##### 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 October 1, 2005
 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)
 Registrants
Telephone Number, Including Area Code  (330) 929-1811
 
   þ o
  o þ
  o þ




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AMH HOLDINGS, INC.
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets October 1, 2005 (Unaudited) and January 1, 2005
    
    
    1Consolidated Statements of Operations (Unaudited) Quarters ended October 1, 2005 and October 2, 2004
Nine months ended October 1, 2005 and October 2, 2004
    
    
    2Consolidated Statements of Cash Flows (Unaudited) Nine months ended October 1, 2005 and October 2, 2004
    
    
    3Notes to Consolidated Financial Statements (Unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23PART II.OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    24Item 6. Exhibits
    
    
    24SIGNATURES
    
    
    25EX-31.1  302 Certification for CEOEX-31.2  302 Certification for CFOEX-32.1  906 Certification for CEOEX-32.2  906 Certification for CFO




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 AMH HOLDINGS, INC.
 
 
 (Unaudited)October 1,
    
    
    January 1,2005
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    3,811
    
    
    $
    58,054Accounts receivable, net
    
    
    178,827
    
    
    
    128,302Receivable from parent
    
    
    1,241
    
    
    
    1,241Inventories
    
    
    145,249
    
    
    
    114,787Income taxes receivable
    
    
    273
    
    
    
    9,210Deferred income taxes
    
    
    18,253
    
    
    
    18,253Other current assets
    
    
    11,282
    
    
    
    12,938Total current assets
    
    
    358,936
    
    
    
    342,785Property, plant and equipment, net
    
    
    145,983
    
    
    
    138,697Goodwill
    
    
    234,787
    
    
    
    234,795Other intangible assets, net
    
    
    110,674
    
    
    
    113,044Other assets
    
    
    26,329
    
    
    
    29,169Total assets
    
    $
    876,709
    
    
    $
    858,490Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    121,817
    
    
    $
    75,139Accrued liabilities
    
    
    65,524
    
    
    
    57,015Notes payable
    
    
    
    
    
    
    11,607Current portion of long-term debt
    
    
    1,750
    
    
    
    875Total current liabilities
    
    
    189,091
    
    
    
    144,636Deferred income taxes
    
    
    45,427
    
    
    
    53,883Other liabilities
    
    
    43,389
    
    
    
    44,058Long-term debt
    
    
    644,739
    
    
    
    621,981Convertible preferred stock, $.01 par value
    
    
    150,000
    
    
    
    150,000Stockholders deficit
    
    
    (195,937
    )
    
    
    (156,068
    )Total liabilities and stockholders equity
    
    $
    876,709
    
    
    $
    858,490
  -1-




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AMH HOLDINGS, INC.
 
 
 Quarter
    
    
    Quarter
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    328,249
    
    
    $
    314,408
    
    
    $
    862,182
    
    
    $
    820,331Cost of sales
    
    
    253,514
    
    
    
    227,347
    
    
    
    666,213
    
    
    
    599,590Gross profit
    
    
    74,735
    
    
    
    87,061
    
    
    
    195,969
    
    
    
    220,741Selling, general and
administrative expense
    
    
    48,580
    
    
    
    48,716
    
    
    
    150,160
    
    
    
    142,150Transaction
costs  bonuses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,498Facility closure costs
    
    
    541
    
    
    
    
    
    
    
    3,956
    
    
    
    Income from operations
    
    
    25,614
    
    
    
    38,345
    
    
    
    41,853
    
    
    
    64,093Interest expense, net
    
    
    16,645
    
    
    
    13,409
    
    
    
    48,242
    
    
    
    35,615Foreign currency (gain) loss
    
    
    267
    
    
    
    (35
    )
    
    
    556
    
    
    
    580Income (loss) before income taxes
    
    
    8,702
    
    
    
    24,971
    
    
    
    (6,945
    )
    
    
    27,898Income taxes (benefit)
    
    
    3,289
    
    
    
    9,911
    
    
    
    (2,998
    )
    
    
    11,797Net income (loss)
    
    $
    5,413
    
    
    $
    15,060
    
    
    $
    (3,947
    )
    
    $
    16,101
  -2-




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AMH HOLDINGS, INC.
 
 
 Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedOctober 1,
    
    
    October 2,2005
    
    
    2004Operating ActivitiesNet income (loss)
    
    $
    (3,947
    )
    
    $
    16,101Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:Depreciation and amortization
    
    
    15,339
    
    
    
    15,565Amortization of debt discount and deferred financing costs
    
    
    27,122
    
    
    
    18,233Amortization of management fee
    
    
    3,000
    
    
    
    Stock compensation expense
    
    
    319
    
    
    
    Tax benefit from stock option exercises
    
    
    
    
    
    
    2,586Deferred taxes
    
    
    (8,562
    )
    
    
    (5,944
    )Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (49,259
    )
    
    
    (52,785
    )Inventories
    
    
    (29,387
    )
    
    
    (29,807
    )Income taxes
    
    
    9,033
    
    
    
    2,101Accounts payable and accrued liabilities
    
    
    54,157
    
    
    
    36,762Other
    
    
    (2,396
    )
    
    
    (2,818
    )Net cash provided by (used in) operating activities
    
    
    15,419
    
    
    
    (6
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (18,961
    )
    
    
    (16,970
    )Net cash used in investing activities
    
    
    (18,961
    )
    
    
    (16,970
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    
    
    
    
    2,376Repayments of term loan
    
    
    (437
    )
    
    
    Dividends
    
    
    (38,275
    )
    
    
    (57,684
    )Settlement of promissory notes
    
    
    (11,607
    )
    
    
    Proceeds from issuance of 11 1/4% senior discount notes
    
    
    
    
    
    
    258,265Options exercised
    
    
    (319
    )
    
    
    1,760Redemption of preferred stock
    
    
    
    
    
    
    (177,844
    )Redemption of common stock
    
    
    
    
    
    
    (125
    )Financing costs
    
    
    (99
    )
    
    
    (10,327
    )Net cash provided by (used in) financing activities
    
    
    (50,737
    )
    
    
    16,421Net decrease in cash
    
    
    (54,279
    )
    
    
    (555
    )Effect of exchange rate changes on cash
    
    
    36
    
    
    
    (7
    )Cash at beginning of period
    
    
    58,054
    
    
    
    4,282Cash at end of period
    
    $
    3,811
    
    
    $
    3,720Supplemental information:Cash paid for interest
    
    $
    16,575
    
    
    $
    13,249Cash paid (received) for income taxes
    
    $
    (3,551
    )
    
    $
    13,020
  -3-




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AMH HOLDINGS, INC.
 
 
 Note 1  Basis of Presentation
       New Accounting Pronouncements
   -4-




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Note 2  Recapitalization Transactions
    -5-




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Note 3  Inventories
  October 1,
    
    
    January 1,2005
    
    
    2005Raw materials
    
    $
    33,149
    
    
    $
    27,127Work-in-process
    
    
    11,847
    
    
    
    9,570Finished goods and purchased stock
    
    
    100,253
    
    
    
    78,090$
    145,249
    
    
    $
    114,787
 Note 4  Goodwill and Other Intangible Assets
  AverageAmortization
    
    
    October 1, 2005
    
    
    January 1, 2005Period
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying(in Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and
trade names
    
    
    15
    
    
    $
    109,280
    
    
    $
    6,112
    
    
    $
    103,168
    
    
    $
    109,280
    
    
    $
    4,712
    
    
    $
    104,568Patents
    
    
    10
    
    
    
    6,550
    
    
    
    2,253
    
    
    
    4,297
    
    
    
    6,550
    
    
    
    1,763
    
    
    
    4,787Customer base
    
    
    7
    
    
    
    4,824
    
    
    
    1,615
    
    
    
    3,209
    
    
    
    4,762
    
    
    
    1,073
    
    
    
    3,689Total other
intangible assets
    
    
    
    
    
    $
    120,654
    
    
    $
    9,980
    
    
    $
    110,674
    
    
    $
    120,592
    
    
    $
    7,548
    
    
    $
    113,044
 ® ® ®
 Note 5  Long-Term Debt
  October 1,
    
    
    January 1,2005
    
    
    20059 3/4% notes
    
    $
    165,000
    
    
    $
    165,00011 1/4% senior discount notes
    
    
    306,926
    
    
    
    282,856Term loan under credit facility
    
    
    174,563
    
    
    
    175,000Total debt
    
    
    646,489
    
    
    
    622,856Less current portion
    
    
    1,750
    
    
    
    875Long-term debt
    
    $
    644,739
    
    
    $
    621,981
   -6-




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Note 6  Stock Plans
  Quarter
    
    
    Quarter
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss) as reported
    
    $
    5,413
    
    
    $
    15,060
    
    
    $
    (3,947
    )
    
    $
    16,101Stock-based employee
compensation expense included
in reported net income
(loss), net of tax
    
    
    
    
    
    
    
    
    
    
    187
    
    
    
    Pro forma stock based
employee compensation cost,
net of tax
    
    
    (191
    )
    
    
    (48
    )
    
    
    (555
    )
    
    
    (129
    )Pro forma net income (loss)
    
    $
    5,222
    
    
    $
    15,012
    
    
    $
    (4,315
    )
    
    $
    15,972
 Note 7  Comprehensive Income (Loss)
  Quarter
    
    
    Quarter
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss) as reported
    
    $
    5,413
    
    
    $
    15,060
    
    
    $
    (3,947
    )
    
    $
    16,101Foreign currency translation adjustments
    
    
    4,359
    
    
    
    2,399
    
    
    
    2,353
    
    
    
    1,266Comprehensive income (loss)
    
    $
    9,772
    
    
    $
    17,459
    
    
    $
    (1,594
    )
    
    $
    17,367
 -7-




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Note 8  Retirement Plans
  Quarter
    
    
    QuarterEnded
    
    
    EndedOctober 1,
    
    
    October 2,2005
    
    
    2004Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    123
    
    
    $
    344
    
    
    $
    113
    
    
    $
    284Interest cost
    
    
    718
    
    
    
    522
    
    
    
    649
    
    
    
    451Expected return on assets
    
    
    (759
    )
    
    
    (554
    )
    
    
    (704
    )
    
    
    (445
    )Amortization of unrecognized net loss
    
    
    143
    
    
    
    
    
    
    
    88
    
    
    
    Net periodic pension cost
    
    $
    225
    
    
    $
    312
    
    
    $
    146
    
    
    $
    290
 Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedOctober 1,
    
    
    October 2,2005
    
    
    2004Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    370
    
    
    $
    1,003
    
    
    $
    321
    
    
    $
    832Interest cost
    
    
    2,058
    
    
    
    1,524
    
    
    
    1,905
    
    
    
    1,324Expected return on assets
    
    
    (2,276
    )
    
    
    (1,615
    )
    
    
    (2,112
    )
    
    
    (1,305
    )Amortization of unrecognized net loss
    
    
    428
    
    
    
    1
    
    
    
    228
    
    
    
    Net periodic pension cost
    
    $
    580
    
    
    $
    913
    
    
    $
    342
    
    
    $
    851
 Note 9  Facility Closure
  -8-




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Note 10  Subsidiary Guarantors
  ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    71
    
    
    $
    252
    
    
    $
    3,488
    
    
    $
    
    
    
    $
    3,811Accounts receivable, net
    
    
    114,521
    
    
    
    30,951
    
    
    
    33,355
    
    
    
    
    
    
    
    178,827Intercompany receivables
    
    
    
    
    
    
    (5,958
    )
    
    
    22,497
    
    
    
    (16,539
    )
    
    
    Receivable from parent
    
    
    3,908
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,908Inventories
    
    
    92,399
    
    
    
    19,610
    
    
    
    33,240
    
    
    
    
    
    
    
    145,249Income taxes receivable
    
    
    
    
    
    
    2,059
    
    
    
    
    
    
    
    (2,059
    )
    
    
    Deferred income taxes
    
    
    
    
    
    
    16,319
    
    
    
    3,393
    
    
    
    (1,459
    )
    
    
    18,253Other current assets
    
    
    8,657
    
    
    
    1,294
    
    
    
    1,331
    
    
    
    
    
    
    
    11,282Total current assets
    
    
    219,556
    
    
    
    64,527
    
    
    
    97,304
    
    
    
    (20,057
    )
    
    
    361,330Property, plant and equipment, net
    
    
    108,357
    
    
    
    4,472
    
    
    
    33,154
    
    
    
    
    
    
    
    145,983Goodwill
    
    
    198,270
    
    
    
    36,517
    
    
    
    
    
    
    
    
    
    
    
    234,787Other intangible assets, net
    
    
    97,362
    
    
    
    11,992
    
    
    
    1,320
    
    
    
    
    
    
    
    110,674Investment in subsidiaries
    
    
    139,955
    
    
    
    73,080
    
    
    
    
    
    
    
    (213,035
    )
    
    
    Other assets
    
    
    17,362
    
    
    
    
    
    
    
    119
    
    
    
    
    
    
    
    17,481Total assets
    
    $
    780,862
    
    
    $
    190,588
    
    
    $
    131,897
    
    
    $
    (233,092
    )
    
    $
    870,255Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    68,028
    
    
    $
    19,982
    
    
    $
    33,807
    
    
    $
    
    
    
    $
    121,817Intercompany payables
    
    
    16,539
    
    
    
    
    
    
    
    
    
    
    
    (16,539
    )
    
    
    Accrued liabilities
    
    
    49,284
    
    
    
    7,815
    
    
    
    8,425
    
    
    
    
    
    
    
    65,524Current portion of long-term debt
    
    
    1,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,750Deferred
income taxes
    
    
    1,459
    
    
    
    
    
    
    
    
    
    
    
    (1,459
    )
    
    
    Income taxes payable
    
    
    1,653
    
    
    
    
    
    
    
    693
    
    
    
    (2,059
    )
    
    
    287Total current liabilities
    
    
    138,713
    
    
    
    27,797
    
    
    
    42,925
    
    
    
    (20,057
    )
    
    
    189,378Deferred income taxes
    
    
    50,416
    
    
    
    5,559
    
    
    
    6,852
    
    
    
    
    
    
    
    62,827Other liabilities
    
    
    17,072
    
    
    
    17,277
    
    
    
    9,040
    
    
    
    
    
    
    
    43,389Long-term debt
    
    
    337,813
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    337,813Stockholders equity
    
    
    236,848
    
    
    
    139,955
    
    
    
    73,080
    
    
    
    (213,035
    )
    
    
    236,848Total liabilities and
stockholders equity
    
    $
    780,862
    
    
    $
    190,588
    
    
    $
    131,897
    
    
    $
    (233,092
    )
    
    $
    870,255
 -9-




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ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    227,844
    
    
    $
    66,084
    
    
    $
    81,235
    
    
    $
    (46,914
    )
    
    $
    328,249Cost of sales
    
    
    171,059
    
    
    
    63,566
    
    
    
    65,803
    
    
    
    (46,914
    )
    
    
    253,514Gross profit
    
    
    56,785
    
    
    
    2,518
    
    
    
    15,432
    
    
    
    
    
    
    
    74,735Selling, general and
administrative expense
    
    
    37,279
    
    
    
    4,605
    
    
    
    6,696
    
    
    
    
    
    
    
    48,580Facility closure costs
    
    
    541
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    541Income (loss) from operations
    
    
    18,965
    
    
    
    (2,087
    )
    
    
    8,736
    
    
    
    
    
    
    
    25,614Interest expense, net
    
    
    7,959
    
    
    
    
    
    
    
    175
    
    
    
    
    
    
    
    8,134Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    267
    
    
    
    
    
    
    
    267Income (loss) before income taxes
    
    
    11,006
    
    
    
    (2,087
    )
    
    
    8,294
    
    
    
    
    
    
    
    17,213Income taxes (benefit)
    
    
    3,258
    
    
    
    (1,017
    )
    
    
    3,271
    
    
    
    
    
    
    
    5,512Income (loss) before equity
income from subsidiaries
    
    
    7,748
    
    
    
    (1,070
    )
    
    
    5,023
    
    
    
    
    
    
    
    11,701Equity income from subsidiaries
    
    
    3,953
    
    
    
    5,023
    
    
    
    
    
    
    
    (8,976
    )
    
    
    Net income
    
    $
    11,701
    
    
    $
    3,953
    
    
    $
    5,023
    
    
    $
    (8,976
    )
    
    $
    11,701
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    605,284
    
    
    $
    176,729
    
    
    $
    200,475
    
    
    $
    (120,306
    )
    
    $
    862,182Cost of sales
    
    
    455,362
    
    
    
    165,719
    
    
    
    165,438
    
    
    
    (120,306
    )
    
    
    666,213Gross profit
    
    
    149,922
    
    
    
    11,010
    
    
    
    35,037
    
    
    
    
    
    
    
    195,969Selling, general and
administrative expense
    
    
    115,175
    
    
    
    15,847
    
    
    
    19,138
    
    
    
    
    
    
    
    150,160Facility closure costs
    
    
    3,956
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,956Income (loss) from operations
    
    
    30,791
    
    
    
    (4,837
    )
    
    
    15,899
    
    
    
    
    
    
    
    41,853Interest expense, net
    
    
    22,878
    
    
    
    
    
    
    
    509
    
    
    
    
    
    
    
    23,387Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    556
    
    
    
    
    
    
    
    556Income (loss) before income taxes
    
    
    7,913
    
    
    
    (4,837
    )
    
    
    14,834
    
    
    
    
    
    
    
    17,910Income taxes (benefit)
    
    
    2,499
    
    
    
    (2,186
    )
    
    
    5,462
    
    
    
    
    
    
    
    5,775Income (loss) before equity
income from subsidiaries
    
    
    5,414
    
    
    
    (2,651
    )
    
    
    9,372
    
    
    
    
    
    
    
    12,135Equity income from subsidiaries
    
    
    6,721
    
    
    
    9,372
    
    
    
    
    
    
    
    (16,093
    )
    
    
    Net income
    
    $
    12,135
    
    
    $
    6,721
    
    
    $
    9,372
    
    
    $
    (16,093
    )
    
    $
    12,135
 -10-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    14,868
    
    
    $
    (10,158
    )
    
    $
    10,291
    
    
    $
    15,001Investing ActivitiesAdditions to property, plant and equipment
    
    
    (17,681
    )
    
    
    (444
    )
    
    
    (836
    )
    
    
    (18,961
    )Net cash used in investing activities
    
    
    (17,681
    )
    
    
    (444
    )
    
    
    (836
    )
    
    
    (18,961
    )Financing ActivitiesRepayments of term loan
    
    
    (437
    )
    
    
    
    
    
    
    
    
    
    
    (437
    )Dividends
    
    
    (38,275
    )
    
    
    
    
    
    
    
    
    
    
    (38,275
    )Settlement of promissory notes
    
    
    (11,607
    )
    
    
    
    
    
    
    
    
    
    
    (11,607
    )Intercompany transactions
    
    
    9,510
    
    
    
    3,971
    
    
    
    (13,481
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (40,809
    )
    
    
    3,971
    
    
    
    (13,481
    )
    
    
    (50,319
    )Net decrease in cash
    
    
    (43,622
    )
    
    
    (6,631
    )
    
    
    (4,026
    )
    
    
    (54,279
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    36Cash at beginning of period
    
    
    43,693
    
    
    
    6,883
    
    
    
    7,478
    
    
    
    58,054Cash at end of period
    
    $
    71
    
    
    $
    252
    
    
    $
    3,488
    
    
    $
    3,811
 -11-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    43,693
    
    
    $
    6,883
    
    
    $
    7,478
    
    
    $
    
    
    
    $
    58,054Accounts receivable, net
    
    
    88,930
    
    
    
    20,803
    
    
    
    18,569
    
    
    
    
    
    
    
    128,302Intercompany receivables
    
    
    
    
    
    
    
    
    
    
    8,582
    
    
    
    (8,582
    )
    
    
    Receivable from parent
    
    
    3,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,490Inventories
    
    
    65,854
    
    
    
    19,435
    
    
    
    29,498
    
    
    
    
    
    
    
    114,787Income taxes receivable
    
    
    10,347
    
    
    
    
    
    
    
    
    
    
    
    (1,487
    )
    
    
    8,860Deferred income taxes
    
    
    
    
    
    
    16,471
    
    
    
    3,393
    
    
    
    (1,611
    )
    
    
    18,253Other current assets
    
    
    10,844
    
    
    
    1,302
    
    
    
    792
    
    
    
    
    
    
    
    12,938Total current assets
    
    
    223,158
    
    
    
    64,894
    
    
    
    68,312
    
    
    
    (11,680
    )
    
    
    344,684Property, plant and equipment, net
    
    
    100,184
    
    
    
    5,033
    
    
    
    33,480
    
    
    
    
    
    
    
    138,697Goodwill
    
    
    198,270
    
    
    
    36,526
    
    
    
    
    
    
    
    
    
    
    
    234,796Other intangible assets, net
    
    
    99,038
    
    
    
    12,510
    
    
    
    1,496
    
    
    
    
    
    
    
    113,044Investment in subsidiaries
    
    
    130,881
    
    
    
    59,996
    
    
    
    
    
    
    
    (190,877
    )
    
    
    Other assets
    
    
    19,460
    
    
    
    
    
    
    
    174
    
    
    
    
    
    
    
    19,634Total assets
    
    $
    770,991
    
    
    $
    178,959
    
    
    $
    103,462
    
    
    $
    (202,557
    )
    
    $
    850,855Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    41,446
    
    
    $
    13,753
    
    
    $
    19,940
    
    
    $
    
    
    
    $
    75,139Intercompany payables
    
    
    7,028
    
    
    
    1,554
    
    
    
    
    
    
    
    (8,582
    )
    
    
    Accrued liabilities
    
    
    39,569
    
    
    
    9,782
    
    
    
    7,664
    
    
    
    
    
    
    
    57,015Notes payable
    
    
    11,607
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,607Current portion of long-term debt
    
    
    875
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    875Deferred
income taxes
    
    
    1,611
    
    
    
    
    
    
    
    
    
    
    
    (1,611
    )
    
    
    Income taxes payable
    
    
    
    
    
    
    855
    
    
    
    632
    
    
    
    (1,487
    )
    
    
    Total current liabilities
    
    
    102,136
    
    
    
    25,944
    
    
    
    28,236
    
    
    
    (11,680
    )
    
    
    144,636Deferred income taxes
    
    
    50,264
    
    
    
    5,711
    
    
    
    6,745
    
    
    
    
    
    
    
    62,720Other liabilities
    
    
    19,150
    
    
    
    16,423
    
    
    
    8,485
    
    
    
    
    
    
    
    44,058Long-term debt
    
    
    339,125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    339,125Stockholders equity
    
    
    260,316
    
    
    
    130,881
    
    
    
    59,996
    
    
    
    (190,877
    )
    
    
    260,316Total liabilities and
stockholders equity
    
    $
    770,991
    
    
    $
    178,959
    
    
    $
    103,462
    
    
    $
    (202,557
    )
    
    $
    850,855
 -12-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    222,546
    
    
    $
    47,561
    
    
    $
    65,608
    
    
    $
    (21,307
    )
    
    $
    314,408Cost of sales
    
    
    156,446
    
    
    
    40,205
    
    
    
    52,003
    
    
    
    (21,307
    )
    
    
    227,347Gross profit
    
    
    66,100
    
    
    
    7,356
    
    
    
    13,605
    
    
    
    
    
    
    
    87,061Selling, general and
administrative expense
    
    
    37,625
    
    
    
    5,222
    
    
    
    5,869
    
    
    
    
    
    
    
    48,716Income from operations
    
    
    28,475
    
    
    
    2,134
    
    
    
    7,736
    
    
    
    
    
    
    
    38,345Interest expense, net
    
    
    6,064
    
    
    
    
    
    
    
    154
    
    
    
    
    
    
    
    6,218Foreign currency gain
    
    
    
    
    
    
    
    
    
    
    (35
    )
    
    
    
    
    
    
    (35
    )Income before income taxes
    
    
    22,411
    
    
    
    2,134
    
    
    
    7,617
    
    
    
    
    
    
    
    32,162Income taxes
    
    
    9,052
    
    
    
    1,215
    
    
    
    2,030
    
    
    
    
    
    
    
    12,297Income before equity income
from subsidiaries
    
    
    13,359
    
    
    
    919
    
    
    
    5,587
    
    
    
    
    
    
    
    19,865Equity income from subsidiaries
    
    
    6,506
    
    
    
    5,587
    
    
    
    
    
    
    
    (12,093
    )
    
    
    Net income
    
    $
    19,865
    
    
    $
    6,506
    
    
    $
    5,587
    
    
    $
    (12,093
    )
    
    $
    19,865
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    575,740
    
    
    $
    135,941
    
    
    $
    164,444
    
    
    $
    (55,794
    )
    
    $
    820,331Cost of sales
    
    
    406,940
    
    
    
    115,915
    
    
    
    132,529
    
    
    
    (55,794
    )
    
    
    599,590Gross profit
    
    
    168,800
    
    
    
    20,026
    
    
    
    31,915
    
    
    
    
    
    
    
    220,741Selling, general and
administrative expense
    
    
    108,377
    
    
    
    16,614
    
    
    
    17,159
    
    
    
    
    
    
    
    142,150Transaction costs  bonuses
    
    
    14,498
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,498Income from operations
    
    
    45,925
    
    
    
    3,412
    
    
    
    14,756
    
    
    
    
    
    
    
    64,093Interest expense, net
    
    
    18,192
    
    
    
    7
    
    
    
    285
    
    
    
    
    
    
    
    18,484Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    580
    
    
    
    
    
    
    
    580Income before income taxes
    
    
    27,733
    
    
    
    3,405
    
    
    
    13,891
    
    
    
    
    
    
    
    45,029Income taxes
    
    
    11,259
    
    
    
    1,382
    
    
    
    4,903
    
    
    
    
    
    
    
    17,544Income before equity income
from subsidiaries
    
    
    16,474
    
    
    
    2,023
    
    
    
    8,988
    
    
    
    
    
    
    
    27,485Equity income from subsidiaries
    
    
    11,011
    
    
    
    8,988
    
    
    
    
    
    
    
    (19,999
    )
    
    
    Net income
    
    $
    27,485
    
    
    $
    11,011
    
    
    $
    8,988
    
    
    $
    (19,999
    )
    
    $
    27,485
 -13-




---



##### Table of Contents



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (6
    )
    
    $
    (7,631
    )
    
    $
    6,213
    
    
    $
    1,099
    
    
    $
    (325
    )Investing ActivitiesAdditions to property, plant and
equipment
    
    
    (15,324
    )
    
    
    (1,062
    )
    
    
    (584
    )
    
    
    
    
    
    
    (16,970
    )Net cash used in investing activities
    
    
    (15,324
    )
    
    
    (1,062
    )
    
    
    (584
    )
    
    
    
    
    
    
    (16,970
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    
    
    
    
    
    
    
    
    2,376
    
    
    
    
    
    
    
    2,376Equity contribution from Holdings
    
    
    14,498
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,498Financing costs
    
    
    (67
    )
    
    
    
    
    
    
    (101
    )
    
    
    
    
    
    
    (168
    )Intercompany transactions
    
    
    1,601
    
    
    
    6,296
    
    
    
    (7,897
    )
    
    
    
    
    
    
    Net cash provided by (used in)
financing activities
    
    
    16,032
    
    
    
    6,296
    
    
    
    (5,622
    )
    
    
    
    
    
    
    16,706Net increase (decrease) in cash
    
    
    702
    
    
    
    (2,397
    )
    
    
    7
    
    
    
    1,099
    
    
    
    (589
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    (7
    )Cash at beginning of period
    
    
    2,399
    
    
    
    2,982
    
    
    
    
    
    
    
    (1,099
    )
    
    
    4,282Cash at end of period
    
    $
    3,101
    
    
    $
    585
    
    
    $
    
    
    
    $
    
    
    
    $
    3,686
 -14-




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
   ® ® ®
    -15-




---



##### Table of Contents



Results of Operations
  Quarter
    
    
    Quarter
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    328,249
    
    
    $
    314,408
    
    
    $
    862,182
    
    
    $
    820,331Cost of sales
    
    
    253,514
    
    
    
    227,347
    
    
    
    666,213
    
    
    
    599,590Gross profit
    
    
    74,735
    
    
    
    87,061
    
    
    
    195,969
    
    
    
    220,741Selling, general and
administrative expense
    
    
    48,580
    
    
    
    48,716
    
    
    
    150,160
    
    
    
    142,150Transaction
costs  bonuses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,498Facility closure costs
    
    
    541
    
    
    
    
    
    
    
    3,956
    
    
    
    Income from operations
    
    
    25,614
    
    
    
    38,345
    
    
    
    41,853
    
    
    
    64,093Interest expense, net
    
    
    16,645
    
    
    
    13,409
    
    
    
    48,242
    
    
    
    35,615Foreign currency (gain) loss
    
    
    267
    
    
    
    (35
    )
    
    
    556
    
    
    
    580Income (loss) before income taxes
    
    
    8,702
    
    
    
    24,971
    
    
    
    (6,945
    )
    
    
    27,898Income taxes (benefit)
    
    
    3,289
    
    
    
    9,911
    
    
    
    (2,998
    )
    
    
    11,797Net income (loss)
    
    $
    5,413
    
    
    $
    15,060
    
    
    $
    (3,947
    )
    
    $
    16,101
 -16-




---



##### Table of Contents



Quarter
    
    
    Quarter
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,2005
    
    
    2004
    
    
    2005
    
    
    2004Other Data:EBITDA (a)
    
    $
    30,609
    
    
    $
    43,702
    
    
    $
    56,636
    
    
    $
    79,078Adjusted EBITDA (a)
    
    
    32,417
    
    
    
    43,667
    
    
    
    64,467
    
    
    
    94,156
 
 (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. The definition of EBITDA under the indentures governing the notes also
excludes certain items. Adjusted EBITDA has 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.
Adjusted EBITDA is not a measure 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):
 Nine Months
    
    
    Nine MonthsQuarter Ended
    
    
    Quarter Ended
    
    
    Ended October 1,
    
    
    Ended October 2,October 1, 2005
    
    
    October 2, 2004
    
    
    2005
    
    
    2004Net income (loss)
    
    $
    5,413
    
    
    $
    15,060
    
    
    $
    (3,947
    )
    
    $
    16,101Interest expense, net
    
    
    16,645
    
    
    
    13,409
    
    
    
    48,242
    
    
    
    35,615Income taxes (benefit)
    
    
    3,289
    
    
    
    9,911
    
    
    
    (2,998
    )
    
    
    11,797Depreciation and amortization
    
    
    5,262
    
    
    
    5,322
    
    
    
    15,339
    
    
    
    15,565EBITDA
    
    
    30,609
    
    
    
    43,702
    
    
    
    56,636
    
    
    
    79,078Foreign currency (gain) loss
    
    
    267
    
    
    
    (35
    )
    
    
    556
    
    
    
    580Transaction costs  bonuses (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,498Amortization of management fee (c)
    
    
    1,000
    
    
    
    
    
    
    
    3,000
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    319
    
    
    
    Facility closure costs (d)
    
    
    541
    
    
    
    
    
    
    
    3,956
    
    
    
    Adjusted EBITDA
    
    $
    32,417
    
    
    $
    43,667
    
    
    $
    64,467
    
    
    $
    94,156
 (b)
    
    Represents management and director bonuses paid in connection with the March 2004 dividend
recapitalization.
 (c)
    
    Represents amortization of a prepaid management fee paid in connection with the December
2004 recapitalization transaction.
 (d)
    
    Represents one-time costs associated with the closure of the Freeport, Texas manufacturing
facility consisting primarily of equipment relocation expenses. Total pre-tax expenses
related to the Freeport closing were $8.5 million, including a $4.5 million pre-tax charge
recorded in the fourth quarter of 2004.
 Quarter Ended October 1, 2005 Compared to Quarter Ended October 2, 2004
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Nine Months Ended October 1, 2005 Compared to Nine Months Ended October 2, 2004
   -18-




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##### Table of Contents



Liquidity and Capital Resources
  Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedOctober 1,
    
    
    October 2,2005
    
    
    2004Cash provided by (used in) operating activities
    
    $
    15,419
    
    
    $
    (6
    )Cash used in investing activities
    
    
    (18,961
    )
    
    
    (16,970
    )Cash provided by (used in) financing activities
    
    
    (50,737
    )
    
    
    16,421
 Cash Flows
  Cash Flows from Operating Activities
  -19-




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##### Table of Contents



Cash Flows from Investing Activities
  Cash Flows from Financing Activities
   Description of the Companys Outstanding Indebtedness
   -20-




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Effects of Inflation
  -21-




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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
loan documents 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 achievement of anticipated synergies and operational efficiencies from the Gentek acquisition; and
    
    the other factors discussed under the heading Risk Factors in the
Companys annual report on Form 10-K for the year ended January 1, 2005 and elsewhere
in this report.
  -22-




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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
   -23-




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 6. Exhibits
 (a) 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 SEC Release Nos. 33-8212 and 34-47551. -24-




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##### Table of Contents



SIGNATURES
  AMH HOLDINGS, INC.(Registrant)Date: November 15, 2005
    
    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)
 -25-




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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 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
 -26-