** **

**UNITED STATESSECURITIES 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 27, 2002**                                              |
|                                  |                                                                                          |
| **o**                                 | **Transition Report Pursuant to Section 13 or 15(d) of the  Securities Exchange Act of 1934** |
|                                  |                                                                                          |
| **Commission File Number: 333-05978** |

 

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| **EURAMAX  INTERNATIONAL, INC.**                                             |
|------------------------------------------------------------------------------|
| (Exact name 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) |
|                                                                         |   |   |
| Registrant’s telephone  number, including area code: **(770) 449-7066** |
|                                                                         |   |   |
| Securities registered  pursuant to Section 12(b) of the Act:                 |

 

| **Title of  each class** |   | **Name of  each exchange on which registered** |
|--------------------------|--------|------------------------------------------------|
| None                     |   | None                                           |

 

Securities registeredpursuant to Section 12(g) of the Act:

**None ***

(Title of Class)

 

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*                                         Certain notes issued by the Registrant are tradedon the Luxembourg Stock Exchange.

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

Yes ýNo o

 

Indicate by check mark if disclosure of delinquent filers pursuant toItem 405 of Regulation S-K is not contained herein, and will not be contained,to the best of registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of the Form 10-K or anyamendment to this Form 10-K.  ý

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Exchange Act Rule 12b-2).

Yes oNo ý

 

As of March 21, 2003, Registrant has outstanding 440,650.84 shares ofClass A common stock and 44,346.80 shares of Class B convertible common stock.

 

 

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Note Regarding Private Securities Litigation ReformAct: Statements contained in this Form 10-K that are nothistorical facts include forward-looking statements that are subject to thesafe harbor rules created by the Private Securities Litigation Reform Act of 1995.All statements, other than statements of historical facts, included orincorporated by reference in this Form 10-K which address activities, events ordevelopments which Euramax International, Inc. and subsidiaries (the “Company”or “Euramax”) expect or anticipate will or may occur in the future, includingstatements regarding the Company’s competitive position, the risks ofacquisition of businesses (including limited knowledge of the businessesacquired and misrepresentations by sellers), changes in business strategy ordevelopment plans, cyclical demand for the Company’s products, the supplyand/or price of aluminum and other raw materials, currency exchange ratefluctuations, the Company’s ability to pass on price increases, the impact ofenvironmental laws and regulations, the availability of financing, reliance onkey management personnel, ability to manage growth, the Company’s expectationsregarding the adequacy of current financing arrangements, loss of customers,quantitative and qualitative disclosures about market risk, and otherstatements regarding future plans and strategies, anticipated events or trendsand similar expressions concerning matters that are not historical facts areforward looking statements. Words such as “expects,” “anticipates,” “intends,”“plans,” “believes,” “estimates,” or variations of such words and similarexpressions are intended to identify such forward-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 resultsand developments will conform with the Company’s expectations and predictionsis subject to a number of risks and uncertainties which could cause actualresults to differ significantly and materially from past results and from theCompany’s expectations, including the risk factors discussed in this Form 10-K,Item 1 “Business,” and Item 7 “Management’s Discussion and Analysis ofFinancial Conditions and Results of Operations,” and other factors, many ofwhich are beyond the control of the Company. Consequently, all of the forwardlooking statements made in this Form 10-K are qualified by these cautionarystatements and there can be no assurance that the actual results ordevelopments anticipated by the Company will be realized or, even ifsubstantially realized, that they will have the expected consequences to oreffects on the Company or its business or operations. The Company assumes noobligation to update publicly any such forward-looking statements, whether as aresult of new information, future events or otherwise.

 

**Part I**

 

**Item1.  Business**

 

**General**

 

Euramax is an international producer of value-added aluminum, steel,vinyl and fiberglass fabricated products with facilities strategically locatedin the United Kingdom (“U.K.”), The Netherlands, France, and all major regionsof the continental United States (“U.S.”). Euramax’s core products includespecialty coated coils, aluminum recreational vehicle (“RV”) sidewalls, RVdoors, farm and agricultural panels, metal and vinyl raincarrying systems,roofing accessories, soffit and fascia systems, and vinyl replacement windows.The Company’s customers include original equipment manufacturers (“OEMs”) suchas RV, commercial panel manufacturers and transportation industrymanufacturers; rural contractors; home centers; manufactured housing producers;distributors; industrial and architectural contractors; and home improvementcontractors.

 

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Euramax operates downstream of producers of aluminum coil, aluminumextrusions, steel coil and aluminum ingot. These producers supply the Companywith aluminum coil, aluminum extrusions and steel coil. The Company soldapproximately 180 and 240 million pounds of aluminum and steel, respectively,in 2002. To a lesser extent, the Company also distributes and fabricatesproducts manufactured from vinyl and fiberglass.

 

Euramax is a national supplier in several of its key U.S. product linesand is one of the only national suppliers with in-house coil coatingcapabilities to supply aluminum sidewalls to RV manufacturers and steel sidingto manufactured housing customers. This gives the Company certain advantagesover regional suppliers who do not have in-house manufacturing capabilities ornational distribution 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 are generated in nichemarkets where the Company has a leading market share, including aluminum RVsidewalls, metal raincarrying products and steel siding. The Company believesthat in 2002 it sold at least 61% and 83% of the aluminum sidewalls used by RVmanufacturers in the U.S. and Europe, respectively. These estimates are based uponthe Company’s sales volume of aluminum sidewalls used by RV manufacturers, as apercentage of management’s estimate of total sales volume for such products.The Company believes that in 2002 it sold at least 85% of all metalDo-It-Yourself raincarrying products sold to U.S. home centers. The Companyalso believes that it sold at least 35% of the steel siding sold to producersof manufactured housing in the U.S. These estimates are based upon theCompany’s sales volume of metal raincarrying products sold to U.S. home centersand steel siding sold to producers of manufactured housing as a percentage ofmanagement’s estimate of total sales volume for such products. Net sales for2002 in the U.S. and Europe were $440.9 million and $198.2 million, respectively.

 

In 1999, the Company was reorganized to become a U.S. outboundmultinational group. Formerly a multinational company incorporated in the U.K.under the name of Euramax International Limited, the new parent holdingcompany, Euramax International, Inc., is incorporated in the U.S. (see “TheTransactions”). Euramax International Limited was formed in 1996 by (i) ACPHolding Company (“ACP”), an affiliate of Citicorp Venture Capital, Ltd. (“CVC”)and (ii) CVC European Equity Partners, L.P. (“CVCEEP”) and CVC European EquityPartners (Jersey), L.P., (collectively with CVCEEP, “CVC Europe”, andcollectively with CVC, the “Investor Group”) to acquire certain portions of thefabricated products operations of Alumax Inc., pursuant to the Acquisition(defined below). Alumax Inc. was acquired by Aluminum Company of America in1998, and is hereafter referred to as “Alumax.” In 1998, ACP, a limitedDelaware partnership, distributed its holdings in Euramax to the ACP partners(see Item 12 “Security Ownership of Certain Beneficial Owners and Management”).

 

**BusinessStrategy**

 

The Company’s strategy is to expand its leadership position as aproducer of aluminum and steel products and to further diversify productofferings, customers and geographic regions in which it operates. Since theCompany’s formation in 1996, management has pursued a strategy of improving theCompany’s operations and profitability while positioning the Company for futuregrowth. Under this strategy, the Company is pursuing organic growth throughproduct development, new territories and new customers. In addition, since itsformation in September 1996, the Company has completed seven acquisitions whichhave enabled it to offer complementary products and expand its geographic 

 

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coverage. In addition, the Company has sold two businesses that did notserve management’s strategy (see “The Transactions”). The Company expects tocontinue identifying and acquiring businesses as part of executing itsstrategy.

 

**TheTransactions**

 

*Acquisitionof Alumax’s fabricated products business in September 1996, and relatedfinancing*

 

Pursuant to a purchase agreement (the “Acquisition Agreement”) datedJune 24, 1996, between Euramax International Limited and Alumax, on September25, 1996 (the “Closing Date”), Euramax International Limited purchased, throughits wholly-owned subsidiaries, all of the issued and outstanding capital stockof certain of Alumax’s subsidiaries which operated a portion of Alumax’sfabricated products business (the “Acquisition”). The purchase price ofapproximately $252.4 million, including acquisition expenses of $3.9 millionand adjustments to give effect to certain items including cash acquired andworking capital, was allocated to the assets and liabilities of the Companybased upon their fair market value at the date of the Acquisition under thepurchase method of accounting.

 

In order to finance the purchase price, Euramax International Limitedand certain of its wholly-owned subsidiaries (i) incurred approximately $100.0million of indebtedness under a credit agreement providing for $40.0 million interm loans and 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 BNP Paribas (the agentunder the Credit Agreement), an aggregate of approximately $35.0 million inpreference 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 theReorganization, the parent company was Euramax International Limited (formerlyEuramax International plc), a company organized under the laws of England andWales. Euramax International, Inc. and Euramax International Limited are hereafterreferred to as the “Company” or “Euramax”.

 

The Reorganization was accomplished, in part, by means of a “scheme ofarrangement” under section 425 of the United Kingdom Companies Act 1985, a U.K.judicial proceeding requiring the consent of the registered holders of theCompany’s Notes, the lenders under the Company’s Credit Agreement, and theholders of each class of shares of Euramax. As a result of the Reorganization,the new U.S. holding company of the group, Euramax International, Inc., is thereporting company for the consolidated group. In addition, the new U.S. holdingcompany, two new U.K. intermediate holding companies and Amerimax FabricatedProducts, Inc., an intermediate U.S. holding company, were added as guarantorson the Company’s Notes, and certain covenants in the Company’s Notes wereamended.

 

*Acquisitionof Fabral in July 1997*

 

On July 17, 1997, the Company’s wholly owned subsidiary AmerimaxFabricated Products, Inc. acquired all of the issued and outstanding capitalstock of Gentek Holdings, Inc. and its subsidiary Gentek Building 

 

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Products, Inc. (collectively “Gentek” or “Fabral”) (the “FabralAcquisition”) for approximately $75.3 million. The purchase price was financedthrough additional borrowings under the Credit Agreement which was amended to,among other items, increase borrowings available for the Fabral Acquisition. Atthe Fabral Acquisition date, Gentek was comprised principally of Fabral, adivision of Gentek headquartered in Lancaster, Pennsylvania. Fabral is amanufacturer and distributor of steel and aluminum roofing and wall panelingproducts specifically for the agricultural, commercial and industrial markets.

 

*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, of which $1.3 million was used to extinguishoutstanding indebtedness of JTJ. The remaining purchase price of $1.0 million,representing consideration for certain non-compete agreements, is being paidout in ten equal annual installments ending in 2007. JTJ specializes in thelamination 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 in cash. 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 amanufacturer of aluminum exterior walls and roofs sold primarily to U.K. RVmanufacturers.

 

*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 of metal raincarrying and roofing products soldprimarily to the U.S. distributor market.

 

*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”). The purchase price, including approximately$372.2 thousand in 

 

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acquisition-related fees and expenses, was approximately $45.6 millionin cash. Gutter World is a manufacturer of raincarrying accessories, such asgutter guards, water diverters and downspout strainers, as well as door guardssold primarily to home centers. Global manufactures expanded metal products.

 

**Market Leadership and Diversity of Business**

 

The Company’s position as a leading internationaldownstream producer of aluminum and steel products has historically enabled itto benefit from diversification across economic and product cycles amongdifferent geographic regions and customer groups. This diversification hashistorically enabled Euramax to maintain margins even though demand for certainproducts may be affected by seasonality and by changes in general and regionaleconomic conditions 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 2002 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 69.0% and 31.0% of 2002 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 than11.8% of net sales in 2002. The top ten customers accounted for approximately32.0% of 2002 net sales and represented four distinct end-use markets.These characteristics minimize the Company’s reliance on individual customersor end-use markets.

 

*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 

 

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disclosures relating to the Company’s operatingsegments are provided in Note 14 of the Consolidated Financial Statements. See,also, “Products and Customers.”

 

**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 manufacture standardand custom products efficiently and economically. The Company has the equipmentnecessary for manufacturing substantially all of its products in-house,which minimizes reliance on third party processors. This provides certain costbenefits while enabling the Company to add new products on a timely basis.These capabilities provide certain marketing and pricing advantages, includingthe ability to control delivery time and to develop new and customer-specificproducts 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 theappropriate steps 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 146 million pounds of aluminum (73million pounds in each of the European roll coating segment and the U.S.fabrication segment) and approximately 27 million pounds of steel (11 millionpounds in the European roll coating segment and 16 million pounds in the U.S.fabrication segment) were roll coated by the Company at its eight roll coatingoperations in 2002. The Company has three such coating lines in the U.S. andfive in Europe. The three coating lines in the U.S. are primarily utilized forinternal processing, while the five coating lines in Europe, located within twofacilities, are utilized to supply roll coated products to external customers.The Company believes that its roll coating facility in Roermond, TheNetherlands is one of only three facilities in the world capable of coatingcoil up to 100 inches in width. The Roermond line services a variety of marketsin which wide coated aluminum is becoming increasingly important. Wide coilsprovide customers with the opportunity to produce products more economically byreducing labor costs and requiring fewer joints and seams in theirmanufacturing 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 machineryalso includes equipment to bend, notch and cut aluminum and vinyl extrusionsrequired, together with glass, for the assembly of windows and doors.

 

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**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 14to the Consolidated Financial 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  27,  2002** |   | **December  28,  2001** |   | **December  29,  2000** |   |
|                                     |   |                    |   |   |   |   |   |
| OEMs                                     |   | 41.4                    | %      | 40.7 | % | 44.3 | % |
| Rural Contractors                        |   | 20.5                    | %      | 20.3 | % | 19.2 | % |
| Home Centers                             |   | 20.3                    | %      | 22.0 | % | 18.7 | % |
| Manufactured Housing Producers           |   | 3.0                     | %      | 4.1 | % | 5.8 | % |
| Distributors                             |   | 4.0                     | %      | 2.4 | % | 2.5 | % |
| Home Improvement Contractors             |   | 8.1                     | %      | 7.5 | % | 6.2 | % |
| Industrial and Architectural Contractors |   | 2.7                     | %      | 3.0 | % | 3.3 | % |
|                                     |   | 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 a leading supplier of variousaluminum products to RV manufacturers in the U.S. and Europe. Theseproducts primarily consist of painted aluminum sheet and fabricated paintedaluminum panels. The Company uses its decorative graphic coating lines toproduce aluminum panels with decorative detailing in a variety of colors. TheCompany also supplies RV doors, windows and finished aluminum exteriorwalls and roofing panels. In addition, the Company supplies laminated aluminumand 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 apainted stripe is decorative tape, which must be applied to the aluminum sheet.The tape cannot be applied with the tight tolerances achieved by the Company’spainting process, and does not offer the same graphics variety.

 

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 both residential(e.g., room additions and patio enclosures) and commercial applications(e.g., service stations and school buildings) as well as in the constructionof “cold rooms” used for the 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.

 

Other Manufacturers: The Company also uses its decorative and coilcoating capabilities for products supplied to overhead door manufacturers andproducers of refrigerated transport containers. Door 

 

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manufacturers produce the overhead doors, addingthe necessary hardware and accessory items to complete the 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, buildingand agricultural cooperatives, and animal confinement integrators. Buildingsuppliers and agricultural cooperatives typically purchase smaller quantitiesof product at multiple locations whereas contractors and integrators generallypurchase large volumes for delivery to one site.

 

***Home Centers***

 

The Company’s home center customers supply thewell-established Do-It-Yourself (“DIY”) market in the U.S., Canada, andthe U.K. In the U.S., the Company sells building and construction products,such as residential rain-carrying systems, roof flashing products, soffits,fascias, and steel roofing and siding. In the U.K., the Company sells doors,screen door guards, bath enclosures, and shower, patio, and residential doors.These products, which are designed for ease of installation byDIY consumers, are produced with aluminum, galvanized or painted steel,and vinyl, depending on regional preferences. Home centers include smallhardware stores, large cooperative buying groups, lumberyards and major homecenter retailers. The Company believes that it is the leading supplier of DIYmetal raincarrying systems in the U.S. Competitors are generally regional and, thus, do not have the advantagesof a nationwide service and distribution network such as the Company’s. TheCompany expects to continue to exploit these strengths to introduce additionalDIY products that could be sold through this distribution channel.

 

***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 the Company enjoys a leading position inthis market, recent trends show the annual amounts of steel siding sold to themanufactured housing industry to be declining. This is primarily due to theavailability of low-cost vinyl siding, which has aesthetic advantages oversteel. To a lesser degree, the Company also distributes vinyl siding to certaincustomers in the manufactured housing industry. In addition to steel siding,the Company also fabricates and supplies a variety of steel and aluminum trimcomponents for manufactured home exteriors.

 

***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,raincarrying systems, fascia/soffit systems and drip edges.

 

***Home ImprovementContractors***

 

The Company sells a variety of products to homeimprovement contractors, the most significant of which 

 

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are vinyl replacement windows. Other products soldto home improvement contractors include awnings, lattice systems, metalroofing, shower doors, patio and entrance doors, and insulated roofing panels.In the U.S., the Company offers a full complement of vinyl replacementwindows. In the U.K., the Company produces patio, entrance, and shower doors, marketed primarily to home improvementcontractors. The Company is also one of the largest suppliers of lattice andpainted aluminum awnings to residential contractors 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 and ArchitecturalContractors***

 

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

 

**Raw Materials**

 

The Company’s products are principallymanufactured from aluminum coils and extrusions and steel coils. During 2002,approximately 180 million pounds of aluminum products and approximately240 million pounds of steel were sold. The proportion sold in 2002 by value is$363.3 million of aluminum and $160.3 million of steel. Steel weighsapproximately three times as much as the same volume of aluminum. In addition,during 2002, the Company sold $115.5 million of products manufactured from materialsother 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 57% 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 lessexposed to fluctuations in aluminum prices. Historically, prices at which theCompany sells aluminum products tend to fluctuate with corresponding changes inthe prices paid to suppliers for aluminum raw materials. Supplier priceincreases, of normal amount and frequency can generally be passed to customerswithin two to four months. Conversely, as aluminum prices decline,corresponding price reductions are typically passed on to customers within thesame 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.

 

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 has the option to commit to purchase aspecific quantity of aluminum over a specified time period at a fixed price.The Company would then be exposed for the difference between the fixed priceand the market price of aluminum. Historically, the Company has not engaged inextensive hedging activities intended to manage long-term risks relating tomovements in market prices of steel and aluminum raw materials. However, fromtime to time, the Company may establish a maximum purchase 

 

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price for varying quantities of future aluminumpurchase requirements through the purchase of call options. At times, highaluminum prices have led customers to use alternative products, includingsteel, vinyl and fiberglass. The Company believes that its ability to supplycertain products manufactured from these alternatives provides it with acompetitive advantage over competitors who do not offer these choices.

 

**Competition**

 

Competition in the U.S. RV and manufactured housingmarkets comes primarily from one subsidiary of a large publicly held U.S.building products company. Other competition in these markets, and other U.S.markets, comes largely from privately and publicly held companies that aregenerally smaller than the Company. In Europe, competitors of the Companyinclude three to four integrated companies in the specialty coil-coatingbusiness. Other smaller companies competewith the Company in the building and construction, RV and transportationmarkets in Europe, both on a regional basis and some on a pan-Europeanbasis.

 

**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,and the remediation of contamination associated with the current and past useof hazardous 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’s properties,the Company may be held liable for the costs of remediation (including anyresponse costs), natural resource damages and associated transaction costs.While the amount of such liability could be material, the Company devotesresources to ensuring that its current operations are conducted in a mannerintended 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. See Item 7 “Management’s Discussion and Analysisof Financial Condition and Results of Operation - Environmental Matters.”

 

**Employees**

 

As of December 27, 2002, the Company employed2,312 people of which 961 were employed in Europe and 1,351 were employed inthe U.S. Of these employees, 30% were salaried and 70% were hourly employees.Manufacturing employees at three of the Company’s U.S. manufacturing facilitiesare 

 

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covered by collective bargaining agreements. TheCompany and its subsidiaries are not a party to any material pending laborproceedings and believe that employee relations 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 December 27, 2002, the Company had outstandingindebtedness of $197.0 million, and $86.2 million of equity. For the yearended December 27, 2002, the Company’s ratio of earnings to fixed charges was2.20 to 1. The Company’s leveraged financial position poses substantial risksto holders of the Notes, including the risks that: (i) a substantialportion of the Company’s cash flow from operations is dedicated to the paymentof interest on the Notes and the payment of principal and interest under theCredit Agreement (see Note 6 to the Consolidated Financial Statements fordiscussion of the amendment and restatement of the Credit Agreement thatoccurred on March 15, 2002) and other indebtedness; (ii) the Company’sleveraged position may impede its ability to obtain financing in the future forworking capital, capital expenditures and general corporate purposes, includingacquisitions; and (iii) the Company’s highly leveraged financial positionmay make it more vulnerable to economic downturns and may limit its ability towithstand competitive pressures. The Company believes that, based on itscurrent level of operations, it will have sufficient capital to carry on itsbusiness and will be able to meet its scheduled debt service requirements.However, there can be no assurance that the future cash flow of the Companywill be sufficient to meet the Company’s obligations and commitments. Inaddition, the Credit Agreement contemplates that all borrowings thereunder willbecome due prior to June 2005. If the Company is unable to generate sufficientcash flow from operations in the future to service its indebtedness and to meetits other commitments, the Company will be required to adopt one or morealternatives, such as refinancing or restructuring its indebtedness, sellingmaterial assets or operations or seeking to raise additional debt or equitycapital. There can be no assurance that any of these actions could be effectedon a timely basis or on satisfactory terms or that these actions would enablethe Company to continue to satisfy its capital requirements. In addition, theterms of existing or future debt agreements, including the Credit Agreement andthe Notes, may prohibit the Company from adopting any of these alternatives.See Item 7 “Management’s Discussion and Analysis of Financial Condition andResults of Operations — Liquidity and Capital 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.

 

**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 

 

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reported revenues that are unrelated to the levelof business activity. However, if the Company is unable to pass throughaluminum price changes to its customers in the future, the Company could bematerially adversely affected. Any major dislocation in the supply and/or priceof aluminum could have a material adverse effect on the Company’s business andfinancial condition. The Company is, therefore, subject to the short-termcommodity risk of carrying aluminum in its inventory. See Item 7 “Management’sDiscussion and Analysis of Financial Condition and Results of Operations.”

 

**The Company depends upon steel.**

 

The Company sold approximately $160.3 million ofsteel products in 2002. The Company purchases a majority of its steel rawmaterials from domestic steel producers. The imposition of tariffs on steelproducts imported by certain foreign producers resulted in an increase in thecost of steel raw materials purchased by the Company. While the Company hasbeen able to increase its selling prices on steel products affected by thetariff, and further expects that it will be able to increase its selling pricesin the event of additional steel raw material price increases, no assurance tothat effect can be given. Additionally, the imposition of these tariffs maylimit the availability of steel raw materials as foreign producers import lesssteel. While the Company expects that there will be an adequate supply to meetits demand for steel raw materials, no assurance to that effect can be given.Therefore, the Company is subject to the risk of lost revenue in the event thatit cannot obtain quantities 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 inthe Indenture to the Notes) including all obligations under the CreditAgreement. In the event of a circumstance in which the contractualsubordination provisions apply, holders of the Notes will not be entitled toreceive, and will have an obligation to pay over to holders of Senior Debt, anypayments they may receive in respect of such notes, including any payments receivedin respect of any Claims (as defined in the related Indenture). At December 27,2002, the aggregate amount of consolidated indebtedness and other liabilitiesthat the Notes are effectively subordinated to is approximately$195.2 million, of which approximately $62.0 million is outstandingunder the Credit Agreement. The indebtedness under the Credit Agreement willbecome due prior to the time the principal obligations under the Notes becomedue. The issuers of the Notes, which are Euramax International Limited, EuramaxEuropean Holdings Limited and Euramax European Holdings B.V. (collectively, the“Issuers”) and the guarantors, Amerimax Holdings, Inc., Amerimax FabricatedProducts, Inc., Euramax International, Inc., Euramax International Holdings Limitedand Euramax Continental Limited (the “Guarantors”), are holding companies anddo not have any independent operations. Accordingly, the Notes and theGuarantees are structurally subordinated to all existing and futureindebtedness of the subsidiaries of the Issuers and the Guarantors, throughwhich the Company’s operations are conducted, including obligations under theCredit Agreement. Subject to certain limitations, the Indenture permits theIssuers and their subsidiaries to incur additional indebtedness. See “TheTransactions.” The holders of any indebtedness of the Issuers’ subsidiaries areentitled to payment of their indebtedness from the assets of such subsidiariesprior to the holders of any general unsecured obligations of the Issuers,including the Notes. In addition, substantially all of the assets of theCompany and its subsidiaries are or may in the future be pledged to secureother indebtedness of the Company.

 

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

 

The Credit Agreement requires the Company tomaintain specified financial ratios and meet certain financial tests, amongother obligations, including a minimum interest coverage ratio, a minimum fixedcharge coverage ratio, a maximum leverage ratio and maximum amounts of capitalexpenditures. In addition, the Credit Agreement restricts, among other things,the Issuers’ ability to incur additional indebtedness and make acquisitions. Afailure to comply with the restrictions contained in the Credit Agreement couldlead to an event of default thereunder which could result in an acceleration ofsuch indebtedness. Such an acceleration would constitute an event of defaultunder the Indenture relating to the Notes. In addition, the Indenturerestricts, among other things, the Company’s ability to incur additionalindebtedness, sell assets, make certain payments and dividends or merge orconsolidate. A failure to comply with the restrictions in the Indenture couldresult in an event of default under the Indenture.

 

**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. Resultingtransaction(s) may be financed by incurring additional indebtedness which couldbe material. See “Substantial Leverage.” Any such transaction(s) would besubject to negotiations of definitive agreements, satisfactory financingarrangements (including compliance with the limitations on issuance ofindebtedness in the Indenture and in the Credit Agreement) and applicablegovernmental 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 2002, approximately 31% of the Company’s netsales were made outside the U.S. The U.S. dollar value of the Company’snon-U.S. sales varies with currency exchange rate fluctuations. Changes incurrency exchange rates could have an adverse effect on the Company’s resultsof operations and its ability to meet interest and principal obligations on theNotes. International manufacturing and sales are subject to risks includinglabor unrest, potentially high costs of terminating labor contracts,restrictions on transfers of funds, export duties and quotas, domestic andinternational customs and tariffs, unexpected changes in regulatoryenvironments, difficulty in obtaining distribution and support, potentiallyadverse tax consequences and changes in effective tax rates. There can be noassurance that any of the foregoing factors will not have a material adverseeffect on the Company’s ability to increase or maintain its international salesor 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’sproperties, Euramax may be held liable for cleanup costs, natural resourcedamages 

 

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and associated transaction costs. The amount ofsuch liability could be material. Euramax has been named a party potentiallyresponsible for the costs of investigating and remediating nine waste disposalsites, pursuant to the federal Comprehensive Environmental Response,Compensation, and Liability Act of 1990. See “Business – Environmental,Health and Safety Matters” and Item 7 “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations – Environmental Matters.”

 

**The Company depends significantly on key 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 theCompany include three to four integrated companies in the specialty coilcoating 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. There can be noassurance that the Company will be able to compete effectively in each of itsmarkets in the future.

 

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

 

Three 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 Credit Agreement and may result in a default under other indebtednessof the Company that may be incurred in the future. The Credit Agreementprohibits the purchase of outstanding Notes prior to repayment of theborrowings under the Credit Agreement, and any exercise by the holders of theNotes of their right to require the Issuers to repurchase the Notes will causean event of default under the 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 27, 2002, 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 |
| 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 |
| Sacramento, CA              |   | Manufacturing            |   | (Leased)             |   | 40,000 |
| 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.**  **LegalProceedings**

 

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 providedin Item 1 “Business” and Item 7 “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations.”

 

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

 

There were no items submitted for vote of SecurityHolders in the quarter ended December 27, 2002.

 

**Part II**

 

**Item 5.  Market for Registrant’s Common Equity andRelated 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 27, 2002, there were34 holders of record of the Company’s 488,691.64 outstanding shares of commonstock.

 

The Credit Agreement contains certain restrictionson the payment of cash dividends.

 

During 2002, 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 27, 2002, December 28, 2001,December 29, 2000, December 31, 1999, and December 25, 1998 were derived fromthe audited Consolidated Financial Statements of the Company. The informationcontained in this table should be read in conjunction with Item 7 “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” andthe Consolidated Financial Statements and accompanying notes thereto includedherein.

 
| **Thousands  of U.S. Dollars**                      |   | **Year  ended  December 27,  2002** |    | **Year  ended  December 28,  2001** |    | **Year  ended  December 29,  2000** |    | **Year  ended  December 31,  1999** |      | **Year  ended  December 25,  1998** |    |
|-----------------------------------------------------|--------|-------------------------------------|---------|-------------------------------------|---------|-------------------------------------|---------|-------------------------------------|-----------|-------------------------------------|---------|
| **Statement  of Earnings Data:**                    |   |                                |    |                                |    |                                |    |                                |      |                                |    |
| Net sales                                           |   | $                                   | 639,149 |                                | $       | 593,117                             |    | $                                   | 599,479   |                                | $       | 596,759 |   | $ | 616,219 |   |
|                                                |   |                                |    |                                |    |                                |    |                                |      |                                |    |
| Costs and expenses:                                 |   |                                |    |                                |    |                                |    |                                |      |                                |    |
| Cost of goods sold                                  |   | 508,254                             |    | 477,870                             |    | 494,330                             |    | 479,730                             |      | 507,752                             |    |
| Selling and general                                 |   | 63,593                              |    | 59,230                              |    | 54,475                              |    | 57,986                              |      | 49,881                              |    |
| Depreciation and  amortization                      |   | 13,968                              |    | 17,555                              |    | 16,569                              |    | 13,728                              |      | 12,326                              |    |
|                                                |   | 585,815                             |    | 554,655                             |    | 565,374                             |    | 551,444                             |      | 569,959                             |    |
| Earnings from operations                            |   | 53,334                              |    | 38,462                              |    | 34,105                              |    | 45,315                              |      | 46,260                              |    |
|                                                |   |                                |    |                                |    |                                |    |                                |      |                                |    |
| Interest expense                                    |   | (23,034                             | )       | (25,727                             | )       | (26,376                             | )       | (22,369                             | )         | (24,204                             | )       |
| Interest income                                     |   | 286                                 |    | 469                                 |    | 506                                 |    | 563                                 |      | 557                                 |    |
| Other income (expense)                              |   | 703                                 |    | (2,953                              | )       | 763                                 |    | (933                                | )         | 524                                 |    |
| Earnings before income  taxes                       |   | 31,289                              |    | 10,251                              |    | 8,998                               |    | 22,576                              |      | 23,137                              |    |
| Provision for income taxes                          |   | 11,432                              |    | 5,521                               |    | 5,671                               |    | 11,017                              |      | 10,253                              |    |
| Net earnings                                        |   | 19,857                              |    | 4,730                               |    | 3,327                               |    | 11,559                              |      | 12,884                              |    |
| Dividends on redeemable preference  shares          |   | —                              |    | —                              |    | —                              |    | 6,381                               |      | 5,957                               |    |
| Net earnings available for  shareholders            |   | $                                   | 19,857  |                                | $       | 4,730                               |    | $                                   | 3,327     |                                | $       | 5,178 |   | $ | 6,927 |   |
|                                                |   |                                |    |                                |    |                                |    |                                |      |                                |    |
| **Other  Data:**                                    |   |                                |    |                                |    |                                |    |                                |      |                                |    |
| Capital expenditures                                |   | $                                   | 8,263   |                                | $       | 8,321                               |    | $                                   | 9,706     |                                | $       | 13,358 |   | $ | 12,352 |   |
| Ratio of earnings to fixed  charges(1)              |   | 2.20                                | x  | 1.46                                | x  | 1.27                                | x  | 1.94                                | x    | 1.84                                | x  |
| **Balance  Sheet Data (end of period):**            |   |                                |    |                                |    |                                |    |                                |      |                                |    |
| Working capital                                     |   | $                                   | 90,480  |                                | $       | 70,049                              |    | $                                   | 79,314    |                                | $       | 90,570 |   | $ | 88,558 |   |
| Total assets                                        |   | 416,440                             |    | 384,251                             |    | 413,059                             |    | 399,659                             |      | 388,649                             |    |
| Total long-term debt,  including current maturities |   | 196,972                             |    | 207,724                             |    | 235,528                             |    | 221,279                             |      | 217,678                             |    |
| Redeemable preference  shares                       |   | —                              |    | —                              |    | —                              |    | —                              | (2)  | 46,339                              |    |
| Total shareholders’ equity                     |   | 86,219                              |    | 61,494                              |    | 63,781                              |    | 65,068                              | (2)  | 9,665                               |    |

 

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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 of $23.0 million, includingamortization of debt issuance costs and the estimated interest component ofrent expense of $2.2 million.

(2)                                  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, theCompany issued 500,019.92 shares of common stock to the former EuramaxInternational Limited shareholders.

 

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**Item 7.  Management’s Discussion and Analysis ofFinancial 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” foradditional information regarding the Private Securities 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 core products include specialty coated coils, aluminum recreationalvehicle (“RV”) sidewalls, RV doors, farm and agricultural panels, roofingaccessories, metal and vinyl raincarrying systems, soffit and fascia systems,and vinyl replacement windows. The Company’s customers include originalequipment manufacturers (“OEMs”) such as RV, commercial panel andtransportation industry manufacturers; rural contractors; home centers;manufactured housing producers; distributors; industrial and architecturalcontractors; and home improvement contractors.

 

Financial results for the year ended December 27,2002, compared to the year ended December 28, 2001, reflect strong demand inthe U.S. from recreational vehicle manufacturers and rural contractors, inaddition to higher sales volume of raincarrying products through the distributorchannel and vinyl windows to home improvement contractors. Results also reflecthigher operating margins in the U.S., primarily due to higher sales volume andlower material costs, partially offset by lower selling prices. Europeanresults reflect strong demand from U.K. caravan manufacturers for fabricateddoors and windows, higher volume of fabricated products to the Europeantransportation industry resulting from new product development and strongdemand from customers in the U.K. for bath enclosures and shower doors.Additionally, the strengthening of the Euro and British Pound against the U.S.Dollar had a positive impact on net sales and operating earnings. Theseconditions contributed to increase operating earnings for the year ended December27, 2002 to $53.3 million, from $38.5 million for the year ended December 28,2001. As a result of the increase in profitability in 2002, the Companyrecorded expenses totaling $2.2 million relating to the Company’s long-termincentive plan which rewards participants for an increase in the theoreticalequity value (as defined in the 1999 Phantom Stock Plan) of the Company betweenJanuary 1, 1998 and December 31, 2003. The Company had not recognized anyexpense related to the long-term incentive plan prior to 2002. See Note 11 tothe Consolidated Financial Statements for a description of the long-termincentive plan.

 

**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 - Risk Factors- Acquisition Strategy”). Additionally, there can be no assurance that theCompany will experience similar general economic conditions that contributed tooperating results for the year ended December 27, 2002.

 

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**RiskManagement**

 

The Company is exposed to market risk from changesin interest rates, exchange rates (primarily the Euro and British Pound) andcommodity prices. From time to time, the Company enters into contracts for thepurchase of aluminum and steel at market values in an attempt to assure amargin on specific customer orders. Historically, the Company has not engagedin extensive hedging activities intended to manage long-term risks relating tomovements in market prices of steel and aluminum raw materials. However, fromtime to time, the Company may establish a maximum purchase price for varyingquantities of future aluminum purchase requirements through the purchase ofcall options. Additionally, as part of a risk-management strategy to reduce theimpact of exchange rate fluctuations and/or interest rate fluctuations, theCompany has historically entered into currency agreements and interest rateagreements with major banking institutions. (See Item 7A “Quantitative andQualitative Disclosures About Market Risk”).

 

Approximately 57% of the Company’s 2002 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 a fabricator, Euramax is less exposed tofluctuations 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, can generally be passed to customers within twoto four months. Conversely, as aluminum prices decline, corresponding pricereductions are typically passed on to customers within the same time frame.Accordingly, the Company’s net sales and margins on aluminum products may fluctuatewith little or no change in the volume 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 Company believesthat 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:

 

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|                            |   | **December  27,  2002** |   | **December  28,  2001** |   | **December  29,  2000** |   |
|---------------------------------|--------|-------------------------|--------|-------------------------|--------|-------------------------|--------|
| **Statement of Earnings Data:** |   | 100.0                   | %      | 100.0                   | %      | 100.0                   | %      |
| Net sales                       |   |                    |   |                    |   |                    |   |
| Costs and expenses:             |   |                    |   |                    |   |                    |   |
| Cost of goods sold              |   | 79.5                    | %      | 80.6                    | %      | 82.4                    | %      |
| Selling and general             |   | 9.9                     | %      | 10.0                    | %      | 9.1                     | %      |
| Depreciation and amortization   |   | 2.2                     | %      | 2.9                     | %      | 2.8                     | %      |
| Earnings from operations        |   | 8.4                     | %      | 6.5                     | %      | 5.7                     | %      |
| Interest expense, net           |   | 3.6                     | %      | 4.3                     | %      | 4.3                     | %      |
| Other (income) expense, net     |   | -0.1                    | %      | 0.5                     | %      | -0.1                    | %      |
| Earnings before income taxes    |   | 4.9                     | %      | 1.7                     | %      | 1.5                     | %      |
| Provision for income taxes      |   | 1.8                     | %      | 0.9                     | %      | 0.9                     | %      |
| Net earnings                    |   | 3.1                     | %      | 0.8                     | %      | 0.6                     | %      |

 

**Yearended December 27, 2002 compared to the year ended December 28, 2001**

 

The following table sets forth the net sales andearnings from operations data for the United States and Europe for the twelvemonths ended December 27, 2002 and December 28, 2001:

 
|              |   | **Net Sales**          |    | **Earnings from Operations** |   |
|-------------------|--------|------------------------|---------|------------------------------|--------|
| **In  thousands** |   | **December 27,  2002** |    | **December 28,  2001**       |   | **Increase/  (decrease)** |   | **December 27,  2002** |   | **December 28,  2001** |   | **Increase/  (decrease)** |   |
|              |   |                   |    |                         |   |   |   |   |   |   |   |   |   |
| United  States    |   | $                      | 440,901 |                         | $      | 406,799 |   | 8.4 | % | $ | 36,698 |   | $ | 22,710 |   | 61.6 | % |
| Europe            |   | 198,248                |    | 186,318                      |   | 6.4 | % | 16,636 |   | 15,752 |   | 5.6 | % |
| Totals            |   | $                      | 639,149 |                         | $      | 593,117 |   | 7.8 | % | $ | 53,334 |   | $ | 38,462 |   | 38.7 | % |

 

 

*NetSales.*Net sales increased 7.8% to $639.1 million for theyear ended December 27, 2002, from $593.1 million for the year ended December28, 2001. Net sales in the U.S. increased 8.4% to $440.9 million for the yearended December 27, 2002, from $406.8 million for the year ended December 28,2001. This increase in net sales in the U.S. is primarily from higher sales toRV manufacturers, distributors, home improvement contractors and ruralcontractors, partially offset by lower sales to manufactured housing producers.Additionally, in 2002 the Company began an initiative to sell painted aluminumcoil externally from its Helena, Arkansas paintline. This initiative added$10.5 million in net sales to the year ended December 27, 2002, compared to theyear ended December 28, 2001. For the year ended December 27, 2002, compared tothe year ended December 28, 2001, sales to U.S. RV manufacturers increased$11.4 million; sales of raincarrying products and accessories to distributorsincreased $8.9 million; sales of vinyl windows to home improvement contractorsincreased $4.1 million; and sales to rural contractors increased $3.9million.  Partially offsetting theseincreases was a decrease in sales to manufactured housing producers of $4.8million. The Company’s U.S. subsidiaries are included in the U.S. FabricationSegment (see Note 14 to the Consolidated Financial Statements).

 

Net sales in Europe increased 6.4% to $198.2 million for the year endedDecember 27, 2002, from $186.3 million for the year ended December 28, 2001.This increase in European net sales includes an increase in net sales in theEuropean Fabrication Segment of $10.8 million or 18.4%, and an increase 

 

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in net sales in the European Roll Coating Segment of $1.1 million orless than 1.0% (see Note 14 to the Consolidated Financial Statements). Sales inthe European Fabrication Segment increased primarily from higher sales offabricated doors and windows to European RV manufacturers, bath enclosures andshower doors to customers in the U.K. and sales from France to the Europeantransportation industry. Additionally, the strengthening of the Euro andBritish Pound against the U.S. Dollar increased the European FabricationSegment’s sales by $3.3 million in the year ended December 27, 2002, comparedto the year ended December 28, 2001. For the year ended December 27, 2002,compared to the year ended December 28, 2001, excluding currency impact, salesof fabricated doors and windows to European RV manufacturers increased $2.8million; sales of bath enclosures and shower doors to customers in the U.K.increased $1.4 million; and sales from France to the European transportationindustry increased $3.8 million. Sales in the European Roll Coating Segmentincreased primarily from the strengthening of the Euro and British Poundagainst the U.S. Dollar, partially offset by lower sales of painted aluminumand steel coil to OEMs (excluding RV manufacturers). The strengthening of theEuro and British Pound increased the European Roll Coating Segment’s sales by$6.2 million in the year ended December 27, 2002, compared to the year endedDecember 28, 2001. Sales of painted aluminum and steel coil to OEMs (excludingRV manufacturers) decreased by $4.8 million in the year ended December 27,2002, compared to the year ended December 28, 2001. This decrease primarilyresulted from lower aluminum selling prices resulting from a 6.5% decline inthe twelve-month average London Metals Exchange price for aluminum, in additionto lower export volume from the U.K. due to the strength of the British Pound.

 

*Cost ofgoods sold.*Cost of goods sold, as a percentage of net sales,decreased to 79.5% for the year ended December 27, 2002, from 80.6% for theyear ended December 28, 2001. This decrease is primarily attributable to highersales volume and lower material costs, partially offset by lower selling pricesresulting from a decline in world prices for aluminum. The imposition oftariffs on steel products imported by certain foreign producers resulted in anincrease in the cost of steel raw materials purchased by the Company. While theCompany has been able to increase its selling prices on steel products affectedby the tariff, and further expects that it will be able to increase its sellingprices in the event of additional steel raw material price increases, noassurance to that effect can be given.

 

*Sellingand general.*Selling and general expenses, as a percentage ofnet sales, decreased to 9.9% for the year ended December 27, 2002, from 10.0%for the year ended December 28, 2001. This decrease is primarily attributableto lower bad debt expense and higher net sales, partially offset by an increasein legal and professional expense and an increase in compensation expense. Theincrease in compensation expense is primarily a result of the increase in profitabilityin 2002, resulting in the Company recording expenses totaling $2.2 millionrelating to the Company’s long-term incentive plan which rewards participantsfor an increase in the theoretical equity value (as defined in the 1999 PhantomStock Plan) of the Company between January 1, 1998 and December 31, 2003. TheCompany did not recognize any expense related to the long-term incentive planin 2001. See Note 11 to the Consolidated Financial Statements for a descriptionof the long-term incentive plan.

 

*Depreciationand amortization.*Depreciation and amortization, as apercentage of net sales, was 2.2% for the year ended December 27, 2002,compared to 2.9% for the year ended December 28, 2001. This decrease isprimarily attributable to the adoption of SFAS No. 142 on December 29, 2001.Under SFAS No. 142 goodwill is no longer amortized. See Note 2 to theConsolidated Financial Statements for further discussion on the adoption ofSFAS No. 142.

 

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*Earningsfrom operations.*Earnings from operations in the U.S.increased to $36.7 million for the year ended December 27, 2002, from $22.7million for the year ended December 28, 2001. Earnings from operations inEurope increased to $16.6 million for the year ended December 27, 2002, from$15.8 million for the year ended December 28, 2001. As a result of the adoptionof SFAS No. 142 effective December 29, 2001, goodwill is no longer amortized.Goodwill amortization in the year ended December 28, 2001 was $3.9 million and$935.3 thousand in the U.S. and Europe, respectively. The increase in earningsfrom operations in the U.S. is largely attributable to higher sales volumes. Inaddition, lower raw material costs partially offset by lower aluminum sellingprices and the adoption of SFAS No. 142 contributed to the increase in earningsfrom operations. In Europe, the increase in earnings from operations resultedprimarily from higher sales volume from the European Fabrication Segment,improved margins on sales from the European Roll Coating Segment, the adoptionof SFAS No. 142 and the strengthening of the Euro and British Pound against theU.S. Dollar. The strengthening of the Euro and British Pound against the U.S.Dollar increased European earnings from operations by $900.0 thousand in theyear ended December 27, 2002, compared to the year ended December 28, 2001.Partially offsetting these positives in the U.S. and Europe were an increase inincentive compensation costs and higher legal and professional expenses. Theincrease in compensation expense is primarily a result of the increase inprofitability in 2002, resulting in the Company recording expenses totaling$2.2 million relating to the Company’s long-term incentive plan which rewardsparticipants for an increase in the theoretical equity value (as defined in the1999 Phantom Stock Plan) of the Company between January 1, 1998 and December31, 2003. The Company did not recognize any expense related to the long-termincentive plan in 2001. See Note 11 to the Consolidated Financial Statementsfor a description of the long-term incentive plan.

 

*Interestexpense, net.* Net interest expense decreased to $22.7 millionfor the year ended December 27, 2002, from $25.3 million for the year endedDecember 28, 2001, primarily due to lower interest rates and lower outstandingindebtedness in the year ended December 27, 2002.

 

*Otherincome (expense), net.*Other income (expense) increased to$703.4 thousand for the year ended December 27, 2002, from ($3.0) million forthe year ended December 28, 2001. In the year ended December 28, 2001, theCompany recognized expense of $2.5 million as a result of the change in fairvalue of the Company’s derivative instruments that were not designated ashedges under SFAS No. 133. The Company did not recognize any expense for thisreason in the year ended December 27, 2002. The remaining difference isprimarily due to foreign exchange gains on unhedged liabilities remeasured intothe local currency recognized in the year ended December 27, 2002, whereasforeign exchange losses were recognized in the year ended December 28, 2001.

 

*Provisionfor income taxes.*The effective rate for the provision forincome taxes was 36.5% for the year ended December 27, 2002 and 53.9% for theyear ended December 28, 2001. The decrease in the effective rate is primarilydue to the adoption of SFAS No. 142 on December 29, 2001. Under SFAS No. 142goodwill is not longer amortized, eliminating the permanent difference fornon-deductible goodwill. See Note 2 to the Consolidated Financial Statementsfor further discussion on the adoption of SFAS No. 142.

 

**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** |   |
|------------------|--------|------------------------|---------|------------------------------|--------|
| **In thousands** |   | **December 28,  2001** |    | **December 29,  2000**       |   | **Increase/  (decrease)** |   | **December 28,  2001** |   | **December 29,  2000** |   | **Increase/  (decrease)** |   |
|             |   |                   |    |                         |   |   |   |   |   |   |   |   |   |
| 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 yearended 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 higher sales tohome centers, rural contractors and home improvement contractors. Sales ofraincarrying products and accessories to home centers increased $18.9 millionor 21.3% for the year ended December 28, 2001, compared to the year endedDecember 29, 2000. Gutter World, acquired in April 2000 (See Note 3 to theConsolidated Financial Statements), accounted for $4.9 million of thisincrease. Sales of vinyl replacement windows to home improvement contractorsincreased $6.0 million or 32.8% for the year ended December 28, 2001, comparedto the year ended December 29, 2000. The increase in sales of vinyl replacementwindows is primarily the result of increased market share within the regions ofthe U.S. that the Company competes. These increases were partially offset by adecline in sales to the RV and manufactured housing industries. Lower demandfrom the RV industry, largely resulting from a weak U.S. economy, resulted insales to the U.S. RV industry declining $14.0 million or 16.4% for the yearended December 28, 2001, compared to the year ended December 29, 2000. TheCompany’s U.S. subsidiaries are included in the U.S. Fabrication Segment (seeNote 14 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%. Thisdecrease included a decrease in net sales in the European Roll Coating segmentof 6.5% and an increase in net sales in the European Fabrication segment of4.1% (see Note 14 to the Consolidated Financial Statements). Sales in theEuropean Roll Coating segment decreased primarily from softening demand fromindustrial consumers for painted aluminum and steel from the U.K. and theNetherlands due to a slow down in industrial construction in Western Europe.Additionally, the continued strength of the British Pound relative to otherEuropean currencies has made it difficult to export from the U.K. into WesternEurope. Sales in the European Fabrication segment increased primarily fromimproved sales from France to the European transportation industry.

 

*Cost ofgoods sold.*Cost of goods sold, as a percentage of net sales,decreased to 80.6% for the year ended December 28, 2001, from 82.4% for theyear ended December 29, 2000. This decrease is primarily attributable to lowerraw material costs resulting from a decline in world prices for aluminum andmore favorable steel pricing, in addition to lower labor costs.

 

*Sellingand general.*Selling and general expenses, as a percentage ofnet sales, increased to 10.0% for the year ended December 28, 2001, from 9.1%for the year ended December 29, 2000. This increase is primarily attributableto an increase in advertising, product warranty, provision for bad debts andemployee benefit costs, together with lower net sales.

 

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*Depreciationand amortization.*Depreciation and amortization, as apercentage of net sales, was 2.9% for the year ended December 28, 2001,compared to 2.8% for the year ended December 29, 2000. This increase isprimarily the result of business acquisitions and the reduction in net sales.

 

*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 inEurope decreased to $15.8 million for the year ended December 28, 2001, from$18.4 million for the year ended December 29, 2000. The increase in earningsfrom operations in the U.S. is largely attributable to lower raw materialcosts, most notably for aluminum and steel, in addition to operationalimprovement at the Helena, Arkansas paintline, and lower labor costs. Thedecrease in earnings from operations in Europe is partially attributable to theweakening of European currencies relative to the U.S. Dollar, which reducedreported operating earnings by $655.7 thousand compared to the same period in2000. Additionally, lower European earnings resulted from reduced sales volume,competitive pricing pressures within the industrial construction markets inWestern Europe and an increase in selling and general expenses.

 

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

 

*Otherexpenses, net.*Other expenses increased to $3.0 million forthe year ended December 28, 2001, compared to other income of $763.1 thousandfor 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 2 to the Consolidated Financial Statements). SFAS 133 was adoptedby the Company effective 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. The decrease in the effective rate is primarilydue to (i) higher valuation allowances provided in 2000 due to uncertaintysurrounding the future benefit of U.S. state net operating losses, which areavailable to offset future taxable income and taxes, but begin to expire in2010, and (ii) higher earnings in 2001 mitigating the effect on the effectivetax rate of permanent differences for non-deductible items, primarily goodwill.

 

**Liquidity and Capital Resources**

 

*Liquidity.*The Company’s primary liquidity needs arise from debt serviceon indebtedness incurred in connection with the Acquisition, otheracquisitions, and the funding of capital expenditures. As of December 27, 2002,the Company had outstanding indebtedness of $197.0 million, as compared to$207.7 million as of December 28, 2001. Included in such indebtedness atDecember 27, 2002, was approximately $62.0 million under the Credit Agreement.The undrawn amount of the Revolving Credit Facility at December 27, 2002, wasapproximately $48.0 million, which was available for working capital andgeneral corporate purposes, subject to borrowing base limitations. As ofDecember 27, 2002, $37.1 million of the undrawn amount was available. On March15, 2002, the Credit Agreement was amended and restated to increase theRevolving Credit Facility to $110.0 million (subject to borrowing baselimitations) and extend the maturity of the facility to June 30, 2005. Inconnection with this amendment, outstanding Term Loans were repaid and replacedwith borrowings under the Revolving Credit Facility. The Company believes thatcash generated from operations and, 

 

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subject to borrowing base limitations, borrowings under the CreditAgreement will be adequate to meet its needs for the foreseeable future,although no assurance to that effect can be given. See Note 6 to theConsolidated Financial Statements for further information about the amendmentand restatement of the Company’s credit agreement.

 

The Credit Agreement requires the Company to maintain specifiedfinancial ratios and meet certain financial tests including a minimum interestcoverage ratio, a minimum fixed charge coverage ratio, a maximum leverage ratioand maximum amounts of capital expenditures. Additionally, the Credit Agreementcontains certain restrictions on the payment of cash dividends.

 

Principal and interest payments under the Credit Agreement and interestpayments on the Notes represent significant liquidity requirements for theCompany. The Credit Agreement bears interest at floating rates. Pursuant to aninterest rate agreement entered into in January 2002 that is in place untilDecember 31, 2004, the Company pays a counterparty a fixed rate of interest of3.715% on a notional amount of $35.0 million through December 31, 2002, $25.0million from January 1, 2003 through December 31, 2003, and $15.0 million fromJanuary 1, 2004 through December 31, 2004, in exchange for receiving a floatingrate of interest of 3-month U.S. Dollar LIBOR on an equivalent notional amount.The Notes entitle the holders to an annual fixed interest rate of 11.25% (seeNote 6 to Consolidated Financial Statements). Pursuant to a currency agreementin place until June 30, 2005, the Company pays a counterparty a fixed rate ofinterest of 12.63% on the notional 19.0 million Pounds Sterling value inexchange for receiving interest of 11.25% on the notional U.S. dollar value of$27.2 million. This currency agreement was entered into on February 25, 2002 toreplace a similar currency agreement that was terminated on February 1, 2002.See Note 7 to the Consolidated Financial Statements for additional informationon the terminated currency agreement.

 

As previously noted, the Company’s leveraged financial position requiresthat a substantial portion of the Company’s cash flow from operations be usedto pay interest on the Notes and principal and interest under the CreditAgreement. Significant increases in the floating interest rates on the CreditAgreement would result in increased debt service requirements, which may reducethe funds available for capital expenditures and 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 leveragedposition may make it more vulnerable to economic downturns and may limit itsability to withstand competitive pressures. See Note 6 to the ConsolidatedFinancial Statements for a discussion of restrictive debt covenants.

 

The Company’s primary source of liquidity is cash flows fromoperations, which are supplemented by borrowings under the Credit Agreement.Operations provided cash of $25.4 million in the year ended December 27, 2002,compared to $35.5 million in the year ended December 28, 2001, and $28.1million for the year ended December 29, 2000. Operating cash flow for the yearended December 27, 2002, enabled the Company to make capital expenditures ofapproximately $8.3 million and pay net interest expense of $21.0 million in2002. Operating cash flow for the year ended December 28, 2001, enabled theCompany to make capital expenditures of approximately $8.3 million and pay netinterest expense of $22.4 million in 2001. Operating cash flow for the yearended December 29, 2000 of $28.1 million, together with debt proceeds of $40.0million and proceeds of $10.0 million from the termination of a currencyagreement 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.

 

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See Note 3 to the Consolidated FinancialStatements for further information concerning the acquisitions of Gutter Worldand Global Expanded Metals.

 

Future payments due under debt and leaseobligations at December 27, 2002 are as follows:

 
|       |   | **Long-Term  Debt** |    | **Non-Cancelable  Operating Leases** |   | **Total** |   |
|------------|--------|---------------------|---------|--------------------------------------|--------|-----------|--------|
|       |   |                |    |                                 |   |      |   |
| 2003       |   | $                   | —  |                                 | $      | 6,061     |   | $ | 6,061 |   |
| 2004       |   | —              |    | 4,495                                |   | 4,495     |   |
| 2005       |   | 61,972              |    | 3,008                                |   | 64,980    |   |
| 2006       |   | 135,000             |    | 1,716                                |   | 136,716   |   |
| 2007       |   | —              |    | 962                                  |   | 962       |   |
| Thereafter |   | —              |    | 1,044                                |   | 1,044     |   |
|       |   | $                   | 196,972 |                                 | $      | 17,286    |   | $ | 214,258 |   |

 

*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, $8.3 million and $9.7 million in theyears ended December 27, 2002, December 28, 2001 and December 29, 2000,respectively. Capital expenditures in 2002, 2001 and 2000 include approximately$1.6 million, $1.6 million and $1.7 million, respectively, for improvements topaint lines in Corby, England; Roermond, The Netherlands; and Helena, Arkansas.The paint lines are capital-intensive operations, and will continue to requireimprovements and upgrades in 2003 and beyond to enhance their capabilities andefficiencies. Capital expenditures in 2002, 2001 and 2000 include approximately$2.9 million, $3.8 million and $2.0 million, respectively, for projects relatedto business expansion. The balance of capital expenditures in all periods primarilyrelates to purchases and upgrades of fabricating equipment, transportation andmaterial moving equipment, and information systems. The Company expects thatapproximately $3.0 million to $4.0 million in capital expenditures are requiredannually to maintain existing equipment and facilities. While assurance cannotbe given, management expects that capital spending in 2003 will also be devotedto projects that offer potential for internal growth through new products andexpanding existing products to new markets.

 

*Workingcapital management. *Workingcapital was $90.5 million as of December 27, 2002, compared to $70.0 million asof December 28, 2001. The increase in working capital is primarily related tohigher cash and cash equivalents, accounts receivable and inventories at theend of 2002, partially offset by higher accounts payable and accrued expenses.Stronger European currencies accounted for approximately $4.6 million of theincrease in working capital. In addition to stronger European currencies,higher sales volume in the fourth quarter of 2002 resulted in the increase inaccounts receivable and accounts payable at the end of 2002. Stronger Europeancurrencies, higher steel and aluminum costs and higher volumes of aluminum andsteel in ending inventory resulted in the increase in inventory at the end of2002.

 

**Inflation and Foreign Currency Translation**

 

In recent years, inflation has not had asignificant effect on the Company’s results of operations or 

 

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financial condition. The assets and liabilities ofthe Company’s non-U.S. subsidiaries are translated into U.S. Dollars at currentexchange rates and revenues and expenses are translated at average exchange rates.Currency translations on export sales could be adversely affected in the futureby the relationship of the U.S. Dollar with foreign currencies.

 

**Critical Accounting Policies**

 

*Allowance for doubtful accounts, inventory obsolescence andwarranty reserves.*TheCompany’s significant accounting policies are described in Note 2 to theConsolidated Financial Statements. As indicated there, the Company makesestimates and assumptions that affect certain amounts reported in theconsolidated financial statements. The use of estimates is significant as itrelates to establishing reserves and allowances for doubtful accounts,inventory obsolescence and warranty costs. Ranges of estimates are developedbased upon historical experience, specifically identified conditions andmanagement expectations for the future occurrence of certain events. In theevent that actual results differ from these estimates or the Company adjuststhese estimates in future periods, adjustments to the amounts recorded couldmaterially impact the Company’s financial position and results of operations.There have been no significant changes in the assumptions used to develop theCompany’s estimates in establishing reserves and allowances for doubtfulaccounts, inventory obsolescence and warranty costs from fiscal year 2001 tofiscal year 2002.

 

*Income taxes.*The Company’s income tax accounting policy is significant in determiningfinancial position and results of operations. Such policy requires the Companyto estimate income taxes in each jurisdiction in which it operates. Thisinvolves estimating actual current tax expense, assessing tax exposure mattersand assessing temporary differences resulting from the different treatment ofitems under generally accepted accounting principles and tax law. Thesedifferences result in deferred tax assets and liabilities, which are includedin the consolidated balance sheet of the Company. The Company must then assessthe likelihood that deferred tax assets will be recovered from future taxableincome. To the extent that recovery is less likely than not, a valuationallowance is established. Significant management judgement is required toestablish such allowances as well as to determine the provision for incometaxes and deferred tax assets and liabilities. In the event that actual resultsdiffer from estimates, or do not reflect management judgements, it may benecessary to adjust amounts recorded in income tax accounts, which couldmaterially impact the Company’s financial position and results of operations.There have been no significant changes in the assumptions used to develop theCompany’s estimates in establishing its income tax expense, tax exposurematters or deferred taxes.

 

*Impairment of goodwill.* Managementuses judgment in assessing goodwill for impairment. Upon adoption of SFAS No.142 on December 29, 2001, the Company assessed the recoverability of itsgoodwill. Subsequent to the adoption of SFAS No. 142, the Company will reviewthe carrying value of its goodwill at least annually, or sooner if events orchanges in circumstances indicate the carrying value may exceed fair value.Recoverability is determined by comparing the fair value of the reporting unitto which the goodwill applies to the carrying value, including goodwill, ofthat reporting unit. If the fair value of the reporting unit exceeds itscarrying value, goodwill of the reporting unit is not impaired. If the carryingvalue of the reporting unit exceeds its fair value, the implied fair value ofthe reporting unit goodwill is compared to the carrying value of that goodwill.If the carrying value of the reporting unit goodwill exceeds the implied fairvalue of that goodwill, an impairment loss is recognized in an amount equal tothat excess. At December 27, 2002, the Company had $110.8 million of goodwill,net of amortization, included in its statement of financial position.

 

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**Recent Accounting Pronouncements**

 

In June 2001, the Financial Accounting Standards Board (“FASB”) issuedStatement No. 143, “Accounting for Asset Retirement Obligations” (“SFAS No.143”). SFAS No. 143 addresses financial accounting and reporting for legalobligations associated with the retirement of tangible long-lived assets thatresult from the acquisition, construction, development and normal operation ofa long-lived asset. SFAS No. 143 requires that the fair value of a liabilityfor an asset retirement obligation be recognized in the period in which it isincurred if a reasonable estimate of fair value can be made. The associatedasset retirement costs are capitalized as part of the carrying amount of thelong-lived asset and subsequently allocated to expense over the asset’s usefullife. SFAS No. 143 is effective December 28, 2002 for the Company. The adoptionof SFAS No. 143 is not expected to have a material impact on the Company’sfinancial position or results of operations.

 

The Company adopted SFAS No. 144, “Accounting for the Impairment orDisposal of Long-Lived Assets” (“SFAS No. 144”), effective December 29, 2001.SFAS No. 144 addresses financial accounting and reporting for the impairment ordisposal of long-lived assets. In accordance with SFAS No. 144, long-livedassets are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable.Recoverability of assets to be held and used is measured by a comparison of thecarrying amount of an asset to estimated undiscounted future cash flowsexpected to be generated by the asset. If the carrying amount of an assetexceeds its estimated future cash flows, an impairment charge is recognized inthe amount by which the carrying amount of the asset exceeds the fair value ofthe asset. Assets to be disposed of would be separately presented in thebalance sheet and reported at the lower of the carrying amount or fair valueless costs to sell, and are no longer depreciated. The assets and liabilitiesof a disposed group classified as held for sale would be presented separatelyin the appropriate asset and liability sections of the balance sheet. Theadoption of SFAS No. 144 had no impact on the Company’s financial position orresults of operations. Prior to the adoption of SFAS No. 144, the Companyaccounted for long-lived assets in accordance with SFAS No. 121, “Accountingfor Long-Lived Assets and for Long-Lived Assets to be Disposed Of”.

 

In April 2002, the Financial Accounting Standards Board (“FASB”) issuedStatement of Financial Accounting Standards No. 145, “Rescission of FASBStatements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and TechnicalCorrections” (“SFAS No. 145"). Among other items, SFAS No. 145 updates andclarifies existing accounting pronouncements related to reporting gains andlosses from the extinguishment of debt and certain lease modifications thathave economic effects similar to sale-leaseback transactions. The provisions ofSFAS No. 145 are generally effective for fiscal years beginning after May 15,2002, with earlier adoption of certain provisions encouraged. We do not expectthe adoption of SFAS No. 145 to have a material impact on our financialposition or results of operations.

 

In June 2002, the FASB issued Statement of Financial AccountingStandards No. 146, “Accounting for Costs Associated with Exit or DisposalActivities” (“SFAS No. 146”). SFAS No. 146 nullifies Emerging Issues Task Force(“EITF”) Issue No. 94-3, “Liability Recognition for Costs to Exit an Activity(Including Certain Costs Incurred in a Restructuring”). SFAS No. 146 requiresthat a liability for a cost associated with an exit or disposasl activity berecognized when the liability is incurred. Under EITF Issue 94-3, a liabilityfor an exit cost as defined in EITF Issue 94-3 was recognized at the date of anentity’s commitment to an exit plan. The provisions of SFAS No. 146 areeffective for exit or disposal activities that are initiated after December 31,2002, with earlier application encouraged. Under SFAS No. 146, an entity maynot restate its previously issued financial statements and the new statementgrandfathers the accounting for liabilities that an entity had previouslyrecorded under EITF 

 

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Issue 94-3. We do not expect the adoption of SFAS No. 146 to have amaterial impact on our financial position or results of operations.

 

**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.

 

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.

 

At the Company’s Corby, England facility, Legionella was found to bepresent on site in a cooling tower. An independent testing laboratory istesting water samples for the presence of Legionella on a weekly basis, and nofurther evidence of Legionella has been detected to date. Based upon theinvestigation, management believes that the reasonable likely outcome of thismatter will not materially impact the future consolidated financial position,results of operations, or cash flows of the Company.

 

The Company has made and will continue to make capital expenditures tocomply with Environmental 

 

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Laws. Environmental capital expenditures for the years ended December27, 2002, December 28, 2001 and December 29, 2000 were approximately $212.1thousand, $581.8 thousand and $447.3 thousand, respectively. The Companyestimates that its environmental capital expenditures will be approximately$900.0 thousand in 2003.

 

**Item7A.  Quantitative and Qualitative Disclosures about Market Risk**

 

The following discussion about the Company’srisk-management activities includes forward-looking statements that involverisk and uncertainties. Actual results could differ materially from thoseprojected in the forward-looking statement. See the note preceding Part I ofItem 1 “Business” for additional information regarding the Private SecuritiesLitigation Reform Act.

 

The Company is exposed to market risk from changes in interest rates(primarily U.S Dollar, Euro and British Pound one month LIBOR), exchange rates(primarily the Euro and British Pound) and commodity prices (primarily aluminumand steel). At certain times, the Company enters into contracts for thepurchase of aluminum and steel at market values in an attempt to assure amargin on specific customer orders. Additionally, the Company has the option tocommit to purchase a specific quantity of aluminum over a specified time periodat a fixed price. The Company would then be exposed for the difference betweenthe fixed price and the market price of aluminum. Historically, the Company hasnot engaged in extensive hedging activities intended to manage long-term risksrelating to movements in market prices of steel and aluminum raw materials aschanges in the market price can generally be passed on to customers. However,the Company has at times purchased, and expects from time to time to continueto purchase, options to buy aluminum at a fixed price for a portion of itsanticipated requirements. In addition, although approximately 31% of theCompany’s sales originated in Europe and were impacted by exchange ratefluctuations, the Company has not historically utilized derivatives to manageforeign currency exchange risks related to its European operations. However, inconnection with the Company’s risk-management strategy, the Company hashistorically entered into currency agreements and interest rate agreements withmajor banking institutions to manage the impact of foreign currency exchangerate fluctuations and/or interest rate fluctuations with respect to debtpayments. The agreements are utilized as risk-management tools and not fortrading 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 hedged debtcommitments. The fair value of the currency agreements and interest rateagreements are derived from valuation models based upon recognized financialprincipals and estimates about relevant future 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 2 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 27, 2002, which aresensitive to changes in interest rates. All other factors remaining unchanged,a hypothetical 10 percent increase in interest rates would decrease the fairvalue of the Company’s fixed-rate, long-term debt outstanding at December 27,2002, by approximately $4.4 million, based upon the use of a discounted cashflow model, 

 

33

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as compared to a hypothetical decrease in fairvalue of approximately $5.4 million at December 28, 2001. This decline from2001 to 2002 is primarily a result of the shorter remaining life of thefixed-rate, long-term debt outstanding at December 27, 2002, compared toDecember 28, 2001. A hypothetical 10 percent increase in interest rates for oneyear on the Company’s variable rate financial instruments and derivativeinstruments would increase interest expense by approximately $298.8 thousand in2003, as compared to a hypothetical increase in interest expense of approximately$359.2 thousand calculated in the prior year ended December 28, 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 27, 2002, which are sensitive to changes in foreign currency exchangerisks. A hypothetical 10 percent decrease in foreign currency exchange rateswould increase the Company’s foreign exchange loss by approximately $151.5thousand for those financial instruments and derivative instruments affected byforeign currency exchange fluctuations, as compared to a hypothetical increasein foreign exchange loss of approximately $940.9 thousand calculated in the prioryear ended December 28, 2001. This decrease from prior year is primarily aresult of the elimination of foreign exchange exposure through the repayment ofthe Term Loans (see Note 6 to the Consolidated Financial Statements). All otherfactors remaining unchanged, a hypothetical 10 percent increase in foreigncurrency exchange rates for one year would increase interest expense byapproximately $803.9 thousand for those financial instruments and derivativeinstruments affected by foreign currency exchange fluctuations, as compared toa hypothetical increase in interest expense of approximately $485.1 thousandcalculated in the prior year ended December 28, 2001. This increase from prioryear primarily results from additional interest expense that a stronger PoundSterling would result in on the Pound Sterling Swap (See Note 7 to theConsolidated Financial Statements for further discussion on the Pound SterlingSwap).

 

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**Item 8.  Financial Statements and SupplementaryData**

 

**Report of Independent Auditors**

 

The Board of Directors,Euramax International, Inc. and Subsidiaries

 

We have audited the accompanying consolidated balancesheets of Euramax International, Inc., and Subsidiaries as of December 27, 2002and December 28, 2001, and the related consolidated statements of earnings,changes in equity, and cash flows for the years ended December 27, 2002,December 28, 2001 and December 29, 2000. Our audits also included the relatedfinancial statement schedule listed in the index at Item 15(a)(2). Thesefinancial statements and schedule are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financialstatements and schedule based on our audits.

 

We conducted ouraudits in accordance with auditing standards generally accepted in the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion,the financial statements referred to above present fairly, in all materialrespects, the consolidated financial position of Euramax International, Inc.and Subsidiaries at December 27, 2002 and December 28, 2001, and theconsolidated results of their operations and cash flows for the years endedDecember 27, 2002, December 28, 2001 and December 29, 2000, in conformity withaccounting principles generally accepted in the United States. Also, in ouropinion, the related financial statement schedule, when considered in relationto the basic financial statements taken as a whole, presents fairly in allmaterial respects the information set forth therein.

 

As discussed in Notes 2 and 7 to the consolidated financial statements,in 2002 the Company changed its method of accounting for goodwill and in 2001the Company changed its method of accounting for derivative financialinstruments.

 

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

 

Atlanta, GeorgiaMarch 3, 2003

 

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**Euramax International, Inc. and SubsidiariesConsolidated Statements of Earnings**

 
| **Thousands of U.S. Dollars** |   | **For the  year  ended  December 27,  2002** |    | **For the  year  ended  December 28,  2001** |   | **For the  year  ended  December 29,  2000** |   |
|-------------------------------|--------|----------------------------------------------|---------|----------------------------------------------|--------|----------------------------------------------|--------|
|                          |   |                                         |    |                                         |   |                                         |   |
| Net sales                     |   | $                                            | 639,149 |                                         | $      | 593,117                                      |   | $ | 599,479 |   |
|                          |   |                                         |    |                                         |   |                                         |   |
| Costs and expenses:           |   |                                         |    |                                         |   |                                         |   |
| Cost of goods sold            |   | 508,254                                      |    | 477,870                                      |   | 494,330                                      |   |
| Selling and general           |   | 63,593                                       |    | 59,230                                       |   | 54,475                                       |   |
| Depreciation and amortization |   | 13,968                                       |    | 17,555                                       |   | 16,569                                       |   |
| Earnings from operations      |   | 53,334                                       |    | 38,462                                       |   | 34,105                                       |   |
|                          |   |                                         |    |                                         |   |                                         |   |
| Interest expense, net         |   | (22,748                                      | )       | (25,258                                      | )      | (25,870                                      | )      |
| Other income (expense), net   |   | 703                                          |    | (2,953                                       | )      | 763                                          |   |
| Earnings before income taxes  |   | 31,289                                       |    | 10,251                                       |   | 8,998                                        |   |
| Provision for income taxes    |   | 11,432                                       |    | 5,521                                        |   | 5,671                                        |   |
| Net earnings                  |   | $                                            | 19,857  |                                         | $      | 4,730                                        |   | $ | 3,327 |   |

 

The accompanying notes are an integral part of theseconsolidated financial statements.

 

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**EuramaxInternational, Inc. and SubsidiariesConsolidated Balance Sheets**

 
| **Thousands of U.S. Dollars  (except share data)**                                                                 |   | **December  27,  2002** |    | **December  28,  2001** |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|-------------------------|--------|
| **ASSETS**                                                                                                         |   |                    |    |                    |   |
| Current assets:                                                                                                    |   |                    |    |                    |   |
| Cash and equivalents                                                                                               |   | $                       | 11,646  |                    | $      | 5,897 |   |
| Accounts receivable, less allowance for doubtful  accounts (2002 - $3,513; 2001 - $3,938)                          |   | 88,508                  |    | 77,257                  |   |
| Inventories                                                                                                        |   | 78,480                  |    | 64,114                  |   |
| Deferred income taxes                                                                                              |   | 3,904                   |    | 3,909                   |   |
| Other current assets                                                                                               |   | 1,177                   |    | 1,411                   |   |
| Total current assets                                                                                               |   | 183,715                 |    | 152,588                 |   |
| Property, plant and equipment, net                                                                                 |   | 112,037                 |    | 110,845                 |   |
| Goodwill, net of accumulated amortization                                                                          |   | 110,799                 |    | 107,258                 |   |
| Deferred income taxes                                                                                              |   | 4,975                   |    | 6,886                   |   |
| Other assets                                                                                                       |   | 4,914                   |    | 6,674                   |   |
|                                                                                                               |   | $                       | 416,440 |                    | $      | 384,251 |   |
|                                                                                                               |   |                    |    |                    |   |
| **LIABILITIES  AND SHAREHOLDERS’ EQUITY**                                                                     |   |                    |    |                    |   |
| Current liabilities:                                                                                               |   |                    |    |                    |   |
| Cash overdrafts                                                                                                    |   | $                       | 1,880   |                    | $      | 1,419 |   |
| Accounts payable                                                                                                   |   | 57,104                  |    | 53,439                  |   |
| Accrued expenses                                                                                                   |   | 28,157                  |    | 19,700                  |   |
| Accrued interest payable                                                                                           |   | 4,278                   |    | 4,536                   |   |
| Income taxes payable                                                                                               |   | 811                     |    | 2,598                   |   |
| Deferred income taxes                                                                                              |   | 1,005                   |    | 847                     |   |
| Total current liabilities                                                                                          |   | 93,235                  |    | 82,539                  |   |
| Long-term debt, less current maturities                                                                            |   | 196,972                 |    | 207,724                 |   |
| Commitments and contingencies                                                                                      |   | —                  |    | —                  |   |
| Deferred income taxes                                                                                              |   | 19,421                  |    | 16,563                  |   |
| Other liabilities                                                                                                  |   | 20,593                  |    | 15,931                  |   |
| Total liabilities                                                                                                  |   | 330,221                 |    | 322,757                 |   |
| Shareholders’ equity:                                                                                         |   |                    |    |                    |   |
| Class A common stock - $1.00 par value; 600,000  shares authorized, 455,673.11 issued and 444,344.84 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 - 11,328.27 and  9,850.67 shares in 2002 and 2001, respectively                  |   | (2,056                  | )       | (1,581                  | )      |
| Retained earnings                                                                                                  |   | 44,439                  |    | 24,582                  |   |
| Accumulated other comprehensive loss, net of tax                                                                   |   | (9,884                  | )       | (15,227                 | )      |
| Total shareholders’ equity                                                                                    |   | 86,219                  |    | 61,494                  |   |
|                                                                                                               |   | $                       | 416,440 |                    | $      | 384,251 |   |

 

The accompanying notes are an integral part of theseconsolidated financial statements.

 

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**EuramaxInternational, Inc. and SubsidiariesConsolidated Statements of Changesin Equity**

 
| **Thousands of U.S. Dollars**                 |   | **Common  Stock** |       | **Additional  Paid-in  Capital** |       | **Treasury  Stock** |       | **Retained  Earnings** |       | **Accumulated  Other  Comprehensive  Income (Loss)** |       | **Totals** |       |
|-----------------------------------------------|--------|-------------------|------------|----------------------------------|------------|---------------------|------------|------------------------|------------|------------------------------------------------------|------------|------------|------------|
|                                          |   |              | ** ** |                             | ** ** |                | ** ** |                   | ** ** |                                                 | ** ** |       | ** ** |
| Balance at December 25,  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 loss                            |   |              |       |                             |       |                |       |                   |       |                                                 |       | (2,287     | )          |
| Balance at December 28,  2001                 |   | 500               |       | 53,220                           |       | (1,581              | )          | 24,582                 |       | (15,227                                              | )          | 61,494     |       |
|                                          |   |              |       |                             |       |                |       |                   |       |                                                 |       |       |       |
| Comprehensive income:                         |   |              |       |                             |       |                |       |                   |       |                                                 |       |       |       |
| Net earnings for 2002                         |   | —            |       | —                           |       | —              |       | 19,857                 |       | —                                               |       | 19,857     |       |
| Foreign currency  translation adjustment      |   | —            |       | —                           |       | —              |       | —                 |       | 6,678                                                |       | 6,678      |       |
| Minimum pension liability,  net of taxes      |   | —            |       | —                           |       | —              |       | —                 |       | (1,105                                               | )          | (1,105     | )          |
| Loss on derivative  instruments, net of taxes |   | —            |       | —                           |       | —              |       | —                 |       | (230                                                 | )          | (230       | )          |
| Comprehensive income                          |   |              |       |                             |       |                |       |                   |       |                                                 |       | 25,200     |       |
| Repurchase of common stock                    |   | —            |       | —                           |       | (475                | )          | —                 |       | —                                               |       | (475       | )          |
| Balance at December 27,  2002                 |   | $                 | 500        |                             | $          | 53,220              |       | $                      | (2,056     | )                                                    | $          | 44,439     |       | $ | (9,884 | ) | $ | 86,219 |   |

 

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**Euramax International, Inc. and SubsidiariesConsolidated Statements of Cash Flows**

 
| **Thousands of U.S. Dollars**                                                |   | **For the  year  ended  December 27,  2002** |   | **For the  year  ended  December 28,  2001** |    | **For the  year  ended  December 29,  2000** |   |
|------------------------------------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------|---------|----------------------------------------------|--------|
|                                                                         |   |                                         |   |                                         |    |                                         |   |
| Cash flows from operating  activities:                                       |   |                                         |   |                                         |    |                                         |   |
| Net earnings                                                                 |   | $                                            | 19,857 |                                         | $       | 4,730                                        |   | $ | 3,327 |   |
| Reconciliation of net  earnings to net cash provided by operating activites: |   |                                         |   |                                         |    |                                         |   |
| Depreciation and  amortization                                               |   | 13,968                                       |   | 17,555                                       |    | 16,569                                       |   |
| Amortization of deferred  financing fees                                     |   | 1,319                                        |   | 1,133                                        |    | 1,182                                        |   |
| Provision for doubtful  accounts                                             |   | (177                                         | )      | 1,763                                        |    | 542                                          |   |
| Foreign exchange (gain)  loss                                                |   | (796                                         | )      | (204                                         | )       | —                                       |   |
| Loss (gain) on sale of  assets                                               |   | 552                                          |   | 124                                          |    | (1,108                                       | )      |
| Deferred income taxes                                                        |   | 4,274                                        |   | 29                                           |    | (305                                         | )      |
| Changes in operating assets  and liabilities (excluding acquisitions):       |   |                                         |   |                                         |    |                                         |   |
| Accounts receivable                                                          |   | (5,203                                       | )      | (7,150                                       | )       | 5,542                                        |   |
| Inventories                                                                  |   | (11,197                                      | )      | 16,007                                       |    | 1,922                                        |   |
| Other current assets                                                         |   | 294                                          |   | 716                                          |    | (426                                         | )      |
| Accounts payable and other  current liabilities                              |   | 6,892                                        |   | 2,823                                        |    | (485                                         | )      |
| Income taxes payable                                                         |   | (2,516                                       | )      | (4,861                                       | )       | 4,174                                        |   |
| Other noncurrent assets and  liabilities                                     |   | (1,849                                       | )      | 2,836                                        |    | (2,847                                       | )      |
| Net cash provided by  operating activities                                   |   | 25,418                                       |   | 35,501                                       |    | 28,087                                       |   |
| Cash flows from investing  activities:                                       |   |                                         |   |                                         |    |                                         |   |
| Proceeds from sale of  assets                                                |   | 492                                          |   | 1,164                                        |    | 409                                          |   |
| Purchases of businesses                                                      |   | —                                       |   | —                                       |    | (45,777                                      | )      |
| Capital expenditures                                                         |   | (8,263                                       | )      | (8,321                                       | )       | (9,706                                       | )      |
| Net cash used in investing  activities                                       |   | (7,771                                       | )      | (7,157                                       | )       | (55,074                                      | )      |
| Cash flows from financing  activities:                                       |   |                                         |   |                                         |    |                                         |   |
| Changes in cash overdrafts                                                   |   | 461                                          |   | (290                                         | )       | (301                                         | )      |
| Net borrowings (repayments)  on revolving credit facility                    |   | 23,808                                       |   | (2,774                                       | )       | (18,928                                      | )      |
| Repayment of long-term debt                                                  |   | (38,952                                      | )      | (22,989                                      | )       | (6,463                                       | )      |
| Proceeds from long-term  debt                                                |   | —                                       |   | —                                       |    | 40,000                                       |   |
| Proceeds from settlement of  currency agreements                             |   | 2,790                                        |   | —                                       |    | 10,020                                       |   |
| Payment to terminate  interest rate swap                                     |   | —                                       |   | (3,160                                       | )       | —                                       |   |
| Deferred financing fees                                                      |   | (1,530                                       | )      | (405                                         | )  | (1,000                                       | )      |
| Purchases of treasury stock                                                  |   | (475                                         | )      | —                                       |    | (1,581                                       | )      |
| Net cash (used in) provided  by financing activities                         |   | (13,898                                      | )      | (29,618                                      | )       | 21,747                                       |   |
| Effect of exchange rate  changes on cash                                     |   | 2,000                                        |   | (963                                         | )       | (11                                          | )      |
| Net increase (decrease) in  cash and equivalents                             |   | 5,749                                        |   | (2,237                                       | )       | (5,251                                       | )      |
| Cash and equivalents at  beginning of period                                 |   | 5,897                                        |   | 8,134                                        |    | 13,385                                       |   |
| Cash and equivalents at end  of period                                       |   | $                                            | 11,646 |                                         | $       | 5,897                                        |   | $ | 8,134 |   |
|                                                                         |   |                                         |   |                                         |    |                                         |   |
| Supplemental cash flow  information:                                         |   |                                         |   |                                         |    |                                         |   |
| Income taxes paid, net                                                       |   | $                                            | 9,471  |                                         | $       | 9,512                                        |   | $ | 3,238 |   |
| Interest paid, net                                                           |   | $                                            | 20,958 |                                         | $       | 22,390                                       |   | $ | 24,394 |   |

 

The accompanying notes are anintegral part of these consolidated financial statements.

 

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**Euramax International, Inc. andSubsidiaries****Notes to ConsolidatedFinancial Statements****(Thousands of U.S. Dollars except share data)**

 

**1.  Basis of Presentation:**

 

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 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. The “Company” or “Euramax” refers to Euramax International, Inc.and Subsidiaries, collectively.

 

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

 

**2.  Summary ofSignificant Accounting Policies:**

 

**Principles of Consolidation**

 

The consolidated financial statements of theCompany include the accounts of the Company and all its subsidiaries. Allsignificant intercompany accounts and transactions have been eliminated inconsolidation.

 

**Fiscal Year**

 

The Company operates on a 52 or 53 week fiscalyear ending on the last Friday in December. The Company’s fiscal yearsconsisted of 52 weeks for the years ended December 27, 2002, December 28, 2001and December 29, 2000, 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.

 

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**Inventories**

 

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

 

**Property, Plant and Equipment**

 

Property, plant and equipment is recorded at cost.Repair and maintenance costs are generally expensed unless they extend theuseful lives of assets. Depreciation and amortization of property, plant andequipment is computed principally on the straight-line method over theestimated useful lives of the assets ranging from 5 to 10 years forequipment and 25 years for buildings. Gains or losses related to thedisposition of property, plant and equipment are charged to other income orexpense when incurred. Also, when events or changes in circumstances indicatethat the carrying value of an asset may not be recoverable, management assesseswhether there has been a permanent impairment in the value of the asset bycomparing the estimated undiscounted future cash flows expected to result fromthe use of the asset and its eventual disposition to the carrying amount of theasset. If the expected future cash flows are less than the carrying amount ofthe asset, an impairment loss is recognized.

 

**Goodwill**

 

The Company adopted SFAS No. 142, “Goodwill andOther Intangible Assets”, effective December 29, 2001. Under SFAS No. 142,goodwill and indefinite lived tangible assets are no longer amortized, but arereviewed at least annually for impairment. The Company did not identify anyimpairment in 2002 upon adoption of SFAS No. 142 and completion of its initialimpairment test. The Company completed its annual impairment test and did notidentify any impairment and is not aware of any subsequent developments that wouldindicate impairment. Prior to 2002, goodwill was amortized on a straight-linebasis over periods ranging from 20 to 30 years. Had the Company been accountingfor its goodwill under SFAS No. 142 for all periods presented, the Company’snet earnings would have been as follows:

 
|                              |   | **Years  Ended**        |   |
|-----------------------------------|--------|-------------------------|--------|
|                              |   | **December  27,  2002** |   | **December  28,  2001** |   | **December  29,  2000** |   |
|                              |   |                    |   |   |   |   |   |   |   |   |
| Reported net earnings             |   | $                       | 19,857 |   | $ | 4,730 |   | $ | 3,327 |   |
| Goodwill amortization, net of tax |   | —                  |   | 3,907 |   | 3,696 |   |
| Adjusted net earnings             |   | $                       | 19,857 |   | $ | 8,637 |   | $ | 7,023 |   |

 

**Financial Instruments and Risk Management**

 

SFAS No. 133, *Accounting for Derivative Instruments and HedgingActivities*, as amended by SFAS No. 137 and SFAS No. 138, requirescompanies to recognize all derivative instruments on the balance sheet at fairvalue. The accounting for changes in the fair value of a derivative instrumentdepends on whether it has been designated and qualifies as part of a hedgingrelationship and further, on the type of hedging

 

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relationship. For those derivative instrumentsthat are designated and qualify as hedging instruments, a company mustdesignate the hedging instrument, based upon the exposure being hedged, as afair value hedge, cash flow hedge or a hedge of net investment in a foreignoperation. For derivative instruments that are designated and qualify as a fairvalue hedge, the gain or loss on the derivative instrument as well as theoffsetting gain or loss on the hedged item attributable to the hedged risk arerecognized in current earnings during the period of the change in fair values.For derivative instruments that are designated and qualify as a cash flowhedge, the effective portion of the gain or loss on the derivative instrumentis reported as a component of other comprehensive income and reclassified intoearnings in the same period or periods during which the hedged transactionaffects earnings. The remaining gain or loss on the derivative instrument inexcess of the cumulative change in the present value of future cash flows ofthe hedged item, if any, is recognized in current earnings during the period ofchange. For derivative instruments that are designated and qualify as a hedgeof a net investment in a foreign operation, the gain or loss is reported inother comprehensive income as part of the cumulative translation adjustment tothe extent it is effective. For derivative instruments not designated ashedging instruments, the gain or loss is recognized in current earnings duringthe period of change. Should an agreement be terminated while the underlyingremains outstanding, the gain or loss would be deferred and amortized over theshorter of 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 anddocuments the financial instrument as a hedge of a specific underlyingexposure, as well as the risk management objectives and strategies forundertaking the hedge transaction. Derivatives are recorded in the balancesheet at fair value in either other assets or other liabilities. The earningsimpact resulting from the derivative instruments is recorded in the same lineitem within the statement of earnings as the underlying exposure being hedged.The Company also formally assesses, both at the inception and a least quarterlythereafter, whether the financial instruments that are used in hedgingtransactions are effective at offsetting changes in either the fair value orcash flows of the related underlying exposures. The ineffective portion of afinancial instrument’s change in fair value is immediately recognized inearnings as other income (expense).

 

**Revenue Recognition**

 

The Company recognizes revenue when the persuasiveevidence of an agreement exists, delivery has occurred, the Company’s price tothe buyer is fixed and determinable and collectibility is reasonably assured.Delivery is not considered to have occurred until the customer takes title andassumes the risks and rewards of ownership. The timing of revenue recognitionis largely dependant on shipping terms. Revenue is recognized at the time ofshipment for terms designated f.o.b. shipping point. Revenue is recognized upondelivery to the customer’s delivery site for terms designated f.o.b.destination.

 

The Company provides warranties on certainproducts. The warranty periods differ depending on the product, but generallyrange from one year to limited lifetime warranties. The Company providesaccruals for warranties based on historical experience and expectations offuture occurrence.

 

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**Shipping and Handling Costs**

 

The Company classifies all shipping and handling charges as cost ofgoods 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 and for the remeasurement of amountsthat are not of a long-term investment nature into local currencies areincluded in results of operations. The foreign currency transaction gains(losses) recorded in selling and general expenses were not significant for theyears ended December 27, 2002, December 28, 2001 and December 29, 2000.

 

**Comprehensive Income**

 

Total comprehensive income and the components ofaccumulated other comprehensive income are presented in the ConsolidatedStatements of Changes in Equity. The related tax effects of the components ofcomprehensive income are presented in Note 10.

 

**Recent Accounting Pronouncements**

 

In June 2001, the Financial Accounting Standards Board (“FASB”) issuedStatement No. 143, “Accounting for Asset Retirement Obligations” (“SFAS No.143”). SFAS No. 143 addresses financial accounting and reporting for legalobligations associated with the retirement of tangible long-lived assets thatresult from the acquisition, construction, development and normal operation ofa long-lived asset. SFAS No. 143 requires that the fair value of a liabilityfor an asset retirement obligation be recognized in the period in which it isincurred if a reasonable estimate of fair value can be made. The associatedasset retirement costs are capitalized as part of the carrying amount of thelong-lived asset and subsequently allocated to expense over the asset’s usefullife. SFAS No. 143 is effective December 28, 2002 for the Company. The adoptionof SFAS No. 143 is not expected to have a material impact on the Company’sfinancial position or results of operation.

 

The Company adopted SFAS No. 144, “Accounting for the Impairment orDisposal of Long-Lived Assets” (“SFAS No. 144”), effective December 29, 2001.SFAS No. 144 addresses financial accounting and reporting for the impairment ordisposal of long-lived assets. In accordance with SFAS No. 144, long-livedassets are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable. Recoverabilityof assets to be held and used is measured by a comparison of the carryingamount of an asset to estimated undiscounted future cash flows expected to begenerated by the asset. If the carrying amount of an asset exceeds itsestimated future cash flows, an impairment charge is recognized in the amountby which the carrying amount of the asset exceeds the fair value of the asset.Assets to be disposed of would be separately presented in the balance sheet andreported at the lower of the carrying amount or

 

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fair value less costs to sell, and are no longer depreciated. Theassets and liabilities of a disposed group classified as held for sale would bepresented separately in the appropriate asset and liability sections of thebalance sheet. The adoption of SFAS No. 144 had no impact on the Company’sfinancial position or results of operations. Prior to the adoption of SFAS No.144, the Company accounted for long-lived assets in accordance with SFAS No.121, “Accounting for Long-Lived Assets and for Long-Lived Assets to be DisposedOf”.

 

In April 2002, the FASB issued Statement of Financial AccountingStandards No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendmentof FASB Statement No. 13, and Technical Corrections” (“SFAS No. 145").Among other items, SFAS No. 145 updates and clarifies existing accountingpronouncements related to reporting gains and losses from the extinguishment ofdebt and certain lease modifications that have economic effects similar tosale-leaseback transactions. The provisions of SFAS No. 145 are generallyeffective for fiscal years beginning after May 15, 2002, with earlier adoptionof certain provisions encouraged. The adoption of SFAS No. 145 is not expectedto have a material impact on the Company’s financial position or results ofoperations.

 

In June 2002, the FASB issued Statement of Financial AccountingStandards No. 146, “Accounting for Costs Associated with Exit or DisposalActivities” (“SFAS No. 146”). SFAS No. 146 nullifies Emerging Issues Task Force(“EITF”) Issue No. 94-3, “Liability Recognition for Costs to Exit an Activity(Including Certain Costs Incurred in a Restructuring”). SFAS No. 146 requiresthat a liability for a cost associated with an exit or disposasl activity berecognized when the liability is incurred. Under EITF Issue 94-3, a liabilityfor an exit cost as defined in EITF Issue 94-3 was recognized at the date of anentity’s commitment to an exit plan. The provisions of SFAS No. 146 are effectivefor exit or disposal activities that are initiated after December 31, 2002,with earlier application encouraged. Under SFAS No. 146, an entity may notrestate its previously issued financial statements and the new statementgrandfathers the accounting for liabilities that an entity had previouslyrecorded under EITF Issue 94-3. The adoption of SFAS No. 146 is not expected tohave a material impact on the Company’s financial position or results ofoperations.

 

**Reclassifications**

 

Certain 2001 and 2000 amounts have been reclassified to conform tocurrent year presentation.

 

**3.  Acquisitions:**

 

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”). Thepurchase price, including approximately $372.2 thousand in acquisition-relatedfees and expenses, was approximately $45.6 million in cash, plus the assumptionof approximately $2.6 million of liabilities. Gutter World manufacturesraincarrying accessories, such as gutter guards, water diverters and downspout strainers,as well as door guards sold primarily to home centers. Global manufacturesexpanded metal products.

 

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

 

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The Gutter World and Global Acquisition wasfinanced through borrowings of approximately $5.6 million under the RevolvingCredit Facility and $40.0 million under the previously outstanding Term Loans(see Note 6). The Company allocated the purchase price based on the fair valueof the assets acquired and liabilities assumed with the remainder allocated togoodwill.

 

The pro forma effects of the Gutter World andGlobal Acquisition were not material to the Company’s Consolidated Statement ofEarnings.

 

**4.  Inventories:**

 

Inventories were comprised of:

 
|              |   | **December  27,  2002** |   | **December  28,  2001** |   |
|-------------------|--------|-------------------------|--------|-------------------------|--------|
|              |   |                    |   |                    |   |
| Raw materials     |   | $                       | 60,281 |                    | $      | 50,206 |   |
| Work in process   |   | 2,587                   |   | 2,449                   |   |
| Finished products |   | 15,612                  |   | 11,459                  |   |
|              |   | $                       | 78,480 |                    | $      | 64,114 |   |

 

Inventories are net of related reserves totaling $3,827 at December 27,2002 and $3,284 at December 28, 2001.

 

**5.  Property, Plant and Equipment:**

 

Components of property, plant and equipment wereas follows:

 
|                          |   | **December  27,  2002** |    | **December 28,  2001** |   |
|-------------------------------|--------|-------------------------|---------|------------------------|--------|
|                          |   |                    |    |                   |   |
| Land and improvements         |   | $                       | 9,544   |                   | $      | 8,857 |   |
| Buildings                     |   | 45,774                  |    | 43,057                 |   |
| Machinery and equipment       |   | 118,621                 |    | 107,262                |   |
|                          |   | 173,939                 |    | 159,176                |   |
| Less accumulated depreciation |   | (67,032                 | )       | (51,334                | )      |
|                          |   | 106,907                 |    | 107,842                |   |
| Construction in progress      |   | 5,130                   |    | 3,003                  |   |
|                          |   | $                       | 112,037 |                   | $      | 110,845 |   |

 

Depreciation expense was $13.8 million, $12.6 million, and $12.0million for the years ended December 27, 2002, December 28, 2001 and December29, 2000, respectively.

 

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**6.  Long-TermObligations:**

 

Long-term obligations consisted of the following:

 
|                                       |   | **December 27,  2002** |    | **December 28,  2001** |   |
|--------------------------------------------|--------|------------------------|---------|------------------------|--------|
| Credit Agreement:                          |   |                   |    |                   |   |
| Revolving Credit  Facility                 |   | $                      | 61,972  |                   | $      | 33,773 |   |
| Term Loans                                 |   | —                 |    | 38,951                 |   |
| 11.25% Senior Subordinated  Notes due 2006 |   | 135,000                |    | 135,000                |   |
|                                       |   | $                      | 196,972 |                   | $      | 207,724 |   |

 

On March 15, 2002, the Company and its Lenders amended and restated theCredit Agreement to, among other items, increase the Revolving Credit Facilityfrom $100.0 million to $110.0 million; refinance outstanding Term Loans throughborrowings under the Revolving Credit Facility; and extend the expiration dateof the Credit Agreement from June 30, 2002 to June 30, 2005.

 

Loans under the Credit Agreement are made, at the election of the Company,in U.S. Dollars, Euros and/or Pounds Sterling. Borrowings on the CreditAgreement are repaid in the currency in which the loan is made. Outstandingloans under the Credit Agreement are to be repaid by June 30, 2005.

 

At the option of the Company, the interest ratesapplicable to the loans under the Credit Agreement are based upon a Base Rateor a Eurocurrency Rate (both as defined), plus their respective margins. TheCredit Agreement provides for variable rate margins, determined quarterly,based upon the Company’s ratio of EBITDA (earnings before interest, taxes,depreciation and amortization) to total debt. The maximum and minimum base ratemargins are 2.00% and 1.00%, respectively. The maximum and minimum Eurocurrencyrate margins are 3.25% and 2.25%, respectively. At December 27, 2002, theinterest rate payable under the Credit Agreement averaged 4.8210%, compared to5.1966% at December 28, 2001.

 

As of December 27, 2002, an undrawn amount of$48.0 million remained under the Revolving Credit Facility of which $37.1million was available. The Company is subject to a commitment fee on aquarterly basis equal to 0.50% of the unused portion of the Revolving CreditFacility. During 2002, borrowings under the Credit Agreement increased $4.4million due to fluctuations in foreign exchange rates, offset by repayments of$15.1 million. In 2001, borrowings under the Credit Agreement decreased $2.0million due to fluctuations in foreign exchange rates and $25.8 million due torepayments.

 

The Credit Agreement contains certain covenants and restrictions onactions by the Company and its subsidiaries, including certain restrictions onthe payment of cash dividends. As of December 27, 2002, substantially all ofthe Company’s retained earnings are restricted and unavailable for dividend. Inaddition, the Credit Agreement requires the Company to meet certain financialtests, including minimum fixed charge coverage ratio, minimum interest coverageratio, maximum leverage ratio and maximum amounts of capital expenditures. TheCompany is in compliance as of December 27, 2002 with these and other covenantsand restrictions.

 

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The Company has outstanding $135.0 million in 11.25% SeniorSubordinated Notes (the “Notes”) due 2006. Interest on the Notes is payablesemiannually in arrears on April 1 and October 1 of each year. TheNotes may be redeemed at the option of the Company, in whole or in part, underthe conditions as specified in the note indenture plus accrued and unpaidinterest to the redemption date, at the following redemption prices if redeemedduring the 12-month period beginning October 1 of the years indicated:

 

| **Year** |   | **Percentage** |   |
|----------|--------|----------------|--------|
| 2002     |   | 103.750        | %      |
| 2003     |   | 101.875        | %      |
| 2004     |   | 100.000        | %      |
| 2005     |   | 100.000        | %      |
| 2006     |   | 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 amountof Notes the Company can purchase prior to repayment of the borrowings underthe 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.

 

Future maturities of long-term obligationsas of December 27, 2002 are as follows:

 
| 2003   |   | $       | —  |   |
|--------|--------|---------|---------|--------|
| 2004   |   | —  |    |
| 2005   |   | 61,972  |    |
| 2006   |   | 135,000 |    |
|   |   | $       | 196,972 |   |

 

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.

 

**7.  Financial Instruments**

 

Cash Flow Hedging Strategy

 

In January 2002, the Company entered into aninterest rate agreement (the “Interest Rate Swap”) whereby the Company pays acounterparty a fixed rate of interest of 3.715% on a notional amount of $35.0million

 

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through December 31, 2002, $25.0 million fromJanuary 1, 2003 through December 31, 2003, and $15.0 million from January 1,2004 through December 31, 2004. In exchange, the Company receives a floatingrate of interest of 3-month U.S. Dollar LIBOR on an equivalent notional amount.The Interest Rate Swap was designated as a cash flow hedge that effectivelyconverted a portion of the Company’s U.S. Dollar floating rate debt into fixedrate debt. The effectiveness of the Interest Rate Swap is being assessed usingthe change in variable cash flows method and was assessed as 100% effective in2002. As of December 27, 2002, the Company had recorded a liability for thefair value of the Interest Rate Swap of $955.4 thousand, as estimated by athird party.

 

In February 2002, the Company entered into a PoundSterling cross-currency swap agreement (the “Pound Sterling Swap”). The termsof the Pound Sterling Swap expire on June 30, 2005, and require the Company topay 19.0 million Pound Sterling with semi-annual interest payments at 12.63% inexchange for $27.2 million with semi-annual interest payments at 11.25%. ThePound Sterling Swap was designated as a cash flow hedge that effectivelyconverted $27.2 million of the Notes recorded on the books of a U.K. subsidiaryinto a fixed-rate Pound Sterling loan, which reduced the impact of foreignexchange rate changes on the principal and interest payments on the loan. Theeffectiveness of the Pound Sterling Swap is being assessed using thehypothetical derivative method, which compares the change in the fair value ofthe Pound Sterling Swap to the change in the value of a hypothetical derivativewith terms that exactly match the critical terms of the foreign-currencydenominated loan. The Pound Sterling Swap was assessed as 100% effective in2002. During 2002, the Company reclassified a net loss of $2.1 million fromother comprehensive income into earnings in order to offset the gain recognizedrelated to the remeasurement of the foreign-currency denominated loan. As ofDecember 27, 2002, the Company had recorded a liability for the fair value ofthe Pound Sterling Swap of $3.7 million, as estimated by a third party. As ofDecember 27, 2002, a net loss on the Pound Sterling Swap of $125.9 thousandremained in other comprehensive income, with the remainder having been chargedto earnings.

 

In January 2002, the Company terminated a PoundSterling Swap (“Terminated Pound Sterling Swap”) for proceeds totaling $2.8 million.The amount of the gain remaining in other comprehensive income at the time thehedge was discontinued will be amortized into earnings over the original termof the agreement as other income. During 2002, prior to terminating the swap,the Company reclassified a net gain of $215.3 thousand from other comprehensiveincome into earnings in order to offset the loss recognized related to theremeasurement of the foreign-currency denominated loan. Additionally, during2002, the Company amortized $261.2 thousand of the gain remaining in othercomprehensive income into earnings. As of December 27, 2002, $230.3 thousand ofthe gain remained in other comprehensive income.

 

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Effective December 30, 2000, the Company adoptedSFAS No. 133 which resulted in the Company recording transition adjustments torecognize its derivative instruments at fair value.  The cumulative effect of these transition adjustments was anafter-tax increase in other comprehensive loss of approximately $2.0 million.

 

The following table summarizes activity in othercomprehensive income (“OCI”) related to derivatives held by the Company for theyears ended December 27, 2002 and December 28, 2001 [gain (loss)]:

 
|                                                      |   | **Before-Tax  Amount** |   | **Income  Tax** |   | **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) at December 28, 2001 |   | (661                   | )      | 296             |   | (365                  | )      |
|                                                      |   |                   |   |            |   |                  |   |
| Net changes in fair  value of derivatives                 |   | (3,582                 | )      | 1,145           |   | (2,437                | )      |
| Net losses reclassified  from OCI into earnings           |   | 3,253                  |   | (1,046          | )      | 2,207                 |   |
| Accumulated derivative  net (losses) at December 27, 2002 |   | $                      | (990   | )               | $      | 395                   |   | $ | (595 | ) |

 

During 2002, the Company amortized $441.6 thousandof the loss remaining in other comprehensive income relating to the terminatedinterest rate swap and interest rate cap agreement into earnings. As of December27, 2002, $221.0 thousand of the loss remained in other comprehensive income.

 

At December 27, 2002, the Company expects toreclassify from OCI into earnings net losses of $221.0 thousand over the nexttwelve months, resulting from the amortization of the cumulative effecttranslation adjustment relating to the terminated interest rate swap andinterest rate cap agreement. Additionally, the Company expects to reclassifyfrom OCI into earnings over the next twelve months net gains of $230.3 thousandon the Terminated Pound Sterling Swap resulting from the amortization of thegain remaining in OCI from the termination of the Terminated Pound SterlingSwap.

 

The Company would be exposed to credit-related losses in the event ofnonperformance by the counterparties that issued the currency agreements. TheCompany does not expect that counterparties to the currency agreements willfail to meet their obligations, given their high credit ratings. The Companygenerally does not receive collateral on derivative instruments due to thecredit rating of its counterparties, however, the Company provides collateralwhen 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 value of the Notes was $137.7 million atDecember 27, 2002.  The fair values ofother long-term debt approximates the carrying value at December 27, 2002.

 

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 financialinstruments approximates book value at December 27, 2002 and December 28, 2001.The Company places its cash and equivalents with high credit qualityinstitutions. At times, such investments may be in excess of the FederalDeposit Insurance Corporation insurance limit; however, the Company believes thatits credit risk exposure is not significant due to the high credit quality ofthe institutions. The Company routinely

 

49

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assesses the financial strength of its customers,and generally does not require collateral. Also, due to the large number ofcustomers and the widely dispersed geographic areas in which the Company’sbusinesses operate, the Company believes that its trade accounts receivablecredit risk exposure is not significant; however, the Company does provide fordoubtful accounts based on historical experience and when current marketconditions indicate that collection of an amount is doubtful.

 

**8.  Capital Structure:**

 

**CommonStock**

 

The Company has authorized 1,200,000 shares consisting of (i) 600,000shares of Class A voting common stock, par value of one dollar ($1.00) pershare, and (ii) 600,000 shares of Class B convertible restricted voting commonstock, par value of one dollar ($1.00) per share. As of December 27, 2002, theCompany had 500,019.91 issued and 488,691.64 outstanding shares of common stockwith a par value of one dollar ($1.00) per share. Except with respect to votingrights, all shares of Class A and Class B convertible common stock areidentical 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 Agreement contains certain restrictions on thepayment 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. Inaddition, each share of Class B convertible common stock may be converted atany time into one share of Class A common stock at the option of the holder.

 

During 2002, the Company repurchased 1,477.60shares of its Class A common stock. The shares were recorded as treasury stockat cost.

 

50

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**9.  Income Taxes:**

 

The provisions for income taxes are comprised ofthe following:

 
|         |   | **Year ended  December 27,  2002** |   | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|--------------|--------|------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
| Current:     |   |                               |   |                               |   |                               |   |
| U.S. Federal |   | $                                  | 2,158  |                               | $      | 1,124                              |   | $ | — |   |
| Non-U.S.     |   | 4,246                              |   | 4,011                              |   | 5,699                              |   |
| State        |   | 754                                |   | 357                                |   | 277                                |   |
|         |   | $                                  | 7,158  |                               | $      | 5,492                              |   | $ | 5,976 |   |
|         |   |                               |   |                               |   |                               |   |
| Deferred:    |   |                               |   |                               |   |                               |   |
| U.S. Federal |   | $                                  | 4,642  |                               | $      | 354                                |   | $ | (67 | ) |
| Non-U.S.     |   | (329                               | )      | (75                                | )      | (793                               | )      |
| State        |   | (39                                | )      | (250                               | )      | 555                                |   |
|         |   | $                                  | 4,274  |                               | $      | 29                                 |   | $ | (305 | ) |
|         |   |                               |   |                               |   |                               |   |
|         |   | $                                  | 11,432 |                               | $      | 5,521                              |   | $ | 5,671 |   |

 

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

 
|     |   | **Year ended  December 27,  2002** |   | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|----------|--------|------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
|     |   |                               |   |                               |   |                               |   |
| U.S.     |   | $                                  | 19,734 |                               | $      | 2,064                              |   | $ | (3,387 | ) |
| Non-U.S. |   | 11,555                             |   | 8,187                              |   | 12,385                             |   |
|     |   | $                                  | 31,289 |                               | $      | 10,251                             |   | $ | 8,998 |   |

 

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 27,  2002** |   | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|------------------------------------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
|                                                                   |   |                               |   |                               |   |                               |   |
| Tax at U.S. Federal  statutory rate                                    |   | $                                  | 10,952 |                               | $      | 3,588                              |   | $ | 3,149 |   |
| State income taxes, net  of U.S. Federal income tax benefit            |   | 262                                |   | (791                               | )      | (121                               | )      |
| Impact of non-U.S. tax  rates, net                                     |   | (65                                | )      | 150                                |   | 142                                |   |
| Permanent differences  (primarily goodwill amortization prior to 2002) |   | 233                                |   | 1,113                              |   | 1,526                              |   |
| Valuation allowances  for state taxes                                  |   | 219                                |   | 893                                |   | 1,037                              |   |
| Other, net                                                             |   | (169                               | )      | 568                                |   | (62                                | )      |
|                                                                   |   | $                                  | 11,432 |                               | $      | 5,521                              |   | $ | 5,671 |   |

 

At December 27, 2002 and December 28, 2001, thecombined tax-effected temporary differences are as follows:

 
|                                         |   | **Asset  (Liability)** |    |
|----------------------------------------------|--------|------------------------|---------|
|                                         |   | **December 27,2002**   |    | **December 28,2001** |   |
|                                         |   |                   |    |   |   |
| Accrued expenses                             |   | $                      | 2,075   |   | $ | 2,135 |   |
| Allowance for doubtful  accounts             |   | 481                    |    | 651 |   |
| Book versus tax basis  of inventory          |   | 343                    |    | 276 |   |
| Current, net                                 |   | 2,899                  |    | 3,062 |   |
|                                         |   |                   |    |   |   |
| Book versus tax basis  of depreciable assets |   | (17,120                | )       | (15,881 | ) |
| Net operating losses                         |   | 5,047                  |    | 8,614 |   |
| Accrued pension liability                    |   | 3,011                  |    | 2,963 |   |
| Valuation allowance                          |   | (2,744                 | )       | (2,525 | ) |
| Other                                        |   | (2,640                 | )       | (2,848 | ) |
| Noncurrent, net                              |   | (14,446                | )       | (9,677 | ) |
| Total, net                                   |   | $                      | (11,547 | ) | $ | (6,615 | ) |

 

Deferred taxes have not been provided onundistributed earnings of foreign subsidiaries, which are considered to bepermanently invested. It is not practicable to estimate the amount of tax thatmight be payable on the eventual remittance of such earnings. In addition, anacquired subsidiary, Fabral, Inc., has U.S. operating tax loss carryforwards ofapproximately $5.4 million that are available to offset future taxable incomeand taxes. The tax carryforward benefits begin to expire in 2010. InternalRevenue Service code section 382 imposes an annual limitation on usage ofapproximately $4.0 million for the

 

52

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Fabral net operating loss. The Company believesthat this limitation will not affect its ability to utilize the net operatinglosses prior to expiration. In addition, the Company has state NOL carryforwardsand capital loss carryforwards at December 27, 2002, substantially all of whichare reserved with a valuation allowance. The Company’s valuation allowance was$2.7 million, $2.5 million and $1.6 million as of December 27, 2002, December28, 2001 and December 29, 2000, respectively.

 

**10. Comprehensive Income:**

 

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

 
|                                           |   | **December 27,  2002** |   | **December 28,  2001** |   |
|------------------------------------------------|--------|------------------------|--------|------------------------|--------|
|                                           |   |                   |   |                   |   |
| Foreign currency  translation adjustment       |   | $                      | (1,132 | )                      | $      | (7,810 | ) |
| Accumulated derivative  net losses, net of tax |   | (595                   | )      | (365                   | )      |
| Minimum pension  liability, net of tax         |   | (8,157                 | )      | (7,052                 | )      |
|                                           |   |                   |   |                   |   |
|                                           |   | $                      | (9,884 | )                      | $      | (15,227 | ) |

 

There were no tax effects related to the foreigncurrency translation adjustment component of other comprehensive loss for anyyear presented because the earnings of the subsidiaries are considered to bepermanently invested (See Note 9). The tax effects related to the minimumpension liability component of other comprehensive income (loss) were $4.0 millionfor the year ended December 27, 2002, $3.1 million for the year ended December28, 2001 and $970.3 thousand for the year ended December 29, 2000. The taxeffects related to accumulated derivative net losses are disclosed in Note 7.

 

**11.  Employee RetirementPlans:**

 

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 27,  2002** |   | **Year ended  December 28,  2001** |   |
|------------------------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
|                                                       |   |                               |   |                               |   |
| **Change  in benefit obligation**                          |   |                               |   |                               |   |
| Projected benefit  obligation at beginning of year         |   | $                                  | 2,142  |                               | $      | 1,704 |   |
| Service cost                                               |   | 300                                |   | 267                                |   |
| Interest cost                                              |   | 152                                |   | 130                                |   |
| Plan amendments                                            |   | —                             |   | 19                                 |   |
| Actuarial gain (loss)                                      |   | 203                                |   | 147                                |   |
| Benefits paid                                              |   | (119                               | )      | (125                               | )      |
| Projected benefit  obligation at end of year               |   | $                                  | 2,678  |                               | $      | 2,142 |   |
| Accumulated benefit  obligation                            |   | $                                  | 2,678  |                               | $      | 2,142 |   |
|                                                       |   |                               |   |                               |   |
| **Change  in plan assets**                                 |   |                               |   |                               |   |
| Fair value of plan  assets at beginning of year            |   | $                                  | 1,844  |                               | $      | 1,548 |   |
| Actual loss on plan  assets                                |   | (206                               | )      | (70                                | )      |
| Employer contributions                                     |   | 704                                |   | 491                                |   |
| Benefits paid                                              |   | (119                               | )      | (125                               | )      |
| Fair value of plan  assets at end of year                  |   | $                                  | 2,223  |                               | $      | 1,844 |   |
|                                                       |   |                               |   |                               |   |
| **Funded  status**                                         |   | $                                  | (455   | )                                  | $      | (298 | ) |
| Unrecognized actuarial  loss                               |   | 1,115                              |   | 562                                |   |
| Unrecognized prior  service cost                           |   | 214                                |   | 235                                |   |
| Net amount recognized                                      |   | $                                  | 874    |                               | $      | 499 |   |
|                                                       |   |                               |   |                               |   |
| **Amounts  recognized in the consolidated balance sheets** |   |                               |   |                               |   |
| Accrued pension  liability                                 |   | $                                  | (455   | )                                  | $      | (298 | ) |
| Intangible asset                                           |   | 214                                |   | 235                                |   |
| Accumulated other  comprehensive loss                      |   | 1,115                              |   | 562                                |   |
| Net amount recognized  in balance sheet                    |   | $                                  | 874    |                               | $      | 499 |   |

 

54

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Weighted average assumptions used in theaccounting for the plan include:

 
|                                              |   | **December 27,  2002** |   | **December 28,  2001** |   | **December 29,  2000** |   |
|---------------------------------------------------|--------|------------------------|--------|------------------------|--------|------------------------|--------|
| **Weighted-average  assumptions**                 |   |                   |   |                   |   |                   |   |
| Discount rate                                     |   | 6.75                   | %      | 7.25                   | %      | 7.75                   | %      |
| 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 27,  2002** |   | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|----------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
| **Components  of net periodic pension cost** |   |                               |   |                               |   |                               |   |
| Service cost                                 |   | $                                  | 300    |                               | $      | 267                                |   | $ | 308 |   |
| Interest cost                                |   | 152                                |   | 130                                |   | 107                                |   |
| Expected return on assets                    |   | (174                               | )      | (138                               | )      | (107                               | )      |
| Amortization of prior  service cost          |   | 21                                 |   | 21                                 |   | 20                                 |   |
| Recognized actuarial  net loss               |   | 29                                 |   | —                             |   | —                             |   |
| Net periodic pension  cost                   |   | $                                  | 328    |                               | $      | 280                                |   | $ | 328 |   |

 

*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-taxcontributions up to certain limits. Further, the plans provide fordiscretionary contributions by the Company based on years of service and age.The Company’s expense for the years ended December 27, 2002, December 28, 2001,and December 29, 2000, was approximately $1.5 million, $1.5 million, and $1.0million, 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 27,  2002** |    | **Year ended  December 28,  2001** |   |
|------------------------------------------------------------|--------|------------------------------------|---------|------------------------------------|--------|
|                                                       |   |                               |    |                               |   |
| **Change  in benefit obligation**                          |   |                               |    |                               |   |
| Projected benefit  obligation at beginning of year         |   | $                                  | 22,032  |                               | $      | 16,835 |   |
| Service cost                                               |   | 736                                |    | 944                                |   |
| Interest cost                                              |   | 1,253                              |    | 1,006                              |   |
| Employee contributions                                     |   | 318                                |    | 198                                |   |
| Actuarial loss (gain)                                      |   | (2,624                             | )       | 3,989                              |   |
| Benefits paid                                              |   | (626                               | )       | (491                               | )      |
| Currency translation  adjustment                           |   | 2,161                              |    | (449                               | )      |
| Projected benefit  obligation at end of year               |   | $                                  | 23,250  |                               | $      | 22,032 |   |
| Accumulated benefit  obligation at end of year             |   | $                                  | 23,250  |                               | $      | 22,032 |   |
|                                                       |   |                               |    |                               |   |
| **Change  in plan assets**                                 |   |                               |    |                               |   |
| Fair value of plan  assets at beginning of year            |   | $                                  | 12,104  |                               | $      | 12,926 |   |
| Actual loss on plan  assets                                |   | (2,881                             | )       | (1,297                             | )      |
| Employer contributions                                     |   | 1,453                              |    | 1,307                              |   |
| Employee contributions                                     |   | 318                                |    | 198                                |   |
| Benefits paid                                              |   | (626                               | )       | (491                               | )      |
| Administrative expenses                                    |   | —                             |    | (164                               | )      |
| Currency translation  adjustment                           |   | 1,257                              |    | (375                               | )      |
| Fair value of plan  assets at end of year                  |   | $                                  | 11,625  |                               | $      | 12,104 |   |
|                                                       |   |                               |    |                               |   |
| **Funded  status**                                         |   | $                                  | (11,625 | )                                  | $      | (9,928 | ) |
| Unrecognized actuarial  net loss                           |   | 11,383                             |    | 9,317                              |   |
| Net amount recognized                                      |   | $                                  | (242    | )                                  | $      | (611 | ) |
|                                                       |   |                               |    |                               |   |
| **Amounts  recognized in the consolidated balance sheets** |   |                               |    |                               |   |
| Accrued pension  liability                                 |   | $                                  | (11,625 | )                                  | $      | (9,928 | ) |
| Accumulated other  comprehensive loss                      |   | 11,383                             |    | 9,317                              |   |
| Net amount recognized  in balance sheet                    |   | $                                  | (242    | )                                  | $      | (611 | ) |

 

56

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The U.K. Plan has a significant unrecognizedactuarial net loss. This amount is caused by losses on plan assets and otheractuarial losses caused by other differences versus expectations. The Company'sactuaries revised assumptions and demographic data in 2002 to reflect currentexpectations.

 

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

 
|                                              |   | **2002** |   | **2001** |   | **2000** |   |
|---------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| **Weighted-average  assumptions**                 |   |     |   |     |   |     |   |
| Discount rate                                     |   | 6.00     | %      | 6.25     | %      | 6.25     | %      |
| Rate of compensation  increases                   |   | 3.75     | %      | 4.00     | %      | 3.50     | %      |
| Expected long-term rate  of return on plan assets |   | 7.50     | %      | 7.50     | %      | 7.50     | %      |

 

 

 Netperiodic pension cost for the U.K. Plan includes the following components:

 
|                                         |   | **Year ended  December 27,  2002** |   | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|----------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
| **Components  of net periodic pension cost** |   |                               |   |                               |   |                               |   |
| Service cost                                 |   | $                                  | 736    |                               | $      | 944                                |   | $ | 935 |   |
| Interest cost                                |   | 1,253                              |   | 1,006                              |   | 951                                |   |
| Expected return on  assets                   |   | (989                               | )      | (971                               | )      | (1,017                             | )      |
| Recognized actuarial  net loss               |   | 349                                |   | 201                                |   | —                             |   |
| Net periodic pension  cost                   |   | $                                  | 1,349  |                               | $      | 1,180                              |   | $ | 869 |   |

 

*Supplemental Executive Retirement Plan:*

 

The Company has an unfunded supplemental retirement plan for members ofmanagement. At December 27, 2002 and December 28, 2001, the accrued liabilityfor future benefits under the plan was $1.1 million and $820.0 thousand,respectively. Benefits expense for the plan totaled $314.5 thousand, $103.6thousand and $104.5 thousand in 2002, 2001 and 2000, respectively.

 

57

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**12.  Incentive Plans:**

 

**IncentiveCompensation Plan**

 

The Company has an incentive compensation plan that covers keyemployees. The costs of the plan are computed in accordance with a formula thatincorporates EBITDA (defined in Note 6) and return on average net assets. Costsof the plan for the years ended December 27, 2002, December 28, 2001, andDecember 29, 2000, were approximately $3.7 million, $2.8 million, and $0.4million, 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 thePlan is to link the interests of the participants to those of the Company’sshareholders through compensation that is tied to the increase in the equityvalue of the Company over the long term. Participation in the Plan is limitedto key executives and certain other management employees as approved, from timeto time, by a Committee selected by the President.

 

The Plan provides for one-time awards of phantom shares to selectedparticipants. A phantom share is a unit equal to 4% of the equity value of theCompany, as defined by the Plan, divided by 40,000 (the maximum number ofphantom shares that may be awarded to participants 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 31,385 shares and 31,390 shares remainoutstanding as of December 27, 2002 and December 28, 2001, respectively.Compensation expense accrues in the period from the date of grant to the datefully vested, adjusted for changes in the value of the phantom shares.Compensation expense in connection with the Plan of $2.2 million was recordedin 2002. No amounts were recorded during fiscal years 2001 or 2000 because thevalue of a phantom share as of December 28, 2001 and December 29, 2000 was lessthan the value on the date of grant. The awards become fully vested on theearlier of a change in control; a listing of the Company’s shares; the death, disabilityor retirement of the participant; or December 31, 2003. Compensation will bepaid out in four equal payments during the first quarter of 2004 through 2007,unless there is a change in control; a listing of the Company’s shares; or thedeath, disability or retirement of the participant; in which case thecompensation will be paid out sooner.

 

58

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**13.  Commitments andContingencies:**

 

Minimum commitments under long-termnoncancelable operating leases, principally for operating and office facilitiesat December 27, 2002 were as follows:

 
| 2003       |   | $     | 6,061  |   |
|------------|--------|-------|--------|--------|
| 2004       |   | 4,495 |   |
| 2005       |   | 3,008 |   |
| 2006       |   | 1,716 |   |
| 2007       |   | 962   |   |
| Thereafter |   | 1,044 |   |
|       |   | $     | 17,286 |   |

 

Rent expense amounted to $6.8 million, $5.5million and $5.7 million for the years ended December 27, 2002, December 28,2001 and December 20, 2000, respectively.

 

**Litigation**

 

The Company is subject to legal proceedings andclaims that have arisen in the ordinary course of business. Although occasionaladverse decisions or settlements may occur, it is the opinion of the Company’smanagement, based upon information available at this time, that the expectedoutcome of these matters is not estimable individually or in the aggregate, butwould not 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.

 

**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 potentially responsible party in stateand Federal administrative and judicial proceedings seeking contribution forcosts associated with the investigation, analysis, correction and remediationof environmental conditions at various hazardous waste disposal sites. TheCompany continues to monitor these actions and proceedings and to vigorouslydefend both its own interests as well as the interests of its affiliates. TheCompany’s ultimate liability in connection with present and futureenvironmental claims will depend on many factors, including its volumetricshare of the waste at a given site, the remedial action required, the totalcost of remediation, and the financial viability and participation of the otherentities that also sent waste to the site. Once it becomes probable that theCompany will incur costs in connection with remediation of a site and suchcosts can be reasonably estimated, the Company establishes or adjusts itsreserve for its projected share of these costs. Based upon current law andinformation known to the Company concerning the size of the sites known to it,anticipated costs, their years of operations and the number of other potentiallyresponsible parties, management believes that the Company’s potential share ofthe estimated aggregate liability for the costs of remedial actions and relatedcosts and expenses are not material. In addition, the

 

59

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Company establishes reserves for remedial measures required from timeto time at its own facilities. Management believes that the reasonably probableoutcomes of these matters will not be material. The Company’s reserves,expenditures and expenses for all environmental exposures were not significantfor any of the dates or periods presented.

 

In connection with the acquisition of the Company from Alumax, theCompany was indemnified by Alumax for substantially all of its costs, if any, relatedto specifically identified environmental matters 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. The Company does not believe that ithas any significant probable liability for environmental claims. Further, theCompany believes it to be unlikely that the Company would be required to bearenvironmental costs in excess of its pro rata share of such costs as apotentially responsible party at any site.

 

**14.  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. The facilities also fabricate panels for therecreational 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 a variety of downstream production processeswhich further fabricate the aluminum and steel sheet to form the desiredproduct. 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 laminatefiberglass and aluminum products by adhering fiberglass sheet to wood or othersolid substrates and fabricate windows from vinyl extrusions and glass. Threeof the U.S. facilities also have roll coating facilities for internalprocessing. The facilities utilize distribution facilities locatedstrategically 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 2, “Summary of Significant AccountingPolicies.” Segment data includes intersegment revenues. The Company evaluatesthe performance of its segments and allocates resources to them based primarilyon EBITDA.

 

60

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The Company is organized primarily on the basisof eight operating subsidiaries. Two of the subsidiaries have been aggregatedinto the “European roll coating” segment, the four U.S. subsidiaries have beenaggregated into the “U.S. fabrication” segment, and two of the Europeansubsidiaries have been aggregated into the “European fabrication” segment. Thetable below presents information about reported segments for the fiscal yearsended December 27, 2002, December 28, 2001, and December 29, 2000:

 
|                                           |   | **Year ended  December 27,  2002** |    | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|------------------------------------------------|--------|------------------------------------|---------|------------------------------------|--------|------------------------------------|--------|
|                                           |   |                               |    |                               |   |                               |   |
| **Sales**                                      |   |                               |    |                               |   |                               |   |
| European  Roll Coating                         |   | $                                  | 131,154 |                               | $      | 129,824                            |   | $ | 144,266 |   |
| U.S.  Fabrication                              |   | 440,902                            |    | 406,834                            |   | 399,538                            |   |
| European  Fabrication                          |   | 69,705                             |    | 58,891                             |   | 58,991                             |   |
| Total  segment sales                           |   | 641,761                            |    | 595,549                            |   | 602,795                            |   |
|                                           |   |                               |    |                               |   |                               |   |
| Eliminations                                   |   | (2,612                             | )       | (2,432                             | )      | (3,316                             | )      |
| Consolidated  net sales                        |   | $                                  | 639,149 |                               | $      | 593,117                            |   | $ | 599,479 |   |
|                                           |   |                               |    |                               |   |                               |   |
| **EBITDA**                                     |   |                               |    |                               |   |                               |   |
| European  Roll Coating                         |   | $                                  | 15,639  |                               | $      | 14,649                             |   | $ | 19,492 |   |
| U.S.  Fabrication                              |   | 45,848                             |    | 34,699                             |   | 25,698                             |   |
| European  Fabrication                          |   | 7,815                              |    | 7,195                              |   | 7,110                              |   |
| Total  EBITDA for reportable segments          |   | $                                  | 69,302  |                               | $      | 56,543                             |   | $ | 52,300 |   |
|                                           |   |                               |    |                               |   |                               |   |
| Expenses  that are not segment specific        |   | (1,297                             | )       | (3,479                             | )      | (863                               | )      |
| Depreciation  and amortization                 |   | (13,968                            | )       | (17,555                            | )      | (16,569                            | )      |
| Interest  expense, net                         |   | (22,748                            | )       | (25,258                            | )      | (25,870                            | )      |
| Consolidated  net earnings before income taxes |   | $                                  | 31,289  |                               | $      | 10,251                             |   | $ | 8,998 |   |

 

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.

 

61

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The following table reflects revenues fromexternal customers by groups of similar products for the years ended December27, 2002, December 28, 2001, and December 29, 2000:

 
| **Customers/Markets**                                |   | **Primary Products**                                                                                                                                          |   | **Year ended  December 27,  2002** |    | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|------------------------------------|--------|------------------------------------|--------|
|                                                 |   |                                                                                                                                                          |   |                               |    |                               |   |                               |   |
| 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 |   | $                                  | 264,447 |                               | $      | 241,314                            |   | $ | 265,806 |   |
|                                                 |   |                                                                                                                                                          |   |                               |    |                               |   |                               |   |
| Rural  Contractors                                   |   | Steel and aluminum roofing  and siding                                                                                                                        |   | 130,758                            |    | 120,082                            |   | 115,197                            |   |
|                                                 |   |                                                                                                                                                          |   |                               |    |                               |   |                               |   |
| Home  Centers                                        |   | Raincarrying systems,  roofing accessories, windows, doors and shower enclosures                                                                              |   | 129,943                            |    | 130,539                            |   | 112,205                            |   |
|                                                 |   |                                                                                                                                                          |   |                               |    |                               |   |                               |   |
| Manufactured  Housing                                |   | Steel siding and trim  components                                                                                                                             |   | 19,373                             |    | 24,359                             |   | 34,514                             |   |
|                                                 |   |                                                                                                                                                          |   |                               |    |                               |   |                               |   |
| Distributors                                         |   | Metal coils, raincarrying  systems and roofing accessories                                                                                                    |   | 25,611                             |    | 14,215                             |   | 14,935                             |   |
|                                                 |   |                                                                                                                                                          |   |                               |    |                               |   |                               |   |
| Industrial  and Architectural Contractors            |   | Standing seam panels and  siding and roofing accessories                                                                                                      |   | 17,063                             |    | 17,928                             |   | 19,401                             |   |
|                                                 |   |                                                                                                                                                          |   |                               |    |                               |   |                               |   |
| Home  Improvement Contractors                        |   | Vinyl replacement windows;  metal coils, raincarrying systems; metal roofing and insulated roofing  panels; shower, patio and entrance doors; and awnings     |   | 51,954                             |    | 44,680                             |   | 37,421                             |   |
|                                                 |   |                                                                                                                                                          |   | $                                  | 639,149 |                               | $      | 593,117                            |   | $ | 599,479 |   |

 

62

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The following table reflects goodwill balancesand activity by reportable segment for the years ended December 27, 2002 andDecember 28, 2001:

 
|                          |   | **European  Roll  Coating** |   | **U.S.  Fabrication** |   | **European  Fabrication** |   | **Total** |   |
|-------------------------------|--------|-----------------------------|--------|-----------------------|--------|---------------------------|--------|-----------|--------|
|                          |   |                        |   |                  |   |                      |   |      |   |
| Balance  at December 29, 2000 |   | $                           | 18,259 |                  | $      | 89,354                    |   | $         | 5,711  |   | $ | 113,324 |   |
|                          |   |                        |   |                  |   |                      |   |      |   |
| Amortization                  |   | (721                        | )      | (3,839                | )      | (215                      | )      | (4,775    | )      |
| Foreign  exchange translation |   | (1,126                      | )      | —                |   | (165                      | )      | (1,291    | )      |
| Balance  at December 28, 2001 |   | 16,412                      |   | 85,515                |   | 5,331                     |   | 107,258   |   |
|                          |   |                        |   |                  |   |                      |   |      |   |
| Foreign  exchange translation |   | 2,975                       |   | —                |   | 566                       |   | 3,541     |   |
| Balance  at December 27, 2002 |   | $                           | 19,387 |                  | $      | 85,515                    |   | $         | 5,897  |   | $ | 110,799 |   |

 

The following table reflects sales and long-livedasset information by geographic area as of and for the years ended December 27,2002, December 28, 2001, and December 29, 2000:

 
|             |   | **Sales**                          |    |
|------------------|--------|------------------------------------|---------|
|             |   | **Year ended  December 27,  2002** |    | **Year ended  December 28,  2001** |   | **Year ended  December 29,  2000** |   |
|             |   |                               |    |   |   |   |   |
| United  States   |   | $                                  | 440,901 |   | $ | 406,799 |   | $ | 399,536 |   |
| The  Netherlands |   | 84,388                             |    | 82,614 |   | 86,324 |   |
| United  Kingdom  |   | 79,293                             |    | 74,579 |   | 85,392 |   |
| Other  non-U.S.  |   | 34,567                             |    | 29,125 |   | 28,227 |   |
|             |   | $                                  | 639,149 |   | $ | 593,117 |   | $ | 599,479 |   |

 
|             |   | **Long-Lived Assets**  |    |
|------------------|--------|------------------------|---------|
|             |   | **December 27,  2002** |    | **December 28,  2001** |   |
|             |   |                   |    |   |   |
| United  States   |   | $                      | 138,917 |   | $ | 142,486 |   |
| The  Netherlands |   | 41,756                 |    | 35,878 |   |
| United  Kingdom  |   | 37,840                 |    | 38,244 |   |
| Other  non-U.S.  |   | 9,237                  |    | 8,169 |   |
|             |   | $                      | 227,750 |   | $ | 224,777 |   |

 

Non-U.S. revenue is based on the country in whichthe legal subsidiary is domiciled. The Company’s largest customer accounted for11.8% of 2002 net sales and 12.9% of 2001 net sales. This customer is

 

63

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included in the Company’s U.S. Fabricationsegment. As of December 27, 2002, this customer had an outstanding tradereceivable balance of $7.1 million. No other customer represented greater thanten percent of the Company’s revenues in any period presented.

 

**15.  SupplementalConsolidated Financial Statements:**

 

On September 25, 1996, Euramax purchased the Company from Alumax.The Acquisition was financed, in part, through the Notes. Euramax InternationalLimited, Euramax European Holdings Limited and Euramax European Holdings B.V.are co-obligors under the Notes (the “Co-Obligors”). Euramax International,Inc. has provided a full and unconditional guarantee of the Notes (“ParentGuarantor”). In addition, Amerimax UK, Inc., Amerimax Fabricated Products,Inc., Euramax International Holdings Limited and Euramax Continental Limited,holding company subsidiaries of Euramax, have provided full and unconditionalguarantees of the Notes (collectively, the “Guarantor Subsidiaries”). Thefollowing supplemental condensed combining financial statements as of December27, 2002 and December 28, 2001, and for the years ended December 27, 2002,December 28, 2001 and December 29, 2000 reflect the financial position, resultsof operations, and cash flows of each of the Parent Guarantor, the Co-Obligors,and such combined information of the Guarantor Subsidiaries and thenon-guarantor subsidiaries, principally the operating subsidiaries,(collectively, the “Non-Guarantor Subsidiaries”). The Co-Obligors andGuarantors are wholly-owned subsidiaries of Euramax and are each jointly,severally, fully, and unconditionally liable under the Notes. Separate completefinancial statements of each Co-Obligor and Guarantor are not presentedbecause management has determined that they are not material to investors.

 

64

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|                                       |   | **Year  ended December 27, 2002**                     |   |
|--------------------------------------------|--------|-------------------------------------------------------|--------|
|                                       |   | **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                                 |   | $                                                     | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 639,149 |   | $ | — |   | $ | 639,149 |   |
|                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs  and expenses:                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost  of goods sold                        |   | —                                                |   | — |   | — |   | — |   | — |   | 508,254 |   | — |   | 508,254 |   |
| Selling  and general                       |   | 2,039                                                 |   | 265 |   | — |   | 1 |   | (286 | ) | 61,574 |   | — |   | 63,593 |   |
| Depreciation  and amortization             |   | —                                                |   | — |   | — |   | — |   | 51 |   | 13,917 |   | — |   | 13,968 |   |
| (Loss)  earnings from operations           |   | (2,039                                                | )      | (265 | ) | — |   | (1 | ) | 235 |   | 55,404 |   | — |   | 53,334 |   |
|                                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity  in earnings (loss) of subsidiaries |   | 25,793                                                |   | 7,846 |   | (1,306 | ) | 7,408 |   | 31,315 |   | — |   | (71,056 | ) | — |   |
| Interest  expense, net                     |   | (6,133                                                | )      | — |   | (738 | ) | (208 | ) | (10,111 | ) | (5,558 | ) | — |   | (22,748 | ) |
| Other  income (expense), net               |   | —                                                |   | — |   | 2,862 |   | 235 |   | — |   | (2,394 | ) | — |   | 703 |   |
| Earnings  before income taxes              |   | 17,621                                                |   | 7,581 |   | 818 |   | 7,434 |   | 21,439 |   | 47,452 |   | (71,056 | ) | 31,289 |   |
| (Benefit)  provision for income taxes      |   | (2,236                                                | )      | (80 | ) | 637 |   | 7 |   | (4,353 | ) | 17,457 |   | — |   | 11,432 |   |
| Net  earnings                              |   | $                                                     | 19,857 |   | $ | 7,661 |   | $ | 181 |   | $ | 7,427 |   | $ | 25,792 |   | $ | 29,995 |   | $ | (71,056 | ) | $ | 19,857 |   |

 

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 |   |
| (Loss)  earnings 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  (expense) income, 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 |   |
| (Benefit)  provision 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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|                                  |   | **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 |   |

 

67

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|                                                                                                             |   | **As of December 27, 2002**                           |    |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|
|                                                                                                             |   | **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                                                                                             |   | $                                                     | —  |   | $ | — |   | $ | 1 |   | $ | 1 |   | $ | 181 |   | $ | 11,463 |   | $ | — |   | $ | 11,646 |   |
| Accounts receivable, net                                                                                         |   | —                                                |    | 14 |   | — |   | — |   | 121 |   | 88,373 |   | — |   | 88,508 |   |
| Inventories                                                                                                      |   | —                                                |    | — |   | — |   | — |   | — |   | 78,480 |   | — |   | 78,480 |   |
| Deferred income taxes                                                                                            |   | 508                                                   |    | — |   | — |   | — |   | — |   | 3,396 |   | — |   | 3,904 |   |
| Other current assets                                                                                             |   | —                                                |    | — |   | — |   | — |   | 308 |   | 869 |   | — |   | 1,177 |   |
| Total current assets                                                                                             |   | 508                                                   |    | 14 |   | 1 |   | 1 |   | 610 |   | 182,581 |   | — |   | 183,715 |   |
| Property, plant and  equipment, net                                                                              |   | —                                                |    | — |   | — |   | — |   | 179 |   | 111,858 |   | — |   | 112,037 |   |
| Amounts due from affiliates                                                                                      |   | 102,124                                               |    | 77,552 |   | 55,022 |   | — |   | 150,838 |   | 70,425 |   | (455,961 | ) | — |   |
| Goodwill, net                                                                                                    |   | —                                                |    | — |   | — |   | — |   | 7,799 |   | 103,000 |   | — |   | 110,799 |   |
| Investment in consolidated  subsidiaries                                                                         |   | 153,844                                               |    | 34,800 |   | (20,675 | ) | 41,906 |   | 213,277 |   | — |   | (423,152 | ) | — |   |
| Deferred income taxes                                                                                            |   | —                                                |    | — |   | 1,040 |   | — |   | 60 |   | 3,875 |   | — |   | 4,975 |   |
| Other assets                                                                                                     |   | —                                                |    | 1,260 |   | 350 |   | 379 |   | 1,357 |   | 1,568 |   | — |   | 4,914 |   |
|                                                                                                             |   | $                                                     | 256,476 |   | $ | 113,626 |   | $ | 35,738 |   | $ | 42,286 |   | $ | 374,120 |   | $ | 473,307 |   | $ | (879,113 | ) | $ | 416,440 |   |
|                                                                                                             |   | **LIABILITIES  AND SHAREHOLDERS’ EQUITY**        |    |
| Current liabilities:                                                                                             |   |                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash overdrafts                                                                                                  |   | $                                                     | —  |   | $ | — |   | $ | — |   | $ | — |   | $ | (181 | ) | $ | 2,061 |   | $ | — |   | $ | 1,880 |   |
| Accounts payable                                                                                                 |   | —                                                |    | — |   | — |   | — |   | 159 |   | 56,945 |   | — |   | 57,104 |   |
| Accrued expenses                                                                                                 |   | 767                                                   |    | 57 |   | — |   | — |   | 3,948 |   | 23,385 |   |   |   | 28,157 |   |
| Accrued interest payable                                                                                         |   | 1,047                                                 |    | 1,986 |   | 962 |   | — |   | 234 |   | 49 |   | — |   | 4,278 |   |
| Income taxes payabale                                                                                            |   | (3,036                                                | )       | (1,793 | ) | (1,120 | ) | (7,230 | ) | (8,989 | ) | 22,979 |   | — |   | 811 |   |
| Deferred income taxes                                                                                            |   | —                                                |    | — |   | — |   | — |   | 184 |   | 821 |   | — |   | 1,005 |   |
| Total current liabilities                                                                                        |   | (1,222                                                | )       | 250 |   | (158 | ) | (7,230 | ) | (4,645 | ) | 106,240 |   | — |   | 93,235 |   |
| Long-term debt, less  current maturities                                                                         |   | 37,216                                                |    | 70,605 |   | 27,179 |   | — |   | 31,700 |   | 30,272 |   | — |   | 196,972 |   |
| Amounts due to affiliates                                                                                        |   | 133,239                                               |    | 14,826 |   | 22,117 |   | 3,548 |   | 189,197 |   | 93,034 |   | (455,961 | ) | — |   |
| Deferred income taxes                                                                                            |   | 614                                                   |    | — |   | — |   | — |   | 798 |   | 18,009 |   | — |   | 19,421 |   |
| Other liabilities                                                                                                |   | —                                                |    | — |   | — |   | — |   | 3,229 |   | 17,364 |   | — |   | 20,593 |   |
| Total liabilities                                                                                                |   | 169,847                                               |    | 85,681 |   | 49,138 |   | (3,682 | ) | 220,279 |   | 264,919 |   | (455,961 | ) | 330,221 |   |
| Shareholders’equity:                                                                                        |   |                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Class A common stock - $.01  par value; 600,000 shares authorized, 455,673.11 issued and 444,344.84  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 |   | 78,485 |   | 369,643 |   | (496,851 | ) | 53,220 |   |
| Treasury stock                                                                                                   |   | (2,056                                                | )       | — |   | — |   | — |   | — |   | — |   | — |   | (2,056 | ) |
| Retained earnings (deficit)                                                                                      |   | 27,652                                                |    | 15,384 |   | (12,501 | ) | 36,367 |   | 45,225 |   | (149,823 | ) | 82,135 |   | 44,439 |   |
| Dividends declared                                                                                               |   | —                                                |    | — |   | — |   | — |   | — |   | (10,415 | ) | 10,415 |   | — |   |
| Accumulated other  comprehensive loss                                                                            |   | (4,685                                                | )       | (8,167 | ) | (7,899 | ) | 501 |   | (4,870 | ) | (7,852 | ) | 23,088 |   | (9,884 | ) |
| Total shareholders’ equity                                                                                  |   | 86,629                                                |    | 27,945 |   | (13,400 | ) | 45,968 |   | 153,841 |   | 208,388 |   | (423,152 | ) | 86,219 |   |
|                                                                                                             |   | $                                                     | 256,476 |   | $ | 113,626 |   | $ | 35,738 |   | $ | 42,286 |   | $ | 374,120 |   | $ | 473,307 |   | $ | (879,113 | ) | $ | 416,440 |   |

 

68

----

 
| **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 |   | 78,485 |   | 369,643 |   | (496,851 | ) | 53,220 |   |
| Treasury stock                                                                                                   |   | (1,581 | ) | — |   | — |   | — |   | — |   | — |   | — |   | (1,581 | ) |
| Retained earnings (deficit)                                                                                      |   | 7,795 |   | 7,723 |   | (12,682 | ) | 28,940 |   | 19,433 |   | (12,104 | ) | (14,523 | ) | 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

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|                                                                                |   | **Year ended December 27, 2002**                      |   |
|-------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                                |   | **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)                                                                 |   | $                                                     | 19,857 |   | $ | 7,661 |   | $ | 181 |   | $ | 7,427 |   | $ | 25,792 |   | $ | 29,995 |   | $ | (71,056 | ) | $ | 19,857 |   |
| Reconciliation of net  earnings to cash (used in) provided by operating activities: |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and  amortization                                                      |   | —                                                |   | — |   | — |   | — |   | 51 |   | 13,917 |   | — |   | 13,968 |   |
| Amortization of deferred  financing fees                                            |   | —                                                |   | 336 |   | 88 |   | 91 |   | 412 |   | 392 |   | — |   | 1,319 |   |
| Provision for doubtful  accounts                                                    |   | —                                                |   | — |   | — |   | — |   | — |   | (177 | ) | — |   | (177 | ) |
| Foreign exchange (gain)  loss                                                       |   | —                                                |   | — |   | (2,862 | ) | (235 | ) | — |   | 2,301 |   |   |   | (796 | ) |
| Loss on sale of assets                                                              |   | —                                                |   | — |   | — |   | — |   | — |   | 552 |   | — |   | 552 |   |
| Deferred income taxes                                                               |   | 229                                                   |   | — |   | — |   | — |   | (324 | ) | 4,369 |   | — |   | 4,274 |   |
| Dividends received                                                                  |   | —                                                |   | — |   | — |   | — |   | 10,415 |   | — |   | (10,415 | ) | — |   |
| Equity in (earnings) loss  of subsidiaries                                          |   | (25,793                                               | )      | (7,846 | ) | 1,306 |   | (7,408 | ) | (31,315 | ) | — |   | 71,056 |   | — |   |
| Changes in operating assets  and liabilities                                        |   | (140                                                  | )      | (103 | ) | 530 |   | 7 |   | 1,692 |   | (15,565 | ) | — |   | (13,579 | ) |
| Net cash (used in) provided  by operating activities                                |   | (5,847                                                | )      | 48 |   | (757 | ) | (118 | ) | 6,723 |   | 35,784 |   | (10,415 | ) | 25,418 |   |
|                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from investing  activites:                                               |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from sale of  assets                                                       |   | —                                                |   | — |   | — |   | — |   | — |   | 492 |   | — |   | 492 |   |
| Capital expenditures                                                                |   | —                                                |   | — |   | — |   | — |   | (183 | ) | (8,080 | ) | — |   | (8,263 | ) |
| Net cash used in investing  activities                                              |   | —                                                |   | — |   | — |   | — |   | (183 | ) | (7,588 | ) | — |   | (7,771 | ) |
|                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from financing  activities:                                              |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in cash overdrafts                                                          |   | —                                                |   | — |   | — |   | — |   | 177 |   | 284 |   | — |   | 461 |   |
| Net (repayment) borrowings  on revolving credit facility                            |   | —                                                |   | — |   | — |   | — |   | 27,200 |   | (3,392 | ) | — |   | 23,808 |   |
| Repayment of long-term debt                                                         |   | —                                                |   | — |   | — |   | — |   | (33,910 | ) | (5,042 | ) | — |   | (38,952 | ) |
| Proceeds from settlement of  currency agreements                                    |   | —                                                |   | — |   | — |   | — |   | — |   | 2,790 |   | — |   | 2,790 |   |
| Dividends paid                                                                      |   | —                                                |   | — |   | — |   | — |   | — |   | (10,415 | ) | 10,415 |   | — |   |
| Deferred financing fees                                                             |   | —                                                |   | — |   | — |   | — |   | (931 | ) | (599 | ) | — |   | (1,530 | ) |
| Purchase of treasury stock                                                          |   | (475                                                  | )      | — |   | — |   | — |   | — |   | — |   | — |   | (475 | ) |
| Due to/from parent  affiliate                                                       |   | 6,322                                                 |   | (48 | ) | 618 |   | (213 | ) | 1,094 |   | (7,773 | ) | — |   | — |   |
| Net cash provided by (used  in) financing activities                                |   | 5,847                                                 |   | (48 | ) | 618 |   | (213 | ) | (6,370 | ) | (24,147 | ) | 10,415 |   | (13,898 | ) |
|                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of exchange rate  changes on cash                                            |   | —                                                |   | — |   | 140 |   | 238 |   | — |   | 1,622 |   | — |   | 2,000 |   |
| Net increase (decrease) in  cash and equivalents                                    |   | —                                                |   | — |   | 1 |   | (93 | ) | 170 |   | 5,671 |   | — |   | 5,749 |   |
| Cash and equivalents at  beginning of period                                        |   | —                                                |   | — |   | — |   | 94 |   | 11 |   | 5,792 |   |   |   | 5,897 |   |
| Cash and equivalents at end  of period                                              |   | $                                                     | — |   | $ | — |   | $ | 1 |   | $ | 1 |   | $ | 181 |   | $ | 11,463 |   | — |   | $ | 11,646 |   |
|                                                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental cash flow  information:                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes paid, net                                                              |   | 4,354                                                 |   | — |   | — |   | — |   | (62 | ) | 5,179 |   | — |   | 9,471 |   |
| Interest paid, net                                                                  |   | 4,187                                                 |   | 7,943 |   | 3,461 |   | — |   | 3,107 |   | 2,260 |   | — |   | 20,958 |   |
|                                                                                     |        |                                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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 (earnings) loss  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 | ) |
| Deferred financing fees                                                             |   | —                                                |   | — |   | — |   | — |   | (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

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|                                                                                |   | **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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**Item 9.  Changes in and Disagreements withAccountants on Accounting and Financial Disclosures**

 

None

** **

**Part III**

 

**Item 10.  Directors, Executive Officers and KeyManagement**

 

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            |   | 54      |   | Chief Executive  Officer, President and Chairman       |   |
|                      |   |    |   |                                                   |   |
| Mitchell B.  Lewis        |   | 40      |   | Executive Vice  President and Corporate Business       |   |
|                      |   |    |   | Development  Director                                  |   |
|                      |   |    |   |                                                   |   |
| Neil E. Bashore           |   | 54      |   | Executive Vice  President                              |   |
|                      |   |    |   |                                                   |   |
| Jo Cuypers                |   | 62      |   | Executive Vice  President                              |   |
|                      |   |    |   |                                                   |   |
| R. Scott Vansant          |   | 40      |   | Vice President,  Secretary and Chief Financial Officer |   |
|                      |   |    |   |                                                   |   |
| Scott R.  Anderson        |   | 40      |   | President -  Amerimax Building Products, Inc.          |   |
|                      |   |    |   |                                                   |   |
| Dudley Rowe               |   | 44      |   | President -  Amerimax Home Products, Inc.              |   |
|                      |   |    |   |                                                   |   |
| Rob Dresen                |   | 48      |   | Managing  Director - Euramax Coated Products B.V.      |   |
|                      |   |    |   |                                                   |   |
| David C. Pugh             |   | 53      |   | Managing  Director - Ellbee Limited                    |   |
|                      |   |    |   |                                                   |   |
| Aloyse Wagener            |   | 55      |   | Managing  Director - Euramax Industries S.A.           |   |
|                      |   |    |   |                                                   |   |
| Nick E. Dowd              |   | 45      |   | President -  Fabral, Inc.                              |   |
|                      |   |    |   |                                                   |   |
| Stuart M. Wallis          |   | 57      |   | Director                                               |   |
|                      |   |    |   |                                                   |   |
| Joseph M.  Silvestri      |   | 41      |   | Director                                               |   |
|                      |   |    |   |                                                   |   |
| Richard E.  Mayberry, Jr. |   | 49      |   | Director                                               |   |
|                      |   |    |   |                                                   |   |
| Ronald A.  Collins        |   | 31      |   | Director                                               |   |
|                      |   |    |   |                                                   |   |
| Rolly van  Rappard        |   | 41      |   | Director                                               |   |
|                      |   |    |   |                                                   |   |
| Paul E. Drack             |   | 75      |   | Director                                               |   |

 

**J. David Smith**has been Chief Executive Officer and a Director of the Company sinceSeptember 1996. In March 2002, Mr. Smith was named Chairman of the Board ofDirectors. Mr. Smith’s career in the fabricated products industry spansthirty years, starting with various operational responsibilities with HowmetAluminum Corp. (“Howmet Aluminum”). In 1983, Mr. Smith joined Alumax asGeneral Manager of the Building Specialties Division and became President ofAlumax Home and Specialty Products Group in 1988.  Mr. Smith became President of Amerimax Fabricated Products in1990 and was appointed a Vice President of Alumax in 1994.

 

**Mitchell B. Lewis**became Executive Vice President of the Company in October 1998,Corporate

 

73

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Development Director in June 1998 and served asGroup Vice President of Amerimax Building Products, Inc. and Fabral, Inc. since1997. Prior to being appointed Group Vice President, he was President andGeneral Manager of Amerimax Building Products, Inc. from 1993 to 1997 andAssistant General Manager 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 tobeing appointed Executive Vice President, Mr. Bashore was President and GeneralManager of Amerimax Home Products, Inc. from 1996 to 1999. From 1993 to 1996,Mr. Bashore served as General Manager of Amerimax Home Products, Inc. From1981 to 1993, Mr. Bashore served as Manufacturing Manager of Amerimax HomeProducts, Inc. and has served in other management positions with theCompany since 1975. Mr. Bashore retired from the Company in January 2003.

 

**Jo Cuypers**became Executive Vice President of the Company in January 2001. Prior tobeing appointed Executive Vice President, Mr. Cuypers served as ManagingDirector of Euramax Coated Products B.V. from 1979 to 2000. Mr. Cuypers joinedEuramax Coated Products B.V. in 1970 and has served as production team leader,production and material manager, production director and general manager.Including his service with other companies prior to joining Euramax CoatedProducts BV, Mr. Cuypers has over 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. From1995 to 1996, Mr. Vansant served as Director of Internal Audit for Alumax.Mr. Vansant also served in various operational positions with AlumaxBuilding Products, Inc., including serving as Controller of the divisionfrom 1993 to 1995. Prior to 1991, Mr. Vansant worked as a Certified PublicAccountant for Ernst & Young LLP.

 

**Scott R. Anderson**became President of Amerimax Building Products, Inc. in October 1998.Mr. Anderson has served in various financial and operational roles sincejoining the Company in 1987, including Operations Manager (1997 to 1998) andController (1995 to 1997) of Amerimax 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 Coated Products BV in 1993 as Sales andMarketing Director. Prior to joining Euramax Coated Products B.V., Mr. Dresenspent 14 years in sales and marketing management for such internationalcompanies as Stork Screens International and Akrosit Europe.

 

**Aloyse R. Wagener** joined Euramax Industries S.A. in July 1992 as Managing Director. From1989 to 1992, Mr. Wagener was Managing Director 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.

 

74

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**Nick E. Dowd**became President of Fabral, Inc. in July 2000. Mr. Dowd served asController of Amerimax Building Products, Inc. from 1998 to 2000. Prior to1998, Mr. Dowd served as Divisional President and General Manager for WasteManagement, Inc.

 

**Stuart M. Wallis**became a director of the Company and non-executive chairman of the Boardof Directors in February 1997. Mr. Wallis stepped down as non-executivechairman in March 2002. Mr. Wallis served as Chief Executive for Fisons plcfrom 1994 to 1995 and is currently Chairman of Communisis plc and Prothericsplc, in addition to a number of private 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 and Triumph Group.

 

**Richard E. Mayberry, Jr.** became a director of the Company in January 2002.Mr. Mayberry has been employed by Citicorp Venture Capital, Ltd. since 1984 andhas been a Managing Director of Citicorp Capital Investors, Ltd. since 1994.Mr. Mayberry is a director of a number 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 a director of Kalle Nalo and received hisM.B.A. from Northwestern University’s Kellogg 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. He has been a Managing Director since 1993and Managing Partner since 2001. Mr. van Rappard is currently a directorof, among other companies, Kappa Holding, Wavin and Veen Bosch & KeuningB.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. Collins are nominees of CVC European EquityPartners, L.P. Mr. Silvestri and Mr. Mayberry are nominees of Citicorp VentureCapital, Ltd.

 

75

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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 27, 2002.

 

**Summary Compensation Table**

 
|                                               |   | **Annual  Compensation** |   |
|----------------------------------------------------|--------|--------------------------|--------|
| **Name and  Principal Position**                   |   | **Year**                 |   | **Salary** |   | **Bonus** |   | **All Other  Compensation** |   |
|                                               |   |                     |   |   |   |   |   |   |   |
| J. David Smith, Chief Executive Officer, President |   | 2002                     |   | $ | 431,250 |   | $ | 409,312 |   | $ | 93,388 |   |
| and Director                                       |   | 2001                     |   | 395,000 |   | 304,059 |   | 90,491 |   |
|                                               |   | 2000                     |   | 358,750 |   | — |   | 57,126 |   |
|                                               |   |                     |   |   |   |   |   |   |   |
| Jo Cuypers, Executive Vice President               |   | 2002                     |   | 164,981 |   | 87,307 |   | 52,202 |   |
|                                               |   | 2001                     |   | 138,423 |   | 56,500 |   | 122,166 |   |
|                                               |   | 2000                     |   | 129,663 |   | 38,967 |   | 64,206 |   |
|                                               |   |                     |   |   |   |   |   |   |   |
| Mitchell B. Lewis, Executive Vice President and    |   | 2002                     |   | 245,000 |   | 182,901 |   | 12,022 |   |
| Corporate Business Development Director            |   | 2001                     |   | 226,500 |   | 139,453 |   | 10,635 |   |
|                                               |   | 2000                     |   | 198,000 |   | — |   | 6,986 |   |
|                                               |   |                     |   |   |   |   |   |   |   |
| Neil E. Bashore, Executive Vice President          |   | 2002                     |   | 190,000 |   | 148,560 |   | 249,204 |   |
|                                               |   | 2001                     |   | 182,500 |   | 112,363 |   | 40,944 |   |
|                                               |   | 2000                     |   | 165,000 |   | — |   | 143,906 |   |
|                                               |   |                     |   |   |   |   |   |   |   |
| R. Scott Vansant, Vice President, Secretary and    |   | 2002                     |   | 206,000 |   | 153,786 |   | 11,934 |   |
| Chief Financial Officer                            |   | 2001                     |   | 189,250 |   | 116,519 |   | 10,555 |   |
|                                               |   | 2000                     |   | 166,250 |   | — |   | 6,451 |   |
|                                                    |        |                          |        |  |  |  |  |  |  |  |  |  |

 

----

(1)               Excludes certain perquisites received which do notexceed the lessor of $50,000 or ten percent of any named executive officer’ssalary and bonus.

(2)               All other compensation for 2002 consists of theCompany’s matching contributions to the defined contribution plan, term lifeinsurance, discretionary Company contributions to the defined contribution planbased on age and years of service, and amounts earned for the SupplementalExecutive Retirement Plan (“SERP”) as follows: J. David Smith earned $11,099for term life insurance, $17,500 for the defined contribution plan and $64,789for the SERP; Jo Cuypers earned $52,202 for term life insurance; Mitchell B.Lewis earned $522 for term life insurance and $11,500 for the definedcontribution plan; Neil Bashore earned $911 for term life insurance, $16,900for the defined contribution plan and $231,393 for the SERP; R. Scott Vansantearned $434 for term life insurance and $11,500 for the defined contributionplan.

 

The Company has not granted any options or stockappreciation rights.

 

76

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**Retirement Plans**

 

See Note 11 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. The life annuity, paid annually, is $110,000for Mr. Smith, and $40,000 for Mr. Bashore upon retirement at age 62.Annual benefits payable under the SERP are reduced for participants retiringbefore age 62.  A participant’sbenefits under the SERP are not vested until the earlier of the date theexecutive attains age 52, dies, becomes totally and permanently disabled, orthe occurrence of a change in control. If the employment of Mr. Smith or Mr.Bashore with the Company terminates, for any reason, before his benefits havevested, Mr. Smith and Mr. Bashore will not be entitled to any benefits underthe SERP. Mr. Bashore retired from the Company effective January 2003, at whichtime a lump sum payment under the SERP in the amount $416.0 thousand was madeto Mr. Bashore.

 

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, asdefined by the Plan, divided by 40,000. The award entitles the participants toreceive compensation based on the change in the equity value of the Companybetween January 1, 1999, the grant date, until, at the latest, January 1, 2004.The awards become fully vested on the earlier of a change in control; a listingof the Company's shares; the death, disability or retirement of theparticipant; 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 of the Company's shares; or the death, disabilityor retirement of the participant; in which case the compensation will be paidout sooner. In 2002, compensation expense of $755.8 thousand was recordedresulting from the benefits accrued by Messrs. Smith, Cuypers, Lewis, Bashoreand Vansant. No compensation expense was recorded in 2001 or 2000.

 

**Compensation of Directors**

 

Beginning April 1, 2002,non-executive directors are paid an annual fee of $25,000. Additionally,directors are reimbursed for out-of-pocket expenses incurred in connection withattending meetings.  Prior to April 1,2002, Mr. Drack was paid an annual fee of $24,000 and Mr. Wallis was paid anannual fee of Pound Sterling 43,333 (approximately $65,000).

 

**Employment Agreements**

 

Mr. Smith is party to an employment agreementwith the Company which is renewed on an annual basis. The agreement providesfor a minimum annual salary of $450,000 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 also requires the Company to maintainbenefits for Mr. Smith equal to: (i) basic and supplemental life insurancein total equal to 4-1/2 times base pay, (ii) accidental death anddismemberment insurance equal to 4-1/2 times base pay, and(iii) long-term disability insurance equal to 2/3 base pay plustarget bonus.

 

77

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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 and investmentpower with respect to all shares shown as beneficially owned by them.

 
| **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                  |       | 36.4                            | %      |
|                                                     |   |                        |       |                            |   |
| Citicorp Venture Capital,  Ltd.                          |   |                        |       |                            |   |
| 399 Park Avenue, 14th Floor                              |   |                        |       |                            |   |
| New York, NY 10043                                       |   | 169,680.62                  |       | 34.7                            | %      |
|                                                     |   |                        |       |                            |   |
| BNP Paribas                                              |   |                        |       |                            |   |
| 787 7th Avenue                                           |   |                        |       |                            |   |
| New York, NY 10019                                       |   | 44,346.80                   | (1)        | 9.1                             | %      |
|                                                     |   |                        |       |                            |   |
| J. David Smith                                           |   | 8,373.07                    |       | 1.7                             | %      |
|                                                     |   |                        |       |                            |   |
| Mitchell B. Lewis                                        |   | 6,895.47                    |       | 1.4                             | %      |
|                                                     |   |                        |       |                            |   |
| R. Scott Vansant                                         |   | 3,940.27                    |       |                            | *      |
|                                                     |   |                        |       |                            |   |
| Jo Cuypers                                               |   | 2,955.20                    |       |                            | *      |
|                                                     |   |                        |       |                            |   |
| Joseph M. Silvestri                                      |   | 4,322.02                    | (2)        |                            | *      |
|                                                     |   |                        |       |                            |   |
| Richard E. Mayberry                                      |   | 199.50                      | (2)        |                            | *      |
|                                                     |   |                        |       |                            |   |
| Ronald A. Collins                                        |   | —                      | (3)        |                            | *      |
|                                                     |   |                        |       |                            |   |
| Rolly van Rappard                                        |   | —                      | (3)        |                            | *      |
|                                                     |   |                        |       |                            |   |
| Paul E. Drack                                            |   | 779.87                      |       |                            | *      |
|                                                     |   |                        |       |                            |   |
| Stuart M. Wallis                                         |   | 8,488.76                    | (4)        | 1.7                             | %      |
|                                                     |   |                        |       |                            |   |
| Executive Officers and  Directors as a Group (8 persons) |   | 35,954.16                   |       | 7.4                             | %      |

 

----

* Less than 1%

(1)               Class B common stock

(2)               Excludes the ownership interests of Messrs.Silvestri and Mayberry in Citicorp Venture Capital, Ltd.

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

(4)               Includes the ownership interest of Mr. Wallisin Silverspice Limited.

 

78

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**Item 13.  CertainRelationships and Related Transactions**

 

**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**

 

The Company entered into a registration rightsagreement (the “Registration Agreement”) with certain of the Company’s existingshareholders. Pursuant to the terms of the Registration Agreement, suchshareholders have the right to require the Company, at the Company’s sole costand expense and subject to certain limitations, to register under theSecurities Act or list on any internationally recognized stock exchange all orpart of the common shares held by such shareholders (the “RegistrableSecurities”). All such shareholders will be entitled to participate in allregistrations by the Company or other shareholders, subject to certainlimitations. In connection with all such registrations, the Company has agreedto indemnify all holders of Registrable Securities against certain liabilities,including liabilities under the Securities Act and other applicable state orforeign securities laws. Registrations pursuant to the Registration Agreementwill be made, if applicable, on the appropriate registration form and may beunderwritten registrations.

** **

**Item14.  Controls and Procedures**

 

Within 90 days prior to the filing of this Form 10-K, the Companycarried out an evaluation, under the supervision and with the participation ofthe Company’s management, including the Company’s Chairman and Chief ExecutiveOfficer along with the Company’s Chief Financial Officer, of the effectivenessof the design and operation of the Company’s disclosure controls and procedurespursuant to Exchange Act Rule 13a-14 under the Securities Exchange Act of 1934,as amended (the “Exchange Act”). Based upon that evaluation, the Company’sChief Executive Officer  along with theCompany’s Chief Financial Officer concluded that as of December 27, 2002, theCompany’s disclosure controls and procedures (1) are effective in timelyalerting them to material information relating to the Company (including itsconsolidated subsidiaries) required to be included in the Company’s periodicSEC filings and (2) are adequate to ensure that information required to bedisclosed by the Company in the reports filed or submitted by the Company underthe Exchange Act is recorded, processed and summarized and reported within thetime periods specified in the SEC’s rules and forms. Further, the Company’sChairman and Chief Executive

 

79

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Officer, along with the Company’s Chief Financial Officer, are notaware of any significant changes in disclosure controls and proceduressubsequent to December 27, 2002.

 

**Part IV**

 

**Item 15.  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 years ended December 27, 2002, December 28, 2001 and  December 29, 2000.          |
|                                                                                                                                     |
| Consolidated Balance Sheets  at December 27, 2002 and December 28, 2001.                                                                 |
|                                                                                                                                     |
| Consolidated  Statements of Changes in Equity for the years ended December 27, 2002,  December 28, 2001 and December 29, 2000. |
|                                                                                                                                     |
| Consolidated  Statements of Cash Flows for the years ended December 27, 2002, December 28,  2001 and December 29, 2000.        |
|                                                                                                                                     |
| Notes to  Consolidated Financial Statements                                                                                              |

 

(a)(2)                    FinancialStatement Schedule

 
| Schedule II -  Valuation and Qualifying 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 Form 8-K for thequarter ended December 27, 2002.

 

80

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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                                                                                                                                                                                                                                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.12*    |   | 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                                                                                                                                                                                                                                                                                                                                 |

 

81

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| 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                                    |
|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |   |                                                                                                                                                                                           |
| 10.17*       |   | Euramax Assignment Agreement,  dated as of September 25, 1996, by Euramax International plc in favor of  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                                           |
|         |   |                                                                                                                                                                                           |
| 10.26***     |   | Incentive Compensation Plan  effective January 1, 1997, by Euramax International Limited                                                                                                       |
|         |   |                                                                                                                                                                                           |
| 10.27***     |   | Phantom Stock Plan effective  January 1, 1999, by Euramax International Limited                                                                                                                |
|         |   |                                                                                                                                                                                           |
| 10.33******* |   | Second Amended and Restated  Credit Agreement, dated March 15, 2002, among Euramax International, Inc. and  its subsidiaries, BNP Paribas (as Agent and Lender) and the Lenders.               |
|         |   |                                                                                                                                                                                           |
| 10.34******* |   | Amended and Restated Pledge and  Security Agreement, dated March 15, 2002, among Euramax International, Inc.  and each other grantor from time to time party thereto and BNP Paribas as  Agent |
|         |   |                                                                                                                                                                                           |
| 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 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 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.                                       |
| ******* |   | 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, 2002.                                   |

 

82

----

 

**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 21, 2003

 

**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  21, 2003 |
|          | J. David Smith                      |      |   |                                             |   |   |
|          |                                |      |   |                                             |   |   |
| By:           | /s/  R. Scott Vansant     |      |   | V.P., Secretary and Chief  Financial Officer     |   | March  21, 2003 |
|          | R. Scott Vansant                    |      |   |                                             |   |   |
|          |                                |      |   |                                             |   |   |
| By:           | /s/  Stuart M. Wallis     |      |   | Director                                         |   | March  21, 2003 |
|          | Stuart M. Wallis                    |      |   |                                             |   |   |
|          |                                |      |   |                                             |   |   |
| By:           | /s/  Joseph  M. Silvestri |      |   | Director                                         |   | March  21, 2003 |
|          | Joseph M. Silvestri                 |      |   |                                             |   |   |
|          |                                |      |   |                                             |   |   |
| By:           | /s/  Ronald A.  Collins   |      |   | Director                                         |   | March  21, 2003 |
|          | Ronald A. Collins                   |      |   |                                             |   |   |
|          |                                |      |   |                                             |   |   |
| By:           | /s/  Rolly Van  Rappard   |      |   | Director                                         |   | March  21, 2003 |
|          | Rolly Van Rappard                   |      |   |                                             |   |   |
|          |                                |      |   |                                             |   |   |
| By:           | /s/  Paul E. Drack        |      |   | Director                                         |   | March  21, 2003 |
|          | Paul E. Drack                       |      |   |                                             |   |   |

 

83

----

 

**CERTIFICATIONS**

 

I, J. David Smith, Chairman and Chief Executive Officer of EuramaxInternational, Inc., certify that:

 

1.                    I havereviewed this annual report on Form 10-K of Euramax International, Inc.;

 

2.                    Based on myknowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.                    Based on myknowledge, the financial statements, and other financial information includedin this annual report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this annual report;

 

4.                    Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

(a)     designed such disclosurecontrols and procedures to ensure that material information relating to theregistrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which thisannual report is being prepared;

 

(b)    evaluated the effectiveness ofthe registrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this annual report (the “Evaluation Date”); and

 

(c)     presented in this annualreport our conclusions about the effectiveness of the disclosure controls andprocedures based upon our evaluation as of the Evaluation Date;

 

5.                    Theregistrant’s other certifying officers and I have disclosed, based upon ourmost recent evaluation, to the registrant’s auditors and the audit committee ofthe registrant’s board of directors (or persons performing the equivalentfunction):

 

(a)     all significant deficienciesin the design or operation of internal controls which could adversely affectthe registrant’s ability to record, process, summarize and report financialdata and have identified for the registrant’s auditors any material weaknessesin internal controls; and

 

(b)    any fraud, whether or notmaterial, that involves management or other employees who have a significantrole in the registrants internal controls; and

 

6.                    Theregistrant’s other certifying officers and I have indicated in this annualreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 

 
| Date:   March 21, 2003 | By:    |   | /s/ J. David  Smith                             |   |
|---------------------------------------|--------|--------|-------------------------------------------------|--------|
|                                  |   | Title: | Chairman, Chief Executive Officer and President |
|                                       |        |        |                                                 |        |  |

 

84

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I, R. Scott Vansant, Chief Financial Officer of Euramax International,Inc., certify that:

 

1.                    I havereviewed this annual report on Form 10-K of Euramax International, Inc.;

 

2.                    Based on myknowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.                    Based on myknowledge, the financial statements, and other financial information includedin this annual report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this annual report;

 

4.                    Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

(a)     designed such disclosurecontrols and procedures to ensure that material information relating to theregistrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which thisannual report is being prepared;

 

(b)    evaluated the effectiveness ofthe registrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this annual report (the “Evaluation Date”); and

 

(c)     presented in this annualreport our conclusions about the effectiveness of the disclosure controls andprocedures based upon our evaluation as of the Evaluation Date;

 

5.                    Theregistrant’s other certifying officers and I have disclosed, based upon ourmost recent evaluation, to the registrant’s auditors and the audit committee ofthe registrant’s board of directors (or persons performing the equivalentfunction):

 

(a)     all significant deficienciesin the design or operation of internal controls which could adversely affectthe registrant’s ability to record, process, summarize and report financialdata and have identified for the registrant’s auditors any material weaknessesin internal controls; and

 

(b)    any fraud, whether or notmaterial, that involves management or other employees who have a significantrole in the registrants internal controls; and

 

6.                    Theregistrant’s other certifying officers and I have indicated in this annualreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 

 
| Date:   March 21, 2003 | By:    |   | /s/ R. Scott  Vansant                 |   |
|---------------------------------------|--------|--------|---------------------------------------|--------|
|                                  |   | Title: | Chief Financial Officer and Secretary |
|                                       |        |        |                                       |        |  |

 

85

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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 27, 2002Allowance for doubtful  accounts  |   | A/R,  net                                   |   | $                                      | (3,938 | )                                   | $      | 177                                    |   | $                   | (179   | )                                | $      | 427 |   | $ | (3,513 | ) |
| For the year ended December 28, 2001Allowance for doubtful  accounts  |   | A/R,  net                                   |   | $                                      | (2,973 | )                                   | $      | (1,764                                 | )      | $                   | 61     |                             | $      | 738 |   | $ | (3,938 | ) |
| For the year ended December 29, 2000Allowance for doubtful  accounts  |   | A/R,  net                                   |   | $                                      | (2,934 | )                                   | $      | (542                                   | )      | $                   | 109    |                             | $      | 394 |   | $ | (2,973 | ) |
|                                                                  |   |                                        |   |                                   |   |                                |   |                                   |   |                |   |                             |   |
| For the year ended December 27, 2002Allowance for obsolete  inventory |   | Inventories                                 |   | $                                      | (3,284 | )                                   | $      | (2,234                                 | )      | $                   | (286   | )                                | $      | 1,977 |   | $ | (3,827 | ) |
| For the year ended December 28, 2001Allowance for obsolete  inventory |   | Inventories                                 |   | $                                      | (3,276 | )                                   | $      | (1,352                                 | )      | $                   | 85     |                             | $      | 1,259 |   | $ | (3,284 | ) |
| For the year ended December 29, 2000Allowance for obsolete  inventory |   | Inventories                                 |   | $                                      | (4,126 | )                                   | $      | (177                                   | )      | 182                 |   | $                                | 845    |   | $ | (3,276 | ) |
|                                                                  |   |                                        |   |                                   |   |                                |   |                                   |   |                |   |                             |   |
| For the year ended December 27, 2002  Income tax valuation allowance  |   | Deferred  income taxes, long-term liability |   | $                                      | (2,525 | )                                   | $      | (219                                   | )      | —              |   | —                           |   | $ | (2,744 | ) |
| For the year ended December 28, 2001  Income tax valuation allowance  |   | Deferred  income taxes, long-term liability |   | $                                      | (1,632 | )                                   | $      | (893                                   | )      | —              |   | —                           |   | $ | (2,525 | ) |
| For the year ended December 29, 2000  Income tax valuation allowance  |   | Deferred  income taxes, long-term liability |   | $                                      | (595   | )                                   | $      | (1,037                                 | )      | —              |   | —                           |   | $ | (1,632 | ) |

 

----

Note:

(1)                                  Changes due to foreign currency translationadjustment.

(2)                                  Write-off of bad debts, net of recoveries or writeoff of obsolete inventory.

 

86

----