##### 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 endedMarch 31, 2007
 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, Inc.
  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
 
   þ o
  o o þ
  o þ




---



##### 



AMH HOLDINGS, INC.
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets
March 31, 2007 (Unaudited) and December 30, 2006
    
    
    1Consolidated Statements of Operations (Unaudited)
Quarters ended March 31, 2007 and April 1, 2006
    
    
    2Consolidated Statements of Cash Flows (Unaudited)
Quarters ended March 31, 2007 and April 1, 2006
    
    
    3Notes to Consolidated Financial Statements (Unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Item 6. Exhibits
    
    
    22SIGNATURES
    
    
    23EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 AMH HOLDINGS, INC.
 
   (Unaudited)March 31,
    
    
    December 30,2007
    
    
    2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    6,580
    
    
    $
    15,015Accounts receivable, net
    
    
    131,560
    
    
    
    135,539Inventories
    
    
    147,278
    
    
    
    134,319Deferred income taxes
    
    
    8,787
    
    
    
    8,787Income taxes receivable
    
    
    1,196
    
    
    
    Other current assets
    
    
    9,439
    
    
    
    9,645Total current assets
    
    
    304,840
    
    
    
    303,305Property, plant and equipment, net
    
    
    131,816
    
    
    
    134,290Goodwill
    
    
    231,326
    
    
    
    231,332Other intangible assets, net
    
    
    104,849
    
    
    
    105,541Other assets
    
    
    18,139
    
    
    
    19,397Total assets
    
    $
    790,970
    
    
    $
    793,865Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    85,437
    
    
    $
    78,492Payable to parent
    
    
    2,700
    
    
    
    2,700Accrued liabilities
    
    
    52,013
    
    
    
    64,764Income taxes payable
    
    
    
    
    
    
    7,890Total current liabilities
    
    
    140,150
    
    
    
    153,846Deferred income taxes
    
    
    10,871
    
    
    
    19,130Other liabilities
    
    
    46,205
    
    
    
    46,046Long-term debt
    
    
    651,424
    
    
    
    622,967Stockholders deficit
    
    
    (57,680
    )
    
    
    (48,124
    )Total liabilities and stockholders deficit
    
    $
    790,970
    
    
    $
    793,865
  -1-




---



##### Table of Contents



AMH HOLDINGS, INC.
 
    Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Net sales
    
    $
    218,164
    
    
    $
    259,280Cost of sales
    
    
    170,448
    
    
    
    200,176Gross profit
    
    
    47,716
    
    
    
    59,104Selling, general and administrative expense
    
    
    49,100
    
    
    
    51,014Income (loss) from operations
    
    
    (1,384
    )
    
    
    8,090Interest expense, net
    
    
    16,976
    
    
    
    16,701Foreign currency (gain) loss
    
    
    (6
    )
    
    
    159Loss before income taxes
    
    
    (18,354
    )
    
    
    (8,770
    )Income taxes (benefit)
    
    
    (12,095
    )
    
    
    (4,526
    )Net loss
    
    $
    (6,259
    )
    
    $
    (4,244
    )
  -2-




---



##### Table of Contents



AMH HOLDINGS, INC.
 
    Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Operating ActivitiesNet loss
    
    $
    (6,259
    )
    
    $
    (4,244
    )Adjustments to reconcile net loss to net cash used in operating
activities:Depreciation and amortization
    
    
    5,426
    
    
    
    5,380Amortization of debt discount and deferred financing costs
    
    
    10,615
    
    
    
    9,695Amortization of management fee
    
    
    125
    
    
    
    125Deferred income taxes
    
    
    (8,362
    )
    
    
    (4,615
    )Changes in operating assets and liabilities, adjusted for
the effects of the acquisition of supply center:Accounts receivable, net
    
    
    4,585
    
    
    
    (3,219
    )Inventories
    
    
    (12,259
    )
    
    
    (18,709
    )Accounts payable and accrued liabilities
    
    
    (6,148
    )
    
    
    1,052Income taxes
    
    
    (9,069
    )
    
    
    (3,934
    )Other
    
    
    753
    
    
    
    1,294Net cash used in operating activities
    
    
    (20,593
    )
    
    
    (17,175
    )Investing ActivitiesAcquisition of supply center
    
    
    (801
    )
    
    
    Additions to property, plant and equipment
    
    
    (1,793
    )
    
    
    (2,456
    )Net cash used in investing activities
    
    
    (2,594
    )
    
    
    (2,456
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    18,737
    
    
    
    14,703Dividends
    
    
    (3,973
    )
    
    
    (3,833
    )Financing costs
    
    
    
    
    
    
    (108
    )Net cash provided by financing activities
    
    
    14,764
    
    
    
    10,762Effect of exchange rate changes on cash
    
    
    (12
    )
    
    
    17Net decrease in cash
    
    
    (8,435
    )
    
    
    (8,852
    )Cash at beginning of period
    
    
    15,015
    
    
    
    12,300Cash at end of period
    
    $
    6,580
    
    
    $
    3,448Supplemental information:Cash paid for interest
    
    $
    2,077
    
    
    $
    2,732Cash paid for income taxes
    
    $
    5,405
    
    
    $
    4,050
  -3-




---



##### Table of Contents



AMH HOLDINGS, INC.
 
    Note 1  Basis of Presentation
      Recent Accounting Pronouncements
   -4-




---



##### Table of Contents



Note 2  Inventories
  March 31,
    
    
    December 30,2007
    
    
    2006Raw materials
    
    $
    35,944
    
    
    $
    30,406Work-in-process
    
    
    10,160
    
    
    
    11,867Finished goods and purchased stock
    
    
    101,174
    
    
    
    92,046$
    147,278
    
    
    $
    134,319
 Note 3  Goodwill and Other Intangible Assets
  AverageAmortization
    
    
    March 31, 2007
    
    
    December 30, 2006Period
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying(in Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and trade
names
    
    
    15
    
    
    $
    108,290
    
    
    $
    8,927
    
    
    $
    99,363
    
    
    $
    108,290
    
    
    $
    8,449
    
    
    $
    99,841Patents
    
    
    10
    
    
    
    6,230
    
    
    
    3,074
    
    
    
    3,156
    
    
    
    6,230
    
    
    
    2,918
    
    
    
    3,312Customer base and other
    
    
    7
    
    
    
    4,938
    
    
    
    2,608
    
    
    
    2,330
    
    
    
    4,818
    
    
    
    2,430
    
    
    
    2,388Total other intangible
assets
    
    
    
    
    
    $
    119,458
    
    
    $
    14,609
    
    
    $
    104,849
    
    
    $
    119,338
    
    
    $
    13,797
    
    
    $
    105,541
 ® ® ®
 Note 4  Long-Term Debt
  March 31,
    
    
    December 30,2007
    
    
    20069 3/4% notes
    
    $
    165,000
    
    
    $
    165,00011 1/4% senior discount notes
    
    
    361,687
    
    
    
    351,967Term loan under credit facility
    
    
    106,000
    
    
    
    106,000Revolving loans under credit facility
    
    
    18,737
    
    
    
    Total debt
    
    $
    651,424
    
    
    $
    622,967
  -5-




---



##### Table of Contents



Note 5  Income Taxes
    Note 6  Comprehensive Income
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Net loss as reported
    
    $
    (6,259
    )
    
    $
    (4,244
    )Reclassification adjustments for actuarial gains
or losses and prior service costs, net of tax
    
    
    143
    
    
    
    Foreign currency translation adjustments
    
    
    532
    
    
    
    (198
    )Comprehensive loss
    
    $
    (5,584
    )
    
    $
    (4,442
    )
 -6-




---



##### Table of Contents



Note 7  Retirement Plans
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    136
    
    
    $
    494
    
    
    $
    127
    
    
    $
    493Interest cost
    
    
    718
    
    
    
    635
    
    
    
    688
    
    
    
    591Expected return on assets
    
    
    (832
    )
    
    
    (754
    )
    
    
    (732
    )
    
    
    (653
    )Amortization of prior service costs
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Amortization of unrecognized net loss
    
    
    176
    
    
    
    4
    
    
    
    228
    
    
    
    10Net periodic pension cost
    
    $
    198
    
    
    $
    386
    
    
    $
    311
    
    
    $
    448
 Note 8  Business Segments
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Vinyl windows
    
    $
    74,489
    
    
    $
    81,158Vinyl siding products
    
    
    53,085
    
    
    
    72,216Metal products
    
    
    41,110
    
    
    
    47,483Third party manufactured products
    
    
    34,177
    
    
    
    37,653Other products and services
    
    
    15,303
    
    
    
    20,770$
    218,164
    
    
    $
    259,280
 -7-




---



##### Table of Contents



Note 9  Product Warranty Costs and Service Returns
   Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Balance at the beginning of the period
    
    $
    25,035
    
    
    $
    21,739Provision for warranties issued
    
    
    2,191
    
    
    
    1,981Claims paid
    
    
    (1,639
    )
    
    
    (1,654
    )Balance at the end of the period
    
    $
    25,587
    
    
    $
    22,066
 Note 10  Subsidiary Guarantors
  -8-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    6,199
    
    
    $
    53
    
    
    $
    328
    
    
    $
    
    
    
    $
    6,580Accounts receivable, net
    
    
    85,188
    
    
    
    17,280
    
    
    
    29,092
    
    
    
    
    
    
    
    131,560Intercompany receivables
    
    
    
    
    
    
    32,320
    
    
    
    18,780
    
    
    
    (51,100
    )
    
    
    Inventories
    
    
    88,081
    
    
    
    23,596
    
    
    
    35,601
    
    
    
    
    
    
    
    147,278Deferred income taxes
    
    
    5,675
    
    
    
    2,694
    
    
    
    418
    
    
    
    
    
    
    
    8,787Income taxes receivable
    
    
    
    
    
    
    7,178
    
    
    
    1,172
    
    
    
    (7,528
    )
    
    
    822Other current assets
    
    
    6,664
    
    
    
    1,034
    
    
    
    1,741
    
    
    
    
    
    
    
    9,439Total current assets
    
    
    191,807
    
    
    
    84,155
    
    
    
    87,132
    
    
    
    (58,628
    )
    
    
    304,466Property, plant and equipment, net
    
    
    96,676
    
    
    
    3,271
    
    
    
    31,869
    
    
    
    
    
    
    
    131,816Goodwill
    
    
    194,814
    
    
    
    36,512
    
    
    
    
    
    
    
    
    
    
    
    231,326Other intangible assets, net
    
    
    92,940
    
    
    
    11,031
    
    
    
    878
    
    
    
    
    
    
    
    104,849Investment in subsidiaries
    
    
    146,551
    
    
    
    55,541
    
    
    
    
    
    
    
    (202,092
    )
    
    
    Other assets
    
    
    10,867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,867Total assets
    
    $
    733,655
    
    
    $
    190,510
    
    
    $
    119,879
    
    
    $
    (260,720
    )
    
    $
    783,324Liabilities And Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    42,017
    
    
    $
    18,756
    
    
    $
    24,664
    
    
    $
    
    
    
    $
    85,437Intercompany payables
    
    
    39,340
    
    
    
    
    
    
    
    11,760
    
    
    
    (51,100
    )
    
    
    Payable to parent
    
    
    763
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    763Accrued liabilities
    
    
    40,096
    
    
    
    5,427
    
    
    
    6,490
    
    
    
    
    
    
    
    52,013Income taxes payable
    
    
    7,528
    
    
    
    
    
    
    
    
    
    
    
    (7,528
    )
    
    
    Total current liabilities
    
    
    129,744
    
    
    
    24,183
    
    
    
    42,914
    
    
    
    (58,628
    )
    
    
    138,213Deferred income taxes
    
    
    45,527
    
    
    
    3,568
    
    
    
    1,936
    
    
    
    
    
    
    
    51,031Other liabilities
    
    
    17,246
    
    
    
    16,208
    
    
    
    12,751
    
    
    
    
    
    
    
    46,205Long-term debt
    
    
    283,000
    
    
    
    
    
    
    
    6,737
    
    
    
    
    
    
    
    289,737Stockholders equity
    
    
    258,138
    
    
    
    146,551
    
    
    
    55,541
    
    
    
    (202,092
    )
    
    
    258,138Total liabilities and
stockholders equity
    
    $
    733,655
    
    
    $
    190,510
    
    
    $
    119,879
    
    
    $
    (260,720
    )
    
    $
    783,324
 -9-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    154,963
    
    
    $
    41,366
    
    
    $
    52,944
    
    
    $
    (31,109
    )
    
    $
    218,164Cost of sales
    
    
    120,968
    
    
    
    39,375
    
    
    
    41,214
    
    
    
    (31,109
    )
    
    
    170,448Gross profit
    
    
    33,995
    
    
    
    1,991
    
    
    
    11,730
    
    
    
    
    
    
    
    47,716Selling, general and
administrative expense
    
    
    37,296
    
    
    
    4,413
    
    
    
    7,391
    
    
    
    
    
    
    
    49,100Income (loss) from operations
    
    
    (3,301
    )
    
    
    (2,422
    )
    
    
    4,339
    
    
    
    
    
    
    
    (1,384
    )Interest expense, net
    
    
    6,913
    
    
    
    (22
    )
    
    
    102
    
    
    
    
    
    
    
    6,993Foreign currency (gain) loss
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (6
    )Income (loss) before income taxes
    
    
    (10,214
    )
    
    
    (2,400
    )
    
    
    4,243
    
    
    
    
    
    
    
    (8,371
    )Income taxes (benefit)
    
    
    (3,922
    )
    
    
    (1,262
    )
    
    
    1,451
    
    
    
    
    
    
    
    (3,733
    )Income (loss) before equity
income from subsidiaries
    
    
    (6,292
    )
    
    
    (1,138
    )
    
    
    2,792
    
    
    
    
    
    
    
    (4,638
    )Equity income from subsidiaries
    
    
    1,654
    
    
    
    2,792
    
    
    
    
    
    
    
    (4,446
    )
    
    
    Net income (loss)
    
    $
    (4,638
    )
    
    $
    1,654
    
    
    $
    2,792
    
    
    $
    (4,446
    )
    
    $
    (4,638
    )
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash used in operating activities
    
    $
    (11,341
    )
    
    $
    (2,702
    )
    
    $
    (6,550
    )
    
    $
    (20,593
    )Investing ActivitiesAcquisition of supply center
    
    
    (801
    )
    
    
    
    
    
    
    
    
    
    
    (801
    )Additions to property, plant and
equipment
    
    
    (1,296
    )
    
    
    (256
    )
    
    
    (241
    )
    
    
    (1,793
    )Net cash used in investing activities
    
    
    (2,097
    )
    
    
    (256
    )
    
    
    (241
    )
    
    
    (2,594
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    12,000
    
    
    
    
    
    
    
    6,737
    
    
    
    18,737Dividends
    
    
    (3,973
    )
    
    
    
    
    
    
    
    
    
    
    (3,973
    )Intercompany transactions
    
    
    1,596
    
    
    
    1,319
    
    
    
    (2,915
    )
    
    
    Net cash provided by financing activities
    
    
    9,623
    
    
    
    1,319
    
    
    
    3,822
    
    
    
    14,764Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )Net decrease in cash
    
    
    (3,815
    )
    
    
    (1,639
    )
    
    
    (2,981
    )
    
    
    (8,435
    )Cash at beginning of period
    
    
    10,014
    
    
    
    1,692
    
    
    
    3,309
    
    
    
    15,015Cash at end of period
    
    $
    6,199
    
    
    $
    53
    
    
    $
    328
    
    
    $
    6,580
 -10-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    ReclassificationParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    /Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    10,014
    
    
    $
    1,692
    
    
    $
    3,309
    
    
    $
    
    
    
    $
    15,015Accounts receivable, net
    
    
    93,959
    
    
    
    21,047
    
    
    
    20,533
    
    
    
    
    
    
    
    135,539Intercompany receivables
    
    
    
    
    
    
    33,714
    
    
    
    18,786
    
    
    
    (52,500
    )
    
    
    Inventories
    
    
    84,629
    
    
    
    17,668
    
    
    
    32,022
    
    
    
    
    
    
    
    134,319Deferred income taxes
    
    
    5,675
    
    
    
    2,694
    
    
    
    418
    
    
    
    
    
    
    
    8,787Income taxes receivable
    
    
    
    
    
    
    5,915
    
    
    
    88
    
    
    
    (6,003
    )
    
    
    Other current assets
    
    
    7,154
    
    
    
    1,240
    
    
    
    1,251
    
    
    
    
    
    
    
    9,645Total current assets
    
    
    201,431
    
    
    
    83,970
    
    
    
    76,407
    
    
    
    (58,503
    )
    
    
    303,305Property, plant and equipment, net
    
    
    99,060
    
    
    
    3,225
    
    
    
    32,005
    
    
    
    
    
    
    
    134,290Goodwill
    
    
    194,814
    
    
    
    36,518
    
    
    
    
    
    
    
    
    
    
    
    231,332Other intangible assets, net
    
    
    93,408
    
    
    
    11,189
    
    
    
    944
    
    
    
    
    
    
    
    105,541Investment in subsidiaries
    
    
    144,347
    
    
    
    52,210
    
    
    
    
    
    
    
    (196,557
    )
    
    
    Other assets
    
    
    11,843
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    11,863Total assets
    
    $
    744,903
    
    
    $
    187,112
    
    
    $
    109,376
    
    
    $
    (255,060
    )
    
    $
    786,331Liabilities And Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    43,811
    
    
    $
    15,359
    
    
    $
    19,322
    
    
    $
    
    
    
    $
    78,492Intercompany payables
    
    
    37,744
    
    
    
    
    
    
    
    14,756
    
    
    
    (52,500
    )
    
    
    Payable to parent
    
    
    763
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    763Accrued liabilities
    
    
    49,217
    
    
    
    7,599
    
    
    
    7,948
    
    
    
    
    
    
    
    64,764Income taxes payable
    
    
    14,267
    
    
    
    
    
    
    
    
    
    
    
    (6,003
    )
    
    
    8,264Total current liabilities
    
    
    145,802
    
    
    
    22,958
    
    
    
    42,026
    
    
    
    (58,503
    )
    
    
    152,283Deferred income taxes
    
    
    45,450
    
    
    
    3,560
    
    
    
    1,918
    
    
    
    
    
    
    
    50,928Other liabilities
    
    
    16,577
    
    
    
    16,247
    
    
    
    13,222
    
    
    
    
    
    
    
    46,046Long-term debt
    
    
    271,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    271,000Stockholders equity
    
    
    266,074
    
    
    
    144,347
    
    
    
    52,210
    
    
    
    (196,557
    )
    
    
    266,074Total liabilities and
stockholder s equity
    
    $
    744,903
    
    
    $
    187,112
    
    
    $
    109,376
    
    
    $
    (255,060
    )
    
    $
    786,331
 -11-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    182,349
    
    
    $
    57,858
    
    
    $
    60,313
    
    
    $
    (41,240
    )
    
    $
    259,280Cost of sales
    
    
    137,335
    
    
    
    54,723
    
    
    
    49,358
    
    
    
    (41,240
    )
    
    
    200,176Gross profit
    
    
    45,014
    
    
    
    3,135
    
    
    
    10,955
    
    
    
    
    
    
    
    59,104Selling, general and
administrative
expense
    
    
    39,564
    
    
    
    4,867
    
    
    
    6,583
    
    
    
    
    
    
    
    51,014Income (loss) from
operations
    
    
    5,450
    
    
    
    (1,732
    )
    
    
    4,372
    
    
    
    
    
    
    
    8,090Interest expense, net
    
    
    7,494
    
    
    
    
    
    
    
    232
    
    
    
    
    
    
    
    7,726Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    159
    
    
    
    
    
    
    
    159Income (loss) before
income taxes
    
    
    (2,044
    )
    
    
    (1,732
    )
    
    
    3,981
    
    
    
    
    
    
    
    205Income taxes (benefit)
    
    
    (1,837
    )
    
    
    593
    
    
    
    1,333
    
    
    
    
    
    
    
    89Income (loss) before
equity income from
subsidiaries
    
    
    (207
    )
    
    
    (2,325
    )
    
    
    2,648
    
    
    
    
    
    
    
    116Equity income from
subsidiaries
    
    
    323
    
    
    
    2,648
    
    
    
    
    
    
    
    (2,971
    )
    
    
    Net income
    
    $
    116
    
    
    $
    323
    
    
    $
    2,648
    
    
    $
    (2,971
    )
    
    $
    116
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash used in operating activities
    
    $
    (10,701
    )
    
    $
    (2,232
    )
    
    $
    (4,242
    )
    
    $
    (17,175
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (1,979
    )
    
    
    (26
    )
    
    
    (451
    )
    
    
    (2,456
    )Net cash used in investing activities
    
    
    (1,979
    )
    
    
    (26
    )
    
    
    (451
    )
    
    
    (2,456
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    1,000
    
    
    
    
    
    
    
    13,703
    
    
    
    14,703Dividends
    
    
    (3,833
    )
    
    
    
    
    
    
    
    
    
    
    (3,833
    )Financing costs
    
    
    (108
    )
    
    
    
    
    
    
    
    
    
    
    (108
    )Intercompany transactions
    
    
    9,640
    
    
    
    1,619
    
    
    
    (11,259
    )
    
    
    Net cash provided by financing
activities
    
    
    6,699
    
    
    
    1,619
    
    
    
    2,444
    
    
    
    10,762Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    17Net decrease in cash
    
    
    (5,981
    )
    
    
    (639
    )
    
    
    (2,232
    )
    
    
    (8,852
    )Cash at beginning of period
    
    
    7,010
    
    
    
    1,046
    
    
    
    4,244
    
    
    
    12,300Cash at end of period
    
    $
    1,029
    
    
    $
    407
    
    
    $
    2,012
    
    
    $
    3,448
 -12-




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  ® ® ®
    -13-




---



##### Table of Contents



Results of Operations
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Net sales
    
    $
    218,164
    
    
    $
    259,280Cost of sales
    
    
    170,448
    
    
    
    200,176Gross profit
    
    
    47,716
    
    
    
    59,104Selling, general and
administrative expense
    
    
    49,100
    
    
    
    51,014Income (loss) from operations
    
    
    (1,384
    )
    
    
    8,090Interest expense, net
    
    
    16,976
    
    
    
    16,701Foreign currency (gain) loss
    
    
    (6
    )
    
    
    159Loss before income taxes
    
    
    (18,354
    )
    
    
    (8,770
    )Income taxes (benefit)
    
    
    (12,095
    )
    
    
    (4,526
    )Net loss
    
    $
    (6,259
    )
    
    $
    (4,244
    )Other Data:EBITDA (a)
    
    $
    4,048
    
    
    $
    13,311Adjusted EBITDA (a)
    
    
    4,866
    
    
    
    15,680
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Vinyl windows
    
    $
    74,489
    
    
    $
    81,158Vinyl siding products
    
    
    53,085
    
    
    
    72,216Metal products
    
    
    41,110
    
    
    
    47,483Third party manufactured products
    
    
    34,177
    
    
    
    37,653Other products and services
    
    
    15,303
    
    
    
    20,770$
    218,164
    
    
    $
    259,280
 -14-




---



##### 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 (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): Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    April 1,2007
    
    
    2006Net loss
    
    $
    (6,259
    )
    
    $
    (4,244
    )Interest expense, net
    
    
    16,976
    
    
    
    16,701Income taxes (benefit)
    
    
    (12,095
    )
    
    
    (4,526
    )Depreciation and amortization
    
    
    5,426
    
    
    
    5,380EBITDA
    
    
    4,048
    
    
    
    13,311Foreign currency (gain) loss
    
    
    (6
    )
    
    
    159Separation costs (b)
    
    
    699
    
    
    
    2,085Amortization of management fee (c)
    
    
    125
    
    
    
    125Adjusted EBITDA
    
    $
    4,866
    
    
    $
    15,680
 
 (b)
    
    For the quarter ended March 31, 2007, amount represents separation costs, including
payroll taxes, related to the resignation of Mr. Deighton, former Chief Operating Officer of
the Company. For the quarter ended April 1, 2006, amount represents separation costs,
including payroll taxes and benefits, related to the resignation of Mr. Caporale, former
Chairman, President and Chief Executive Officer of the Company by mutual agreement with the
Companys Board of Directors.(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. Quarter Ended March 31, 2007 Compared to Quarter Ended April 1, 2006
   -15-




---



##### Table of Contents



Recent Accounting Pronouncements
   -16-




---



##### Table of Contents



Liquidity and Capital Resources
  Quarter
    
    QuarterEnded
    
    EndedMarch 31,
    
    April 1,2007
    
    2006Cash used in operating activities
    
    $
    (20,593
    )
    
    $
    (17,175
    )Cash used in investing activities
    
    
    (2,594
    )
    
    
    (2,456
    )Cash provided by financing activities
    
    
    14,764
    
    
    
    10,762
 Cash Flows
  Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  -17-




---



##### Table of Contents



Description of the Companys Outstanding Indebtedness
        -18-




---



##### Table of Contents



Effects of Inflation
  -19-




---



##### Table of Contents



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 make distributions, payments or loans to its
parent company 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;
    
    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 30, 2006 and elsewhere
in this report.
  -20-




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
   Foreign Currency Exchange Risk
  Commodity Price Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  -21-




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 6. Exhibits
 a) Exhibits
 ExhibitNumber
    
    
    
    Description10.1
    
    
    
    Separation Agreement and General Release, dated as of March 14, 2007, by and among Associated
Materials Incorporated and Trevor Deighton (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 30,
2007).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.
 -22-




---



##### Table of Contents



SIGNATURES
  AMH HOLDINGS, INC.
           (Registrant)Date:  May 15, 2007
    By:
    /s/ Thomas N. ChieffeThomas N. ChieffePresident and Chief Executive Officer
(Principal Executive Officer)By:
    /s/ D. Keith LaVanwayD. Keith LaVanwayVice President  Finance,
Chief Financial Officer,
Treasurer and Secretary
(Principal Financial Officer and
Principal Accounting Officer) -23-