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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

|           |  |                                                                                         
|---------- |  | ----------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                         
|(X)        |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
|           |  |                                                                                         
|           |  | For the quarterly period ended September 30, 2002                                       
|           |  |                                                                                         
|           |  | OR                                                                                      
|           |  |                                                                                         
|(  )       |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|           |  |                                                                                         
|           |  | For the transition period from  to                                                      
|           |  |                                                                                         
|           |  | Commission File Number: 333-54122                                                       

Atrium Corporation

(Exact name of registrant as specified in its charter)


|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 75-2814598                             
|                                                               |  |                                        
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)

1341 W. Mockingbird Lane, Suite 1200W, Dallas, Texas 75247, (214) 630-5757

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(Address of principal executive offices, including zip code and telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (X)    No (  )



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ATRIUM CORPORATION

FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2002

INDEX

|                                                                                              |                                                                                                                          |  |       |      |  |      |  | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ |  | ----- | ---- |  | ---- |  | 
|                                                                                              |                                                                                                                          |  |       |      |  | Page
|                                                                                              |                                                                                                                          |  |       |      |  |     
|PART I.                                                                                      
|FINANCIAL INFORMATION                                                                        
|Item 1. Consolidated Financial Statements (Unaudited):                                        |                                                                                                                          |  |       |     
|                                                                                              | Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001                                               |  |       | 2    | 
|                                                                                              | Consolidated Statements of Operations for the Three Months Ended
September 30, 2002 and 2001                             |  |       | 3    | 
|                                                                                              | Consolidated Statements of Operations for the Nine Months Ended
September 30, 2002 and 2001                              |  |       | 4    | 
|                                                                                              | Consolidated Statement of Stockholders Equity and Other Comprehensive Loss
for the Nine Months Ended September 30, 2002 |  |       | 5    | 
|                                                                                              | Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2002 and 2001                              |  |       | 6    | 
|                                                                                              | Notes to Consolidated Financial Statements                                                                               |  |       | 7-12 | 
|Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations |                                                                                                                          |  | 13-17 |     
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                            |                                                                                                                          |  | 17    |     
|Item 4. Controls and Procedures                                                               |                                                                                                                          |  | 17    |     
|PART II.                                                                                     
|OTHER INFORMATION                                                                            
|Item 1. Legal Proceedings                                                                     |                                                                                                                          |  | 18    |     
|                                                                                              | Items 2, 3, 4 and 5 are not applicable                                                                                   |  |       |      | 
|Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                                          |  | 18    |     
|Signatures                                                                                    |                                                                                                                          |  | 19    |     
|Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                      |                                                                                                                          |  | 20-21 |     

1



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ATRIUM CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts)

|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |         |         | 
|-------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------------- | ------- | ------------ | ------- | ------- | ------- | 
|                                             |                                                                                                                                                                     |                                            |         | September 30, |         | December 31,
|                                             |                                                                                                                                                                     |                                            |         | 2002          |         | 2001        
|                                             |                                                                                                                                                                     |                                            |         |               |         |             
|                                             |                                                                                                                                                                     |                                            |         | (unaudited)   |         |              |         |        
|ASSETS                                      
|CURRENT ASSETS:                              |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             | Cash and cash equivalents                                                                                                                                           |                                            | $       | 5,481         |         |              | $       | 1,247   |        
|                                             | Accounts receivable, net                                                                                                                                            |                                            |         | 3,368         |         |              |         | 3,895   |        
|                                             | Retained interest in sold accounts receivable                                                                                                                       |                                            |         | 31,025        |         |              |         | 14,373  |        
|                                             | Inventories                                                                                                                                                         |                                            |         | 38,033        |         |              |         | 36,737  |        
|                                             | Prepaid expenses and other current assets                                                                                                                           |                                            |         | 4,256         |         |              |         | 4,819   |        
|                                             | Deferred tax asset                                                                                                                                                  |                                            |         | 1,327         |         |              |         | 1,106   |        
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             |                                                                                                                                                                     | Total current assets                       |         |               | 83,490  |              |         |         | 62,177  | 
|PROPERTY, PLANT AND EQUIPMENT, net           |                                                                                                                                                                     |                                            | 57,394  |               |         |              | 55,755  |        
|GOODWILL, net                                |                                                                                                                                                                     |                                            | 345,239 |               |         |              | 345,239 |        
|DEFERRED FINANCING COSTS, net                |                                                                                                                                                                     |                                            | 15,450  |               |         |              | 17,982  |        
|OTHER ASSETS, net                            |                                                                                                                                                                     |                                            | 7,825   |               |         |              | 7,366   |        
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             |                                                                                                                                                                     | Total assets                               |         | $             | 509,398 |              |         | $       | 488,519 | 
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY        
|CURRENT LIABILITIES:                         |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             | Current portion of notes payable                                                                                                                                    |                                            | $       | 5,489         |         |              | $       | 6,191   |        
|                                             | Accounts payable                                                                                                                                                    |                                            |         | 31,496        |         |              |         | 18,539  |        
|                                             | Accrued liabilities                                                                                                                                                 |                                            |         | 31,124        |         |              |         | 29,695  |        
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             |                                                                                                                                                                     | Total current liabilities                  |         |               | 68,109  |              |         |         | 54,425  | 
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|LONG-TERM LIABILITIES:                       |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             | Notes payable                                                                                                                                                       |                                            |         | 336,310       |         |              |         | 333,760 |        
|                                             | Deferred tax liability                                                                                                                                              |                                            |         | 1,327         |         |              |         | 1,106   |        
|                                             | Other long-term liabilities                                                                                                                                         |                                            |         | 523           |         |              |         | 707     |        
|                                             | Swaps contract liability                                                                                                                                            |                                            |         | 5,481         |         |              |         | 6,821   |        
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             |                                                                                                                                                                     | Total long-term liabilities                |         |               | 343,641 |              |         |         | 342,394 | 
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             |                                                                                                                                                                     | Total liabilities                          |         |               | 411,750 |              |         |         | 396,819 | 
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|COMMON STOCK SUBJECT TO MANDATORY REDEMPTION |                                                                                                                                                                     |                                            | 15,604  |               |         |              | 15,604  |        
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|COMMITMENTS AND CONTINGENCIES                |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|STOCKHOLDERS EQUITY:                        |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             | Common stock $.01 par value, 245,000 shares authorized, 170,444 and 170,399 shares
issued and outstanding at September 30, 2002 and December 31, 2001, respectively |                                            |         | 2             |         |              |         | 2       |        
|                                             | Paid-in capital                                                                                                                                                     |                                            |         | 179,403       |         |              |         | 179,526 |        
|                                             | Accumulated deficit                                                                                                                                                 |                                            |         | (91,606       | )       |              |         | (95,163 | )      
|                                             | Accumulated other comprehensive loss                                                                                                                                |                                            |         | (5,755        | )       |              |         | (8,269  | )      
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             |                                                                                                                                                                     | Total stockholders equity                 |         |               | 82,044  |              |         |         | 76,096  | 
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        
|                                             |                                                                                                                                                                     | Total liabilities and stockholders equity |         | $             | 509,398 |              |         | $       | 488,519 | 
|                                             |                                                                                                                                                                     |                                            |         |               |         |              |         |        

The accompanying notes are an integral part of the consolidated financial statements.

2



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ATRIUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2002 and 2001
(Dollars in thousands)
(unaudited)

|                                                                                                                               |                            |   |         |        |      |   |         |        |  
|------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | - | ------- | ------ | ---- | - | ------- | ------ | -
|                                                                                                                               |                            |   | 2002    |        | 2001
|                                                                                                                               |                            |   |         |        |     
|NET SALES                                                                                                                      |                            | $ | 144,763 |        |      | $ | 138,514 |       
|COST OF GOODS SOLD                                                                                                             |                            |   | 95,977  |        |      |   | 93,643  |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|Gross profit                                                                                                                   |                            |   | 48,786  |        |      |   | 44,871  |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|OPERATING EXPENSES:                                                                                                            |                            |   |         |        |      |   |         |       
|Selling, delivery, general and administrative expenses (excluding
securitization, stock compensation and amortization expense) |                            |   | 30,313  |        |      |   | 28,693  |       
|                                                                                                                               | Securitization expense     |   |         | 325    |      |   |         | 1,165  |  
|                                                                                                                               | Stock compensation expense |   |         | 75     |      |   |         | (207   | )
|                                                                                                                               | Amortization expense       |   |         | 845    |      |   |         | 3,619  |  
|                                                                                                                               |                            |   |         |        |      |   |         |       
|SELLING, DELIVERY, GENERAL AND ADMINISTRATIVE
EXPENSES                                                                         |                            |   | 31,558  |        |      |   | 33,270  |       
|Special charge                                                                                                                 |                            |   |        |        |      |   | 136     |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|                                                                                                                               |                            |   | 31,558  |        |      |   | 33,406  |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|                                                                                                                               | Income from operations     |   |         | 17,228 |      |   |         | 11,465 |  
|INTEREST EXPENSE                                                                                                               |                            |   | 11,377  |        |      |   | 11,421  |       
|OTHER EXPENSE, net                                                                                                             |                            |   | 132     |        |      |   | 47      |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|Income (loss) before income taxes                                                                                              |                            |   | 5,719   |        |      |   | (3      | )     
|PROVISION FOR INCOME TAXES                                                                                                     |                            |   | 248     |        |      |   | 389     |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|Income (loss) before extraordinary charge                                                                                      |                            |   | 5,471   |        |      |   | (392    | )     
|EXTRAORDINARY CHARGE ON EARLY RETIREMENT OF
DEBT (net of income tax benefit of $0 in 2001)                                     |                            |   |        |        |      |   | 837     |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|NET INCOME (LOSS)                                                                                                              |                            | $ | 5,471   |        |      | $ | (1,229  | )     
|                                                                                                                               |                            |   |         |        |      |   |         |       

The accompanying notes are an integral part of the consolidated financial statements.

3



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ATRIUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2002 and 2001
(Dollars in thousands)
(unaudited)

|                                                                                                                               |                            |   |         |        |      |   |         |        | 
|------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | - | ------- | ------ | ---- | - | ------- | ------ | 
|                                                                                                                               |                            |   | 2002    |        | 2001
|                                                                                                                               |                            |   |         |        |     
|NET SALES                                                                                                                      |                            | $ | 406,233 |        |      | $ | 390,707 |       
|COST OF GOODS SOLD                                                                                                             |                            |   | 273,157 |        |      |   | 267,443 |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|Gross profit                                                                                                                   |                            |   | 133,076 |        |      |   | 123,264 |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|OPERATING EXPENSES:                                                                                                            |                            |   |         |        |      |   |         |       
|Selling, delivery, general and administrative expenses (excluding
securitization, stock compensation and amortization expense) |                            |   | 87,900  |        |      |   | 80,603  |       
|                                                                                                                               | Securitization expense     |   |         | 879    |      |   |         | 1,165  | 
|                                                                                                                               | Stock compensation expense |   |         | 308    |      |   |         | 506    | 
|                                                                                                                               | Amortization expense       |   |         | 2,475  |      |   |         | 10,752 | 
|                                                                                                                               |                            |   |         |        |      |   |         |       
|SELLING, DELIVERY, GENERAL AND ADMINISTRATIVE
EXPENSES                                                                         |                            |   | 91,562  |        |      |   | 93,026  |       
|Special charge                                                                                                                 |                            |   | 3,948   |        |      |   | 275     |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|                                                                                                                               |                            |   | 95,510  |        |      |   | 93,301  |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|                                                                                                                               | Income from operations     |   |         | 37,566 |      |   |         | 29,963 | 
|INTEREST EXPENSE                                                                                                               |                            |   | 33,796  |        |      |   | 34,617  |       
|OTHER INCOME, net                                                                                                              |                            |   | 265     |        |      |   | 9       |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|Income (loss) before income taxes                                                                                              |                            |   | 4,035   |        |      |   | (4,645  | )     
|PROVISION FOR INCOME TAXES                                                                                                     |                            |   | 478     |        |      |   | 899     |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|Income (loss) before extraordinary charge                                                                                      |                            |   | 3,557   |        |      |   | (5,544  | )     
|EXTRAORDINARY CHARGE ON EARLY RETIREMENT OF
DEBT (net of income tax benefit of $0 in 2001)                                     |                            |   |        |        |      |   | 837     |       
|                                                                                                                               |                            |   |         |        |      |   |         |       
|NET INCOME (LOSS)                                                                                                              |                            | $ | 3,557   |        |      | $ | (6,381  | )     
|                                                                                                                               |                            |   |         |        |      |   |         |       

The accompanying notes are an integral part of the consolidated financial statements.

4



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ATRIUM CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY AND OTHER COMPREHENSIVE LOSS
For the Nine Months Ended September 30, 2002
(Dollars in thousands, except share amounts)
(unaudited)

|                             |                                                                              |  |         |   |         |   |             |   |               |   |               |   |        |   |         |       |  |   |             |       |  |   |        |       | 
|---------------------------- | ---------------------------------------------------------------------------- |  | ------- | - | ------- | - | ----------- | - | ------------- | - | ------------- | - | ------ | - | ------- | ----- |  | - | ----------- | ----- |  | - | ------ | ----- | 
|                             |                                                                              |  |         |   |         |   |             |   |               |   |               |   |        |   |         |       |  |   | Accumulated |       |  |   |       
|                             |                                                                              |  | Class A |   |         |   |             |   |               |   |               |   | Other  |   | Total  
|                             |                                                                              |  |         |   | Paid-in |   | Accumulated |   | Comprehensive |   | Stockholders'
|                             |                                                                              |  | Shares  |   | Amount  |   | Capital     |   | Deficit       |   | Loss          |   | Equity
|                             |                                                                              |  |         |   |         |   |             |   |               |   |               |   |       
|Balance, December 31, 2001   |                                                                              |  | 170,399 |   |         | $ | 2           |   |               | $ | 179,526       |   |        | $ | (95,163 | )     |  | $ | (8,269      | )     |  | $ | 76,096 |      
|Issuance of Class A Shares   |                                                                              |  | 70      |   |         |   |            |   |               |   | 1             |   |        |   |        |       |  |   |            |       |  |   | 1      |      
|Repurchase of Class A Shares |                                                                              |  | (25     | ) |         |   |            |   |               |   | (25           | ) |        |   |        |       |  |   |            |       |  |   | (25    | )    
|Repurchase of stock options  |                                                                              |  |        |   |         |   |            |   |               |   | (99           | ) |        |   |        |       |  |   |            |       |  |   | (99    | )    
|Comprehensive income:        |                                                                              |  |         |   |         |   |             |   |               |   |               |   |        |   |         |       |  |   |             |       |  |   |        |      
|                             | Net income                                                                   |  |         |  |         |   |             |  |               |   |               |  |        |   |         | 3,557 |  |   |             |      |  |   |        | 3,557 | 
|                             | Net fair market value adjustment of
derivative
instruments, net of tax of $0 |  |         |  |         |   |             |  |               |   |               |  |        |   |         |      |  |   |             | 2,514 |  |   |        | 2,514 | 
|                             |                                                                              |  |         |   |         |   |             |   |               |   |               |   |        |   |         |       |  |   |             |       |  |   |        |      
|Total comprehensive income   |                                                                              |  |        |   |         |   |            |   |               |   |              |   |        |   | 3,557   |       |  |   | 2,514       |       |  |   | 6,071  |      
|                             |                                                                              |  |         |   |         |   |             |   |               |   |               |   |        |   |         |       |  |   |             |       |  |   |        |      
|Balance, September 30, 2002  |                                                                              |  | 170,444 |   |         | $ | 2           |   |               | $ | 179,403       |   |        | $ | (91,606 | )     |  | $ | (5,755      | )     |  | $ | 82,044 |      
|                             |                                                                              |  |         |   |         |   |             |   |               |   |               |   |        |   |         |       |  |   |             |       |  |   |        |      

The accompanying notes are an integral part of the consolidated financial statements.

5



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ATRIUM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2002 and 2001
(Dollars in thousands)
(unaudited)

|                                               |                                                                                          |                                                     |                                           |         |         |         |       |         |         |         |  
|---------------------------------------------- | ---------------------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------- | ------- | ------- | ----- | ------- | ------- | ------- | -
|                                               |                                                                                          |                                                     |                                           |         | 2002    |         | 2001 
|                                               |                                                                                          |                                                     |                                           |         |         |         |      
|CASH FLOWS FROM OPERATING ACTIVITIES:          |                                                                                          |                                                     |                                           |         |         |         |       |        
|                                               | Net income (loss)                                                                        |                                                     | $                                         | 3,557   |         |         | $     | (6,381  | )      
|                                               | Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                                                     |                                           |         |         |         |       |         |        
|                                               | Extraordinary charge, net of income tax benefit                                          |                                                     |                                           |        |         |         |       | 837     |        
|                                               | Depreciation and amortization                                                            |                                                     |                                           | 10,965  |         |         |       | 18,099  |        
|                                               | Non-cash stock compensation expense                                                      |                                                     |                                           | 225     |         |         |       |        |        
|                                               | Amortization of deferred financing costs                                                 |                                                     |                                           | 2,533   |         |         |       | 2,246   |        
|                                               | Accretion of discount on senior subordinated notes                                       |                                                     |                                           | 152     |         |         |       | 137     |        
|                                               | Accretion of discount on senior payment-in-kind notes                                    |                                                     |                                           | 6,512   |         |         |       | 5,314   |        
|                                               | Accretion of gain from interest rate collars                                             |                                                     |                                           |        |         |         |       | (246    | )      
|                                               | Amortization of gain from sale-leaseback of building                                     |                                                     |                                           | (32     | )       |         |       | (5      | )      
|                                               | Provision for bad debts                                                                  |                                                     |                                           |        |         |         |       | 18      |        
|                                               | Loss on sale of receivables                                                              |                                                     |                                           | 664     |         |         |       | 909     |        
|                                               | Special charge                                                                           |                                                     |                                           | 456     |         |         |       |        |        
|                                               | Loss on sales of assets                                                                  |                                                     |                                           | 1       |         |         |       | 17      |        
|                                               | Changes in assets and liabilities:                                                       |                                                     |                                           |         |         |         |       |         |        
|                                               |                                                                                          | Accounts receivable                                 |                                           |         | 528     |         |       |         | 1,183   |        
|                                               |                                                                                          | Retained interest in sold accounts receivable       |                                           |         | (12,915 | )       |       |         | (11,847 | )      
|                                               |                                                                                          | Sale of accounts receivable                         |                                           |         | (4,400  | )       |       |         | 27,800  |        
|                                               |                                                                                          | Inventories                                         |                                           |         | (1,296  | )       |       |         | (2,180  | )      
|                                               |                                                                                          | Prepaid expenses and other current assets           |                                           |         | 563     |         |       |         | (442    | )      
|                                               |                                                                                          | Accounts payable                                    |                                           |         | 8,271   |         |       |         | 2,469   |        
|                                               |                                                                                          | Accrued liabilities and other long-term liabilities |                                           |         | 1,804   |         |       |         | (2,983  | )      
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        
|                                               |                                                                                          |                                                     | Net cash provided by operating activities |         |         | 17,588  |       |         |         | 34,945  |  
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        
|CASH FLOWS FROM INVESTING ACTIVITIES:          |                                                                                          |                                                     |                                           |         |         |         |       |        
|                                               | Purchases of property, plant and equipment                                               |                                                     |                                           | (10,362 | )       |         |       | (12,100 | )      
|                                               | Proceeds from sales of assets                                                            |                                                     |                                           | 194     |         |         |       | 101     |        
|                                               | Other assets                                                                             |                                                     |                                           | (2,933  | )       |         |       | (1,648  | )      
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        
|                                               |                                                                                          |                                                     | Net cash used in investing activities     |         |         | (13,101 | )     |         |         | (13,647 | )
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        
|CASH FLOWS FROM FINANCING ACTIVITIES:          |                                                                                          |                                                     |                                           |         |         |         |       |        
|                                               | Payments of notes payable and capital lease obligations                                  |                                                     |                                           | (18     | )       |         |       | (230    | )      
|                                               | Net payments under revolving credit facility                                             |                                                     |                                           |        |         |         |       | (5,000  | )      
|                                               | Proceeds from the issuance of common stock                                               |                                                     |                                           | 1       |         |         |       | 10,050  |        
|                                               | Repurchase of stock options and common stock                                             |                                                     |                                           | (124    | )       |         |       | (897    | )      
|                                               | Capitalized deferred financing costs                                                     |                                                     |                                           |        |         |         |       | (1,514  | )      
|                                               | Scheduled principal payments on term notes                                               |                                                     |                                           | (4,114  | )       |         |       | (4,354  | )      
|                                               | Additional principal payments on term notes                                              |                                                     |                                           | (684    | )       |         |       | (20,000 | )      
|                                               | Checks drawn in excess of bank balances                                                  |                                                     |                                           | 4,686   |         |         |       | 3,169   |        
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        
|                                               |                                                                                          |                                                     | Net cash used in financing activities     |         |         | (253    | )     |         |         | (18,776 | )
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        
|NET INCREASE IN CASH AND CASH EQUIVALENTS      |                                                                                          |                                                     | 4,234                                     |         |         |         | 2,522 |        
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |                                                                                          |                                                     | 1,247                                     |         |         |         | 4,646 |        
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        
|CASH AND CASH EQUIVALENTS, END OF PERIOD       |                                                                                          | $                                                   | 5,481                                     |         |         | $       | 7,168 |        
|                                               |                                                                                          |                                                     |                                           |         |         |         |       |        

The accompanying notes are an integral part of the consolidated financial statements.

6



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##### 



ATRIUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002 and 2001
(Dollars in thousands, except share amounts)
(unaudited)



|1. |  | Basis of Presentation
|-- |  | ---------------------

Atrium Corporation (the Company) is engaged in the manufacture and sale
of patio doors, windows and various building materials throughout the United
States through its wholly-owned subsidiary Atrium Companies, Inc. (Atrium
Companies).

The unaudited consolidated financial statements of the Company for the
three and nine months ended September 30, 2002 and 2001, and financial position
as of September 30, 2002 and December 31, 2001 have been prepared in accordance
with generally accepted accounting principles for interim financial reporting,
the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.

These consolidated financial statements and footnotes should be read in
conjunction with the Companys audited financial statements for the fiscal year
ended December 31, 2001 included in the Companys Form 10-K as filed with the
Securities and Exchange Commission on April 1, 2002. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation of the interim financial
information have been included. The results of operations for any interim
period are not necessarily indicative of the results of operations for a full
year. Certain reclassifications have been made to the 2001 balances to conform
to the 2002 presentation.



|2. |  | New Accounting Pronouncements
|-- |  | -----------------------------

In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for
Asset Retirement Obligations (SFAS 143). SFAS 143 addresses financial
accounting and reporting obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. Under SFAS 143,
the fair value of a liability for an asset retirement obligation covered under
the scope of SFAS 143 would be recognized in the period in which the liability
is incurred, with an offsetting increase in the carrying amount of the related
long-lived asset. SFAS 143 is effective for the Company on January 1, 2003.
The Company does not anticipate a significant impact on its results of
operations from adopting this statement.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS 145). SFAS 145 rescinds SFAS No. 4, Reporting Gains and
Losses from Extinguishment of Debt, requiring that gains and losses from the
extinguishment of debt be classified as extraordinary items only if certain
criteria are met. SFAS 145 also amends SFAS No. 13, Accounting for Leases,
and the required accounting for sale-leaseback transactions and certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. SFAS 145 is effective for the Company on January 1, 2003. Upon
adoption of SFAS 145, the Company will reclassify previously reported
extraordinary items as a component of earnings before income taxes.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities (SFAS 146). SFAS 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized initially at fair value when the liability is incurred. SFAS 146 is
effective for the Company on January 1, 2003 and will be applied on a
prospective basis. This statement will affect the timing of exit or disposal
activities reported by the Company after adoption.

7



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##### 





|3. |  | Adoption of SFAS No. 141, Business Combinations, SFAS No. 142,
Goodwill and Other Intangible Assets and SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets"
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In June 2001, the FASB issued SFAS No. 141, Business Combinations (SFAS
141) and SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142).
SFAS 141 and SFAS 142 are effective for fiscal years beginning after December
15, 2001. Under the new rules, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be subject to annual impairment
tests in accordance with the statements. Other intangible assets will continue
to be amortized over their useful lives. The Company adopted SFAS 141 and SFAS
142 on January 1, 2002 and eliminated amortization of goodwill as of such date.
Amortization of goodwill during the third quarter and first nine months of 2001 was $2,933 and $8,792, respectively. The Company has completed
its initial, transitional goodwill impairment analysis under SFAS 142 as of
January 1, 2002, and no goodwill impairment was deemed to exist. In accordance
with the requirements of SFAS 142, the Company will review goodwill for
impairment during the fourth quarter of each year starting in 2002. Goodwill
will also be reviewed for impairment at other times during each year when
events or changes in circumstances indicate an impairment might be present.

As shown in the following table, the Company would have reported net
income of $1,704 and $2,411 during the three and nine months ended September
30, 2001 if the goodwill amortization included in the Companys net loss, as reported, had not been recognized.

|                              |                       |                     |       |                     |       |                     |        |       |       |      |       |   |       |   |        |       |       | 
|----------------------------- | --------------------- | ------------------- | ----- | ------------------- | ----- | ------------------- | ------ | ----- | ----- | ---- | ----- | - | ----- | - | ------ | ----- | ----- | 
|                              |                       |                     |       | Three months        |       | Nine months        
|                              |                       |                     |       | Ended September 30, |       | Ended September 30,
|                              |                       |                     |       |                     |       |                    
|                              |                       |                     |       | 2002                |       | 2001                |        | 2002  |       | 2001
|                              |                       |                     |       |                     |       |                     |        |       |       |     
|Net income (loss)
as reported |                       | $                   | 5,471 |                     |       | $                   | (1,229 | )     |       | $    | 3,557 |   |       | $ | (6,381 | )    
|Adjustment:                   |                       |                     |       |                     |       |                     |        |       |       |      |       |   |       |   |        |      
|                              | Goodwill
amortization |                     |       |                    |       |                     |        | 2,933 |       |      |       |  |       |   |        | 8,792 |      
|                              |                       |                     |       |                     |       |                     |        |       |       |      |       |   |       |   |        |      
|                              |                       | Adjusted net income |       | $                   | 5,471 |                     |        | $     | 1,704 |      |       | $ | 3,557 |   |        | $     | 2,411 | 
|                              |                       |                     |       |                     |       |                     |        |       |       |      |       |   |       |   |        |      

The Company adopted SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS 144), effective January 1, 2002. SFAS
144 retains the fundamental provisions of existing generally accepted
accounting principles with respect to the recognition and measurement of
long-lived asset impairment contained in SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
(SFAS 121). However, SFAS 144 provides new guidance intended to address
certain implementation issues associated with SFAS 121, including expanded
guidance with respect to appropriate cash flows to be used to determine whether
recognition of any long-lived asset impairment is required, and if required,
how to measure the amount of the impairment. SFAS 144 also requires that any
net assets to be disposed of by sale to be reported at the lower of carrying
value or fair value less cost to sell, and expands the reporting of
discontinued operations to include any component of an entity with operations
and cash flows that can be clearly distinguished from the rest of the entity.
Adoption of SFAS 144 did not have a significant effect on the Company as of
January 1, 2002.

8



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##### 





|4. |  | Inventories
|-- |  | -----------

Inventories are valued at the lower of cost or market using the last-in,
first-out (LIFO) method of accounting. Work-in-process and finished goods
inventories consist of materials, labor and manufacturing overhead.
Inventories consisted of the following:

|                |  |               |        |              |  |   |        | 
|--------------- |  | ------------- | ------ | ------------ |  | - | ------ | 
|                |  | September 30, |        | December 31,
|                |  | 2002          |        | 2001        
|                |  |               |        |             
|Raw materials   |  | $             | 22,820 |              |  | $ | 24,209 | 
|Work-in-process |  |               | 1,339  |              |  |   | 1,000  | 
|Finished goods  |  |               | 13,978 |              |  |   | 11,225 | 
|                |  |               |        |              |  |   |        | 
|                |  |               | 38,137 |              |  |   | 36,434 | 
|LIFO reserve    |  |               | (104   | )            |  |   | 303    | 
|                |  |               |        |              |  |   |        | 
|                |  | $             | 38,033 |              |  | $ | 36,737 | 
|                |  |               |        |              |  |   |        | 



|5. |  | Notes Payable
|-- |  | -------------

Notes payable consisted of the following:

|                                                  |                |   |               |         |              |   |         |         | 
|------------------------------------------------- | -------------- | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                                                  |                |   | September 30, |         | December 31,
|                                                  |                |   | 2002          |         | 2001        
|                                                  |                |   |               |         |             
|Revolving credit facility                         |                | $ |              |         |              | $ |        |        
|Term loan A                                       |                |   | 5,714         |         |              |   | 8,185   |        
|Term loan B                                       |                |   | 58,840        |         |              |   | 59,980  |        
|Term loan C                                       |                |   | 68,360        |         |              |   | 69,547  |        
|Senior subordinated notes                         |                |   | 175,000       |         |              |   | 175,000 |        
|Senior payment-in-kind notes                      |                |   | 35,909        |         |              |   | 29,397  |        
|Other                                             |                |   | 10            |         |              |   | 28      |        
|                                                  |                |   |               |         |              |   |         |        
|                                                  |                |   | 343,833       |         |              |   | 342,137 |        
|Less:                                             |                |   |               |         |              |   |         |        
|Unamortized discount on senior subordinated notes |                |   | (2,034        | )       |              |   | (2,186  | )      
|Current portion of notes payable                  |                |   | (5,489        | )       |              |   | (6,191  | )      
|                                                  |                |   |               |         |              |   |         |        
|                                                  | Long-term debt |   | $             | 336,310 |              |   | $       | 333,760 | 
|                                                  |                |   |               |         |              |   |         |        

The Companys credit agreement and senior payment-in-kind notes require the Company to meet certain
financial tests pertaining to interest coverage, fixed charge coverage and
leverage. As of September 30, 2002, the Company was in compliance with all
related covenants.

Additionally, the credit agreement has an excess cash flows provision
mandating additional principal payments on the term loans if certain cash flow
targets are met annually at December 31. An excess cash flow payment of $684
was made in April 2002 related to the 2001 excess cash flows. An excess cash
flow payment was not required in 2001. Based on the Companys results for the
first nine months of 2002, an excess cash flow payment may be required in April
2003.

Interest on the Companys senior payment-in-kind notes accrues at a rate
of 15%, except under the following two conditions: If a default occurs as
defined by the agreement, and remains uncured or, if the ratio of total
consolidated indebtedness to consolidated cash flow of the Company commencing
with March 2002 is greater than 3.75x, then the interest rate shall increase to
17%. The interest rate will return to 15% upon curing of a default or upon the
ratio being equal to or less than the 3.75x limit. The interest rate on the
senior payment-in-kind notes increased to 17% in April 2002 as a result of the
ratio not being met. The interest on the senior payment-in-kind notes will continue to accrue at 17% until the default clears.

The Company uses interest rate swap agreements to hedge exposure to
interest rate fluctuations. At December 31, 2001, the Company had interest
rate swaps with notional amounts totaling $137,500. In March and

9



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##### 



August of 2002, the Company amended the notional amount of one of the
swaps in order to maintain hedge effectiveness. At September 30, 2002, the
total notional amount of the swaps was $132,900.



|6. |  | Contingencies
|-- |  | -------------

The Company is party to various claims, legal actions and complaints
arising in the ordinary course of business. In the opinion of management, all
such matters are without merit or are of such kind, or involve such amounts,
that an unfavorable disposition would not have a material effect on the
consolidated financial position, results of operations or liquidity of the
Company.

The Company has four unionized facilities within the State of Texas, all
of which are represented by the Union of Needletrades, Industrial and Textile
Employees (UNITE!). During May of 2001, the Company entered into a new
three-year collective bargaining agreement with UNITE! which will expire in
2004.

The Company is involved in various stages of investigation and cleanup
related to environmental protection matters, some of which relate to waste
disposal sites. The potential costs related to such matters and the possible
impact thereof on future operations are uncertain due in part to: the
uncertainty as to the extent of pollution; the complexity of government laws
and regulations and their interpretations; the varying costs and effectiveness
of alternative cleanup technologies and methods; the uncertain level of
insurance or other types of recovery; and the questionable level of the
Companys involvement. In 1998, the Company was named as a potentially
responsible party (PRP) in two superfund sites pursuant to the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended.

The Company is a PRP at the Chemical Recycling, Inc. or CRI Superfund
site in Wylie, Texas. The Company is a very small contributor at the CRI site,
being assigned approximately 2.788% of the damages based on its waste volume at
the site. The site was a solvent reclamation facility, and the Company sent
paint waste to the site for recycling. The site has soil and groundwater
contamination. Major removal actions have occurred and a Work Plan for Risk
Assessment/Feasibility Study was submitted to the Environmental Protection
Agency (EPA) in October 1996. According to the studies performed by the
sites steering committee, affected groundwater has not migrated off-site.
According to the EPA general counsel in charge of the site, the site is low
priority compared to other sites in the region. There are 115 PRPs at this
site with approximately 85 that are members of the sites steering committee.
Two main PRPs, Glidden and Sherwin Williams, account for approximately 46% of
all liability. The Companys costs to date associated with this site have been
approximately $78, with a current credit for overpayment of $30.

The second site is the Diaz Refinery site in Jackson County, Arkansas.
There is no known documentation linking the Company to the site. In connection
with a De Minimis Buyout Agreement, the Company paid $11 to exclude itself from
future liability. Because of the lack of documentation linking the Company to
the site and the De Minimis Buyout Agreement, it is not expected that the costs
will be incurred in the future. Records indicate that, through agreements with
the sites steering committee and the Arkansas Department of Pollution Control
(the ADPCE), the Company will not receive any orders or be allocated
additional costs for continuing work because the Company does not have a volume
contribution assigned to the site (because of the lack of records showing it
used the site). The facility was a solvent recovery, supplemental fuel
blending and hazardous waste facility from the mid 1970s to 1988, resulting in
impacted soil and groundwater. In 1995, the ADPCE approved a work plan and no
further requirements have been assigned. Additionally, monitoring actions were
completed in 2000 and no further activities have occurred since then.

The Company believes that based on the information currently available,
including the substantial number of other PRPs and relatively small share
allocated to it at such sites, its liability, if any, associated with either of
these sites will not have a material adverse effect on the Companys
consolidated financial position, results of operations or liquidity.

The Company owned one parcel of real estate that requires future costs
related to environmental clean-up. The estimated costs of clean-up have been
reviewed by third-party sources and are not expected to exceed $150. The
previous owner of the property has established an escrow of $400 to remediate
the associated costs. This property was sold in December 1999. The Company has
established a letter of credit of $250 to cover any costs of remediation
exceeding the previous owners escrow. The Company believes the existing escrow
amount is adequate to cover costs associated with this clean-up. No additional
liabilities are believed to exist in regards to the Companys remaining
operations.

10



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##### 





|7. |  | Wing Divestiture and Woodville Closing
|-- |  | --------------------------------------

During the second quarter of 2002, the Company recorded a special charge
in the amount of $3,948 for liabilities associated with the divestiture of the
assets of Wing Industries, Inc. (Wing). The majority of the special charge
is attributable to $2,859 of exit costs incurred by the Company on the
remaining lease obligations at Wings former facilities. The special charge
also includes $1,089 for litigation expenses. As of the end of the third
quarter of 2002, $3,492 of the special charge was incurred and has been paid by
the Company, leaving a remaining accrual of $456 for unpaid liabilities, a
portion of which is still under negotiation.

During 2002, the Company has incurred $715 against its accrued provisions
for the Woodville closing reducing the remaining accrual to $270. The Company
does not anticipate additional liabilities related to the Woodville closure.



|8. |  | Extraordinary Charge
|-- |  | --------------------

During the third quarter of 2001, the Company wrote off deferred financing
costs of $837 in connection with the retirement of debt under the Companys
credit agreement from the proceeds of the securitization of accounts
receivable.



|9. |  | Atrium Corporation Financial Information
|-- |  | ----------------------------------------

Condensed Balance Sheets

|                                     |                                              |                                            |   |               |         |              |   |         |         | 
|------------------------------------ | -------------------------------------------- | ------------------------------------------ | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                                     |                                              |                                            |   | September 30, |         | December 31,
|                                     |                                              |                                            |   | 2002          |         | 2001        
|                                     |                                              |                                            |   |               |         |             
|Assets                               |                                              |                                            |   |               |         |              |   |        
|                                     | Investment in subsidiary                     |                                            | $ | 129,317       |         |              | $ | 116,489 |        
|                                     | Deferred financing costs, net                |                                            |   | 4,240         |         |              |   | 4,632   |        
|                                     |                                              |                                            |   |               |         |              |   |        
|                                     |                                              | Total assets                               |   | $             | 133,557 |              |   | $       | 121,121 | 
|                                     |                                              |                                            |   |               |         |              |   |        
|Liabilities and Stockholders Equity |                                              |                                            |   |               |         |              |   |        
|                                     | Accrued liabilities                          |                                            | $ |              |         |              | $ | 24      |        
|                                     | Notes payable                                |                                            |   | 35,909        |         |              |   | 29,397  |        
|                                     | Common stock subject to mandatory redemption |                                            |   | 15,604        |         |              |   | 15,604  |        
|                                     | Stockholders equity                         |                                            |   | 82,044        |         |              |   | 76,096  |        
|                                     |                                              |                                            |   |               |         |              |   |        
|                                     |                                              | Total liabilities and stockholders equity |   | $             | 133,557 |              |   | $       | 121,121 | 
|                                     |                                              |                                            |   |               |         |              |   |        

Condensed Statements of Operations

|                                             |                   |   |                                  |       |      |   |       |        |  
|-------------------------------------------- | ----------------- | - | -------------------------------- | ----- | ---- | - | ----- | ------ | -
|                                             |                   |   | Three months ended September 30,
|                                             |                   |   |                                 
|                                             |                   |   | 2002                             |       | 2001
|                                             |                   |   |                                  |       |     
|Operating Expenses                           |                   | $ | 12                               |       |      | $ | 5     |       
|Interest expense                             |                   |   | 2,464                            |       |      |   | 1,962 |       
|Equity in undistributed income of subsidiary |                   |   | 7,947                            |       |      |   | 738   |       
|                                             |                   |   |                                  |       |      |   |       |       
|                                             | Net income (loss) |   | $                                | 5,471 |      |   | $     | (1,229 | )
|                                             |                   |   |                                  |       |      |   |       |       

11



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Condensed Statements of Operations

|                                                    |                   |   |                                 |       |      |   |       |        |  
|--------------------------------------------------- | ----------------- | - | ------------------------------- | ----- | ---- | - | ----- | ------ | -
|                                                    |                   |   | Nine months ended September 30,
|                                                    |                   |   |                                
|                                                    |                   |   | 2002                            |       | 2001
|                                                    |                   |   |                                 |       |     
|Operating expenses                                  |                   | $ | 12                              |       |      | $ | 5     |       
|Interest expense                                    |                   |   | 6,913                           |       |      |   | 5,650 |       
|Equity in undistributed income (loss) of subsidiary |                   |   | 10,482                          |       |      |   | (726  | )     
|                                                    |                   |   |                                 |       |      |   |       |       
|                                                    | Net income (loss) |   | $                               | 3,557 |      |   | $     | (6,381 | )
|                                                    |                   |   |                                 |       |      |   |       |       

Condensed Statements of Cash Flows

|                                             |                                                       |                                                     |   |                                 |      |      |   |        |        |  
|-------------------------------------------- | ----------------------------------------------------- | --------------------------------------------------- | - | ------------------------------- | ---- | ---- | - | ------ | ------ | -
|                                             |                                                       |                                                     |   | Nine months ended September 30,
|                                             |                                                       |                                                     |   |                                
|                                             |                                                       |                                                     |   | 2002                            |      | 2001
|                                             |                                                       |                                                     |   |                                 |      |     
|Cash flows from operating activities:        |                                                       |                                                     |   |                                 |      |      |   |       
|                                             | Net income (loss)                                     |                                                     | $ | 3,557                           |      |      | $ | (6,381 | )     
|                                             | Equity
in undistributed (income) loss of subsidiary   |                                                     |   | (10,482                         | )    |      |   | 726    |       
|                                             | Accretion of discount on senior payment-in-kind notes |                                                     |   | 6,512                           |      |      |   | 5,314  |       
|                                             | Amortization of deferred financing costs              |                                                     |   | 393                             |      |      |   | 322    |       
|                                             | Changes in assets and liabilities                     |                                                     |   | (25                             | )    |      |   |       |       
|                                             |                                                       |                                                     |   |                                 |      |      |   |       
|                                             |                                                       | Net cash used in operating activities               |   |                                 | (45  | )    |   |        | (19    | )
|                                             |                                                       |                                                     |   |                                 |      |      |   |       
|Cash flows from investing activities:        |                                                       |                                                     |   |                                 |      |      |   |       
|                                             | Cash received from (invested in) subsidiary           |                                                     |   | 168                             |      |      |   | (8,008 | )     
|                                             |                                                       |                                                     |   |                                 |      |      |   |       
|                                             |                                                       | Net cash provided by (used in) investing activities |   |                                 | 168  |      |   |        | (8,008 | )
|                                             |                                                       |                                                     |   |                                 |      |      |   |       
|Cash flows from financing activities:        |                                                       |                                                     |   |                                 |      |      |   |       
|                                             | Proceeds from the issuance of common stock            |                                                     |   | 1                               |      |      |   | 10,050 |       
|                                             | Capitalized deferred financing costs                  |                                                     |   |                                |      |      |   | (1,126 | )     
|                                             | Repurchase of stock options and common stock          |                                                     |   | (124                            | )    |      |   | (897   | )     
|                                             |                                                       |                                                     |   |                                 |      |      |   |       
|                                             |                                                       | Net cash provided by (used in) financing activities |   |                                 | (123 | )    |   |        | 8,027  |  
|                                             |                                                       |                                                     |   |                                 |      |      |   |       
|Net increase in cash and cash equivalents    |                                                       |                                                     |  |                                 |      |      |  |       
|Cash and cash equivalents, beginning of year |                                                       |                                                     |  |                                 |      |      |  |       
|                                             |                                                       |                                                     |   |                                 |      |      |   |       
|Cash and cash equivalents, end of year       |                                                       | $                                                   |  |                                 |      | $    |  |       
|                                             |                                                       |                                                     |   |                                 |      |      |   |       

12



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Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations

Certain Forward-Looking Statements

This 10-Q contains certain forward looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) that involve
substantial risks and uncertainties relating to the Company that are based on
the beliefs of management. When used in this 10-Q, the words anticipate,
believe, estimate, expect, intend, and similar expressions, as they
relate to the Company or the Companys management, identify forward-looking
statements. Such statements reflect the current views of the Company with
respect to the risks and uncertainties regarding the operations and the results
of operations of the Company as well as its customers and suppliers, including
as a result of the availability of consumer credit, interest rates, employment
trends, changes in levels of consumer confidence, changes in consumer
preferences, national and regional trends in new housing starts, raw material
costs, pricing pressures, shifts in market demand and general economic
conditions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions or estimates prove incorrect, actual results may
vary materially from those described herein as anticipated, believed,
estimated, expected or intended.

Results of Operations

The operations of the Company are cyclical in nature and generally result
in increases during the peak building season, which coincides with the second
and third quarters of the year. Accordingly, results of operations for the
third quarter and the first nine months of 2002 are not necessarily indicative
of results expected for the full year.

Net Sales.Net sales increased by $6,249, or 4.5% from $138,514 during the
third quarter of 2001 to $144,763 during the third quarter of 2002 and
increased $15,526, or 4.0% from $390,707 during the first nine months of 2001
to $406,233 during the first nine months of 2002. The increase in net sales
was due to an increase in volume at the Companys aluminum and vinyl window
operations, offset by a decline in sales at the Darby and aluminum extrusion
operations. Net sales at the aluminum window operations increased $6,672, or
16.4% during the third quarter of 2002 and $15,429, or 12.8% during the first
nine months of 2002 over the prior year. This increase was primarily due to
increased volume to the Companys homecenter customers. Net sales at the vinyl
window operations increased by $530, or .7% during the third quarter of 2002
and $6,460, or 3.1% during the first nine months of 2002 over the prior year.
The growth rate at the vinyl window operations was hindered by soft sales at
our West Coast and Northwest operations due to general economic slowdowns in
their respective markets. Net sales at the Darby and aluminum extrusion
operations combined for a decrease of 5.0% during the third quarter of 2002 and
10.7% during the first nine months of 2002. The decrease at the aluminum
extrusion operations was virtually all related to declining aluminum prices
which affect the overall selling price of the extrusion product, while the
decrease at the Darby operations was a result of softer demand in the
multi-family market.

Cost of Goods Sold. Cost of goods sold as a percentage of net sales improved
from 67.6% during the third quarter of 2001 to 66.3% during the third quarter
of 2002 and from 68.5% during the first nine months of 2001 to 67.2% during the
first nine months of 2002. The improvement was largely the result of a
decrease in material costs as a percentage of net sales, as materials decreased
from 40.9% during the third quarter of 2001 to 39.0% during the third quarter
of 2002 and from 41.3% during the first nine months of 2001 to 40.0% during the
first nine months of 2002. This decrease was due to our increased purchasing
power and the realization of synergies from acquisitions made in prior years.
Overall, changes in the cost of goods sold as a percentage of net sales for one
period as compared to another period may reflect a number of factors, including
changes in the relative mix of products sold and the effects of changes in
sales prices, material costs and changes in productivity levels.

Selling, Delivery, General and Administrative
Expenses.Selling, delivery,
general and administrative expenses increased $1,620 from $28,693 (20.7% of net
sales during the third quarter of 2001) to $30,313 (20.9% of net sales during
the third quarter of 2002) and increased $7,297 from $80,603 (20.6% of net
sales during the first nine months of 2001) to $87,900 (21.6% of net sales
during the first nine months of 2002). General and administrative expenses

13



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##### 



increased $70, but decreased as a percentage of net sales in the third quarter
from 8.5% in 2001 to 8.2% in 2002 and increased $4,150 from 7.9% of net sales
during the first nine months of 2001 to 8.6% during 2002. The increase in
general and administrative expenses for the first nine months of 2002 was
largely the result of a $776 increase in bonus compensation and a $716 increase
in professional fees over prior year. The increase in professional fees was
attributable to the establishment of the Companys new operations in Mexico, as
well as legal fees for the successful defense against a union organizing effort
at one of the Companys facilities. The remaining increase to general and
administrative expenses was due to higher insurance premiums in 2002, as well
as an increase to salary and related payroll expenses. Delivery expenses
increased $1,507 from 5.8% of net sales during the third quarter of 2001 to
6.6% during 2002 and $2,845 from 6.0% of net sales during the first nine months
of 2001 to 6.5% during 2002. The increase in delivery expenses over the prior
year was primarily related to an increase in the volume of products shipped
into the Southern California market, which resulted in a longer average
distance per truckload. An additional increase in delivery expenses during the
third quarter related to expenditures incurred by the Company in obtaining and
utilizing a new common carrier for the majority of its homecenter deliveries.
Selling expenses, which consist primarily of commissions, decreased slightly as
a percentage of net sales from 6.4% during the third quarter of 2001 to 6.2%
during 2002 and from 6.7% of net sales during the first nine months of 2001 to
6.6% during 2002.

Securitization Expense.Atrium Companies securitized its accounts receivable in the
third quarter of 2001. Securitization expense decreased $840 from $1,165 during
the third quarter of 2001 to $325 in the third quarter of 2002 and decreased
$286 from $1,165 in the first nine months of 2001 to $879 in the first nine
months of 2002. In the third quarter of 2001, the Company incurred $840 of
fees associated with the placement of the securitization and a loss on the
sales of receivables in the amount of $325. The securitization expense
incurred by the Company on the loss on the sale of Atrium Companies accounts
receivable both for the third quarter and the first nine months of 2002
represents the interest expense and commitment fee components of the
transaction.

Stock Compensation Expense.Stock compensation expense increased $282 from
($207) in the third quarter of 2001 to $75 in the third quarter of 2002 and
decreased $198 from $506 in the first nine months of 2001 to $308 in the first
nine months of 2002. Stock compensation expense during the third quarter of
2001 and 2002 included $54 and $0, respectively, for the repurchase of
outstanding stock options from former employees and $75 of payments for
services rendered in the form of the Companys common stock to the Companys
equity sponsor, Ardshiel, Inc. Stock compensation during the first nine months
of 2001 and 2002 included $281 and $83, respectively, for the repurchase of
outstanding stock options from former employees and $225 of payments for
services rendered in the form of the Companys common stock to Ardshiel, Inc.

Amortization Expense.Amortization expense decreased $2,774 from $3,619 during
the third quarter of 2001 to $845 during the third quarter of 2002 and
decreased $8,277 from $10,752 during the first nine months of 2001 to $2,475
during the first nine months of 2002. The decrease was primarily attributable
to the Companys adoption of SFAS 142 (see Note 3) which eliminates the
amortization of goodwill and subjects it to an annual impairment test.
Goodwill amortization for the third quarter and first nine months of 2001 was
$2,933 and $8,792, respectively.

Special Charge.Special charge increased from $275 in the first nine months of
2001 to $3,948 during 2002. During the second quarter of 2002, the Company
recorded a special charge in the amount of $3,948 for liabilities associated
with the divestiture of the assets of Wing. The majority of the special charge
is attributable to $2,859 of exit costs incurred by the Company on the
remaining lease obligations at Wings former facilities. The special charge
also includes $1,089 for litigation expenses. At the end of the third quarter
of 2002, $3,492 of the special charge was incurred and has been paid by the
Company, leaving a remaining accrual of $456 for unpaid liabilities, a portion
of which is still under negotiation. The special charge in 2001 relates to one
time charges of $275 that were incurred in the second and third quarters of
2001 relating to non-capitalizable legal fees incurred to amend the credit
agreement.

Interest Expense.Interest expense decreased $44 from $11,421 during the third
quarter of 2001 to $11,377 during the third quarter of 2002 and decreased $821,
from $34,617 during the first nine months of 2001 to $33,796 during the first
nine months of 2002. The decrease is attributable to reduced debt levels in
2002 as a result of working capital improvements and the execution of the
accounts receivable securitization facility in August 2001, from which the
proceeds were used to repay long-term debt.

14



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Extraordinary Charge.Extraordinary charge decreased from $837 during the
third quarter and first nine months of 2001 to $0 in the third quarter and first nine months of 2002.
Extraordinary charge in 2001 consisted of the write-off of a pro-rata portion
of deferred financing costs of $837 during the third quarter in connection with
the $20,000 prepayment of debt under the Companys credit agreement from the
proceeds of our securitization of accounts receivable.

Liquidity and Capital Resources

Cash generated from operations and availability under Atrium Companies
revolving credit facility and Atrium Companies accounts receivable
securitization facility are the Companys principal sources of liquidity.
During the first nine months of 2002, cash was primarily used for capital
expenditures and for debt payments. Net cash provided by operating activities
during the first nine months of 2002 was $17,588 compared to $34,945 during the
first nine months of 2001. The decrease in net cash provided by operating
activities during 2002 over the prior year was largely due to the initial cash
provided by the accounts receivable securitization facility in August of 2001.
Net cash used in investing activities during the first nine months of 2002 was
$13,101 compared to $13,647 during the first nine months of 2001. Net cash
used in financing activities during the first nine months of 2002 was $253
compared to $18,776 during the first nine months of 2001. The decrease in net
cash used in financing activities is attributable to additional principal
payments made during the third quarter of 2001 on the term loans and revolving
credit facility using the initial cash provided by the accounts receivable
securitization facility. The additional principal payments made during
2001 were offset by proceeds received from the issuance of common stock during
the first nine months of 2001.

Additionally, Atrium Companies credit agreement has an excess cash
flows provision mandating additional principal payments on the term loans if
certain cash flow targets are met annually at December 31. An excess cash flow
payment of $684 was made in April 2002 related to the 2001 excess cash flows.
An excess cash flow payment was not required in 2001. Based on the Atrium
Companies results for the first nine months of 2002, an excess cash flow
payment may be required in April 2003.

Interest on the Companys senior payment-in-kind notes accrues at a rate
of 15%, except under the following two conditions: If a default occurs as
defined by the agreement, and remains uncured or, if the ratio of total
consolidated indebtedness to consolidated cash flow of the Company commencing
with March 2002 is greater than 3.75x, then the ratio being equal to or less
than the 3.75x limit. The interest rate on the senior payment-in-kind notes
increased to 17% in April 2002 as a result of the ratio not being met. The interest on the senior payment-in-kind notes will continue to accrue at 17% until the default clears.

Other Capital Resources

Atrium Companies credit agreement, as amended, provides for a revolving
credit facility in the amount of $47,000, which includes a $10,000 letter of
credit sub-facility. The revolving credit facility has a maturity date of June
30, 2004. Additionally, Atrium Companies has an accounts receivable
securitization facility, which can make additional funds available to the
Company depending on accounts receivable levels. On July 30, 2002 Atrium
Companies receivables purchase agreement was amended to reduce the size of the
accounts receivable securitization facility from $50,000 to $42,000.

At September 30, 2002, the Company had $44,233 of availability under the
revolving credit facility, net of outstanding letters of credit totaling $2,767, $14,400 of availability under the accounts receivable securitization
facility and an additional $4,600 currently unavailable due to borrowing base
limitations, net of securitizations of $23,000. As of November 8, 2002, the
Company had cash of $4,637 and $44,233 of availability under the revolving
credit facility, net of outstanding letters of credit totaling $2,767, $7,200 of availability under the accounts receivable securitization facility and
an additional $6,500 currently unavailable due to borrowing base limitations,
net of securitizations of $28,300.

15



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Capital Expenditures

The Company had cash capital expenditures (net of proceeds from sales) of
$10,168 during the first nine months of 2002 ($3,720 during the third quarter
of 2002) compared to $11,999 during the first nine months of 2001 ($3,372
during the third quarter of 2001). Capital expenditures both for the first
nine months of 2002 and 2001 are a result of the Companys effort to increase
plant capacity and to increase efficiency through automation at its various
manufacturing facilities. The Company expects capital expenditures (exclusive
of acquisitions, if any) in 2002 to be approximately $13,500, however, actual
capital requirements may change based on management and strategic
decisions.

The Companys ability to meet debt service, working capital obligations
and capital expenditure requirements is dependent upon the Companys future
performance which, in turn, will be subject to general economic conditions and
to financial, business and other factors, including factors beyond the
Companys control.

New Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations (SFAS 143). SFAS 143 addresses financial accounting
and reporting obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. Under SFAS 143, the fair
value of a liability for an asset retirement obligation covered under the scope
of SFAS 143 would be recognized in the period in which the liability is
incurred, with an offsetting increase in the carrying amount of the related
long-lived asset. SFAS 143 is effective for the Company on January 1, 2003.
The Company does not anticipate a significant impact on its results of
operations from adopting this statement.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS 145). SFAS 145 rescinds SFAS No. 4, Reporting Gains and
Losses from Extinguishment of Debt, requiring that gains and losses from the
extinguishment of debt be classified as extraordinary items only if certain
criteria are met. SFAS 145 also amends SFAS No. 13, Accounting for Leases,
and the required accounting for sale-leaseback transactions and certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. SFAS 145 is effective for the Company on January 1, 2003. Upon
adoption of SFAS 145, the Company will reclassify previously reported
extraordinary items as a component of earnings before income taxes.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities (SFAS 146). SFAS 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized initially at fair value when the liability is incurred. SFAS 146 is
effective for the Company on January 1, 2003 and will be applied on a
prospective basis. This statement will affect the timing of exit or disposal
activities reported by the Company after adoption.

Adoption of SFAS No. 141, SFAS No. 142 and SFAS No. 144

In June 2001, the FASB issued SFAS No. 141, Business Combinations (SFAS
141) and SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142).
SFAS 141 and SFAS 142 are effective for fiscal years beginning after December
15, 2001. Under the new rules, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the statements. Other intangible assets
will continue to be amortized over their useful lives. The Company adopted
SFAS 141 and SFAS 142 on January 1, 2002 and eliminated amortization of
goodwill as of such date. Amortization of goodwill during the third quarter and first nine months of 2001 was $2,933 and $8,792, respectively. The
Company has completed its initial, transitional goodwill impairment analysis
under SFAS 142 as of January 1, 2002, and no goodwill impairment was deemed to
exist. In accordance with the requirements of SFAS 142, the Company will review
goodwill for impairment during the fourth quarter of each year starting in
2002. Goodwill will also be reviewed for impairment at other times during each
year when events or changes in circumstances indicate an impairment might be
present.

The Company adopted SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS 144), effective January 1, 2002. SFAS
144 retains the fundamental provisions of existing generally accepted
accounting principles with respect to the recognition and measurement of
long-lived asset impairment

16



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##### 



contained in SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of (SFAS 121). However,
SFAS 144 provides new guidance intended to address certain implementation
issues associated with SFAS 121, including expanded guidance with respect to
appropriate cash flows to be used to determine whether recognition of any
long-lived asset impairment is required, and if required, how to measure the
amount of the impairment. SFAS 144 also requires that any net assets to be
disposed of by sale to be reported at the lower of carrying value or fair value
less cost to sell, and expands the reporting of discontinued operations to
include any component of an entity with operations and cash flows that can be
clearly distinguished from the rest of the entity. Adoption of SFAS 144 did
not have a significant effect on the Company as of January 1, 2002.

Item 3.Quantitative and Qualitative Disclosure About Market Risk

Market Risk

The Company is exposed to market risk from changes in interest rates and
commodity pricing. The Company uses derivative financial instruments on a
limited basis to hedge economic exposures including interest rate protection
agreements and forward commodity delivery agreements. The Company does not
enter into derivative financial instruments or other financial instruments for
speculative trading purposes.

On November 1, 2000, Atrium Companies entered into a $100,000 interest
rate swap agreement to limit the effect of changes in interest rates on
long-term borrowings. Under the agreement, the Company pays interest at a fixed
rate of 6.66% on the notional amount and receives interest therein at the
three-month LIBOR on a quarterly basis. This swap expires in November 2003.
The fair value of this swap is a liability of $5,481 and is included in swaps
contract liability.

On December 8, 2000, Atrium Companies entered into a $40,000 interest rate
swap agreement to limit the effect of changes in interest rates on long-term
borrowings. In August 2002, the notional amount of the swap was amended to
$32,900 in order to maintain hedge effectiveness. The amended swap expires in
December 2002. Under the agreement, the Company pays interest at a fixed rate
of 6.15% on the notional amount and receives interest therein at the
three-month LIBOR on a quarterly basis. The fair value of this swap is a
liability of $274 and is included in accrued liabilities.

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of the
Companys disclosure controls and procedures (as defined in Rule 13a-14(c)
under the Securities Exchange Act of 1934, as amended (the Exchange Act)) was
carried out within 90 days prior to the filing of this quarterly report. This
evaluation was made under the supervision and with the participation of the
Companys management, including its Chief Executive Officer and Chief Financial
Officer. Based upon this evaluation, the Companys Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure controls
and procedures (a) are effective to ensure that information required to be
disclosed by the Company in reports filed or submitted under the Exchange Act
is timely recorded, processed, summarized and reported and (b) include, without
limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in reports filed or submitted under the
Exchange Act is accumulated and communicated to the Companys management,
including its Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no significant changes in the Companys internal controls
or, to the knowledge of the management of the Company, in other factors that
could significantly affect these controls subsequent to the date of the
Companys evaluation.

17



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##### 



PART II. OTHER INFORMATION

Item 1.Legal Proceedings

The Company is party to various claims, legal actions, and complaints
arising in the ordinary course of business. In the opinion of management, all
such matters are without merit or are of such kind, or involve such amounts,
that an unfavorable disposition would not have a material adverse effect on the
consolidated financial position, results of operations or liquidity of the
Company.

Item 6.Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits                                                                                                                                 
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The exhibits filed with or incorporated by reference in this report
are listed on the Exhibit Index beginning on page E-1 of this
report.
|
| | (b) |  | Reports on Form 8-K                                                                                                                      
|
| |     |  | The following reports of Form 8-K were filed by the registrant
during the third quarter:                                                 
|
| |     |  | None.                                                                                                                                    

18



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##### 



SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |  |                   |  |                                 |  |                                                                                                                                          
|----- |  | ----------------- |  | ------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|      |  |                   |  | ATRIUM CORPORATION
(Registrant)
|     
|Date: |  | November 14, 2002 |  | By:                             |  | /s/ Jeff L. HullJeff L. Hull
President, Chief Executive Officer andDirector (Principal Executive Officer)                                
|     
|Date: |  | November 14, 2002 |  | By:                             |  | /s/ Eric W. LongEric W. Long Executive Vice President, Chief Financial Officer and
Treasurer (Principal Financial and Accounting Officer)

19



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CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeff L. Hull, certify that:



|(1) |  | I have reviewed this quarterly report on Form 10-Q of Atrium Corporation;
|--- |  | -------------------------------------------------------------------------



|(2) |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrants as of, and for, the periods presented in this
quarterly report;
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which the periodic reports
are being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing of this
quarterly report (the Evaluation Date); and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|      |  |                   |  |     |  |                                                                                                           
|----- |  | ----------------- |  | --- |  | ----------------------------------------------------------------------------------------------------------
|Date: |  | November 14, 2002 |  | By: |  | /s/ Jeff L. HullJeff L. Hull
President, Chief Executive Officer and
Director (Principal Executive Officer)

20



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##### 



CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Eric W. Long, certify that:



|(1) |  | I have reviewed this quarterly report on Form 10-Q of Atrium Corporation;
|--- |  | -------------------------------------------------------------------------



|(2) |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrants as of, and for, the periods presented in this
quarterly report;
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which the periodic reports
are being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing of this
quarterly report (the Evaluation Date); and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|      |  |                   |  |     |  |                                                                                                                                          
|----- |  | ----------------- |  | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|Date: |  | November 14, 2002 |  | By: |  | /s/ Eric W. LongEric W. Long
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

21



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##### 



ATRIUM CORPORATION
EXHIBIT INDEX

|        |  |                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                   
|Number  |  | Description                                                                                                                                       
|        |  |                                                                                                                                                   
|99.1    |  | Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|99.2    |  | Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

E-1