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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For
the quarterly period ended July 2, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For
the Transition period from
to
 Commission file number 0-20328
 AMTROL Inc.
 (Exact Name of Registrant as Specified in its Charter)
 Rhode Island
    
    05-0246955(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 1400 Division Road, West Warwick, RI 02893-1008  (Address of principal executive offices)
 (401) 884-6300
 þ o
 o þ




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##### Table of Contents



AMTROL INC. AND SUBSIDIARIES
 FORM 10-Q FOR THE QUARTER ENDED JULY 2, 2005
 INDEX
 PAGEPART I Financial InformationItem 1. Condensed Consolidated Balance Sheets -July 2, 2005 and December 31, 2004
    
    
    3Condensed Consolidated Statements of Operations -For the Quarters and Six Months Ended July 2, 2005 and July 3, 2004
    
    
    4Condensed Consolidated Statements of Shareholders Equity -For the Quarters and Six Months Ended July 2, 2005 and July 3, 2004
    
    
    5Condensed Consolidated Statements of Cash Flows -For the Six Months Ended July 2, 2005 and July 3, 2004
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    26PART II Other InformationItem 1. Legal Proceedings
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 5. Other Information
    
    
    27Item 6. Exhibits
    
    
    27Signatures
    
    
    28Certifications
    
    
    29EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
 2




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AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
 (Unaudited  In
thousands, except per share data)
 July 2,
    
    December 31,2005
    
    2004AssetsCurrent assets:Cash and cash equivalents
    
    $
    6,373
    
    
    $
    12,378Accounts receivable, less allowance for doubtful accounts
    
    
    33,554
    
    
    
    29,946Inventories
    
    
    28,220
    
    
    
    30,637Tax refund receivable
    
    
    2,035
    
    
    
    2,010Prepaid expenses and other
    
    
    2,379
    
    
    
    1,030Total current assets
    
    
    72,561
    
    
    
    76,001Property, plant and equipment, net
    
    
    30,112
    
    
    
    30,800Other assets:Goodwill
    
    
    119,205
    
    
    
    119,205Deferred financing costs
    
    
    1,420
    
    
    
    1,920Other
    
    
    318
    
    
    
    314Total other assets
    
    
    120,943
    
    
    
    121,439$
    223,616
    
    
    $
    228,240Liabilities and Shareholders DeficitCurrent liabilities:Current maturities of long-term debt
    
    $
    2,957
    
    
    $
    2,957Notes payable to banks
    
    
    7,114
    
    
    
    10,774Accounts payable
    
    
    22,354
    
    
    
    23,006Accrued volume rebates
    
    
    2,496
    
    
    
    4,615Accrued expenses
    
    
    10,365
    
    
    
    10,158Accrued interest
    
    
    20
    
    
    
    256Accrued income taxes
    
    
    1,519
    
    
    
    1,415Total current liabilities
    
    
    46,825
    
    
    
    53,181Other noncurrent liabilities
    
    
    3,999
    
    
    
    3,979Long-term debt, less current maturities
    
    
    178,266
    
    
    
    171,300Shareholders Deficit:Capital stock $.01 par value  authorized 1,000 shares,
100 shares issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    99,273
    
    
    
    99,273Accumulated deficit
    
    
    (108,340
    )
    
    
    (105,339
    )Accumulated other comprehensive income
    
    
    3,593
    
    
    
    5,846Total shareholders deficit
    
    
    (5,474
    )
    
    
    (220
    )$
    223,616
    
    
    $
    228,240
  3




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AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations
(Unaudited  in thousands)
 QUARTER ENDED
    
    SIX MONTHS ENDEDJuly 2, 2005
    
    July 3, 2004
    
    July 2, 2005
    
    July 3, 2004Net sales
    
    $
    56,119
    
    
    $
    52,668
    
    
    $
    111,109
    
    
    $
    105,323Cost of goods sold
    
    
    44,796
    
    
    
    40,153
    
    
    
    88,495
    
    
    
    81,292Gross profit
    
    
    11,323
    
    
    
    12,515
    
    
    
    22,614
    
    
    
    24,031Operating expenses:Selling, general and administrative
    
    
    6,734
    
    
    
    6,885
    
    
    
    13,871
    
    
    
    14,151Income from operations
    
    
    4,589
    
    
    
    5,630
    
    
    
    8,743
    
    
    
    9,880Other income (expense):Interest expense
    
    
    (5,517
    )
    
    
    (5,431
    )
    
    
    (11,053
    )
    
    
    (10,909
    )Interest income
    
    
    67
    
    
    
    30
    
    
    
    110
    
    
    
    71Other, net
    
    
    (287
    )
    
    
    46
    
    
    
    (217
    )
    
    
    112Income (loss) from continuing operations
before provision for income taxes
    
    
    (1,148
    )
    
    
    275
    
    
    
    (2,417
    )
    
    
    (846
    )Provision for income taxes
    
    
    326
    
    
    
    223
    
    
    
    584
    
    
    
    368Income (loss) from continuing operations
    
    
    (1,474
    )
    
    
    52
    
    
    
    (3,001
    )
    
    
    (1,214
    )Discontinued operations:Gain (loss) from sale of subsidiary, net
    
    
    
    
    
    
    238
    
    
    
    
    
    
    
    (8,093
    )Loss from discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (389
    )Net income (loss)
    
    ($
    1,474
    )
    
    $
    290
    
    
    ($
    3,001
    )
    
    ($
    9,696
    )
  4




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AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Shareholders Equity
(Unaudited  in thousands)
 Six Months Ended July 2, 2005
 Accumulated OtherAdditional Paid-in
    
    
    
    
    
    ComprehensiveCommon Stock
    
    Capital
    
    Accumulated Deficit
    
    Income (Loss)
    
    Comprehensive LossBalance, December 31, 2004
    
    $
    
    
    
    $
    99,273
    
    
    $
    (105,339
    )
    
    $
    5,846
    
    
    $
    Net loss
    
    
    
    
    
    
    
    
    
    
    (1,527
    )
    
    
    
    
    
    
    (1,527
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (970
    )
    
    
    (970
    )Balance, April 2, 2005
    
    
    
    
    
    
    99,273
    
    
    
    (106,866
    )
    
    
    4,876
    
    
    
    (2,497
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (1,474
    )
    
    
    
    
    
    
    (1,474
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,283
    )
    
    
    (1,283
    )Balance, July 2, 2005
    
    $
    
    
    
    $
    99,273
    
    
    $
    (108,340
    )
    
    $
    3,593
    
    
    $
    (5,254
    )
 Six Months Ended July 3, 2004
 Accumulated OtherAdditional Paid-in
    
    
    
    
    
    Comprehensive
    
    ComprehensiveCommon Stock
    
    Capital
    
    Accumulated Deficit
    
    Income (Loss)
    
    Income (Loss)Balance, December 31, 2003
    
    $
    
    
    
    $
    99,273
    
    
    $
    (83,125
    )
    
    $
    1,063
    
    
    $
    Net loss
    
    
    
    
    
    
    
    
    
    
    (9,986
    )
    
    
    
    
    
    
    (9,986
    )Derivative instrument valuation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    37Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,405
    
    
    
    2,405Balance, April 3, 2004
    
    
    
    
    
    
    99,273
    
    
    
    (93,111
    )
    
    
    3,505
    
    
    
    (7,544
    )Net income
    
    
    
    
    
    
    
    
    
    
    290
    
    
    
    
    
    
    
    290Derivative instrument valuation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    19Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (126
    )
    
    
    (126
    )Balance, July 3, 2004
    
    $
    
    
    
    $
    99,273
    
    
    $
    (92,821
    )
    
    $
    3,398
    
    
    $
    (7,361
    )
  5




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AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
(Unaudited  in thousands)
 Six Months EndedJuly 2,
    
    July 3,2005
    
    2004Cash Flows Provided by (Used in) Operating Activities:Loss from continuing operations
    
    $
    (3,001
    )
    
    $
    (1,214
    )Loss from discontinued operations
    
    
    
    
    
    
    (8,482
    )Adjustments to reconcile net loss to net cash
provided by (used in) operating activities -Depreciation and amortization
    
    
    3,896
    
    
    
    4,216Provision for losses on accounts receivable
    
    
    34
    
    
    
    18Deferred interest
    
    
    3,596
    
    
    
    3,288Net assets of discontinued operations
    
    
    
    
    
    
    5,011Changes in operating assets and liabilities
    
    
    (6,480
    )
    
    
    (2,982
    )Net cash used in operating activities
    
    
    (1,955
    )
    
    
    (145
    )Cash Flows Provided by (Used in) Investing Activities:Capital expenditures
    
    
    (4,145
    )
    
    
    (3,216
    )Proceeds from sale of discontinued business
    
    
    
    
    
    
    363Net cash used in investing activities
    
    
    (4,145
    )
    
    
    (2,853
    )Cash Flows Provided by (Used in) Financing Activities:Repayment of debt
    
    
    (80,491
    )
    
    
    (83,784
    )Issuance of debt
    
    
    80,892
    
    
    
    81,966Net cash provided by (used in) financing activities
    
    
    401
    
    
    
    (1,818
    )Net decrease in cash and cash equivalents
    
    
    (5,699
    )
    
    
    (4,816
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    (306
    )
    
    
    (35
    )Cash and cash equivalents, beginning of period
    
    
    12,378
    
    
    
    13,289Cash and cash equivalents, end of period
    
    $
    6,373
    
    
    $
    8,438
  6




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AMTROL INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
 1. Basis of Presentation
  2. Use of Estimates
  3. Significant Accounting Policies
 Revenue Recognition and Related Costs
  Accounting for Points and Certain Other Time-Based or Volume-Based
Sales Incentive Offers, and Offers for Free Products or Services to Be Delivered in the Future
 7




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Cash and Cash Equivalents
  Allowance for Doubtful Accounts
  Reclassifications
  Concentration of Credit Risk
   Depreciable Property and Equipment
  Building and improvements
    
    10-40 yearsMachinery and equipment
    
    3-12 yearsFurniture and fixtures
    
    5-20 yearsOther
    
    3-10 years
 Inventories
  8




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Warranty
   Six Months Ended
    
    Year EndedJuly 2,
    
    December 31,(in thousands)
    
    2005
    
    2004Balance, beginning of period
    
    $
    3,662
    
    
    $
    3,065Warranties issued during the period
    
    
    1,236
    
    
    
    1,924Claims during the period
    
    
    (1,236
    )
    
    
    (1,987
    )Change in estimate
    
    
    
    
    
    
    660Balance, end of period
    
    $
    3,662
    
    
    $
    3,662
 Goodwill and Long-Lived Assets
 Goodwill and Other Intangible Assets,
  9




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Accounting for the Impairment or Disposal of Long-Lived Assets,
 Deferred Financing Costs
  Foreign Currency Translation
   Recent Accounting Pronouncements
 Share-Based Payment, . Statement of Cash Flows.
 10




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Inventory Costs  an amendment of ARB No. 43. Inventory Pricing,
 Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51
 4. Long-Term Debt
 Revolving Credit and Term Loans
    11




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Senior Subordinated Notes
   5. Discontinued Operations
  12




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6. Inventories
  July 2,
    
    December 31,2005
    
    2004Raw materials and work in process
    
    $
    17,473
    
    
    $
    18,935Finished goods
    
    
    10,747
    
    
    
    11,702$
    28,220
    
    
    $
    30,637
 7. Accounting for Derivative Instruments and Hedging Activities
  8. Provision for Income Taxes
  9. Business Segment Information
  13




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14




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Quarter Ended
    
    Six Months Ended(in thousands)
    
    July 2, 2005
    
    July 3, 2004
    
    July 2, 2005
    
    July 3, 2004Net Sales to external customersNorth AmericaUSWater technologies
    
    $
    23,807
    
    
    $
    25,212
    
    
    $
    47,804
    
    
    $
    50,188Cylinders
    
    
    7,639
    
    
    
    7,246
    
    
    
    14,773
    
    
    
    13,300OtherWater technologies
    
    
    1,574
    
    
    
    1,639
    
    
    
    3,616
    
    
    
    3,447EuropePortugalCylinders
    
    
    22,793
    
    
    
    18,213
    
    
    
    44,269
    
    
    
    37,738OtherCylinders
    
    
    306
    
    
    
    358
    
    
    
    647
    
    
    
    650Consolidated
    
    $
    56,119
    
    
    $
    52,668
    
    
    $
    111,109
    
    
    $
    105,323Income from operationsNorth America
    
    $
    2,440
    
    
    $
    4,138
    
    
    $
    4,913
    
    
    $
    7,376Europe
    
    
    2,149
    
    
    
    1,492
    
    
    
    3,830
    
    
    
    2,504Consolidated
    
    $
    4,589
    
    
    $
    5,630
    
    
    $
    8,743
    
    
    $
    9,880EBITDANorth America
    
    $
    3,499
    
    
    $
    5,267
    
    
    $
    7,005
    
    
    $
    9,648Europe
    
    
    2,563
    
    
    
    2,211
    
    
    
    5,027
    
    
    
    4,059Consolidated
    
    $
    6,062
    
    
    $
    7,478
    
    
    $
    12,032
    
    
    $
    13,707
 July 2,
    
    December 31,2005
    
    2004Long-lived assetsNorth AmericaUS
    
    $
    114,226
    
    
    $
    114,859Other
    
    
    8
    
    
    
    9Europe
Portugal
    
    
    33,385
    
    
    
    33,127Other
    
    
    1,698
    
    
    
    2,010Consolidated
    
    $
    149,317
    
    
    $
    150,005
  Three Months Ended
    
    Six Months EndedJuly 2,
    
    July 3,
    
    July 2,
    
    July 3,(in thousands)
    
    2005
    
    2004
    
    2005
    
    2004Gain (loss) from
continuing
operations
    
    $
    (1,474
    )
    
    $
    52
    
    
    $
    (3,001
    )
    
    $
    (1,214
    )Interest expense
    
    
    5,517
    
    
    
    5,431
    
    
    
    11,053
    
    
    
    10,909Depreciation (a)
    
    
    1,693
    
    
    
    1,772
    
    
    
    3,396
    
    
    
    3,644Income taxes
    
    
    326
    
    
    
    223
    
    
    
    584
    
    
    
    368EBITDA
    
    $
    6,062
    
    
    $
    7,478
    
    
    $
    12,032
    
    
    $
    13,707
 
 (a)
    
    Statement of Cash flows denotes $3,896 and $4,216 for the six months ending July 2 ,2005 and
July 3, 2004, respectively. These amounts include deferred financing costs which are presented as part
of interest expense on the Companys Condensed Consolidated Statement of Operations. 15




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10. Commitments and Contingencies
     16




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
    Results of Operations
 Three Months Ended July 2, 2005 Compared to Three Months Ended July 3, 2004.
 Consolidated Operations
  17




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##### Table of Contents



QUARTER ENDEDJuly 2, 2005
    
    July 3, 2004In milions of dollars
    
    Actual
    
    % of Net Sales
    
    % Change
    
    Actual
    
    % of Net SalesNet sales
    
    $
    56.1
    
    
    
    100.0
    %
    
    
    6.5
    %
    
    $
    52.7
    
    
    
    100.0
    %Cost of goods sold
    
    
    44.8
    
    
    
    79.9
    %
    
    
    11.4
    %
    
    
    40.2
    
    
    
    76.3
    %Gross profit
    
    
    11.3
    
    
    
    20.1
    %
    
    
    -9.6
    %
    
    
    12.5
    
    
    
    23.7
    %Selling, general and administrative
expenses
    
    
    6.7
    
    
    
    11.9
    %
    
    
    -2.9
    %
    
    
    6.9
    
    
    
    13.1
    %Income from operations
    
    
    4.6
    
    
    
    8.2
    %
    
    
    -17.9
    %
    
    
    5.6
    
    
    
    10.6
    %Other income (expense), net
Interest expense, net
    
    
    (5.5
    )
    
    
    -9.8
    %
    
    
    1.9
    %
    
    
    (5.4
    )
    
    
    -10.2
    %Other, net
    
    
    (0.3
    )
    
    
    -0.6
    %
    
    
    -400.0
    %
    
    
    0.1
    
    
    
    0.2
    %Income (loss) from continuing
operations before income taxes
    
    
    (1.2
    )
    
    
    -2.2
    %
    
    
    -500.0
    %
    
    
    0.3
    
    
    
    0.6
    %Income tax expense
    
    
    0.3
    
    
    
    0.5
    %
    
    
    50.0
    %
    
    
    0.2
    
    
    
    0.4
    %Income (loss) from continuing operations
    
    
    (1.5
    )
    
    
    -2.7
    %
    
    
    -1600.0
    %
    
    
    0.1
    
    
    
    0.2
    %Income from discontinued operations, net
    
    
    
    
    
    
    0.0
    %
    
    
    -100.0
    %
    
    
    0.2
    
    
    
    0.4
    %Net income (loss)
    
    $
    (1.5
    )
    
    
    -2.7
    %
    
    
    -600.0
    %
    
    $
    0.3
    
    
    
    0.6
    %
 Net Sales .
 Gross Profit .
 Selling, General and Administrative Expenses .
 Interest Expense.
 Other Income (Expense), Net .
 18




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Income Taxes.
 Segment Operations
 North America
  QUARTER ENDEDJuly 2, 2005
    
    July 3, 2004In millions
    
    Actual
    
    % of Net Sales
    
    % Change
    
    Actual
    
    % of Net SalesNet sales
    
    $
    33.0
    
    
    
    100.0
    %
    
    
    -3.2
    %
    
    $
    34.1
    
    
    
    100.0
    %Cost of goods sold
    
    
    25.3
    
    
    
    76.7
    %
    
    
    3.7
    %
    
    
    24.4
    
    
    
    71.6
    %Gross profit
    
    
    7.7
    
    
    
    23.3
    %
    
    
    -20.6
    %
    
    
    9.7
    
    
    
    28.4
    %Selling, general and
administrative
expenses
    
    
    5.3
    
    
    
    16.0
    %
    
    
    -5.4
    %
    
    
    5.6
    
    
    
    16.4
    %Income from operations
    
    $
    2.4
    
    
    
    7.3
    %
    
    
    -41.5
    %
    
    $
    4.1
    
    
    
    12.0
    %Units shipped
    
    
    1.28
    
    
    
    
    
    
    
    
    
    
    
    1.41
  Europe
  19




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QUARTER ENDEDJuly 2, 2005
    
    July 3, 2004In millions
    
    Actual
    
    % of Net Sales
    
    % Change
    
    Actual
    
    % of Net SalesNet sales
    
    $
    23.1
    
    
    
    100.0
    %
    
    
    24.2
    %
    
    $
    18.6
    
    
    
    100.0
    %Cost of goods sold
    
    
    19.5
    
    
    
    84.4
    %
    
    
    23.4
    %
    
    
    15.8
    
    
    
    84.9
    %Gross profit
    
    
    3.6
    
    
    
    15.6
    %
    
    
    28.6
    %
    
    
    2.8
    
    
    
    15.1
    %Selling, general and
administrative
expenses
    
    
    1.4
    
    
    
    6.1
    %
    
    
    7.7
    %
    
    
    1.3
    
    
    
    7.0
    %Income from operations
    
    $
    2.2
    
    
    
    9.5
    %
    
    
    46.7
    %
    
    $
    1.5
    
    
    
    8.1
    %Units shipped
    
    
    1.13
    
    
    
    
    
    
    
    
    
    
    
    1.22
  Six Months Ended July 2, 2005 Compared to Six Months Ended July 3, 2004.
 Consolidated Operations
  20




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##### Table of Contents



SIX MONTHS ENDEDJuly 2, 2005
    
    July 3, 2004In milions of dollars
    
    Actual
    
    % of Net Sales
    
    % Change
    
    Actual
    
    % of Net SalesNet sales
    
    $
    111.1
    
    
    
    100.0
    %
    
    
    5.5
    %
    
    $
    105.3
    
    
    
    100.0
    %Cost of goods sold
    
    
    88.5
    
    
    
    79.7
    %
    
    
    8.9
    %
    
    
    81.3
    
    
    
    77.2
    %Gross profit
    
    
    22.6
    
    
    
    20.3
    %
    
    
    -5.8
    %
    
    
    24.0
    
    
    
    22.8
    %Selling, general and administrative
expenses
    
    
    13.9
    
    
    
    12.5
    %
    
    
    -1.4
    %
    
    
    14.1
    
    
    
    13.4
    %Income from operations
    
    
    8.7
    
    
    
    7.8
    %
    
    
    -12.1
    %
    
    
    9.9
    
    
    
    9.4
    %Other income (expense), net
Interest expense, net
    
    
    (10.9
    )
    
    
    -9.8
    %
    
    
    0.9
    %
    
    
    (10.8
    )
    
    
    -10.3
    %Other, net
    
    
    (0.2
    )
    
    
    -0.2
    %
    
    
    -300.0
    %
    
    
    0.1
    
    
    
    0.1
    %Loss from continuing operations
before income taxes
    
    
    (2.4
    )
    
    
    -2.2
    %
    
    
    -200.0
    %
    
    
    (0.8
    )
    
    
    -0.8
    %Income tax expense
    
    
    0.6
    
    
    
    0.5
    %
    
    
    50.0
    %
    
    
    0.4
    
    
    
    0.3
    %Loss from continuing operations
    
    
    (3.0
    )
    
    
    -2.7
    %
    
    
    -150.0
    %
    
    
    (1.2
    )
    
    
    -1.1
    %Loss from discontinued operations, net
    
    
    
    
    
    
    0.0
    %
    
    
    100.0
    %
    
    
    (8.5
    )
    
    
    -8.1
    %Net loss
    
    $
    (3.0
    )
    
    
    -2.7
    %
    
    
    69.1
    %
    
    $
    (9.7
    )
    
    
    -9.2
    %
 Net Sales .
 Gross Profit .
 Selling, General and Administrative Expenses .
 Interest Expense.
 Other Income (Expense), Net .
 21




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##### Table of Contents



Income Taxes.
 Segment Operations
 North America
  SIX MONTHS ENDEDJuly 2, 2005
    
    July 3, 2004In millions
    
    Actual
    
    % of Net Sales
    
    % Change
    
    Actual
    
    % of Net SalesNet sales
    
    $
    66.2
    
    
    
    100.0
    %
    
    
    -1.0
    %
    
    $
    66.9
    
    
    
    100.0
    %Cost of goods sold
    
    
    50.3
    
    
    
    76.0
    %
    
    
    4.8
    %
    
    
    48.0
    
    
    
    71.7
    %Gross profit
    
    
    15.9
    
    
    
    24.0
    %
    
    
    -15.9
    %
    
    
    18.9
    
    
    
    28.3
    %Selling, general and
administrative
expenses
    
    
    11.0
    
    
    
    16.6
    %
    
    
    -4.3
    %
    
    
    11.5
    
    
    
    17.2
    %Income from operations
    
    $
    4.9
    
    
    
    7.4
    %
    
    
    -33.8
    %
    
    $
    7.4
    
    
    
    11.1
    %Units shipped
    
    
    2.57
    
    
    
    
    
    
    
    
    
    
    
    2.73
  Europe
  22




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##### Table of Contents



SIX MONTHS ENDEDJuly 2, 2005
    
    July 3, 2004In millions
    
    Actual
    

    % of Net Sales
    

    % Change
    

    Actual

    
    % of Net SalesNet sales
    
    $
    44.9
    
    
    
    100.0
    %
    
    
    16.9
    %
    
    $
    38.4
    
    
    
    100.0
    %Cost of goods sold
    
    
    38.2
    
    
    
    85.1
    %
    
    
    14.7
    %
    
    
    33.3
    
    
    
    86.7
    %Gross profit
    
    
    6.7
    
    
    
    14.9
    %
    
    
    31.4
    %
    
    
    5.1
    
    
    
    13.3
    %Selling, general and
administrative
expenses
    
    
    2.9
    
    
    
    6.4
    %
    
    
    11.5
    %
    
    
    2.6
    
    
    
    6.8
    %Income from operations
    
    $
    3.8
    
    
    
    8.5
    %
    
    
    52.0
    %
    
    $
    2.5
    
    
    
    6.5
    %Units shipped
    
    
    2.13
    
    
    
    
    
    
    
    
    
    
    
    2.43
  Liquidity and Capital Resources
     23
    Table of Contents        24
    Table of Contents         Inflation
  25




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  26




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##### Table of Contents



AMTROL INC. AND SUBSIDIARIES
 
 PART II
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibits:
 31.1
    
    Certification of Chief Executive Officer
pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.31.2
    
    Certification of Chief Financial Officer
pursuant to Rule 13a-14 (a) under the Securities Exchange Act of 1934.32.1
    
    Certification of Chief Executive Officer
pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer
pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 27




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##### Table of Contents



AMTROL INC. AND SUBSIDIARIES
 
 SIGNATURES
  AMTROL INC.Date: August 11, 2005
    
    By:
    
    /s/ ALBERT D. INDELICATOAlbert D. Indelicato
President, Chairman of the Board,
Chief Executive Officer and DirectorDate: August 11, 2005
    
    By:
    
    /s/ LARRY T. GUILLEMETTELarry T. Guillemette,
Executive Vice President,
Chief Financial Officer and Treasurer
 28