operations in
developed countries, but do not have large investments that would be subject to expropriation risk in developing countries.
Fluctuations in foreign currency exchange rates affect the U.S. dollar translation of international operations in each segment.
Additional information regarding the Company’s business segments and geographic areas is incorporated herein by reference to the
material captioned “Business Segment Results” in Item 7 and Note P, Business Segments and Geographic Areas, of the Notes to the
Consolidated Financial Statements in Item 8.
CDIY
The CDIY segment is comprised of the professional power tool and accessories business, the consumer power tool business, which
includes outdoor products, plumbing (Pfister) and the hand tools, fasteners & storage business. The segment sells its products to
professional end users, distributors and retail consumers. The majority of sales are distributed through retailers, including home
centers, mass merchants, hardware stores, and retail lumber yards. Annual revenues in the CDIY segment were $5.3 billion in 2011,
representing 50% of the Company’s total revenues.