##### Table of Contents



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 October 1, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the Transition period from

to
 Commission file number 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
 o þ




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AMTROL INC. AND SUBSIDIARIES
 FORM 10-Q FOR THE QUARTER ENDED October 1, 2005
 INDEX
  
 PAGEPART I Financial InformationItem 1. Condensed Consolidated Balance Sheets  October 1, 2005 and December 31, 2004
    
    
    3Condensed Consolidated Statements of Operations  For the Quarters and Nine Months Ended October 1, 2005 and October 2, 2004
    
    
    4Condensed Consolidated Statements of Shareholders Equity  For the Quarters and Nine Months Ended October 1, 2005 and October 2, 2004
    
    
    5Condensed Consolidated Statements of Cash Flows  For the Nine Months Ended October 1, 2005 and October 2, 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
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II Other InformationItem 1. Legal Proceedings
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3. Defaults Upon Senior Securities
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26Signatures
    
    
    27Certifications
    
    
    28EX-31.1 SECTION 302 CERTIFICATION OF C.E.O.EX-31.2 SECTION 302 CERTIFICATION OF C.F.O.EX-32.1 SECTION 906 CERTIFICATION OF C.E.O.EX-32.2 SECTION 906 CERTIFICATION OF C.F.O.
  2




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##### Table of Contents



AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
(Unaudited  In thousands, except per share data)
 October 1,
    
    
    December 31,2005
    
    
    2004AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,447
    
    
    $
    12,378Accounts receivable, less allowance for doubtful accounts
    
    
    30,057
    
    
    
    29,946Inventories
    
    
    29,111
    
    
    
    30,637Tax refund receivable
    
    
    2,174
    
    
    
    2,010Prepaid expenses and other
    
    
    1,387
    
    
    
    1,030Total current assets
    
    
    68,176
    
    
    
    76,001Property, plant and equipment, net
    
    
    30,226
    
    
    
    30,800Other assets:Goodwill
    
    
    119,205
    
    
    
    119,205Deferred financing costs
    
    
    1,170
    
    
    
    1,920Other
    
    
    314
    
    
    
    314Total other assets
    
    
    120,689
    
    
    
    121,439$
    219,091
    
    
    $
    228,240Liabilities and Shareholders DeficitCurrent liabilities:Current maturities of long-term debt
    
    $
    2,957
    
    
    $
    2,957Notes payable to banks
    
    
    6,847
    
    
    
    10,774Accounts payable
    
    
    19,854
    
    
    
    23,006Accrued volume rebates
    
    
    3,535
    
    
    
    4,615Accrued expenses
    
    
    10,144
    
    
    
    10,158Accrued interest
    
    
    2,856
    
    
    
    256Accrued income taxes
    
    
    1,713
    
    
    
    1,415Total current liabilities
    
    
    47,906
    
    
    
    53,181Other noncurrent liabilities
    
    
    3,895
    
    
    
    3,979Long-term debt, less current maturities
    
    
    173,702
    
    
    
    171,300Shareholders Deficit:Capital stock $.01 par value  authorized 1,000 shares,
100 shares issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    99,273
    
    
    
    99,273Accumulated deficit
    
    
    (109,298
    )
    
    
    (105,339
    )Accumulated other comprehensive income
    
    
    3,613
    
    
    
    5,846Total shareholders deficit
    
    
    (6,412
    )
    
    
    (220
    )$
    219,091
    
    
    $
    228,240
  3




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AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations
(Unaudited  in thousands)
 QUARTER ENDED
    
    
    NINE MONTHS ENDEDOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    50,249
    
    
    $
    45,726
    
    
    $
    161,358
    
    
    $
    151,049Cost of goods sold
    
    
    39,756
    
    
    
    35,030
    
    
    
    128,251
    
    
    
    116,322Gross profit
    
    
    10,493
    
    
    
    10,696
    
    
    
    33,107
    
    
    
    34,727Operating expenses:Selling, general and administrative
    
    
    5,713
    
    
    
    6,530
    
    
    
    19,584
    
    
    
    20,681Income from operations
    
    
    4,780
    
    
    
    4,166
    
    
    
    13,523
    
    
    
    14,046Other income (expense):Interest expense
    
    
    (5,651
    )
    
    
    (5,402
    )
    
    
    (16,704
    )
    
    
    (16,311
    )Interest income
    
    
    39
    
    
    
    25
    
    
    
    149
    
    
    
    96Other, net
    
    
    99
    
    
    
    (20
    )
    
    
    (118
    )
    
    
    92Loss from continuing operations
before provision for income taxes
    
    
    (733
    )
    
    
    (1,231
    )
    
    
    (3,150
    )
    
    
    (2,077
    )Provision for income taxes
    
    
    225
    
    
    
    251
    
    
    
    809
    
    
    
    619Loss from continuing operations
    
    
    (958
    )
    
    
    (1,482
    )
    
    
    (3,959
    )
    
    
    (2,696
    )Discontinued operations:Loss from sale of subsidiary, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,093
    )Loss from discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (389
    )Net loss
    
    ($
    958
    )
    
    ($
    1,482
    )
    
    ($
    3,959
    )
    
    ($
    11,178
    )
  4




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AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Shareholders Equity
(Unaudited  in thousands)
 Nine Months Ended October 1, 2005
 Accumulated OtherAdditional Paid-in
    
    
    
    
    
    
    Comprehensive
    
    
    ComprehensiveCommon Stock
    
    
    Capital
    
    
    Accumulated Deficit
    
    
    Income (Loss)
    
    
    Income (Loss)Balance, 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
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (958
    )
    
    
    
    
    
    
    (958
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20Balance, October 1, 2005
    
    $
    
    
    
    $
    99,273
    
    
    $
    (109,298
    )
    
    $
    3,613
    
    
    $
    (6,192
    )
 Nine Months Ended October 2, 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
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (1,482
    )
    
    
    
    
    
    
    (1,482
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    514
    
    
    
    514Balance, October 2, 2004
    
    $
    
    
    
    $
    99,273
    
    
    $
    (94,303
    )
    
    $
    3,912
    
    
    $
    (8,329
    )
  5




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AMTROL INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
(Unaudited  in thousands)
 Nine Months EndedOctober 1,
    
    
    October 2,2005
    
    
    2004Cash Flows Provided by (Used in) Operating Activities:Loss from continuing operations
    
    $
    (3,959
    )
    
    $
    (2,696
    )Loss from discontinued operations
    
    
    
    
    
    
    (8,482
    )Adjustments to reconcile net loss to net cash
provided by (used in) operating activities 
Depreciation and amortization
    
    
    5,682
    
    
    
    6,164Provision for losses on accounts receivable
    
    
    50
    
    
    
    33Deferred interest
    
    
    5,483
    
    
    
    5,002Net assets of discontinued operations
    
    
    
    
    
    
    5,011Changes in operating assets and liabilities
    
    
    (1,551
    )
    
    
    (367
    )Net cash provided by operating activities
    
    
    5,705
    
    
    
    4,665Cash Flows Provided by (Used in) Investing Activities:Capital expenditures
    
    
    (5,812
    )
    
    
    (4,644
    )Proceeds from sale of discontinued business
    
    
    
    
    
    
    363Net cash used in investing activities
    
    
    (5,812
    )
    
    
    (4,281
    )Cash Flows Provided by (Used in) Financing Activities:Repayment of debt
    
    
    (122,134
    )
    
    
    (122,882
    )Issuance of debt
    
    
    115,703
    
    
    
    118,357Net cash used in financing activities
    
    
    (6,431
    )
    
    
    (4,525
    )Net decrease in cash and cash equivalents
    
    
    (6,538
    )
    
    
    (4,141
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    (393
    )
    
    
    (5
    )Cash and cash equivalents, beginning of period
    
    
    12,378
    
    
    
    13,289Cash and cash equivalents, end of period
    
    $
    5,447
    
    
    $
    9,143
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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
   Nine Months Ended
    
    
    Year EndedOctober 1,
    
    
    December 31,(in thousands)
    
    2005
    
    
    2004Balance, beginning of period
    
    $
    3,662
    
    
    $
    3,065Warranties issued during the period
    
    
    1,849
    
    
    
    1,924Claims during the period
    
    
    (1,850
    )
    
    
    (1,987
    )Change in estimate
    
    
    
    
    
    
    660Balance, end of period
    
    $
    3,661
    
    
    $
    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
   12




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##### Table of Contents



5. Discontinued Operations
   6. Inventories
  October 1,
    
    
    December 31,2005
    
    
    2004Raw materials and work in process
    
    $
    17,667
    
    
    $
    18,935Finished goods
    
    
    11,444
    
    
    
    11,702$
    29,111
    
    
    $
    30,637
 7. Accounting for Derivative Instruments and Hedging Activities
  8. Provision for Income Taxes
  13




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9. Business Segment Information
     14




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##### Table of Contents



Quarter Ended
    
    
    Nine Months Ended(in thousands)
    
    October 1, 2005
    
    
    October 2, 2004
    
    
    October 1, 2005
    
    
    October 2, 2004Net Sales to external customersNorth AmericaUSWater technologies
    
    $
    24,226
    
    
    $
    24,332
    
    
    $
    72,030
    
    
    $
    74,501Cylinders
    
    
    6,445
    
    
    
    5,541
    
    
    
    21,218
    
    
    
    18,860OtherWater technologies
    
    
    2,239
    
    
    
    1,975
    
    
    
    5,855
    
    
    
    5,422EuropePortugalCylinders
    
    
    17,006
    
    
    
    13,560
    
    
    
    61,275
    
    
    
    51,298OtherCylinders
    
    
    333
    
    
    
    318
    
    
    
    980
    
    
    
    968Consolidated
    
    $
    50,249
    
    
    $
    45,726
    
    
    $
    161,358
    
    
    $
    151,049Income from operationsNorth America
    
    $
    3,492
    
    
    $
    3,524
    
    
    $
    8,405
    
    
    $
    10,900Europe
    
    
    1,288
    
    
    
    642
    
    
    
    5,118
    
    
    
    3,146Consolidated
    
    $
    4,780
    
    
    $
    4,166
    
    
    $
    13,523
    
    
    $
    14,046EBITDANorth America
    
    $
    4,527
    
    
    $
    4,574
    
    
    $
    11,532
    
    
    $
    14,222Europe
    
    
    1,927
    
    
    
    1,297
    
    
    
    6,954
    
    
    
    5,356Consolidated
    
    $
    6,454
    
    
    $
    5,871
    
    
    $
    18,486
    
    
    $
    19,578
 October 1,
    
    
    December 31,Long-lived assets
    
    2005
    
    
    2004North AmericaUS
    
    $
    113,779
    
    
    $
    114,859Other
    
    
    11
    
    
    
    9EuropePortugal
    
    
    33,968
    
    
    
    33,127Other
    
    
    1,673
    
    
    
    2,010Consolidated
    
    $
    149,431
    
    
    $
    150,005
  Three Months Ended
    
    
    Nine Months EndedOct 1,
    
    
    Oct 2,
    
    
    Oct 1,
    
    
    Oct 2,2005
    
    
    2004
    
    
    2005
    
    
    2004Loss from continuing operations
    
    $
    (958
    )
    
    $
    (1,482
    )
    
    $
    (3,959
    )
    
    $
    (2,696
    )Interest expense
    
    
    5,651
    
    
    
    5,402
    
    
    
    16,704
    
    
    
    16,311Depreciation (a)
    
    
    1,536
    
    
    
    1,700
    
    
    
    4,932
    
    
    
    5,344Income taxes
    
    
    225
    
    
    
    251
    
    
    
    809
    
    
    
    619EBITDA
    
    $
    6,454
    
    
    $
    5,871
    
    
    $
    18,486
    
    
    $
    19,578
 
 (a)
    
    Statement of Cash flows denotes $5,682 and $6,164 for the nine months ending October 1, 2005 and
October 2, 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 October 1, 2005 Compared to Three Months Ended October 2, 2004.
 Consolidated Operations
  17




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QUARTER ENDEDOctober 1, 2005
    
    
    October 2, 2004% of Net
    
    
    %
    
    
    
    
    
    
    % of NetIn millions of dollars
    
    Actual
    
    
    Sales
    
    
    Change
    
    
    Actual
    
    
    SalesNet sales
    
    $
    50.2
    
    
    
    100.0
    %
    
    
    9.9
    %
    
    $
    45.7
    
    
    
    100.0
    %Cost of goods sold
    
    
    39.7
    
    
    
    79.1
    %
    
    
    13.3
    %
    
    
    35.0
    
    
    
    76.6
    %Gross profit
    
    
    10.5
    
    
    
    20.9
    %
    
    
    -1.4
    %
    
    
    10.7
    
    
    
    23.4
    %Selling, general and administrative expenses
    
    
    5.7
    
    
    
    11.4
    %
    
    
    -12.5
    %
    
    
    6.5
    
    
    
    14.3
    %Income from operations
    
    
    4.8
    
    
    
    9.5
    %
    
    
    16.1
    %
    
    
    4.2
    
    
    
    9.1
    %Other income (expense), netInterest expense, net
    
    
    (5.6
    )
    
    
    -11.2
    %
    
    
    4.4
    %
    
    
    (5.4
    )
    
    
    -11.8
    %Other, net
    
    
    0.1
    
    
    
    0.3
    %
    
    
    
    
    
    
    
    
    
    
    Loss from continuing operations before income taxes
    
    
    (0.7
    )
    
    
    -1.4
    %
    
    
    -44.3
    %
    
    
    (1.2
    )
    
    
    -2.7
    %Income tax expense
    
    
    0.3
    
    
    
    0.5
    %
    
    
    9.6
    %
    
    
    0.3
    
    
    
    0.5
    %Loss from continuing operations
    
    
    (1.0
    )
    
    
    -1.9
    %
    
    
    -34.7
    %
    
    
    (1.5
    )
    
    
    -3.2
    %Income from discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    Net loss
    
    $
    (1.0
    )
    
    
    -1.9
    %
    
    
    -34.7
    %
    
    $
    (1.5
    )
    
    
    -3.2
    %
 Net Sales .
 Gross Profit .
 Selling, General and Administrative Expenses .
 Interest Expense.
 Other Income (Expense), Net .
 18




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##### Table of Contents



Income
Taxes.
 Segment Operations
 North America
  QUARTER ENDEDOctober 1, 2005
    
    
    October 2, 2004% of Net
    
    
    %
    
    
    
    
    
    
    % of NetIn millions
    
    Actual
    
    
    Sales
    
    
    Change
    
    
    Actual
    
    
    SalesNet sales
    
    $
    32.9
    
    
    
    100.0
    %
    
    
    3.3
    %
    
    $
    31.8
    
    
    
    100.0
    %Cost of goods sold
    
    
    24.8
    
    
    
    75.4
    %
    
    
    8.6
    %
    
    
    22.8
    
    
    
    71.7
    %Gross profit
    
    
    8.1
    
    
    
    24.6
    %
    
    
    -9.9
    %
    
    
    9.0
    
    
    
    28.3
    %Selling, general and administrative expenses
    
    
    4.6
    
    
    
    13.8
    %
    
    
    -16.8
    %
    
    
    5.5
    
    
    
    17.2
    %Income from operations
    
    $
    3.5
    
    
    
    10.8
    %
    
    
    -0.7
    %
    
    $
    3.5
    
    
    
    11.1
    %Units shipped
    
    
    1.25
    
    
    
    
    
    
    
    
    
    
    
    1.24
  Europe
  QUARTER ENDEDOctober 1, 2005
    
    
    October 2, 2004% of Net
    
    
    %
    
    
    
    
    
    
    % of NetIn millions
    
    Actual
    
    
    Sales
    
    
    Change
    
    
    Actual
    
    
    SalesNet sales
    
    $
    17.3
    
    
    
    100.0
    %
    
    
    24.9
    %
    
    $
    13.9
    
    
    
    100.0
    %Cost of goods sold
    
    
    14.9
    
    
    
    85.9
    %
    
    
    22.3
    %
    
    
    12.2
    
    
    
    87.8
    %Gross profit
    
    
    2.4
    
    
    
    14.1
    %
    
    
    44.1
    %
    
    
    1.7
    
    
    
    12.2
    %Selling, general and administrative expenses
    
    
    1.1
    
    
    
    6.3
    %
    
    
    9.5
    %
    
    
    1.0
    
    
    
    6.9
    %Income from operations
    
    $
    1.3
    
    
    
    7.8
    %
    
    
    80.3
    %
    
    $
    0.7
    
    
    
    5.3
    %Units shipped
    
    
    0.72
    
    
    
    
    
    
    
    
    
    
    
    0.80
 19




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##### Table of Contents



Nine Months Ended October 1, 2005 Compared to Nine Months Ended October 2, 2004.
 Consolidated Operations
  NINE MONTHS ENDEDOctober 1, 2005
    
    
    October 2, 2004Actual
    
    
    % of Net
    
    
    %
    
    
    
    
    
    
    % of NetIn millions of dollars
    
    
    
    
    
    Sales
    
    
    Change
    
    
    Actual
    
    
    SalesNet sales
    
    $
    161.4
    
    
    
    100.0
    %
    
    
    6.8
    %
    
    $
    151.0
    
    
    
    100.0
    %Cost of goods sold
    
    
    128.3
    
    
    
    79.5
    %
    
    
    10.3
    %
    
    
    116.3
    
    
    
    77.0
    %Gross profit
    
    
    33.1
    
    
    
    20.5
    %
    
    
    -4.7
    %
    
    
    34.7
    
    
    
    23.0
    %Selling, general and administrative
expenses
    
    
    19.6
    
    
    
    12.1
    %
    
    
    -5.3
    %
    
    
    20.7
    
    
    
    13.7
    %Income from operations
    
    
    13.5
    
    
    
    8.4
    %
    
    
    -3.7
    %
    
    
    14.0
    
    
    
    9.3
    %Other income (expense), netInterest expense, net
    
    
    (16.6
    )
    
    
    -10.3
    %
    
    
    2.1
    %
    
    
    (16.2
    )
    
    
    -10.7
    %Other, net
    
    
    (0.1
    )
    
    
    -0.1
    %
    
    
    -218.0
    %
    
    
    0.1
    
    
    
    0.0
    %Loss from continuing operations before
income taxes
    
    
    (3.2
    )
    
    
    -2.0
    %
    
    
    -52.4
    %
    
    
    (2.1
    )
    
    
    -1.4
    %Income tax expense
    
    
    0.8
    
    
    
    0.5
    %
    
    
    30.7
    %
    
    
    0.6
    
    
    
    0.4
    %Loss from continuing operations
    
    
    (4.0
    )
    
    
    -2.5
    %
    
    
    -47.4
    %
    
    
    (2.7
    )
    
    
    -1.8
    %Loss from discontinued operations, net
    
    
    
    
    
    
    0.0
    %
    
    
    100.0
    %
    
    
    (8.5
    )
    
    
    -5.6
    %Net loss
    
    $
    (4.0
    )
    
    
    -2.5
    %
    
    
    64.6
    %
    
    $
    (11.2
    )
    
    
    -7.4
    %
 Net Sales .
 20




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##### Table of Contents



Gross Profit .
 Selling, General and Administrative Expenses .
 Interest Expense.
 Other Income (Expense), Net .
 Income
Taxes.
 Segment Operations
 North America
  NINE MONTHS ENDEDOctober 1, 2005
    
    
    October 2, 2004% of Net
    
    
    %
    
    
    
    
    
    
    % of NetIn millions
    
    Actual
    
    
    Sales
    
    
    Change
    
    
    Actual
    
    
    SalesNet sales
    
    $
    99.1
    
    
    
    100.0
    %
    
    
    0.3
    %
    
    $
    98.8
    
    
    
    100.0
    %Cost of goods sold
    
    
    75.2
    
    
    
    75.9
    %
    
    
    6.2
    %
    
    
    70.8
    
    
    
    71.7
    %Gross profit
    
    
    23.9
    
    
    
    24.1
    %
    
    
    -14.6
    %
    
    
    28.0
    
    
    
    28.3
    %Selling, general and
administrative
expenses
    
    
    15.6
    
    
    
    15.7
    %
    
    
    -9.2
    %
    
    
    17.1
    
    
    
    17.4
    %Income from operations
    
    $
    8.3
    
    
    
    8.4
    %
    
    
    -23.5
    %
    
    $
    10.9
    
    
    
    10.9
    %Units shipped
    
    
    3.82
    
    
    
    
    
    
    
    
    
    
    
    3.97
 21




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##### Table of Contents



Europe
  NINE MONTHS ENDEDOctober 1, 2005
    
    
    October 2, 2004% of Net
    
    
    %
    
    
    
    
    
    
    % of NetIn millions
    
    Actual
    
    
    Sales
    
    
    Change
    
    
    Actual
    
    
    SalesNet sales
    
    $
    62.3
    
    
    
    100.0
    %
    
    
    19.3
    %
    
    $
    52.2
    
    
    
    100.0
    %Cost of goods sold
    
    
    53.1
    
    
    
    85.3
    %
    
    
    16.8
    %
    
    
    45.5
    
    
    
    87.2
    %Gross profit
    
    
    9.2
    
    
    
    14.7
    %
    
    
    37.6
    %
    
    
    6.7
    
    
    
    12.8
    %Selling, general and
administrative
expenses
    
    
    4.0
    
    
    
    6.4
    %
    
    
    10.7
    %
    
    
    3.6
    
    
    
    7.0
    %Income from operations
    
    $
    5.2
    
    
    
    8.3
    %
    
    
    69.4
    %
    
    $
    3.1
    
    
    
    5.8
    %Units shipped
    
    
    2.85
    
    
    
    
    
    
    
    
    
    
    
    3.23
 22
    Table of Contents   Liquidity and Capital Resources
        23




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##### Table of Contents



24
    Table of Contents     Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  25




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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
 (a)
    
    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.
 26




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##### Table of Contents



AMTROL INC. AND SUBSIDIARIES
 
 SIGNATURES
  AMTROL INC.Date: November 10, 2005
    By:
    /s/ ALBERT D. INDELICATOAlbert D. IndelicatoPresident, Chairman of the Board,
Chief Executive Officer and
DirectorDate: November 10, 2005
    By:
    /s/ LARRY T. GUILLEMETTELarry T. Guillemette,Executive Vice President,
Chief Financial Officer and
Treasurer 27