##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 28, 2008
 or
 o
    
    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: 333-115543
 AMH Holdings, LLC
  Delaware
    
    16-1693178(State or Other Jurisdiction of Incorporation of Organization)
    
    (I.R.S. Employer Identification No.)3773 State Rd. Cuyahoga Falls, Ohio
    
    44223(Address of Principal Executive Offices)
    
    (Zip Code)
 (330) 929 -1811
 Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



AMH HOLDINGS, LLC
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated
Balance Sheets
June 28, 2008 (Unaudited) and December 29, 2007
    
    
    1Consolidated
Statements of Operations (Unaudited) 
Quarters ended June 28, 2008 and June 30, 2007
Six months ended June 28, 2008 and June 30, 2007
    
    
    2Consolidated
Statements of Cash Flows (Unaudited) 
Six months ended June 28, 2008 and June 30, 2007
    
    
    3Notes to Consolidated Financial Statements (Unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    26PART II. OTHER INFORMATIONItem 6. Exhibits
    
    
    26SIGNATURES
    
    
    28Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 AMH HOLDINGS, LLC
 
 
 (Unaudited)June 28,
    
    
    December 29,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    8,207
    
    
    $
    21,603Accounts receivable, net
    
    
    169,438
    
    
    
    138,653Inventories
    
    
    155,609
    
    
    
    137,015Deferred income taxes
    
    
    9,983
    
    
    
    9,983Other current assets
    
    
    10,845
    
    
    
    11,686Total current assets
    
    
    354,082
    
    
    
    318,940Property, plant and equipment, net
    
    
    128,767
    
    
    
    133,531Goodwill
    
    
    231,236
    
    
    
    231,213Other intangible assets, net
    
    
    100,779
    
    
    
    102,424Deferred taxes
    
    
    16,131
    
    
    
    Other assets
    
    
    12,574
    
    
    
    14,314Total assets
    
    $
    843,569
    
    
    $
    800,422Liabilities and Members EquityCurrent liabilities:Accounts payable
    
    $
    101,862
    
    
    $
    80,082Payable to parent
    
    
    6,592
    
    
    
    6,592Accrued liabilities
    
    
    55,733
    
    
    
    64,618Revolving loans under credit facility
    
    
    28,309
    
    
    
    Income taxes payable
    
    
    824
    
    
    
    11,298Total current liabilities
    
    
    193,320
    
    
    
    162,590Deferred income taxes
    
    
    
    
    
    
    1,542Other liabilities
    
    
    45,989
    
    
    
    47,615Long-term debt
    
    
    640,765
    
    
    
    618,677Members equity
    
    
    (36,505
    )
    
    
    (30,002
    )Total liabilities and members equity
    
    $
    843,569
    
    
    $
    800,422
   1




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##### Table of Contents



AMH HOLDINGS, LLC
 
 
 Quarter
    
    
    Quarter
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    314,812
    
    
    $
    337,951
    
    
    $
    515,690
    
    
    $
    556,115Cost of sales
    
    
    235,820
    
    
    
    246,885
    
    
    
    392,085
    
    
    
    417,333Gross profit
    
    
    78,992
    
    
    
    91,066
    
    
    
    123,605
    
    
    
    138,782Selling, general and
administrative expense
    
    
    52,862
    
    
    
    53,244
    
    
    
    102,990
    
    
    
    102,344Manufacturing restructuring costs
    
    
    938
    
    
    
    
    
    
    
    1,783
    
    
    
    Income from operations
    
    
    25,192
    
    
    
    37,822
    
    
    
    18,832
    
    
    
    36,438Interest expense, net
    
    
    17,422
    
    
    
    17,657
    
    
    
    34,396
    
    
    
    34,633Foreign currency (gain) loss
    
    
    12
    
    
    
    (94
    )
    
    
    90
    
    
    
    (100
    )Income (loss) before income taxes
    
    
    7,758
    
    
    
    20,259
    
    
    
    (15,654
    )
    
    
    1,905Income taxes (benefit)
    
    
    (6,468
    )
    
    
    13,294
    
    
    
    (15,106
    )
    
    
    1,199Net income (loss)
    
    $
    14,226
    
    
    $
    6,965
    
    
    $
    (548
    )
    
    $
    706
   2




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##### Table of Contents



AMH HOLDINGS, LLC
 
 
 Six Months
    
    
    Six MonthsEnded
    
    
    EndedJune 28,
    
    
    June 30,2008
    
    
    2007Operating ActivitiesNet income (loss)
    
    $
    (548
    )
    
    $
    706Adjustments to reconcile net income (loss) to net cash
used in operating activities:Depreciation and amortization
    
    
    11,398
    
    
    
    10,892Amortization of deferred financing costs
    
    
    23,660
    
    
    
    21,568Amortization of management fee
    
    
    250
    
    
    
    250Deferred income taxes
    
    
    (17,777
    )
    
    
    (8,649
    )Non-cash portion of manufacturing restructuring costs
    
    
    1,577
    
    
    
    Loss on sale or disposal of assets other than by sale
    
    
    1,846
    
    
    
    289Changes in operating assets and liabilities,
adjusted for the effects of the acquisition of
supply center:Accounts receivable, net
    
    
    (31,450
    )
    
    
    (35,891
    )Inventories
    
    
    (20,683
    )
    
    
    (11,539
    )Accounts payable and accrued liabilities
    
    
    13,982
    
    
    
    19,216Income taxes
    
    
    (10,484
    )
    
    
    873Other
    
    
    (598
    )
    
    
    40Net cash used in operating activities
    
    
    (28,827
    )
    
    
    (2,245
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (8,210
    )
    
    
    (4,850
    )Acquisition of supply center
    
    
    
    
    
    
    (801
    )Proceeds from sale of assets
    
    
    24
    
    
    
    Net cash used in investing activities
    
    
    (8,186
    )
    
    
    (5,651
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    28,309
    
    
    
    9,972Dividends
    
    
    (4,118
    )
    
    
    (3,973
    )Net cash provided by financing activities
    
    
    24,191
    
    
    
    5,999Effect of exchange rate changes on cash
    
    
    (574
    )
    
    
    388Net decrease in cash
    
    
    (13,396
    )
    
    
    (1,509
    )Cash at beginning of period
    
    
    21,603
    
    
    
    15,015Cash at end of period
    
    $
    8,207
    
    
    $
    13,506Supplemental information:Cash paid for interest
    
    $
    10,547
    
    
    $
    12,518Cash paid for income taxes
    
    $
    13,157
    
    
    $
    8,939
   3




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##### Table of Contents



AMH HOLDINGS, LLC
 
 
 Note 1  Basis of Presentation
     Recent Accounting Pronouncements
     4




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##### Table of Contents



Note 2  Inventories
  June 28,
    
    
    December 29,2008
    
    
    2007Raw materials
    
    $
    27,539
    
    
    $
    31,886Work-in-process
    
    
    14,526
    
    
    
    10,075Finished goods and purchased stock
    
    
    113,544
    
    
    
    95,054$
    155,609
    
    
    $
    137,015
 Note 3  Goodwill and Other Intangible Assets
  AverageAmortization
    
    
    June 28, 2008
    
    
    December 29, 2007Period
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying(in Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and trade
names
    
    
    15
    
    
    $
    108,080
    
    
    $
    11,236
    
    
    $
    96,844
    
    
    $
    108,080
    
    
    $
    10,283
    
    
    $
    97,797Patents
    
    
    10
    
    
    
    6,230
    
    
    
    3,850
    
    
    
    2,380
    
    
    
    6,230
    
    
    
    3,540
    
    
    
    2,690Customer base and other
    
    
    7
    
    
    
    5,227
    
    
    
    3,672
    
    
    
    1,555
    
    
    
    5,298
    
    
    
    3,361
    
    
    
    1,937Total other intangible
assets
    
    
    
    
    
    $
    119,537
    
    
    $
    18,758
    
    
    $
    100,779
    
    
    $
    119,608
    
    
    $
    17,184
    
    
    $
    102,424
 ® ® ®
 Note 4
 Long-Term Debt
  June 28,
    
    
    December 29,2008
    
    
    20079 3/4% notes
    
    $
    165,000
    
    
    $
    165,00011 1/4% notes
    
    
    414,765
    
    
    
    392,677Term loan under credit facility
    
    
    61,000
    
    
    
    61,000Total long-term debt
    
    $
    640,765
    
    
    $
    618,677
   5




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##### Table of Contents



Note 5
 Comprehensive Income (Loss)
  Quarter
    
    
    Quarter
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss) as reported
    
    $
    14,226
    
    
    $
    6,965
    
    
    $
    (548
    )
    
    $
    706Reclassification adjustments for
actuarial gains or losses and prior
service costs, net of tax
    
    
    180
    
    
    
    143
    
    
    
    276
    
    
    
    286Foreign currency translation adjustments
    
    
    686
    
    
    
    4,672
    
    
    
    (2,113
    )
    
    
    5,204Comprehensive income (loss)
    
    $
    15,092
    
    
    $
    11,780
    
    
    $
    (2,385
    )
    
    $
    6,196
  6




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##### Table of Contents



Note 6
 Retirement Plans
  Quarter
    
    
    QuarterEnded
    
    
    EndedJune 28,
    
    
    June 30,2008
    
    
    2007Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    134
    
    
    $
    545
    
    
    $
    136
    
    
    $
    537Interest cost
    
    
    747
    
    
    
    790
    
    
    
    719
    
    
    
    691Expected return on assets
    
    
    (875
    )
    
    
    (924
    )
    
    
    (832
    )
    
    
    (820
    )Amortization of prior service costs
    
    
    7
    
    
    
    8
    
    
    
    
    
    
    
    7Amortization of unrecognized net loss
    
    
    150
    
    
    
    26
    
    
    
    176
    
    
    
    5Net periodic pension cost
    
    $
    163
    
    
    $
    445
    
    
    $
    199
    
    
    $
    420
 Six Months
    
    
    Six MonthsEnded
    
    
    EndedJune 28,
    
    
    June 30,2008
    
    
    2007Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    268
    
    
    $
    1,094
    
    
    $
    272
    
    
    $
    1,031Interest cost
    
    
    1,494
    
    
    
    1,586
    
    
    
    1,437
    
    
    
    1,326Expected return on assets
    
    
    (1,750
    )
    
    
    (1,855
    )
    
    
    (1,664
    )
    
    
    (1,574
    )Amortization of prior service costs
    
    
    14
    
    
    
    16
    
    
    
    
    
    
    
    14Amortization of unrecognized net loss
    
    
    300
    
    
    
    52
    
    
    
    352
    
    
    
    9Net periodic pension cost
    
    $
    326
    
    
    $
    893
    
    
    $
    397
    
    
    $
    806
 Note 7
 Business Segments
  Quarter
    
    
    Quarter
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Vinyl windows
    
    $
    103,935
    
    
    $
    114,010
    
    
    $
    173,623
    
    
    $
    187,773Vinyl siding products
    
    
    70,315
    
    
    
    82,160
    
    
    
    114,449
    
    
    
    135,048Metal products
    
    
    61,789
    
    
    
    62,437
    
    
    
    101,133
    
    
    
    104,841Third party manufactured products
    
    
    58,187
    
    
    
    58,035
    
    
    
    91,120
    
    
    
    91,639Other products and services
    
    
    20,586
    
    
    
    21,309
    
    
    
    35,365
    
    
    
    36,814$
    314,812
    
    
    $
    337,951
    
    
    $
    515,690
    
    
    $
    556,115
  7




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##### Table of Contents



Note 8  Product Warranty Costs and Service Returns
   Quarter
    
    
    Quarter
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Balance at the beginning of the period
    
    $
    29,246
    
    
    $
    25,587
    
    
    $
    28,684
    
    
    $
    25,035Provision for warranties issued
    
    
    2,601
    
    
    
    3,254
    
    
    
    4,591
    
    
    
    5,445Claims paid
    
    
    (1,914
    )
    
    
    (2,487
    )
    
    
    (3,342
    )
    
    
    (4,126
    )Balance at the end of the period
    
    $
    29,933
    
    
    $
    26,354
    
    
    $
    29,933
    
    
    $
    26,354
 Note 9
 Manufacturing Restructuring Costs
  Note
10  Subsidiary Guarantors
   8




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    3,433
    
    
    $
    446
    
    
    $
    4,328
    
    
    $
    
    
    
    $
    8,207Accounts receivable, net
    
    
    106,569
    
    
    
    20,123
    
    
    
    42,746
    
    
    
    
    
    
    
    169,438Intercompany receivables
    
    
    
    
    
    
    30,209
    
    
    
    22,229
    
    
    
    (52,438
    )
    
    
    Inventories
    
    
    97,854
    
    
    
    17,217
    
    
    
    40,538
    
    
    
    
    
    
    
    155,609Deferred income taxes
    
    
    6,886
    
    
    
    2,674
    
    
    
    423
    
    
    
    
    
    
    
    9,983Income taxes receivable
    
    
    
    
    
    
    3,266
    
    
    
    1,902
    
    
    
    (5,168
    )
    
    
    Other current assets
    
    
    7,684
    
    
    
    1,168
    
    
    
    1,993
    
    
    
    
    
    
    
    10,845Total current assets
    
    
    222,426
    
    
    
    75,103
    
    
    
    114,159
    
    
    
    (57,606
    )
    
    
    354,082Property, plant and equipment, net
    
    
    86,669
    
    
    
    3,261
    
    
    
    38,837
    
    
    
    
    
    
    
    128,767Goodwill
    
    
    194,814
    
    
    
    36,422
    
    
    
    
    
    
    
    
    
    
    
    231,236Other intangible assets, net
    
    
    89,963
    
    
    
    10,243
    
    
    
    573
    
    
    
    
    
    
    
    100,779Investment in subsidiaries
    
    
    176,398
    
    
    
    94,295
    
    
    
    
    
    
    
    (270,693
    )
    
    
    Other assets
    
    
    6,093
    
    
    
    33
    
    
    
    490
    
    
    
    
    
    
    
    6,616Total assets
    
    $
    776,363
    
    
    $
    219,357
    
    
    $
    154,059
    
    
    $
    (328,299
    )
    
    $
    821,480Liabilities And Members EquityCurrent liabilities:Accounts payable
    
    $
    53,326
    
    
    $
    15,266
    
    
    $
    33,270
    
    
    $
    
    
    
    $
    101,862Intercompany payables
    
    
    52,438
    
    
    
    
    
    
    
    
    
    
    
    (52,438
    )
    
    
    Payable to parent
    
    
    5,029
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,029Accrued liabilities
    
    
    36,108
    
    
    
    9,488
    
    
    
    10,137
    
    
    
    
    
    
    
    55,733Revolving loans under credit facility
    
    
    26,000
    
    
    
    
    
    
    
    2,309
    
    
    
    
    
    
    
    28,309Income taxes payable
    
    
    6,355
    
    
    
    
    
    
    
    
    
    
    
    (5,168
    )
    
    
    1,187Total current liabilities
    
    
    179,256
    
    
    
    24,754
    
    
    
    45,716
    
    
    
    (57,606
    )
    
    
    192,120Deferred income taxes
    
    
    44,257
    
    
    
    4,325
    
    
    
    2,359
    
    
    
    
    
    
    
    50,941Other liabilities
    
    
    20,420
    
    
    
    13,880
    
    
    
    11,689
    
    
    
    
    
    
    
    45,989Long-term debt
    
    
    226,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226,000Members equity
    
    
    306,430
    
    
    
    176,398
    
    
    
    94,295
    
    
    
    (270,693
    )
    
    
    306,430Total liabilities and members equity
    
    $
    776,363
    
    
    $
    219,357
    
    
    $
    154,059
    
    
    $
    (328,299
    )
    
    $
    821,480
  9




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    213,079
    
    
    $
    57,214
    
    
    $
    92,836
    
    
    $
    (48,317
    )
    
    $
    314,812Cost of sales
    
    
    159,844
    
    
    
    55,572
    
    
    
    68,721
    
    
    
    (48,317
    )
    
    
    235,820Gross profit
    
    
    53,235
    
    
    
    1,642
    
    
    
    24,115
    
    
    
    
    
    
    
    78,992Selling, general and
administrative expense
    
    
    39,800
    
    
    
    820
    
    
    
    12,242
    
    
    
    
    
    
    
    52,862Manufacturing restructuring costs
    
    
    385
    
    
    
    
    
    
    
    553
    
    
    
    
    
    
    
    938Income from operations
    
    
    13,050
    
    
    
    822
    
    
    
    11,320
    
    
    
    
    
    
    
    25,192Interest expense, net
    
    
    5,807
    
    
    
    (3
    )
    
    
    111
    
    
    
    
    
    
    
    5,915Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    12Income before income taxes
    
    
    7,243
    
    
    
    825
    
    
    
    11,197
    
    
    
    
    
    
    
    19,265Income taxes
    
    
    2,693
    
    
    
    881
    
    
    
    3,650
    
    
    
    
    
    
    
    7,224Income (loss) before equity
income from subsidiaries
    
    
    4,550
    
    
    
    (56
    )
    
    
    7,547
    
    
    
    
    
    
    
    12,041Equity income from subsidiaries
    
    
    7,491
    
    
    
    7,547
    
    
    
    
    
    
    
    (15,038
    )
    
    
    Net income
    
    $
    12,041
    
    
    $
    7,491
    
    
    $
    7,547
    
    
    $
    (15,038
    )
    
    $
    12,041
  10




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    352,963
    
    
    $
    101,033
    
    
    $
    147,167
    
    
    $
    (85,473
    )
    
    $
    515,690Cost of sales
    
    
    268,946
    
    
    
    97,934
    
    
    
    110,678
    
    
    
    (85,473
    )
    
    
    392,085Gross profit
    
    
    84,017
    
    
    
    3,099
    
    
    
    36,489
    
    
    
    
    
    
    
    123,605Selling, general and
administrative expense
    
    
    76,783
    
    
    
    4,949
    
    
    
    21,258
    
    
    
    
    
    
    
    102,990Manufacturing restructuring costs
    
    
    1,136
    
    
    
    
    
    
    
    647
    
    
    
    
    
    
    
    1,783Income (loss) from operations
    
    
    6,098
    
    
    
    (1,850
    )
    
    
    14,584
    
    
    
    
    
    
    
    18,832Interest expense, net
    
    
    11,642
    
    
    
    (10
    )
    
    
    150
    
    
    
    
    
    
    
    11,782Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    90
    
    
    
    
    
    
    
    90Income (loss) before income taxes
    
    
    (5,544
    )
    
    
    (1,840
    )
    
    
    14,344
    
    
    
    
    
    
    
    6,960Income taxes (benefit)
    
    
    (2,063
    )
    
    
    59
    
    
    
    4,676
    
    
    
    
    
    
    
    2,672Income (loss) before equity
income from subsidiaries
    
    
    (3,481
    )
    
    
    (1,899
    )
    
    
    9,668
    
    
    
    
    
    
    
    4,288Equity income from subsidiaries
    
    
    7,769
    
    
    
    9,668
    
    
    
    
    
    
    
    (17,437
    )
    
    
    Net income
    
    $
    4,288
    
    
    $
    7,769
    
    
    $
    9,668
    
    
    $
    (17,437
    )
    
    $
    4,288
  11




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash used in operating activities
    
    $
    (18,212
    )
    
    $
    (2,931
    )
    
    $
    (7,684
    )
    
    $
    (28,827
    )Investing ActivitiesAdditions to property, plant and
equipment
    
    
    (4,710
    )
    
    
    (106
    )
    
    
    (3,394
    )
    
    
    (8,210
    )Proceeds from sale of assets
    
    
    20
    
    
    
    4
    
    
    
    
    
    
    
    24Net cash used in investing activities
    
    
    (4,690
    )
    
    
    (102
    )
    
    
    (3,394
    )
    
    
    (8,186
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    26,000
    
    
    
    
    
    
    
    2,309
    
    
    
    28,309Dividends
    
    
    (4,118
    )
    
    
    
    
    
    
    
    
    
    
    (4,118
    )Intercompany transactions
    
    
    (1,954
    )
    
    
    3,108
    
    
    
    (1,154
    )
    
    
    Net cash provided by financing activities
    
    
    19,928
    
    
    
    3,108
    
    
    
    1,155
    
    
    
    24,191Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (574
    )
    
    
    (574
    )Net increase (decrease) in cash
    
    
    (2,974
    )
    
    
    75
    
    
    
    (10,497
    )
    
    
    (13,396
    )Cash at beginning of period
    
    
    6,407
    
    
    
    371
    
    
    
    14,825
    
    
    
    21,603Cash at end of period
    
    $
    3,433
    
    
    $
    446
    
    
    $
    4,328
    
    
    $
    8,207
  12




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    ReclassificationParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    /Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    6,407
    
    
    $
    371
    
    
    $
    14,825
    
    
    $
    
    
    
    $
    21,603Accounts receivable, net
    
    
    92,314
    
    
    
    17,999
    
    
    
    28,340
    
    
    
    
    
    
    
    138,653Intercompany receivables
    
    
    
    
    
    
    33,341
    
    
    
    21,052
    
    
    
    (54,393
    )
    
    
    Inventories
    
    
    85,876
    
    
    
    14,083
    
    
    
    37,056
    
    
    
    
    
    
    
    137,015Deferred income taxes
    
    
    6,886
    
    
    
    2,674
    
    
    
    423
    
    
    
    
    
    
    
    9,983Income taxes receivable
    
    
    
    
    
    
    3,375
    
    
    
    
    
    
    
    (3,375
    )
    
    
    Other current assets
    
    
    8,683
    
    
    
    878
    
    
    
    2,125
    
    
    
    
    
    
    
    11,686Total current assets
    
    
    200,166
    
    
    
    72,721
    
    
    
    103,821
    
    
    
    (57,768
    )
    
    
    318,940Property, plant and equipment, net
    
    
    92,920
    
    
    
    3,592
    
    
    
    37,019
    
    
    
    
    
    
    
    133,531Goodwill
    
    
    194,814
    
    
    
    36,399
    
    
    
    
    
    
    
    
    
    
    
    231,213Other intangible assets, net
    
    
    91,098
    
    
    
    10,559
    
    
    
    767
    
    
    
    
    
    
    
    102,424Investment in subsidiaries
    
    
    170,682
    
    
    
    86,692
    
    
    
    
    
    
    
    (257,374
    )
    
    
    Other assets
    
    
    7,831
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,831Total assets
    
    $
    757,511
    
    
    $
    209,963
    
    
    $
    141,607
    
    
    $
    (315,142
    )
    
    $
    793,939Liabilities And Members EquityCurrent liabilities:Accounts payable
    
    $
    42,268
    
    
    $
    9,981
    
    
    $
    27,833
    
    
    $
    
    
    
    $
    80,082Intercompany payables
    
    
    54,393
    
    
    
    
    
    
    
    
    
    
    
    (54,393
    )
    
    
    Payable to parent
    
    
    5,029
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,029Accrued liabilities
    
    
    43,299
    
    
    
    11,476
    
    
    
    9,843
    
    
    
    
    
    
    
    64,618Income taxes payable
    
    
    13,573
    
    
    
    
    
    
    
    1,463
    
    
    
    (3,375
    )
    
    
    11,661Total current liabilities
    
    
    158,562
    
    
    
    21,457
    
    
    
    39,139
    
    
    
    (57,768
    )
    
    
    161,390Deferred income taxes
    
    
    44,126
    
    
    
    4,316
    
    
    
    2,395
    
    
    
    
    
    
    
    50,837Other liabilities
    
    
    20,726
    
    
    
    13,508
    
    
    
    13,381
    
    
    
    
    
    
    
    47,615Long-term debt
    
    
    226,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226,000Members equity
    
    
    308,097
    
    
    
    170,682
    
    
    
    86,692
    
    
    
    (257,374
    )
    
    
    308,097Total liabilities and members equity
    
    $
    757,511
    
    
    $
    209,963
    
    
    $
    141,607
    
    
    $
    (315,142
    )
    
    $
    793,939
  13




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    235,768
    
    
    $
    63,344
    
    
    $
    88,067
    
    
    $
    (49,228
    )
    
    $
    337,951Cost of sales
    
    
    169,324
    
    
    
    60,493
    
    
    
    66,296
    
    
    
    (49,228
    )
    
    
    246,885Gross profit
    
    
    66,444
    
    
    
    2,851
    
    
    
    21,771
    
    
    
    
    
    
    
    91,066Selling, general and
administrative expense
    
    
    40,216
    
    
    
    4,558
    
    
    
    8,470
    
    
    
    
    
    
    
    53,244Income (loss) from operations
    
    
    26,228
    
    
    
    (1,707
    )
    
    
    13,301
    
    
    
    
    
    
    
    37,822Interest expense, net
    
    
    7,119
    
    
    
    (10
    )
    
    
    207
    
    
    
    
    
    
    
    7,316Foreign currency gains
    
    
    
    
    
    
    
    
    
    
    (94
    )
    
    
    
    
    
    
    (94
    )Income (loss) before income taxes
    
    
    19,109
    
    
    
    (1,697
    )
    
    
    13,188
    
    
    
    
    
    
    
    30,600Income taxes
    
    
    7,259
    
    
    
    1,812
    
    
    
    4,510
    
    
    
    
    
    
    
    13,581Income (loss) before equity
income from subsidiaries
    
    
    11,850
    
    
    
    (3,509
    )
    
    
    8,678
    
    
    
    
    
    
    
    17,019Equity income from subsidiaries
    
    
    5,169
    
    
    
    8,678
    
    
    
    
    
    
    
    (13,847
    )
    
    
    Net income
    
    $
    17,019
    
    
    $
    5,169
    
    
    $
    8,678
    
    
    $
    (13,847
    )
    
    $
    17,019
  14




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    390,731
    
    
    $
    104,710
    
    
    $
    141,011
    
    
    $
    (80,337
    )
    
    $
    556,115Cost of sales
    
    
    290,292
    
    
    
    99,868
    
    
    
    107,510
    
    
    
    (80,337
    )
    
    
    417,333Gross profit
    
    
    100,439
    
    
    
    4,842
    
    
    
    33,501
    
    
    
    
    
    
    
    138,782Selling, general and
administrative expense
    
    
    77,512
    
    
    
    8,971
    
    
    
    15,861
    
    
    
    
    
    
    
    102,344Income (loss) from operations
    
    
    22,927
    
    
    
    (4,129
    )
    
    
    17,640
    
    
    
    
    
    
    
    36,438Interest expense, net
    
    
    14,032
    
    
    
    (32
    )
    
    
    309
    
    
    
    
    
    
    
    14,309Foreign currency gains
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    (100
    )Income (loss) before income taxes
    
    
    8,895
    
    
    
    (4,097
    )
    
    
    17,431
    
    
    
    
    
    
    
    22,229Income taxes
    
    
    3,337
    
    
    
    550
    
    
    
    5,961
    
    
    
    
    
    
    
    9,848Income (loss) before equity
income from subsidiaries
    
    
    5,558
    
    
    
    (4,647
    )
    
    
    11,470
    
    
    
    
    
    
    
    12,381Equity income from subsidiaries
    
    
    6,823
    
    
    
    11,470
    
    
    
    
    
    
    
    (18,293
    )
    
    
    Net income
    
    $
    12,381
    
    
    $
    6,823
    
    
    $
    11,470
    
    
    $
    (18,293
    )
    
    $
    12,381
  15




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    1,895
    
    
    $
    (10,955
    )
    
    $
    6,815
    
    
    $
    (2,245
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (3,376
    )
    
    
    (675
    )
    
    
    (799
    )
    
    
    (4,850
    )Acquisition of supply center
    
    
    (801
    )
    
    
    
    
    
    
    
    
    
    
    (801
    )Net cash used in investing activities
    
    
    (4,177
    )
    
    
    (675
    )
    
    
    (799
    )
    
    
    (5,651
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    7,500
    
    
    
    
    
    
    
    2,472
    
    
    
    9,972Dividends
    
    
    (3,973
    )
    
    
    
    
    
    
    
    
    
    
    (3,973
    )Intercompany transactions
    
    
    (2,941
    )
    
    
    10,026
    
    
    
    (7,085
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    586
    
    
    
    10,026
    
    
    
    (4,613
    )
    
    
    5,999Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    388
    
    
    
    388Net increase (decrease) in cash
    
    
    (1,696
    )
    
    
    (1,604
    )
    
    
    1,791
    
    
    
    (1,509
    )Cash at beginning of period
    
    
    10,014
    
    
    
    1,692
    
    
    
    3,309
    
    
    
    15,015Cash at end of period
    
    $
    8,318
    
    
    $
    88
    
    
    $
    5,100
    
    
    $
    13,506
  16




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
 ® ® ®
     17




---



##### Table of Contents



Results of Operations
  Quarter
    
    
    Quarter
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    314,812
    
    
    $
    337,951
    
    
    $
    515,690
    
    
    $
    556,115Cost of sales
    
    
    235,820
    
    
    
    246,885
    
    
    
    392,085
    
    
    
    417,333Gross profit
    
    
    78,992
    
    
    
    91,066
    
    
    
    123,605
    
    
    
    138,782Selling, general and
administrative expense
    
    
    52,862
    
    
    
    53,244
    
    
    
    102,990
    
    
    
    102,344Manufacturing restructuring
costs
    
    
    938
    
    
    
    
    
    
    
    1,783
    
    
    
    Income from operations
    
    
    25,192
    
    
    
    37,822
    
    
    
    18,832
    
    
    
    36,438Interest expense, net
    
    
    17,422
    
    
    
    17,657
    
    
    
    34,396
    
    
    
    34,633Foreign currency (gain) loss
    
    
    12
    
    
    
    (94
    )
    
    
    90
    
    
    
    (100
    )Income (loss) before income taxes
    
    
    7,758
    
    
    
    20,259
    
    
    
    (15,654
    )
    
    
    1,905Income taxes (benefit)
    
    
    (6,468
    )
    
    
    13,294
    
    
    
    (15,106
    )
    
    
    1,199Net income (loss)
    
    $
    14,226
    
    
    $
    6,965
    
    
    $
    (548
    )
    
    $
    706Other Data:EBITDA (a)
    
    $
    30,925
    
    
    $
    43,382
    
    
    $
    30,140
    
    
    $
    47,430Adjusted EBITDA (a)
    
    
    34,663
    
    
    
    44,581
    
    
    
    34,926
    
    
    
    49,447
  Quarter
    
    
    Quarter
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 28,
    
    
    June 30,
    
    
    June 28,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Vinyl windows
    
    $
    103,935
    
    
    $
    114,010
    
    
    $
    173,623
    
    
    $
    187,773Vinyl siding products
    
    
    70,315
    
    
    
    82,160
    
    
    
    114,449
    
    
    
    135,048Metal products
    
    
    61,789
    
    
    
    62,437
    
    
    
    101,133
    
    
    
    104,841Third party manufactured products
    
    
    58,187
    
    
    
    58,035
    
    
    
    91,120
    
    
    
    91,639Other products and services
    
    
    20,586
    
    
    
    21,309
    
    
    
    35,365
    
    
    
    36,814$
    314,812
    
    
    $
    337,951
    
    
    $
    515,690
    
    
    $
    556,115
  18




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##### Table of Contents



(a)
    
    EBITDA is calculated as net income (loss) plus interest, taxes, depreciation and
amortization. Adjusted EBITDA excludes certain items. The Company considers adjusted EBITDA
to be an important indicator of its operational strength and performance of its business.
The Company has included adjusted EBITDA because it is a key financial measure used by
management to (i) assess the Companys ability to service its debt and / or incur debt and
meet the Companys capital expenditure requirements; (ii) internally measure the Companys
operating performance; and (iii) determine the Companys incentive compensation programs. In
addition, the Companys credit facility has certain covenants that use ratios utilizing this
measure of adjusted EBITDA. EBITDA and adjusted EBITDA have not been prepared in accordance
with U.S. generally accepted accounting principles (GAAP). Adjusted EBITDA as presented by
the Company may not be comparable to similarly titled measures reported by other companies.
EBITDA and adjusted EBITDA are not measures determined in accordance with GAAP and should
not be considered as alternatives to, or more meaningful than, net income (loss) (as
determined in accordance with GAAP) as a measure of the Companys operating results or cash
flows from operations (as determined in accordance with GAAP) as a measure of the Companys
liquidity. The reconciliation of the Companys net income (loss) to EBITDA and adjusted
EBITDA is as follows (in thousands): Six Months
    
    
    Six MonthsQuarter Ended
    
    
    Quarter Ended
    
    
    Ended
    
    
    EndedJune 28, 2008
    
    
    June 30, 2007
    
    
    June 28, 2008
    
    
    June 30, 2007Net income (loss)
    
    $
    14,226
    
    
    $
    6,965
    
    
    $
    (548
    )
    
    $
    706Interest expense, net
    
    
    17,422
    
    
    
    17,657
    
    
    
    34,396
    
    
    
    34,633Income taxes
    
    
    (6,468
    )
    
    
    13,294
    
    
    
    (15,106
    )
    
    
    1,199Depreciation and amortization
    
    
    5,745
    
    
    
    5,466
    
    
    
    11,398
    
    
    
    10,892EBITDA
    
    
    30,925
    
    
    
    43,382
    
    
    
    30,140
    
    
    
    47,430Foreign currency (gain) loss
    
    
    12
    
    
    
    (94
    )
    
    
    90
    
    
    
    (100
    )Separation costs (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    699Amortization of management fee (c)
    
    
    125
    
    
    
    125
    
    
    
    250
    
    
    
    250Transaction costs (d)
    
    
    
    
    
    
    1,168
    
    
    
    
    
    
    
    1,168Manufacturing restructuring costs
(e)
    
    
    1,797
    
    
    
    
    
    
    
    2,642
    
    
    
    Loss upon disposal of assets other
than by sale (f)
    
    
    1,804
    
    
    
    
    
    
    
    1,804
    
    
    
    Adjusted EBITDA
    
    $
    34,663
    
    
    $
    44,581
    
    
    $
    34,926
    
    
    $
    49,447
 (b)
    
    Represents separation costs, including payroll taxes, related to the resignation of
Mr. Deighton, former Chief Operating Officer of the Company.(c)
    
    Represents amortization of a prepaid management fee of $6 million paid to Investcorp
International Inc. in connection with the December 2004 recapitalization transaction. The
Company is expensing the prepaid management fee based on the services provided over the life
of the agreement, as defined in the Management Advisory Agreement with Investcorp
International Inc. In accordance with the Management Advisory Agreement, the Company
recorded $4 million as expense for the year ended December 31, 2005, with the remaining
unamortized amount to be expensed equally over the remaining four-year term of the agreement.(d)
    
    Represents legal and accounting fees incurred in connection with an unsuccessful bid for an
acquisition target.(e)
    
    During 2008, the Company committed to a plan to discontinue use of its warehouse facility
adjacent to its Ennis, Texas vinyl manufacturing facility and began using a third party
distribution center located in Ashtabula, Ohio. In addition, the Company committed to
relocating certain vinyl siding production from Ennis, Texas to its vinyl manufacturing
facilities in West Salem, Ohio and Burlington, Ontario. For the three and six months ended
June 28, 2008, the amounts represent asset impairment costs, inventory markdown costs, and
costs incurred to relocate manufacturing equipment. Inventory markdown costs of $.9 million
are included in cost of sales in the statement of operations.(f)
    
    As part of the Companys ongoing efforts to improve its internal controls, the Company
enhanced its controls surrounding the physical verification of property, plant and equipment
during the quarter ended June 28, 2008. The amounts recorded represent the loss upon
disposal of assets other than by sale as a result of executing these enhanced controls.  19




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##### Table of Contents



Quarter Ended June 28, 2008 Compared to Quarter Ended June 30, 2007
          20




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##### Table of Contents



Six Months Ended June 28, 2008 Compared to Six Months Ended June 30, 2007
         21




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##### Table of Contents



Recent Accounting Pronouncements
    Liquidity and Capital Resources
  Six Months
    
    
    Six MonthsEnded
    
    
    EndedJune 28,
    
    
    June 30,2008
    
    
    2007Cash used in operating activities
    
    $
    (28,827
    )
    
    $
    (2,245
    )Cash used in investing activities
    
    
    (8,186
    )
    
    
    (5,651
    )Cash provided by financing activities
    
    
    24,191
    
    
    
    5,999
 Cash Flows
   22




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##### Table of Contents



Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Description of the Companys Outstanding Indebtedness
    23




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##### Table of Contents



24




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##### Table of Contents



Effects of Inflation
  Certain Forward-Looking Statements
  
    
    the Companys operations and results of operations;
 
    
    changes in home building industry, economic conditions, interest rates, foreign
currency exchange rates and other conditions;
 
    
    changes in availability of consumer credit, employment trends, levels of consumer
confidence and consumer preferences;
 
    
    changes in raw material costs and availability;
 
    
    market acceptance of price increases;
 
    
    changes in national and regional trends in new housing starts and home remodeling;
 
    
    changes in weather conditions;
 
    
    the Companys ability to comply with certain financial covenants in the credit
facility and indenture governing its indebtedness;
 
    
    the Companys ability to receive distributions, payments or loans from its
subsidiaries or make distributions, payments or loans to its parent to allow it to make
required payments on its debt;
 
    
    increases in competition from other manufacturers of vinyl and metal exterior
residential building products as well
as alternative building products;
  25




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##### Table of Contents




    
    shifts in market demand;
 
    
    increases in the Companys indebtedness;
 
    
    increases in costs of environmental compliance;
 
    
    increases in capital expenditure requirements;
 
    
    potential conflict between existing Alside and Gentek distribution channels;
 
    
    the other factors discussed under the heading Risk Factors in the Companys annual
report on Form 10-K for the year ended December 29, 2007 and elsewhere in this report.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
   Foreign Currency Exchange Risk
  Commodity Price Risk
   26




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
    27




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 6. Exhibits
 a) Exhibits
 ExhibitNumber
    
    Description10.1
    
    
    Amended and Restated Employment Agreement, dated as of April 1, 2008,
by and between Associated Materials, LLC and Thomas N. Chieffe
(incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K, filed with the Securities and Exchange Commission on April
4, 2008).10.2
    
    
    Amended and Restated Employment Agreement, dated as of April 1, 2008,
by and between Associated Materials, LLC and Robert M. Franco
(incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K, filed with the Securities and Exchange Commission on April
4, 2008).10.3
    
    
    Employment Agreement, dated as of April 1, 2008, by and between
Associated Materials, LLC and Warren J. Arthur (incorporated by
reference to Exhibit 10.3 to the Current Report on Form 8-K, filed
with the Securities and Exchange Commission on April 4, 2008).10.4
    
    
    Employment Agreement, dated as of April 1, 2008, by and between
Associated Materials, LLC and Cynthia L. Sobe (incorporated by
reference to Exhibit 10.4 to the Current Report on Form 8-K, filed
with the Securities and Exchange Commission on April 4, 2008).31.1
    
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14
of the Exchange Act, as adopted, pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14
of the Exchange Act, as adopted, pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 *
    
    This document is being furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K and
SEC Release Nos. 33-8238 and 34-47986.  28




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##### Table of Contents



SIGNATURES
  AMH HOLDINGS, LLC(Registrant)Date:  August 12, 2008
    By:
    /s/ Thomas N. ChieffeThomas N. ChieffePresident and Chief Executive Officer
(Principal Executive Officer)Date:  August 12, 2008
    By:
    /s/ Cynthia L. SobeCynthia L. SobeVice President  Chief Financial Officer,
Treasurer and Secretary
(Principal Financial Officer and
Principal Accounting Officer)  29




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14
of the Exchange Act, as adopted, pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14
of the Exchange Act, as adopted, pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 *
    
    This document is being furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K and
SEC Release Nos. 33-8238 and 34-47986.  30