##### 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 July 4, 2009
 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
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes o No þ




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##### 



AMH HOLDINGS, LLC
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets 
July 4, 2009 (Unaudited) and January 3, 2009
    
    
    1Consolidated Statements of Operations (Unaudited) 
Quarters ended July 4, 2009 and June 28, 2008
Six months ended July 4, 2009 and June 28, 2008
    
    
    2Consolidated Statements of Cash Flows (Unaudited) 
Six months ended July 4, 2009 and June 28, 2008
    
    
    3Notes to Consolidated Financial Statements (Unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29PART II. OTHER INFORMATIONItem 6. Exhibits
    
    
    30SIGNATURES
    
    
    31Exhibit 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)July 4,
    
    
    January 3,2009
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    15,741
    
    
    $
    6,709Accounts receivable, net
    
    
    143,337
    
    
    
    116,878Inventories
    
    
    135,292
    
    
    
    141,170Income taxes receivable
    
    
    355
    
    
    
    Deferred income taxes
    
    
    12,183
    
    
    
    12,183Prepaid expenses
    
    
    9,259
    
    
    
    10,486Total current assets
    
    
    316,167
    
    
    
    287,426Property, plant and equipment, net
    
    
    109,498
    
    
    
    115,156Goodwill
    
    
    231,330
    
    
    
    231,358Other intangible assets, net
    
    
    97,612
    
    
    
    99,131Receivable from parent
    
    
    26,833
    
    
    
    Other assets
    
    
    20,965
    
    
    
    17,650Total assets
    
    $
    802,405
    
    
    $
    750,721Liabilities and Members EquityCurrent liabilities:Accounts payable
    
    $
    110,709
    
    
    $
    54,520Payable to parent
    
    
    16,994
    
    
    
    10,526Accrued liabilities
    
    
    70,240
    
    
    
    54,449Income taxes payable
    
    
    
    
    
    
    6,578Total current liabilities
    
    
    197,943
    
    
    
    126,073Deferred income taxes
    
    
    50,776
    
    
    
    45,346Other liabilities
    
    
    58,301
    
    
    
    53,655Long-term debt
    
    
    655,500
    
    
    
    659,095Members equity
    
    
    (160,115
    )
    
    
    (133,448
    )Total liabilities and members equity
    
    $
    802,405
    
    
    $
    750,721
   1




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AMH HOLDINGS, LLC
 
 
  Quarters Ended
    
    
    Six Months EndedJuly 4,
    
    
    June 28,
    
    
    July 4,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    274,969
    
    
    $
    314,812
    
    
    $
    447,301
    
    
    $
    515,690Cost of sales
    
    
    196,988
    
    
    
    235,820
    
    
    
    339,067
    
    
    
    392,085Gross profit
    
    
    77,981
    
    
    
    78,992
    
    
    
    108,234
    
    
    
    123,605Selling, general and
administrative expense
    
    
    51,297
    
    
    
    52,862
    
    
    
    99,795
    
    
    
    102,990Gain on debt extinguishment
    
    
    8,897
    
    
    
    
    
    
    
    8,897
    
    
    
    Manufacturing restructuring costs
    
    
    5,255
    
    
    
    938
    
    
    
    5,255
    
    
    
    1,783Income from operations
    
    
    30,326
    
    
    
    25,192
    
    
    
    12,081
    
    
    
    18,832Interest expense, net
    
    
    18,015
    
    
    
    17,422
    
    
    
    35,701
    
    
    
    34,396Foreign currency (gain) loss
    
    
    (274
    )
    
    
    12
    
    
    
    (222
    )
    
    
    90Income (loss) before income taxes
    
    
    12,585
    
    
    
    7,758
    
    
    
    (23,398
    )
    
    
    (15,654
    )Income taxes (benefit)
    
    
    3,249
    
    
    
    (6,468
    )
    
    
    2,254
    
    
    
    (15,106
    )Net income (loss)
    
    $
    9,336
    
    
    $
    14,226
    
    
    $
    (25,652
    )
    
    $
    (548
    )
   2




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AMH HOLDINGS, LLC
 
 
  Six Months EndedJuly 4,
    
    
    June 28,2009
    
    
    2008Operating ActivitiesNet loss
    
    $
    (25,652
    )
    
    $
    (548
    )Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    10,945
    
    
    
    11,398Provision for losses on accounts receivable
    
    
    7,231
    
    
    
    2,108Amortization
of deferred financing costs and accretion on senior discount notes
    
    
    9,437
    
    
    
    23,660Amortization of management fee
    
    
    250
    
    
    
    250Deferred income taxes
    
    
    5,039
    
    
    
    (17,777
    )Non-cash portion of gain on debt extinguishment
    
    
    (8,897
    )
    
    
    Non-cash portion of manufacturing restructuring costs
    
    
    5,255
    
    
    
    1,577Loss on sale or disposal of assets other than by sale
    
    
    56
    
    
    
    1,846Changes in operating assets and liabilities:Accounts receivable
    
    
    (32,519
    )
    
    
    (33,558
    )Inventories
    
    
    7,200
    
    
    
    (20,683
    )Accounts payable and accrued liabilities
    
    
    69,903
    
    
    
    13,982Income taxes
    
    
    (6,613
    )
    
    
    (10,484
    )Other
    
    
    2,536
    
    
    
    (598
    )Net cash provided by (used in) operating activities
    
    
    44,171
    
    
    
    (28,827
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (2,381
    )
    
    
    (8,210
    )Proceeds from sale of assets
    
    
    
    
    
    
    24Net cash used in investing activities
    
    
    (2,381
    )
    
    
    (8,186
    )Financing ActivitiesNet
repayments under ABL Facility
    
    
    (16,500
    )
    
    
    Net increase in revolving line of credit
    
    
    
    
    
    
    28,309AMH II intercompany loan
    
    
    (26,833
    )
    
    
    Issuance of senior subordinated notes
    
    
    20,000
    
    
    
    Financing costs
    
    
    (5,014
    )
    
    
    Dividends
paid
    
    
    (4,269
    )
    
    
    (4,118
    )Net cash (used in) provided by financing activities
    
    
    (32,616
    )
    
    
    24,191Effect of exchange rate changes on cash
    
    
    (142
    )
    
    
    (574
    )Net increase
(decrease) in cash
    
    
    9,032
    
    
    
    (13,396
    )Cash at beginning of period
    
    
    6,709
    
    
    
    21,603Cash at end of period
    
    $
    15,741
    
    
    $
    8,207Supplemental information:Cash paid for interest
    
    $
    9,598
    
    
    $
    10,547Cash paid for income taxes
    
    $
    3,828
    
    
    $
    13,157
   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
  July 4,
    
    
    January 3,2009
    
    
    2009Raw materials
    
    $
    28,670
    
    
    $
    25,779Work-in-process
    
    
    13,120
    
    
    
    17,316Finished goods and purchased stock
    
    
    93,502
    
    
    
    98,075$
    135,292
    
    
    $
    141,170
 Note 3  Goodwill and Other Intangible Assets
  AverageAmortization
    
    
    July 4, 2009
    
    
    January 3, 2009Period
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying(in Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and
trade names
    
    
    15
    
    
    $
    108,080
    
    
    $
    13,136
    
    
    $
    94,944
    
    
    $
    108,080
    
    
    $
    12,187
    
    
    $
    95,893Patents
    
    
    10
    
    
    
    6,230
    
    
    
    4,471
    
    
    
    1,759
    
    
    
    6,230
    
    
    
    4,160
    
    
    
    2,070Customer base
    
    
    7
    
    
    
    4,926
    
    
    
    4,017
    
    
    
    909
    
    
    
    4,836
    
    
    
    3,668
    
    
    
    1,168Total other
intangible assets
    
    
    
    
    
    $
    119,236
    
    
    $
    21,624
    
    
    $
    97,612
    
    
    $
    119,146
    
    
    $
    20,015
    
    
    $
    99,131
 ® ® ®
  5




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Note 4  Long-Term Debt
  July 4,
    
    
    January 3,2009
    
    
    20099 3/4% notes
    
    $
    165,000
    
    
    $
    165,00015% notes
    
    
    20,000
    
    
    
    11 1/4% notes
    
    
    431,000
    
    
    
    438,095Borrowings under the ABL Facility
    
    
    39,500
    
    
    
    56,000Total long-term debt
    
    $
    655,500
    
    
    $
    659,095
        6




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pari passu th th th th th th
  st st
      7




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Note 5  Comprehensive Income (Loss)
  Quarters Ended
    
    
    Six Months EndedJuly 4,
    
    
    June 28,
    
    
    July 4,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss)
    
    $
    9,336
    
    
    $
    14,226
    
    
    $
    (25,652
    )
    
    $
    (548
    )Unrecognized
prior service cost and net loss
    
    
    254
    
    
    
    180
    
    
    
    511
    
    
    
    276Foreign currency translation adjustments
    
    
    3,544
    
    
    
    686
    
    
    
    2,742
    
    
    
    (2,113
    )Comprehensive income (loss)
    
    $
    13,134
    
    
    $
    15,092
    
    
    $
    (22,399
    )
    
    $
    (2,385
    )
 Note 6  Retirement Plans
 st
 Quarters EndedJuly 4, 2009
    
    
    June 28, 2008Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    146
    
    
    $
    354
    
    
    $
    134
    
    
    $
    545Interest cost
    
    
    783
    
    
    
    787
    
    
    
    747
    
    
    
    790Expected return on assets
    
    
    (674
    )
    
    
    (667
    )
    
    
    (875
    )
    
    
    (924
    )Amortization of prior service costs
    
    
    8
    
    
    
    7
    
    
    
    7
    
    
    
    8Amortization of unrecognized net loss
    
    
    375
    
    
    
    15
    
    
    
    150
    
    
    
    26Net periodic pension cost
    
    $
    638
    
    
    $
    496
    
    
    $
    163
    
    
    $
    445
 Six Months EndedJuly 4, 2009
    
    
    June 28, 2008Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    292
    
    
    $
    678
    
    
    $
    268
    
    
    $
    1,094Interest cost
    
    
    1,566
    
    
    
    1,509
    
    
    
    1,494
    
    
    
    1,586Expected return on assets
    
    
    (1,348
    )
    
    
    (1,279
    )
    
    
    (1,750
    )
    
    
    (1,855
    )Amortization of prior service costs
    
    
    16
    
    
    
    14
    
    
    
    14
    
    
    
    16Amortization of unrecognized net loss
    
    
    750
    
    
    
    28
    
    
    
    300
    
    
    
    52Net periodic pension cost
    
    $
    1,276
    
    
    $
    950
    
    
    $
    326
    
    
    $
    893
  8




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Note 7  Business Segments
  Quarters Ended
    
    
    Six Months EndedJuly 4,
    
    
    June 28,
    
    
    July 4,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Vinyl windows
    
    $
    99,031
    
    
    $
    103,935
    
    
    $
    160,087
    
    
    $
    173,623Vinyl siding products
    
    
    56,829
    
    
    
    70,315
    
    
    
    92,418
    
    
    
    114,449Metal products
    
    
    44,421
    
    
    
    61,789
    
    
    
    73,404
    
    
    
    101,133Third party manufactured products
    
    
    57,305
    
    
    
    58,187
    
    
    
    90,021
    
    
    
    91,120Other products and services
    
    
    17,383
    
    
    
    20,586
    
    
    
    31,371
    
    
    
    35,365$
    274,969
    
    
    $
    314,812
    
    
    $
    447,301
    
    
    $
    515,690
 Note 8  Product Warranty Costs and Service Returns
   9




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Quarters Ended
    
    
    Six Months EndedJuly 4,
    
    
    June 28,
    
    
    July 4,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at the beginning of the period
    
    $
    30,084
    
    
    $
    29,246
    
    
    $
    29,425
    
    
    $
    28,684Provision for warranties issued
    
    
    2,491
    
    
    
    2,586
    
    
    
    4,697
    
    
    
    4,764Claims paid
    
    
    (1,917
    )
    
    
    (1,914
    )
    
    
    (3,410
    )
    
    
    (3,342
    )Foreign currency translation
    
    
    289
    
    
    
    15
    
    
    
    235
    
    
    
    (173
    )Balance at the end of the period
    
    $
    30,947
    
    
    $
    29,933
    
    
    $
    30,947
    
    
    $
    29,933
 Note 9  Manufacturing Restructuring Costs
   Note 10  Subsidiary Guarantors
   10




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ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    2,933
    
    
    $
    
    
    
    $
    12,808
    
    
    $
    
    
    
    $
    15,741Accounts receivable, net
    
    
    95,945
    
    
    
    11,797
    
    
    
    35,595
    
    
    
    
    
    
    
    143,337Intercompany receivables
    
    
    
    
    
    
    70,833
    
    
    
    6,891
    
    
    
    (77,724
    )
    
    
    Inventories
    
    
    95,926
    
    
    
    7,073
    
    
    
    32,293
    
    
    
    
    
    
    
    135,292Deferred income taxes
    
    
    9,196
    
    
    
    2,482
    
    
    
    505
    
    
    
    
    
    
    
    12,183Income taxes receivable
    
    
    675
    
    
    
    
    
    
    
    1,097
    
    
    
    (1,772
    )
    
    
    Prepaid expenses
    
    
    6,668
    
    
    
    1,119
    
    
    
    1,472
    
    
    
    
    
    
    
    9,259Total current assets
    
    
    211,343
    
    
    
    93,304
    
    
    
    90,661
    
    
    
    (79,496
    )
    
    
    315,812Property, plant and equipment, net
    
    
    75,451
    
    
    
    2,286
    
    
    
    31,761
    
    
    
    
    
    
    
    109,498Goodwill
    
    
    194,814
    
    
    
    36,516
    
    
    
    
    
    
    
    
    
    
    
    231,330Other intangible assets, net
    
    
    87,695
    
    
    
    9,718
    
    
    
    199
    
    
    
    
    
    
    
    97,612Investment in subsidiaries
    
    
    175,432
    
    
    
    73,045
    
    
    
    
    
    
    
    (248,477
    )
    
    
    Receivable
from AMH II
    
    
    26,833
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,833Other assets
    
    
    14,252
    
    
    
    
    
    
    
    1,972
    
    
    
    
    
    
    
    16,224Total assets
    
    $
    785,820
    
    
    $
    214,869
    
    
    $
    124,593
    
    
    $
    (327,973
    )
    
    $
    797,309Liabilities And Members EquityCurrent liabilities:Accounts payable
    
    $
    65,532
    
    
    $
    12,832
    
    
    $
    32,345
    
    
    $
    
    
    
    $
    110,709Intercompany payables
    
    
    77,724
    
    
    
    
    
    
    
    
    
    
    
    (77,724
    )
    
    
    Payable to parent
    
    
    9,326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,326Accrued liabilities
    
    
    39,219
    
    
    
    5,614
    
    
    
    9,249
    
    
    
    
    
    
    
    54,082Income taxes payable
    
    
    
    
    
    
    1,821
    
    
    
    
    
    
    
    (1,772
    )
    
    
    49Total current liabilities
    
    
    191,801
    
    
    
    20,267
    
    
    
    41,594
    
    
    
    (79,496
    )
    
    
    174,166Deferred income taxes
    
    
    40,984
    
    
    
    3,511
    
    
    
    2,323
    
    
    
    
    
    
    
    46,818Other liabilities
    
    
    35,011
    
    
    
    15,659
    
    
    
    7,631
    
    
    
    
    
    
    
    58,301Long-term debt
    
    
    224,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    224,500Members equity
    
    
    293,524
    
    
    
    175,432
    
    
    
    73,045
    
    
    
    (248,477
    )
    
    
    293,524Total liabilities and
members equity
    
    $
    785,820
    
    
    $
    214,869
    
    
    $
    124,593
    
    
    $
    (327,973
    )
    
    $
    797,309
  11




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ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    200,645
    
    
    $
    38,801
    
    
    $
    73,922
    
    
    $
    (38,399
    )
    
    $
    274,969Cost of sales
    
    
    143,726
    
    
    
    36,708
    
    
    
    54,953
    
    
    
    (38,399
    )
    
    
    196,988Gross profit
    
    
    56,919
    
    
    
    2,093
    
    
    
    18,969
    
    
    
    
    
    
    
    77,981Selling, general and
administrative expense
    
    
    41,782
    
    
    
    551
    
    
    
    8,964
    
    
    
    
    
    
    
    51,297Manufacturing restructuring costs
    
    
    5,255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,255Income from operations
    
    
    9,882
    
    
    
    1,542
    
    
    
    10,005
    
    
    
    
    
    
    
    21,429Interest expense, net
    
    
    5,091
    
    
    
    
    
    
    
    153
    
    
    
    
    
    
    
    5,244Foreign currency gain
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    
    
    
    
    274Income before income taxes
    
    
    4,791
    
    
    
    1,542
    
    
    
    10,126
    
    
    
    
    
    
    
    16,459Income taxes
    
    
    1,996
    
    
    
    1,140
    
    
    
    3,250
    
    
    
    
    
    
    
    6,386Income before equity income from
subsidiaries
    
    
    2,795
    
    
    
    402
    
    
    
    6,876
    
    
    
    
    
    
    
    10,073Equity income from subsidiaries
    
    
    7,278
    
    
    
    6,876
    
    
    
    
    
    
    
    (14,154
    )
    
    
    Net income
    
    $
    10,073
    
    
    $
    7,278
    
    
    $
    6,876
    
    
    $
    (14,154
    )
    
    $
    10,073
  12




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    333,870
    
    
    $
    65,279
    
    
    $
    113,412
    
    
    $
    (65,260
    )
    
    $
    447,301Cost of sales
    
    
    250,589
    
    
    
    64,521
    
    
    
    89,217
    
    
    
    (65,260
    )
    
    
    339,067Gross profit
    
    
    83,281
    
    
    
    758
    
    
    
    24,195
    
    
    
    
    
    
    
    108,234Selling, general and
administrative expense
    
    
    81,033
    
    
    
    1,739
    
    
    
    17,023
    
    
    
    
    
    
    
    99,795Manufacturing restructuring costs
    
    
    5,255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,255Income (loss) from operations
    
    
    (3,007
    )
    
    
    (981
    )
    
    
    7,172
    
    
    
    
    
    
    
    3,184Interest expense, net
    
    
    10,211
    
    
    
    
    
    
    
    371
    
    
    
    
    
    
    
    10,582Foreign currency gain
    
    
    
    
    
    
    
    
    
    
    222
    
    
    
    
    
    
    
    222Income (loss) before income taxes
    
    
    (13,218
    )
    
    
    (981
    )
    
    
    7,023
    
    
    
    
    
    
    
    (7,176
    )Income taxes (benefit)
    
    
    (5,315
    )
    
    
    277
    
    
    
    2,254
    
    
    
    
    
    
    
    (2,784
    )Income (loss) before equity
income from subsidiaries
    
    
    (7,903
    )
    
    
    (1,258
    )
    
    
    4,769
    
    
    
    
    
    
    
    (4,392
    )Equity income from subsidiaries
    
    
    3,511
    
    
    
    4,769
    
    
    
    
    
    
    
    (8,280
    )
    
    
    Net income (loss)
    
    $
    (4,392
    )
    
    $
    3,511
    
    
    $
    4,769
    
    
    $
    (8,280
    )
    
    $
    (4,392
    )
  13




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    20,300
    
    
    $
    12,912
    
    
    $
    10,959
    
    
    $
    44,171Investing ActivitiesAdditions to property, plant and equipment
    
    
    (1,983
    )
    
    
    (11
    )
    
    
    (387
    )
    
    
    (2,381
    )Other
    
    
    (383
    )
    
    
    383
    
    
    
    
    
    
    
    Net cash provided by (used in) investing activities
    
    
    (2,366
    )
    
    
    372
    
    
    
    (387
    )
    
    
    (2,381
    )Financing ActivitiesNet repayments under ABL Facility
    
    
    (16,500
    )
    
    
    
    
    
    
    
    
    
    
    (16,500
    )AMH II
intercompany loan
    
    
    (26,833
    )
    
    
    
    
    
    
    
    
    
    
    (26,833
    )Intercompany transactions
    
    
    12,557
    
    
    
    (13,381
    )
    
    
    824
    
    
    
    Dividends
    
    
    (4,269
    )
    
    
    
    
    
    
    
    
    
    
    (4,269
    )Issuance of
senior subordinated notes
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    20,000Financing costs
    
    
    (4,920
    )
    
    
    
    
    
    
    (94
    )
    
    
    (5,014
    )Net cash provided by (used in) financing activities
    
    
    (19,965
    )
    
    
    (13,381
    )
    
    
    730
    
    
    
    (32,616
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (142
    )
    
    
    (142
    )Net increase (decrease) in cash
    
    
    (2,031
    )
    
    
    (97
    )
    
    
    11,160
    
    
    
    9,032Cash at beginning of period
    
    
    4,964
    
    
    
    97
    
    
    
    1,648
    
    
    
    6,709Cash at end of period
    
    $
    2,933
    
    
    $
    
    
    
    $
    12,808
    
    
    $
    15,741
  14




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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
    
    $
    4,964
    
    
    $
    97
    
    
    $
    1,648
    
    
    $
    
    
    
    $
    6,709Accounts receivable, net
    
    
    82,479
    
    
    
    13,251
    
    
    
    21,148
    
    
    
    
    
    
    
    116,878Intercompany receivables
    
    
    
    
    
    
    57,426
    
    
    
    7,742
    
    
    
    (65,168
    )
    
    
    Inventories
    
    
    92,802
    
    
    
    14,892
    
    
    
    33,476
    
    
    
    
    
    
    
    141,170Income taxes receivable
    
    
    
    
    
    
    
    
    
    
    1,057
    
    
    
    (1,057
    )
    
    
    Deferred income taxes
    
    
    9,196
    
    
    
    2,482
    
    
    
    505
    
    
    
    
    
    
    
    12,183Prepaid expenses
    
    
    7,887
    
    
    
    1,194
    
    
    
    1,405
    
    
    
    
    
    
    
    10,486Total current assets
    
    
    197,328
    
    
    
    89,342
    
    
    
    66,981
    
    
    
    (66,225
    )
    
    
    287,426Property, plant and equipment, net
    
    
    80,567
    
    
    
    2,975
    
    
    
    31,614
    
    
    
    
    
    
    
    115,156Goodwill
    
    
    194,814
    
    
    
    36,544
    
    
    
    
    
    
    
    
    
    
    
    231,358Other intangible assets, net
    
    
    88,828
    
    
    
    9,970
    
    
    
    333
    
    
    
    
    
    
    
    99,131Investment in subsidiaries
    
    
    169,112
    
    
    
    65,508
    
    
    
    
    
    
    
    (234,620
    )
    
    
    Other assets
    
    
    10,448
    
    
    
    19
    
    
    
    1,751
    
    
    
    
    
    
    
    12,218Total assets
    
    $
    741,097
    
    
    $
    204,358
    
    
    $
    100,679
    
    
    $
    (300,845
    )
    
    $
    745,289Liabilities And Members EquityCurrent liabilities:Accounts payable
    
    $
    32,150
    
    
    $
    5,191
    
    
    $
    17,179
    
    
    $
    
    
    
    $
    54,520Intercompany payables
    
    
    65,168
    
    
    
    
    
    
    
    
    
    
    
    (65,168
    )
    
    
    Payable to parent
    
    
    9,326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,326Accrued liabilities
    
    
    37,030
    
    
    
    9,252
    
    
    
    8,167
    
    
    
    
    
    
    
    54,449Income taxes payable
    
    
    6,494
    
    
    
    1,545
    
    
    
    
    
    
    
    (1,057
    )
    
    
    6,982Total current liabilities
    
    
    150,168
    
    
    
    15,988
    
    
    
    25,346
    
    
    
    (66,225
    )
    
    
    125,277Deferred income taxes
    
    
    40,710
    
    
    
    3,486
    
    
    
    2,231
    
    
    
    
    
    
    
    46,427Other liabilities
    
    
    30,289
    
    
    
    15,772
    
    
    
    7,594
    
    
    
    
    
    
    
    53,655Long-term debt
    
    
    221,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221,000Members equity
    
    
    298,930
    
    
    
    169,112
    
    
    
    65,508
    
    
    
    (234,620
    )
    
    
    298,930Total liabilities and members equity
    
    $
    741,097
    
    
    $
    204,358
    
    
    $
    100,679
    
    
    $
    (300,845
    )
    
    $
    745,289
  15




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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
  16




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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
  17




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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
  18




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
 ® ® ®
    19




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##### Table of Contents



Results of Operations
  Quarters Ended
    
    
    Six Months EndedJuly 4,
    
    
    June 28,
    
    
    July 4,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    274,969
    
    
    $
    314,812
    
    
    $
    447,301
    
    
    $
    515,690Cost of sales
    
    
    196,988
    
    
    
    235,820
    
    
    
    339,067
    
    
    
    392,085Gross profit
    
    
    77,981
    
    
    
    78,992
    
    
    
    108,234
    
    
    
    123,605Selling, general and
administrative expense
    
    
    51,297
    
    
    
    52,862
    
    
    
    99,795
    
    
    
    102,990Gain on debt extinguishment
    
    
    8,897
    
    
    
    
    
    
    
    8,897
    
    
    
    Manufacturing restructuring
costs
    
    
    5,255
    
    
    
    938
    
    
    
    5,255
    
    
    
    1,783Income from operations
    
    
    30,326
    
    
    
    25,192
    
    
    
    12,081
    
    
    
    18,832Interest expense, net
    
    
    18,015
    
    
    
    17,422
    
    
    
    35,701
    
    
    
    34,396Foreign currency (gain) loss
    
    
    (274
    )
    
    
    12
    
    
    
    (222
    )
    
    
    90Income (loss) before income taxes
    
    
    12,585
    
    
    
    7,758
    
    
    
    (23,398
    )
    
    
    (15,654
    )Income taxes (benefit)
    
    
    3,249
    
    
    
    (6,468
    )
    
    
    2,254
    
    
    
    (15,106
    )Net income (loss)
    
    $
    9,336
    
    
    $
    14,226
    
    
    $
    (25,652
    )
    
    $
    (548
    )Other Data:EBITDA (a)
    
    $
    36,104
    
    
    $
    30,925
    
    
    $
    23,248
    
    
    $
    30,140Adjusted EBITDA (a)
    
    
    32,558
    
    
    
    34,651
    
    
    
    19,937
    
    
    
    34,836
  20




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##### Table of Contents



Quarters Ended
    
    
    Six Months EndedJuly 4,
    
    
    June 28,
    
    
    July 4,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Vinyl windows
    
    $
    99,031
    
    
    $
    103,935
    
    
    $
    160,087
    
    
    $
    173,623Vinyl siding products
    
    
    56,829
    
    
    
    70,315
    
    
    
    92,418
    
    
    
    114,449Metal products
    
    
    44,421
    
    
    
    61,789
    
    
    
    73,404
    
    
    
    101,133Third party manufactured products
    
    
    57,305
    
    
    
    58,187
    
    
    
    90,021
    
    
    
    91,120Other products and services
    
    
    17,383
    
    
    
    20,586
    
    
    
    31,371
    
    
    
    35,365$
    274,969
    
    
    $
    314,812
    
    
    $
    447,301
    
    
    $
    515,690
 (a)
    
    EBITDA is calculated as net income 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 ABL Facility has certain covenants that apply 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 an alternative 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): Quarters Ended
    
    
    Six Months EndedJuly 4, 2009
    
    
    June 28, 2008
    
    
    July 4, 2009
    
    
    June 28, 2008Net income (loss)
    
    $
    9,336
    
    
    $
    14,226
    
    
    $
    (25,652
    )
    
    $
    (548
    )Interest expense, net
    
    
    18,015
    
    
    
    17,422
    
    
    
    35,701
    
    
    
    34,396Income taxes
    
    
    3,249
    
    
    
    (6,468
    )
    
    
    2,254
    
    
    
    (15,106
    )Depreciation and amortization
    
    
    5,504
    
    
    
    5,745
    
    
    
    10,945
    
    
    
    11,398EBITDA
    
    
    36,104
    
    
    
    30,925
    
    
    
    23,248
    
    
    
    30,140Amortization of management fee (b)
    
    
    125
    
    
    
    125
    
    
    
    250
    
    
    
    250Manufacturing restructuring costs
(c)
    
    
    5,255
    
    
    
    1,797
    
    
    
    5,255
    
    
    
    2,642Bank audit fees (d)
    
    
    (29
    )
    
    
    
    
    
    
    81
    
    
    
    Loss upon disposal of assets other
than by sale (e)
    
    
    
    
    
    
    1,804
    
    
    
    
    
    
    
    1,804Gain on debt extinguishment (f)
    
    
    (8,897
    )
    
    
    
    
    
    
    (8,897
    )
    
    
    Adjusted EBITDA (g)
    
    $
    32,558
    
    
    $
    34,651
    
    
    $
    19,937
    
    
    $
    34,836
 (b)
    
    Represents amortization of a prepaid management fee paid to Investcorp International
Inc. in connection with the December 2004 recapitalization transaction.(c)
    
    During the first quarter of 2008, the Company committed to, and subsequently
completed, relocating a portion of its vinyl siding production from Ennis, Texas to its vinyl
manufacturing facilities in West Salem, Ohio and Burlington, Ontario. In addition, during
2008, the Company transitioned the majority of distribution of its U.S. vinyl siding products
to a center located in Ashtabula, Ohio and committed to a plan to discontinue use of its
warehouse facility adjacent to its Ennis, Texas vinyl manufacturing facility. For the
quarter 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 $0.9 million are included in cost of sales in the statement of operations
for the quarter and six months ended June 28, 2008. The Company discontinued its use of the
warehouse facility adjacent to the Ennis manufacturing plant during the second quarter of
2009. As a result, the related lease costs associated with the discontinued use of the
warehouse facility were recorded as a restructuring charge of approximately $5.3 million for
the quarter and six months ended July 4, 2009.(d)
    
    Represents bank audit fees incurred under the Companys ABL Facility.  21




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##### Table of Contents



(e)
    
    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.(f)
    
    Represents the Companys gain on extinguishment of debt for the quarter and six
months ended July 4, 2009.(g)
    
    Prior year adjusted EBITDA amounts have been reclassified to conform to the current
years presentation, which, in conformity with the computation of adjusted EBITDA under the
Companys current credit facility, excludes any adjustment for foreign currency gain or loss. Quarter Ended July 4, 2009 Compared to Quarter Ended June 28, 2008
           22




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##### Table of Contents



Six Months Ended July 4, 2009 Compared to Six Months Ended June 28, 2008
         Recent Accounting Pronouncements
   23




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##### Table of Contents



Liquidity and Capital Resources
  Six Months EndedJuly 4,
    
    
    June 28,2009
    
    
    2008Cash provided by (used in) operating activities
    
    $
    44,171
    
    
    $
    (28,827
    )Cash used in investing activities
    
    
    (2,381
    )
    
    
    (8,186
    )Cash (used in) provided by financing activities
    
    
    (32,616
    )
    
    
    24,191
 Cash Flows
  Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
   24




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##### Table of Contents



Description of the Companys Outstanding Indebtedness
       pari
passu th th th th th th
  25




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##### Table of Contents



st st
     26




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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 and remodeling industries, economic conditions,
interest rates, foreign currency exchange rates and other conditions;
    
    changes in availability of consumer credit, employment trends, levels of
consumer confidence and spending, and consumer preferences;
  27




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##### Table of Contents




    
    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;
    
    Associated Materials ability to comply with certain financial covenants in
its ABL Facility and indentures governing its 9 3/4% notes and 15% notes;
    
    Associated Materials ability to make distributions, payments or loans to
its parent companies to allow them to make required payments on their debt;
    
    the ability of the Company and its parent company to refinance indebtedness
when required;
    
    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 unanticipated warranty or product liability claims;
    
    increases in capital expenditure requirements;
    
    potential conflict between existing Alside and Gentek distribution
channels; and
    
    the other factors discussed under Item 1A. Risk Factors as filed in the
Companys Annual Report on Form 10-K for the year ended January 3, 2009 and elsewhere
in this report.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
    28




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##### Table of Contents



Foreign Currency Exchange Risk
  Commodity Price Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
     29




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##### Table of Contents



Changes in Internal Control over Financial Reporting
    Inherent Limitations on the Effectiveness of Internal Controls
  
 PART II. OTHER INFORMATION
 
 Item 6. Exhibits
 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




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##### Table of Contents



SIGNATURES
  AMH HOLDINGS, LLC
(Registrant)Date:  August 18, 2009
    By:
    /s/ Thomas N. ChieffeThomas N. ChieffePresident and Chief Executive Officer
(Principal Executive Officer)Date:  August 18, 2009
    By:
    /s/ Stephen E. GrahamStephen E. GrahamVice President  Chief Financial Officer,
Treasurer and Secretary
(Principal Financial Officer and
Principal Accounting Officer)  31




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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.  32