Black & Decker 2015 Annual Report Download - page 17

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FORM 10-K
PART I
ITEM 1. BUSINESS
General
Stanley Black & Decker, Inc. ("the Company") was founded in 1843 by Fredrick T. Stanley and incorporated in Connecticut in
1852. In March 2010, the Company completed a merger ("the Merger") with The Black & Decker Corporation (“Black &
Decker”), a company founded by S. Duncan Black and Alonzo G. Decker and incorporated in Maryland in 1910. At that time,
the Company changed its name from The Stanley Works ("Stanley") to Stanley Black & Decker, Inc. The Company is a
diversified global provider of hand tools, power tools and related accessories, mechanical access solutions (i.e. automatic doors
and commercial locking systems), electronic security and monitoring systems, healthcare solutions, engineered fastening
systems and products and services for various industrial applications, with 2015 consolidated annual revenues of $11.2 billion.
The Company is continuing to pursue a growth and acquisition strategy that involves industry, geographic and customer
diversification to foster sustainable revenue, earnings and cash flow growth. The Company is focused on growing organically,
including increasing its presence in emerging markets, with a goal of generating greater than 20% of annual revenues from
those markets, and leveraging the Stanley Fulfillment System, a now expanded program focused on upgrading innovation and
digital capabilities while maintaining commercial and supply chain excellence, and funding required investments through
functional transformation. In regards to acquisitions in the near-term, the Company intends to pursue targets that consolidate
the tool industry and expand the Industrial platform in Engineered Fastening and Infrastructure. The Company remains focused
on improving the operating results of the Security business and plans to reevaluate its recovery progress and strategic fit by the
second half of 2016. In 2015, approximately 53% of the Company’s annual revenues were generated in the United States, with
the remainder largely from Europe (22%), emerging markets (16%) and Canada (5%).
Execution of the Company's strategy has resulted in approximately $6.2 billion of acquisitions since 2002 (excluding the Black
& Decker merger) and increased brand investment, enabled by cash flow generation and increased debt capacity. The
acquisitions of Infastech in February 2013 and Jiangsu Guoqiang Tools Co., Ltd. ("GQ") in May 2013 exemplify this strategy.
Infastech is a global manufacturer and distributor of specialty engineered fastening technology based in Hong Kong. The
acquisition of Infastech added to the Company's strong positioning in specialty engineered fastening, an industry with solid
growth prospects particularly in the global electronics, industrial and automotive end markets, and further expanded the
Company's global footprint with its strong concentration in fast-growing emerging markets. GQ is the #3 mid-price-point
power tool manufacturer in China and complements the Company's existing power tools product offerings in the Tools &
Storage segment. In addition to these acquisitions, in December 2012, the Company sold its Hardware & Home Improvement
business ("HHI"), including the residential portion of Tong Lung, to Spectrum Brands Holdings, Inc. ("Spectrum") for
approximately $1.4 billion in cash. The purchase and sale agreement stipulated that the sale occur in a First and Second
Closing. The First Closing, which excluded the residential portion of the Tong Lung business, occurred on December 17, 2012
while the Second Closing, in which the residential portion of the Tong Lung business was sold, occurred on April 8, 2013. The
Company also divested several smaller businesses in recent years that did not fit into its long-term strategic objectives. The
operating results of these divested businesses have been reported as discontinued operations in the Consolidated Financial
Statements. Refer to Note E, Acquisitions, and Note T, Discontinued Operations, of the Notes to Consolidated Financial
Statements in Item 8 for further discussion.
At January 2, 2016, the Company employed approximately 51,250 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
During the first quarter of 2015, the Company combined the Construction & Do-It-Yourself ("CDIY") business with certain
complementary elements of the Industrial and Automotive Repair ("IAR") and Healthcare businesses (formerly part of the
Industrial and Security segments, respectively) to form one Tools & Storage business. As a result, the Company recast segment
financial information for prior periods to align with this change in organizational structure. There was no impact to the
consolidated financial statements of the Company as a result of this change.
The Company’s operations are classified into three reportable business segments, which also represent its operating segments:
Tools & Storage, Security and Industrial. All segments have significant international operations and are exposed to translational
and transactional impacts from fluctuations in foreign currency exchange rates.
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 Consolidated Financial Statements in Item 8.