**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

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**FORM 10-K**

 
| **ý** | **Annual Report Pursuant to Section  13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended  December 28, 2001** |
|------------|----------------------------------------------------------------------------------------------------------------------------------------|

 
| **o** | **Transition Report Pursuant to Section 13 or 15(d) of the  Securities Exchange Act of 1934** |
|-------|-----------------------------------------------------------------------------------------------|

 

**CommissionFile Number: 333-05978**

 

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**EURAMAX INTERNATIONAL, INC.**

(Exactname of registrant as specified in its charter)

 
| **Delaware**                                                     |   | **58-2502320**                                 |
|------------------------------------------------------------------|--------|------------------------------------------------|
| (State or other  jurisdiction of incorporation or organization)  |   | (I.R.S. Employer  Identification No.)          |
|                                                             |   |                                           |
| **5445 Triangle Pkwy Suite 350,  Norcross, Georgia**             |   | **30092**                                      |
| (address of  principal executive offices)                        |   | (Zip Code)                                     |
|                                                             |   |                                           |
| **(770) 449-7066**                                               |
| Registrant’s telephone number, including area code          |
|                                                             |   |                                           |
| Securities registered pursuant to Section 12(b) of the Act:      |
|                                                             |   |                                           |
| **Title of each class**                                          |   | **Name of each exchange on which  registered** |
| None                                                             |   | None                                           |
|                                                             |   |                                           |
| **Securities registered pursuant to  Section 12(g) of the Act:** |
| None *                                                           |
| **(Title of Class)**                                             |

 

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*              Certainnotes issued by the Registrant are traded on the Luxembourg Stock Exchange.

 

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section  13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period  that the registrant wasrequired to file such  reports), and (2)has been subject to such filing requirements for the past 90 days.

Yes   ý   No  o

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of the Form 10-K or any amendment to this Form 10-K.   ý

 

As of March 20, 2002, Registranthas outstanding 445,822.44 shares of Class A common stock and 44,346.80 sharesof Class B convertible common stock.

 

 

Note Regarding Private Securities Litigation ReformAct:  Statementscontained in this Form 10-K that are not historical facts includeforward-looking statements that are subject to the safe harbor rules created bythe Private Securities Litigation Reform Act of 1995.  All statements, other than statements of historical facts,included or incorporated by reference in this Form 10-K which addressactivities, events or developments which Euramax International, Inc. andsubsidiaries (the “Company” or “Euramax”) expect or anticipate will or mayoccur in the future, including statements regarding the Company’s competitiveposition, the risks of acquisition of businesses (including limited knowledgeof the businesses acquired and misrepresentations by sellers), changes inbusiness strategy or development plans, cyclical demand for the Company’sproducts, the supply and/or price of aluminum and other raw materials, currencyexchange rate fluctuations, the Company’s ability to pass on price increases,the impact of environmental laws and regulations, the availability offinancing, reliance on key management personnel, ability to manage growth, theCompany’s expectations regarding the adequacy of current financingarrangements, loss of customers, quantitative and qualitative disclosures aboutmarket risk, and other statements regarding future plans and strategies,anticipated events or trends and similar expressions concerning matters thatare not historical facts are forward looking statements. Words such as“expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” orvariations of such words and similar expressions are intended to identify suchforward-looking statements.  Thesestatements are based on certain assumptions and analyses made by the Company inlight of its experience and its perception of historical trends, currentconditions and expected future developments as well as other factors itbelieves are appropriate in the circumstances. However, whether actual results and developments will conform with theCompany’s expectations and predictions is subject to a number of risks and uncertaintieswhich could cause actual results to differ significantly and materially frompast results and from the Company’s expectations, including the risk factorsdiscussed in this Form 10-K, Item 1 “Business,” and Item 7 “Management’sDiscussion and Analysis of Financial Conditions and Results of Operations,” andother factors, many of which are beyond the control of the Company.  Consequently, all of the forward lookingstatements made in this Form 10-K are qualified by these cautionary statementsand there can be no assurance that the actual results or developmentsanticipated by the Company will be realized or, even if substantially realized,that they will have the expected consequences to or effects on the Company orits business or operations.  The Companyassumes no obligation to update publicly any such forward-looking statements,whether as a result of new information, future events or otherwise.

 

**PartI**

 

**Item 1.  Business**

 

**General**

 

Euramax is aninternational producer of value-added aluminum, steel, vinyl and fiberglassfabricated products with facilities strategically located in the United Kingdom(“U.K.”), The Netherlands, France, and all major regions of the continentalUnited States (“U.S.”). Euramax’s core products include specialty coated coils,aluminum recreational vehicle (“RV”) sidewalls, RV doors, farm and agriculturalpanels, metal and vinyl raincarrying systems, roofing accessories, soffit andfascia systems, and vinyl replacement windows. The Company’s customers include original equipment manufacturers(“OEMs”) such as RV, commercial panel manufacturers and transportation industrymanufacturers; rural contractors; home centers; manufactured housing producers;distributors; industrial and architectural contractors; and home improvementcontractors.

 

Euramax operatesdownstream of producers of aluminum coil, aluminum extrusions, steel coil andaluminum ingot. These producers supply the Company with aluminum coil, aluminumextrusions and

 

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steel coil. TheCompany sold approximately 165 and 231 million pounds of aluminum and steel,respectively, in 2001. To a lesser extent, the Company also distributes andfabricates products manufactured from vinyl and fiberglass.

 

Euramax is anational supplier in several of its key U.S. product lines and is one of theonly national suppliers with in-house coil coating capabilities to supplyaluminum sidewalls to RV manufacturers and steel siding to manufactured housingcustomers. This gives the Company certain advantages over regional supplierswho do not have in–house manufacturing capabilities or nationaldistribution networks. In addition, extensive in-house manufacturingcapabilities coupled with product offerings made from alternate raw materialsenable Euramax to react to changing customer preferences.

 

A significant portion of the Company’s sales aregenerated in niche markets where the Company has a leading market share,including aluminum RV sidewalls, metal raincarrying products and steel siding.The Company believes that in 2001 it sold at least 64% and 85% of the aluminumsidewalls used by RV manufacturers in the U.S. and Europe, respectively. Theseestimates are based upon the Company’s sales volume of aluminum sidewalls usedby RV manufacturers, as a percentage of management’s estimate of total salesvolume for such products.  In the sameyear, the Company sold aluminum and steel raincarrying products to more than 15of the largest 50 home center companies in the U.S. The Company believes thatin 2001 it sold at least 83% of all metal Do–It–Yourselfraincarrying products sold to U.S. home centers. The Company also believes thatit sold at least 35% of the steel siding sold to producers of manufacturedhousing in the U.S.  These estimates arebased upon the Company’s sales volume of metal raincarrying products sold to U.S.home centers and steel siding sold to producers of manufactured housing as apercentage of management’s estimate of total sales volume for suchproducts.  Net sales for 2001 in theU.S. and Europe were $406.8 million and $186.3 million, respectively.

 

In 1999, theCompany was reorganized to become a U.S. outbound multinational group. Formerlya multinational company incorporated in the U.K. under the name of EuramaxInternational Limited, the new parent holding company, Euramax International,Inc., is incorporated in the U.S. (see “The Transactions”).  Euramax International Limited was formed in1996 by (i) ACP Holding Company (“ACP”), an affiliate of Citicorp VentureCapital, Ltd. (“CVC”) and (ii) CVC European Equity Partners, L.P. (“CVCEEP”)and CVC European Equity Partners (Jersey), L.P., (collectively with CVCEEP,“CVC Europe”, and collectively with CVC, the “Investor Group”) to acquirecertain portions of the fabricated products operations of Alumax Inc., pursuantto the Acquisition (defined below). Alumax Inc. was acquired by Aluminum Company of America in 1998, and ishereafter referred to as “Alumax.”  In1998, ACP, a limited Delaware partnership, distributed its holdings in Euramaxto the ACP partners (see Item 12 “Security Ownership of Certain BeneficialOwners and Management”).

 

**Business Strategy**

 

The Company’sstrategy is to expand its leadership position as a producer of aluminum andsteel products and to further diversify product offerings, customers and geographicregions in which it operates. Since the Company’s formation in 1996, managementhas pursued a strategy of improving the Company’s operations and profitabilitywhile positioning the Company for future growth.  Under this strategy, the Company is pursuing organic growththrough product development, new territories and new customers. In addition,since its formation in September 1996, the Company has completed sevenacquisitions which have enabled it to offer complementary products and expandits geographic coverage.  In addition,the Company has sold two businesses that did not serve management’s strategy(see “The Transactions”). The Company expects to continue identifying andacquiring businesses as part of executing its strategy.

 

 

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**The Transactions**

 

*Acquisition of Alumax’s fabricatedproducts business in September 1996, and related financing*

 

Pursuant to apurchase agreement (the “Acquisition Agreement”) dated June 24, 1996, betweenEuramax International Limited and Alumax, on September 25, 1996 (the “ClosingDate”), Euramax International Limited purchased, through its wholly-ownedsubsidiaries, all of the issued and outstanding capital stock of certain ofAlumax’s subsidiaries which operated a portion of Alumax’s fabricated productsbusiness (the “Acquisition”).  Thepurchase price of approximately $252.4 million, including acquisition expensesof $3.9 million and adjustments to give effect to certain items including cashacquired and working capital, was allocated to the assets and liabilities ofthe Company based upon their fair market value at the date of the Acquisitionunder the purchase method of accounting.

 

In order tofinance the purchase price, Euramax International Limited and certain of itswholly-owned subsidiaries (i) incurred approximately $100.0 million ofindebtedness under a credit agreement providing for $40.0 million in term loansand a revolving credit facility of up to $85.0 million (the “CreditAgreement”), (ii) issued $135.0 million of subordinated notes (the “Notes”) and(iii) issued to the Investor Group, certain members of management of theCompany (the “Management Investors”) and an affiliate of Banque Paribas (theagent under the Credit Agreement), an aggregate of approximately $35.0 millionin preference and ordinary shares (the “Equity Contribution”).

 

*TheReorganization*

 

In December 1999, Euramax International Limited completed areorganization (the “Reorganization”) whereby Euramax International, Inc., aDelaware corporation, was positioned as the top holding company.  Prior to the Reorganization, the parentcompany was Euramax International Limited (formerly Euramax International plc),a company organized under the laws of England and Wales. Euramax International,Inc. and Euramax International Limited are hereafter referred to as the“Company” or “Euramax”.

 

The Reorganizationwas accomplished, in part, by means of a “scheme of arrangement” under section425 of the United Kingdom Companies Act 1985, a U.K. judicial proceedingrequiring the consent of the registered holders of the Company’s Notes, thelenders under the Company’s Credit Agreement, and the holders of each class ofshares of Euramax.  As a result of theReorganization, the new U.S. holding company of the group, EuramaxInternational, Inc., is the reporting company for the consolidated group.  In addition, the new U.S. holding company,two new U.K. intermediate holding companies and Amerimax Fabricated Products,Inc., an intermediate U.S. holding company, were added as guarantors on theCompany’s Notes, and certain covenants in the Company’s Notes were amended.

 

*Acquisition of Fabral in July 1997*

 

On July 17, 1997, the Company’s wholly ownedsubsidiary Amerimax Fabricated Products, Inc. acquired all of the issuedand outstanding capital stock of Gentek Holdings, Inc. and its subsidiaryGentek Building Products, Inc. (collectively “Gentek” or “Fabral”) (the “FabralAcquisition”) for approximately $75.3 million. The purchase price was financed through additional borrowings under theCredit Agreement which was amended to, among other items, increase borrowingsavailable for the Fabral Acquisition. At the Fabral Acquisition date, Gentek was comprised principally ofFabral, a division of Gentek headquartered in Lancaster, Pennsylvania.  Fabral is a manufacturer and distributor ofsteel and aluminum roofing and wall paneling products specifically for theagricultural, commercial and industrial markets.

 

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*Acquisitionof JTJ Laminating, Inc. in March 1997*

 

On March 28, 1997, the Company’s wholly owned subsidiary AmerimaxBuilding Products, Inc. purchased all of the issued and outstanding capitalstock of JTJ Laminating, Inc. (“JTJ”) for approximately $2.2 million, includingtransaction expenses of $100.0 thousand, along with the assumption ofoutstanding indebtedness of $1.3 million. At the closing date, approximately $2.4 million was paid in cash, ofwhich $1.3 million was used to extinguish outstanding indebtedness of JTJ. Theremaining purchase price of $1.0 million, representing consideration forcertain non-compete agreements, is being paid out in ten equal annualinstallments ending in 2007.  JTJspecializes in the lamination of fiberglass and other product offerings.

 

*Acquisitionof Unimet Manufacturing, Inc. in February 1999*

 

On February 5, 1999, the Company’s wholly owned subsidiary AmerimaxHome Products, Inc. purchased certain assets related to the building materialsbusiness of Unimet Manufacturing, Inc. (“Unimet”) for approximately $3.3million, including transaction expenses of approximately $135.4 thousand.  Approximately $2.8 million was paid incash.  The remaining purchase price of$500.0 thousand, representing consideration for certain non-compete agreements,is being paid in five equal annual installments ending in 2004.

 

*Acquisitionof Color Clad plc in April 1999*

 

On April 23, 1999, the Company’s wholly owned subsidiary Euramax CoatedProducts Limited purchased all of the issued and outstanding capital stock ofColor Clad plc (“Color Clad”) for approximately $3.8 million, includingtransaction expenses of approximately $171.5 thousand.  Color Clad is a manufacturer of aluminumexterior walls and roofs sold primarily to U.K. RV manufacturers.

 

*Acquisitionof Atlanta Metal Products, Inc. in June 1999*

 

On June 3, 1999, the Company’s wholly owned subsidiary AmerimaxFabricated Products, Inc. purchased all of the issued and outstanding capitalstock of Atlanta Metal Products, Inc. (“AMP”) for approximately $15.6 million,excluding cash and including approximately $641.0 thousand of transactionexpenses.  AMP is a manufacturer ofmetal raincarrying and roofing products sold primarily to the U.S. distributormarket.

 

*Acquisitionsof Gutter World, Inc. and Global Expanded Metals, Inc. in April 2000*

 

On April 10, 2000, the Company’s wholly owned subsidiary Amerimax HomeProducts, Inc. acquired substantially all of the assets and assumed certainliabilities of Gutter World, Inc. and Global Expanded Metals, Inc., companiesunder common control, (“Gutter World” and “Global”, respectively) (the “GutterWorld and Global Acquisition”).  Thepurchase price, including approximately $372.2 thousand in acquisition-relatedfees and expenses, was approximately $45.6 million in cash.  Gutter World is a manufacturer ofraincarrying accessories, such as gutter guards, water diverters and downspoutstrainers, as well as door guards sold primarily to home centers.  Global manufactures expanded metal products.

 

The Gutter World and Global Acquisition was financed through borrowingsunder the Credit Agreement, which was amended April 10, 2000.  See Note 6 to the Consolidated FinancialStatements.

 

**Market Leadership and Diversity of Business**

 

The Company’s position as a leading internationaldownstream producer of aluminum and steel products has

 

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historically enabled it to benefit fromdiversification across economic and product cycles among different geographicregions and customer groups. This diversification has historically enabledEuramax to maintain margins even though demand for certain products may beaffected by seasonality and by changes in general and regional economicconditions such as trends in disposable income.

 

*Leadership in several markets:* The Company believes that its leadership positionin a variety of niche markets continues to minimize the volatility of operatingresults. For example, the Company is a leading supplier of aluminum and steelsidewalls and siding to U.S. RV producers. In addition, the Company believesthat its 2001 sales of raincarrying systems represent a majority of suchproducts sold to U.S. home centers. Similar leading positions are enjoyed bythe Company’s roll formed aluminum sheet and coil products sold to RVmanufacturers in the U.S. and Europe.

 

*Manufacturing expertise and diversity of products:* The Company’s technological expertise and itsability to fabricate from alternative materials have allowed it to develop newproducts and applications and to respond to changing product requirements ofits customers. Over time, Euramax has increased its ability to offer productsmanufactured from steel, vinyl and fiberglass, allowing it to meet regionalmaterial preferences, to provide substitute products for end-users and toretain customers in the event of demand shifts between raw materials.

 

*Geographic diversity:* The Company’s sales span both the continentalU.S. and Europe, which represented approximately 68.6% and 31.4% of 2001 netsales, respectively. The Company has manufacturing or distribution facilitiesstrategically located in the U.K., The Netherlands, France and all majorregions of the continental U.S. The Company’s geographic diversity of saleslimits reliance on any single regional economy in the U.S. or national economyin Europe.

 

*Customer diversity:* The Company is diversified by both size and type of customer. Of theCompany’s more than 5,000 customers, no single customer accounted for more than12.9% of net sales in 2001. The top ten customers accounted for approximately31.9% of 2001 net sales and represented four distinct end-use markets. Thesecharacteristics minimize the Company’s reliance on individual customers or end–usemarkets.

 

*Distribution capability:* The Company’s manufacturing and distributionnetwork consists of 35 strategically located facilities, of which 30 arelocated in the United States, and 5 are located in Europe. Euramax’s network offacilities allows the Company to offer more comprehensive service than itsregional competitors and to meet the increasing demands of its customers forshort delivery lead times.

 

**Operating Segments**

 

The Company’s reportable segments, aggregatedaccording to manufacturing process, are as follows: European roll coating, U.S.fabrication and European fabrication. Financial information and other disclosures relating to the Company’soperating segments are provided in Note 13 of the Consolidated FinancialStatements.  See, also, “Products andCustomers.”

 

**Manufacturing Processes**

 

The Company’s manufacturing processes employ avariety of equipment and several types of facilities. Management believes thatthe Company’s effective deployment of equipment enables it to manufacturestandard and custom products efficiently and economically. The Company has theequipment necessary for manufacturing substantially all of its productsin-house, which minimizes reliance on third party processors. This providescertain cost benefits while enabling the Company to add new products on atimely basis.

 

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These capabilities provide certain marketing andpricing advantages, including the ability to control delivery time and todevelop new and customer-specific products in an expeditious manner.

 

The Company’s manufacturing process generallybegins with painting aluminum or steel coil through a process known as rollcoating. Once coated, the aluminum or steel is further fabricated throughselected processes which include tension leveling, embossing, slitting, rollforming,brake pressing, notching and bending. These processes complete the appropriatesteps to fabricate a finished product.

 

The Company’s coating and fabrication capabilitiesare described in more detail as follows:

 

*Coating (painting and anodizing): *Roll coatingis the process of applying a variety of liquid coatings (primarily paint) tobare aluminum or steel coil, providing a baked-on finish that is bothprotective and decorative. Approximately 129 million pounds of aluminum (74million pounds in the European roll coating segment and 55 million pounds inthe U.S. fabrication segment) and approximately 32 million pounds of steel (12million pounds in the European roll coating segment and 20 million pounds inthe U.S. fabrication segment) were roll coated by the Company at its eight rollcoating operations in 2001. The Company has three such coating lines in theU.S. and five in Europe. The three coating lines in the U.S. are primarilyutilized for internal processing, while the five coating lines in Europe,located within two facilities, are utilized to supply roll coated products toexternal customers. The Company believes that its roll coating facility inRoermond, The Netherlands is one of only three facilities in the world capableof coating coil up to 100 inches in width. The Roermond line services a varietyof markets in which wide coated aluminum is becoming increasingly important.Wide coils provide customers with the opportunity to produce products moreeconomically by reducing labor costs and requiring fewer joints and seams intheir manufacturing processes.

 

Anodizing is an electrochemical process thatalters an aluminum surface through a controlled and accelerated oxidationprocess, which, if desired, may also color the material. Anodizing provides ahigh quality architectural finish to aluminum extrusions, which is demanded bycertain customers. Anodizing is a key manufacturing process offered by theCompany in certain European facilities included in the European fabricationsegment, which fabricate bath and shower enclosures and automotive windowtrims.

 

*Fabrication:*  After coating, much of theCompany’s coil, in both its U.S. and European fabrication segments, isprocessed through slitting operations which cut coils into more narrow widths.The cut coils may then undergo a variety of downstream production processeswhich further fabricate the aluminum and steel sheet to form the desiredproduct. Fabrication equipment includes rollformers, punch and brake pressesand expanding machinery for a variety of applications.  Production machinery also includes equipmentto bend, notch and cut aluminum and vinyl extrusions required, together withglass, for the assembly of windows and doors.

 

In 1995, the Company introduced laminatedfiberglass products for use in the RV and transportation markets.  The lamination process adheres fiberglass oraluminum sheet to a wood or other solid substrate that provides rigidity.  Further, in March 1997, the Company acquiredJTJ Laminating, Inc. (see “The Transactions”) to further enhance its fiberglasslamination capabilities and laminated product offerings for its U.S.fabrication segment.

 

**Products and Customers**

 

The Company’s products are sold to a diverse groupof customers operating in a variety of industries. The Company’s sales andmarketing effort is organized on a decentralized basis to provide requiredservices to its broad customer base in multiple geographic areas (see Note 13to the Consolidated Financial

 

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Statements). Customers include:

 

•      OEMs, including RV, Commercial Panel, andTransportation Industry Manufacturers

•      Rural Contractors

•      Home Centers

•      Manufactured Housing Producers

•      Distributors

•      Home Improvement Contractors

•      Industrial and Architectural Contractors

 

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The table below lists the Company’s key products,materials used, customers and end–users, sales regions and segments:

 
| **Products**                                                                |   | **Primary Materials**               |   | **Customers and End-Users**                                                                                                                             |   | **Primary Sales  Regions** |   | **Segments**                |   |
|-----------------------------------------------------------------------------|--------|-------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|-----------------------------|--------|
| Specialty Coated Coils(painted  aluminum andsteel coils)                    |   | Aluminum, Steel                     |   | OEMs, RV Manufacturers,  Transportation Industry Manufacturers, Various Building Panel Manufacturers                                                    |   | Europe                     |   | European RollCoating        |   |
|                                                                        |   |                                |   |                                                                                                                                                    |   |                       |   |                        |   |
| Roofing & Siding (includingvehicle sidewalls andbuilding  panels)  |   | Aluminum, Steel, Vinyl,  Fiberglass |   | OEMs, RV Manufacturers,  Manufactured Housing, Rural Contractors, Distributors, Industrial and  Architectural Contractors, Home Improvement Contractors |   | U.S., Europe               |   | U.S. andEuropeanFabrication |   |
|                                                                        |   |                                |   |                                                                                                                                                    |   |                       |   |                        |   |
| Raincarrying Systems(gutters,  downspouts)                                  |   | Aluminum, Steel, Vinyl              |   | Home Centers, Manufactured  Housing, Rural Contractors, Home Improvement Contractors, Distributors                                                      |   | U.S.                       |   | U.S. Fabrication            |   |
|                                                                        |   |                                |   |                                                                                                                                                    |   |                       |   |                        |   |
| Soffit (roof overhangs),Fascia  (trims), Flashing(roofing valley  material) |   | Aluminum, Steel                     |   | Home Centers, Manufactured  Housing, Rural Contractors, Industrial and Architectural Contractors, Home  Improvement Contractors                         |   | U.S.                       |   | U.S. Fabrication            |   |
|                                                                        |   |                                |   |                                                                                                                                                    |   |                       |   |                        |   |
| Doors                                                                       |   | Aluminum, Fiberglass                |   | OEMs, RV Manufacturers,  Distributors, Home Improvement Contractors                                                                                     |   | U.S., Europe               |   | U.S. andEuropeanFabrication |   |
|                                                                        |   |                                |   |                                                                                                                                                    |   |                       |   |                        |   |
| Windows                                                                     |   | Aluminum, Vinyl                     |   | OEMs, RV Manufacturers, Home  Improvement Contractors, Transportation Industry Manufacturers                                                            |   | U.S., Europe               |   | U.S. andEuropeanFabrication |   |

 

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The following table sets forth the percentage of the Company’s netsales attributable to its customers/markets:

 
|                                      |   | **Years Ended**         |   |
|-------------------------------------------|--------|-------------------------|--------|
|                                      |   | **December  28,  2001** |   | **December 29,  2000** |   | **December 31,  1999** |   |
| OEMs                                      |   | 40.7                    | %      | 44.3 | % | 44.0 | % |
| Rural  Contractors                        |   | 20.3                    | %      | 19.2 | % | 20.4 | % |
| Home Centers                              |   | 19.5                    | %      | 16.1 | % | 14.7 | % |
| Manufactured  Housing Producers           |   | 4.1                     | %      | 5.8 | % | 8.3 | % |
| Distributors                              |   | 5.6                     | %      | 5.8 | % | 4.8 | % |
| Home Improvement  Contractors             |   | 6.8                     | %      | 5.5 | % | 4.4 | % |
| Industrial and  Architectural Contractors |   | 3.0                     | %      | 3.3 | % | 3.4 | % |
|                                      |   | 100.0                   | %      | 100.0 | % | 100.0 | % |

 

***Original EquipmentManufacturers (“OEMs”)***

 

The Company supplies OEMs such as RV, commercial panel manufacturersand transportation industry manufacturers. The Company’s principal OEMcustomers are described below:

 

Recreational VehicleManufacturers:* *The Company is aleading supplier of various aluminum products to RV manufacturers in theU.S. and Europe. These products primarily consist of painted aluminum sheet andfabricated painted aluminum panels. The Company uses its decorative graphiccoating lines to produce aluminum panels with decorative detailing in a varietyof colors. The Company also supplies RV doors, windows and finishedaluminum exterior walls and roofing panels. In addition, the Company supplieslaminated aluminum and fiberglass panels to RV manufacturers.

 

The Company believes its decorative coating capabilities in the U.S.and in Europe provide a distinct technological advantage. These capabilitiesenable the Company to paint a stripe or other decorative pattern directly ontothe aluminum sheet according to customer specifications.  The alternative to a painted stripe isdecorative tape, which must be applied to the aluminum sheet. The tape cannotbe applied with the tight tolerances achieved by the Company’s paintingprocess, and does not offer the same graphics variety.

 

In recent years, laminated fiberglass sidewalls have displaced aluminumsidewalls in the “towable” segment of the U.S. RV market.  In response to demand for laminated productsin the U.S. markets, in 1995, the Company opened a lamination line, whichcan laminate fiberglass and aluminum, among other materials, to a variety of substrates.  In addition, in March 1997, the Companyacquired JTJ Laminating, Inc. to further enhance its fiberglass laminationcapabilities and laminated product offerings in the U.S.

 

Commercial Panel Manufacturers:  TheCompany sells painted aluminum coil to customers who produce commercialbuilding panels. These panels become part of a total package of commercialbuilding wall panels and facades. The Company also produces a composite“sandwich” building panel comprised of two aluminum skins with a polystyrenecore, which insulates and abates noise. The panels are used in bothresidential  (e.g., room additionsand patio enclosures) and commercial applications (e.g., service stationsand school buildings) as well as in the construction of “cold rooms” used forthe storage of perishable goods.

 

Transportation Industry Manufacturers:In addition to supplying RV manufacturers and commercial panel manufacturers,the Company also supplies manufacturers in the transportation industry inEurope with windows, sunroofs, frames and other interior components withdecorative detailing.

 

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Other Manufacturers: The Company also uses its decorative and coilcoating capabilities for products supplied to overhead door manufacturers andproducers of refrigerated transport containers. Door manufacturers produce theoverhead doors, adding the necessary hardware and accessory items to completethe product.

 

***Rural Contractors***

 

The Company supplies aluminum and steel roofingand siding products to rural contractors for use in agricultural and ruralbuildings such as sheds and animal confinement buildings. The Company sells itsproducts to traditional rural contractors, including building supply dealers,building and agricultural cooperatives, and animal confinement integrators.Building suppliers and agricultural cooperatives typically purchase smallerquantities of product at multiple locations whereas contractors and integratorsgenerally purchase large volumes for delivery to one site.  The Fabral Acquisition substantiallyincreased the Company’s sales to rural contractors.  See “The Transactions.”

 

***Home Centers***

 

The Company’s home center customers supply thewell-established Do-It-Yourself (“DIY”) market in the U.S., Canada, and theUnited Kingdom. In the U.S., the Company sells building and constructionproducts, such as residential rain-carrying systems, roof flashing products,soffits, fascias, and steel roofing and siding.  In the United Kingdom, the Company sells doors, screen doorguards, bath enclosures, and shower, patio, and residential doors. Theseproducts, which are designed for ease of installation by DIY consumers,are produced with aluminum, galvanized or painted steel, and vinyl, dependingon regional preferences. Home centers include small hardware stores, largecooperative buying groups, lumberyards and major home center retailers. TheCompany believes that it is the leading supplier of DIY metal raincarryingsystems in the U.S. Competitors are generally regional and, thus, do not havethe advantages of a nationwide service and distribution network such as theCompany’s.  The Company expects tocontinue to exploit these strengths to introduce additional DIY products thatcould be sold through this distribution channel. The Company’s acquisition ofUnimet in February 1999 and Gutter World in April 2000 allowed it to expand itscustomer base and product offerings for raincarrying systems and accessoriessold to home centers.  See Note 2 to theConsolidated Financial Statements and “The Transactions.”

 

***Manufactured HousingProducers***

 

The Company sells rollformed steel siding and trimparts to producers of manufactured housing in the U.S. These products are usedfor exterior walls and roofs.  While theCompany enjoys a leading position in this market, recent trends show the annualamounts of steel siding sold to the manufactured housing industry to bedeclining.  This is primarily due to theavailability of low-cost vinyl siding, which has aesthetic advantages oversteel.  To a lesser degree, the Companyalso distributes vinyl siding to certain customers in the manufactured housingindustry.  In addition to steel siding,the Company also fabricates and supplies a variety of steel and aluminum trimcomponents for manufactured home exteriors.

 

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***Distributors***

 

The Company sells to distributors and stockists(the European equivalent of distributors), which perform as service centers forthe next tier of customers in both the U.S. and Europe. A distributor willtypically purchase coil which is later broken down or fabricated prior toresale. Residential building products sold through distributors include a widerange of metal roof flashing materials, painted aluminum trim coil, raincarryingsystems, fascia/soffit systems and drip edges. The Company’s acquisition of AMP in June 1999 enhanced its position as asupplier of metal raincarrying and roofing products to the distributor marketin the U.S. See Note 2 to the Consolidated Financial Statements and “TheTransactions.”

 

***Home ImprovementContractors***

 

The Company sells a variety of products to homeimprovement contractors, the most significant of which are vinyl replacementwindows. Other products sold to home improvement contractors include awnings,lattice systems, metal roofing, shower doors, patio and entrance doors, andinsulated roofing panels. In the U.S., the Company offers a full complementof vinyl replacement windows. In the U.K., the Company produces patio,entrance, and shower doors, marketedprimarily to home improvement contractors. The Company is also one of thelargest suppliers of lattice and painted aluminum awnings to residentialcontractors in the western U.S.  Inaddition, the Company manufactures painted aluminum and steel panels forresidential roofing, which are distributed primarily in the Pacific Northwest.

 

***Industrial andArchitectural Contractors***

 

The Company sells various products to thearchitectural and industrial contractor markets including standing seam panels,siding, soffits and fascias.  Theseproducts are primarily produced from galvanized steel or aluminum.

 

**Raw Materials**

 

The Company’s products are principallymanufactured from aluminum coils and extrusions and steel coils. During 2001,approximately 165 million pounds of aluminum products and approximately231 million pounds of steel were sold. The proportion sold in 2001 by value is$313.7 million of aluminum and $157.5 million of steel. Steel weighsapproximately three times as much as the same volume of aluminum. In addition,during 2001, the Company sold $121.9 million of products manufactured frommaterials other than aluminum and steel.

 

All of the Company’s raw material inputs aresourced from external suppliers. The Company purchases its steel and aluminumsheet requirements from several foreign and domestic aluminum and steel mills.Management believes there is sufficient supply in the market place tocompetitively source all of its requirements without reliance on any particularsupplier. The Company’s large volume of aluminum and steel purchases afford itcompetitive market pricing.

 

Approximately 53% of the Company’s net sales arederived from sales of aluminum products. Compared to the cost of other rawmaterials used by the Company, the cost of aluminum is subject to a high degreeof volatility caused by, among other items, the relationship of world aluminumsupply to world aluminum demand. However, as a fabricator, Euramax is less exposed to fluctuations inaluminum prices. Historically, prices at which the Company sells aluminumproducts tend to fluctuate with corresponding changes in the prices paid tosuppliers for aluminum raw materials. Supplier price increases, of normalamount and frequency can generally be passed to customers within two to fourmonths.  Conversely, as aluminum pricesdecline, corresponding price reductions are typically passed on to customerswithin the same time frame. Accordingly, the Company’s net sales and margins attributableto aluminum products may fluctuate with little or no change in the volume ofaluminum shipments.

 

12

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The Company continually scrutinizes aluminum costsand adjusts its purchasing, inventory and sales programs accordingly. From timeto time, the Company enters into contracts for the purchase of aluminum andsteel at market values in an attempt to assure a margin on specific customerorders.  Additionally, the Company hasthe option to commit to purchase a specific quantity of aluminum over aspecified time period at a fixed price. The Company would then be exposed for the difference between the fixedprice and the market price of aluminum. Historically, the Company has not engaged in extensive hedgingactivities intended to manage long-term risks relating to movements in marketprices of steel and aluminum raw materials. However, from time to time, theCompany may establish a maximum purchase price for varying quantities of futurealuminum purchase requirements through the purchase of call options.  At times, high aluminum prices have ledcustomers to use alternative products, including steel, vinyl and fiberglass.The Company believes that its ability to supply certain products manufacturedfrom these alternatives provides it with a competitive advantage overcompetitors who do not offer these choices.

 

**Competition**

 

Competition in the U.S. RV and manufactured housing markets comesprimarily from one subsidiary of a large publicly held U.S. building productscompany.  Other competition in thesemarkets, and other U.S. markets, comes largely from privately and publicly heldcompanies that are generally smaller than the Company. In Europe, competitorsof the Company include three to four integrated companies in the specialtycoil-coating business. Other smaller companies compete with the Company in thebuilding and construction, RV and transportation markets in Europe, both on aregional basis and some on a pan-European basis.

 

**Environmental, Health and Safety Matters**

 

The Company’s manufacturing facilities are subjectto a range of federal, state, local and European environmental and occupationalhealth and safety laws, including those which relate to air emissions,wastewater discharges, the handling and disposal of solid and hazardous waste, andthe remediation of contamination associated with the current and past use ofhazardous substances or materials (collectively, “Environmental Laws”). If arelease of hazardous substances or materials occurs on or from the Company’sproperties or any offsite disposal location used by the Company, or ifcontamination from prior activities is discovered at any of the Company’sproperties, the Company may be held liable for the costs of remediation(including any response costs), natural resource damages and associatedtransaction costs. While the amount of such liability could be material, theCompany devotes resources to ensuring that its current operations are conductedin a manner intended to reduce such risks.

 

Based upon environmental reviews conducted (i)internally on a quarterly basis, (ii) by outside consultants on a periodicbasis, and (iii) by outside consultants in connection with the Acquisition, andassuming compliance by Alumax with its indemnification obligations under theAcquisition Agreement, the Company believes that it is currently in compliancewith, and not subject to liability under, Environmental Laws except where suchnoncompliance or liability would not reasonably be expected to have a materialadverse effect on the consolidated financial position, results of operations orcash flows of the Company and its subsidiaries taken as a whole. Pursuant tothe terms of the Acquisition Agreement, Alumax agreed to correct and to bearsubstantially all costs with respect to certain identified conditions ofpotential noncompliance and liability under Environmental Laws, none of whichcosts is currently believed to be material. Alumax’s indemnificationobligations under the Acquisition Agreement are not subject to an aggregatedollar limitation and survive indefinitely with respect to specificallyidentified environmental matters. However, with respect to all otherenvironmental matters, Alumax’s obligations are limited to $125.0 million andexpire in September 2002.  See Item 7“Management’s Discussion and Analysis of Financial Condition and Results ofOperation — Environmental Matters.”

 

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**Employees**

 

As of December 28, 2001, the Company employed2,226 people of which 905 were employed in Europe and 1,321 were employed inthe United States. Of these employees, 30% were salaried and 70% were hourlyemployees. Manufacturing employees at three of the Company’s U.S. manufacturingfacilities are covered by collective bargaining agreements.  The Company and its subsidiaries are not aparty to any material pending labor proceedings and believe that employeerelations are satisfactory.

 

**Risk Factors**

 

**The Company has substantial leverage.**

 

The Company incurred significant debt inconnection with the Acquisition, the Fabral Acquisition and the Gutter Worldand Global Acquisition.  As of December28, 2001, the Company had outstanding indebtedness of $207.7 million, and$61.5 million of equity. For the year ended December 28, 2001, the Company’sratio of earnings to fixed charges was 1.46 to 1. The Company’s leveragedfinancial position poses substantial risks to holders of the Notes, includingthe risks that: (i) a substantial portion of the Company’s cash flow fromoperations is dedicated to the payment of interest on the Notes and the paymentof principal and interest under the Amended and Restated Credit Agreement (seeNote 14 to the Consolidated Financial Statements for discussion of theamendment and restatement of the Credit Agreement that occurred on March 15,2002) and other indebtedness; (ii) the Company’s leveraged position mayimpede its ability to obtain financing in the future for working capital,capital expenditures and general corporate purposes, including acquisitions;and (iii) the Company’s highly leveraged financial position may make itmore vulnerable to economic downturns and may limit its ability to withstandcompetitive pressures. The Company believes that, based on its current level ofoperations, it will have sufficient capital to carry on its business and willbe able to meet its scheduled debt service requirements. However, there can beno assurance that the future cash flow of the Company will be sufficient tomeet the Company’s obligations and commitments. In addition, the Amended and RestatedCredit Agreement contemplates that all borrowings thereunder will become dueprior to June 2005. If the Company is unable to generate sufficient cash flowfrom operations in the future to service its indebtedness and to meet its othercommitments, the Company will be required to adopt one or more alternatives,such as refinancing or restructuring its indebtedness, selling material assetsor operations or seeking to raise additional debt or equity capital. There canbe no assurance that any of these actions could be effected on a timely basisor on satisfactory terms or that these actions would enable the Company tocontinue to satisfy its capital requirements. In addition, the terms ofexisting or future debt agreements, including the Amended and Restated CreditAgreement and related Indenture (as defined), may prohibit the Company fromadopting any of these alternatives. See Item 7 “Management’s Discussion andAnalysis of Financial Condition and Results of Operations — Liquidity andCapital Resources.”

 

**Demand for many of the Company’s products is cyclical.**

 

Demand for most of the Company’s products iscyclical in nature and subject to changes in general economic conditions thataffect market demand. Sales to the building and construction markets are drivenby trends in commercial and residential construction, housing starts,residential repair and remodelings. Transportation market sales are alsocyclical in nature and typically follow the trends in the automotive, truck andrecreational vehicle manufacturing industries. Historically, lower demand hasled to lower margins, lower production levels, or both.

 

14

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**The Company depends upon aluminum.**

 

The Company’s primary raw material is aluminumcoil. Because changes in aluminum prices are generally passed through to theCompany’s customers, increases or decreases in aluminum prices generally causecorresponding increases and decreases in reported net sales, causingfluctuations in reported revenues that are unrelated to the level of businessactivity. However, if the Company is unable to pass through aluminum pricechanges to its customers in the future, the Company could be materiallyadversely affected. Any major dislocation in the supply and/or price of aluminumcould have a material adverse effect on the Company’s business and financialcondition. The Company is, therefore, subject to the short-term commodity riskof carrying aluminum in its inventory. See Item 7 “Management’s Discussion andAnalysis of Financial Condition and Results of Operations.”

 

**The Company depends upon steel.**

** **

The Company sold approximately $157.5 million of steel products in2001.  The Company purchases a majorityof its steel raw materials from domestic steel producers.  Recently, the U.S. government imposedsignificant tariffs on steel products imported by certain foreignproducers.  Such tariffs of 30% in year1, 24% in year 2 and 18% in year 3 are generally expected to increase theprices of the steel raw materials purchased by the Company.  While the Company anticipates that it willbe able to increase its selling prices on steel products, no assurance to thateffect can be given.  Therefore, theCompany is subject to the risk of margin erosion resulting from the impositionof these steel tariffs.  Additionally,the imposition of these tariffs may limit the availability of steel rawmaterials as foreign producers import less steel.  While the Company expects that there will be an adequate supplyto meet its demand for steel raw materials, no assurance to that effect can begiven.  Therefore, the Company issubject to the risk of lost revenue in the event that it cannot obtainquantities of steel necessary to meet customer demand.

 

**The Notes are subordinated to Senior Debt.**

 

The Notes and related guarantees given by AmerimaxHoldings, Inc. and Amerimax Fabricated Products, Inc., U.S. holding companysubsidiaries, Euramax International, Inc., as well as Euramax InternationalHoldings Limited and Euramax Continental Limited, U.K. holding companysubsidiaries, are contractually subordinated to all Senior Debt (as defined)including all obligations under the Amended and Restated Credit Agreement. Inthe event of a circumstance in which the contractual subordination provisionsapply, holders of the Notes will not be entitled to receive, and will have anobligation to pay over to holders of Senior Debt, any payments they may receivein respect of such notes, including any payments received in respect of anyClaims (as defined in the related Indenture). At December 28, 2001, the aggregate amount of consolidated indebtednessand other liabilities that the Notes are effectively subordinated to isapproximately $187.8 million, of which approximately $72.7 million isoutstanding under the Credit Agreement. The indebtedness under the Amended andRestated Credit Agreement will become due prior to the time the principalobligations under the Notes become due. The issuers of the Notes, which areEuramax International Limited, Euramax European Holdings Limited and EuramaxEuropean Holdings B.V. (collectively, the “Issuers”) and the guarantors,Amerimax Holdings, Inc., Amerimax Fabricated Products, Inc., EuramaxInternational, Inc., Euramax International Holdings Limited and EuramaxContinental Limited (the “Guarantors”), are holding companies and do not haveany independent operations. Accordingly, the Notes and the Guarantees arestructurally subordinated to all existing and future indebtedness of thesubsidiaries of the Issuers and the Guarantors, through which the Company’soperations are conducted, including obligations under the Amended and RestatedCredit Agreement. Subject to certain limitations, the Indenture permits theIssuers and their subsidiaries to incur additional indebtedness. See “The Transactions.”The holders of any indebtedness of the Issuers’ subsidiaries are entitled topayment of their indebtedness from the assets of such subsidiaries prior to theholders of any general unsecured obligations of the Issuers, including theNotes. In addition, substantially all of the assets of the Company and itssubsidiaries are or may in the future be pledged to secure other indebtednessof the Company.

 

**There are substantial restrictions imposed on the Company bythe Amended and Restated Credit Agreement and the Indenture.**

 

The Amended and Restated Credit Agreement requiresthe Company to maintain specified financial ratios and meet certain financialtests, among other obligations, including a minimum interest coverage ratio, aminimum fixed charge coverage ratio, a maximum leverage ratio and maximumamounts of capital expenditures. In addition, the Amended and Restated CreditAgreement restricts, among other things, the Issuers’ ability to incuradditional indebtedness and make acquisitions. A failure to comply with therestrictions contained in the Amended and Restated Credit Agreement could leadto an event of default thereunder which could result in an acceleration of suchindebtedness. Such an acceleration would constitute an event of default under theIndenture relating to the Notes. In addition, the Indenture restricts, amongother things, the Company’s ability to incur additional indebtedness, sellassets, make certain payments and dividends or merge or consolidate. A failureto comply with the restrictions in the Indenture could result in an event ofdefault under the Indenture.

 

15

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**The Company’s acquisition strategy may not be successful.**

 

The Company has engaged in and continues to engagein evaluations of and discussions with potential acquisition candidates.Resulting transaction(s) may be financed by incurring additional indebtednesswhich could be material. See “Substantial Leverage.” Any such transaction(s)would be subject to negotiations of definitive agreements, satisfactoryfinancing arrangements (including compliance with the limitations on issuanceof indebtedness in the Indenture and in the Amended and Restated CreditAgreement) and applicable governmental approvals and consents.  There can be no assurance that anyadditional acquisitions will be completed or that such acquired entities orassets will be successfully integrated into the Company’s operations, or willbe able to operate profitably.

 

**The Company is subject to risk of currency exchange ratefluctuations and risks associated with international operations.**

 

In 2001, approximately 31% of the Company’s netsales were made outside the United States. The U.S. dollar value of theCompany’s non-U.S. sales varies with currency exchange rate fluctuations.Changes in currency exchange rates could have an adverse effect on theCompany’s results of operations and its ability to meet interest and principalobligations on the Notes. International manufacturing and sales are subject torisks including labor unrest, potentially high costs of terminating laborcontracts, restrictions on transfers of funds, export duties and quotas,domestic and international customs and tariffs, unexpected changes inregulatory environments, difficulty in obtaining distribution and support,potentially adverse tax consequences and changes in effective tax rates. Therecan be no assurance that any of the foregoing factors will not have a materialadverse effect on the Company’s ability to increase or maintain itsinternational sales or on the Company’s results of operations.

 

**The Company is subject to strict environmental regulations.**

 

The Company’s U.S. and European facilities aresubject to the requirements of federal, state, local and European environmentaland occupational health and safety laws and regulations. There can be noassurance that Euramax is at all times in compliance with all suchrequirements. Euramax has made and will continue to make capital expendituresto comply with environmental requirements. As is the case with manufacturers ingeneral, if a release of hazardous substances occurs on or from Euramax’sproperties or any offsite disposal location used by Euramax, or ifcontamination from prior activities is discovered at any of Euramax’s properties,Euramax may be held liable for cleanup costs, natural resource damages andassociated transaction costs. The amount of such liability could be material.Euramax has been named a party potentially responsible for the costs ofinvestigating and remediating nine waste disposal sites, pursuant to thefederal Comprehensive Environmental Response, Compensation, and Liability Actof 1990. See “Business — Environmental, Health and Safety Matters” and Item 7“Management’s Discussion and Analysis of Financial Condition and Results ofOperations — Environmental Matters.”

 

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**The Company depends significantly onkey personnel.**

 

The Company is dependent on the continued servicesof its senior management team. Although the Company believes it could replacekey employees in an orderly fashion should the need arise, the loss of such keypersonnel could have a material adverse effect on the Company. The Company doesnot maintain key-person insurance for any of its officers, employees ordirectors. See Item 10 “Directors, Executive Officers and Key Management.”

 

**The Company competes in highly competitive markets.**

 

The markets in which the Company competes arehighly competitive. In the United States, competition comes from both large andsmall publicly held and privately held companies.  In Europe, competitors of the Company include three to fourintegrated companies in the specialty coil coating business. Other smallercompanies compete with the Company in the building and construction, RV andtransportation markets in Europe, both on a regional basis and some on apan-European basis. There can be no assurance that the Company will be able tocompete effectively in each of its markets in the future.

 

**The Company is controlled by four shareholders.**

 

Four shareholders, each owning greater than 5% ofthe Company’s common stock, own approximately 80% of the Company’s total commonstock and collectively control the affairs and policies of the Company.Circumstances may occur in which the interests of these shareholders could bein conflict with the interests of the holders of the Notes. In addition, theseshareholders may have an interest in pursuing acquisitions, divestitures orother transactions that, in their judgment, could enhance their equityinvestment, even though such transactions might involve risks to the holders ofthe Notes. See Item 12 “Security Ownership of Certain Beneficial Owners andManagement.”

 

**The Issuers may not be able to repurchase the Notes upon achange of control.**

 

In the event of a change of control, the Issuerswill be required to make an offer for cash to repurchase the Notes at 101% ofthe principal amount thereof, plus accrued and unpaid interest, if any, thereonto the repurchase date. A change of control will result in an event of defaultunder the Amended and Restated Credit Agreement and may result in a defaultunder other indebtedness of the Company that may be incurred in the future. TheAmended and Restated Credit Agreement prohibits the purchase of outstandingNotes prior to repayment of the borrowings under the Amended and RestatedCredit Agreement, and any exercise by the holders of the Notes of their rightto require the Issuers to repurchase the Notes will cause an event of defaultunder the Amended and Restated Credit Agreement. Finally, there can be noassurance that the Company will have the financial resources necessary torepurchase the Notes upon a change of control.

 

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**Item 2.  Properties**

 

The Company’s principal executive office andheadquarters are located in Norcross, Georgia. The principal facilities of theCompany as of December 28, 2001, are listed below by operating segment:

 
| **Facility**                |   | **Function**             |   | **Square Feet**      |   |
|-----------------------------|--------|--------------------------|--------|----------------------|--------|
| **U.S.  Fabrication**  |   |                     |   |                 |   |   |   |
| Anaheim, CA                 |   | Manufacturing            |   | (Leased)             |   | 15,000 |   |
| Atlanta, GA                 |   | Office and Manufacturing |   | (Leased)             |   | 132,250 |   |
| Atlanta, GA                 |   | Manufacturing            |   | (Leased)             |   | 57,000 |   |
| Bedford Park, IL            |   | Manufacturing            |   | (Leased)             |   | 70,000 |   |
| Bloomsburg, PA              |   | Manufacturing            |   | (Leased)             |   | 96,000 |   |
| Bristol, IN                 |   | Manufacturing            |   | (Owned)              |   | 110,115 |   |
| Cedar City, UT              |   | Manufacturing            |   | (Leased)             |   | 38,000 |   |
| Dallas, TX                  |   | Office                   |   | (Leased)             |   | 12,400 |   |
| Denver, CO                  |   | Warehouse                |   | (Leased)             |   | 5,000 |   |
| Elkhart, IN                 |   | Manufacturing            |   | (Leased)             |   | 65,000 |   |
| Elkhart, IN                 |   | Manufacturing            |   | (Leased)             |   | 96,000 |   |
| Grand Prairie, TX           |   | Manufacturing            |   | (Leased)             |   | 45,281 |   |
| Gridley, IL                 |   | Manufacturing            |   | (Owned)              |   | 93,200 |   |
| Idabel, OK                  |   | Manufacturing            |   | (Owned)              |   | 37,440 |   |
| Jackson, GA                 |   | Manufacturing            |   | (Owned)              |   | 69,450 |   |
| Kennesaw, GA                |   | Manufacturing            |   | (Owned)              |   | 10,000 |   |
| Lancaster, PA               |   | Office and Manufacturing |   | (Owned)              |   | 220,000 |   |
| Lancaster, PA               |   | Office and Manufacturing |   | (Owned)              |   | 126,083 |   |
| Lawrenceville, GA           |   | Manufacturing            |   | (Leased)             |   | 55,000 |   |
| Loveland, CO                |   | Manufacturing            |   | (Leased)             |   | 51,362 |   |
| Mableton, GA                |   | Manufacturing            |   | (Owned)              |   | 88,000 |   |
| Mansfield, TX               |   | Manufacturing            |   | (Owned)              |   | 55,280 |   |
| Marshfield, WI              |   | Manufacturing            |   | (Owned)              |   | 28,200 |   |
| Norcross, GA                |   | Executive Offices        |   | (Leased)             |   | 3,627 |   |
| Rathdrum, ID                |   | Manufacturing            |   | (Leased)             |   | 26,190 |   |
| Romoland, CA                |   | Manufacturing            |   | (Owned)              |   | 65,500 |   |
| Sacramento, CA              |   | Manufacturing            |   | (Leased)             |   | 40,800 |   |
| Stayton, OR                 |   | Manufacturing            |   | (Leased)             |   | 35,733 |   |
| Tifton, GA                  |   | Manufacturing            |   | (Leased)             |   | 55,600 |   |
| Tifton, GA                  |   | Manufacturing            |   | (Leased)             |   | 26,934 |   |
| West Sacramento, CA         |   | Manufacturing            |   | (Leased)             |   | 70,000 |   |
| West Helena, AR             |   | Manufacturing            |   | (Owned)              |   | 230,000 |   |
| **European Roll  Coating**  |   |                     |   |                 |   |   |   |
| Corby, England              |   | Office and Manufacturing |   | (Owned)              |   | 171,000 |   |
| Roermond, The Netherlands   |   | Office and Manufacturing |   | (Owned)              |   | 208,216 |   |
| **European  Fabrication**   |   |                     |   |                 |   |   |   |
| Pudsey, England             |   | Office and Manufacturing |   | (Owned & Leased) |   | 211,200 |   |
| Andrezieux-Boutheon, France |   | Office and Manufacturing |   | (Owned)              |   | 69,968 |   |
| Montreuil-Bellay, France    |   | Office and Manufacturing |   | (Owned)              |   | 233,663 |   |

 

Management believes that the Company’s facilities,taken as a whole, have adequate productive capacity and sufficientmanufacturing equipment to conduct business at levels meeting current demand.

 

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**Item 3.**  **Legal Proceedings**

 

The Company and its subsidiaries are not currently parties to anypending legal proceedings other than such proceedings incident to its business.Management believes that such proceedings would not, individually or in theaggregate, reasonably be expected to have a material adverse effect on theconsolidated financial position, results of operations or cash flows of theCompany and its subsidiaries taken as a whole.   See further information provided in Item 1 “Business” and Item 7“Management’s Discussion and Analysis of Financial Condition and Results ofOperations.”

 

**Item 4.**  **Submission of Matters to a Vote of Security Holders**

 

There were no items submitted for vote of SecurityHolders in the quarter ended December 28, 2001.

 

**Part II**

 

**Item 5.  Market forRegistrant’s Common Equity and Related Stockholders Matters**

 

The Company issued Notes that were registeredunder the Securities Act of 1933 in March 1997.

 

There is no established public trading market forany class of common equity of the Company. As of December 28, 2001, there were 34 holders of record of theCompany’s 490,169.24 outstanding shares of common stock.

 

The Amended and Restated Credit Agreement containscertain restrictions on the payment of cash dividends.

 

During 2001, the Company sold no securities.

 

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**Item 6.**  **Selected Financial Data**

 

Set forth below are selected financial data of theCompany as of the dates and for the periods presented. The selected financialdata for each of the five years ended December 28, 2001, December 29, 2000,December 31, 1999, December 25, 1998, and December 26, 1997 were derived fromthe audited Consolidated Financial Statements of the Company.  The information contained in this tableshould be read in conjunction with Item 7 “Management’s Discussion and Analysisof Financial Condition and Results of Operations” and the ConsolidatedFinancial Statements and accompanying notes thereto included herein.

 
|                                               |   | **Year********ended********December 28,  2001** |    | **Year********ended********December 29,  2000** |   | **Year********ended********December 31,  1999** |   | **Year********ended********December 25,  1998** |    | **Year********ended********December 26,  1997** |   |
|----------------------------------------------------|--------|-------------------------------------------------|---------|-------------------------------------------------|--------|-------------------------------------------------|--------|-------------------------------------------------|---------|-------------------------------------------------|--------|
|                                               |   | ***Thousands of U.S. Dollars***                 |    |
| **Statement of Earnings Data:**                    |   |                                            |    |                                            |   |                                            |   |                                            |    |                                            |   |
| Net sales                                          |   | $                                               | 593,117 |                                            | $      | 599,479                                         |   | $                                               | 596,759 |                                            | $      | 616,219 |   | $ | 557,014 |   |
|                                               |   |                                            |    |                                            |   |                                            |   |                                            |    |                                            |   |
| Costs and expenses:                                |   |                                            |    |                                            |   |                                            |   |                                            |    |                                            |   |
| Cost of goods sold                                 |   | 477,870                                         |    | 494,330                                         |   | 479,730                                         |   | 507,752                                         |    | 454,180                                         |   |
| Selling and general                                |   | 59,230                                          |    | 54,475                                          |   | 57,986                                          |   | 49,881                                          |    | 49,239                                          |   |
| Depreciation and amortization                      |   | 17,555                                          |    | 16,569                                          |   | 13,728                                          |   | 12,326                                          |    | 11,663                                          |   |
|                                               |   | 554,655                                         |    | 565,374                                         |   | 551,444                                         |   | 569,959                                         |    | 515,082                                         |   |
| Earnings from operations                           |   | 38,462                                          |    | 34,105                                          |   | 45,315                                          |   | 46,260                                          |    | 41,932                                          |   |
|                                               |   |                                            |    |                                            |   |                                            |   |                                            |    |                                            |   |
| Interest expense                                   |   | (25,727                                         | )       | (26,376                                         | )      | (22,369                                         | )      | (24,204                                         | )       | (24,082                                         | )      |
| Interest income                                    |   | 469                                             |    | 506                                             |   | 563                                             |   | 557                                             |    | 544                                             |   |
| Other income (expense)                             |   | (2,953                                          | )       | 763                                             |   | (933                                            | )      | 524                                             |    | 1,107                                           |   |
| Earnings before income taxes                       |   | 10,251                                          |    | 8,998                                           |   | 22,576                                          |   | 23,137                                          |    | 19,501                                          |   |
| Provision for income taxes                         |   | 5,521                                           |    | 5,671                                           |   | 11,017                                          |   | 10,253                                          |    | 7,947                                           |   |
| Earnings before extraordinary item                 |   | 4,730                                           |    | 3,327                                           |   | 11,559                                          |   | 12,884                                          |    | 11,554                                          |   |
| Extraordinary item                                 |   | —                                          |    | —                                          |   | —                                          |   | —                                          |    | 1,758                                           |   |
| Net earnings                                       |   | 4,730                                           |    | 3,327                                           |   | 11,559                                          |   | 12,884                                          |    | 9,796                                           |   |
| Dividends on redeemable preference shares          |   | —                                          |    | —                                          |   | 6,381                                           |   | 5,957                                           |    | 5,191                                           |   |
| Net earnings available for shareholders            |   | $                                               | 4,730   |                                            | $      | 3,327                                           |   | $                                               | 5,178   |                                            | $      | 6,927 |   | $ | 4,605 |   |
|                                               |   |                                            |    |                                            |   |                                            |   |                                            |    |                                            |   |
| **Other Data:**                                    |   |                                            |    |                                            |   |                                            |   |                                            |    |                                            |   |
| Capital expenditures                               |   | $                                               | 8,321   |                                            | $      | 9,706                                           |   | $                                               | 13,358  |                                            | $      | 12,352 |   | $ | 7,184 |   |
| Ratio of earnings to fixed charges (1)             |   | 1.46x                                           |    | 1.27x                                           |   | 1.94x                                           |   | 1.84x                                           |    | 1.70x                                           |   |
| **Balance Sheet Data (end of period):**            |   |                                            |    |                                            |   |                                            |   |                                            |    |                                            |   |
| Working capital                                    |   | $                                               | 70,049  |                                            | $      | 79,314                                          |   | $                                               | 90,570  |                                            | $      | 88,558 |   | $ | 93,013 |   |
| Total assets                                       |   | 384,251                                         |    | 413,059                                         |   | 399,659                                         |   | 388,649                                         |    | 397,750                                         |   |
| Total long-term debt, including current maturities |   | 207,724                                         |    | 235,528                                         |   | 221,279                                         |   | 217,678                                         |    | 244,216                                         |   |
| Redeemable preference shares                       |   | —                                          |    | —                                          |   | —                                          | (3)    | 46,339                                          |    | 40,382                                          |   |
| Total shareholders' equity                         |   | 61,494                                          |    | 63,781                                          |   | 65,068                                          | (3)    | 9,665                                           |    | 3,494                                           |   |

 

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(1)           Earnings used in computing the ratio ofearnings to fixed charges consist of earnings before income taxes plus fixedcharges. Fixed charges consist of interest expense, including amortization ofdebt issuance costs and the estimated interest component of rent expense.

(2)           The results for the year ended December 26,1997, included an extraordinary loss of $1.8 million, net of taxes of $1.1million, for the write-off of deferred financing fees in connection with theamendment and restatement of the Company's Credit Agreement to, among otheritems, provide available borrowings for the acquisition of Fabral.

(3)           In December 1999, in connection with theReorganization, the 1,000,000 ordinary shares and 34,000,000 redeemablepreference shares, including accrued cumulative dividends, of EuramaxInternational Limited were cancelled. Concurrent with that cancellation, the Company issued 50,001,992 sharesof common stock to the former Euramax International Limited shareholders.

 

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**Item 7.  Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

 

The following discussion should be read inconjunction with Item 6 “Selected Financial Data” and the ConsolidatedFinancial Statements of the Company and the accompanying notes thereto includedelsewhere herein. Also, see the note preceding Part I of Item 1"Business" for additional information regarding the PrivateSecurities Litigation Reform Act.

 

**Overview**

 

The Company is an international producer ofvalue-added aluminum, steel, vinyl and fiberglass fabricated products, withfacilities strategically located in the United Kingdom ("U.K."), TheNetherlands, France and all major regions of the continental United States"U.S."  Euramax's coreproducts include specialty coated coils, aluminum recreational vehicle("RV") sidewalls, RV doors, farm and agricultural panels, roofingaccessories, metal and vinyl raincarrying systems, soffit and fascia systems,and vinyl replacement windows.  TheCompany's customers include original equipment manufacturers ("OEMs")such as RV, commercial panel and transportation industry manufacturers; ruralcontractors; home centers; manufactured housing producers; distributors;industrial and architectural contractors; and home improvement contractors.

 

Financial results for the year ended December 28,2001, compared to the year ended December 29, 2000, reflect improved sales ofrain-carrying products to the home center industry, aluminum and steel roofingand siding to rural contractors, and vinyl replacement windows to homeimprovement contractors. Results also reflect improved operating margins in theU.S., largely resulting from lower raw material costs, and productivityimprovements at the Helena, Arkansas paintline.  These conditions contributed to increase operating earnings forthe year ended December 28, 2001 to $38.5 million, from $34.1 million for theyear ended December 29, 2000. Negatively impacting the Company's results were continued weak demand inthe U.S. RV market, a decline in industrial construction in Western Europe,most notably in Germany, and continued weakness of European currencies relativeto the U.S. Dollar.

 

**Strategy**

 

A discussion of the Company's business strategy is located in Item 1"Business - Business Strategy."

 

While the Company's strategy includes identifying and acquiringbusinesses and assets that would enable it to offer complementary productsand/or expand geographic coverage, there can be no assurance that additionalacquisitions will be completed or that, if completed, such acquisitions wouldimprove the overall profitability of the Company (see "Business - RiskFactors - Acquisition Strategy"). Additionally, there can be no assurance that the Company will experiencesimilar general economic conditions that contributed to operating results forthe year ended December 28, 2001.

 

**RiskManagement**

 

The Company is exposed to market risk from changesin interest rates, exchange rates (primarily the Euro and British PoundSterling) and commodity prices. From time to time, the Company enters intocontracts for the purchase of aluminum and steel at market values in an attemptto assure a margin on specific customer orders.  Historically, the Company has not engaged in extensive hedgingactivities intended to manage long-term risks relating to movements in marketprices of steel and aluminum raw materials. However, from time to time, theCompany may establish a maximum purchase price for varying quantities of futurealuminum purchase requirements through the purchase of call options.  Additionally, as part of a risk-managementstrategy to reduce the impact of exchange rate fluctuations and/or interestrate fluctuations, the Company has historically entered into currencyagreements and interest rate agreements with major banking institutions. (See Item7A “Quantitative and Qualitative Disclosures About Market Risk”).

 

21

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Approximately 53% of the Company’s 2001 net sales were derived fromsales of aluminum products. Compared to the cost of other raw materials used bythe Company, the cost of aluminum is subject to a high degree of volatilitycaused by, among other items, the relationship of world aluminum supply toworld aluminum demand.  However, as afabricator, Euramax is less exposed to fluctuations in aluminum prices.  Historically, prices at which the Companysells aluminum products tend to fluctuate with corresponding changes in theprices paid to suppliers for aluminum raw materials.  Supplier price increases, of normal amount and frequency, cangenerally be passed to customers within two to four months. Conversely, asaluminum prices decline, corresponding price reductions are typically passed onto customers within the same time frame. Accordingly, the Company’s net salesand margins on aluminum products may fluctuate with little or no change in thevolume of aluminum shipments.

 

The Company continually scrutinizes aluminum costsand adjusts its purchasing, inventory and sales programs accordingly. As notedabove, from time to time, the Company enters into contracts for the purchase ofaluminum and steel at market values in an attempt to assure a margin onspecific customer orders. At times, high aluminum prices have led customers touse alternative products, including steel, vinyl and fiberglass. The Companybelieves that its ability to supply certain products manufactured from thesealternatives provides it with a competitive advantage over competitors who donot offer these choices.

 

**Results of Operations**

 

See Note 1 to the Consolidated FinancialStatements for a description of the basis of presentation of financialinformation.

 

The following table sets forth the Company’sConsolidated Statements of Earnings Data expressed as a percentage of netsales:

 
|                             |   | **December 28,  2001** |   | **December 29,  2000** |   | **December 31,  1999** |   |
|----------------------------------|--------|------------------------|--------|------------------------|--------|------------------------|--------|
| **Statement  of Earnings Data:** |   |                   |   |                   |   |                   |   |
| Net sales                        |   | 100.0                  | %      | 100.0                  | %      | 100.0                  | %      |
| Costs and  expenses:             |   |                   |   |                   |   |                   |   |
| Cost of goods  sold              |   | 80.6                   | %      | 82.4                   | %      | 80.4                   | %      |
| Selling and  general             |   | 10.0                   | %      | 9.1                    | %      | 9.7                    | %      |
| Depreciation and  amortization   |   | 2.9                    | %      | 2.8                    | %      | 2.3                    | %      |
| Earnings from  operations        |   | 6.5                    | %      | 5.7                    | %      | 7.6                    | %      |
| Interest  expense, net           |   | 4.3                    | %      | 4.3                    | %      | 3.7                    | %      |
| Other (income)  expense, net     |   | 0.5                    | %      | -0.1                   | %      | 0.1                    | %      |
| Earnings before  income taxes    |   | 1.7                    | %      | 1.5                    | %      | 3.8                    | %      |
| Provision for  income taxes      |   | 0.9                    | %      | 0.9                    | %      | 1.9                    | %      |
| Net earnings                     |   | 0.8                    | %      | 0.6                    | %      | 1.9                    | %      |

 

**Yearended December 28, 2001 compared to the year ended December 29, 2000**

 

The following table sets forth the net sales andearnings from operations data for the United States and Europe for the twelvemonths ended December 28, 2001 and December 29, 2000:

 

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|          |   | **Net Sales**           |    | **Earnings  from Operations** |   |
|---------------|--------|-------------------------|---------|-------------------------------|--------|
|          |   | **December  28,  2001** |    | **December  29,  2000**       |   | **Increase/********(decrease)** |   | **December  28,  2001** |   | **December  29  2000** |   | **Increase/********(decrease)** |   |
|          |   | ***In thousands***      |    |
| United States |   | $                       | 406,799 |                          | $      | 399,538 |   |  1.8% |   | $ | 22,710 |   | $ | 15,662 |   |  45.0% |   |
| Europe        |   | 186,318                 |    | 199,941                       |   | (6.8)% |   | 15,752 |   | 18,443 |   | (14.6)% |   |
| Totals        |   | $                       | 593,117 |                          | $      | 599,479 |   | (1.1)% |   | $ | 38,462 |   | $ | 34,105 |   | 12.8% |   |

* *

*NetSales.*Net sales decreased 1.1% to $593.1 million for theyear ended December 28, 2001, from $599.5 million for the year ended December29, 2000.  Net sales in the U.S.increased 1.8% to $406.8 million for the year ended December 28, 2001, from$399.5 million for the year ended December 29, 2000.  This increase in net sales in the U.S. is primarily from highersales to home centers, rural contractors and home improvement contractors.  Sales of raincarrying products andaccessories to home centers increased $18.9 million or 21.3% for the year endedDecember 28, 2001, compared to the year ended December 29, 2000.  Gutter World, acquired in April 2000 (SeeNote 2 to the Consolidated Financial Statements), accounted for $4.9 million ofthis increase.  Sales of vinylreplacement windows to home improvement contractors increased $6.0 million or32.8% for the year ended December 28, 2001, compared to the year ended December29, 2000.  The increase in sales ofvinyl replacement windows is primarily the result of increased market sharewithin the regions of the U.S. that the Company competes.  These increases were partially offset by adecline in sales to the RV and manufactured housing industries.  Lower demand from the RV industry, largely resultingfrom a weak U.S. economy, resulted in sales to the U.S. RV industry declining$14.0 million or 16.4% for the year ended December 28, 2001, compared to theyear ended December 29, 2000.  TheCompany’s U.S. subsidiaries are included in the U.S. Fabrication Segment (seeNote 13 to the Consolidated Financial Statements).

 

Excluding a decline in reported net sales of approximately $7.6 milliondue to the weakening of foreign exchange rates relative to the U.S. Dollar, netsales in Europe for the year ended December 28, 2001 decreased by 3.0%.  This decrease included a decrease in netsales in the European Roll Coating segment of 6.5% and an increase in net salesin the European Fabrication segment of 4.1% (see Note 13 to the ConsolidatedFinancial Statements).  Sales in theEuropean Roll Coating segment decreased primarily from softening demand fromindustrial consumers for painted aluminum and steel from the United Kingdom andthe Netherlands due to a slow down in industrial construction in WesternEurope. Additionally, the continued strength of the British Pound relative toother European currencies has made it difficult to export from the UnitedKingdom into Western Europe.  Sales inthe European Fabrication segment increased primarily from improved sales fromFrance to the transportation industry in Western Europe

 

*Cost ofgoods sold. *Cost ofgoods sold, as a percentage of net sales, decreased to 80.6% for the year endedDecember 28, 2001, from 82.4% for the year ended December 29, 2000.  This decrease is primarily attributable tolower raw material and labor costs.  TheCompany expects that the imposition of tariffs on steel products imported bycertain foreign producers will result in an increase in the cost of steel rawmaterials purchased by the Company. While the Company expects that it will be able to increase its sellingprices on steel products, no assurance to that effect can be given.  Therefore, the Company is subject to therisk of margin erosion resulting from the expected increase in the cost ofsteel raw materials.

 

*Sellingand general. *Sellingand general expenses, as a percentage of net sales, increased to 10.0% for theyear ended December 28, 2001, from 9.1% for the year ended December 29,2000.  This increase is primarilyattributable to an increase in advertising, product warranty, provision for baddebts and employee benefit costs, together with lower net sales.

 

*Depreciationand amortization. *Depreciationand amortization, as a percentage of net sales, was 2.9% for the year endedDecember 28, 2001, compared to 2.8% for the year ended December 29, 2000. Thisincrease is primarily the result of business acquisitions and the reduction innet sales.

 

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*Earningsfrom operations.*Earnings from operations in the U.S.increased to $22.7 million for the year ended December 28, 2001, from $15.7million for the year ended December 29, 2000. Earnings from operations in Europe decreased to $15.8 million for theyear ended December 28, 2001, from $18.4 million for the year ended December29, 2000.  The increase in earnings fromoperations in the U.S. is largely attributable to lower raw material costs,most notably for aluminum and steel, in addition to operational improvement atthe Helena, Arkansas paintline, and lower labor costs. The decrease in earningsfrom operations in Europe is partially attributable to the weakening ofEuropean currencies relative to the U.S. Dollar, which reduced reportedoperating earnings by $655.7 thousand compared to the same period in 2000.  Additionally, lower European earningsresulted from reduced sales volume, competitive pricing pressures within theindustrial construction markets in Western Europe and an increase in sellingand general expenses.

 

*Interestexpense, net.*  Netinterest expense decreased to $25.3 million for the year ended December 28,2001, from $25.9 million for the year ended December 29, 2000, primarily due tolower interest rates and lower outstanding indebtedness in the year endedDecember 28, 2001.

 

*Otherexpenses, net.* Otherexpenses increased to $3.0 million for the year ended December 28, 2001,compared to other income of $763.1 thousand for the year ended December 29,2000.  The increase in other expenses isprimarily the result of the change in fair value and related costs of theCompany’s derivative instruments that are not designated as hedges under SFAS133 (see Note 3 to the Consolidated Financial Statements).  SFAS 133 was adopted by the Companyeffective December 30, 2000.

 

*Provisionfor income taxes.*The effective rate for the provision forincome taxes was 53.9% for the year ended December 28, 2001 and 63.0% for theyear ended December 29, 2000.  Thedecrease in the effective rate is primarily due to (i) higher valuationallowances provided in 2000 due to uncertainty surrounding the future benefitof U.S. state net operating losses, which are available to offset futuretaxable income and taxes, but begin to expire in 2010, and (ii) higher earningsin 2001 mitigating the effect on the effective tax rate of permanentdifferences for non-deductible items, primarily goodwill.

 

**Yearended December 29, 2000 compared to the year ended December 31, 1999**

 

The following table sets forth the net sales andearnings from operations data for the United States and Europe for the twelvemonths ended December 29, 2000 and December 31, 1999:

 
|          |   | **Net Sales**           |    | **Earnings  from Operations** |   |
|---------------|--------|-------------------------|---------|-------------------------------|--------|
|          |   | **December  29,  2000** |    | **December  31,  1999**       |   | **Increase/********(decrease)** |   | **December  29,  2000** |   | **December  31,  1999** |   | **Increase/********(decrease)** |   |
|          |   | ***In thousands***      |    |
| United States |   | $                       | 399,538 |                          | $      | 397,437 |   | 0.5% |   | $ | 15,662 |   | $ | 27,799 |   |  (43.7)% |   |
| Europe        |   | 199,941                 |    | 199,322                       |   | 0.3% |   | 18,443 |   | 17,516 |   | 5.3 |   |
| Totals        |   | $                       | 599,479 |                          | $      | 596,759 |   | 0.5% |   | $ | 34,105 |   | $ | 45,315 |   |  (24.7)% |   |

* *

*NetSales.*Net sales increased 0.5% to $599.5 million for theyear ended December 29, 2000, from $596.8 million for the year ended December31, 1999.  Sales in the U.S. increasedprimarily from increased sales to home centers, distributors and homeimprovement contractors resulting primarily from the second quarter acquisitionsof Gutter World and Global (see Note 2 tothe Consolidated Financial Statements), as well as the 1999 acquisition ofAtlanta Metal Products, Inc. (see Note 2 to the Consolidated FinancialStatements).  These increases wereoffset by a decline in sales of steel roofing and siding to the manufacturedhousing and rural contractor markets. Additionally, after strong RV sales inthe first half of the year, rising interest rates, rising fuel costs and lowerconsumer confidence had a negative impact on end-user 

 

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demand resulting in net sales declining 2.9% forthe year ended December 29, 2000 compared to the year ended December 31, 1999.  The Company’s U.S. subsidiaries are includedin the U.S. Fabrication Segment (see Note 13 to the Consolidated FinancialStatements).

 

Excluding a decline in reported net sales of approximately $23.8million due to the weakening of foreign exchange rates relative to the U.S.Dollar, net sales in Europe for the year ended December 29, 2000 increased by12.2%.  Sales in the European RollCoating Segment (see Note 13 to the Consolidated Financial Statements)increased primarily from strong demand for painted aluminum in Europe resultingfrom general economic conditions and a healthy European RV (caravan) market.  Offsetting the increases within the EuropeanRoll Coating Segment were decreases in sales to the U.K. export marketsresulting, in part, from the continued strength of the Pound Sterling relativeto other European currencies.

 

*Cost ofgoods sold. *Cost ofgoods sold, as a percentage of net sales, increased to 82.4% for the year endedDecember 29, 2000, from 80.4% for the year ended December 31, 1999.  This increase is primarily attributable toan increase in raw material aluminum prices and freight costs compared to thesame period in the prior year.

 

*Sellingand general. *Sellingand general expenses, as a percentage of net sales, decreased to 9.1% for theyear ended December 29, 2000, from 9.7% for the year ended December 31,1999.  This decrease is primarily attributableto lower levels of spending on incentive compensation, reduced professionalfees relating to the Reorganization (see Note 1 to the Consolidated FinancialStatements for information regarding the Reorganization), and reducedinformation technology expenses.

 

*Depreciationand amortization. *Depreciationand amortization, as a percentage of net sales, was 2.8% for the year endedDecember 29, 2000, compared to 2.3% for the year ended December 31, 1999. Thisincrease is primarily attributable to additional depreciation and amortizationresulting from capital expenditures and business acquisitions.

 

*Earningsfrom operations.*Earnings from operations in the U.S.decreased to $15.7 million for the year ended December 29, 2000, from $27.8million for the year ended December 31, 1999. Earnings from operations in Europe increased to $18.4 million for theyear ended December 29, 2000, from $17.5 million for the year ended December31, 1999.  Earnings from operations inthe U.S. were negatively impacted to a larger extent by higher raw materialcosts than were earnings in Europe, as historically, the U.S. operations arenot able to pass raw material price increases to their customers as quickly asthe European operations.  Additionally,throughout 2000 there was significant market resistance in the U.S. to higherselling prices.  The ability to passalong price increases at a quicker pace in Europe, together with strongEuropean demand, enabled the increase in earnings from operations inEurope.  This increase was achieveddespite weakening European currencies, which reduced reported operatingearnings by $2.9 million compared to the year ended December 31, 1999.

 

*Interestexpense, net.*  Netinterest expense increased to $25.9 million for the year ended December 29,2000, from $21.8 million for the year ended December 31, 1999, primarily due toadditional debt used in financing the Gutter World and Global Acquisition (seeNote 2 to the Consolidated Financial Statements).

 

*Otherexpenses, net.* Otherexpenses were not significant for the**year ended December 29, 2000 and December31, 1999.

 

*Provisionfor income taxes.*The effective rate for the provision forincome taxes was 63.0% for the year ended December 29, 2000 and 48.8% for theyear ended December 31, 1999.  Theincrease in the effective rate is primarily due to valuation allowancesprovided for U.S. state net operating losses.

 

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**Liquidity and Capital Resources**

 

*Liquidity. *The Company’s primaryliquidity needs arise from debt service on indebtedness incurred in connectionwith the Acquisition, other acquisitions, and the funding of capitalexpenditures.  As of December 28, 2001,the Company had outstanding indebtedness of $207.7 million, as compared to$235.5 million as of December 29, 2000. Included in such indebtedness at December 28, 2001, was approximately$72.7 million under the Credit Agreement, consisting of $38.9 million under theTerm Loans and $33.8 million under the Revolving Credit Facility. The undrawnamount of the Revolving Credit Facility at December 28, 2001, was approximately$66.2 million, which was available for working capital and general corporatepurposes, subject to borrowing base limitations. As of December 28, 2001, $53.9million of the undrawn amount was available. On March 15, 2002, the Credit Agreement was amended and restated toincrease the Revolving Credit Facility to $110.0 million (subject to borrowingbase limitations) and extend the maturity of the facility to June 30, 2005.  In connection with this amendment,outstanding Term Loans were repaid and replaced with borrowings under theRevolving Credit Facility.  TheCompany's use of the Revolving Credit Facility to refinance outstanding termloans on March 15, 2002, significantly reduced the undrawn amount of thefacility below levels available at December 28, 2001.  Immediately after the refinancing, borrowings on the $110.0million Revolving Credit Facility were $81.2 million and $9.7 million of theundrawn amount was available.  TheCompany believes that cash generated from operations and, subject to borrowingbase limitations, borrowings under the Amended and Restated Credit Agreementwill be adequate to meet its needs for the forseeable future, although noassurance to that effect can be given. See Note 14 to the Consolidated Financial Statements for furtherinformation about the amendment and restatement of the Company’s creditagreement.

 

The Amended and Restated Credit Agreement requires the Company tomaintain specified financial ratios and meet certain financial tests includinga minimum interest coverage ratio, a minimum fixed charge coverage ratio, amaximum leverage ratio and maximum amounts of capital expenditures.

 

Principal and interest payments under the Amended and Restated CreditAgreement and interest payments on the Notes represent significant liquidityrequirements for the Company.  TheRevolving Credit Facility bears interest at floating rates.  Pursuant to an interest rate agreemententered into in January 2002 that is in place until December 31, 2004, theCompany pays a counterparty a fixed rate of interest of 3.715% on a notionalamount of $35.0 million through December 31, 2002, $25.0 million from January1, 2003 through December 31, 2003, and $15.0 million from January 1, 2004through December 31, 2004, in exchange for receiving a floating rate ofinterest of 3-month U.S. Dollar LIBOR on an equivalent notional amount.  The Notes entitle the holders to an annualfixed interest rate of 11.25%. (See Note 6 to Consolidated FinancialStatements.)  Pursuant to a currencyagreement in place until June 30, 2005, the Company pays a counterparty a fixedrate of interest of 12.63% on the notional 19.0 million Pounds Sterling valuein exchange for receiving interest of 11.25% on the notional U.S. dollar valueof $27.2 million.  This currencyagreement was entered into on February 25, 2002 to replace a similar currencyagreement that was terminated on February 1, 2002.  See Note 3 to the Consolidated Financial Statements foradditional information on the terminated currency agreement.

 

As previously noted, the Company’s leveraged financial positionrequires that a substantial portion of the Company’s cash flow from operationsbe used to pay interest on the Notes and principal and interest under theAmended and Restated Credit Agreement. Significant increases in the floatinginterest rates on the Revolving Credit Facility would result in increased debtservice requirements, which may reduce the funds available for capital expendituresand other operational needs.  Inaddition, the Company’s leveraged position may impede its ability to obtainfinancing in the future for working capital, capital expenditures and generalcorporate purposes, including acquisitions. Further, the Company’s leveraged position may make it more vulnerable toeconomic downturns and may limit its ability to withstand competitivepressures.  See Note 6 to theConsolidated Financial Statements for a discussion of restrictive debtcovenants.

 

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The Company’s primary source of liquidity is cash flows fromoperations, which are supplemented by borrowings under the Amended and RestatedCredit Agreement.  Operations providedcash of $35.5 million in the year ended December 28, 2001, compared to $28.1million in the year ended December 29, 2000, and $28.6 million for the yearended December 31, 1999.  Operating cashflow for the year ended December 28, 2001, enabled the Company to make capitalexpenditures of approximately $8.3 million and pay net interest expense of$22.4 million in 2001.  Operating cashflow for the year ended December 29, 2000 of $28.1 million, together with debtproceeds of $40.0 million and proceeds of $10.0 million from the termination ofa currency agreement enabled the Company to acquire Gutter World and Global forapproximately $45.6 million, make capital expenditures of approximately $9.7million and pay net interest expense of $24.4 million in 2000.  Operating cash flow for the year endedDecember 31, 1999 of $28.6 million and debt proceeds of $22.7 million enabledthe Company to acquire Unimet, Color Clad and AMP for approximately $22.2million, make capital expenditures of approximately $13.4 million and pay netinterest expense of $21.6 million in 1999.

 

See Note 2 to the Consolidated FinancialStatements for further information concerning acquisitions and divestitures.

 

*CapitalExpenditures.* In addition to meeting debt servicerequirements, operating cash flows have enabled the Company to invest incapital projects, which maintain manufacturing capabilities, enable compliancewith laws and regulations and prepare Euramax for future growth. The Company’scapital expenditures were $8.3 million, $9.7 million and $13.4 million in theyears ended December 28, 2001, December 29, 2000 and December 31, 1999,respectively.  Capital expenditures in2001, 2000 and 1999 include approximately $1.6 million, $1.7 million and $4.5million, respectively, for improvements to paint lines in Corby, England;Roermond, The Netherlands; and Helena, Arkansas. The paint lines arecapital-intensive operations, and will continue to require improvements andupgrades in 2002 and beyond to enhance their capabilities and efficiencies.  The balance of capital expenditures in allperiods primarily relates to purchases and upgrades of fabricating equipment,transportation and material moving equipment, and information systems.  The Company expects that approximately $3.0million to $4.0 million in capital expenditures are required annually tomaintain existing equipment and facilities. While assurance cannot be given, management expects that capitalspending in 2002 will also be devoted to projects that offer potential forinternal growth through new products and expanding existing products to newmarkets.

 

*Workingcapital management. *Workingcapital was $70.0 million as of December 28, 2001, compared to $79.3 million asof December 29, 2000.  The decrease inworking capital is primarily related to a decrease in inventory levelsresulting from a focused effort to reduce working capital levels.

 

**Inflation and Foreign Currency Translation**

 

In recent years, inflation has not had asignificant effect on the Company’s results of operations or financialcondition. The assets and liabilities of the Company’s non-U.S. subsidiariesare translated into U.S. Dollars at current exchange rates and revenues andexpenses are translated at average exchange rates.  Currency translations on export sales could be adversely affectedin the future by the relationship of the U.S. Dollar with foreign currencies.

 

**CriticalAccounting Policies**

** **

*Allowance fordoubtful accounts, inventory obsolescence and warranty reserves*

* *

The Company's significant accounting policies aredescribed in Note 3 to the Consolidated Financial Statements.  As indicated there, the Company makesestimates and assumptions that affect certain amounts reported in theconsolidated financial statements.  Theuse of estimates is significant as it relates to establishing reserves andallowances for doubtful accounts, inventory obsolescence and warrantycosts.  Estimates used to value theseamounts are based upon historical experience, specifically identifiedconditions and management expectations for the future occurrence of certainevents.  In the event that actualresults differ from these estimates or the Company adjusts these estimates infuture periods, adjustments to amounts recorded could materially impact theCompany's financial position and results of operations.

 

*Income taxes*

 

The Company's income tax accounting policy issignificant in determining financial position and results of operations.  Such policy requires the Company to estimateincome taxes in each jurisdiction in which it operates.  This involves estimating actual current taxexpense together with assessing temporary differences resulting from differenttreatment of items under generally accepted accounting principles and taxlaw.  These differences result indeferred tax assets and liabilities, which are included in the consolidatedbalance sheet of the Company.  TheCompany then must assess the likelihood that deferred tax assets will berecovered from future taxable income. To the extent that recovery is not expected, a valuation allowance isestablished.  Significant managementjudgement is required to establish such allowances as well as to determine theprovision for income taxes and deferred tax assets and liabilities.  In the event that actual results differ fromestimates, or do not reflect management judgements, it may be necessary toadjust amounts recorded in income tax accounts, which could materially impactthe Company's financial position and results of operation.

 

*Impairment ofgoodwill*

* *

At December 28, 2001, the Company had $107.3million of goodwill, net of amortization, included in its statement offinancial position.  In analyzinggoodwill for potential impairment, the Company must make judgements regardingwhether impairment indicators are present, and if they are to make assumptionsregarding future cash flows generated by the business on which the goodwill isrecorded.  If these assumptions changein the future, the Company may be required to record impairment charges thatcould materially impact the Company's financial position and results of operations.

 

 

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**Recent Accounting Pronouncements**

 

In July 2001, the FASB issued Statements of Financial AccountingStandards (SFAS) No. 142, “Goodwill and Other Intangible Assets”.  Under the new rules, goodwill and indefinitelived intangible assets are no longer amortized, but are reviewed annually forimpairment. Separable intangible assets that are not deemed to have anindefinite life will continue to be amortized over their useful lives.  The amortization provisions of SFAS No. 142apply immediately to goodwill and intangible assets acquired after June 30,2001.  With respect to goodwill andintangible assets acquired prior to July 1, 2001, the Company will adopt thenew accounting rules beginning December 29, 2001.  Management is currently assessing the financial impact SFAS No.142 will have on the Consolidated Financial Statements.

 

**Environmental Matters**

 

The Company’s U.S. and European manufacturingfacilities are subject to a range of federal, state, local and Europeanenvironmental laws and regulations (“Environmental Laws”), including thoserelating to air emissions, wastewater discharges, the handling and disposal ofsolid and hazardous waste, and the remediation of contamination associated withthe current and historic use of hazardous substances or materials. If a releaseof hazardous substances or materials occurs on or from the Company’s propertiesor any offsite disposal location used by the Company, or if contamination fromprior activities is discovered at any of the Company’s properties, the Companymay be held liable for the costs of remediation including response costs,natural resource damage and associated transaction costs. While the amount ofsuch liability could be material, the Company devotes resources to ensuringthat its operations are conducted in a manner intended to reduce such risks.

 

Based upon environmental reviews conducted (i)internally on a quarterly basis, (ii) by outside consultants on a periodicbasis, and (iii) by outside consultants in connection with the Acquisition, andassuming compliance by Alumax with its indemnification obligations under theAcquisition Agreement, the Company believes that it is currently in compliancewith, and not subject to liability under, Environmental Laws except where suchnoncompliance or liability would not reasonably be expected to have a materialadverse effect on the consolidated financial position, results of operations orcash flows of the Company and its subsidiaries taken as a whole. Pursuant tothe terms of the Acquisition Agreement, Alumax agreed to correct and to bearsubstantially all costs with respect to certain identified conditions ofpotential noncompliance and liability under Environmental Laws, none of whichcosts are currently believed to be material. Alumax’s indemnificationobligations under the Acquisition Agreement are not subject to an aggregatedollar limitation and survive indefinitely with respect to specificallyidentified environmental matters. However, with respect to all otherenvironmental matters, Alumax’s obligations are limited to $125.0 million andexpire in September 2002.

 

Liability with respect to hazardous substance ormaterial releases in the U.S. arises principally under the federalComprehensive Environmental Response, Compensation, and Liability Act of 1980,as amended (“CERCLA”) and similar state laws, which impose strict, and undercertain circumstances, retroactive, joint and several liability uponstatutorily defined classes of potentially responsible parties (“PRPs”). TheCompany has been identified as a PRP at nine National Priorities List (“NPL”)sites under CERCLA, although two of these nine sites may relate to disposal bydivisions of Alumax that have never been and are not now part of the Company.Pursuant to the terms of the Acquisition Agreement, Alumax has agreed toindemnify the Company for all of the costs associated with each of these nineNPL sites. In addition, Alumax has agreed to indemnify the Company for all ofthe costs associated with eleven additional sites listed on state hazardoussite cleanup lists, with respect to which the Company has not received anynotice of potential responsibility.

 

28

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At the Company’s Corby, England facility, Legionella was found to bepresent on site in a cooling tower at this location. An independent testinglaboratory is testing water samples for the presence of Legionella on a weeklybasis, and no further evidence of Legionella has been detected to date.  Based upon the investigation, managementbelieves that the reasonable likely outcome of this matter will not materiallyimpact the future consolidated financial position, results of operations, orcash flows of the Company.

 

The Company has made and will continue to make capital expenditures tocomply with Environmental Laws. Environmental capital expenditures for the years ended December 28,2001, December 29, 2000 and December 31, 1999 were not significant. The Companyestimates that its environmental capital expenditures will be approximately$433.7 thousand in 2002.

 

**Item7A.  Quantitative and QualitativeDisclosures about Market Risk**

 

The following discussion about the Company’srisk-management activities includes forward-looking statements that involverisk and uncertainties.  Actual resultscould differ materially from those projected in the forward-lookingstatement.  See the note preceding PartI of Item 1 “Business” for additional information regarding the PrivateSecurities Litigation Reform Act.

 

The Company is exposed to market risk from changes in interest rates,exchange rates (primarily the Euro and British Pound Sterling) and commodityprices. At certain times, the Company enters into contracts for the purchase ofaluminum and steel at market values in an attempt to assure a margin onspecific customer orders. Additionally, the Company has the option to commit topurchase a specific quantity of aluminum over a specified time period at afixed price. The Company would then be exposed for the difference between thefixed price and the market price of aluminum. Historically, the Company has notengaged in extensive hedging activities intended to manage long-term risksrelating to movements in market prices of steel and aluminum raw materials.  However, the Company has at times purchased,and expects from time to time to continue to purchase, options to buy

 

29

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aluminum at a fixed price for a portion of its anticipatedrequirements.  In addition, althoughapproximately 31% of the Company’s sales originated in Europe and were impactedby exchange rate fluctuations, the Company has not historically utilizedderivatives to manage foreign currency exchange risks related to its Europeanoperations.  However, in connection withthe Company’s risk-management strategy, the Company has historically enteredinto currency agreements and interest rate agreements with major bankinginstitutions to manage the impact of foreign currency exchange rate fluctuationsand/or interest rate fluctuations with respect to debt payments.  The agreements are utilized asrisk-management tools and not for trading purposes.  Currency agreements involve exchanges of interest payments indiffering currencies and provide for the exchange of principal amounts atmaturity.   Interest rate agreementsinvolve exchanges of interest payments at differing interest rates and cap thehighest rate of interest to be paid on specified notional amounts of debt.  The amounts of interest paid or receivedeffectively limit the interest payment exposure of the Company’s debtcommitments.  The fair value of thecurrency agreements and interest rate agreements are derived from valuationmodels based upon recognized financial principals and estimates about relevantfuture market conditions.  The amountsexchanged are based upon the notional amounts of the currency agreements andinterest rate agreements, as well as on the other terms of the agreements,which relate to interest payments and exchange rates. For detailed informationon the terms and fair values of the Company’s financial instruments andderivative instruments, see Note 3 to Consolidated Financial Statements.

 

**Interest Rate Risk**

 

This analysis presents the hypothetical loss infair value and increase in interest expense of those financial instruments andderivative instruments held by the Company at December 28, 2001, which aresensitive to changes in interest rates. All other factors remaining unchanged, a hypothetical 10 percent increasein interest rates would decrease the fair value of the Company’s fixed-rate,long-term debt outstanding at December 28, 2001, by approximately $5.4 million,based upon the use of a discounted cash flow model, as compared to ahypothetical decrease in fair value of approximately $6.7 million at December29, 2000. A hypothetical 10 percent increase in interest rates for one year onthe Company’s variable rate financial instruments and derivative instrumentswould increase interest expense by approximately $359.2 thousand in 2002, ascompared to a hypothetical increase in interest expense of approximately $919.0thousand in 2001.

 

**Foreign Currency Exchange Risk**

 

This analysis presents the hypothetical increasein foreign exchange loss and increase in interest expense related to thosefinancial instruments and derivative instruments held by the Company atDecember 28, 2001, which are sensitive to changes in foreign currency exchangerisks.  A hypothetical 10 percent decreasein foreign currency exchange rates would increase the Company’s foreignexchange loss by approximately $940.9 thousand for those financial instrumentsand derivative instruments affected by foreign currency exchange fluctuations,as compared to a hypothetical increase in foreign exchange loss ofapproximately $844.2 thousand for the year ended December 29, 2000.  All other factors remaining unchanged, ahypothetical 10 percent increase in foreign currency exchange rates for oneyear would increase interest expense by approximately $485.1 thousand in 2002for those financial instruments and derivative instruments affected by foreigncurrency exchange fluctuations, as compared to a hypothetical increase ininterest expense of approximately $497.3 thousand calculated in the prior yearended December 29, 2000.

 

30

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**Item 8.  FinancialStatements and Supplementary Data**

 

**Report of Independent Auditors**

 

The Board of Directors and Shareholders,

Euramax International, Inc. and subsidiaries

 

We have audited the accompanying consolidated balancesheet of Euramax International, Inc., and subsidiaries as of December 28, 2001and December 29, 2000, and the related consolidated statements of earnings,changes in equity, and cash flows for the years then ended.  Our audit also included the relatedfinancial statement schedule listed in the index at Item 14 (a).  These financial statements and schedule arethe responsibility of the Company’s management.  Our responsibility is to express an opinion on these financialstatements and schedule based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the consolidated financialposition of Euramax International, Inc. and subsidiaries at December 28, 2001and December 29, 2000, and the consolidated results of their operations andcash flows for the years ended December 28, 2001 and December 29, 2000, inconformity with accounting principles generally accepted in the United States.Also, in our opinion, the related financial statement schedule, when consideredin relation to the basic financial statements taken as a whole, presents fairlyin all material respects the information set forth therein.

 

As discussed in Note 3 to the financial statements, in 2001 the Companychanged its method of accounting for derivative financial instruments.

 
|   | /s/  Ernst  & Young LLP |
|--------|----------------------------------|

 

Atlanta, Georgia

February 22, 2002, except as to Note 14 as to which the date is March15, 2002

 

31

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**Report of Independent Accountants**

 

To the Board of Directors and Shareholders,

Euramax International, Inc.

 

In our opinion, the accompanying consolidatedfinancial statements listed in the index appearing under Item 14 (a) (1)present fairly, in all material respects, the results of operations and cashflows for the year ended December 31, 1999 in conformity with accounting principlesgenerally accepted in the United States of America.  In addition, in our opinion, the financial statement schedulelisted in the index appearing under Item 14 (a) (2) presents fairly, in allmaterial respects, the 1999 information set forth therein when read inconjunction with the related consolidated financial statements.  These financial statements and financialstatement schedule are the responsibility of the Company’s management; ourresponsibility is to express an opinion on these financial statements andfinancial statement schedule based on our audit.  We conducted our audit of these statements in accordance withgenerally accepted auditing standards in the United States of America, whichrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement.  An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall financial statementpresentation.  We believe that our auditprovides a reasonable basis for the opinion expressed above.

 
| /s/ PRICEWATERHOUSECOOPERS LLP |   |
|--------------------------------|--------|

 

Atlanta, Georgia

February 22, 2000

 

32

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**EuramaxInternational, Inc. and Subsidiaries**

**ConsolidatedStatements of Earnings**

** **
|                                            |   | **For the year********ended********December 28,  2001** |    | **For the year********ended********December 29,**** ****2000** |   | **For the year  ended********December 31,  1999** |   |
|-------------------------------------------------|--------|---------------------------------------------------------|---------|---------------------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                            |   | ***Thousands of U.S. Dollars***                         |    |
| Net sales                                       |   | $                                                       | 593,117 |                                                                | $      | 599,479                                           |   | $ | 596,759 |   |
|                                            |   |                                                    |    |                                                                |   |                                              |   |
| Costs and  expenses:                            |   |                                                    |    |                                                                |   |                                              |   |
| Cost of goods  sold                             |   | 477,870                                                 |    | 494,330                                                             |   | 479,730                                           |   |
| Selling and  general                            |   | 59,230                                                  |    | 54,475                                                              |   | 57,986                                            |   |
| Depreciation and  amortization                  |   | 17,555                                                  |    | 16,569                                                              |   | 13,728                                            |   |
| Earnings from  operations                       |   | 38,462                                                  |    | 34,105                                                              |   | 45,315                                            |   |
|                                            |   |                                                    |    |                                                                |   |                                              |   |
| Interest  expense, net                          |   | (25,258                                                 | )       | (25,870                                                             | )      | (21,806                                           | )      |
| Other income  (expense), net                    |   | (2,953                                                  | )       | 763                                                                 |   | (933                                              | )      |
| Earnings before  income taxes                   |   | 10,251                                                  |    | 8,998                                                               |   | 22,576                                            |   |
| Provision for  income taxes                     |   | 5,521                                                   |    | 5,671                                                               |   | 11,017                                            |   |
| Net earnings                                    |   | 4,730                                                   |    | 3,327                                                               |   | 11,559                                            |   |
| Dividends on  redeemable preference shares      |   | —                                                  |    | —                                                              |   | 6,381                                             |   |
| Net earnings  available for common shareholders |   | $                                                       | 4,730   |                                                                | $      | 3,327                                             |   | $ | 5,178 |   |

 

The accompanying notesare an integral part of these consolidated financial statements.

 

33

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**EuramaxInternational, Inc. and Subsidiaries**

**ConsolidatedBalance Sheets**

 
|                                                                                                                   |   | **December  28,  2001**                                  |    | **December 29,  2000** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|---------|------------------------|--------|
|                                                                                                                   |   | ***Thousands of U.S. Dollars (except share data)*** |    |
| **ASSETS**                                                                                                             |   |                                                     |    |                   |   |
| Current assets:                                                                                                        |   |                                                     |    |                   |   |
| Cash and  equivalents                                                                                                  |   | $                                                        | 5,897   |                   | $      | 8,134 |   |
| Accounts  receivable, less allowance for doubtful accounts (2001 — $3,938; 2000 —  $2,973)                   |   | 77,257                                                   |    | 73,721                 |   |
| Inventories                                                                                                            |   | 64,114                                                   |    | 81,215                 |   |
| Deferred income  taxes                                                                                                 |   | 3,909                                                    |    | 2,677                  |   |
| Other current  assets                                                                                                  |   | 1,411                                                    |    | 2,144                  |   |
| Total current  assets                                                                                                  |   | 152,588                                                  |    | 167,891                |   |
| Property, plant  and equipment, net                                                                                    |   | 110,845                                                  |    | 119,218                |   |
| Goodwill, net of  accumulated amortization (2001 — $16,492; 2000 — $11,895)                                  |   | 107,258                                                  |    | 113,324                |   |
| Deferred income  taxes                                                                                                 |   | 6,886                                                    |    | 5,615                  |   |
| Other assets                                                                                                           |   | 6,674                                                    |    | 7,011                  |   |
|                                                                                                                   |   | $                                                        | 384,251 |                   | $      | 413,059 |   |
|                                                                                                                   |   |                                                     |    |                   |   |
| **LIABILITIES AND SHAREHOLDERS'  EQUITY**                                                                              |   |                                                     |    |                   |   |
| Current  liabilities:                                                                                                  |   |                                                     |    |                   |   |
| Cash overdrafts                                                                                                        |   | $                                                        | 1,419   |                   | $      | 1,709 |   |
| Accounts payable                                                                                                       |   | 53,439                                                   |    | 57,975                 |   |
| Accrued expenses                                                                                                       |   | 19,700                                                   |    | 14,579                 |   |
| Accrued interest  payable                                                                                              |   | 4,536                                                    |    | 4,030                  |   |
| Income taxes  payable                                                                                                  |   | 2,598                                                    |    | 7,981                  |   |
| Deferred income  taxes                                                                                                 |   | 847                                                      |    | 56                     |   |
| Current  maturities of long-term debt                                                                                  |   | —                                                   |    | 2,247                  |   |
| Total current  liabilities                                                                                             |   | 82,539                                                   |    | 88,577                 |   |
| Long-term debt,  less current maturities                                                                               |   | 207,724                                                  |    | 233,281                |   |
| Commitments and  contingencies                                                                                         |   | —                                                   |    | —                 |   |
| Deferred income  taxes                                                                                                 |   | 16,563                                                   |    | 16,952                 |   |
| Other  liabilities                                                                                                     |   | 15,931                                                   |    | 10,468                 |   |
| Total  liabilities                                                                                                     |   | 322,757                                                  |    | 349,278                |   |
| Shareholders' equity:                                                                                                  |   |                                                     |    |                   |   |
| Class A common  stock — $1.00 par value; 600,000 shares authorized, 455,673.11 issued and  445,822.44 outstanding |   | 456                                                      |    | 456                    |   |
| Class B  convertible common stock — $1.00 par value; 600,000 shares authorized,  44,346.80 issued and outstanding |   | 44                                                       |    | 44                     |   |
| Additional  paid-in capital                                                                                            |   | 53,220                                                   |    | 53,220                 |   |
| Common stock in  treasury, at cost — 9,850.67 shares                                                              |   | (1,581                                                   | )       | (1,581                 | )      |
| Retained  earnings                                                                                                     |   | 24,582                                                   |    | 19,852                 |   |
| Accumulated  other comprehensive loss                                                                                  |   | (15,227                                                  | )       | (8,210                 | )      |
| Total  shareholders' equity                                                                                            |   | 61,494                                                   |    | 63,781                 |   |
|                                                                                                                   |   | $                                                        | 384,251 |                   | $      | 413,059 |   |

 

The accompanying notesare an integral part of these consolidated financial statements.

 

34

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**EuramaxInternational, Inc. and Subsidiaries**

**ConsolidatedStatements of Changes in Equity**

 
|                                                                        |   | **Common********Stock**          |   | **Additional********Paid-in********Capital** |   | **Ordinary********and********Non-voting********Shares** |   | **Treasury********Stock** |   | **Retained********Earnings** |   | **Accumulated********Other********Comprehensive**** ****Income (Loss)** |   | **Totals** |   |
|-----------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------|--------|------------------------------|--------|------------------------------------------------------------------------------|--------|------------|--------|
|                                                                        |   | ***Thousands of U.S.  Dollars*** |   |
| Balance at December 25, 1998                                                |   | —                           |   | —                                       |   | 1,000                                                   |   | —                    |   | 11,347                       |   | (2,682                                                                       | )      | 9,665      |   |
|                                                                        |   |                             |   |                                         |   |                                                    |   |                      |   |                         |   |                                                                         |   |       |   |
| Comprehensive income:                                                       |   |                             |   |                                         |   |                                                    |   |                      |   |                         |   |                                                                         |   |       |   |
| Net earnings for 1999                                                       |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | 11,559                       |   | —                                                                       |   | 11,559     |   |
| Foreign currency translation adjustment                                     |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | —                       |   | (4,480                                                                       | )      | (4,480     | )      |
| Minimum pension liability, net of taxes                                     |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | —                       |   | 1,985                                                                        |   | 1,985      |   |
| Comprehensive income                                                        |   |                             |   |                                         |   |                                                    |   |                      |   |                         |   |                                                                         |   | 9,064      |   |
| Dividends accrued on redeemable preference shares                           |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | (6,381                       | )      | —                                                                       |   | (6,381     | )      |
| Cancel dividends accrued on redeemable preference shares                    |   | —                           |   | 18,720                                       |   | —                                                  |   | —                    |   | —                       |   | —                                                                       |   | 18,720     |   |
| Cancel shares of Euramax International Limited                              |   | —                           |   | —                                       |   | (1,000                                                  | )      | —                    |   | —                       |   | —                                                                       |   | (1,000     | )      |
| Issue shares of Euramax International, Inc. pursuant to the  Reorganization |   | 500                              |   | 34,500                                       |   | —                                                  |   | —                    |   | —                       |   | —                                                                       |   | 35,000     |   |
| Balance at December 31, 1999                                                |   | 500                              |   | 53,220                                       |   | —                                                  |   | —                    |   | 16,525                       |   | (5,177                                                                       | )      | 65,068     |   |
|                                                                        |   |                             |   |                                         |   | —                                                  |   | —                    |   |                         |   |                                                                         |   |       |   |
| Comprehensive income:                                                       |   |                             |   |                                         |   | —                                                  |   | —                    |   |                         |   |                                                                         |   |       |   |
| Net earnings for 2000                                                       |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | 3,327                        |   | —                                                                       |   | 3,327      |   |
| Foreign currency translation adjustment                                     |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | —                       |   | (1,444                                                                       | )      | (1,444     | )      |
| Minimum pension liability, net of taxes                                     |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | —                       |   | (1,589                                                                       | )      | (1,589     | )      |
| Comprehensive income                                                        |   | —                           |   |                                         |   |                                                    |   |                      |   | —                       |   |                                                                         |   | 294        |   |
| Repurchase of common stock                                                  |   | —                           |   | —                                       |   | —                                                  |   | (1,581                    | )      | —                       |   | —                                                                       |   | (1,581     | )      |
| Balance at December 29, 2000                                                |   | 500                              |   | 53,220                                       |   | —                                                  |   | (1,581                    | )      | 19,852                       |   | (8,210                                                                       | )      | 63,781     |   |
|                                                                        |   |                             |   |                                         |   |                                                    |   |                      |   |                         |   |                                                                         |   |       |   |
| Comprehensive income:                                                       |   |                             |   |                                         |   |                                                    |   |                      |   |                         |   |                                                                         |   |       |   |
| Net earnings for 2001                                                       |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | 4,730                        |   | —                                                                       |   | 4,730      |   |
| Foreign currency translation adjustment                                     |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | —                       |   | (2,151                                                                       | )      | (2,151     | )      |
| Minimum pension liability, net of taxes                                     |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | —                       |   | (4,501                                                                       | )      | (4,501     | )      |
| Loss on derivative instruments, net of taxes                                |   | —                           |   | —                                       |   | —                                                  |   | —                    |   | —                       |   | (365                                                                         | )      | (365       | )      |
| Comprehensive income                                                        |   |                             |   |                                         |   |                                                    |   |                      |   |                         |   |                                                                         |   | (2,287     | )      |
| Balance at December 28, 2001                                                |   | $                                | 500    |                                         | $      | 53,220                                                  |   | $                         | — |                         | $      | (1,581                                                                       | )      | $          | 24,582 |   | $ | (15,227 | ) | $ | 61,494 |   |
|                                                                             |        |                                  |        |                                              |        |                                                         |        |                           |        |                              |        |                                                                              |        |            |        |  |  |  |  |  |  |  |

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

35

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**EuramaxInternational, Inc. and Subsidiaries**

**ConsolidatedStatements of Cash Flows**

 
|                                                                         |   | **For the year********ended********December 28,  2001** |       | **For the year********ended********December 29,********2000** |   | **For the year  ended********December 31,********1999** |   |
|------------------------------------------------------------------------------|--------|---------------------------------------------------------|------------|---------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                         |   | ***Thousands of U.S. Dollars***                         | ** ** |
| Cash flows from  operating activities:                                       |   |                                                    |       |                                                          |   |                                                    |   |
| Net earnings                                                                 |   | $                                                       | 4,730      |                                                          | $      | 3,327                                                   |   | $ | 11,559 |   |
| Reconciliation  of net earnings to net cash provided by operating activites: |   |                                                    |       |                                                          |   |                                                    |   |
| Depreciation and  amortization                                               |   | 17,555                                                  |       | 16,569                                                        |   | 13,728                                                  |   |
| Amortization of  deferred financing fees                                     |   | 1,133                                                   |       | 1,182                                                         |   | 1,080                                                   |   |
| Provision for  doubtful accounts                                             |   | 1,763                                                   |       | 542                                                           |   | 283                                                     |   |
| Foreign exchange  (gain) loss                                                |   | (204                                                    | )          | —                                                        |   | 729                                                     |   |
| Loss (gain) on  sale of assets                                               |   | 124                                                     |       | (1,108                                                        | )      | (146                                                    | )      |
| Deferred income  taxes                                                       |   | 29                                                      |       | (305                                                          | )      | 3,977                                                   |   |
| Changes in  operating assets and liabilities (excluding acquisitions):       |   |                                                    |       |                                                          |   |                                                    |   |
| Accounts  receivable                                                         |   | (7,150                                                  | )          | 5,542                                                         |   | 491                                                     |   |
| Inventories                                                                  |   | 16,007                                                  |       | 1,922                                                         |   | (6,260                                                  | )      |
| Other current  assets                                                        |   | 716                                                     |       | (426                                                          | )      | (534                                                    | )      |
| Accounts payable  and other current liabilities                              |   | 2,823                                                   |       | (485                                                          | )      | (37                                                     | )      |
| Income taxes  payable                                                        |   | (4,861                                                  | )          | 4,174                                                         |   | 1,395                                                   |   |
| Other noncurrent  assets and liabilities                                     |   | 2,836                                                   |       | (2,847                                                        | )      | 2,341                                                   |   |
| Net cash  provided by operating activities                                   |   | 35,501                                                  |       | 28,087                                                        |   | 28,606                                                  |   |
| Cash flows from  investing activities:                                       |   |                                                    |       |                                                          |   |                                                    |   |
| Proceeds from  sale of assets                                                |   | 1,164                                                   |       | 409                                                           |   | 706                                                     |   |
| Purchases of  businesses                                                     |   | —                                                  |       | (45,777                                                       | )      | (22,161                                                 | )      |
| Capital  expenditures                                                        |   | (8,321                                                  | )          | (9,706                                                        | )      | (13,358                                                 | )      |
| Net cash used in  investing activities                                       |   | (7,157                                                  | )          | (55,074                                                       | )      | (34,813                                                 | )      |
| Cash flows from  financing activities:                                       |   |                                                    |       |                                                          |   |                                                    |   |
| Changes in cash  overdrafts                                                  |   | (290                                                    | )          | (301                                                          | )      | 496                                                     |   |
| Net (repayments)  borrowings on revolving credit facility                    |   | (2,774                                                  | )          | (18,928                                                       | )      | 22,703                                                  |   |
| Repayment of  long-term debt                                                 |   | (22,989                                                 | )          | (6,463                                                        | )      | (18,535                                                 | )      |
| Proceeds from  long-term debt                                                |   | —                                                  |       | 40,000                                                        |   | —                                                  |   |
| Proceeds from  settlement of currency agreements                             |   | —                                                  |       | 10,020                                                        |   | —                                                  |   |
| Payment to  terminate interest rate swap                                     |   | (3,160                                                  | )          | —                                                        |   | —                                                  |   |
| Deferred  financing fees                                                     |   | —                                                  |       | (1,000                                                        | )      | —                                                  |   |
| Credit Agreement  amendment fee                                              |   | (405                                                    | )          | —                                                        |   | —                                                  |   |
| Purchases of  treasury stock                                                 |   | —                                                  |       | (1,581                                                        | )      | —                                                  |   |
| Net cash  provided by (used in) financing activities                         |   | (29,618                                                 | )          | 21,747                                                        |   | 4,664                                                   |   |
| Effect of  exchange rate changes on cash                                     |   | (963                                                    | )          | (11                                                           | )      | (4,116                                                  | )      |
| Net (decrease)  increase in cash and equivalents                             |   | (2,237                                                  | )          | (5,251                                                        | )      | (5,659                                                  | )      |
| Cash and  equivalents at beginning of period                                 |   | 8,134                                                   |       | 13,385                                                        |   | 19,044                                                  |   |
| Cash and equivalents  at end of period                                       |   | $                                                       | 5,897      |                                                          | $      | 8,134                                                   |   | $ | 13,385 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements.

 

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|                                                                                                                                          |   | **For the year  ended********December 28,********2001** |   | **For the year**** ****ended********December 29,********2000** |   | **For the year**** ****ended********December 31,********1999** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
|                                                                                                                                          |   | ***Thousands of U.S. Dollars***                         |   |
| Noncash  financing and investing activities:                                                                                                  |   |                                                    |   |                                                                |   |                                                                |   |
| Euramax  International Limited cancelled 34,000,000 preference shares, 1,000,000  ordinary shares and accrued preference dividends of $18,720 |   | $                                                       | — |                                                                | $      | —                                                              |   | $ | 53,720 |   |
| Euramax  International, Inc. issued 50,001,992 shares common stock to former Euramax  International Limited shareholders                      |   | $                                                       | — |                                                                | $      | —                                                              |   | $ | 500 |   |
| Dividends  accrued on redeemable preference shares                                                                                            |   | $                                                       | — |                                                                | $      | —                                                              |   | $ | 6,381 |   |
| Payable for  certain non-compete agreements associated with purchase of business                                                              |   | $                                                       | — |                                                                | $      | —                                                              |   | $ | 500 |   |
| Supplemental  cash flow information:                                                                                                          |   |                                                    |   |                                                                |   |                                                                |   |
| Income taxes  paid, net                                                                                                                       |   | $                                                       | 9,512  |                                                                | $      | 3,238                                                               |   | $ | 7,029 |   |
| Interest paid,  net                                                                                                                           |   | $                                                       | 22,390 |                                                                | $      | 24,394                                                              |   | $ | 21,601 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements.

 

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**EuramaxInternational, Inc. and Subsidiaries**

**Notes toConsolidated Financial Statements**

**(Thousandsof U.S. Dollars except share data)**

 

**1.  Basis ofPresentation:**

 

Euramax International, Inc. is an international producer of value-addedaluminum, steel, vinyl and fiberglass fabricated products with facilitiesstrategically located in the United Kingdom (“U.K.”), The Netherlands, France,and all major regions of the continental United States (“U.S.”). Euramax’s coreproducts include specialty coated coils, aluminum recreational vehicle (“RV”)sidewalls, RV doors, farm and agricultural panels, metal and vinyl raincarryingsystems, roofing accessories, soffit and fascia systems, and vinyl replacementwindows.  The Company’s customersinclude original equipment manufacturers (“OEMs”) such as RV, commercial panelmanufacturers and transportation industry manufacturers; rural contractors;home centers; manufactured housing producers; distributors; industrial andarchitectural contractors; and home improvement contractors. The “Company” or“Euramax” refers to Euramax International, Inc. and Subsidiaries, collectively.

 

The Company was organized by an investor group to acquire, through itswholly owned subsidiaries, certain portions of the fabricated productsoperations of Alumax Inc. (the “Acquisition”). Alumax Inc. was acquired by Aluminum Company of America in May 1998, andis hereafter referred to as “Alumax.” The Acquisition was completed September25, 1996. In December 1999, the Company completed a reorganization (the“Reorganization”) whereby Euramax International, Inc., a Delaware corporation, waspositioned as the top holding company. Prior to the Reorganization, the parent company was EuramaxInternational Limited (formerly Euramax International plc), a company organizedunder the laws of England and Wales.

 

The Reorganization was accomplished, in part, under section 425 of theUnited Kingdom Companies Act 1985, a U.K. judicial proceeding requiring theconsent of the registered holders of the Company’s Notes (defined in Note 6),the lenders under the Company’s Credit Agreement (defined in Note 6), and theholders of each class of shares of Euramax. As a result of the Reorganization, the new U.S. holding company of thegroup, Euramax International, Inc., is the reporting company for theconsolidated group.  In addition, thenew U.S. holding company, two new U.K. intermediate holding companies andAmerimax Fabricated Products, Inc., an intermediate U.S. holding company, wereadded as guarantors on the Company’s Notes, and certain covenants in theCompany’s Notes were amended.  The Reorganization did not result in a newbasis of accounting.

 

Per share data has not been presented since suchdata provides no useful information as the shares of the Company are closelyheld.

 

**2.  Acquisitions and Divestitures:**

 

On April 10, 2000 (the “Acquisition Date”), the Company’s wholly ownedsubsidiary Amerimax Home Products, Inc. acquired substantially all of theassets and assumed certain liabilities of Gutter World, Inc. and GlobalExpanded Metals, Inc., companies under common control, (“Gutter World” and “Global”,respectively) (the “Gutter World and Global Acquisition”).  The purchase price, including approximately$372.2 thousand in acquisition-related fees and expenses, was approximately$45.6 million in cash, plus the assumption of approximately $2.6 million ofliabilities.  Gutter World manufacturesraincarrying accessories, such as gutter guards, water diverters and downspoutstrainers, as well as door guards sold primarily to home centers. Globalmanufactures expanded metal products.

 

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The results of operations of Gutter World and Global are included inthe Consolidated Statement of Earnings from the Acquisition Date.

 

The Gutter World and Global Acquisition wasfinanced through borrowings of approximately $5.6 million under the RevolvingCredit Facility and $40.0 million under the Term Loans (defined in Note6).  Such borrowings were availableunder the Credit Agreement which was amended to provide additional Term Loansof $40.0 million (see Note 6).  TheCompany allocated the purchase price based on the fair value of the assetsacquired and liabilities assumed with the remainder allocated to goodwill,which is being amortized on a straight-line basis over 20 years.

 

The following unaudited pro forma data present theresults of operations for the year ended December 29, 2000 and December 31,1999, as though the Gutter World and Global Acquisition had been completed onthe first day of the fiscal year, and assume that there are no other changes inoperations of the Company. Such pro forma information includes adjustments tointerest expense; changes in amortization of goodwill relating to theallocation of the purchase price; elimination of the effect of transactionsbetween Gutter World and a Euramax subsidiary and between Gutter World andGlobal; and the income tax effect related to these items.  The pro forma results are not necessarilyindicative of the financial results that might have occurred had the GutterWorld and Global Acquisition actually taken place on the first day of thefiscal year or of the future results of operations.  Certain Financial Statements and Exhibits for the Gutter Worldand Global Acquisition can be found in the Company’s Current Report on Form8-K, filed April 24, 2000.

 
|                          |   | **Year ended********December 29, 2000** |    | **Year ended  December 31, 1999** |   |
|-------------------------------|--------|-----------------------------------------|---------|-----------------------------------|--------|
| Net sales                     |   | $                                       | 603,632 |                              | $      | 619,943 |   |
| Earnings before  income taxes |   | 8,085                                   |    | 21,416                            |   |
| Net earnings                  |   | 2,769                                   |    | 10,851                            |   |
|                               |        |                                         |         |                                   |        |  |  |

 

On February 5, 1999, the Company’s wholly owned subsidiary AmerimaxHome Products, Inc. purchased certain assets related to the building materialsbusiness of Unimet Manufacturing, Inc. (“Unimet”) for approximately $3.3million, including transaction expenses of approximately $135.4 thousand.  Approximately $2.8 million was paid in cash.  The remaining purchase price of $500.0thousand, representing consideration for certain non-compete agreements, isbeing paid in equal installments over five years.

 

On April 23, 1999, the Company’s wholly owned subsidiary Euramax CoatedProducts Limited purchased all of the issued and outstanding capital stock ofColor Clad plc (“Color Clad”) for approximately $3.8 million, includingtransaction expenses of approximately $171.5 thousand.

 

On June 3, 1999, the Company’s wholly owned subsidiary Amerimax FabricatedProducts, Inc. purchased all of the issued and outstanding capital stock ofAtlanta Metal Products, Inc. (“AMP”) for approximately $15.6 million, excludingcash and including approximately $641.0 thousand of transaction expenses.

 

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The Unimet, Color Clad and AMP acquisitions were financed throughborrowings under the Revolving Credit Facility (defined in Note 6).  The unaudited pro forma results of theseacquisitions are not material.  Thepurchase prices of the above acquisitions have been allocated to the acquiredassets and liabilities based upon their estimated fair market values at theacquisition dates under the purchase method of accounting, with the remainderallocated to goodwill.  Goodwill isbeing amortized on a straight-line basis over periods ranging from 20 to 30years.

 

**3.  Summary ofSignificant Accounting Policies:**

 

**Principles of Consolidation**

 

The consolidated financial statements of theCompany include the accounts of the Company and all its subsidiaries.  All significant intercompany accounts andtransactions have been eliminated in consolidation.

 

**Fiscal Year**

 

The Company operates on a 52 or 53 week fiscalyear ending on the last Friday in December. The Company’s fiscal years consisted of 52 weeks, 52 weeks and 53 weeksfor the years ended December 28, 2001, December 29, 2000 and December 31, 1999,respectively.

 

**Use of Estimates**

 

The preparation of financial statements inconformity with accounting principles generally accepted in the United Statesrequires management to make estimates and assumptions that may affect thereported amounts of certain assets and liabilities and disclosure ofcontingencies at the date of the financial statements and the reported amountsof revenues and expenses during the reporting period. Actual results coulddiffer from those estimates, and the differences could be material.

 

**Cash and Equivalents**

 

The Company considers all highly liquidinvestments with an initial maturity of three months or less to be cashequivalents. Certain cash overdrafts of the Company have been netted withpositive cash balances held with the same financial institutions.

 

**Inventories**

 

Inventories are stated at the lower of cost ormarket, with cost determined under the first-in, first-out (“FIFO”) method.

 

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**Property, Plant and Equipment**

 

Property, plant and equipment is recorded at cost.Repairs and maintenance costs are generally expensed unless they extend theuseful lives of assets.  Depreciationand amortization of property, plant and equipment is computed principally onthe straight-line method over the estimated useful lives of the assets rangingfrom 5 to 10 years for equipment and 25 years for buildings. Gains orlosses related to the disposition of property, plant and equipment are chargedto other income or expense when incurred. Also, when events or changes incircumstances indicate that the carrying value of an asset may not berecoverable, management assesses whether there has been a permanent impairmentin the value of the asset by comparing the estimated undiscounted future cashflows expected to result from the use of the asset and its eventual dispositionto the carrying amount of the asset.  Ifthe expected future cash flows are less than the carrying amount of the asset,an impairment loss is recognized.

 

**Goodwill**

 

Goodwill is amortized on a straight-line basisover periods ranging from 20 to 30 years. The Company periodically reviews the amortization period to determine ifevents and circumstances warrant revised estimates of the useful lives. Thefactors considered by management in the assessment include operating results,trends and prospects, as well as the effects of obsolescence, demand,competition and other economic factors. As appropriate, management assesseswhether there has been a permanent impairment in the value of goodwill bycomparing anticipated undiscounted future cash flows from operating activitieswith the carrying value of goodwill. If the carrying value of goodwill were toexceed the anticipated undiscounted future cash flows from operatingactivities, an impairment charge would be recorded equal to the excess of thenet carrying value over the fair value of the goodwill.

 

**Financial Instruments and Risk Management**

 

Effective December 30, 2000, the Company adoptedSFAS 133, *Accountingfor Derivative Instruments and Hedging Activities*, as amended bySFAS 137 and SFAS 138.  These statementsrequire the Company to recognize all derivative instruments on the balancesheet at fair value.  The accounting forchanges in the fair value of a derivative instrument depends on whether it hasbeen designated and qualifies as part of a hedging relationship and further, onthe type of hedging relationship.  Forthose derivative instruments that are designated and qualify as hedginginstruments, a company must designate the hedging instrument, based upon theexposure being hedged, as a fair value hedge, cash flow hedge or a hedge of netinvestment in a foreign operation.

 

For derivative instruments that are designated andqualify as a fair value hedge, the gain or loss on the derivative instrument aswell as the offsetting gain or loss on the hedged item attributable to thehedged risk are recognized in current earnings during the period of the changein fair values.  For derivativeinstruments that are designated and qualify as a cash flow hedge, the effectiveportion of the gain or loss on the derivative instrument is reported as acomponent of other comprehensive income and reclassified into earnings in thesame period or periods during which the hedged transaction affectsearnings.  The remaining gain or loss onthe derivative instrument in excess of the cumulative change in the presentvalue of future cash flows of the hedged item, if any, is recognized in currentearnings during the period of change. For derivative instruments that are designated and qualify as a hedge ofa net investment in a foreign operation, the gain or loss is reported in othercomprehensive income as part of the cumulative translation adjustment to theextent it is effective.  For derivativeinstruments not designated as hedging

 

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instruments, the gain or loss is recognized incurrent earnings during the period of change. Should an agreement be terminated while the underlying remainsoutstanding, the gain or loss would be deferred and amortized over the shorterof the remaining life of the underlying or the agreement.

 

The Company uses derivative financial instrumentsprimarily to reduce its exposure to fluctuations in interest rates and foreignexchange rates and, to a lesser extent, to reduce its exposure to fluctuationsin commodity prices.  When entered into,the Company formally designates and documents the financial instrument as ahedge of a specific underlying exposure, as well as the risk managementobjectives and strategies for undertaking the hedge transaction.  Derivatives are recorded in the balancesheet at fair value in either other assets or other liabilities.  The earnings impact resulting from thederivative instruments is recorded in the same line item within the statementof earnings as the underlying exposure being hedged.  The Company also formally assesses, both at the inception and aleast quarterly thereafter, whether the financial instruments that are used inhedging transactions are effective at offsetting changes in either the fairvalue or cash flows of the related underlying exposures.  The ineffective portion of a financialinstrument’s change in fair value is immediately recognized in earnings asother income (expense).

 

The adoption of SFAS 133 resulted in the Companyrecording transition adjustments to recognize its derivative instruments atfair value.  The cumulative effect ofthese transition adjustments was an after-tax increase in other comprehensiveloss of approximately $2.0 million.

 

Fair Value Hedging Strategy

 

The Company has entered into a Euro forwardforeign exchange contract to reduce the impact of foreign exchange rate changeson a foreign-currency denominated loan. The contract is not designated as a hedge under SFAS 133.  Accordingly, the change in fair value of thecontract is recorded in earnings immediately. As of December 28, 2001, the Company has recorded a liability for thefair value of the contract of $113.6 thousand, as estimated by informationobtained from a third party.

 

Cash Flow Hedging Strategy

 

At December 28, 2001, the Company was a party to aPound Sterling cross-currency swap agreement (the “Pound Sterling Swap”)requiring the Company to pay 16.0 million Pound Sterling with semi-annualinterest payments at 12.72% in exchange for $25.0 million with semi-annualinterest payments at 11.25%.  The PoundSterling Swap was designated as a cash flow hedge, that effectively converted$27.2 million of the Notes into a fixed-rate Pound Sterling loan, which reducedthe impact of foreign exchange rate changes on the principal and interestpayments on the loan.  Upon adoption ofSFAS 133, the Company recognized a loss in other comprehensive income of $464.4thousand, net of tax.  The Companyassessed effectiveness of the Pound Sterling Swap using the hypotheticalderivative method, which compares the change in the fair value of the Pound SterlingSwap to the change in the value of a hypothetical derivative with terms thatexactly match the critical terms of the foreign-currency denominated loan.  Under this method, the Company reclassified$495.0 thousand from other comprehensive income into earnings in order tooffset the loss recognized related to the remeasurement of the foreign-currencydenominated loan.  As of December 28,2001, a net gain on the Pound Sterling Swap of $297.2 thousand remained inother comprehensive income. As the amount of the foreign-currency denominateddebt exceeds the notional amount of the Pound Sterling Swap,

 

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the Company included the remeasurement of theunhedged portion of the loan in other income (expense) in the statement ofearnings, with no offset.  As ofDecember 28, 2001, the Company had recorded an asset for the fair value of thePound Sterling Swap of $2.3 million, as estimated by a third party.  In January 2002, the Company terminated itsPound Sterling Swap for proceeds totaling $2.8 million.  The gain was deferred and will be amortizedover the original term of the agreement. In February 2002, the Company entered into a Pound Sterling Swap("New Pound Sterling Swap") to replace the Pound Sterling Swapterminated in January 2002.  The termsof the New Pound Sterling Swap expire on June 30, 2005 and require the Companyto pay 19.0 million Pound Sterling with semi-annual interest payments of 12.63%in exchange for $27.2 million with semi-annual interest payments at 11.25%.

 

Additionally, the Company entered into an interestrate swap and interest rate cap agreement to cap the highest rate of interestto be paid on a portion of the Company’s U.S. Dollar variable rateindebtedness, in addition to providing for the Company to exchange floatingU.S. Libor interest rates for a floating rate tied to a historically lessvolatile index.  Upon adoption of SFAS133, the Company recognized a loss in other comprehensive income of $1.1million, net of tax, which is being amortized into earnings over the remaininglife of the agreement. In 2001, $441.7 thousand was reclassified from othercomprehensive income into interest expense in the statement of earnings.  In July 2001, the Company terminated itsinterest rate swap and interest rate cap agreement for a cost of $3.2million.  The interest rate swap andinterest rate cap agreement was not designated as a hedge under SFAS 133.  The Company recognized a loss in otherexpense in the statement of earnings of $1.8 million on the agreement duringthe year ended December 28, 2001. Lastly, the Company purchased aluminum calloptions to establish a maximum purchase price for varying quantities of futurealuminum purchase requirements.  Uponadoption of SFAS 133, the Company recognized a loss in other comprehensiveincome of $445.3 thousand, net of tax, which was amortized into earnings uponthe sale of the related aluminum inventory. These call options were not designated as a hedge under SFAS 133.  Accordingly, the change in the fair value ofthe call options subsequent to adoption of SFAS 133 was recorded in earningsimmediately.  At December 28, 2001, theCompany did not have any outstanding aluminum call options.

 

The following table summarizes activity in othercomprehensive income (“OCI”) related to derivatives held by the Company duringthe period from December 30, 2000 to December 28, 2001 [gain (loss)]:

 
|                                                         |   | **Before-Tax  Amount** |   | **Income********Tax Effect** |   | **After-Tax  Amount** |   |
|--------------------------------------------------------------|--------|------------------------|--------|------------------------------|--------|-----------------------|--------|
| Cumulative  effect of adopting SFAS 133                      |   | $                      | (3,204 | )                            | $      | 1,190                 |   | $ | (2,014 | ) |
| Net changes in  fair value of derivatives                    |   | 1,798                  |   | (541                         | )      | 1,257                 |   |
| Net losses  reclassified from OCI into earnings              |   | 745                    |   | (353                         | )      | 392                   |   |
| Accumulated  derivative net (losses) as of December 28, 2001 |   | $                      | (661   | )                            | $      | 296                   |   | $ | (365 | ) |

 

At December 28, 2001, the Company expects toreclassify from OCI into earnings net losses of $441.7 thousand resulting fromthe amortization of the cumulative effect translation adjustment relating tothe terminated interest rate swap and interest rate cap agreement over the nexttwelve months.  Additionally, theCompany expects to reclassify from OCI into earnings over the next twelvemonths net gains of $618.7 thousand on the Pound Sterling Swap to offset losseson the underlying created by foreign exchange movement and to amortize thedeferred gain on the termination of the agreement.

 

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For the year ended December 28, 2001, the Companyrecognized a pre-tax loss of $1.8 million on derivative instruments that arenot designated or did not qualify as a hedge under SFAS 133.  The Company did not discontinue anydesignated fair value or cash flow hedge relationships during the year endedDecember 28, 2001.

 

The Company would be exposed to credit-related losses in the event ofnonperformance by the counterparties that issued the currency agreements.  The Company does not expect thatcounterparties to the currency agreements will fail to meet their obligations,given their high credit ratings.  TheCompany generally does not receive collateral on derivative instruments due tothe credit rating of its counterparties, however, the Company providescollateral when required by its counterparties.

 

The fair value of the Company’s long-term debt isestimated based on the current rates offered to the Company for debt of similarterms except for the 11.25% Senior Subordinated Notes, which are measured atthe quoted market rate.  The fair valueof the Notes was $129.6 million at December 28, 2001.  The fair values of other long-term debt approximates the carryingvalue at December 28, 2001.

 

The Company’s financial instruments that areexposed to concentrations of credit risk consist primarily of cash andequivalents and trade accounts receivable. The fair value of these financial instruments approximates book value atDecember 28, 2001 and December 29, 2000. The Company places its cash and equivalents with high credit qualityinstitutions.  At times, such investmentsmay be in excess of the Federal Deposit Insurance Corporation insurance limit;however, the Company believes that its credit risk exposure is not significantdue to the high credit quality of the institutions.  The Company routinely assesses the financial strength of itscustomers, and generally does not require collateral.  Also, due to the large number of customers and the widelydispersed geographic areas in which the Company’s businesses operate, theCompany believes that its trade accounts receivable credit risk exposure is notsignificant.

 

**Revenue Recognition**

 

The Company generally recognizes revenue whentitle passes to the customer. Title to goods typically passes when delivered tothe customer by company truck, or when shipped, if by common carrier.

 

**Shipping and Handling Costs**

 

The Company classifies all freight-out charges as cost of goods sold.

 

**Translation of Foreign Currencies**

 

Assets and liabilities of non-U.S. subsidiariesare translated to U.S. Dollars at the rate of exchange in effect on the balancesheet date; income and expenses are translated to U.S. Dollars at the weightedaverage rates of exchange prevailing during the year. Foreign currency gainsand losses resulting from transactions are included in results of operations.The foreign currency transaction gains (losses) recorded in selling and generalexpenses were not significant for the years ended December 28, 2001, December29, 2000 and December 31, 1999.

 

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**Comprehensive Income**

 

Total comprehensive income and the components ofaccumulated other comprehensive income are presented in the ConsolidatedStatements of Changes in Equity.  Therelated tax effects of the components of comprehensive income are presented inNote 9.

** **

**Recent Accounting Pronouncements**

 

In July 2001, the FASB issued Statements of Financial AccountingStandards (SFAS) No. 142, “Goodwill and Other Intangible Assets”.  Under the new rules, goodwill and indefinitelived intangible assets are no longer amortized, but are reviewed annually forimpairment.  Separable intangible assetsthat are not deemed to have an indefinite life will continue to be amortizedover their useful lives.  With respectto goodwill and intangible assets acquired prior to July 1, 2001, the Companywill adopt the new accounting rules beginning December 29, 2001.  Management is currently assessing thefinancial impact SFAS No. 142 will have on the Consolidated FinancialStatements.

 

**4.  Inventories:**

 

Inventories were comprised of:

 
|               |   | **December 28, 2001** |   | **December 29, 2000** |   |
|--------------------|--------|-----------------------|--------|-----------------------|--------|
| Raw materials      |   | $                     | 50,206 |                  | $      | 58,101 |   |
| Work in process    |   | 2,449                 |   | 9,067                 |   |
| Finished  products |   | 11,459                |   | 14,047                |   |
|               |   | $                     | 64,114 |                  | $      | 81,215 |   |

 

**5.  Property, Plantand Equipment:**

 

Components of property, plant and equipment wereas follows:

 

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|                           |   | **December 28, 2001** |    | **December 29, 2000** |   |
|--------------------------------|--------|----------------------------|---------|----------------------------|--------|
| Land and  improvements         |   | $                          | 8,857   |                       | $      | 9,099 |   |
| Buildings                      |   | 43,057                     |    | 43,009                     |   |
| Machinery and  equipment       |   | 107,262                    |    | 103,498                    |   |
|                           |   | 159,176                    |    | 155,606                    |   |
| Less accumulated  depreciation |   | (51,334                    | )       | (40,399                    | )      |
|                           |   | 107,842                    |    | 115,207                    |   |
| Construction in progress       |   | 3,003                      |    | 4,011                      |   |
|                           |   | $                          | 110,845 |                       | $      | 119,218 |   |

 

Depreciation expense was $12.6 million, $12.0 million, and $10.6million for the years ended December 28, 2001, December 29, 2000 and December31, 1999, respectively.

 

**6.  Long-TermObligations:**

 

On March 15, 2002, the Company amended andrestated its credit agreement (the "Credit Agreement") to refinanceoutstanding term loan and revolver borrowings (see Note 14).  Such long-term obligations consisted of thefollowing:

** **
|                                       |   | **December 28,  2001** |    | **December 29,  2000** |   |
|--------------------------------------------|--------|------------------------|---------|------------------------|--------|
| Credit  Agreement:                         |   |                   |    |                   |   |
| Revolving Credit  Facility                 |   | $                      | 33,773  |                   | $      | 38,522 |   |
| Term Loans                                 |   | 38,951                 |    | 62,006                 |   |
| 11.25% Senior  Subordinated Notes due 2006 |   | 135,000                |    | 135,000                |   |
|                                       |   | 207,724                |    | 235,528                |   |
| Less current  portion                      |   | —                 |    | (2,247                 | )      |
|                                       |   | $                      | 207,724 |                   | $      | 233,281 |   |

 

At December 28, 2001, the Company had outstanding borrowings under theCredit Agreement consisting of term loans (the “Term Loans”) and a revolvingcredit facility (the “Revolving Credit Facility”), a portion of which wasavailable for letters of credit and swing loans.

 

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The Term Loans consisted of the following facilities:

 
|                     |   | **December 28,  2001** |   | **December 29,  2000** |   |
|--------------------------|--------|------------------------|--------|------------------------|--------|
| Pound Sterling           |   | $                      | — |                   | $      | 1,696 |   |
| U.S. Dollar -  Tranche B |   | 5,042                  |   | 5,042                  |   |
| U.S. Dollar -  Tranche C |   | 4,913                  |   | 15,568                 |   |
| U.S. Dollar -  Tranche D |   | 28,996                 |   | 39,700                 |   |
|                     |   | $                      | 38,951 |                   | $      | 62,006 |   |

 

Loans under the Revolving Credit Facility are made, at the election ofthe Company, in U.S. Dollars, Euros and/or Pounds Sterling. All borrowingsunder the Term Loans and the Revolving Credit Facility are repaid in thecurrency in which the loan is made.

 

Outstanding loans under the Revolving Credit Facility were to be repaidby June 30, 2002.  Outstanding loansunder the Tranche C Facility were to be repaid by December 31, 2002.  Outstanding loans under the Tranche BFacility were to be repaid by March 31, 2003. Outstanding loans under the Tranche D Facility were to be repaid by June30, 2005.  As of December 28, 2001, alloutstanding loans under the Credit Agreement are classified as non-current asthe Company refinanced such obligations, as described in Note 14.

 

 

Through December 28, 2001, at the option of theCompany, the interest rates applicable to the loans under the Credit Agreementwere based upon a Base Rate or a Eurocurrency Rate (both as defined), plustheir respective margins.  The CreditAgreement provides for variable rate margins, determined quarterly, based uponthe Company’s ratio of EBITDA (earnings before interest, taxes, depreciation andamortization) to total debt.  Themaximum and minimum base rate margins are 2.25% and 0.25%, respectively.  The maximum and minimum Eurocurrency ratemargins are 3.25% and 1.25%, respectively. At December 28, 2001, the interest rate payable under the RevolvingCredit Facility averaged 5.3995%, the interest rate on the Tranche B andTranche C Facilities averaged 4.7167%, and the interest rate on the Tranche DFacility averaged 5.1250%.

 

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As of December 28, 2001, an undrawn amount of$66.2 million remained under the Revolving Credit Facility of which $53.9million was available.  However, asdiscussed in Note 14, amounts outstanding under term loans were refinanced onMarch 15, 2002 with borrowings on the new $110.0 million Revolving CreditFacility.  The Company is subject to acommitment fee on a quarterly basis equal to 0.50% of the unused portion of theRevolving Credit Facility.  During 2001,debt decreased $2.0 million due to fluctuations in the foreign exchange rates,as compared to a decrease of $359.6 thousand during 2000.

 

The Credit Agreement contains certain covenants and restrictions onactions by the Company and its subsidiaries, including certain restrictions onthe payment of cash dividends.  As ofDecember 28, 2001, substantially all of the Company’s retained earnings arerestricted and unavailable for dividend. In addition, the Credit Agreement requires the Company to meet certainfinancial tests, including minimum fixed charge coverage ratio, minimuminterest coverage ratio, maximum leverage ratio, minimum EBITDA requirementsand maximum amounts of capital expenditures. Effective, March 19, 2001, the Company and the Lenders amended theCredit Agreement to, among other items, lower the minimum EBITDA requirementand the interest coverage ratio and raise the total leverage ratio.  The Company is in compliance as of December28, 2001 with these and other covenants and restrictions.

 

The Company has outstanding $135.0 million in 11.25% Senior SubordinatedNotes (the “Notes”) due 2006. Interest on the Notes is payable semiannually inarrears on April 1 and October 1 of each year. The Notes may beredeemed at the option of the Company, in whole or in part, at any time on orafter October 1, 2001, under the conditions as specified in the noteindenture plus accrued and unpaid interest to the redemption date, at thefollowing redemption prices:

 

| **Year** |   | **Percentage** |
|----------|--------|----------------|
| 2002     |   | 103.750%       |
| 2003     |   | 101.875%       |
| 2004     |   | 100.000%       |

 

Upon a change of control, each holder of the Notes may require theCompany to repurchase such holder’s Notes in whole or in part at the purchaseprice equal to 101% of the principal amount thereof plus accrued and unpaidinterest to the purchase date.  However,the Credit Agreement limits the amount of Notes the Company can purchase priorto repayment of the borrowings under the Credit Agreement.

 

The Notes are unsecured obligations subordinatedto all existing and future unsubordinated borrowings of the Company, includingall of the obligations under the Credit Agreement, and will be effectivelysubordinated to all obligations of any subsidiaries of the Company.

 

48

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Future maturities of long-term obligations as ofDecember 28, 2001 are as follows:

 

| 2002   |   | $       | —  |   |
|--------|--------|---------|---------|--------|
| 2003   |   | —  |    |
| 2004   |   | —  |    |
| 2005   |   | 72,724  |    |
| 2006   |   | 135,000 |    |
|   |   | $       | 207,724 |   |

 

The Notes are guaranteed on a senior subordinatedbasis by Euramax International, Inc., Amerimax Fabricated Products, Inc.,Euramax International Holdings Limited and Euramax Continental Limited. Theborrowings under the Credit Agreement are guaranteed by the Company and all ofits subsidiaries, other than its French subsidiaries. Substantially all assetsof the Company are pledged as collateral against the borrowings under theCredit Agreement.

 

To facilitate the payment of interest and repayment of the notes issuedby the Dutch and U.K. holding companies, on September 25, 1996, the Companyentered into two currency agreements (“DutchGuilder swap” and “Pound Sterling swap”) with a major financialinstitution. The agreements provide for exchanges of interest payments in DutchGuilders and Pounds Sterling for U.S. Dollars on April 1, andOctober 1 of each year, and provide for exchanges of principal amounts atmaturity on October 1, 2003.  Referto Note 3 for discussion of the Pound Sterling Swap.  In a series of transactions completed on August 7, 1998, theCompany sold its interest in the Dutch Guilder swap and entered into a newcurrency agreement (“New Dutch Guilder Swap”) requiring the Company to exchange75.0 million Dutch Guilders for $37.5 million. On October 20, 2000, the New Dutch Guilder Swap was terminated.  Proceeds from the termination approximated$10.0 million and were used to reduce long-term indebtedness. The net gain onthe sale of the swap was $1.2 million.

 

**7.  Capital Structure:**

 

**CommonStock**

 

In connection with the Reorganization described in Note 1, the Companyauthorized the issuance of 60,000,000 shares of stock consisting of:  (i) 55,000,000 shares of Class A votingcommon stock, par value one cent ($0.01) per share; and (ii) 5,000,000 sharesof Class B convertible restricted voting common stock, par value one cent($0.01) per share.  Of the totalauthorized shares of stock, the Company issued 45,567,312 shares of Class Avoting common stock and 4,434,680 shares of Class B convertible restrictedvoting common stock, for a total of 50,001,992 shares of common stock.Effective October 31, 2000, the stockholders of Euramax International, Inc.authorized the amendment of the Company’s certificate of incorporation toreduce the aggregate number of outstanding shares of common stock.  In addition, the stockholders authorized thereduction of the number of outstanding shares of common stock pursuant to areverse stock split.  Accordingly, theCompany’s certificate of incorporation was amended to revise the number ofauthorized shares from 60,000,000 shares to 1,200,000 shares consisting of (i)600,000 shares of Class A voting common stock, par value of one dollar ($1.00)per share, and (ii) 600,000 shares of Class B convertible restricted votingcommon stock, par value of one dollar ($1.00) per share.  Further, the Company effected a 100 to 1reverse split of its outstanding common stock such that one hundred outstandingshares of common stock were converted into one share of common stock.

 

49

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As of December 28, 2001, the Company had 455,673.11 issued and445,822.44 outstanding shares of common stock with a par value of one dollar($1.00) per share.  Except with respectto voting rights, all shares of Class A and Class B convertible common stockare identical in all respects and entitle the holders thereof to the same rights,preferences and privileges, and are subject to the same qualifications,limitations and restrictions, all as described in the Company’s Certificate ofIncorporation.  The Credit Agreementcontains certain restrictions on the payment of cash dividends.

 

The holders of Class A common stock are entitled to one vote per shareon all matters voted on by the Company’s stockholders, and the holders of ClassB convertible common stock are generally entitled to one vote per ten (10)shares held on any matters to be voted on the by the Company’s stockholders,with exceptions as noted in the Company’s Certificate of Incorporation.  In addition, each share of Class Bconvertible common stock may be converted at any time into one share of Class Acommon stock at the option of the holder.

 

**Preference and Ordinary Shares**

 

In connection with the Acquisition described inNote 1, Euramax International Limited issued the equivalent of 34,000,000shares of redeemable preference shares as follows: 33,925,000 preference shareswith a stated value of $1 per share, and 50,000 sterling preference shares witha stated value of 1 British Pound Sterling per share. In addition,Euramax International Limited issued 1,000,000 ordinary shares as follows:911,520 ordinary shares with a stated value of $1 per share and 88,480 non-votingordinary shares with a stated value of $1 per share. In connection with theReorganization described in Note 1, all ordinary and preference shares,including accrued but unpaid dividends, were cancelled in exchange for commonstock.

 

**8.  Income Taxes:**

 

The provisions for income taxes are comprised ofthe following:

 

50

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|         |   | **Year ended********December 28,**** ****2001** |   | **Year ended********December 29,**** 2000** |   | **Year ended  December 31,**** 1999** |   |
|--------------|--------|------------------------------------------------------|--------|--------------------------------------------------|--------|--------------------------------------------|--------|
| Current:     |   |                                                 |   |                                             |   |                                       |   |
| U.S. Federal |   | $                                                    | 1,124  |                                             | $      | —                                     |   | $ | 2,497 |   |
| Non-U.S.     |   | 4,011                                                |   | 5,699                                            |   | 3,973                                      |   |
| State        |   | 357                                                  |   | 277                                              |   | 570                                        |   |
|         |   | 5,492                                                |   | 5,976                                            |   | 7,040                                      |   |
|         |   |                                                 |   |                                             |   |                                       |   |
| Deferred:    |   |                                                 |   |                                             |   |                                       |   |
| U.S. Federal |   | $                                                    | 354    |                                             | $      | (67                                        | )      | $ | 3,738 |   |
| Non-U.S.     |   | (75                                                  | )      | (793                                             | )      | 414                                        |   |
| State        |   | (250                                                 | )      | 555                                              |   | (175                                       | )      |
|         |   | 29                                                   |   | (305                                             | )      | 3,977                                      |   |
|         |   |                                                 |   |                                             |   |                                       |   |
|         |   | $                                                    | 5,521  |                                             | $      | 5,671                                      |   | $ | 11,017 |   |

 

The U.S. and non-U.S. components of earnings (loss) before income taxesare as follows:

 
|     |   | **Year ended********December 28,**** ****2001** |   | **Year ended********December 29,**** ****2000** |   | **Year ended********December 31,********1999** |   |
|----------|--------|------------------------------------------------------|--------|------------------------------------------------------|--------|------------------------------------------------|--------|
|     |   |                                                 |   |                                                 |   |                                           |   |
| U.S.     |   | $                                                    | 2,064  |                                                 | $      | (3,387                                         | )      | $ | 14,407 |   |
| Non-U.S. |   | 8,187                                                |   | 12,385                                               |   | 8,169                                          |   |
|     |   | $                                                    | 10,251 |                                                 | $      | 8,998                                          |   | $ | 22,576 |   |

 

51

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Reconciliation of the differences between incometaxes computed at the U.S. Federal statutory tax rate and the Company’s incometax provision follows:

 
|                                                           |   | **Year ended  December 28,  2001** |   | **Year ended********December 29,  2000** |   | **Year ended  December 31,  1999** |   |
|----------------------------------------------------------------|--------|------------------------------------|--------|------------------------------------------|--------|------------------------------------|--------|
| Tax at U.S.  Federal statutory rate                            |   | $                                  | 3,588  |                                     | $      | 3,149                              |   | $ | 7,989 |   |
| State income  taxes, net of U.S. Federal income tax benefit    |   | (791                               | )      | (121                                     | )      | 659                                |   |
| Non-U.S. taxes,  net                                           |   | 150                                |   | 142                                      |   | 199                                |   |
| Reorganization  costs                                          |   | —                             |   | —                                   |   | 893                                |   |
| Other permanent  differences (primarily goodwill amortization) |   | 1,113                              |   | 1,526                                    |   | 1,173                              |   |
| Valuation  allowances for state taxes                          |   | 893                                |   | 1,037                                    |   | —                             |   |
| Other, net                                                     |   | 568                                |   | (62                                      | )      | 104                                |   |
|                                                           |   | $                                  | 5,521  |                                     | $      | 5,671                              |   | $ | 11,017 |   |

 

At December 28, 2001 and December 29, 2000, thecombined tax-effected temporary differences are as follows:

 
|                                         |   | **Asset (Liability)**              |   |
|----------------------------------------------|--------|------------------------------------|--------|
|                                         |   | **December 28,**** ****2001** |   | **December 29,********2000** |   |
|                                         |   |                               |   |
| Accrued expenses                             |   | $                                  | 2,135  |   | $ | 2,385 |   |
| Allowance for  doubtful accounts             |   | 651                                |   | 245 |   |
| Book versus tax  basis of inventory          |   | 276                                |   | (9 | ) |
| Current, net                                 |   | 3,062                              |   | 2,621 |   |
|                                         |   |                               |   |   |   |
| Book versus tax  basis of depreciable assets |   | (15,881                            | )      | (18,173 | ) |
| Net operating  losses                        |   | 8,614                              |   | 9,609 |   |
| Accrued pension  liability                   |   | 2,963                              |   | (42 | ) |
| Valuation  allowance                         |   | (2,525                             | )      | (1,632 | ) |
| Other                                        |   | (2,848                             | )      | (1,099 | ) |
| Noncurrent, net                              |   | (9,677                             | )      | (11,337 | ) |
| Total, net                                   |   | $                                  | (6,615 | ) | $ | (8,716 | ) |

 

Deferred taxes have not been provided onundistributed earnings of foreign subsidiaries, which are considered to bepermanently invested.  It is notpracticable to estimate the amount of tax that might be payable on the eventualremittance of such earnings.  Inaddition, an acquired subsidiary, Fabral, Inc., has U.S. operating tax losscarryforwards of approximately $16.1 million that are available to offsetfuture taxable income and taxes.  Thetax carryforward benefits begin to expire in 2010. Internal Revenue Servicecode section 382 imposes an 

 

52

----

 

annual limitation on usage of approximately $4.0million for the Fabral net operating loss. The Company believes that this limitation will not affect its ability toutilize the net operating losses prior to expiration.  In addition, the Company has certain state and other NOLcarryforwards, some of which are reserved with a valuation allowance.  The Company's valuation allowance was $2.5million, $1.6 million and $595.0 thousand as of December 28, 2001, December 29,2000, and December 31, 1999, respectively.

 

**9.             ComprehensiveIncome:**

 

Accumulated other comprehensive income (loss)balances were as follows:

** **
|                               |   | **December 28,**** ****2001** |     | **December 29,********2000** |   |
|------------------------------------|--------|------------------------------------|----------|------------------------------|--------|
| Foreign Currency                   |   |                               |     |                         |   |
| Translation  Adjustment            |   | $                                  | (7,810   | )                            | $      | (5,659 | ) |
| Accumulated  Derivative Net Losses |   | (365                               | )        | —                       |   |
| Minimum Pension  Liability         |   | (7,052                             | )        | (2,551                       | )      |
|                               |   |                               |     |                         |   |
|                               |   | $                                  | (15,227) |                         | $      | (8,210 | ) |

 

There were no tax effects related to the foreign currency translationadjustment component of other comprehensive loss for any year presented becausethe earnings of the subsidiaries are considered to be permanently invested (seeNote 8).  The tax effects related to theminimum pension liability component of other comprehensive income (loss) were$3.1 million for the year ended December 28, 2001, $970.3 thousand for the yearended December 19, 2000 and $338.2 thousand for the year ended December 31,1999.  The tax effects related toaccumulated derivative net losses are disclosed in Note 3.

** **

**10.  EmployeeRetirement Plans:**

 

The Company maintains a variety of retirementplans as follows:

 

*U.S. Plans:*

 

*Defined Benefit:*

The Company maintains a non-contributory definedbenefit pension plan covering substantially all U.S. hourly employees.

 

53

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The following table sets forth the reconciliationsof the projected benefit obligation and plan assets, the funded status of theplan and the amounts recognized in the Company’s consolidated balance sheets:

 
|                                                       |   | **Year ended  December 28,********2001** |   | **Year ended********December 29,********2000** |   |
|------------------------------------------------------------|--------|------------------------------------------|--------|------------------------------------------------|--------|
| **Change  in benefit obligation**                          |   |                                     |   |                                           |   |
| Projected  benefit obligation at beginning of year         |   | $                                        | 1,704  |                                           | $      | 1,401 |   |
| Service cost                                               |   | 267                                      |   | 308                                            |   |
| Interest cost                                              |   | 130                                      |   | 107                                            |   |
| Plan amendments                                            |   | 19                                       |   | 20                                             |   |
| Actuarial gain  (loss)                                     |   | 147                                      |   | (32                                            | )      |
| Benefits paid                                              |   | (125                                     | )      | (100                                           | )      |
| Projected  benefit obligation at end of year               |   | $                                        | 2,142  |                                           | $      | 1,704 |   |
| Accumulated  benefit obligation                            |   | $                                        | 2,142  |                                           | $      | 1,704 |   |
|                                                       |   |                                     |   |                                           |   |
| **Change  in plan assets**                                 |   |                                     |   |                                           |   |
| Fair value of  plan assets at beginning of year            |   | $                                        | 1,548  |                                           | $      | 1,005 |   |
| Actual loss on  plan assets                                |   | (70                                      | )      | (40                                            | )      |
| Employer  contributions                                    |   | 491                                      |   | 683                                            |   |
| Benefits paid                                              |   | (125                                     | )      | (100                                           | )      |
| Fair value of  plan assets at end of year                  |   | $                                        | 1,844  |                                           | $      | 1,548 |   |
|                                                       |   |                                     |   |                                           |   |
| **Funded  status**                                         |   | $                                        | (298   | )                                              | $      | (156 | ) |
| Unrecognized  actuarial loss                               |   | 562                                      |   | 206                                            |   |
| Unrecognized  prior service cost                           |   | 235                                      |   | 237                                            |   |
| Net amount  recognized                                     |   | $                                        | 499    |                                           | $      | 287 |   |
|                                                       |   |                                     |   |                                           |   |
| **Amounts  recognized in the consolidated balance sheets** |   |                                     |   |                                           |   |
| Accrued pension  liability                                 |   | $                                        | (298   | )                                              | $      | (156 | ) |
| Intangible asset                                           |   | 235                                      |   | 237                                            |   |
| Accumulated  other comprehensive loss                      |   | 562                                      |   | 206                                            |   |
| Net amount  recognized in balance sheet                    |   | $                                        | 499    |                                           | $      | 287 |   |

 

54

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Weighted average assumptions used in theaccounting for the plan include:
|                                              |   | **December 28,********2001** |   | **December 29,********2000** |   | **December 31,********1999** |   |
|---------------------------------------------------|--------|------------------------------|--------|------------------------------|--------|------------------------------|--------|
| **Weighted-average  assumptions**                 |   |                         |   |                         |   |                         |   |
| Discount rate                                     |   | 7.25                         | %      | 7.75                         | %      | 7.75                         | %      |
| Rate of  compensation increases                   |   | n/a                          |   | n/a                          |   | n/a                          |   |
| Expected  long-term rate of return on plan assets |   | 8.00                         | %      | 8.00                         | %      | 8.00                         | %      |

 

Net periodic pension costs for the plan includethe following components:

 
|                                         |   | **Year ended  December 28,********2001** |   | **Year ended********December 29,********2000** |   | **Year ended********December 31,********1999** |   |
|----------------------------------------------|--------|------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|
| **Components  of net periodic pension cost** |   |                                     |   |                                           |   |                                           |   |
| Service cost                                 |   | $                                        | 267    |                                           | $      | 308                                            |   | $ | 375 |   |
| Interest cost                                |   | 130                                      |   | 107                                            |   | 90                                             |   |
| Expected return  on assets                   |   | (138                                     | )      | (107                                           | )      | (51                                            | )      |
| Amortization of  prior service cost          |   | 21                                       |   | 20                                             |   | 18                                             |   |
| Recognized net  actuarial loss               |   | —                                   |   | —                                         |   | 25                                             |   |
| Net periodic  pension cost                   |   | $                                        | 280    |                                           | $      | 328                                            |   | $ | 457 |   |

 

*Defined Contribution:*

The Company maintains three defined contributionretirement and savings plans, which also allow the employees to contribute apercentage of their pretax and/or after-tax income in accordance with specifiedguidelines. The Company matches a certain percentage of employee pre-tax contributionsup to certain limits.  Further, theplans provide for discretionary contributions by the Company based on years ofservice and age. The Company’s expense for the years ended December 28, 2001,December 29, 2000, and December 31, 1999, was approximately $1.5 million, $1.0million, and $1.4 million, respectively.

 

*International Plans:*

In addition to the above, the employees of EuramaxCoated Products Limited and Ellbee Limited participate in a single employerpension plan (the “U.K. Plan”).

 

55

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The following table sets forth the reconciliationsof the projected benefit obligations and plan assets, the funded status of theU.K. Plan and amounts recognized in the Company’s consolidated balance sheets:

 
|                                                       |   | **Year ended  December 28,********2001** |   | **Year ended********December 29,********2000** |   |
|------------------------------------------------------------|--------|------------------------------------------|--------|------------------------------------------------|--------|
| **Change  in benefit obligation**                          |   |                                     |   |                                           |   |
| Projected  benefit obligation at beginning of year         |   | $                                        | 16,835 |                                           | $      | 16,514 |   |
| Service cost                                               |   | 944                                      |   | 935                                            |   |
| Interest cost                                              |   | 1,006                                    |   | 951                                            |   |
| Employee  contributions                                    |   | 198                                      |   | 253                                            |   |
| Actuarial loss  (gain)                                     |   | 3,989                                    |   | (53                                            | )      |
| Benefits paid                                              |   | (491                                     | )      | (490                                           | )      |
| Currency  translation adjustment                           |   | (449                                     | )      | (1,275                                         | )      |
| Projected  benefit obligation at end of year               |   | $                                        | 22,032 |                                           | $      | 16,835 |   |
| Accumulated  benefit obligation at end of year             |   | $                                        | 22,032 |                                           | $      | 16,835 |   |
|                                                       |   |                                     |   |                                           |   |
| **Change  in plan assets**                                 |   |                                     |   |                                           |   |
| Fair value of  plan assets at beginning of year            |   | $                                        | 12,926 |                                           | $      | 14,240 |   |
| Actual loss on  plan assets                                |   | (1,297                                   | )      | (1,029                                         | )      |
| Employer  contributions                                    |   | 1,307                                    |   | 1,174                                          |   |
| Employee  contributions                                    |   | 198                                      |   | 253                                            |   |
| Benefits paid                                              |   | (491                                     | )      | (490                                           | )      |
| Administrative  expenses                                   |   | (164                                     | )      | (149                                           | )      |
| Currency  translation adjustment                           |   | (375                                     | )      | (1,073                                         | )      |
| Fair value of  plan assets at end of year                  |   | $                                        | 12,104 |                                           | $      | 12,926 |   |
|                                                       |   |                                     |   |                                           |   |
| **Funded  status**                                         |   | $                                        | (9,928 | )                                              | $      | (3,909 | ) |
| Unrecognized  actuarial net loss                           |   | 9,317                                    |   | 3,149                                          |   |
| Net amount  recognized                                     |   | $                                        | (611   | )                                              | $      | (760 | ) |
|                                                       |   |                                     |   |                                           |   |
| **Amounts  recognized in the consolidated balance sheets** |   |                                     |   |                                           |   |
| Accrued pension  liability                                 |   | $                                        | (9,928 | )                                              | $      | (3,909 | ) |
| Accumulated  other comprehensive loss                      |   | 9,317                                    |   | 3,149                                          |   |
| Net amount  recognized in balance sheet                    |   | $                                        | (611   | )                                              | $      | (760 | ) |

 

The change in the funded status of the U.K. Planresulted from losses on plan assets in both 2001 and 2000, together with anincrease in the projected benefit obligation resulting from revisions todemographic assumptions.

 

56

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Weighted average assumptions used in theaccounting for the U.K. plan include:

 
|                                              |   | **December 28,  2001** |   | **December 29,********2000** |   | **December 31,********1999** |   |
|---------------------------------------------------|--------|------------------------|--------|------------------------------|--------|------------------------------|--------|
| **Weighted-average  assumptions**                 |   |                   |   |                         |   |                         |   |
| Discount rate                                     |   | 6.25                   | %      | 6.25                         | %      | 6.25                         | %      |
| Rate of  compensation increases                   |   | 4.00                   | %      | 3.50                         | %      | 3.75                         | %      |
| Expected  long-term rate of return on plan assets |   | 7.50                   | %      | 7.50                         | %      | 7.50                         | %      |

 

Net periodic pension cost for the U.K. Planincludes the following components:

 
|                                         |   | **Year ended********December 28,********2001** |   | **Year ended********December 29,********2000** |   | **Year ended********December 31,********1999** |   |
|----------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|
| **Components  of net periodic pension cost** |   |                                           |   |                                           |   |                                           |   |
| Service cost                                 |   | $                                              | 944    |                                           | $      | 935                                            |   | $ | 882 |   |
| Interest cost                                |   | 1,006                                          |   | 951                                            |   | 967                                            |   |
| Expected return  on assets                   |   | (971                                           | )      | (1,017                                         | )      | (856                                           | )      |
| Recognized net  loss                         |   | 201                                            |   | —                                         |   | 210                                            |   |
| Net periodic  pension cost                   |   | $                                              | 1,180  |                                           | $      | 869                                            |   | $ | 1,203 |   |

 

*Supplemental Executive Retirement Plan:*

 

The Company has an unfunded supplemental retirement plan for members ofmanagement.  At December 28, 2001 andDecember 29, 2000, the accrued liability for future benefits under the plan was$820.0 thousand and $730.0 thousand, respectively.  Benefits expense for the plan totaled $103.6 thousand, $104.5thousand and $119.0 thousand in 2001, 2000 and 1999, respectively.

 

57

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**11.  Incentive Plans:**

 

**IncentiveCompensation Plan**

 

The Company has an incentive compensation plan that covers keyemployees.  The costs of the plan arecomputed in accordance with a formula that incorporates EBITDA (defined in Note6) and return on average net assets. Costs of the plan for the years ended December 28, 2001, December 29,2000, and December 31, 1999, were approximately $2.8 million, $0.4 million, and$2.6 million, respectively.

 

**Long-TermIncentive Plan**

 

In 1998, the Company established the Euramax International 1999 PhantomStock Plan (the “Plan”) which was effective January 1, 1999.  The purpose of the Plan is to link theinterests of the participants to those of the Company’s shareholders throughcompensation that is tied to the increase in the equity value of the Companyover the long term. Participation in the Plan is limited to key executives andcertain other management employees as approved, from time to time, by aCommittee selected by the President.

 

The Plan provides for one-time awards of phantom shares to selectedparticipants.  A phantom share is a unitequal to 4% of the equity value of the Company, as defined by the Plan, dividedby 40,000 (the maximum number of phantom shares that may be awarded toparticipants under the Plan).  A phantomshare entitles the participant to receive compensation equal to the value of aphantom share when fully vested, minus the value of a phantom share at the dateof grant, all as defined by the Plan. On January 1, 1999, 36,000 of the phantomshares were granted, of which 31,390 shares and 29,442 shares remainoutstanding as of December 28, 2001 and December 29, 2000, respectively.  Compensation expense accrues in the periodfrom the date of grant to the date fully vested, adjusted for changes in thevalue of the phantom shares.  No amountshave been recorded during fiscal years 2001, 2000 or 1999 in connection withthe Plan because the value of a phantom share as of December 28, 2001, December29, 2000 and December 31, 1999 were less than the value on the date of grant.The awards become fully vested on the earlier of a change in control; alisting; the death, disability or retirement of the participant; or December31, 2003.  Compensation will be paid outin four equal payments during the first quarter of 2004 through 2007, unlessthere is a change in control; a listing; or the death, disability or retirementof the participant; in which case the compensation will be paid out sooner.

 

58

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**12.  Commitments andContingencies:**

 

Minimum commitments under long-term noncancelableoperating leases, principally for operating and office facilities at December28, 2001 were as follows:

 

| 2002       |   | $     | 5,285  |   |
|------------|--------|-------|--------|--------|
| 2003       |   | 3,818 |   |
| 2004       |   | 2,377 |   |
| 2005       |   | 1,310 |   |
| 2006       |   | 563   |   |
| Thereafter |   | 684   |   |
|       |   | $     | 14,037 |   |

 

 

Rent expense amounted to $5.5 million, $5.7million and $6.4 million for the years ended December 28, 2001, December 29,2000 and December 31, 1999, respectively.

 

**Litigation**

 

The Company is subject to legal proceedings andclaims that have arisen in the ordinary course of business.  Although occasional adverse decisions orsettlements may occur, it is the opinion of the Company’s management, basedupon information available at this time, that the expected outcome of thesematters is not estimable individually or in the aggregate, but would notreasonably be expected to have a material adverse effect on the consolidatedfinancial position, results of operations or cash flows of the Company and itssubsidiaries taken as a whole.

 

**EnvironmentalMatters**

 

The Company’s operations are subject to federal, state, local andEuropean environmental laws and regulations concerning the management ofpollution and hazardous substances.

 

The Company has been named as a defendant in lawsuits or as apotentially responsible party in state and Federal administrative and judicialproceedings seeking contribution for costs associated with the investigation,analysis, correction and remediation of environmental conditions at varioushazardous waste disposal sites. The Company continues to monitor these actionsand proceedings and to vigorously defend both its own interests as well as theinterests of its affiliates. The Company’s ultimate liability in connectionwith present and future environmental claims will depend on many factors,including its volumetric share of the waste at a given site, the remedialaction required, the total cost of remediation, and the financial viability andparticipation of the other entities that also sent waste to the site. Once itbecomes probable that the Company will incur costs in connection withremediation of a site and such costs can be reasonably estimated, the Companyestablishes or adjusts its reserve for its projected share of these costs.Based upon current law and information known to the Company concerning the sizeof the sites known to it, anticipated costs, their years of operations and thenumber of other potentially responsible parties, Management believes that theCompany’s potential share of the estimated aggregate liability for the costs ofremedial actions and related costs and expenses are not material. In addition,the Company establishes reserves for remedial measures required from time totime at its own facilities. Management believes that the reasonably probableoutcomes of these matters will not be material.

 

59

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The Company’s reserves, expenditures and expenses for all environmentalexposures were not significant for any of the dates or periods presented.

 

In connection with the Acquisition referred to in Note 1, theCompany was indemnified by Alumax for substantially all of its costs, if any,related to environmental matters for occurrences arising prior to the closingdate of the Acquisition during the period of time it was owned directly orindirectly by Alumax. Such indemnification includes costs that may ultimatelybe incurred to contribute to the remediation of certain specified existingNational Priorities List (“NPL”) sites for which the Company had been named apotentially responsible party under the federal Comprehensive EnvironmentalResponse, Compensation, and Liability Information System (“CERCLA”) as of theclosing date of the Acquisition, as well as certain potential costs for siteslisted on state hazardous cleanup lists. With respect to all otherenvironmental matters, Alumax’s obligations are limited to $125.0 million andexpire in September 2002. However, notwithstanding the indemnity, the Companydoes not believe that it has any significant probable liability forenvironmental claims. Further, the Company believes it to be unlikely that theCompany would be required to bear environmental costs in excess of its pro ratashare of such costs as a potentially responsible party at any site.

 

**13.  SegmentInformation:**

 

The Company’s reportable segments have beenaggregated according to manufacturing process with similar economiccharacteristics and are as follows:

 

*European roll coating—*The European roll coating facilities primarilyapply a variety of liquid (primarily paint) coatings to bare aluminum or steelcoil, providing a baked-on finish.  Thefacilities also fabricate panels for the recreational vehicle industry.

 

*U.S.  fabrication—*The U.S. fabrication facilities primarily processcoated coil through slitting operations which cut the coils into more narrowwidths.  The cut coils then undergo avariety of downstream production processes which further fabricate the aluminumand steel sheet to form the desired product. The predominant fabricating activity is rollforming, which begins withsteel or aluminum and results in the production of gutters, roofing, siding,soffit, fascia, trim, and other products. In addition, the facilities laminate fiberglass and aluminum products byadhering fiberglass sheet to wood or other solid substrates and fabricatewindows from vinyl extrusions and glass. Three of the U.S. facilities also have roll coating facilities forinternal processing.  The facilities utilizedistribution facilities located strategically throughout the U.S.

 

*European fabrication—*The predominant fabricating activity begins withaluminum extrusions and glass which are welded and glazed and that result inthe production of windows, doors, shower enclosures, sunroofs and otherproducts.

 

The accounting policies of the segments are thesame as those described in Note 3, “Summary of Significant AccountingPolicies.” Segment data includes intersegment revenues.  The Company evaluates the performance of itssegments and allocates resources to them based primarily on EBITDA.

 

The Company is organized primarily on the basisof seven operating subsidiaries.  Two ofthe subsidiaries have been aggregated into the “European roll coating” segment,the three U.S. subsidiaries

 

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have been aggregated into the “U.S. fabrication”segment, and two of the European subsidiaries have been aggregated into the“European fabrication” segment.  Thetable below presents information about reported segments for the fiscal yearsended December 28, 2001, December 29, 2000, and December 31, 1999:

 
|                                          |   | **Year ended  December 28, 2001** |    | **Year ended  December 29, 2000** | ** ** | **Year ended  December 31, 1999** |   |
|-----------------------------------------------|--------|-----------------------------------|---------|-----------------------------------|------------|-----------------------------------|--------|
| **Sales**                                     |   |                              |    |                              |       |                              |   |
| European Roll Coating                         |   | $                                 | 129,824 |                              | $          | 144,266                           |   | $ | 140,075 |   |
| U.S. Fabrication                              |   | 406,834                           |    | 399,538                           |       | 397,437                           |   |
| European Fabrication                          |   | 58,891                            |    | 58,991                            |       | 62,022                            |   |
| Total segment sales                           |   | 595,549                           |    | 602,795                           |       | 599,534                           |   |
|                                          |   |                              |    |                              |       |                              |   |
| Eliminations                                  |   | (2,432                            | )       | (3,316                            | )          | (2,775                            | )      |
| Consolidated net sales                        |   | $                                 | 593,117 |                              | $          | 599,479                           |   | $ | 596,759 |   |
|                                          |   |                              |    |                              |       |                              |   |
| **EBITDA**                                    |   |                              |    |                              |       |                              |   |
| European Roll Coating                         |   | $                                 | 14,649  |                              | $          | 19,492                            |   | $ | 20,185 |   |
| U.S. Fabrication                              |   | 34,699                            |    | 25,698                            |       | 35,294                            |   |
| European Fabrication                          |   | 7,195                             |    | 7,110                             |       | 8,042                             |   |
| Total EBITDA for reportable segments          |   | $                                 | 56,543  |                              | $          | 52,300                            |   | $ | 63,521 |   |
|                                          |   |                              |    |                              |       |                              |   |
| Expenses that are not segment specific        |   | (3,479                            | )       | (863                              | )          | (5,411                            | )      |
| Depreciation and amortization                 |   | (17,555                           | )       | (16,569                           | )          | (13,728                           | )      |
| Interest expense, net                         |   | (25,258                           | )       | (25,870                           | )          | (21,806                           | )      |
| Consolidated net earnings before income taxes |   | $                                 | 10,251  |                              | $          | 8,998                             |   | $ | 22,576 |   |

 

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Segment assets are not included in the abovetable because asset information is not reported by segment in the informationreviewed by the chief operating decision maker for purposes of making decisionsabout allocating resources to the segments and assessing their performance.

 

The following table reflects revenues fromexternal customers by groups of similar products for the years ended December28, 2001, December 29, 2000, and December 31, 1999:

 

 
| **Customers/Markets**                               |   | **Primary Products**                                                                                                                                          |   | **Year ended  December 28, 2001** |    | **Year ended  December 29, 2000** |   | **Year ended  December 31, 1999** | ** ** |
|-----------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|-----------------------------------|--------|-----------------------------------|------------|
| Original Equipment Manufacturers (“OEMs”) |   | Painted aluminum sheet and coil; fabricated painted aluminum,  laminated and fiberglass panels; RV doors, windows and roofing; and composite  building panels |   | $                                 | 241,314 |                              | $      | 265,806                           |       | $ | 262,733 |   |
|                                                |   |                                                                                                                                                          |   |                              |    |                              |   |                              |       |
| Rural Contractors                                   |   | Steel and aluminum roofing and siding                                                                                                                         |   | 120,082                           |    | 115,197                           |   | 121,612                           |       |
|                                                |   |                                                                                                                                                          |   |                              |    |                              |   |                              |       |
| Home Centers                                        |   | Raincarrying systems, roofing accessories, windows, doors and shower  enclosures                                                                              |   | 115,856                           |    | 96,773                            |   | 87,452                            |       |
|                                                |   |                                                                                                                                                          |   |                              |    |                              |   |                              |       |
| Manufactured Housing                                |   | Steel siding and trim components                                                                                                                              |   | 24,359                            |    | 34,514                            |   | 49,566                            |       |
|                                                |   |                                                                                                                                                          |   |                              |    |                              |   |                              |       |
| Distributors                                        |   | Metal coils, raincarrying systems and roofing accessories                                                                                                     |   | 32,996                            |    | 34,814                            |   | 28,842                            |       |
|                                                |   |                                                                                                                                                          |   |                              |    |                              |   |                              |       |
| Industrial and Architectural Contractors            |   | Standing seam panels and siding and roofing accessories                                                                                                       |   | 17,928                            |    | 19,401                            |   | 20,480                            |       |
|                                                |   |                                                                                                                                                          |   |                              |    |                              |   |                              |       |
| Home Improvement Contractors                        |   | Vinyl replacement windows; metal coils, raincarrying systems; metal  roofing and insulated roofing panels; shower, patio and entrance doors; and  awnings     |   | 40,582                            |    | 32,974                            |   | 26,074                            |       |
|                                                |   |                                                                                                                                                          |   | $                                 | 593,117 |                              | $      | 599,479                           |       | $ | 596,759 |   |

 

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The following table reflects sales and long–livedasset information by geographic area as of and for the years ended December 28,2001, December 29, 2000, and December 31, 1999:

 
|            |   | **Sales**                         |    |
|-----------------|--------|-----------------------------------|---------|
|            |   | **Year ended  December 28, 2001** |    | **Year ended  December 29, 2000** | ** ** | **Year ended  December 31, 1999** | ** ** |
| United States   |   | $                                 | 406,799 |   | $ | 399,536 |   | $ | 397,437 |   |
| The Netherlands |   | 82,614                            |    | 86,324 |   | 78,117 |   |
| United Kingdom  |   | 74,579                            |    | 85,392 |   | 93,632 |   |
| Other non-U.S.  |   | 29,125                            |    | 28,227 |   | 27,573 |   |
|            |   | $                                 | 593,117 |   | $ | 599,479 |   | $ | 596,759 |   |

 
|            |   | **Long-Lived Assets** | ** ** |
|-----------------|--------|-----------------------|------------|
|            |   | **December 28, 2001** |       | **December 29, 2000** | ** ** |
| United States   |   | $                     | 142,486    |   | $ | 152,075 |   |
| The Netherlands |   | 39,942                |       | 43,968 |   |
| United Kingdom  |   | 38,244                |       | 40,467 |   |
| Other non-U.S.  |   | 4,105                 |       | 3,043 |   |
|            |   | $                     | 224,777    |   | $ | 239,553 |   |

 

Non-U.S. revenue is based on the country in whichthe legal subsidiary is domiciled.  TheCompany’s largest customer accounted for 12.9% of 2001 net sales and 10.1% of2000 net sales.  This customer is includedin the Company’s U.S. Fabrication segment. As of December 28, 2001, this customer had an outstanding tradereceivable balance of $9.1 million.  Noother customer represented greater than ten percent of the Company’s revenuesin any period presented.

 

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**14.  SubsequentEvents:**

 

Effective March 15, 2002, the Company and itsLenders amended and restated the Credit Agreement (“Amended and Restated CreditAgreement”) to, among other items, increase the Revolving Credit Facility from$100.0 million to $110.0 million; refinance outstanding Term Loans throughborrowings under the Revolving Credit Facility; and extend the expiration dateof the Revolving Credit Facility from June 30, 2002 to June 30, 2005.

 

At the option of the Company, the interest ratesapplicable to the loans under the Amended and Restated Credit Agreement arebased upon a Base Rate or a Eurocurrency Rate (both as defined), plus theirrespective margins.  The Amended andRestated Credit Agreement provides for variable rate margins, determinedquarterly, based upon the Company’s ratio of EBITDA (earnings before interest,taxes, depreciation and amortization) to total debt.  The maximum and minimum Base Rate margins are 2.00% and 1.00%,respectively.  The maximum and minimumEurocurrency Rate margins are 3.25% and 2.25%, respectively.

 

The Amended and Restated Credit Agreementcontains certain covenants and restrictions on actions by the Company and itssubsidiaries, including certain restrictions on the payment of cashdividends.  In addition, the Amended andRestated Credit Agreement requires the Company to meet certain financial tests,including fixed charge coverage ratio, minimum interest coverage ratio, maximumleverage ratio and maximum amounts of capital expenditures.  The Amended and Restated Credit Agreementdoes not contain the Excess Cash Flow Provision that was included in the CreditAgreement requiring an additional annual payment on the Company’s borrowingsbased upon the Company’s excess cash flows as defined in the Credit Agreement.

 

 

**15.  SupplementalConsolidated Financial Statements:**

 

As described in Note 1, on September 25, 1996, Euramax purchasedthe Company from Alumax. As further described in Note 6, the Acquisition wasfinanced, in part, through the Notes. Euramax International Limited, EuramaxEuropean Holdings Limited and Euramax European Holdings B.V. are co-obligorsunder the Notes (the “Co–Obligors”).  Asdiscussed in Note 1, Euramax International, Inc., the new U.S. parent of thegroup, has provided a full and unconditional guarantee of the Notes (“ParentGuarantor”).  In addition, AmerimaxHoldings, Inc., Amerimax Fabricated Products, Inc., Euramax InternationalHoldings Limited and Euramax Continental Limited, holding company subsidiariesof Euramax, have provided full and unconditional guarantees of the Notes(collectively, the “Guarantor Subsidiaries”). The following supplemental condensed combining financial statements as ofDecember 28, 2001 and December 29, 2000, and for the years ended December 28,2001, December 29, 2000 and December 31, 1999 reflect the financial position,results of operations, and

 

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cash flows of each of the Parent Guarantor, the Co-Obligors, and suchcombined information of the Guarantor Subsidiaries and the non-guarantorsubsidiaries, principally the operating subsidiaries, (collectively, the“Non-Guarantor Subsidiaries”).  TheCo-Obligors and Guarantors are wholly-owned subsidiaries of Euramax and areeach jointly, severally, fully, and unconditionally liable under the Notes.Separate complete financial statements of each Co-Obligor and Guarantor are notpresented because management has determined that they are not material toinvestors.

 

65

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|                                       |   | **Year  ended December 28, 2001**                   |   |
|--------------------------------------------|--------|-----------------------------------------------------|--------|
|                                       |   | **Euramax  International, Inc. (Parent Guarantor)** |   | **Euramax  International Limited (Co-Obligor)** |   | **Euramax  European Holdings Limited (Co-Obligor)** |   | **Euramax  European Holdings B.V. (Co-Obligor)** |   | **Guarantor  Subsidiaries** |   | **Non-Guarantor  Subsidiaries** |   | **Eliminations** |   | **Consolidated  Totals** |   |
| Net sales                                  |   | $                                                   | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 593,117 |   | $ | — |   | $ | 593,117 |   |
|                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and  expenses:                       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                         |   | —                                              |   | — |   | — |   | — |   | — |   | 477,870 |   | — |   | 477,870 |   |
| Selling and  general                       |   | 1,251                                               |   | 336 |   | — |   | — |   | (1,321 | ) | 58,964 |   | — |   | 59,230 |   |
|                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and  amortization             |   | —                                              |   | — |   | — |   | — |   | 346 |   | 17,209 |   | — |   | 17,555 |   |
| Earnings (loss)  from operations           |   | (1,251                                              | )      | (336 | ) | — |   | — |   | 975 |   | 39,074 |   | — |   | 38,462 |   |
| Equity in  earnings (loss) of subsidiaries |   | 9,122                                               |   | 4,563 |   | (1,278 | ) | 6,683 |   | 18,648 |   | — |   | (37,738 | ) | — |   |
| Interest expense,  net                     |   | (5,484                                              | )      | (99 | ) | (419 | ) | (268 | ) | (12,800 | ) | (6,188 | ) | — |   | (25,258 | ) |
| Other income  (expense), net               |   | (19                                                 | )      | (9 | ) | (810 | ) | (118 | ) | (2,616 | ) | 619 |   | — |   | (2,953 | ) |
| Earnings (loss)  before income taxes       |   | 2,368                                               |   | 4,119 |   | (2,507 | ) | 6,297 |   | 4,207 |   | 33,505 |   | (37,738 | ) | 10,251 |   |
|                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision  (benefit) for income taxes      |   | (2,362                                              | )      | (133 | ) | (369 | ) | (105 | ) | (4,915 | ) | 13,405 |   | — |   | 5,521 |   |
| Net earnings  (loss)                       |   | $                                                   | 4,730  |   | $ | 4,252 |   | $ | (2,138 | ) | $ | 6,402 |   | $ | 9,122 |   | $ | 20,100 |   | $ | (37,738 | ) | $ | 4,730 |   |

 

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**15.  SupplementalConsolidated Financial Statements (continued):**

 
|                                        |   | **Year  ended December 29, 2000**                   |   |
|---------------------------------------------|--------|-----------------------------------------------------|--------|
|                                        |   | **Euramax  International, Inc. (Parent Guarantor)** |   | **Euramax  International Limited (Co-Obligor)** |   | **Euramax  European Holdings Limited (Co-Obligor)** |   | **Euramax  European Holdings B.V. (Co-Obligor)** |   | **Guarantor  Subsidiaries** |   | **Non-Guarantor  Subsidiaries** |   | **Eliminations** |   | **Consolidated  Totals** |   |
| Net sales                                   |   | $                                                   | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 599,479 |   | $ | — |   | $ | 599,479 |   |
|                                        |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and  expenses:                        |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods  sold                         |   | —                                              |   | — |   | — |   | — |   | 389 |   | 493,941 |   | — |   | 494,330 |   |
| Selling and  general                        |   | 1,515                                               |   | 496 |   | — |   | — |   | (918 | ) | 53,382 |   | — |   | 54,475 |   |
|                                        |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and  amortization              |   | —                                              |   | — |   | — |   | — |   | 364 |   | 16,205 |   | — |   | 16,569 |   |
| (Loss) earnings  from operations            |   | (1,515                                              | )      | (496 | ) | — |   | — |   | 165 |   | 35,951 |   | — |   | 34,105 |   |
| Equity in  earnings of subsidiaries         |   | 6,102                                               |   | 7,848 |   | 45 |   | 13,746 |   | 7,551 |   | — |   | (35,292 | ) | — |   |
| Interest expense,  net                      |   | (2,106                                              | )      | (99 | ) | (420 | ) | (490 | ) | (1,730 | ) | (21,025 | ) | — |   | (25,870 | ) |
| Other income  (expense), net                |   | —                                              |   | 65 |   | (2,152 | ) | (6,178 | ) | (262 | ) | 9,290 |   | — |   | 763 |   |
| Earnings (loss)  before income taxes        |   | 2,481                                               |   | 7,318 |   | (2,527 | ) | 7,078 |   | 5,724 |   | 24,216 |   | (35,292 | ) | 8,998 |   |
|                                        |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Benefit)  provision  for income taxes |   | (846                                                | )      | (159 | ) | (745 | ) | (2,302 | ) | (376 | ) | 10,099 |   | — |   | 5,671 |   |
| Net earnings  (loss)                        |   | $                                                   | 3,327  |   | $ | 7,477 |   | $ | (1,782 | ) | $ | 9,380 |   | $ | 6,100 |   | $ | 14,117 |   | $ | (35,292 | ) | $ | 3,327 |   |

 

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|                                            |   | **Year  ended December 31, 1999**                   |   |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                            |   | **Euramax  International, Inc. (Parent Guarantor)** |   | **Euramax  International Limited (Co-Obligor)** |   | **Euramax  European Holdings Limited (Co-Obligor)** |   | **Euramax  European Holdings B.V. (Co-Obligor)** |   | **Guarantor  Subsidiaries** |   | **Non-Guarantor  Subsidiaries** |   | **Eliminations** |   | **Consolidated  Totals** |   |
| Net sales                                       |   | —                                              |   | — |   | — |   | — |   | — |   | $ | 96,759 |   | — |   | $ | 96,759 |   |
|                                            |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and  expenses:                            |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods  sold                             |   | —                                              |   | — |   | — |   | — |   | — |   | 479,730 |   | — |   | 479,730 |   |
| Selling and  general                            |   | 102                                                 |   | 4,387 |   | — |   | 1 |   | (471 | ) | 53,967 |   | — |   | 57,986 |   |
|                                            |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and  amortization                  |   | —                                              |   | — |   | — |   | — |   | 106 |   | 13,622 |   | — |   | 13,728 |   |
| (Loss) earnings  from operations                |   | (102                                                | )      | (4,387 | ) | — |   | (1 | ) | 365 |   | 49,440 |   | — |   | 45,315 |   |
|                                            |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity in  earnings of subsidiaries             |   | —                                              |   | 14,892 |   | 915 |   | 10,908 |   | 7,974 |   | — |   | (34,689 | ) | — |   |
| Interest expense,  net                          |   | —                                              |   | (4 | ) | (132 | ) | (355 | ) | (178 | ) | (21,137 | ) | — |   | (21,806 | ) |
| Other (expense)  income, net                    |   | —                                              |   | (12 | ) | (951 | ) | (5,481 | ) | (27 | ) | 5,538 |   | — |   | (933 | ) |
| (Loss) earnings  before income taxes            |   | (102                                                | )      | 10,489 |   | (168 | ) | 5,071 |   | 8,134 |   | 33,841 |   | (34,689 | ) | 22,576 |   |
|                                            |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision  (benefit) for income taxes           |   | 160                                                 |   | (1,332 | ) | (319 | ) | (2,016 | ) | 788 |   | 13,736 |   | — |   | 11,017 |   |
| Net (loss)  earnings                            |   | (262                                                | )      | 11,821 |   | 151 |   | 7,087 |   | 7,346 |   | 20,105 |   | (34,689 | ) | 11,559 |   |
| Dividends on redeemable  preference shares      |   | —                                              |   | 6,381 |   | — |   | — |   | — |   | — |   | — |   | 6,381 |   |
| Net (loss)  earnings available for shareholders |   | $                                                   | 262    | ) | $ | 5,440 |   | $ | 151 |   | $ | 7,087 |   | $ | 7,346 |   | $ | 20,105 |   | $ | (34,689 | ) | $ | 5,178 |   |
|                                                 |        |                                                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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|                                                                                                                  |   | **As of  December 28, 2001**                       |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                                                  |   | **Euramax  International,Inc. (Parent Guarantor)** |       | **Euramax  International Limited (Co-Obligor)** |   | **Euramax  European Holdings Limited (Co-Obligor)** |   | **Euramax  European Holdings B.V.(Co-Obligor)** |   | **Guarantor  Subsidiaries** |   | **Non-Guarantor  Subsidiaries** |   | **Eliminations** |   | **Consolidated  Totals** |   |
|                                                                                                                  |   | **ASSETS**                                         | ** ** |
| Current assets:                                                                                                       |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and  equivalents                                                                                                 |   | $                                                  | —     |   | $ | — |   | $ | — |   | $ | 94 |   | $ | 11 |   | $ | 5,792 |   | $ | — |   | $ | 5,897 |   |
| Accounts  receivable, net                                                                                             |   | 1                                                  |       | 15 |   | — |   | — |   | — |   | 77,241 |   | — |   | 77,257 |   |
| Inventories                                                                                                           |   | —                                             |       | — |   | — |   | — |   | — |   | 64,114 |   | — |   | 64,114 |   |
| Deferred income  taxes                                                                                                |   | 321                                                |       | — |   | — |   | — |   | — |   | 3,588 |   | — |   | 3,909 |   |
| Other current  assets                                                                                                 |   | —                                             |       | — |   | — |   | — |   | 600 |   | 811 |   | — |   | 1,411 |   |
| Total current  assets                                                                                                 |   | 322                                                |       | 15 |   | — |   | 94 |   | 611 |   | 151,546 |   | — |   | 152,588 |   |
| Property, plant  and equipment, net                                                                                   |   | —                                             |       | — |   | — |   | — |   | 47 |   | 110,798 |   | — |   | 110,845 |   |
| Amounts due from  affiliates                                                                                          |   | 95,392                                             |       | 79,253 |   | 46,891 |   | 1,677 |   | 138,391 |   | 49,775 |   | (411,379 | ) | — |   |
| Goodwill, net                                                                                                         |   | —                                             |       | — |   | — |   | — |   | 7,799 |   | 99,459 |   | — |   | 107,258 |   |
| Investment in  consolidated subsidiaries                                                                              |   | 123,576                                            |       | 22,091 |   | (16,591 | ) | 28,506 |   | 187,448 |   | — |   | (345,030 | ) | — |   |
| Deferred income  taxes                                                                                                |   | —                                             |       | — |   | 955 |   | — |   | 12 |   | 5,919 |   | — |   | 6,886 |   |
| Other assets                                                                                                          |   | —                                             |       | 1,595 |   | 401 |   | 406 |   | 688 |   | 3,584 |   | — |   | 6,674 |   |
|                                                                                                                  |   | $                                                  | 219,290    |   | $ | 102,954 |   | $ | 31,656 |   | $ | 30,683 |   | $ | 334,996 |   | $ | 421,081 |   | $ | (756,409 | ) | $ | 384,251 |   |
|                                                                                                                  |   | **LIABILITIES  AND SHAREHOLDERS’ EQUITY**     | ** ** |
| Current  liabilities:                                                                                                 |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash overdrafts                                                                                                       |   | $                                                  | —     |   | $ | — |   | $ | — |   | $ | — |   | $ | (358 | ) | $ | 1,777 |   | $ | — |   | $ | 1,419 |   |
| Accounts payable                                                                                                      |   | —                                             |       | — |   | — |   | — |   | 17 |   | 53,422 |   | — |   | 53,439 |   |
| Accrued expenses                                                                                                      |   | 38                                                 |       | 108 |   | — |   | — |   | 2,227 |   | 17,327 |   |   |   | 19,700 |   |
| Accrued interest  payable                                                                                             |   | 1,009                                              |       | 1,986 |   | 800 |   | — |   | 627 |   | 114 |   | — |   | 4,536 |   |
| Income taxes  payabale                                                                                                |   | (2,395                                             | )          | (1,740 | ) | (1,440 | ) | (6,129 | ) | (6,556 | ) | 20,858 |   | — |   | 2,598 |   |
| Deferred income  taxes                                                                                                |   | —                                             |       | — |   | — |   | — |   | 189 |   | 658 |   | — |   | 847 |   |
| Current  maturities of long-term debt                                                                                 |   | —                                             |       | — |   | — |   | — |   | — |   | — |   | — |   | — |   |
| Total current  liabilities                                                                                            |   | (1,348                                             | )          | 354 |   | (640 | ) | (6,129 | ) | (3,854 | ) | 94,156 |   | — |   | 82,539 |   |
| Long-term debt,  less current maturities                                                                              |   | 37,216                                             |       | 70,605 |   | 27,179 |   | — |   | 38,409 |   | 34,315 |   | — |   | 207,724 |   |
| Amounts due to  affiliates                                                                                            |   | 120,186                                            |       | 16,574 |   | 16,544 |   | 4,880 |   | 175,637 |   | 77,558 |   | (411,379 | ) | — |   |
| Deferred income  taxes                                                                                                |   | 464                                                |       | — |   | — |   | — |   | 721 |   | 15,378 |   | — |   | 16,563 |   |
| Other liabilities                                                                                                     |   | —                                             |       | — |   | — |   | — |   | 508 |   | 15,423 |   | — |   | 15,931 |   |
| Total liabilities                                                                                                     |   | 156,518                                            |       | 87,533 |   | 43,083 |   | (1,249 | ) | 211,421 |   | 236,830 |   | (411,379 | ) | 322,757 |   |
| Shareholders’equity:                                                                                             |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Class A common  stock — $.01 par value; 600,000 shares authorized, 455,673.11 issued and  445,822.44 outstanding |   | 456                                                |       | 2 |   | 78 |   | 23 |   | 35,001 |   | 6,835 |   | (41,939 | ) | 456 |   |
| Class B  convertible common stock — $.01 par value; 600,000 shares authorized,  44,346.80 issued and outstanding |   | 44                                                 |       | — |   | — |   | — |   | — |   | — |   | — |   | 44 |   |
| Additional  paid-in capital                                                                                           |   | 65,218                                             |       | 20,726 |   | 6,922 |   | 9,077 |   | 149,085 |   | 369,643 |   | (567,451 | ) | 53,220 |   |
| Treasury stock                                                                                                        |   | (1,581                                             | )          | — |   | — |   | — |   | — |   | — |   | — |   | (1,581 | ) |
| Retained earnings  (deficit)                                                                                          |   | 7,795                                              |       | 7,723 |   | (12,682 | ) | 28,940 |   | (51,167 | ) | (12,104 | ) | 56,077 |   | 24,582 |   |
| Dividends  declared                                                                                                   |   | —                                             |       | — |   | — |   | — |   | — |   | (167,714 | ) | 167,714 |   | — |   |
| Accumulated other  comprehensive loss                                                                                 |   | (9,160                                             | )          | (13,030 | ) | (5,745 | ) | (6,108 | ) | (9,344 | ) | (12,409 | ) | 40,569 |   | (15,227 | ) |
| Total  shareholders’ equity                                                                                      |   | 62,772                                             |       | 15,421 |   | (11,427 | ) | 31,932 |   | 123,575 |   | 184,251 |   | (345,030 | ) | 61,494 |   |
|                                                                                                                  |   | $                                                  | 219,290    |   | $ | 102,954 |   | $ | 31,656 |   | $ | 30,683 |   | $ | 334,996 |   | $ | 421,081 |   | $ | (756,409 | ) | $ | 384,251 |   |

 

69

----

 
|                                                                                                                  |   | **As of  December 29, 2000**                       |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                                                  |   | **Euramax  International,Inc. (Parent Guarantor)** |       | **Euramax  International Limited (Co-Obligor)** |   | **Euramax  European Holdings Limited (Co-Obligor** |   | **Euramax  European Holdings B.V.(Co-Obligor)** |   | **Guarantor  Subsidiaries** |   | **Non-Guarantor  Subsidiaries** |   | **Eliminations** |   | **Consolidated  Totals** |   |
|                                                                                                                  |   | **ASSETS**                                         | ** ** |
| Current assets:                                                                                                       |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and  equivalents                                                                                                 |   | $                                                  | —     |   | $ | — |   | $ | — |   | $ | — |   | $ | 27 |   | $ | 8,107 |   | $ | — |   | $ | 8,134 |   |
| Accounts  receivable, net                                                                                             |   | 1                                                  |       | 31 |   | — |   | — |   | 63 |   | 73,626 |   | — |   | 73,721 |   |
| Inventories                                                                                                           |   | —                                             |       | — |   | — |   | — |   | — |   | 81,215 |   | — |   | 81,215 |   |
| Deferred income  taxes                                                                                                |   | 26                                                 |       | — |   | — |   | — |   | — |   | 2,651 |   | — |   | 2,677 |   |
| Other current  assets                                                                                                 |   | 100                                                |       | — |   | — |   | — |   | 1,271 |   | 773 |   | — |   | 2,144 |   |
| Total current  assets                                                                                                 |   | 127                                                |       | 31 |   | — |   | — |   | 1,361 |   | 166,372 |   | — |   | 167,891 |   |
| Property, plant  and equipment, net                                                                                   |   | —                                             |       | — |   | — |   | — |   | 109 |   | 119,109 |   | — |   | 119,218 |   |
| Amounts due from  affiliates                                                                                          |   | 99,126                                             |       | 77,700 |   | 46,240 |   | 11,522 |   | 333,649 |   | 150,246 |   | (718,483 | ) | — |   |
| Goodwill, net                                                                                                         |   | —                                             |       | — |   | — |   | — |   | 8,083 |   | 105,241 |   | — |   | 113,324 |   |
| Investment in  consolidated subsidiaries                                                                              |   | 121,120                                            |       | 23,411 |   | (11,534 | ) | 23,711 |   | 130,061 |   | — |   | (286,769 | ) | — |   |
| Deferred income  taxes                                                                                                |   | —                                             |       | 169 |   | — |   | — |   | 13 |   | 5,433 |   | — |   | 5,615 |   |
| Other assets                                                                                                          |   | —                                             |       | 1,931 |   | 499 |   | 524 |   | 1,119 |   | 2,938 |   | — |   | 7,011 |   |
|                                                                                                                  |   | $                                                  | 220,373    |   | $ | 103,242 |   | $ | 35,205 |   | $ | 35,757 |   | $ | 474,395 |   | $ | 549,339 |   | $ | (1,005,252 | ) | $ | 413,059 |   |
|                                                                                                                  |   | **LIABILITIES  AND SHAREHOLDERS’ EQUITY**     | ** ** |
| Current  liabilities:                                                                                                 |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash overdrafts                                                                                                       |   | $                                                  | —     |   | $ | — |   | $ | — |   | $ | — |   | $ | (186 | ) | $ | 1,895 |   | $ | — |   | $ | 1,709 |   |
| Accounts payable                                                                                                      |   | —                                             |       | — |   | — |   | — |   | 148 |   | 57,827 |   | — |   | 57,975 |   |
| Accrued expenses                                                                                                      |   | 68                                                 |       | 38 |   | — |   | — |   | 1,251 |   | 13,222 |   |   |   | 14,579 |   |
| Accrued interest  payable                                                                                             |   | 722                                                |       | 1,986 |   | 822 |   | 324 |   | 84 |   | 92 |   | — |   | 4,030 |   |
| Income taxes  payabale                                                                                                |   | —                                             |       | (1,607 | ) | (2,090 | ) | 755 |   | (886 | ) | 11,809 |   | — |   | 7,981 |   |
| Deferred income  taxes                                                                                                |   | —                                             |       | — |   | — |   | — |   | 56 |   | — |   | — |   | 56 |   |
| Current  maturities of long-term debt                                                                                 |   | —                                             |       | — |   | — |   | — |   | 551 |   | 1,696 |   | — |   | 2,247 |   |
| Total current  liabilities                                                                                            |   | 790                                                |       | 417 |   | (1,268 | ) | 1,079 |   | 1,018 |   | 86,541 |   | — |   | 88,577 |   |
| Long-term debt,  less current maturities                                                                              |   | 37,216                                             |       | 70,605 |   | 27,179 |   | — |   | 65,517 |   | 32,764 |   | — |   | 233,281 |   |
| Amounts due to  affiliates                                                                                            |   | 120,090                                            |       | 15,168 |   | 14,634 |   | 7,343 |   | 285,305 |   | 275,943 |   | (718,483 | ) | — |   |
| Deferred income  taxes                                                                                                |   | (2,430                                             | )          | — |   | — |   | — |   | 490 |   | 18,892 |   | — |   | 16,952 |   |
| Other liabilities                                                                                                     |   | —                                             |       | — |   | — |   | — |   | 945 |   | 9,523 |   | — |   | 10,468 |   |
| Total liabilities                                                                                                     |   | 155,666                                            |       | 86,190 |   | 40,545 |   | 8,422 |   | 353,275 |   | 423,663 |   | (718,483 | ) | 349,278 |   |
| Shareholders’equity:                                                                                             |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Class A common  stock — $.01 par value; 600,000 shares authorized, 455,673.11 issued and  445,822.44 outstanding |   | 456                                                |       | 2 |   | 78 |   | 23 |   | 35,001 |   | 6,835 |   | (41,939 | ) | 456 |   |
| Class B  convertible common stock — $.01 par value; 600,000 shares authorized,  44,346.80 issued and outstanding |   | 44                                                 |       | — |   | — |   | — |   | — |   | — |   | — |   | 44 |   |
| Additional  paid-in capital                                                                                           |   | 65,218                                             |       | 20,726 |   | 6,922 |   | 9,077 |   | 149,085 |   | 157,574 |   | (355,382 | ) | 53,220 |   |
| Treasury stock                                                                                                        |   | (1,581                                             | )          | — |   | — |   | — |   | — |   | — |   | — |   | (1,581 | ) |
| Retained earnings  (deficit)                                                                                          |   | 3,065                                              |       | 3,471 |   | (10,544 | ) | 22,538 |   | (60,289 | ) | (25,719 | ) | 87,330 |   | 19,852 |   |
| Dividends  declared                                                                                                   |   | —                                             |       | — |   | — |   | — |   | — |   | (6,485 | ) | 6,485 |   | — |   |
| Accumulated other  comprehensive loss                                                                                 |   | (2,495                                             | )          | (7,147 | ) | (1,796 | ) | (4,303 | ) | (2,677 | ) | (6,529 | ) | 16,737 |   | (8,210 | ) |
| Total  shareholders’ equity                                                                                      |   | 64,707                                             |       | 17,052 |   | (5,340 | ) | 27,335 |   | 121,120 |   | 125,676 |   | (286,769 | ) | 63,781 |   |
|                                                                                                                  |   | $                                                  | 220,373    |   | $ | 103,242 |   | $ | 35,205 |   | $ | 35,757 |   | $ | 474,395 |   | $ | 549,339 |   | $ | (1,005,252 | ) | $ | 413,059 |   |

 

70

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|                                                                                |   | **Year  ended December 28, 2001**                   |   |
|-------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                |   | **Euramax  International, Inc. (Parent Guarantor)** |   | **Euramax  International Limited (Co-Obligor)** |   | **Euramax  European Holdings Limited (Co-Obligor)** |   | **Euramax  European Holdings B.V. (Co-Obligor)** |   | **Guarantor  Subsidiaries** |   | **Non-Guarantor  Subsidiaries** |   | **Eliminations** |   | **Consolidated  Totals** |   |
| Cash flows from  operating activities:                                              |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings  (loss)                                                                |   | $                                                   | 4,730  |   | $ | 4,252 |   | $ | (2,138 | ) | $ | 6,402 |   | $ | 9,122 |   | $ | 20,100 |   | $ | (37,738 | ) | $ | 4,730 |   |
| Reconciliation of  net earnings to cash (used in) provided by operating activities: |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and  amortization                                                      |   | —                                              |   | — |   | — |   | — |   | 346 |   | 17,209 |   | — |   | 17,555 |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of  deferred financing fees                                            |   | —                                              |   | 237 |   | 84 |   | 87 |   | 389 |   | 336 |   | — |   | 1,133 |   |
| Provision for  doubtful accounts                                                    |   | —                                              |   | — |   | — |   | — |   | — |   | 1,763 |   | — |   | 1,763 |   |
| Foreign exchange  (gain) loss                                                       |   | 19                                                  |   | 9 |   | 811 |   | 118 |   | — |   | (1,161 | ) |   |   | (204 | ) |
| Loss on sale of  assets                                                             |   | —                                              |   | — |   | — |   | — |   | — |   | 124 |   | — |   | 124 |   |
| Deferred income  taxes                                                              |   | 33                                                  |   | — |   | — |   | — |   | 149 |   | (153 | ) | — |   | 29 |   |
| Dividends  received                                                                 |   | —                                              |   | — |   | — |   | 294 |   | 167,428 |   | — |   | (167,722 | ) | — |   |
| Equity in (loss)  earnings of subsidiaries                                          |   | (9,122                                              | )      | (4,563 | ) | 1,278 |   | (6,683 | ) | (18,648 | ) | — |   | 37,738 |   | — |   |
| Changes in  operating assets and liabilities                                        |   | 509                                                 |   | 163 |   | (362 | ) | (7,245 | ) | (929 | ) | 18,235 |   | — |   | 10,371 |   |
| Net cash (used  in) provided by operating activities                                |   | (3,831                                              | )      | 98 |   | (327 | ) | (7,027 | ) | 157,857 |   | 56,453 |   | (167,722 | ) | 35,501 |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from  investing activites:                                               |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from  sale of assets                                                       |   | —                                              |   | — |   | — |   | — |   | — |   | 1,164 |   | — |   | 1,164 |   |
| Capital  expenditures                                                               |   | —                                              |   | — |   | — |   | — |   | — |   | (8,321 | ) | — |   | (8,321 | ) |
| Contributed  capital to subsidiaries                                                |   | —                                              |   | — |   | — |   | — |   | (212,069 | ) | — |   | 212,069 |   | — |   |
| Net cash used in  investing activities                                              |   | —                                              |   | — |   | — |   | — |   | (212,069 | ) | (7,157 | ) | 212,069 |   | (7,157 | ) |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from  financing activities:                                              |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in cash  overdrafts                                                         |   | —                                              |   | — |   | — |   | — |   | (172 | ) | (118 | ) | — |   | (290 | ) |
| Net (repayment)  borrowings on revolving credit facility                            |   | —                                              |   | — |   | — |   | — |   | (6,300 | ) | 3,526 |   | — |   | (2,774 | ) |
| Repayment of  long-term debt                                                        |   | —                                              |   | — |   | — |   | — |   | (21,358 | ) | (1,631 | ) | — |   | (22,989 | ) |
| Dividends paid                                                                      |   | —                                              |   | — |   | — |   | — |   | — |   | (167,722 | ) | 167,722 |   | — |   |
| Payment to  terminate interest rate swap                                            |   | —                                              |   | — |   | — |   | — |   | (3,160 | ) | — |   | — |   | (3,160 | ) |
| Payment of credit  agreement amendment fee                                          |   | —                                              |   | — |   | — |   | — |   | (405 | ) | — |   | — |   | (405 | ) |
| Contributed  capital from parent                                                    |   | —                                              |   | — |   | — |   | — |   | — |   | 212,069 |   | (212,069 | ) | — |   |
| Due to/from  parent affiliate                                                       |   | 3,831                                               |   | (98 | ) | 346 |   | 7,226 |   | 85,591 |   | (96,896 | ) | — |   | — |   |
| Net cash provided  by (used in) financing activities                                |   | 3,831                                               |   | (98 | ) | 346 |   | 7,226 |   | 54,196 |   | (50,772 | ) | (44,347 | ) | (29,618 | ) |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of  exchange rate changes on cash                                            |   | —                                              |   | — |   | (19 | ) | (105 | ) | — |   | (839 | ) | — |   | (963 | ) |
| Net increase  (decrease) in cash and equivalents                                    |   | —                                              |   | — |   | — |   | 94 |   | (16 | ) | (2,315 | ) | — |   | (2,237 | ) |
| Cash and  equivalents at beginning of period                                        |   | —                                              |   | — |   | — |   | — |   | 27 |   | 8,107 |   |   |   | 8,134 |   |
| Cash and  equivalents at end of period                                              |   | $                                                   | — |   | $ | — |   | $ | — |   | $ | 94 |   | $ | 11 |   | $ | 5,792 |   | — |   | $ | 5,897 |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental cash  flow information:                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes  paid, net                                                             |   | —                                              |   | — |   | — |   | — |   | 296 |   | 9,216 |   | — |   | 9,512 |   |
| Interest paid,  net                                                                 |   | 3,900                                               |   | 7,943 |   | 3,191 |   | 286 |   | 4,062 |   | 3,008 |   | — |   | 22,390 |   |
|                                                                                     |        |                                                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

71

----

 
|                                                                                |   | **Year  ended December 29, 2000**                   |   |
|-------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                |   | **Euramax  International, Inc. (Parent Guarantor)** |   | **Euramax  International Limited (Co-Obligor)** |   | **Euramax  European Holdings Limited (Co-Obligor)** |   | **Euramax  European Holdings B.V. (Co-Obligor)** |   | **Guarantor  Subsidiaries** |   | **Non-Guarantor  Subsidiaries** |   | **Eliminations** |   | **Consolidated  Totals** |   |
| Cash flows from  operating activities:                                              |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings  (loss)                                                                |   | $                                                   | 3,327  |   | $ | 7,477 |   | $ | (1,782 | ) | $ | 9,380 |   | $ | 15,480 |   | $ | 14,117 |   | $ | (44,672 | ) | $ | 3,327 |   |
| Reconciliation of  net earnings to cash (used in) provided by operating activities: |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and  amortization                                                      |   | —                                              |   | — |   | — |   | — |   | 364 |   | 16,205 |   | — |   | 16,569 |   |
| Amortization of  deferred financing fees                                            |   | —                                              |   | 236 |   | 88 |   | 89 |   | 435 |   | 334 |   | — |   | 1,182 |   |
| Provision for  doubtful accounts                                                    |   | —                                              |   | — |   | — |   | — |   | — |   | 542 |   | — |   | 542 |   |
| Foreign exchange  loss (gain)                                                       |   | —                                              |   | — |   | 2,152 |   | 6,178 |   | — |   | (8,330 | ) |   |   | — |   |
| Gain on sale of  assets                                                             |   | —                                              |   | — |   | — |   | — |   | — |   | (1,108 | ) | — |   | (1,108 | ) |
| Deferred income  taxes                                                              |   | (846                                                | )      | — |   | — |   | — |   | 257 |   | 284 |   | — |   | (305 | ) |
| Dividends  received                                                                 |   | —                                              |   | — |   | — |   | 6,485 |   | — |   | — |   | (6,485 | ) | — |   |
| Equity in  earnings of subsidiaries                                                 |   | (6,102                                              | )      | (7,848 | ) | (45 | ) | (13,746 | ) | (16,931 | ) | — |   | 44,672 |   | — |   |
| Changes in  operating assets and liabilities                                        |   | (2,786                                              | )      | 771 |   | (2,881 | ) | (2,699 | ) | 9,254 |   | 6,221 |   | — |   | 7,880 |   |
| Net cash (used  in) provided by operating activities                                |   | (6,407                                              | )      | 636 |   | (2,468 | ) | 5,687 |   | 8,859 |   | 28,265 |   | (6,485 | ) | 28,087 |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from  investing activites:                                               |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from  sale of assets                                                       |   | —                                              |   | — |   | — |   | — |   | — |   | 409 |   | — |   | 409 |   |
| Purchases of  businesses                                                            |   | —                                              |   | — |   | — |   | — |   | — |   | (45,777 | ) | — |   | (45,777 | ) |
| Capital  expenditures                                                               |   | —                                              |   | — |   | — |   | — |   | (28 | ) | (9,678 | ) | — |   | (9,706 | ) |
| Net cash used in  investing activities                                              |   | —                                              |   | — |   | — |   | — |   | (28 | ) | (55,046 | ) | — |   | (55,074 | ) |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from  financing activities:                                              |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in cash  overdrafts                                                         |   | —                                              |   | — |   | — |   | — |   | 1,845 |   | (2,146 | ) | — |   | (301 | ) |
| Net (repayment)  borrowings on revolving credit facility                            |   | —                                              |   | — |   | — |   | — |   | (19,200 | ) | 272 |   | — |   | (18,928 | ) |
| Repayment of  long-term debt                                                        |   | —                                              |   | — |   | — |   | — |   | (5,839 | ) | (624 | ) | — |   | (6,463 | ) |
| Proceeds from  long-term debt                                                       |   | 37,216                                              |   | — |   | — |   | (37,216 | ) | 40,000 |   | — |   | — |   | 40,000 |   |
| Dividends paid                                                                      |   | —                                              |   | — |   | — |   | — |   | — |   | (6,485 | ) | 6,485 |   | — |   |
| Proceeds from  settlement of currency agreements                                    |   | —                                              |   | — |   | — |   | — |   | — |   | 10,020 |   | — |   | 10,020 |   |
| Deferred  financing fees                                                            |   | —                                              |   | — |   | — |   | — |   | — |   | (1,000 | ) | — |   | (1,000 | ) |
| Purchases of  treasury stock                                                        |   | (1,581                                              | )      | — |   | — |   | — |   | — |   | — |   | — |   | (1,581 | ) |
| Contributed  capital from parent                                                    |   | —                                              |   | — |   | — |   | — |   | (45,015 | ) | 45,015 |   | — |   | — |   |
| Due to/from parent  affiliate                                                       |   | (29,228                                             | )      | (636 | ) | 356 |   | 34,608 |   | 17,868 |   | (22,968 | ) | — |   | — |   |
| Net cash provided  by (used in) financing activities                                |   | 6,407                                               |   | (636 | ) | 356 |   | (2,608 | ) | (10,341 | ) | 22,084 |   | 6,485 |   | 21,747 |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of  exchange rate changes on cash                                            |   | —                                              |   | — |   | 2,112 |   | (3,079 | ) | — |   | 956 |   | — |   | (11 | ) |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net decrease in  cash and equivalents                                               |   | —                                              |   | — |   | — |   | — |   | (1,510 | ) | (3,741 | ) | — |   | (5,251 | ) |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and  equivalents at beginning of period                                        |   | —                                              |   | — |   | — |   | — |   | 1,537 |   | 11,848 |   |   |   | 13,385 |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and  equivalents at end of period                                              |   | $                                                   | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 27 |   | $ | 8,107 |   | — |   | $ | 8,134 |   |
|                                                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental cash  flow information:                                                |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes paid,  net                                                             |   | —                                              |   | — |   | — |   | 2,965 |   | (520 | ) | 793 |   | — |   | 3,238 |   |
| Interest paid,  net                                                                 |   | —                                              |   | — |   | 3,367 |   | 3,051 |   | 15,671 |   | 2,305 |   | — |   | 24,394 |   |
|                                                                                     |        |                                                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

72

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** **
|                                                                                | **Year Ended December 31, 1999** |                                                                           |
|-------------------------------------------------------------------------------------|----------------------------------|--------------------------------------------------------------------------------|
|                                                                                |                             | **Euramax********International,********Inc.********(Parent********Guarantor)** |   | **Euramax********International********Limited  (Co-Obligor)** |   | **Euramax********European Holdings********Limited  (Co-Obligor)** |   | **Euramax********European********Holdings********B.V.  (Co-Obligor)** |   | **Guarantor********Subsidiaries** |   | **Non-Guarantor********Subsidiaries** |   | **Eliminations** |   | **Consolidated********Totals** |   |
| Cash flows from  operating activities:                                              |                             |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings  (loss)                                                                |                             | $                                                                              | (262 | ) | $ | 11,821 |   | $ | 151 |   | $ | 7,087 |   | $ | 7,346 |   | $ | 20,105 |   | $ | (34,689 | ) | $ | 11,559 |   |
| Reconciliation of  net earnings to cash (used in) provided by operating activities: |                             |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and  amortization                                                      |                             | —                                                                         |   | — |   | — |   | — |   | 105 |   | 13,623 |   | — |   | 13,728 |   |
| Amortization of  deferred financing fees                                            |                             | —                                                                         |   | 237 |   | 94 |   | 104 |   | 435 |   | 210 |   | — |   | 1,080 |   |
| Provision for  doubtful accounts                                                    |                             | —                                                                         |   | — |   | — |   | — |   | — |   | 283 |   | — |   | 283 |   |
| Gain on sale of  assets                                                             |                             | —                                                                         |   | — |   | — |   | — |   | — |   | (146 | ) | — |   | (146 | ) |
| Foreign exchange  loss (gain)                                                       |                             | —                                                                         |   | — |   | 951 |   | 5,481 |   | — |   | (5,703 | ) | — |   | 729 |   |
| Deferred income  taxes                                                              |                             | (200                                                                           | ) | — |   | — |   | — |   | 261 |   | 3,916 |   | — |   | 3,977 |   |
| Dividends  received                                                                 |                             | 20,759                                                                         |   | 19,823 |   | 13,902 |   | 11,174 |   | 27,684 |   | — |   | (93,342 | ) | — |   |
| Equity in  earnings of subsidiaries                                                 |                             | —                                                                         |   | (14,892 | ) | (915 | ) | (10,908 | ) | (7,974 | ) | — |   | 34,689 |   | — |   |
| Changes in  operating assets and liabilities                                        |                             | 2,064                                                                          |   | (547 | ) | (311 | ) | 2,451 |   | (5,958 | ) | (303 | ) | — |   | (2,604 | ) |
| Net cash provided  by operating activities                                          |                             | 22,361                                                                         |   | 16,442 |   | 13,872 |   | 15,389 |   | 21,899 |   | 31,985 |   | (93,342 | ) | 28,606 |   |
|                                                                                |                             |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from  investing activites:                                               |                             |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from  sale of assets                                                       |                             | —                                                                         |   | — |   | — |   | — |   | 1 |   | 705 |   | — |   | 706 |   |
| Purchases of  businesses                                                            |                             | —                                                                         |   | — |   | — |   | — |   | (15,561 | ) | (6,600 | ) | — |   | (22,161 | ) |
| Capital  expenditures                                                               |                             | —                                                                         |   | — |   | — |   | — |   | (43 | ) | (13,315 | ) | — |   | (13,358 | ) |
| Net cash used in  investing activities                                              |                             | —                                                                         |   | — |   | — |   | — |   | (15,603 | ) | (19,210 | ) | — |   | (34,813 | ) |
|                                                                                |                             |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from  financing activities:                                              |                             |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in cash  overdrafts                                                         |                             | —                                                                         |   | — |   | — |   | — |   | 1,746 |   | (1,250 | ) | — |   | 496 |   |
| Net borrowings on  revolving credit facility                                        |                             | —                                                                         |   | — |   | — |   | — |   | 2,000 |   | 20,703 |   | — |   | 22,703 |   |
| Repayment of  long-term debt                                                        |                             | —                                                                         |   | — |   | — |   | — |   | (9,182 | ) | (9,353 | ) | — |   | (18,535 | ) |
| Contributed  capital from reorganization                                            |                             | (72,565                                                                        | ) | — |   | — |   | — |   | 72,565 |   | — |   | — |   | — |   |
| Dividends paid                                                                      |                             | —                                                                         |   | (20,793 | ) | (12,932 | ) | (6,891 | ) | (27,650 | ) | (25,076 | ) | 93,342 |   | — |   |
| Due to/from  parent or affiliate                                                    |                             | 50,204                                                                         |   | 4,351 |   | (930 | ) | (8,496 | ) | (44,213 | ) | (916 | ) | — |   | — |   |
| Net cash used in  financing activities                                              |                             | (22,361                                                                        | ) | (16,442 | ) | (13,862 | ) | (15,387 | ) | (4,734 | ) | (15,892 | ) | 93,342 |   | 4,664 |   |
|                                                                                |                             |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of  exchange rate changes on cash                                            |                             | —                                                                         |   | — |   | (10 | ) | (2 | ) | (37 | ) | (4,067 | ) | — |   | (4,116 | ) |
| Net increase  (decrease) in cash and equivalents                                    |                             | —                                                                         |   | — |   | — |   | — |   | 1,525 |   | (7,184 | ) | — |   | (5,659 | ) |
| Cash and  equivalents at beginning of period                                        |                             | —                                                                         |   | — |   | — |   | — |   | 12 |   | 19,032 |   | — |   | 19,044 |   |
| Cash and  equivalents at end of period                                              |                             | $                                                                              | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 1,537 |   | $ | 11,848 |   | $ | — |   | $ | 13,385 |   |

 

 

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|                                                                                                                                           | **Year  Ended December 31, 1999** |                                                                           |
|------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------------------------------------------------------------------------------|
|                                                                                                                                           |                              | **Euramax********International,********Inc.********(Parent********Guarantor)** |   | **Euramax********International********Limited  (Co-Obligor)** |   | **Euramax********European Holdings********Limited  (Co-Obligor)** |   | **Euramax********European********Holdings********B.V.  (Co-Obligor)** |   | **Guarantor********Subsidiaries** | ** ** | **Non-Guarantor********Subsidiaries** | ** ** | **Eliminations** | ** ** | **Consolidated********Totals** | ** ** |
| Noncash financing  and investing activities:                                                                                                   |                              |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Euramax  International Limited cancelled 34,000,000 preference shares, 1,000,000  ordinary shares, and accrued preference dividends of $18,720 |                              | $                                                                              | — |   | $ | 53,720 |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 53,720 |   |
| Euramax  International, Inc. issued 50,001,992 shares common stock to former Euramax  International Limited shareholders                       |                              | $                                                                              | 500 |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 500 |   |
| Dividends accrued  on redeemable preference shares                                                                                             |                              | $                                                                              | — |   | $ | 6,381 |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 6,381 |   |
| Payable for  certain non-compete agreements associated with purchase of business                                                               |                              | $                                                                              | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 500 |   | $ | — |   | $ | 500 |   |
|                                                                                                                                           |                              |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental cash  flow information:                                                                                                           |                              |                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes paid  (refunded), net                                                                                                             |                              | $                                                                              | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 7,082 |   | $ | (53 | ) | $ | — |   | $ | 7,029 |   |
| Interest paid,  net                                                                                                                            |                              | $                                                                              | — |   | $ | 4 |   | $ | 3,572 |   | $ | 3,521 |   | $ | 13,633 |   | $ | 871 |   | $ | — |   | $ | 21,601 |   |
|                                                                                                                                                |                                   |                                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

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**Item 9.  Changes inand Disagreements with Accountants on Accounting and Financial Disclosures**

 

None

**Part III**

 

**Item 10.  Directors,Executive Officers and Key Management**

 

The following sets forth certain information withrespect to the persons who are members of the Board of Directors, executiveofficers and key management of the Company and its subsidiaries.

 
| **Name**            |   | **Age** |   | **Position**                                                          |
|---------------------|--------|---------|--------|-----------------------------------------------------------------------|
| J. David Smith      |   | 53      |   | Chief Executive Officer, President and Director                       |
|                |   |    |   |                                                                  |
| Mitchell B. Lewis   |   | 39      |   | Executive Vice President and Corporate Business  Development Director |
|                |   |    |   |                                                                  |
| Neil E. Bashore     |   | 53      |   | Executive Vice President                                              |
|                |   |    |   |                                                                  |
| Jo Cuypers          |   | 61      |   | Executive Vice President                                              |
|                |   |    |   |                                                                  |
| R. Scott Vansant    |   | 39      |   | Vice President, Secretary and Chief Financial  Officer                |
|                |   |    |   |                                                                  |
| Scott R. Anderson   |   | 39      |   | President - Amerimax Building Products, Inc.                          |
|                |   |    |   |                                                                  |
| Dudley Rowe         |   | 43      |   | President - Amerimax Home Products, Inc.                              |
|                |   |    |   |                                                                  |
| Rob Dresen          |   | 47      |   | Managing Director - Euramax Coated Products B.V.                      |
|                |   |    |   |                                                                  |
| David C. Pugh       |   | 52      |   | Managing Director - Ellbee Limited                                    |
|                |   |    |   |                                                                  |
| Aloyse Wagener      |   | 54      |   | Managing Director - Euramax Industries S.A.                           |
|                |   |    |   |                                                                  |
| Nick E. Dowd        |   | 44      |   | President - Fabral, Inc.                                              |
|                |   |    |   |                                                                  |
| Stuart M. Wallis    |   | 56      |   | Director, Non-executive Chairman                                      |
|                |   |    |   |                                                                  |
| Joseph M. Silvestri |   | 40      |   | Director                                                              |
|                |   |    |   |                                                                  |
| Ronald A. Collins   |   | 30      |   | Director                                                              |
|                |   |    |   |                                                                  |
| Rolly van Rappard   |   | 40      |   | Director                                                              |
|                |   |    |   |                                                                  |
| Paul E. Drack       |   | 74      |   | Director                                                              |

 

**J. David Smith**has been Chief Executive Officer and a Director of the Company sinceSeptember 1996. Mr. Smith’s career in the fabricated products industryspans thirty years, starting with various operational responsibilities withHowmet Aluminum Corp. (“Howmet Aluminum”). In 1983, Mr. Smith joinedAlumax as General Manager of the Building Specialties Division and becamePresident of Alumax Home and Specialty Products Group in 1988.  Mr. Smith became President of AmerimaxFabricated Products in 1990 and was appointed a Vice President of Alumax in1994.

 

**Mitchell B. Lewis**became Executive Vice President of the Company in October 1998,Corporate Development Director in June 1998 and served as Group Vice Presidentof Amerimax Building Products, Inc. and Fabral, Inc. since 1997.  Prior to being appointed Group VicePresident, he was President and General Manager of Amerimax Building Products,Inc. from 1993 to 1997 and Assistant General Manager

 

75

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of Amerimax Building Products, Inc. from 1991 to1993. Prior to 1991, Mr. Lewis served as corporate counsel with Alumax,and, prior to joining Alumax, he practiced law, specializing in mergers andacquisitions.

 

**Neil E. Bashore**became Executive Vice President of the Company in October 1999.  Prior to being appointed Executive VicePresident, Mr. Bashore was President and General Manager of Amerimax HomeProducts, Inc. from 1996 to 1999. From 1993 to 1996, Mr. Bashore served asGeneral Manager of Amerimax Home Products, Inc. From 1981 to 1993,Mr. Bashore served as Manufacturing Manager of Amerimax HomeProducts, Inc. and has served in other management positions with theCompany since 1975.

 

**Jo Cuypers**became Executive Vice President of the Company in January 2001.  Prior to being appointed Executive VicePresident, Mr. Cuypers served as Managing Director of Euramax Coated ProductsB.V. from 1979 to 2000.  Mr. Cuypersjoined Euramax Coated Products B.V. in 1970 and has served as production teamleader, production and material manager, production director and generalmanager.  Including his service withother companies prior to joining Euramax Coated Products BV, Mr. Cuypers hasover 40 years of industry experience.

 

**R. Scott Vansant**became Chief Financial Officer of the Company in July 1998 and VicePresident and Secretary in September 1996. He joined Alumax in 1991. From 1995 to 1996, Mr. Vansant served asDirector of Internal Audit for Alumax. Mr. Vansant also served in variousoperational positions with Alumax Building Products, Inc., includingserving as Controller of the division from 1993 to 1995. Prior to 1991,Mr. Vansant worked as a Certified Public Accountant for Ernst & YoungLLP.

 

**Scott R. Anderson**became President of Amerimax Building Products, Inc. in October1998.  Mr. Anderson has served invarious financial and operational roles since joining the Company in 1987,including Operations Manager (1997 to 1998) and Controller (1995 to 1997) ofAmerimax Building Products, Inc.

 

**Dudley Rowe**became President of Amerimax Home Products, Inc. in October 1999. Mr.Rowe has served in various sales and operational roles since joining theCompany in October 1980, including Sales Manager of Amerimax Home Products,Inc. from 1988 to 1999.

 

**Rob Dresen**became managing Director of Euramax Coated Products B.V. in January2001.  Mr. Dresen joined Euramax CoatedProducts BV in 1993 as Sales and Marketing Director.  Prior to joining Euramax Coated Products B.V., Mr. Dresen spent14 years in sales and marketing management for such international companies asStork Screens International and Akrosit Europe.

 

**Aloyse R. Wagener** joined Euramax Industries S.A. in July 1992 as Managing Director.  From 1989 to 1992, Mr. Wagener was ManagingDirector of Para-Press in Luxembourg. Prior to 1989, Mr. Wagener held several positions with Para-Press, includingPurchasing Director and Sales Director.

 

**David C. Pugh**has been Managing Director of Ellbee Limited since 1996. Prior to theAcquisition, Mr. Pugh held several positions with Alumax, including SalesDirector and Production Director of Ellbee Limited.

 

76

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**Nick E. Dowd**became President of Fabral, Inc. in July 2000.  Mr. Dowd served as Controller of Amerimax Building Products, Inc.from 1998 to 2000.  Prior to 1998, Mr.Dowd served as Divisional President and General Manager for Waste Management,Inc.

 

**Stuart M. Wallis**became a director of the Company and non-executive chairman of the Boardof Directors in February 1997, having served as Chief Executive for Fisons plcfrom 1994 to 1995.  Mr. Wallis is currentlyChairman of Communisis plc and Protherics plc, in addition to a number ofprivate companies.

 

**Joseph M. Silvestri**became a director of the Company upon consummation of the Transactions.Mr. Silvestri has been employed by Citicorp Venture Capital, Ltd. since1990 and has been a Vice President since 1995. Mr. Silvestri is a directorof Delco Remy, MacDermid, ISG Resources and Triumph Group, in addition to anumber of private companies.

 

**Ronald A. Collins**became a director of the Company in November 2000. Mr. Collins hasbeen employed by CVC Capital Partners, Ltd. since 1999, and is currently anInvestment Director.  Mr. Collins is adirector of Kalle Nalo and received his M.B.A. from Northwestern University’sKellogg Graduate School of Management.

 

**Rollyvan Rappard**became a director of the Company uponconsummation of the Transactions. Mr. van Rappard has been employed by CVCCapital Partners B.V. since 1988.  Hehas been a Managing Director since 1993 and Managing Partner since 2001.Mr. van Rappard is currently a director of, among other companies, KappaHolding, Wavin and Veen Bosch & Keuning B.V.

 

**Paul E.Drack**became a director of the Company in December 1996.Mr. Drack retired from AMAX Inc. in December 1993 after serving asPresident and Chief Operating Officer from 1991. From 1985 to 1991,Mr. Drack was employed in various positions with Alumax Inc. serving asPresident and Chief Executive Officer from 1986 to 1991.

 

See “Item 13.  CertainRelationships and Related Transactions — Shareholders Agreement and Articles ofAssociation” below for more information on agreements regarding election ofdirectors.  Mr. van Rappard and Mr.Anderson are nominees of CVC European Equity Partners, L.P.  Mr. Silvestri is the nominee of CiticorpVenture Capital, Ltd.

 

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**Item 11.  ExecutiveCompensation**

 

The following table sets forth the aggregatecompensation earned by the Company’s executive officers that earned $100,000 ormore during the year ended December 28, 2001.

 

**Summary Compensation Table**

 
|                                                                                     |   | **Year**         |       | **Annual  Compensation**  |                      | **All Other Compensation** |   |
|------------------------------------------------------------------------------------------|--------|------------------|------------|---------------------------|---------------------------|----------------------------|--------|
| **Name and Principal Position**                                                          |   |             | **Salary** |                      | **Bonus**                 |                       |   |
| J. David Smith, Chief  Executive Officer, President and Director                         |   | 2001  2000  1999 |       | $                         | 395,000  358,750  312,500 |                       | $      | 304,059  —  220,494 |   | $ | 90,49157,126  61,417 |   |
|                                                                                     |   |             |       |                      |                      |                       |   |   |   |
| Jo Cuypers,  Executive Vice President                                                    |   | 2001  2000  1999 |       | 138,423  129,663

140,746 |                      | 56,500  38,967  67,053     |   | 3⁄43⁄43⁄4 |   |
|                                                                                     |   |             |       |                      |                      |                       |   |   |   |
| Mitchell B. Lewis,  Executive Vice President and Corporate Business Development Director |   | 2001  2000  1999 |       | 226,500  198,000  175,000 |                      | 139,453  —  99,941    |   | 10,635  6,986  9,959 |   |
|                                                                                     |   |             |       |                      |                      |                       |   |   |   |
| Neil E. Bashore,  Executive Vice President                                               |   | 2001  2000  1999 |       | 182,500  165,000  134,500 |                      | 112,363  —  59,546    |   | 40,944  143,906  75,738 |   |
|                                                                                     |   |             |       |                      |                      |                       |   |   |   |
| R. Scott Vansant, Vice  President, Secretary and Chief Financial Officer                 |   | 2001  2000  1999 |       | 189,250  166,250  148,750 |                      | 116,519  —  85,244    |   | 10,555  6,451  8,365 |   |
|                                                                                          |        |                  |            |                           |                           |                            |        |  |  |  |  |  |

 

----

(1)              Excludescertain perquisites received which do not exceed the lessor of $50,000 or ten percentof any named executive officer’s salary and bonus.

(2)              Allother compensation for 2002 consists of the Company’s matching contributions tothe defined contribution plan, term life insurance, discretionary Companycontributions to the defined contribution plan based on age and years ofservice, and amounts earned for the Supplemental Executive Retirement Plan(“SERP”) as follows: J. David Smith earned $10,509 for term life insurance,$15,300 for the defined contribution plan and $64,682 for the SERP; Mitchell B.Lewis earned $435 for term life insurance and $10,200 for the definedcontribution plan; Neil Bashore earned $870 for term life insurance, $15,300for the defined contribution plan and $24,774; R. Scott Vansant earned $355 forterm life insurance and $10,200 for the defined contribution plan.

 

The Company has not granted any options or stockappreciation rights.

 

78

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**Retirement Plans**

 

See Note 9 to the Consolidated FinancialStatements for a description of the Company’s retirement plans. Additionally,the Company maintains an unfunded supplemental executive retirement plan (the“SERP”) for Mr. Smith and Mr. Bashore that is designed to supplementbenefits payable under other plans of the Company. The participants may electto receive benefits in the form of a lump sum, which is the value equivalent ofa life annuity, or a life annuity.  Thelife annuity, paid annually, is $110,000 for Mr. Smith, and $40,000 forMr. Bashore upon retirement at age 62. Annual benefits payable under theSERP are reduced for participants retiring before age 62.  A participant’s benefits under the SERP arenot vested until the earlier of the date the executive attains age 52, dies,becomes totally and permanently disabled, or the occurrence of a change incontrol. If the employment of Mr. Smith or Mr. Bashore with the Companyterminates, for any reason, before his benefits have vested, Mr. Smith and Mr.Bashore will not be entitled to any benefits under the SERP.

 

Effective January 1, 1999, Messrs. Smith, Cuypers, Lewis, Bashore andVansant were granted phantom stock awards under the Company’s 1999 PhantomStock Plan.  Each award is equal to 4%of the equity value of the Company, as defined by the Plan, divided by40,000.  The award entitles theparticipants to receive compensation based on the change in the equity value ofthe Company between January 1, 1999, the grant date, until, at the latest,January 1, 2004.  The awards become fullyvested on the earlier of a change in control; a listing; the death, disabilityor retirement of the participant; or December 31, 2003.  The compensation will be paid out in fourequal payments during the first quarter of 2004 through 2007, unless there is achange in control; a listing; or the death, disability or retirement of theparticipant; in which case the compensation will be paid out sooner.  No compensation expense was recorded for theyears ended December 28, 2001 or December 29, 2000.

 

**Compensation of Directors**

 

Mr. Wallis and Mr. Drack received approximately$62,443 and $24,000, respectively, in directors’ fees for the year endedDecember 28, 2001.  Other directors whoare not executive officers of the Company are entitled to an annual fee of $15,000.Directors are reimbursed for out-of-pocket expenses incurred in connection withattending meetings.   In 2001, theCompany paid approximately $86,443 in directors’ fees.

 

**Employment Agreements**

 

Mr. Smith is party to an employment agreement withthe Company which is renewed on an annual basis. The agreement provides for aminimum annual salary of $425,000 and bonuses based on the achievement ofcertain operating income and return on asset targets established by the Boardof Directors of the Company in consultation with Mr. Smith. Subject tocertain exceptions, in the event Mr. Smith is terminated by the Company(other than for cause), Mr. Smith will be entitled to receive his annualsalary for a period of twenty-four months following the date of suchtermination.  The employment agreement alsorequires the Company to maintain benefits for Mr. Smith equal to:(i) basic and supplemental life insurance in total equal to 4-1/2 timesbase pay, (ii) accidental death and dismemberment insurance equal to 4-1/2times base pay, and (iii) long-term disability insurance equal to 2/3 basepay plus target bonus.

 

79

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**Management Equity Participation**

 

In connection with the Acquisition, in order toprovide financial incentives for certain of its employees, the Company providedfor certain rights with respect to the ordinary shares and the preferenceshares purchased by the Management Investors. On the Closing Date, theManagement Investors purchased an aggregate of approximately $1.0 million ofordinary shares and preference shares. The ordinary shares and preferenceshares of the Management Investors are subject to certain call provisionsexercisable by the Company and/or the Investor Group in the event of thetermination of a Management Investor’s employment with the Company and itssubsidiaries.  In connection with theReorganization described in Note 1 of the Consolidated Financial Statements,the ordinary shares were cancelled and replaced with common stock.  (See Note 7 to the Consolidated FinancialStatements).

 

**Descriptionof Preference Shares**

 

As part of the Transactions, the Company issuedthe equivalent of 34,000,000 redeemable preference shares for a purchase priceof $34.0 million (the “Liquidation Value”) to the Investor Group, theManagement Investors and an affiliate of Paribas. In connection with theReorganization described in Note 1 of the Consolidated Financial Statements,the preference shares and accrued dividends were cancelled and replaced withcommon stock.  (See Note 7 to theConsolidated Financial Statements.)

 

80

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**Item12.  Security Ownership of CertainBeneficial Owners and Management**

 

The table below sets forth certain informationregarding the beneficial ownership of the common stock by (i) each person whois known to the Company to be the beneficial owner of more than 5% of eitherclass, (ii) each director, (iii) each named executive officer of the Company,and (iv) all executive officers and directors of the Company as a group. Exceptas set forth below, the stockholders listed below have sole voting andinvestment power with respect to all shares shown as beneficially owned bythem.

 
| **Name and Address of Beneficial Owner**                                                                                                            |   | **Number  of   Common Stock** |   | **Percentage  of   Common Stock** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|-----------------------------------|--------|
| CVC  European Equity Partners, L.P.  Hudson House  8-10 Tavistock Street  London WCZE 7PP  United Kingdom                                           |   | 178,115.21                    |   | 35.6                              | %      |
| Citicorp  Venture Capital, Ltd.  399 Park Avenue, 14th Floor  New York, NY  10043                                                              |   | 152,309.32                    |   | 30.5                              | %      |
| BNP  Paribas  787 7th Avenue  New York, NY  10019                                                                                              |   | 44,346.80                     | (1)    | 8.9                               | %      |
| CCT  III Partners, L.P.  c/o Citicorp Venture Capital, Ltd.  399 Park Avenue, 14th Floor  New York, NY  10043                                  |   | 26,878.12                     |   | 5.4                               | %      |
| CVC  European Equity Partners (Jersey), L.P.  Mourant & Co. Limited  P.O. Box 87  18 Greville Street  St. Helier  Jersey JE48PX  Channel Island |   | 21,445.36                     |   | 4.3                               | %      |
| J.  David Smith  5130 Riverlake Drive  Duluth, GA  30097                                                                                       |   | 8,373.07                      |   | 1.7                               | %      |
| Mitchell  B. Lewis  10245 Brier Mill Ct.  Alpharetta, GA  30022                                                                                |   | 6,895.47                      |   | 1.4                               | %      |
| Neil  E. Bashore  802 Amerden Ponds Court  Duluth, GA  30097                                                                                   |   | 3,694.00                      |   |                              | *      |
| R.  Scott Vansant  150 Brightmore Way  Alpharetta, GA  30005                                                                                   |   | 3,940.27                      |   |                              | *      |
| Joseph M. Silvestri                                                                                                                                 |   | 664.99                        | (2)    |                              | *      |
| Richard M. Cashin                                                                                                                                   |   | 5,616.22                      | (2)    | 1.1%                              |   |
| Ronald A. Collins                                                                                                                                   |   | —                        | (3)    |                              | *      |
| Rolly van Rappard                                                                                                                                   |   | —                        | (3)    |                              | *      |
| Paul E. Drack                                                                                                                                       |   | 779.87                        |   |                              | *      |
| Stuart M. Wallis                                                                                                                                    |   | 3,819.94                      |   |                              | *      |
| Executive Officers and  Directors as a Group (9 persons)                                                                                            |   | 33,783.83                     |   | 6.8%                              |   |

 

----

* Less than 1%

(1)       Class B common stock

(2)       Excludes the ownershipinterests of Messrs. Silvestri and Cashin in Citicorp Venture Capital, Ltd.

(3)       Excludes the ownershipinterests of Messrs. Collins and van Rappard in CVC European Equity Partners,L.P.

 

81

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**Item13.  Certain Relationships and RelatedTransactions**

 

**Shareholders Agreement and Articles of Association**

 

The Company, the Investor Group, the ManagementInvestors and an affiliate of Paribas are parties to a shareholders agreement(the “Shareholders Agreement”) which contains certain agreements among suchparties with respect to the equity interests and corporate governance of theCompany. The Board of Directors of the Company is comprised of seven members.The partners of CVC Europe have the right to appoint two directors. J. DavidSmith is to be re-appointed a director for as long as he is Chief ExecutiveOfficer of the Company. Pursuant to the Shareholders Agreement and the Articlesof Incorporation of the Company, the disposition of shares is restricted. TheShareholders Agreement and the Articles of Incorporation also contain certainparticipation rights, approval rights and rights of first refusal exercisableby the partners of CVC Europe and Citicorp Venture Capital, Ltd. and itsaffiliates who are shareholders of the Company, in the event of certain salesor proposed sales of equity interests by the other.

 

**Registration Rights Agreement**

 

On the Closing Date of the Acquisition, September25, 1996, the Company entered into a registration rights agreement (the“Registration Agreement”) with certain of the Company’s existing shareholders.Pursuant to the terms of the Registration Agreement, such shareholders have theright to require the Company, at the Company’s sole cost and expense andsubject to certain limitations, to register under the Securities Act or list onany internationally recognized stock exchange all or part of the OrdinaryShares held by such shareholders (the “Registrable Securities”). All suchshareholders will be entitled to participate in all registrations by theCompany or other shareholders, subject to certain limitations. In connectionwith all such registrations, the Company has agreed to indemnify all holders ofRegistrable Securities against certain liabilities, including liabilities underthe Securities Act and other applicable state or foreign securities laws.Registrations pursuant to the Registration Agreement will be made, ifapplicable, on the appropriate registration form and may be underwrittenregistrations.  In connection with theReorganization described in Note 1 of the Consolidated Financial Statements,the Registration Rights Agreement with Euramax International plc was terminatedand replaced with a new agreement with Euramax International, Inc. whichcontains substantially similar terms and conditions as the RegistrationAgreement.

 

82

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**Part IV**

 

**Item 14.  Exhibits,Financial Statement Schedules, and Reports on Form 8-K**

 

(a)(1)       The following consolidated financial statements of EuramaxInternational, Inc. and its subsidiaries are included in Part II, Item 8.

 

Reports of Independent Auditors

 

Consolidated Statements of Earnings for the yearsended December 28, 2001, December 29, 2000 and December 31, 1999.

 

Consolidated Balance Sheets atDecember 28, 2001 and December 29, 2000.

 

Consolidated Statements of Changes in Equity for theyears ended December 28, 2001, December 29, 2000 and December 31, 1999.

 

Consolidated Statements of Cash Flows for the yearsended December 28, 2001, December 29, 2000 and December 31, 1999.

 

Notes to Consolidated FinancialStatements

 

(a)(2)       Financial Statement Schedule

 

Schedule II — Valuation andQualifying Accounts

 

All other schedules for whichprovision is made in the applicable accounting regulations of the Securitiesand Exchange Commission have been omitted either because they are not requiredunder the related instructions or because they are inapplicable.

 

(b)           The Company filed no reports on Form8-K for the quarter ended December 28, 2001.

 

83

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(c)           Exhibits:

| 2.1**       | Purchase Agreement dated as of  April 28, 1997, among the Company and Genstar Capital Corporation (“GCC”),  Ontario Teachers’ Pension Plan Board and the Management Stockholders of  Gentek Holdings, Inc. (“Holdings”) as sellers GCC as sellers’ representative;  Holdings and Gentek Building Products, Inc. (“GBPI”).  (Incorporated by reference to Exhibit 2.1  of the Registrant’s Form 8-K filed August 1, 1997). |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 2.2******   | Proposals for the acquisition  of the entire issued share capital of Euramax International Limited by  Euramax International, Inc. to be effected by means of a Scheme Arrangement  under Section 425 of the Companies Act 1985.                                                                                                                                                                                                                                            |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 2.3******** | Purchase Agreement dated as of  March 10, 2000, by and between Amerimax Home Products, Inc., Gutter World,  Inc. and Global Expanded Metals, Inc., and all of the stockholders of Gutter  World, Inc. and Global Expanded Metals, Inc.                                                                                                                                                                                                                                      |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.1*        | Articles of Association of  Euramax International plc                                                                                                                                                                                                                                                                                                                                                                                                                       |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.2*        | Memorandum and Articles of  Association of Euramax European Holdings plc                                                                                                                                                                                                                                                                                                                                                                                                    |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.3*        | Articles of Association of  Euramax International B.V.                                                                                                                                                                                                                                                                                                                                                                                                                      |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.4*        | Articles of Incorporation of  Amerimax Holdings, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                       |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.5*        | Bylaws of Amerimax Holdings,  Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.3*        | Indenture, dated as of  September 25, 1996, by and among Euramax International plc, Euramax European  Holdings plc, Euramax European Holdings B.V., Amerimax Holdings, Inc. and the  Chase Manhattan Bank, as Trustee.                                                                                                                                                                                                                                                      |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.4*        | Deposit Agreement, dated as of  September 25, 1996, by and among Euramax International plc, Euramax European  Holdings plc, Euramax European Holdings B.V., and The Chase Manhattan Bank,  as book-entry depositary                                                                                                                                                                                                                                                         |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.5*        | Registration Rights Agreement,  dated as of September 25, 1996, by and among Euramax International plc,  Euramax European Holdings plc, Euramax European Holdings B.V., Amerimax  Holdings, Inc. and J.P. Morgan Securities Inc. and Goldman Sachs & Co.                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.6*        | Purchase Agreement dated as of  September 18, 1996, by and among Euramax International Ltd., Euramax European  Holdings Ltd., Euramax European Holdings B.V., Amerimax Holdings, Inc. and  J.P. Morgan Securities Inc. and Goldman Sachs & Co.                                                                                                                                                                                                                          |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.7*******  | Supplemental Indenture, dated  as of November 18, 1999, among Euramax International Limited, Euramax  European Holdings plc, Euramax European Holdings, B.V., as Issuers, Amerimax  Holdings, Inc., as Guarantor, and The Chase Manhattan Bank, as Trustee                                                                                                                                                                                                                  |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.8*******  | Amended and Restated  Supplemental Indenture, dated as of December 14, 1999, among Euramax  International Limited, Euramax European Holdings plc, Euramax European Holdings,  B.V., as Issuers, Amerimax Holdings, Inc., as Guarantor, and The Chase  Manhattan Bank, as Trustee                                                                                                                                                                                            |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.1*       | Purchase Agreement, dated as of  June 24, 1996, by and between Euramax International Ltd. and Alumax Inc.                                                                                                                                                                                                                                                                                                                                                                   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2*       | Executive Employment Agreement,  dated as of September 25, 1996, by and between J. David Smith and Euramax  International plc                                                                                                                                                                                                                                                                                                                                               |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.5*       | Domestic Security Agreement,  dated as of September 25, 1996, by Amerimax Holdings, Inc. in favor of Banque  Paribas, as agent                                                                                                                                                                                                                                                                                                                                              |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.6*       | Domestic Security Agreement,  dated as of September 25, 1996, by Amerimax Fabricated Products, Inc. in  favor of Banque Paribas, as agent                                                                                                                                                                                                                                                                                                                                   |

 

84

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| 10.7*    | Domestic Security Agreement,  dated as of September 25, 1996, by Amerimax Home Products, Inc. in favor of  Banque Paribas, as agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.8*    | Domestic Security Agreement,  dated as of September 25, 1996, by Amerimax Building Products, Inc. in favor  of Banque Paribas, as agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.9*    | Domestic Security Agreement,  dated as of September 25, 1996, by Amerimax Coated Products, Inc. in favor of  Banque Paribas, as agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.10*   | Domestic Security Agreement,  dated as of September 25, 1996, by Johnson Door Products, Inc. in favor of  Banque Paribas, as agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.11*   | Domestic Security Agreement,  dated as of September 25, 1996, by Amerimax Specialty  Products, Inc. in favor of Banque Paribas,  as agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.12*   | Domestic Subsidiary Guaranty,  dated as of September 25, 1996, by each of Amerimax Home Products, Inc.,  Amerimax Specialty Products, Inc., Amerimax Building Products, Inc., Amerimax  Coated Products, Inc. and Johnson Door Products, Inc. in favor of the  Guarantied Parties referred to therein                                                                                                                                                                                                                                                                                                                                              |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.13*   | U.S. Holdings Guaranty, dated  as of September 25, 1996, by Amerimax Holdings, Inc. in favor of the  Guaranteed Parties referred to therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.14*   | U.S. Holdings Pledge Agreement,  dated as of September 25, 1996, by Amerimax Holdings, Inc., to Banque  Paribas, as Agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.15*   | U.S. Operating Co. Guaranty,  dated as of September 25, 1996, by Amerimax Fabricated Products, Inc. in  favor of the Guarantied Parties referred to therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.16*   | U.S. Operating Co. Pledge  Agreement dated as of September 25, 1996, by Amerimax Fabricated Products,  Inc. to Banque Paribas, as Agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.17*   | Euramax Assignment Agreement,  dated as of September 25, 1996, by Euramax International plc in favor of  Banque Paribas, as Agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.18*   | Euramax Pledge Agreement, dated  as of September 25, 1996, by Euramax International plc to Banque Paribas, as  Agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.19*   | Building Products Pledge  Agreement, dated as of September 25, 1996, by Amerimax Building Products,  Inc. to Banque Paribas, as Agent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.20*   | Dutch Holdings Guaranty, dated  as of September 25, 1996, by Euramax European Holdings B.V. in favor of the  Guarantied Parties referred to therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.21*   | Dutch Company Guaranty, dated  as of September 25, 1996, by Euramax Netherlands B.V., in favor of the  Guarantied Parties referred to therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.22*   | Dutch Operating Co. Guaranty,  dated as of September 25, 1996, by Euramax Europe B.V., in favor of the  Guarantied Parties referred to therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.23*   | Dutch Subsidiary Guaranty,  dated as of September 25, 1996, by Euramax

Coated Products B.V., in favor  of the Guarantied Parties referred to therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.24*** | Amended and Restated Credit  Agreement, dated as of July 16, 1997, by and among Amerimax Fabricated  Products, Euramax Holdings Limited, Euramax Europe B.V., Euramax Netherlands  B.V., as Borrowers; Euramax International plc, Amerimax Holdings, Inc.,  Euramax European Holdings plc, Euramax European Holdings B.V., Euramax Europe  Limited and certain of their operating subsidiaries, as other Loan Parties;  Banque Paribas, as Agent, as a Lender and as the Issuer; and the other  lenders named therein.  (Incorporated  by reference to Exhibit 10.1 of the Registrant’s Form 10-Q for the quarter  ended June 28, 1997.) |

 

85

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| 10.25***        | Amendment to Credit Agreement,  dated as of December 18, 1997, by and among Amerimax Fabricated Products,  Euramax Holdings Limited, Euramax Europe B.V., Euramax Netherlands B.V., as  Borrowers; Euramax International plc, Amerimax Holdings, Inc., Euramax  European Holdings plc, Euramax European Holdings B.V., Euramax Europe Limited  and certain of their operating subsidiaries, as other Loan Parties; Banque  Paribas, as Agent, as a Lender and as the Issuer; and the other lenders named  therein.  (Incorporated by reference  to Exhibit 10.25 of the Registrant’s Form 10-K for the year ended December  26, 1997.) |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.26****       | Incentive Compensation Plan  effective January 1, 1997, by Euramax International Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.27****       | Phantom Stock Plan effective  January 1, 1999, by Euramax International Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.28*****      | Amendment and Waiver dated as  of April 6, 1999, among Euramax International Limited, and its subsidiaries,  Paribas (as Agent and Lender), and the Lenders, to the Amended and Restated  Credit Agreement dated as of July 16, 1997                                                                                                                                                                                                                                                                                                                                                                                                             |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.29*******    | Amendment, dated as of December  8, 1999, among Euramax International Limited, the other Loan Parties, the  Swing Loan Lender and the Issuer and Paribas, as Agent, to (a) the Amended  and Restated Credit Agreement, dated as of July 16, 1997 and (b) the other  Loan Documents                                                                                                                                                                                                                                                                                                                                                               |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.30*******    | Amendment and Consent, dated as  of December 9, 1999, among Euramax International Limited, the other Loan  Parties, the Swing Loan Lender and the Issuer and Paribas, as Agent, to (a)  Amended and Restated Credit Agreement, dated as of July 16, 1997 and (b) the  other Loan Documents                                                                                                                                                                                                                                                                                                                                                       |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.31*********  | Amendment and Waiver dated as  of April 10, 2000, among Euramax International, Inc. and its subsidiaries,  Paribas (as Agent and Lender), and the Lenders, to the Amended and Restated  Credit Agreement dated as of July 16, 1997.                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.32********** | Amendment and Waiver dated as  of March 19, 2001, among Euramax International, Inc. and its subsidiaries,  Paribas (as Agent and Lender), and the Lenders, to the Amended and Restated  Credit Agreement dated as of July 16, 1997.                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 21.1            | Subsidiaries of Euramax  International, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

----

| *        | Incorporated by reference to  the Exhibit with the same number in the Registrant’s Registration Statement  on Form S-4 (333-05978) which became effective on February 7, 1997. |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **       | Incorporated by reference to  the Exhibit with the same number in the Registrant’s Annual Report on Form  10-K (333-05978) which was filed on March 12, 1998.                  |
| ***      | Incorporated by reference to  the Exhibit with the same number in the Registrant’s Annual Report on Form  10-K (333-05978) which was filed on March 5, 1999.                   |
| ****     | Incorporated by reference to  the Exhibit with the same number in the Quarterly Report on Form 10-Q  (333-05978) which was filed on April 26, 1999.                                 |
| *****    | Incorporated by reference to  the Exhibit with the same number in the Quarterly Report on Form 10-Q  (333-05978) which was filed on August 2, 1999.                                 |
| ******   | Incorporated by reference to  the Exhibit with the same number in the Quarterly Report on Form 10-Q  (333-05978) which was filed on November 3, 1999.                               |
| *******  | Incorporated by reference to  the Exhibit with the same number in the Registrant’s Annual Report on Form  10-K (333-05978) which was filed on March 23, 2000.                  |
| ******** | Incorporated by reference to  Exhibit 2.2 in the Registrant’s Current Report on Form 8-K (333-05978) which  was filed on April 24, 2000.                                       |

 

86

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| *********  | Incorporated by reference to  the Exhibit with the same number in the Quarterly Report on Form 10-Q  (333-05978) which was filed on August 10, 2000. |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| ********** | Incorporated by reference to  the Exhibit with the same number in the Quarterly Report on Form 10-Q  (333-05978) which was filed on May 10, 2001.    |

** **

**SIGNATURES**

 

**Pursuant to the requirements of Section 13 or 15(d) of theSecurities and Exchange Act of 1934, Euramax International, Inc. has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.**

 

**EURAMAX INTERNATIONAL, INC.**

 
| By:    | /s/ J. David Smith   | Chief  Executive Officer and President |
|--------|----------------------|---------------------------------------------|
|   |  J. David Smith |                                        |

 

Dated: March 20, 2002

 

**Pursuant to the requirements of the Securities Exchange Actof 1934, this report has been signed below by the following persons on behalfof Euramax International, Inc. and in the capacities and on the datedindicated.**

 
| **Signature** |                | **Title**           |   | **Date** |
|---------------|---------------------|---------------------|--------|----------|
|          |                |                |   |     |   |
| By:           | /s/                 | J. David Smith      |   |     | Chief Executive Officer,  President and Director | March 20, 2002 |
|          | J. David Smith      |                |   |     |
|          |                |                |   |     |   |
|          |                |                |   |     |   |
| By:           | /s/                 | R. Scott Vansant    |   |     | V.P., Secretary and Chief  Financial Officer | March 20, 2002 |
|          | R. Scott Vansant    |                |   |     |
|          |                |                |   |     |   |
|          |                |                |   |     |   |
| By:           | /s/                 | Stuart M. Wallis    |   |     | Director | March 20, 2002 |
|          | Stuart M. Wallis    |                |   |     |
|          |                |                |   |     |
|          |                |                |   |     |
| By:           | /s/                 | Joseph M. Silvestri |   |     | Director | March 20, 2002 |
|          | Joseph M. Silvestri |                |   |     |
|          |                |                |   |     |   |
|          |                |                |   |     |   |
| By:           | /s/                 | Ronald A. Collins   |   |     | Director | March 20, 2002 |
|          | Ronald A. Collins   |                |   |     |
|          |                |                |   |     |   |
|          |                |                |   |     |   |
| By:           | /s/                 | Rolly Van Rappard   |   |     | Director | March 20, 2002 |
|          | Rolly Van Rappard   |                |   |     |
|          |                |                |   |     |   |
|          |                |                |   |     |   |
| By:           | /s/                 | Paul E. Drack       |   |     | Director | March 20, 2002 |
|          | Paul E. Drack       |                |   |     |
|               |                     |                     |        |          |  |  |  |  |  |  |  |

 

87

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**Schedule II**

 

**Euramax International, Inc.**

Valuation and Qualifying Accounts

 

Thousands of U.S. Dollars

 
| **Description**                      |   | **Classification**                 |   | **Balance at beginning****of period** |   | **Charged to costs and expenses** |   | **Charged to other accounts****(1)** |   | **Deductions****(2)** |   | **Balance at end****of period** |   |
|--------------------------------------|--------|------------------------------------|--------|---------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|-----------------------|--------|---------------------------------|--------|
| For the year ended December 28, 2001 |   |                               |   |                                  |   |                              |   |                                 |   |                  |   |                            |   |
| Allowance for doubtful accounts      |   | A/R,  net                          |   | $                                     | (2,973 | )                                 | $      | (1,764                               | )      | $                     | 61     |                            | $      | 738 |   | $ | (3,938 | ) |
| For the year ended December 29, 2000 |   |                               |   |                                  |   |                              |   |                                 |   |                  |   |                            |   |
| Allowance for doubtful accounts      |   | A/R,  net                          |   | $                                     | (2,934 | )                                 | $      | (542                                 | )      | $                     | 109    |                            | $      | 394 |   | $ | (2,973 | ) |
| For the year ended December 31, 1999 |   |                               |   |                                  |   |                              |   |                                 |   |                  |   |                            |   |
| Allowance for doubtful accounts      |   | A/R,  net                          |   | $                                     | (3,609 | )                                 | $      | (355                                 | )      | $                     | 136    |                            | $      | 894 |   | $ | (2,934 | ) |
|                                 |   |                               |   |                                  |   |                              |   |                                 |   |                  |   |                            |   |
| For the year ended December 28, 2001 |   | Deferred                           |   |                                  |   |                              |   |                                 |   |                  |   |                            |   |
| Income tax valuation allowance       |   | income  taxes, long-term liability |   | $                                     | (1,632 | )                                 | $      | (893                                 | )      | —                |   | —                          |   | $ | (2,525 | ) |
| For the year ended December 29, 2000 |   | Deferred                           |   |                                  |   |                              |   |                                 |   |                  |   |                            |   |
| Income tax valuation allowance       |   | income  taxes, long-term liability |   | $                                     | (595   | )                                 | $      | (1,037                               | )      | —                |   | —                          |   | $ | (1,632 | ) |
| For the year ended December 31, 1999 |   | Deferred                           |   |                                  |   |                              |   |                                 |   |                  |   |                            |   |
| Income tax valuation allowance       |   | income  taxes, long-term liability |   | —                                |   | $                                 | (595   | )                                    | — |                  | — |                            | $      | (595 | ) |

 

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Note:

(1)           Changes due to foreign currencytranslation adjustment.

(2)           Write-off of bad debts, net ofrecoveries.

 

 

 

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