##### 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 March 29, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number: 333-115543
 AMH Holdings, LLC
  Delaware
    
    16-1693178(State or Other Jurisdiction of Incorporation of Organization)
    
    (I.R.S. Employer Identification No.)
 3773 State Rd. Cuyahoga Falls, Ohio
    
    44223(Address of Principal Executive Offices)
    
    (Zip Code)
 (330) 929 -1811
 
  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)
  o þ




---



##### 



AMH HOLDINGS, LLC
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets
March 29, 2008 (Unaudited) and December 29, 2007
    
    
    1Consolidated Statements of Operations (Unaudited)
Quarters ended March 29, 2008 and March 31, 2007
    
    
    2Consolidated Statements of Cash Flows (Unaudited)
Quarters ended March 29, 2008 and March 31, 2007
    
    
    3Notes to Consolidated Financial Statements (Unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    22PART II. OTHER INFORMATIONItem 6. Exhibits
    
    
    22SIGNATURES
    
    
    23EX-4.1EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 AMH HOLDINGS, LLC
 
   (Unaudited)March 29,
    
    
    December 29,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    4,334
    
    
    $
    21,603Accounts receivable, net
    
    
    121,523
    
    
    
    138,653Inventories
    
    
    154,471
    
    
    
    137,015Deferred income taxes
    
    
    9,983
    
    
    
    9,983Income taxes receivable
    
    
    2,509
    
    
    
    Other current assets
    
    
    11,832
    
    
    
    11,686Total current assets
    
    
    304,652
    
    
    
    318,940Property, plant and equipment, net
    
    
    130,673
    
    
    
    133,531Goodwill
    
    
    231,243
    
    
    
    231,213Other intangible assets, net
    
    
    101,583
    
    
    
    102,424Deferred income taxes
    
    
    2,500
    
    
    
    Other assets
    
    
    13,523
    
    
    
    14,314Total assets
    
    $
    784,174
    
    
    $
    800,422Liabilities and Members EquityCurrent liabilities:Accounts payable
    
    $
    72,653
    
    
    $
    80,082Payable to parent
    
    
    6,592
    
    
    
    6,592Accrued liabilities
    
    
    50,439
    
    
    
    64,618Income taxes payable
    
    
    
    
    
    
    11,298Total current liabilities
    
    
    129,684
    
    
    
    162,590Deferred income taxes
    
    
    
    
    
    
    1,542Other liabilities
    
    
    47,197
    
    
    
    47,615Long-term debt
    
    
    658,889
    
    
    
    618,677Members equity
    
    
    (51,596
    )
    
    
    (30,002
    )Total liabilities and members equity
    
    $
    784,174
    
    
    $
    800,422
  1




---



##### Table of Contents



AMH HOLDINGS, LLC
 
    Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Net sales
    
    $
    200,878
    
    
    $
    218,164Cost of sales
    
    
    156,265
    
    
    
    170,448Gross profit
    
    
    44,613
    
    
    
    47,716Selling, general and administrative expense
    
    
    50,128
    
    
    
    49,100Manufacturing restructuring costs
    
    
    845
    
    
    
    Loss from operations
    
    
    (6,360
    )
    
    
    (1,384
    )Interest expense, net
    
    
    16,974
    
    
    
    16,976Foreign currency (gain) loss
    
    
    78
    
    
    
    (6
    )Loss before income taxes
    
    
    (23,412
    )
    
    
    (18,354
    )Income tax benefit
    
    
    (8,638
    )
    
    
    (12,095
    )Net loss
    
    $
    (14,774
    )
    
    $
    (6,259
    )
  2




---



##### Table of Contents



AMH HOLDINGS, LLC
 
    Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Operating ActivitiesNet loss
    
    $
    (14,774
    )
    
    $
    (6,259
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    5,653
    
    
    
    5,426Amortization of deferred financing costs
    
    
    11,631
    
    
    
    10,615Amortization of management fee
    
    
    125
    
    
    
    125Deferred income taxes
    
    
    (4,086
    )
    
    
    (8,362
    )Non-cash portion of manufacturing restructuring costs
    
    
    718
    
    
    
    Loss on sale of assets
    
    
    44
    
    
    
    Changes in operating assets and liabilities,
adjusted for the effects of the acquisition of
supply center:Accounts receivable, net
    
    
    16,008
    
    
    
    4,585Inventories
    
    
    (19,114
    )
    
    
    (12,259
    )Accounts payable and accrued liabilities
    
    
    (20,166
    )
    
    
    (6,148
    )Income taxes
    
    
    (13,843
    )
    
    
    (9,069
    )Other
    
    
    (56
    )
    
    
    753Net cash used in operating activities
    
    
    (37,860
    )
    
    
    (20,593
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (4,248
    )
    
    
    (1,793
    )Acquisition of supply center
    
    
    
    
    
    
    (801
    )Proceeds from sale of assets
    
    
    22
    
    
    
    Net cash used in investing activities
    
    
    (4,226
    )
    
    
    (2,594
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    29,368
    
    
    
    18,737Dividends
    
    
    (4,118
    )
    
    
    (3,973
    )Net cash provided by financing activities
    
    
    25,250
    
    
    
    14,764Effect of exchange rate changes on cash
    
    
    (433
    )
    
    
    (12
    )Net decrease in cash
    
    
    (17,269
    )
    
    
    (8,435
    )Cash at beginning of period
    
    
    21,603
    
    
    
    15,015Cash at end of period
    
    $
    4,334
    
    
    $
    6,580Supplemental information:Cash paid for interest
    
    $
    1,219
    
    
    $
    2,077Cash paid for income taxes
    
    $
    9,290
    
    
    $
    5,405
  3




---



##### Table of Contents



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




---



##### Table of Contents



Note 2  Inventories
  March 29,
    
    
    December 29,2008
    
    
    2007Raw materials
    
    $
    26,280
    
    
    $
    31,886Work-in-process
    
    
    16,193
    
    
    
    10,075Finished goods and purchased stock
    
    
    111,998
    
    
    
    95,054$
    154,471
    
    
    $
    137,015
 Note 3  Goodwill and Other Intangible Assets
  AverageAmortization
    
    
    March 29, 2008
    
    
    December 29, 2007Period
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Net Carrying(in Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and trade
names
    
    
    15
    
    
    $
    108,080
    
    
    $
    10,761
    
    
    $
    97,319
    
    
    $
    108,080
    
    
    $
    10,283
    
    
    $
    97,797Patents
    
    
    10
    
    
    
    6,230
    
    
    
    3,695
    
    
    
    2,535
    
    
    
    6,230
    
    
    
    3,540
    
    
    
    2,690Customer base and other
    
    
    7
    
    
    
    5,203
    
    
    
    3,474
    
    
    
    1,729
    
    
    
    5,298
    
    
    
    3,361
    
    
    
    1,937Total other intangible
assets
    
    
    
    
    
    $
    119,513
    
    
    $
    17,930
    
    
    $
    101,583
    
    
    $
    119,608
    
    
    $
    17,184
    
    
    $
    102,424
 ® ® ®
 Note 4  Long-Term Debt
  March 29,
    
    
    December 29,2008
    
    
    20079 3/4% notes
    
    $
    165,000
    
    
    $
    165,00011 1/4% notes
    
    
    403,521
    
    
    
    392,677Term loan under credit facility
    
    
    61,000
    
    
    
    61,000Revolving loans under credit facility
    
    
    29,368
    
    
    
    Total debt
    
    $
    658,889
    
    
    $
    618,677
   5




---



##### Table of Contents



Note 5  Comprehensive Loss
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Net loss as reported
    
    $
    (14,774
    )
    
    $
    (6,259
    )Reclassification adjustments for
actuarial gains or losses and prior
service costs, net of tax
    
    
    96
    
    
    
    143Foreign currency translation adjustments
    
    
    (2,799
    )
    
    
    532Comprehensive loss
    
    $
    (17,477
    )
    
    $
    (5,584
    )
 6




---



##### Table of Contents



Note 6  Retirement Plans
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansNet periodic pension costService cost
    
    $
    134
    
    
    $
    549
    
    
    $
    136
    
    
    $
    494Interest cost
    
    
    747
    
    
    
    796
    
    
    
    718
    
    
    
    635Expected return on assets
    
    
    (875
    )
    
    
    (931
    )
    
    
    (832
    )
    
    
    (754
    )Amortization of prior service costs
    
    
    7
    
    
    
    8
    
    
    
    
    
    
    
    7Amortization of unrecognized net loss
    
    
    150
    
    
    
    26
    
    
    
    176
    
    
    
    4Net periodic pension cost
    
    $
    163
    
    
    $
    448
    
    
    $
    198
    
    
    $
    386
 Note 7  Business Segments
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Vinyl windows
    
    $
    69,688
    
    
    $
    74,489Vinyl siding products
    
    
    44,134
    
    
    
    53,085Metal products
    
    
    39,344
    
    
    
    41,110Third party manufactured products
    
    
    32,933
    
    
    
    34,177Other products and services
    
    
    14,779
    
    
    
    15,303$
    200,878
    
    
    $
    218,164
 7




---



##### Table of Contents



Note 8  Product Warranty Costs and Service Returns
   Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Balance at the beginning of the period
    
    $
    28,684
    
    
    $
    25,035Provision for warranties issued
    
    
    1,990
    
    
    
    2,191Claims paid
    
    
    (1,428
    )
    
    
    (1,639
    )Balance at the end of the period
    
    $
    29,246
    
    
    $
    25,587
 Note 9  Manufacturing Restructuring Costs
  Note 10  Subsidiary Guarantors
  8




---



##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    3,308
    
    
    $
    646
    
    
    $
    380
    
    
    $
    
    
    
    $
    4,334Accounts receivable, net
    
    
    77,704
    
    
    
    14,657
    
    
    
    29,162
    
    
    
    
    
    
    
    121,523Intercompany receivables
    
    
    
    
    
    
    32,613
    
    
    
    19,400
    
    
    
    (52,013
    )
    
    
    Inventories
    
    
    98,196
    
    
    
    16,708
    
    
    
    39,567
    
    
    
    
    
    
    
    154,471Deferred income taxes
    
    
    6,886
    
    
    
    2,674
    
    
    
    423
    
    
    
    
    
    
    
    9,983Income taxes receivable
    
    
    
    
    
    
    4,183
    
    
    
    2,562
    
    
    
    (4,599
    )
    
    
    2,146Other current assets
    
    
    8,883
    
    
    
    1,043
    
    
    
    1,906
    
    
    
    
    
    
    
    11,832Total current assets
    
    
    194,977
    
    
    
    72,524
    
    
    
    93,400
    
    
    
    (56,612
    )
    
    
    304,289Property, plant and equipment, net
    
    
    89,496
    
    
    
    3,433
    
    
    
    37,744
    
    
    
    
    
    
    
    130,673Goodwill
    
    
    194,814
    
    
    
    36,429
    
    
    
    
    
    
    
    
    
    
    
    231,243Other intangible assets, net
    
    
    90,530
    
    
    
    10,401
    
    
    
    652
    
    
    
    
    
    
    
    101,583Investment in subsidiaries
    
    
    168,191
    
    
    
    86,037
    
    
    
    
    
    
    
    (254,228
    )
    
    
    Other assets
    
    
    6,801
    
    
    
    23
    
    
    
    479
    
    
    
    
    
    
    
    7,303Total assets
    
    $
    744,809
    
    
    $
    208,847
    
    
    $
    132,275
    
    
    $
    (310,840
    )
    
    $
    775,091Liabilities And Members EquityCurrent liabilities:Accounts payable
    
    $
    37,872
    
    
    $
    13,076
    
    
    $
    21,705
    
    
    $
    
    
    
    $
    72,653Intercompany payables
    
    
    52,013
    
    
    
    
    
    
    
    
    
    
    
    (52,013
    )
    
    
    Payable to parent
    
    
    5,029
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,029Accrued liabilities
    
    
    33,327
    
    
    
    9,451
    
    
    
    7,661
    
    
    
    
    
    
    
    50,439Income taxes payable
    
    
    4,599
    
    
    
    
    
    
    
    
    
    
    
    (4,599
    )
    
    
    Total current liabilities
    
    
    132,840
    
    
    
    22,527
    
    
    
    29,366
    
    
    
    (56,612
    )
    
    
    128,121Deferred income taxes
    
    
    44,233
    
    
    
    4,320
    
    
    
    2,328
    
    
    
    
    
    
    
    50,881Other liabilities
    
    
    21,012
    
    
    
    13,809
    
    
    
    12,376
    
    
    
    
    
    
    
    47,197Long-term debt
    
    
    253,200
    
    
    
    
    
    
    
    2,168
    
    
    
    
    
    
    
    255,368Members equity
    
    
    293,524
    
    
    
    168,191
    
    
    
    86,037
    
    
    
    (254,228
    )
    
    
    293,524Total liabilities and member s equity
    
    $
    744,809
    
    
    $
    208,847
    
    
    $
    132,275
    
    
    $
    (310,840
    )
    
    $
    775,091
 9




---



##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    139,884
    
    
    $
    43,819
    
    
    $
    54,331
    
    
    $
    (37,156
    )
    
    $
    200,878Cost of sales
    
    
    109,102
    
    
    
    42,362
    
    
    
    41,957
    
    
    
    (37,156
    )
    
    
    156,265Gross profit
    
    
    30,782
    
    
    
    1,457
    
    
    
    12,374
    
    
    
    
    
    
    
    44,613Selling, general and
administrative expense
    
    
    36,983
    
    
    
    4,129
    
    
    
    9,016
    
    
    
    
    
    
    
    50,973Manufacturing restructuring costs
    
    
    751
    
    
    
    
    
    
    
    94
    
    
    
    
    
    
    
    845Income (loss) from operations
    
    
    (6,952
    )
    
    
    (2,672
    )
    
    
    3,264
    
    
    
    
    
    
    
    (6,360
    )Interest expense, net
    
    
    5,835
    
    
    
    (7
    )
    
    
    39
    
    
    
    
    
    
    
    5,867Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    78
    
    
    
    
    
    
    
    78Income (loss) before income taxes
    
    
    (12,787
    )
    
    
    (2,665
    )
    
    
    3,147
    
    
    
    
    
    
    
    (12,305
    )Income taxes (benefit)
    
    
    (4,756
    )
    
    
    (822
    )
    
    
    1,026
    
    
    
    
    
    
    
    (4,552
    )Income (loss) before equity
income from subsidiaries
    
    
    (8,031
    )
    
    
    (1,843
    )
    
    
    2,121
    
    
    
    
    
    
    
    (7,753
    )Equity income from subsidiaries
    
    
    278
    
    
    
    2,121
    
    
    
    
    
    
    
    (2,399
    )
    
    
    Net income (loss)
    
    $
    (7,753
    )
    
    $
    278
    
    
    $
    2,121
    
    
    $
    (2,399
    )
    
    $
    (7,753
    )
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash used in operating activities
    
    $
    (21,456
    )
    
    $
    (366
    )
    
    $
    (16,038
    )
    
    $
    (37,860
    )Investing ActivitiesAdditions to property, plant and
equipment
    
    
    (2,364
    )
    
    
    (61
    )
    
    
    (1,823
    )
    
    
    (4,248
    )Proceeds from sale of assets
    
    
    18
    
    
    
    4
    
    
    
    
    
    
    
    22Net cash used in investing activities
    
    
    (2,346
    )
    
    
    (57
    )
    
    
    (1,823
    )
    
    
    (4,226
    )Financing ActivitiesNet increase in revolving line of credit
    
    
    27,200
    
    
    
    
    
    
    
    2,168
    
    
    
    29,368Dividends
    
    
    (4,118
    )
    
    
    
    
    
    
    
    
    
    
    (4,118
    )Intercompany transactions
    
    
    (2,379
    )
    
    
    698
    
    
    
    1,681
    
    
    
    Net cash provided by financing activities
    
    
    20,703
    
    
    
    698
    
    
    
    3,849
    
    
    
    25,250Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (433
    )
    
    
    (433
    )Net increase (decrease) in cash
    
    
    (3,099
    )
    
    
    275
    
    
    
    (14,445
    )
    
    
    (17,269
    )Cash at beginning of period
    
    
    6,407
    
    
    
    371
    
    
    
    14,825
    
    
    
    21,603Cash at end of period
    
    $
    3,308
    
    
    $
    646
    
    
    $
    380
    
    
    $
    4,334
 10




---



##### Table of Contents



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




---



##### Table of Contents



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




---



##### Table of Contents



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




---



##### Table of Contents



Results of Operations
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Net sales
    
    $
    200,878
    
    
    $
    218,164Cost of sales
    
    
    156,265
    
    
    
    170,448Gross profit
    
    
    44,613
    
    
    
    47,716Selling, general and administrative expense
    
    
    50,128
    
    
    
    49,100Manufacturing restructuring costs
    
    
    845
    
    
    
    Loss from operations
    
    
    (6,360
    )
    
    
    (1,384
    )Interest expense, net
    
    
    16,974
    
    
    
    16,976Foreign currency (gain) loss
    
    
    78
    
    
    
    (6
    )Loss before income taxes
    
    
    (23,412
    )
    
    
    (18,354
    )Income tax benefit
    
    
    (8,638
    )
    
    
    (12,095
    )Net loss
    
    $
    (14,774
    )
    
    $
    (6,259
    )Other Data:EBITDA (a)
    
    $
    (785
    )
    
    $
    4,048Adjusted EBITDA (a)
    
    
    263
    
    
    
    4,866
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 29,
    
    
    March 31,2008
    
    
    2007Vinyl windows
    
    $
    69,688
    
    
    $
    74,489Vinyl siding products
    
    
    44,134
    
    
    
    53,085Metal products
    
    
    39,344
    
    
    
    41,110Third party manufactured products
    
    
    32,933
    
    
    
    34,177Other products and services
    
    
    14,779
    
    
    
    15,303$
    200,878
    
    
    $
    218,164
 14




---



##### Table of Contents



(a)
    
    EBITDA is calculated as net loss plus interest, taxes, depreciation and amortization.
Adjusted EBITDA excludes certain items. The Company considers adjusted EBITDA to be an
important indicator of its operational strength and performance of its business. The
Company has included adjusted EBITDA because it is a key financial measure used by
management to (i) assess the Companys ability to service its debt and / or incur debt and
meet the Companys capital expenditure requirements; (ii) internally measure the Companys
operating performance; and (iii) determine the Companys incentive compensation programs.
In addition, the Companys credit facility has certain covenants that use ratios utilizing
this measure of adjusted EBITDA. EBITDA and adjusted EBITDA have not been prepared in
accordance with U.S. generally accepted accounting principles (GAAP). Adjusted EBITDA as
presented by the Company may not be comparable to similarly titled measures reported by
other companies. EBITDA and adjusted EBITDA are not measures determined in accordance with
GAAP and should not be considered as alternatives to, or more meaningful than, net income
(as determined in accordance with GAAP) as a measure of the Companys operating results or
cash flows from operations (as determined in accordance with GAAP) as a measure of the
Companys liquidity. The reconciliation of the Companys net loss to EBITDA and adjusted
EBITDA is as follows (in thousands): Quarter Ended
    
    
    Quarter EndedMarch 29,2008
    
    
    March 31,2007Net loss
    
    $
    (14,774
    )
    
    $
    (6,259
    )Interest expense, net
    
    
    16,974
    
    
    
    16,976Income tax benefit
    
    
    (8,638
    )
    
    
    (12,095
    )Depreciation and amortization
    
    
    5,653
    
    
    
    5,426EBITDA
    
    
    (785
    )
    
    
    4,048Foreign currency (gains) loss
    
    
    78
    
    
    
    (6
    )Separation costs (b)
    
    
    
    
    
    
    699Amortization of management fee (c)
    
    
    125
    
    
    
    125Manufacturing restructuring costs (d)
    
    
    845
    
    
    
    Adjusted EBITDA
    
    $
    263
    
    
    $
    4,866
 
 (b)
    
    For the quarter ended March 31, 2007, the amount represents separation costs, including
payroll taxes, related to the resignation of Mr. Deighton, former Chief Operating Officer of
the Company.(c)
    
    Represents amortization of a prepaid management fee of $6 million paid to Investcorp
International Inc. in connection with the December 2004 recapitalization transaction. The
Company is expensing the prepaid management fee based on the services provided over the life
of the agreement, as defined in the Management Advisory Agreement with Investcorp
International Inc. In accordance with the Management Advisory Agreement, the Company
recorded $4 million as expense for the year ended December 31, 2005, with the remaining
unamortized amount to be expensed equally over the remaining four-year term of the agreement.(d)
    
    During the quarter ended March 29, 2008, the Company committed to a plan to discontinue use
of its warehouse facility adjacent to its Ennis, Texas vinyl manufacturing facility and began
using a third party distribution center located in Ashtabula, Ohio. In addition, the Company
committed to relocating certain vinyl siding production from Ennis, Texas to its vinyl
manufacturing facilities in West Salem, Ohio and Burlington, Ontario. For the quarter ended
March 29, 2008, the amount represents asset impairment costs and costs incurred to relocate
manufacturing equipment. Quarter Ended March 29, 2008 Compared to Quarter Ended March 31, 2007
   15




---



##### Table of Contents



Recent Accounting Pronouncements
  16




---



##### Table of Contents



Liquidity and Capital Resources
  QuarterQuarter
    
    EndedEnded
    
    March 31,March 29, 2008
    
    2007Cash used in operating activities
    
    $
    (37,860
    )
    
    $
    (20,593
    )Cash used in investing activities
    
    
    (4,226
    )
    
    
    (2,594
    )Cash provided by financing activities
    
    
    25,250
    
    
    
    14,764
 Cash Flows
  Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  17




---



##### Table of Contents



Cash Flows from Financing Activities
  Description of the Companys Outstanding Indebtedness
      18




---



##### Table of Contents



Effects of Inflation
  19




---



##### Table of Contents



Certain Forward-Looking Statements
  
    
    the Companys operations and results of operations;
    
    changes in home building industry, economic conditions, interest rates, foreign
currency exchange rates and other conditions;
    
    changes in availability of consumer credit, employment trends, levels of consumer
confidence and consumer preferences;
    
    changes in raw material costs and availability;
    
    market acceptance of price increases;
    
    changes in national and regional trends in new housing starts and home remodeling;
    
    changes in weather conditions;
    
    the Companys ability to comply with certain financial covenants in the credit
facility and indenture governing its indebtedness;
    
    the Companys ability to receive distributions, payments or loans from its
subsidiaries or make distributions, payments or loans to its parent to allow it to make
required payments on its debt;
    
    increases in competition from other manufacturers of vinyl and metal exterior
residential building products as well as alternative building products;
    
    shifts in market demand;
    
    increases in the Companys indebtedness;
    
    increases in costs of environmental compliance;
    
    increases in capital expenditure requirements;
    
    potential conflict between existing Alside and Gentek distribution channels;
    
    the other factors discussed under the heading Risk Factors in the Companys annual
report on Form 10-K for the year ended December 29, 2007 and elsewhere in this report.
  
 20




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
   Foreign Currency Exchange Risk
  Commodity Price Risk
  21




---



##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 6. Exhibits
 a) Exhibits
 ExhibitNumber
    
    Description4.1
    
    Supplemental Indenture governing AMHs 11 1/4% Senior Discount Notes Due 2014, dated as of
March 27, 200831.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act, as
adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act, as
adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*32.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
 
 *
    
    This document is being furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K and
SEC Release Nos. 33-8238 and 34-47986. 22




---



##### Table of Contents



SIGNATURES
  AMH HOLDINGS, LLC(Registrant)Date: May 13, 2008
    
    By:
    
    /s/ Thomas N. ChieffeThomas N. ChieffePresident and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ Cynthia L. SobeCynthia L. SobeVice President  Chief Financial Officer,Treasurer and Secretary(Principal Financial Officer andPrincipal Accounting Officer)
 23