##### 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
 April 1, 2006
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
  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




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##### 



AMH HOLDINGS, INC.
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets
    
    
    1April 1, 2006 (Unaudited) and December 31, 2005Consolidated Statements of Operations (Unaudited)
    
    
    2Quarters ended April 1, 2006 and April 2, 2005Consolidated Statements of Cash Flows (Unaudited)
    
    
    3Quarters ended April 1, 2006 and April 2, 2005Notes to Consolidated Financial Statements (Unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    20PART II.OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 1A. Risk Factors
    
    
    21Item 6. Exhibits
    
    
    21SIGNATURES
    
    
    22EX-10.2 Amended Employment Agreement - LavanwayEX-10.3 Amended Employment Agreement - FrancoEX-10.4 Amended Employment Agreement - HaumesserEX-10.5 Instrument of Amendment - DeightonEX-31.1 Certification 302 - CEOEX-31.2 Certification 302 - CFOEX-32.1 Certification 906 - CEOEX-32.2 Certification 906 - CFO




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 AMH HOLDINGS, INC.
 (Unaudited)April 1,
    
    
    December 31,2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    3,448
    
    
    $
    12,300Accounts receivable, net
    
    
    150,689
    
    
    
    147,664Receivable from parent
    
    
    1,241
    
    
    
    1,241Inventories
    
    
    152,005
    
    
    
    133,524Deferred income taxes
    
    
    26,629
    
    
    
    26,629Other current assets
    
    
    9,707
    
    
    
    10,220Total current assets
    
    
    343,719
    
    
    
    331,578Property, plant and equipment, net
    
    
    141,304
    
    
    
    143,588Goodwill
    
    
    230,693
    
    
    
    230,691Other intangible assets, net
    
    
    109,056
    
    
    
    109,867Other assets
    
    
    23,679
    
    
    
    25,086Total assets
    
    $
    848,451
    
    
    $
    840,810Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    104,251
    
    
    $
    96,933Accrued liabilities
    
    
    51,210
    
    
    
    57,711Income taxes payable
    
    
    3,104
    
    
    
    7,042Total current liabilities
    
    
    158,565
    
    
    
    161,686Deferred income taxes
    
    
    42,500
    
    
    
    47,131Other liabilities
    
    
    44,127
    
    
    
    43,874Long-term debt
    
    
    655,893
    
    
    
    632,478Convertible preferred stock, $0.01 par value
    
    
    150,000
    
    
    
    150,000Stockholders equity
    
    
    (202,634
    )
    
    
    (194,359
    )Total liabilities and stockholders equity
    
    $
    848,451
    
    
    $
    840,810
  -1-




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AMH HOLDINGS, INC.
 Quarter
    
    
    QuarterEnded
    
    
    EndedApril 1,
    
    
    April 2,2006
    
    
    2005Net sales
    
    $
    259,280
    
    
    $
    218,569Cost of sales
    
    
    200,176
    
    
    
    169,537Gross profit
    
    
    59,104
    
    
    
    49,032Selling, general and administrative expense
    
    
    51,014
    
    
    
    50,751Facility closure costs
    
    
    
    
    
    
    2,553Income (loss) from operations
    
    
    8,090
    
    
    
    (4,272
    )Interest expense, net
    
    
    16,701
    
    
    
    15,296Foreign currency (gain) loss
    
    
    159
    
    
    
    (3
    )Loss before income taxes
    
    
    (8,770
    )
    
    
    (19,565
    )Income taxes (benefit)
    
    
    (4,526
    )
    
    
    (7,483
    )Net loss
    
    $
    (4,244
    )
    
    $
    (12,082
    )
  -2-




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AMH HOLDINGS, INC.
 
 
 Quarter
    
    
    QuarterEnded
    
    
    EndedApril 1,
    
    
    April 2,2006
    
    
    2005Operating ActivitiesNet loss
    
    $
    (4,244
    )
    
    $
    (12,082
    )Adjustments to reconcile net loss to net cash used in operating
activities:Depreciation and amortization
    
    
    5,380
    
    
    
    4,955Amortization of debt discount and deferred financing costs
    
    
    9,695
    
    
    
    8,741Amortization of management fee
    
    
    125
    
    
    
    1,000Stock compensation expense
    
    
    
    
    
    
    319Deferred taxes
    
    
    (4,615
    )
    
    
    (3,163
    )Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (3,219
    )
    
    
    (2,450
    )Inventories
    
    
    (18,709
    )
    
    
    (25,347
    )Income taxes
    
    
    (3,934
    )
    
    
    (3,387
    )Accounts payable and accrued liabilities
    
    
    1,052
    
    
    
    (4,441
    )Other
    
    
    1,294
    
    
    
    (1,507
    )Net cash used in operating activities
    
    
    (17,175
    )
    
    
    (37,362
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (2,456
    )
    
    
    (9,128
    )Net cash used in investing activities
    
    
    (2,456
    )
    
    
    (9,128
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    14,703
    
    
    
    43,619Dividends
    
    
    (3,833
    )
    
    
    (33,713
    )Settlement of promissory notes
    
    
    
    
    
    
    (11,607
    )Financing costs
    
    
    (108
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    10,762
    
    
    
    (1,701
    )Net decrease in cash
    
    
    (8,869
    )
    
    
    (48,191
    )Effect of exchange rate changes on cash
    
    
    17
    
    
    
    (174
    )Cash at beginning of period
    
    
    12,300
    
    
    
    58,054Cash at end of period
    
    $
    3,448
    
    
    $
    9,689Supplemental information:Cash paid for interest
    
    $
    2,732
    
    
    $
    2,129Cash paid (received) for income taxes
    
    $
    4,050
    
    
    $
    (1,004
    )
  -3-




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AMH HOLDINGS, INC.
 Note 1  Basis of Presentation
       Note 2  Inventories
  April 1,
    
    
    December 312006
    
    
    2005Raw materials
    
    $
    33,948
    
    
    $
    27,480Work-in-process
    
    
    12,444
    
    
    
    10,709Finished goods and purchased stock
    
    
    105,613
    
    
    
    95,335$
    152,005
    
    
    $
    133,524
 -4-




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Note 3  Goodwill and Other Intangible Assets
  AverageAmortization
    
    

April 1, 2006
    
    

December 31, 2005Period
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying(in Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and
trade names
    
    
    15
    
    
    $
    109,280
    
    
    $
    7,047
    
    
    $
    102,233
    
    
    $
    109,280
    
    
    $
    6,580
    
    
    $
    102,700Patents
    
    
    10
    
    
    
    6,550
    
    
    
    2,579
    
    
    
    3,971
    
    
    
    6,550
    
    
    
    2,416
    
    
    
    4,134Customer base
    
    
    7
    
    
    
    4,815
    
    
    
    1,963
    
    
    
    2,852
    
    
    
    4,824
    
    
    
    1,791
    
    
    
    3,033Total other
intangible assets
    
    
    
    
    
    $
    120,645
    
    
    $
    11,589
    
    
    $
    109,056
    
    
    $
    120,654
    
    
    $
    10,787
    
    
    $
    109,867
 ® ® ®
 Note 4  Long-Term Debt
  April 1,
    
    
    December 31,2006
    
    
    20059 3/4% notes
    
    $
    165,000
    
    
    $
    165,00011 1/4% senior discount notes
    
    
    324,190
    
    
    
    315,478Term loan under credit facility
    
    
    152,000
    
    
    
    152,000Revolving loans under credit facility
    
    
    14,703
    
    
    
    Total debt
    
    $
    655,893
    
    
    $
    632,478
    -5-




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Note 5  Stock Plans
  Note 6  Comprehensive Income
  Quarter
    
    
    QuarterEnded
    
    
    EndedApril 1,
    
    
    April 2,2006
    
    
    2005Net loss as reported
    
    $
    (4,244
    )
    
    $
    (12,082
    )Foreign currency translation adjustments
    
    
    (198
    )
    
    
    (807
    )Comprehensive loss
    
    $
    (4,442
    )
    
    $
    (12,889
    )
 Note 7  Retirement Plans
  -6-




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Quarter
    
    
    QuarterEnded
    
    
    EndedApril 1,
    
    
    April 2,2006
    
    
    2005Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    127
    
    
    $
    493
    
    
    $
    123
    
    
    $
    331Interest cost
    
    
    688
    
    
    
    591
    
    
    
    670
    
    
    
    504Expected return on assets
    
    
    (732
    )
    
    
    (653
    )
    
    
    (758
    )
    
    
    (533
    )Amortization of prior service costs
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    Amortization of unrecognized net loss
    
    
    228
    
    
    
    10
    
    
    
    143
    
    
    
    Net periodic pension cost
    
    $
    311
    
    
    $
    448
    
    
    $
    178
    
    
    $
    302
 -7-




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Note 8  Subsidiary Guarantors
  ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1,029
    
    
    $
    407
    
    
    $
    2,012
    
    
    $
    
    
    
    $
    3,448Accounts receivable, net
    
    
    97,721
    
    
    
    26,146
    
    
    
    26,822
    
    
    
    
    
    
    
    150,689Intercompany receivables
    
    
    
    
    
    
    33,221
    
    
    
    18,789
    
    
    
    (52,010
    )
    
    
    Receivable from parent
    
    
    3,908
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,908Inventories
    
    
    98,346
    
    
    
    19,611
    
    
    
    34,048
    
    
    
    
    
    
    
    152,005Income taxes receivable
    
    
    
    
    
    
    3,059
    
    
    
    
    
    
    
    (3,059
    )
    
    
    Deferred income taxes
    
    
    17,560
    
    
    
    9,069
    
    
    
    
    
    
    
    
    
    
    
    26,629Other current assets
    
    
    7,279
    
    
    
    979
    
    
    
    1,449
    
    
    
    
    
    
    
    9,707Total current assets
    
    
    225,843
    
    
    
    92,492
    
    
    
    83,120
    
    
    
    (55,069
    )
    
    
    346,386Property, plant and equipment, net
    
    
    105,229
    
    
    
    3,901
    
    
    
    32,174
    
    
    
    
    
    
    
    141,304Goodwill
    
    
    194,174
    
    
    
    36,519
    
    
    
    
    
    
    
    
    
    
    
    230,693Other intangible assets, net
    
    
    96,244
    
    
    
    11,646
    
    
    
    1,166
    
    
    
    
    
    
    
    109,056Investment in subsidiaries
    
    
    137,604
    
    
    
    38,947
    
    
    
    
    
    
    
    (176,551
    )
    
    
    Other assets
    
    
    14,875
    
    
    
    
    
    
    
    481
    
    
    
    
    
    
    
    15,356Total assets
    
    $
    773,969
    
    
    $
    183,505
    
    
    $
    116,941
    
    
    $
    (231,620
    )
    
    $
    842,795Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    51,041
    
    
    $
    20,879
    
    
    $
    32,331
    
    
    $
    
    
    
    $
    104,251Intercompany payables
    
    
    38,952
    
    
    
    
    
    
    
    13,058
    
    
    
    (52,010
    )
    
    
    Accrued liabilities
    
    
    39,683
    
    
    
    5,685
    
    
    
    5,842
    
    
    
    
    
    
    
    51,210Income taxes payable
    
    
    6,365
    
    
    
    
    
    
    
    528
    
    
    
    (3,059
    )
    
    
    3,834Total current liabilities
    
    
    136,041
    
    
    
    26,564
    
    
    
    51,759
    
    
    
    (55,069
    )
    
    
    159,295Deferred income taxes
    
    
    62,207
    
    
    
    1,549
    
    
    
    3,329
    
    
    
    
    
    
    
    67,085Other liabilities
    
    
    17,136
    
    
    
    17,788
    
    
    
    9,203
    
    
    
    
    
    
    
    44,127Long-term debt
    
    
    318,000
    
    
    
    
    
    
    
    13,703
    
    
    
    
    
    
    
    331,703Stockholders equity
    
    
    240,585
    
    
    
    137,604
    
    
    
    38,947
    
    
    
    (176,551
    )
    
    
    240,585Total liabilities and stockholders equity
    
    $
    773,969
    
    
    $
    183,505
    
    
    $
    116,941
    
    
    $
    (231,620
    )
    
    $
    842,795
 -8-




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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 (loss) 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
    
    
    
    10,762Net decrease in cash
    
    
    (5,981
    )
    
    
    (639
    )
    
    
    (2,249
    )
    
    
    (8,869
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    17Cash at beginning of period
    
    
    7,010
    
    
    
    1,046
    
    
    
    4,244
    
    
    
    12,300Cash at end of period
    
    $
    1,029
    
    
    $
    407
    
    
    $
    2,012
    
    
    $
    3,448
 -9-




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ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    7,010
    
    
    $
    1,046
    
    
    $
    4,244
    
    
    $
    
    
    
    $
    12,300Accounts receivable, net
    
    
    100,679
    
    
    
    26,506
    
    
    
    20,479
    
    
    
    
    
    
    
    147,664Intercompany receivables
    
    
    
    
    
    
    34,843
    
    
    
    18,787
    
    
    
    (53,630
    )
    
    
    Receivable from parent
    
    
    3,908
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,908Inventories
    
    
    90,773
    
    
    
    14,672
    
    
    
    28,079
    
    
    
    
    
    
    
    133,524Income taxes receivable
    
    
    
    
    
    
    2,860
    
    
    
    
    
    
    
    (2,860
    )
    
    
    Deferred income taxes
    
    
    17,560
    
    
    
    9,069
    
    
    
    
    
    
    
    
    
    
    
    26,629Other current assets
    
    
    7,987
    
    
    
    1,062
    
    
    
    1,171
    
    
    
    
    
    
    
    10,220Total current assets
    
    
    227,917
    
    
    
    90,058
    
    
    
    72,760
    
    
    
    (56,490
    )
    
    
    334,245Property, plant and equipment, net
    
    
    106,887
    
    
    
    4,167
    
    
    
    32,534
    
    
    
    
    
    
    
    143,588Goodwill
    
    
    194,174
    
    
    
    36,517
    
    
    
    
    
    
    
    
    
    
    
    230,691Other intangible assets, net
    
    
    96,803
    
    
    
    11,819
    
    
    
    1,245
    
    
    
    
    
    
    
    109,867Investment in subsidiaries
    
    
    137,480
    
    
    
    36,497
    
    
    
    
    
    
    
    (173,977
    )
    
    
    Other assets
    
    
    15,999
    
    
    
    
    
    
    
    501
    
    
    
    
    
    
    
    16,500Total assets
    
$
    779,260
    
    
    $
    179,058
    
    
    $
    107,040
    
    
    $
    (230,467
    )
    
    $
    834,891Liabilities And Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    57,820
    
    
    $
    13,073
    
    
    $
    26,040
    
    
    $
    
    
    
    $
    96,933Intercompany payables
    
    
    29,311
    
    
    
    
    
    
    
    24,319
    
    
    
    (53,630
    )
    
    
    Accrued liabilities
    
    
    41,568
    
    
    
    9,162
    
    
    
    6,981
    
    
    
    
    
    
    
    57,711Income taxes payable
    
    
    10,263
    
    
    
    
    
    
    
    368
    
    
    
    (2,860
    )
    
    
    7,771Total current liabilities
    
    
    138,962
    
    
    
    22,235
    
    
    
    57,708
    
    
    
    (56,490
    )
    
    
    162,415Deferred income taxes
    
    
    62,208
    
    
    
    1,549
    
    
    
    3,344
    
    
    
    
    
    
    
    67,101Other liabilities
    
    
    16,589
    
    
    
    17,794
    
    
    
    9,491
    
    
    
    
    
    
    
    43,874Long-term debt
    
    
    317,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317,000Stockholders equity
    
    
    244,501
    
    
    
    137,480
    
    
    
    36,497
    
    
    
    (173,977
    )
    
    
    244,501Total liabilities and
stockholders equity
    
    $
    779,260
    
    
    $
    179,058
    
    
    $
    107,040
    
    
    $
    (230,467
    )
    
    $
    834,891
 -10-




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##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Non-Guarantor
    
    
    Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    ConsolidatedNet sales
    
    $
    154,714
    
    
    $
    45,122
    
    
    $
    46,021
    
    
    $
    (27,288
    )
    
    $
    218,569Cost of sales
    
    
    118,169
    
    
    
    40,371
    
    
    
    38,285
    
    
    
    (27,288
    )
    
    
    169,537Gross profit
    
    
    36,545
    
    
    
    4,751
    
    
    
    7,736
    
    
    
    
    
    
    
    49,032Selling, general and administrative
expense
    
    
    38,732
    
    
    
    5,920
    
    
    
    6,099
    
    
    
    
    
    
    
    50,751Facility closure costs
    
    
    2,553
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,553Income (loss) from operations
    
    
    (4,740
    )
    
    
    (1,169
    )
    
    
    1,637
    
    
    
    
    
    
    
    (4,272
    )Interest expense, net
    
    
    7,198
    
    
    
    2
    
    
    
    111
    
    
    
    
    
    
    
    7,311Foreign currency (gain) loss
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Income (loss) from before income taxes
    
    
    (11,938
    )
    
    
    (1,171
    )
    
    
    1,529
    
    
    
    
    
    
    
    (11,580
    )Income taxes (benefit)
    
    
    (4,378
    )
    
    
    (481
    )
    
    
    540
    
    
    
    
    
    
    
    (4,319
    )Income (loss) before equity income
from subsidiaries
    
    
    (7,560
    )
    
    
    (690
    )
    
    
    989
    
    
    
    
    
    
    
    (7,261
    )Equity income (loss) from subsidiaries
    
    
    299
    
    
    
    989
    
    
    
    
    
    
    
    (1,288
    )
    
    
    Net income (loss)
    
    $
    (7,261
    )
    
    $
    299
    
    
    $
    989
    
    
    $
    (1,288
    )
    
    $
    (7,261
    )
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash used in operating activities
    
    $
    (14,155
    )
    
    $
    (9,984
    )
    
    $
    (13,223
    )
    
    $
    (37,362
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (8,627
    )
    
    
    (315
    )
    
    
    (186
    )
    
    
    (9,128
    )Net cash used in investing activities
    
    
    (8,627
    )
    
    
    (315
    )
    
    
    (186
    )
    
    
    (9,128
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    30,666
    
    
    
    
    
    
    
    12,953
    
    
    
    43,619Dividends
    
    
    (33,713
    )
    
    
    
    
    
    
    
    
    
    
    (33,713
    )Settlement of promissory notes
    
    
    (11,607
    )
    
    
    
    
    
    
    
    
    
    
    (11,607
    )Intercompany transactions
    
    
    82
    
    
    
    5,056
    
    
    
    (5,138
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (14,572
    )
    
    
    5,056
    
    
    
    7,815
    
    
    
    (1,701
    )Net increase (decrease) in cash
    
    
    (37,354
    )
    
    
    (5,243
    )
    
    
    (5,594
    )
    
    
    (48,191
    )Effect of exchange rates on cash
    
    
    
    
    
    
    
    
    
    
    (174
    )
    
    
    (174
    )Cash at beginning of period
    
    
    43,693
    
    
    
    6,883
    
    
    
    7,478
    
    
    
    58,054Cash at end of period
    
    $
    6,339
    
    
    $
    1,640
    
    
    $
    1,710
    
    
    $
    9,689
 -11-




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  ® ® ®
    -12-




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##### Table of Contents



Results of Operations
  Quarter
    
    
    QuarterEnded
    
    
    EndedApril 1,
    
    
    April 2,2006
    
    
    2005Net sales
    
    $
    259,280
    
    
    $
    218,569Cost of sales
    
    
    200,176
    
    
    
    169,537Gross profit
    
    
    59,104
    
    
    
    49,032Selling, general and administrative expense
    
    
    51,014
    
    
    
    50,751Facility closure costs
    
    
    
    
    
    
    2,553Income (loss) from operations
    
    
    8,090
    
    
    
    (4,272
    )Interest expense, net
    
    
    16,701
    
    
    
    15,296Foreign currency (gain) loss
    
    
    159
    
    
    
    (3
    )Income (loss) before income taxes
    
    
    (8,770
    )
    
    
    (19,565
    )Income taxes (benefit)
    
    
    (4,526
    )
    
    
    (7,483
    )Net income (loss)
    
    $
    (4,244
    )
    
    $
    (12,082
    )Other Data:EBITDA (a)
    
    $
    13,311
    
    
    $
    687Adjusted EBITDA (a)
    
    
    15,680
    
    
    
    4,556
 
 (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, AMI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
accounting principles generally accepted in the United States (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): -13-




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##### Table of Contents



Quarter
    
    
    QuarterEnded
    
    
    EndedApril 1,
    
    
    April 2,2006
    
    
    2005Net income (loss)
    
    $
    (4,244
    )
    
    $
    (12,082
    )Interest
    
    
    16,701
    
    
    
    15,296Taxes
    
    
    (4,526
    )
    
    
    (7,483
    )Depreciation and amortization
    
    
    5,380
    
    
    
    4,956EBITDA
    
    
    13,311
    
    
    
    687Foreign currency (gain) loss
    
    
    159
    
    
    
    (3
    )Separation costs (b)
    
    
    2,085
    
    
    
    Amortization of management fee (c)
    
    
    125
    
    
    
    1,000Stock compensation expense
    
    
    
    
    
    
    319Facility closure costs (d)
    
    
    
    
    
    
    2,553Adjusted EBITDA
    
    $
    15,680
    
    
    $
    4,556
 
 (b)
    
    Represents separation costs, including payroll taxes and benefits, related to the
resignation of Mr. Caporale, 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 expenses 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. As such, 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 one-time costs associated with the closure of the Freeport, Texas
manufacturing facility consisting primarily of equipment relocation expenses. Quarter Ended April 1, 2006 Compared to Quarter Ended April 2, 2005
     -14-




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##### Table of Contents



Liquidity and Capital Resources
  Quarter
    
    QuarterEnded
    
    EndedApril 1,
    
    April 2,2006
    
    2005Cash used in operating activities
    
    $
    (17,175
    )
    
    $
    (37,362
    )Cash used in investing activities
    
    
    (2,456
    )
    
    
    (9,128
    )Cash provided by (used in) financing activities
    
    
    10,762
    
    
    
    (1,701
    )
 Cash Flows
  Cash Flows from Operating Activities
  -15-




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##### Table of Contents



Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  -16-




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##### Table of Contents



Description of the Companys Outstanding Indebtedness
         -17-




---



##### Table of Contents



Effects of Inflation
  -18-




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##### 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 31, 2005 and elsewhere
in this report.
  -19-




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##### 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
   -20-




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  
 Item 6. Exhibits
 (a) Exhibits
 ExhibitNumber
    
    Description10.1
    
    Amendment No. 1, dated as of February 1, 2006, to AMIs Second Amended and Restated Credit
Agreement, dated December 22, 2004, among Associated Materials Incorporated and Gentek
Building Products Limited, as borrowers, AMH Holdings, Inc. and Associated Materials Holdings,
Inc., as guarantors, the lenders party thereto, UBS AG, Stamford Branch, as the U.S.
Administrative Agent, Canadian Imperial Bank of Commerce, as the Canadian Administrative
Agent, Citigroup Global Markets Inc., as syndication agent, General Electric Capital
Corporation and National City Bank, as Co-Documentation Agents, and UBS Securities, LLC and
Citigroup Global Markets Inc., as joint lead arrangers (incorporated by reference to Exhibit
10.1 to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on
February 3, 2006).10.2
    
    Amended and Restated Employment Agreement, dated as of March 31, 2006, between the Company
and D. Keith LaVanway.10.3
    
    Amended and Restated Employment Agreement, dated as of March 30, 2006, between the Company
and Robert M. Franco.10.4
    
    Amended and Restated Employment Agreement, dated as of March 31, 2006, between the Company
and John F. Haumesser.10.5
    
    Instrument of Amendment, dated as of March 31, 2006, between the Company and Trevor Deighton,
to the Employment Agreement, dated as of November 28, 2005, between the Company and Trevor
Deighton.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. -21-




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##### Table of Contents



SIGNATURES
  AMH HOLDINGS, INC.(Registrant)Date:  May 16, 2006
    By:
    /s/ Michael Caporale, Jr.Michael Caporale, Jr.Chairman, President 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) -22-




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description10.1
    
    Amendment No. 1, dated as of February 1, 2006, to AMIs Second Amended and Restated Credit
Agreement, dated December 22, 2004, among Associated Materials Incorporated and Gentek
Building Products Limited, as borrowers, AMH Holdings, Inc. and Associated Materials Holdings,
Inc., as guarantors, the lenders party thereto, UBS AG, Stamford Branch, as the U.S.
Administrative Agent, Canadian Imperial Bank of Commerce, as the Canadian Administrative
Agent, Citigroup Global Markets Inc., as syndication agent, General Electric Capital
Corporation and National City Bank, as Co-Documentation Agents, and UBS Securities, LLC and
Citigroup Global Markets Inc., as joint lead arrangers (incorporated by reference to Exhibit
10.1 to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on
February 3, 2006).10.2
    
    Amended and Restated Employment Agreement, dated as of March 31, 2006, between the Company and
D. Keith LaVanway.10.3
    
    Amended and Restated Employment Agreement, dated as of March 30, 2006, between the Company
and Robert M. Franco.10.4
    
    Amended and Restated Employment Agreement, dated as of March 31, 2006, between the Company and
John F. Haumesser.10.5
    
    Instrument of Amendment, dated as of March 31, 2006, between the Company and Trevor Deighton,
to the Employment Agreement, dated as of November 28, 2005, between the Company and Trevor
Deighton.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 200232.2
    
    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
 
 -23-