##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE
ACT OF 1934
 For the fiscal year ended December 31, 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 000-24956
 Associated Materials Incorporated
 
 DELAWARE
    
    75-1872487(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 3773 STATE ROAD
CUYAHOGA FALLS, OHIO 44223
 (330) 929-1811
 NONE
 NONE
 o þ
 þ o
 þ o
 þ
  o o þ
 o þ




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##### 



PART I
 ITEM 1. BUSINESS
 GENERAL DEVELOPMENT OF BUSINESS
 ® ® ®
  RECAPITALIZATION TRANSACTIONS
   2




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##### 



FINANCIAL INFORMATION ABOUT SEGMENTS
  INDUSTRY OVERVIEW
  
    
    Favorable demographics. The segment of the population age 50 years and above, which
generally favors professionally installed, low maintenance home improvements, is growing.
By 2010, this age segment will represent approximately 40% of the United States population.
    
    Aging of the housing stock. The median home age increased from 23 years in 1985 to 32
years in 2004, and more than 60% of the current housing stock was built prior to 1980.
    
    Increase in average home size. The average home size increased over 30% from 1,785
square feet in 1985 to 2,349 square feet in 2004.
    
    Favorable mortgage interest rates. Despite recent increases, mortgage interest rates
over the past few years have been at historically low levels.
    3




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##### 



Products
 Ò Ò Ò Ò Ò
 Ò Ò Ò Ò Ò Ò
  Ò TM
 4




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##### 



Product Line
    
    Window
    
    Vinyl Siding
    
    Steel Siding
    
    Aluminum SidingPremium
    
    Advantage
Preservation
Regency
Sequoia Select
Sheffield
Sovereign
UltraMaxx
    
    Berkshire Beaded
Bennington
Board and Batten
Centennial Beaded
CenterLock
Charter Oak
Northern Forest
Preservation
Prodigy
Sequoia
Sovereign Select
Williamsport
    
    Cedarwood
Driftwood
Gallery Series
SuperGuard
SteelTek
SteelSide
Universal
    
    Cedarwood
Vin.Al.Wood DeluxeStandard
    
    Alpine 80 Series
Berkshire
Excalibur
Fairfield 80 Series
Geneva
Sierra
Signature
    
    Advantage III
Advantage Plus
Amherst
Concord
Fair Oaks
Odyssey Plus
Seneca
Signature Supreme
Somerville IIIEconomy
    
    Alpine 70 Series
Amherst
Blue Print Series
Centurion
Concord
Fairfield 70 Series
New Construction
Performance Series
    
    Aurora Brushed
Aurora Driftwood
Conquest
Driftwood
Landscape
    
    
    
    Woodgrain Series
 ®
  Marketing and Distribution
 5




---



##### 



Manufacturing.
 6




---



##### 



Raw Materials.
 Competition.
 7




---



##### 



Seasonality.
 BACKLOG
  ACQUISITIONS AND DIVESTITURES
 Ò Ò Ò Ò Ò
  TRADEMARKS, PATENTS AND OTHER INTANGIBLE ASSETS
 ®
 GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
  8




---



##### 



EMPLOYEES
   FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
  AVAILABLE INFORMATION
  ITEM 1A . RISK FACTORS
   9




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##### 



The Companys substantial level of indebtedness could adversely affect its financial
condition.
   
    
    the Companys ability to obtain additional financing for working capital, capital
expenditures, acquisitions or general corporate purposes may be impaired;
    
    the Company must use a substantial portion of its cash flow from operations to pay
interest and principal on the notes and other indebtedness, which will reduce the funds
available to the Company for other purposes such as potential acquisitions and capital
expenditures;
    
    the Company is exposed to fluctuations in interest rates, because the credit facility
has a variable rate of interest;
    
    the Company has a higher level of indebtedness than some of its competitors, which may
put it at a competitive disadvantage and reduce the Companys flexibility in planning for,
or responding to, changing industry conditions, including increased competition;
    
    the Company is more vulnerable to general economic downturns and adverse developments in
its business; and
    
    the Companys failure to comply with financial and other restrictive covenants in the
credit facility, in the indenture governing the $165 million of 9 3/4% senior subordinated
notes due 2012 (9 3/4% notes) and other debt obligations, some of which require the
Company to maintain specified financial ratios and limit the Companys ability to incur
additional debt and sell assets, could result in an event of default that, if not cured or
waived, could harm the Companys business or prospects and could result in bankruptcy.
   10




---



##### 



If AMH II defaults on its debt obligations, it could result in a change in control.
   The Company will be able to incur more indebtedness and the risks associated with its
substantial leverage, including its ability to service its indebtedness, will increase.
  The right to receive payments on the 9 3/4% notes and guarantees is subordinated to the
Companys senior debt.
  11




---



##### 



The indenture for the 9 3/4% notes and credit facility impose significant operating and
financial restrictions on the Company, which may prevent it from capitalizing on business
opportunities and taking some corporate actions.
  
    
    incur or guarantee additional indebtedness;
    
    pay dividends or make other distributions;
    
    repurchase stock;
    
    make investments;
    
    sell or otherwise dispose of assets including capital stock of subsidiaries;
    
    create liens;
    
    enter into agreements restricting the Companys subsidiaries ability to pay dividends;
    
    enter into transactions with affiliates; and
    
    consolidate, merge or sell all of its assets.
   The exterior building products industry is cyclical and downturns in the industry or the
economy could negatively affect the Companys operating results.
  The Company has substantial fixed costs and, as a result, operating income is sensitive to
changes in net sales.
  12




---



##### 



Changes in raw material costs and availability can adversely affect our profit margins.
  The Company could face potential product liability claims relating to products it manufactures
or distributes.
  The Company has significant goodwill and other intangible assets.
  The Company is controlled by affiliates of Investcorp S.A. and Harvest Partners, Inc., whose
interests may be different than other investors.
  13




---



##### 



The Company may have inadequate warranty reserves.
  The Company is subject to various environmental statutes and regulations, which may result in
significant costs.
   ITEM 1B . UNRESOLVED STAFF COMMENTS
  14




---



##### 



ITEM 2 . PROPERTIES
  Location
    
    Principal Use
    
    Square FeetCuyahoga Falls, Ohio
    
    Associated Materials Incorporated Headquarters
    
    70,000Cuyahoga Falls, Ohio
    
    Vinyl Windows, Vinyl Fencing and Railing
    
    577,000Bothell, Washington
    
    Vinyl Windows
    
    159,000
(1)Yuma, Arizona
    
    Vinyl Windows
    
    223,000
(1)Cedar Rapids, Iowa
    
    Vinyl Windows
    
    257,000
(1)Kinston, North Carolina
    
    Vinyl Windows
    
    319,000
(1)London, Ontario
    
    Vinyl Windows
    
    60,000Richmond, Virginia
    
    Former Vinyl Windows Plant
    
    60,000
(2)Burlington, Ontario
    
    Vinyl Siding Products
    
    394,000
(3)Ennis, Texas
    
    Vinyl Siding Products
    
    538,000
(4)Freeport, Texas
    
    Former Vinyl Siding Products Plant
    
    120,000
(5)West Salem, Ohio
    
    Vinyl Window Extrusions, Vinyl
Fencing and Railing
    
    173,000Pointe Claire, Quebec
    
    Metal Products
    
    289,000Woodbridge, New Jersey
    
    Metal Products
    
    318,000
(1)
 
 (1)
    
    Leased facilities.(2)
    
    This plant was closed in June 2004 and is currently being subleased.(3)
    
    The Company leases a portion of its warehouse space in this facility.(4)
    
    Includes a 237,000 square foot warehouse that was built during 2005 and is leased. The
Company owns the remainder of the facility.(5)
    
    The Company completed the shutdown of this facility during 2005. This facility is still
owned by the Company.    ITEM 3. LEGAL PROCEEDINGS
   15




---



##### 



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
  16




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##### 



PART II
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 MARKET INFORMATION
  HOLDERS
  DIVIDENDS
  SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
  RECENT SALES OF UNREGISTERED SECURITIES
  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  17




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##### 



ITEM 6. SELECTED FINANCIAL DATA
  108 Days
    
    
    
    257 Days
    
    
    Year
    
    
    Year
    
    
    YearYear Ended
    
    
    Ended
    
    
    
    Ended
    
    
    Ended
    
    
    Ended
    
    
    EndedDecember 31,
    
    
    April 18,
    
    
    
    December 31,
    
    
    January 3,
    
    
    January 1,
    
    
    December 31,2001
    
    
    2002
    
    
    
    2002
    
    
    2004
    
    
    2005
    
    
    2005Predecessor
    
    
    
    Successor(In thousands)Income Statement Data:Net sales
    
    $
    595,819
    
    
    $
    180,230
    
    
    
    $
    449,324
    
    
    $
    779,836
    
    
    $
    1,093,959
    
    
    $
    1,173,591Cost of sales
    
    
    425,366
    
    
    
    130,351
    
    
    
    
    317,077
    
    
    
    561,525
    
    
    
    804,951
    
    
    
    906,267Gross profit
    
    
    170,453
    
    
    
    49,879
    
    
    
    
    132,247
    
    
    
    218,311
    
    
    
    289,008
    
    
    
    267,324Selling, general and
administrative expenses
    
    
    119,945
    
    
    
    43,272
    
    
    
    
    86,097
    
    
    
    149,571
    
    
    
    184,524
    
    
    
    198,493Transaction costs:Bonuses(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,811
    
    
    
    Stock option
compensation expense(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,838
    
    
    
    Facility closure costs(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,535
    
    
    
    3,956Income from operations
    
    
    50,508
    
    
    
    6,607
    
    
    
    
    46,150
    
    
    
    68,740
    
    
    
    32,300
    
    
    
    64,875Interest expense(4)
    
    
    6,795
    
    
    
    2,068
    
    
    
    
    16,850
    
    
    
    27,369
    
    
    
    27,784
    
    
    
    31,922Foreign currency (gain) loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (548
    )
    
    
    387
    
    
    
    781Recapitalization
transaction costs(5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,297
    
    
    
    Merger transaction costs(6)
    
    
    
    
    
    
    9,319
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Debt extinguishment
costs(7)(8)
    
    
    
    
    
    
    
    
    
    
    
    7,579
    
    
    
    
    
    
    
    
    
    
    
    Write-down of Amercord(9)
    
    
    2,393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) before income
taxes
    
    
    41,320
    
    
    
    (4,780
    )
    
    
    
    21,721
    
    
    
    41,919
    
    
    
    (12,168
    )
    
    
    32,172Income taxes (benefit)
    
    
    15,908
    
    
    
    977
    
    
    
    
    9,016
    
    
    
    17,388
    
    
    
    (1,234
    )
    
    
    9,709Income (loss) from
continuing operations
    
    
    25,412
    
    
    
    (5,757
    )
    
    
    
    12,705
    
    
    
    24,531
    
    
    
    (10,934
    )
    
    
    22,463Loss from discontinued
operations, net
    
    
    
    
    
    
    
    
    
    
    
    (521
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    25,412
    
    
    $
    (5,757
    )
    
    
    $
    12,184
    
    
    $
    24,531
    
    
    $
    (10,934
    )
    
    $
    22,463Other Data:Capital expenditure
    
    $
    15,022
    
    
    $
    3,817
    
    
    
    $
    8,938
    
    
    $
    12,689
    
    
    $
    18,741
    
    
    $
    20,959Cash provided by (used in)
operating activities
    
    
    43,989
    
    
    
    (18,258
    )
    
    
    
    42,577
    
    
    
    55,976
    
    
    
    18,737
    
    
    
    47,897Cash used in investing
activities(8)
    
    
    (9,861
    )
    
    
    (3,597
    )
    
    
    
    (346,993
    )
    
    
    (123,510
    )
    
    
    (18,651
    )
    
    
    (20,877
    )Cash provided by (used in)
financing activities(8)
    
    
    (21,138
    )
    
    
    (245
    )
    
    
    
    311,745
    
    
    
    58,738
    
    
    
    53,176
    
    
    
    (72,882
    )Balance Sheet Data (end of
period):Working capital
    
    $
    110,632
    
    
    
    
    
    
    
    $
    88,546
    
    
    $
    113,698
    
    
    $
    200,048
    
    
    $
    171,830Total assets
    
    
    258,660
    
    
    
    
    
    
    
    
    565,537
    
    
    
    721,004
    
    
    
    850,855
    
    
    
    834,891Long-term debt, less
current maturities
    
    
    75,000
    
    
    
    
    
    
    
    
    242,408
    
    
    
    305,000
    
    
    
    339,125
    
    
    
    317,000
 18




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##### 



(1)
    
    Represents bonuses paid to certain members of management and a director in conjunction with
the March 2004 dividend recapitalization and the December 2004 recapitalization transaction of
$14.5 million and $22.3 million, respectively.
 (2)
    
    Represents stock option compensation expense recognized in connection with the December 2004
recapitalization transaction resulting from the exercise and redemption of certain stock
options.
 (3)
    
    Represents one-time costs associated with the closure of the Freeport, Texas manufacturing
facility consisting primarily of relocation costs for certain equipment of approximately $1.9
million, inventory relocation costs of approximately $1.5 million, facility shut down costs of
approximately $0.4 million and contract termination costs of approximately $0.2 million for
the year ended December 31, 2005 and asset write-downs of approximately $3.7 million,
equipment relocation costs of approximately $0.3 million, severance benefits of approximately
$0.3 million and contract termination costs of approximately $0.2 million for the year ended
January 1, 2005.
 (4)
    
    The years ended January 1, 2005 and January 3, 2004 include the write-off of $2.8 million and
$3.9 million, respectively, of debt issuance costs as a result of amending and restating the
Companys credit facility.
 (5)
    
    Recapitalization transaction costs include $16.3 million of investment banking, legal and
other expenses incurred as a result of the December 2004 recapitalization transaction.
 (6)
    
    Merger transaction costs include investment banking and legal fees incurred by the
Predecessor in conjunction with the strategic review process and subsequent April 2002 merger
transaction.
 (7)
    
    Debt extinguishment costs include $4.9 million for the extinguishment of substantially all of
the Successors assumed 9 1/4% notes and $2.7 million for the expense of financing fees
related to an interim credit facility utilized for the April 2002 merger transaction, which
was repaid shortly thereafter.
 (8)
    
    In 2003, the Company adopted FASB Statement of Financial Accounting Standards No. 145, 
Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections, which among other provisions, required debt extinguishment costs
incurred in prior periods to be reclassified and no longer presented as extraordinary items.
As a result of adopting this standard, the Company reclassified debt extinguishment costs
recorded in the second quarter of 2002.
 (9)
    
    The Company recorded a $2.4 million loss upon the write-off of its remaining investment in
Amercord due to the deterioration of Amercords operations.
 19




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##### 



ITEM 7 . MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
 Ò Ò Ò
    20




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##### 



RECAPITALIZATION TRANSACTIONS
    21




---



##### 



RESULTS OF OPERATIONS
  Years EndedDecember 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofTotal
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    TotalNet
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    NetAmount
    
    
    Sales
    
    
    Amount
    
    
    Sales
    
    
    Amount
    
    
    SalesNet sales
    
    $
    1,173,591
    
    
    
    100.0
    %
    
    $
    1,093,959
    
    
    
    100.0
    %
    
    $
    779,836
    
    
    
    100.0
    %Gross profit
    
    
    267,324
    
    
    
    22.8
    
    
    
    289,008
    
    
    
    26.4
    
    
    
    218,311
    
    
    
    28.0Selling, general and
administrative expense
    
    
    198,493
    
    
    
    16.9
    
    
    
    184,524
    
    
    
    16.9
    
    
    
    149,571
    
    
    
    19.2Transaction costs:Bonuses
    
    
    
    
    
    
    
    
    
    
    36,811
    
    
    
    3.4
    
    
    
    
    
    
    
    Stock option compensation
expense
    
    
    
    
    
    
    
    
    
    
    30,838
    
    
    
    2.8
    
    
    
    
    
    
    
    Facility closure costs
    
    
    3,956
    
    
    
    0.3
    
    
    
    4,535
    
    
    
    0.4
    
    
    
    
    
    
    
    Income from operations
    
    
    64,875
    
    
    
    5.5
    
    
    
    32,300
    
    
    
    3.0
    
    
    
    68,740
    
    
    
    8.8Interest expense, net
    
    
    31,922
    
    
    
    
    
    
    
    27,784
    
    
    
    
    
    
    
    27,369Foreign currency (gain) loss
    
    
    781
    
    
    
    
    
    
    
    387
    
    
    
    
    
    
    
    (548
    )Recapitalization transaction costs
    
    
    
    
    
    
    
    
    
    
    16,297
    
    
    
    
    
    
    
    Income (loss) before income taxes
    
    
    32,172
    
    
    
    
    
    
    
    (12,168
    )
    
    
    
    
    
    
    41,919Income taxes (benefit)
    
    
    9,709
    
    
    
    
    
    
    
    (1,234
    )
    
    
    
    
    
    
    17,388Net income (loss)
    
    $
    22,463
    
    
    
    
    
    
    $
    (10,934
    )
    
    
    
    
    
    $
    24,531Other Data:EBITDA(1)(2)
    
    $
    84,569
    
    
    
    
    
    
    $
    36,548
    
    
    
    
    
    
    $
    85,403Adjusted EBITDA(1)(2)
    
    
    93,625
    
    
    
    
    
    
    
    125,416
    
    
    
    
    
    
    
    86,257Depreciation and amortization
    
    
    20,475
    
    
    
    
    
    
    
    20,932
    
    
    
    
    
    
    
    16,115Capital expenditures
    
    
    20,959
    
    
    
    
    
    
    
    18,741
    
    
    
    
    
    
    
    12,689
 
 (1)
    
    EBITDA is calculated as net income (loss) plus interest, taxes, depreciation and
amortization. Adjusted EBITDA excludes certain items. The Company considers adjusted EBITDA
to be an important indicator of its operational strength and performance of its business. The
Company has included adjusted EBITDA because it is a key financial measure used by management
to (i) assess the Companys ability to service its debt and / or incur debt and meet the
Companys capital expenditure requirements; (ii) internally measure the Companys operating
performance; and (iii) determine the Companys incentive compensation programs. In addition,
AMIs credit facility has certain covenants that use ratios utilizing this measure of adjusted
EBITDA. Adjusted EBITDA has not been prepared in accordance with accounting principles
generally accepted in the United States 22




---



##### 



Years EndedDecember 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004Net income (loss)
    
    $
    22,463
    
    
    $
    (10,934
    )
    
    $
    24,531Interest expense, net
    
    
    31,922
    
    
    
    27,784
    
    
    
    27,369Income taxes
    
    
    9,709
    
    
    
    (1,234
    )
    
    
    17,388Depreciation and amortization
    
    
    20,475
    
    
    
    20,932
    
    
    
    16,115EBITDA
    
    
    84,569
    
    
    
    36,548
    
    
    
    85,403Foreign currency (gain) loss
    
    
    781
    
    
    
    387
    
    
    
    (548
    )Transaction costs  bonuses (i)
    
    
    
    
    
    
    36,811
    
    
    
    Transaction costs  stock option
compensation expense (ii)
    
    
    
    
    
    
    30,838
    
    
    
    Recapitalization transaction costs (iii)
    
    
    
    
    
    
    16,297
    
    
    
    Amortization of management fee (iv)
    
    
    4,000
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    319
    
    
    
    
    
    
    
    Facility closure costs (v)
    
    
    3,956
    
    
    
    4,535
    
    
    
    Cost of sales adjustments(vi)
    
    
    
    
    
    
    
    
    
    
    1,402Adjusted EBITDA
    
    $
    93,625
    
    
    $
    125,416
    
    
    $
    86,257
 
 (i)
    
    Represents bonuses paid to certain members of management and one director in
conjunction with the March 2004 dividend recapitalization and the December 2004
recapitalization transaction of $14.5 million and $22.3 million, respectively.(ii)
    
    Represents stock option compensation expense recognized in connection with the
December 2004 recapitalization transaction resulting from the exercise and redemption of
certain stock options.(iii)
    
    Represents recapitalization transaction costs including investment banking, legal
and other expenses incurred as a result of the December 2004 recapitalization transaction.(iv)
    
    Represents amortization of a prepaid management fee paid in connection with the
December 2004 recapitalization transaction.(v)
    
    Represents one-time costs associated with the closure of the Freeport, Texas
manufacturing facility consisting primarily of asset write-downs and equipment relocation
expenses. Total pre-tax expenses related to the Freeport closing were $8.5 million.(vi)
    
    Represents the expense related to inventory fair value adjustments recorded at the
time of the Gentek acquisition. 23




---



##### 



(2)
    
    The results of operations for fiscal years 2005 and 2004 include the results of Gentek for
the full years. The results of operations for fiscal year 2003 only includes the results of
Gentek for the period subsequent to its acquisition on August 29, 2003. As fiscal years 2004
and 2003 are not comparable, a reconciliation of Genteks net income to EBITDA and adjusted
EBITDA for the years ended January 1, 2005 and January 3, 2004 is provided below (in
thousands):
 Years EndedJanuary 1,
    
    
    January 3,2005
    
    
    2004Net income
    
    $
    14,147
    
    
    $
    3,067Interest expense, net
    
    
    445
    
    
    
    436Income taxes
    
    
    7,376
    
    
    
    1,644Depreciation and amortization
    
    
    7,240
    
    
    
    3,720EBITDA
    
    
    29,208
    
    
    
    8,867Foreign currency (gain) loss
    
    
    387
    
    
    
    (548
    )Cost of sales adjustment (see note (1)(vi) above)
    
    
    
    
    
    
    1,402Adjusted EBITDA
    
    $
    29,595
    
    
    $
    9,721
 YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED JANUARY 1, 2005
    24




---



##### 



25




---



##### 



YEAR ENDED JANUARY 1, 2005 COMPARED TO YEAR ENDED JANUARY 3, 2004
     26




---



##### 



QUARTERLY FINANCIAL DATA
   Three Months EndedApril 2
    
    
    July 2
    
    
    October 1
    
    
    December 312005Net sales
    
    $
    218,569
    
    
    $
    315,364
    
    
    $
    328,249
    
    
    $
    311,409Gross profit
    
    
    49,032
    
    
    
    72,202
    
    
    
    74,735
    
    
    
    71,355Selling, general and
administrative expenses(1)
    
    
    50,751
    
    
    
    50,829
    
    
    
    48,580
    
    
    
    48,333Facility closure costs
    
    
    2,553
    
    
    
    862
    
    
    
    541
    
    
    
    Income (loss) from operations
    
    
    (4,272
    )
    
    
    20,511
    
    
    
    25,614
    
    
    
    23,022Net income (loss)
    
    
    (7,261
    )
    
    
    7,695
    
    
    
    11,701
    
    
    
    10,328
 Three Months EndedApril 3 (2)
    
    
    July 3
    
    
    October 2
    
    
    January 1 (2)2004Net sales
    
    $
    204,321
    
    
    $
    301,602
    
    
    $
    314,408
    
    
    $
    273,628Gross profit
    
    
    50,355
    
    
    
    83,325
    
    
    
    87,061
    
    
    
    68,267Selling, general and
administrative expenses
    
    
    45,394
    
    
    
    48,040
    
    
    
    48,716
    
    
    
    42,374Transaction
costs  bonuses
    
    
    14,498
    
    
    
    
    
    
    
    
    
    
    
    22,313Transaction
costs  stock option compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,838Facility closure costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,535Income (loss) from operations
    
    
    (9,537
    )
    
    
    35,285
    
    
    
    38,345
    
    
    
    (31,793
    )Recapitalization transaction costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,297Net income (loss)
    
    
    (9,099
    )
    
    
    16,719
    
    
    
    19,865
    
    
    
    (38,419
    )
 
 (1)
    
    Selling, general and administrative expenses in each of the four quarters of fiscal 2005
include $1.0 million of amortization of prepaid management fees paid in connection with the
December 2004 recapitalization transaction.(2)
    
    The quarterly results for the quarters ended April 3, 2004 and January 1, 2005 include costs
incurred related to the recapitalization transactions. During the quarter ended April 3, 2004
the Company incurred costs of $14.5 million for bonuses paid to management and a director in
conjunction with the March 2004 dividend recapitalization. During the quarter ended January 1,
2005, the Company incurred expenses related to the December 2004 recapitalization transaction.
Costs related to the December 2004 recapitalization transaction include $30.8 million of stock
option compensation expense resulting from the exercise and redemption of certain stock
options, $22.3 million of bonuses paid to management and a director, and $16.3 million of
investing banking, legal and other related expenses. The results for the quarter ended January
1, 2005 also
include the write-off of $2.8 million of debt issuance costs as a result of amending and
restating the Companys 27




---



##### 



LIQUIDITY AND CAPITAL RESOURCES
  Years EndedDecember 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004Net cash provided by operating activities
    
    $
    47,897
    
    
    $
    18,737
    
    
    $
    55,976Net cash used in investing activities
    
    
    (20,877
    )
    
    
    (18,651
    )
    
    
    (123,510
    )Net cash provided by (used in) financing activities
    
    
    (72,882
    )
    
    
    53,176
    
    
    
    58,738
 CASH FLOWS
  CASH FLOWS FROM OPERATING ACTIVITIES
   CASH FLOWS FROM INVESTING ACTIVITIES
   28




---



##### 



CASH FLOWS FROM FINANCING ACTIVITIES
     DESCRIPTION OF THE COMPANYS OUTSTANDING INDEBTEDNESS
   29




---



##### 



30




---



##### 



CONTRACTUAL OBLIGATIONS
  Payments Due by PeriodLess
than 1

    
    
    
    2-3
    
    
    4-5
    
    
    AfterTotal
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    5 YearsLong-term debt (1) (2)
    
    $
    317,000
    
    
    $
    
    
    
    $
    
    
    
    $
    152,000
    
    
    $
    165,000Interest payments on 9 3/4% notes
    
    $
    104,569
    
    
    $
    16,088
    
    
    $
    32,175
    
    
    $
    32,175
    
    
    $
    24,131Interest payments on term loan
portion of credit facility (3)
    
    $
    46,900
    
    
    $
    10,720
    
    
    $
    21,440
    
    
    $
    14,740
    
    
    $
    Commitments (4)
    
    $
    5,280
    
    
    $
    5,280
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating leases (5)
    
    $
    102,012
    
    
    $
    26,311
    
    
    $
    39,705
    
    
    $
    20,973
    
    
    $
    15,023
 
 (1)
    
    Represents principal amounts, but not interest. See Note 12 to the consolidated financial
statements.(2)
    
    The Companys long-term debt consists of the second amended and restated credit facility and
the 9 3/4% notes.(3)
    
    Future interest payments on the Companys term loan were calculated assuming no principal
payments until the required quarterly principal payments that begin in December 2009. The
interest rate used for the calculation was 7.05%, calculated as the weighted average interest
rate of the outstanding borrowings at December 31, 2005 plus a margin of 2.50%, which
represents the required margin based on the February 2006 amendment to the credit facility.(4)
    
    Represents the minimum purchase obligation under inventory contracts.(5)
    
    For additional information on the Companys operating leases, see Note 13 to the consolidated
financial statements.  RELATED PARTY TRANSACTIONS
  31




---



##### 



32




---



##### 



RETIREMENT PLANS
  EFFECTS OF INFLATION
  FINANCIAL ACCOUNTING STANDARDS
   33




---



##### 



APPLICATION OF CRITICAL ACCOUNTING POLICIES
 General.
  Revenue Recognition
 Accounts Receivable
 Inventories
 Goodwill and Other Intangible Assets
 34




---



##### 



Pensions
 Product Warranty Costs and Service Returns
 CERTAIN FORWARD-LOOKING STATEMENTS
  
    
    the Companys operations and results of operations;
    
    changes in home building industry, economic conditions, interest rates,
foreign currency exchange rates and other conditions;
    
    changes in availability of consumer credit, employment trends, levels of
consumer confidence and consumer preferences;
    
    changes in raw material costs and availability;
    
    market acceptance of price increases;
    
    changes in national and regional trends in new housing starts and home remodeling;
    
    changes in weather conditions;
    
    the Companys ability to comply with certain financial covenants in the
loan documents governing its indebtedness;
    
    the Companys ability to make distributions, payments or loans to its
parent companies to allow them to make required payments on their debt;
    
    increases in competition from other manufacturers of vinyl and metal
exterior residential building products as well as alternative building products;
    
    shifts in market demand;
    
    increases in the Companys indebtedness;
 35




---



##### 




    
    increases in costs of environmental compliance;
    
    increases in capital expenditure requirements;
    
    potential conflict between existing Alside and Gentek distribution channels; and
    
    the other factors discussed under Item 1A. Risk Factors and elsewhere in this report.
  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 INTEREST RATE RISK
   FOREIGN CURRENCY EXCHANGE RATE RISK
  COMMODITY PRICE RISK
  36




---



##### 



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 ASSOCIATED MATERIALS INCORPORATED
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    38Consolidated Balance Sheets as of December 31, 2005 and January 1, 2005
    
    39Consolidated Statements of Operations for the Years Ended December 31,
2005, January 1, 2005 and January 3, 2004
    
    40Consolidated Statements of Stockholders Equity and Comprehensive
Income for the Years Ended December 31, 2005, January 1, 2005 and
January 3, 2004
    
    41Consolidated Statements of Cash Flows for the Years Ended December 31,
2005, January 1, 2005 and January 3, 2004
    
    42Notes to Consolidated Financial Statements
    
    43
 37




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 38




---



##### 



ASSOCIATED MATERIALS INCORPORATED
 December 31,
    
    
    January 1,2005
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    12,300
    
    
    $
    58,054Accounts receivable, net of allowance for doubtful accounts of
$8,567 at December 31, 2005 and $7,391 at January 1, 2005
    
    
    147,664
    
    
    
    128,302Receivable from parent
    
    
    3,908
    
    
    
    3,490Inventories
    
    
    133,524
    
    
    
    114,787Income taxes receivable
    
    
    
    
    
    
    8,860Deferred income taxes
    
    
    26,629
    
    
    
    18,253Other current assets
    
    
    10,220
    
    
    
    12,938Total current assets
    
    
    334,245
    
    
    
    344,684Property, plant and equipment, net
    
    
    143,588
    
    
    
    138,697Goodwill
    
    
    230,691
    
    
    
    234,796Other intangible assets, net
    
    
    109,867
    
    
    
    113,044Other assets
    
    
    16,500
    
    
    
    19,634Total assets
    
    $
    834,891
    
    
    $
    850,855LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    96,933
    
    
    $
    75,139Accrued liabilities
    
    
    57,711
    
    
    
    57,015Notes payable
    
    
    
    
    
    
    11,607Current portion of long-term debt
    
    
    
    
    
    
    875Income taxes payable
    
    
    7,771
    
    
    
    Total current liabilities
    
    
    162,415
    
    
    
    144,636Deferred income taxes
    
    
    67,101
    
    
    
    62,720Other liabilities
    
    
    43,874
    
    
    
    44,058Long-term debt
    
    
    317,000
    
    
    
    339,125Commitments and contingenciesStockholders equity:Common stock, $0.01 par value:Authorized shares  1,000 at December 31, 2005 and January 1, 2005Issued shares  100 at December 31, 2005 and January 1, 2005
    
    
    
    
    
    
    Capital in excess of par
    
    
    233,723
    
    
    
    233,404Accumulated other comprehensive income
    
    
    809
    
    
    
    1,131Retained earnings
    
    
    9,969
    
    
    
    25,781Total stockholders equity
    
    
    244,501
    
    
    
    260,316Total liabilities and stockholders equity
    
    $
    834,891
    
    
    $
    850,855
  39




---



##### 



ASSOCIATED MATERIALS INCORPORATED
 Years EndedDecember 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004Net sales
    
    $
    1,173,591
    
    
    $
    1,093,959
    
    
    $
    779,836Cost of sales
    
    
    906,267
    
    
    
    804,951
    
    
    
    561,525Gross profit
    
    
    267,324
    
    
    
    289,008
    
    
    
    218,311Selling, general and administrative expenses
    
    
    198,493
    
    
    
    184,524
    
    
    
    149,571Transaction costs:Bonuses
    
    
    
    
    
    
    36,811
    
    
    
    Stock option compensation expense
    
    
    
    
    
    
    30,838
    
    
    
    Facility closure costs
    
    
    3,956
    
    
    
    4,535
    
    
    
    Income from operations
    
    
    64,875
    
    
    
    32,300
    
    
    
    68,740Interest expense, net
    
    
    31,922
    
    
    
    27,784
    
    
    
    27,369Foreign currency (gain) loss
    
    
    781
    
    
    
    387
    
    
    
    (548
    )Recapitalization transaction costs
    
    
    
    
    
    
    16,297
    
    
    
    Income (loss) before income taxes
    
    
    32,172
    
    
    
    (12,168
    )
    
    
    41,919Income taxes (benefit)
    
    
    9,709
    
    
    
    (1,234
    )
    
    
    17,388Net income (loss)
    
    $
    22,463
    
    
    $
    (10,934
    )
    
    $
    24,531
  40




---



##### 



ASSOCIATED MATERIALS INCORPORATED
 AccumulatedOtherCapital in
    
    
    
    
    
    
    Comprehensive
    
    
    TotalCommon Stock
    
    
    Excess
    
    
    Retained
    
    
    Income
    
    
    Stockholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Of Par
    
    
    Earnings
    
    
    (Loss)
    
    
    Equity
    
    
    IncomeBalance at December 31, 2002
    
    
    
    
    
    $
    
    
    
    $
    169,932
    
    
    $
    12,184
    
    
    $
    (4,347
    )
    
    $
    177,769Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,531
    
    
    
    
    
    
    
    24,531
    
    
    $
    24,531Minimum pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    667
    
    
    
    667
    
    
    
    667Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,002
    
    
    
    3,002
    
    
    
    3,002Balance at January 3, 2004
    
    
    
    
    
    
    
    
    
    
    169,932
    
    
    
    36,715
    
    
    
    (678
    )
    
    
    205,969
    
    
    
    28,200Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,934
    )
    
    
    
    
    
    
    (10,934
    )
    
    
    (10,934
    )Minimum pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,316
    )
    
    
    (2,316
    )
    
    
    (2,316
    )Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,125
    
    
    
    4,125
    
    
    
    4,125Equity contribution from
Holdings
    
    
    
    
    
    
    
    
    
    
    60,691
    
    
    
    
    
    
    
    
    
    
    
    60,691
    
    
    
    Distribution of Investcorp
proceeds to management
shareholders
    
    
    
    
    
    
    
    
    
    
    (30,406
    )
    
    
    
    
    
    
    
    
    
    
    (30,406
    )
    
    
    Impact of stock option
exercise
    
    
    
    
    
    
    
    
    
    
    30,406
    
    
    
    
    
    
    
    
    
    
    
    30,406
    
    
    
    Tax benefit from stock
option exercises
    
    
    
    
    
    
    
    
    
    
    2,781
    
    
    
    
    
    
    
    
    
    
    
    2,781
    
    
    
    Balance at January 1, 2005
    
    
    
    
    
    
    
    
    
    
    233,404
    
    
    
    25,781
    
    
    
    1,131
    
    
    
    260,316
    
    
    
    (9,125
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,463
    
    
    
    
    
    
    
    22,463
    
    
    
    22,463Minimum pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,687
    )
    
    
    (2,687
    )
    
    
    (2,687
    )Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,365
    
    
    
    2,365
    
    
    
    2,365Impact of stock option
exercise
    
    
    
    
    
    
    
    
    
    
    319
    
    
    
    
    
    
    
    
    
    
    
    319
    
    
    
    Dividends to parent company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,275
    )
    
    
    
    
    
    
    (38,275
    )
    
    
    Balance at December 31, 2005
    
    
    
    
    
    $
    
    
    
    $
    233,723
    
    
    $
    9,969
    
    
    $
    809
    
    
    $
    244,501
    
    
    $
    22,141
  41




---



##### 



ASSOCIATED MATERIALS INCORPORATED
 Years EndedDecember 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004OPERATING ACTIVITIESNet income (loss)
    
    $
    22,463
    
    
    $
    (10,934
    )
    
    $
    24,531Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation and amortization
    
    
    20,475
    
    
    
    20,932
    
    
    
    16,115Deferred income taxes
    
    
    (2,328
    )
    
    
    (3,608
    )
    
    
    524Provision for losses on accounts receivable
    
    
    3,498
    
    
    
    1,283
    
    
    
    2,029Loss on sale of assets
    
    
    23
    
    
    
    692
    
    
    
    20Write-down of fixed assets related to facility closure
    
    
    
    
    
    
    3,647
    
    
    
    Stock option compensation expense
    
    
    319
    
    
    
    30,406
    
    
    
    Tax benefit from stock option exercises
    
    
    
    
    
    
    2,781
    
    
    
    Cost of sales expense related to an inventory fair
value purchase accounting adjustment
    
    
    
    
    
    
    
    
    
    
    1,402Receivable from parent
    
    
    (418
    )
    
    
    (3,490
    )
    
    
    Amortization of deferred financing costs
    
    
    3,864
    
    
    
    4,310
    
    
    
    5,679Amortization of management fee
    
    
    4,000
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (22,218
    )
    
    
    (18,649
    )
    
    
    3,938Inventories
    
    
    (18,382
    )
    
    
    (15,024
    )
    
    
    (95
    )Other current assets
    
    
    (1,313
    )
    
    
    (6,994
    )
    
    
    331Accounts payable
    
    
    20,963
    
    
    
    24,389
    
    
    
    (9,155
    )Accrued liabilities
    
    
    988
    
    
    
    13,011
    
    
    
    2,707Income taxes receivable/payable
    
    
    16,760
    
    
    
    (14,650
    )
    
    
    8,756Other assets
    
    
    (535
    )
    
    
    (2,410
    )
    
    
    22Other liabilities
    
    
    (262
    )
    
    
    (6,955
    )
    
    
    (828
    )Net cash provided by operating activities
    
    
    47,897
    
    
    
    18,737
    
    
    
    55,976INVESTING ACTIVITIESAdditions to property, plant and equipment
    
    
    (20,959
    )
    
    
    (18,741
    )
    
    
    (12,689
    )Proceeds from sale of assets
    
    
    82
    
    
    
    90
    
    
    
    2,104Other investing activities
    
    
    
    
    
    
    
    
    
    
    330Purchase of Gentek Holdings, Inc.
    
    
    
    
    
    
    
    
    
    
    (113,255
    )Net cash used in investing activities
    
    
    (20,877
    )
    
    
    (18,651
    )
    
    
    (123,510
    )FINANCING ACTIVITIESEquity contribution from Holdings
    
    
    
    
    
    
    60,691
    
    
    
    Distribution of Investcorp proceeds to management
shareholders
    
    
    
    
    
    
    (30,406
    )
    
    
    Proceeds from borrowings under term loan
    
    
    
    
    
    
    175,000
    
    
    
    190,000Repayments of term loan
    
    
    (23,000
    )
    
    
    (140,000
    )
    
    
    (126,500
    )Repayment of 9 1/4% Senior Subordinated Notes
    
    
    
    
    
    
    
    
    
    
    (908
    )Financing costs
    
    
    
    
    
    
    (12,109
    )
    
    
    (3,854
    )Settlement of promissory notes
    
    
    (11,607
    )
    
    
    
    
    
    
    Dividends paid
    
    
    (38,275
    )
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    (72,882
    )
    
    
    53,176
    
    
    
    58,738Net increase (decrease) in cash
    
    
    (45,862
    )
    
    
    53,262
    
    
    
    (8,796
    )Effect of exchange rate changes on cash
    
    
    108
    
    
    
    510
    
    
    
    56Cash at beginning of period
    
    
    58,054
    
    
    
    4,282
    
    
    
    13,022Cash at end of period
    
    $
    12,300
    
    
    $
    58,054
    
    
    $
    4,282Supplemental Information:Cash paid for interest
    
    $
    27,715
    
    
    $
    23,422
    
    
    $
    21,277Cash paid (received) for income taxes
    
    $
    (4,821
    )
    
    $
    14,832
    
    
    $
    8,739
  42




---



##### 



ASSOCIATED MATERIALS INCORPORATED
 1. ACCOUNTING POLICIES
 NATURE OF OPERATIONS
  BASIS OF PRESENTATION
   PRINCIPLES OF CONSOLIDATION
  USE OF ESTIMATES
  REVENUE RECOGNITION
  CASH AND CASH EQUIVALENTS
  43




---



##### 



ACCOUNTS RECEIVABLE
  INVENTORIES
  PROPERTY, PLANT AND EQUIPMENT
  Building and improvements
    
    
    7 to 40 yearsComputer equipment
    
    
    3 to 5 yearsMachinery and equipment
    
    
    3 to 15 years
 LONG-LIVED ASSETS WITH DEPRECIABLE OR AMORTIZABLE LIVES
  GOODWILL AND OTHER INTANGIBLE ASSETS WITH INDEFINITE LIVES
  PENSIONS
  PRODUCT WARRANTY COSTS AND SERVICE RETURNS
  44




---



##### 



December 31,
    
    
    January 1,2005
    
    
    2005Balance at the beginning of the year
    
    $
    21,579
    
    
    $
    15,979Provision for warranties issued
    
    
    8,011
    
    
    
    7,016Gentek warranties assumed
    
    
    
    
    
    
    6,673Claims paid
    
    
    (7,850
    )
    
    
    (8,089
    )Balance at the end of the year
    
    $
    21,740
    
    
    $
    21,579
 INCOME TAXES
  STOCK PLANS
  Years EndedDecember 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004Net income (loss) as reported
    
    $
    22,463
    
    
    $
    (10,934
    )
    
    $
    24,531Stock-based employee compensation
expense included in reported net
income, net of tax
    
    
    187
    
    
    
    
    
    
    
    Pro forma stock based
employee compensation cost, net
of tax
    
    
    (629
    )
    
    
    (177
    )
    
    
    (132
    )Pro forma net income (loss)
    
    $
    22,021
    
    
    $
    (11,111
    )
    
    $
    24,399
  MARKETING AND ADVERTISING
  45




---



##### 



RECLASSIFICATIONS
  NEW ACCOUNTING PRONOUNCEMENTS
   2. RECAPITALIZATION TRANSACTIONS
   46




---



##### 



3. ACQUISITIONS AND DIVESTITURES
 Ò Ò
 4. RELATED PARTIES
     47




---



##### 



5. GOODWILL AND OTHER INTANGIBLE ASSETS
  Average
    
    
    December 31, 2005
    
    
    January 1, 2005Amortization
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    NetPeriod
    
    
    
    
    
    
    Accumulated
    
    
    Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Carrying(In Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and trade names
    
    
    15
    
    
    $
    109,280
    
    
    $
    6,580
    
    
    $
    102,700
    
    
    $
    109,280
    
    
    $
    4,712
    
    
    $
    104,568Patents
    
    
    10
    
    
    
    6,550
    
    
    
    2,416
    
    
    
    4,134
    
    
    
    6,550
    
    
    
    1,763
    
    
    
    4,787Customer base
    
    
    7
    
    
    
    4,824
    
    
    
    1,791
    
    
    
    3,033
    
    
    
    4,762
    
    
    
    1,073
    
    
    
    3,689Total other intangible assets
    
    
    
    
    
    $
    120,654
    
    
    $
    10,787
    
    
    $
    109,867
    
    
    $
    120,592
    
    
    $
    7,548
    
    
    $
    113,044
 48




---



##### 



Ò Ò Ò
 6. PRO FORMA INFORMATION
  Year EndedJanuary 3,2004Net sales
    
    $
    969,876Net income
    
    $
    28,264
  7. ALLOWANCE FOR DOUBTFUL ACCOUNTS
  Years EndedDecember 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004Balance at beginning of period
    
    $
    7,391
    
    
    $
    7,942
    
    
    $
    5,552Provision for losses
    
    
    3,498
    
    
    
    1,283
    
    
    
    2,029Losses sustained (net of recoveries)
    
    
    (2,322
    )
    
    
    (1,834
    )
    
    
    (1,375
    )Allowance for Gentek receivables acquired
    
    
    
    
    
    
    
    
    
    
    1,736Balance at end of period
    
    $
    8,567
    
    
    $
    7,391
    
    
    $
    7,942
  8. INVENTORIES
  December 31,
    
    
    January 1,2005
    
    
    2005Raw materials
    
    $
    27,480
    
    
    $
    27,127Work-in-progress
    
    
    10,709
    
    
    
    9,570Finished goods and purchased stock
    
    
    95,335
    
    
    
    78,090$
    133,524
    
    
    $
    114,787
 49




---



##### 



9. PROPERTY, PLANT AND EQUIPMENT
  December 31,
    
    
    January 1,2005
    
    
    2005Land
    
    $
    5,916
    
    
    $
    4,668Buildings
    
    
    52,115
    
    
    
    49,658Construction in process
    
    
    2,234
    
    
    
    2,623Machinery and equipment
    
    
    131,890
    
    
    
    113,660192,155
    
    
    
    170,609Less accumulated depreciation
    
    
    48,567
    
    
    
    31,912$
    143,588
    
    
    $
    138,697
  10. ACCRUED AND OTHER LIABILITIES
  December 31,
    
    
    January 1,2005
    
    
    2005Employee compensation
    
    $
    12,521
    
    
    $
    16,888Sales promotions and incentives
    
    
    18,605
    
    
    
    14,657Warranty reserves
    
    
    6,652
    
    
    
    6,500Employee benefits
    
    
    6,225
    
    
    
    6,435Interest
    
    
    4,122
    
    
    
    3,770Taxes other than income
    
    
    4,443
    
    
    
    2,972Other
    
    
    5,143
    
    
    
    5,793$
    57,711
    
    
    $
    57,015
  December 31,
    
    
    January 1,2005
    
    
    2005Pensions and other post-employment benefits
    
    $
    28,787
    
    
    $
    24,883Warranty reserves
    
    
    15,087
    
    
    
    15,079Other
    
    
    
    
    
    
    4,096$
    43,874
    
    
    $
    44,058
 11. NOTES PAYABLE
  12. LONG-TERM DEBT
  December 31,
    
    
    January 1,2005
    
    
    20059 3/4% notes
    
    $
    165,000
    
    
    $
    165,000Term loan under credit facility
    
    
    152,000
    
    
    
    175,000Total debt
    
    
    317,000
    
    
    
    340,000Less current portion
    
    
    
    
    
    
    875Long-term debt
    
    $
    317,000
    
    
    $
    339,125
 50




---



##### 



51




---



##### 



13. COMMITMENTS
  2006
    
    
    26,3112007
    
    
    22,3402008
    
    
    17,3652009
    
    
    12,9322010
    
    
    8,041Thereafter
    
    
    15,023Total future minimum lease payments
    
    $
    102,012
  52




---



##### 



14. INCOME TAXES
  Years EndedDecember 31, 2005
    
    
    January 1, 2005
    
    
    January 3, 2004Current
    
    
    Deferred
    
    
    Current
    
    
    Deferred
    
    
    Current
    
    
    DeferredFederal
    
    $
    3,903
    
    
    $
    1,012
    
    
    $
    (4,382
    )
    
    $
    (2,786
    )
    
    $
    10,756
    
    
    $
    1,325State
    
    
    1,327
    
    
    
    (3,417
    )
    
    
    811
    
    
    
    (730
    )
    
    
    3,520
    
    
    
    365Foreign
    
    
    6,807
    
    
    
    77
    
    
    
    5,945
    
    
    
    (92
    )
    
    
    1,583
    
    
    
    (161
    )$
    12,037
    
    
    $
    (2,328
    )
    
    $
    2,374
    
    
    $
    (3,608
    )
    
    $
    15,859
    
    
    $
    1,529
   December 31,
    
    
    January 1,2005
    
    
    2005Deferred tax assets:Medical benefits
    
    $
    2,365
    
    
    $
    2,732Bad debt expense
    
    
    3,414
    
    
    
    3,096Pension
    
    
    8,428
    
    
    
    7,300Inventory costs
    
    
    1,866
    
    
    
    1,838Interest
    
    
    1,087
    
    
    
    1,485Warranty costs
    
    
    8,446
    
    
    
    8,802Net operating loss carryforward
    
    
    3,982
    
    
    
    6,603Accrued expenses and other
    
    
    2,705
    
    
    
    4,029Total deferred tax assets
    
    
    32,293
    
    
    
    35,885Deferred tax liabilities:Depreciation
    
    
    30,810
    
    
    
    33,538Intangible assets
    
    
    41,955
    
    
    
    46,796Other
    
    
    
    
    
    
    18Total deferred tax liabilities
    
    
    72,765
    
    
    
    80,352Net deferred tax liabilities
    
    $
    (40,472
    )
    
    $
    (44,467
    )
  53




---



##### 



Years EndedDecember 31,
    
    January 1,
    
    January 3,2005
    
    2005
    
    2004Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income tax, net of federal income tax benefit
    
    
    (8.3
    )
    
    
    (0.3
    )
    
    
    6.2Non-deductible merger transaction costs
    
    
    (3.3
    )
    
    
    (31.3
    )
    
    
    Earnings Repatriation
    
    
    6.5
    
    
    
    
    
    
    
    Foreign rate differential
    
    
    (1.4
    )
    
    
    2.0
    
    
    
    (0.2
    )Other
    
    
    1.7
    
    
    
    4.7
    
    
    
    0.5Effective rate
    
    
    30.2
    %
    
    
    10.1
    %
    
    
    41.5
    %
   15. STOCKHOLDERS EQUITY
   December 31,
    
    
    January 1,
    
    
    January 3,2005
    
    
    2005
    
    
    2004Minimum pension liability adjustments
    
    $
    (8,683
    )
    
    $
    (5,996
    )
    
    $
    (3,680
    )Foreign currency translation adjustments
    
    
    9,492
    
    
    
    7,127
    
    
    
    3,002Accumulated other comprehensive income (loss)
    
    $
    809
    
    
    $
    1,131
    
    
    $
    (678
    )
 54




---



##### 



16. STOCK PLANS
   
    
    Options to purchase shares of AMH common stock at the fair market value on the date of
grant, which will vest over time;
    
    Options to purchase shares of AMH common stock at the fair market value on the date of
grant, which will vest 100% on the eighth anniversary from the date of grant provided that
the option vesting may be accelerated upon the occurrence of a liquidity event, as defined
in the 2002 Plan, and the achievement of a specified internal rate of return on the funds
invested by Harvest Partners and minimum aggregate proceeds for the investment by Harvest
Partners (performance-based options) and;
    
    Options to purchase shares of Holdings common stock and preferred stock as a unit,
comprised of one share of preferred stock and a specified fraction of a share of common
stock granted in exchange for a portion of the outstanding options to purchase shares of
the predecessor companys common stock, which became fully vested upon completion of the
April 2002 merger transaction (Roll-Over Options). These options were exercised for
Holdings stock in connection with the March 2004 dividend recapitalization with shares
being exchanged for AMH stock after exercise. The shares of AMH preferred stock were
redeemed in connection with the March 2004 dividend recapitalization.
   55




---



##### 



WeightedAverageShares
    
    
    Price
    
    
    Exercise PriceOptions outstanding December 31, 2002
    
    
    483,950
    
    
    $
    10.00 to 22.65
    
    
    $
    11.61Granted
    
    
    10,628
    
    
    
    18.29
    
    
    
    18.29Options outstanding January 3, 2004
    
    
    494,578
    
    
    
    10.00 to 22.65
    
    
    
    11.75Granted under 2002 Plan
    
    
    36,757
    
    
    
    66.17
    
    
    
    66.17Exercised
    
    
    (333,350
    )
    
    
    10.00 to 66.17
    
    
    
    15.56Expired or canceled
    
    
    (8,070
    )
    
    
    10.00
    
    
    
    10.00Options outstanding prior to
December 2004 recapitalization
transaction
    
    
    189,915
    
    
    
    10.00 to 66.17
    
    
    
    15.67Options adjusted for December 2004
recapitalization transaction
    
    
    189,915
    
    
    
    5.00 to 33.09
    
    
    
    7.83Granted under 2004 Plan
    
    
    429,850
    
    
    
    70.95
    
    
    
    70.95Options outstanding January 1, 2005
    
    
    809,680
    
    
    
    5.00 to 70.95
    
    
    
    41.34Granted under 2004 Plan
    
    
    38,950
    
    
    
    10.75 to 70.95
    
    
    
    65.54Exercised
    
    
    (5,247
    )
    
    
    5.00
    
    
    
    5.00Expired or canceled
    
    
    (114,530
    )
    
    
    5.00 to 70.95
    
    
    
    51.31Options outstanding December 31, 2005
    
    
    728,853
    
    
    $
    5.00 to 70.95
    
    
    $
    41.33
   56




---



##### 



17. FACILITY CLOSURE
  18. BUSINESS SEGMENTS
  19. RETIREMENT PLANS
  2005
    
    
    2004Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansAccumulated Benefit Obligation
    
    $
    50,644
    
    
    $
    35,711
    
    
    $
    45,929
    
    
    $
    32,147Change In Projected Benefit ObligationProjected benefit obligation at beginning of year
    
    $
    45,929
    
    
    $
    34,566
    
    
    $
    41,159
    
    
    $
    27,786Service cost
    
    
    478
    
    
    
    1,364
    
    
    
    437
    
    
    
    1,139Interest cost
    
    
    2,651
    
    
    
    2,071
    
    
    
    2,565
    
    
    
    1,812Plan amendments
    
    
    
    
    
    
    415
    
    
    
    
    
    
    
    Actuarial loss
    
    
    4,105
    
    
    
    3,022
    
    
    
    3,819
    
    
    
    2,253Employee contributions
    
    
    
    
    
    
    321
    
    
    
    
    
    
    
    250Benefits paid
    
    
    (2,041
    )
    
    
    (583
    )
    
    
    (2,051
    )
    
    
    (1,056
    )Effect of foreign exchange
    
    
    
    
    
    
    1,343
    
    
    
    
    
    
    
    2,382Projected benefit obligation at end of year
    
    $
    51,122
    
    
    $
    42,519
    
    
    $
    45,929
    
    
    $
    34,566
 57




---



##### 



2005
    
    
    2004Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansChange In Plan AssetsFair value of assets at beginning of year
    
    $
    34,328
    
    
    $
    26,357
    
    
    $
    33,148
    
    
    $
    21,358Actual return on plan assets
    
    
    2,008
    
    
    
    2,501
    
    
    
    2,839
    
    
    
    1,570Employer contributions
    
    
    478
    
    
    
    2,516
    
    
    
    392
    
    
    
    2,416Employee contributions
    
    
    
    
    
    
    321
    
    
    
    
    
    
    
    251Benefits paid
    
    
    (2,041
    )
    
    
    (583
    )
    
    
    (2,051
    )
    
    
    (1,056
    )Effect of foreign exchange
    
    
    
    
    
    
    1,012
    
    
    
    
    
    
    
    1,818Fair value of assets at end of year
    
    
    34,773
    
    
    
    32,124
    
    
    
    34,328
    
    
    
    26,357Funded status
    
    
    (16,349
    )
    
    
    (10,395
    )
    
    
    (11,601
    )
    
    
    (8,209
    )Unrecognized:Prior service costs
    
    
    
    
    
    
    402
    
    
    
    
    
    
    
    Cumulative net loss
    
    
    13,864
    
    
    
    4,780
    
    
    
    9,462
    
    
    
    1,921Net amount recognized in consolidated
balance sheets
    
    $
    (2,485
    )
    
    $
    (5,213
    )
    
    $
    (2,139
    )
    
    $
    (6,288
    )Amounts recognized in the consolidated
balance sheets consist of:Accrued benefit cost
    
    $
    (15,870
    )
    
    $
    (6,787
    )
    
    $
    (11,601
    )
    
    $
    (6,874
    )Other asset
    
    
    
    
    
    
    402
    
    
    
    
    
    
    
    Cumulative other comprehensive loss
    
    
    13,385
    
    
    
    1,172
    
    
    
    9,462
    
    
    
    586$
    (2,485
    )
    
    $
    (5,213
    )
    
    $
    (2,139
    )
    
    $
    (6,288
    )
 December 31,
    
    December 31,2005
    
    2004Domestic
    
    Foreign
    
    Domestic
    
    ForeignPlans
    
    Plans
    
    Plans
    
    PlansWEIGHTED AVERAGE ASSUMPTIONS
USED TO DETERMINE BENEFIT
OBLIGATIONS AT DECEMBER 31Discount rate
    
    
    5.50
    %
    
    
    5.25
    %
    
    
    5.75
    %
    
    
    5.75
    %Salary increases
    
    
    3.75
    %
    
    
    3.50
    %
    
    
    
    
    
    
    3.50
    %
   2005
    
    2004Domestic
    
    Foreign
    
    Domestic
    
    ForeignPlans
    
    Plans
    
    Plans
    
    PlansASSET ALLOCATIONSEquity securities
    
    
    64
    %
    
    
    60
    %
    
    
    68
    %
    
    
    58
    %Debt securities
    
    
    35
    %
    
    
    35
    %
    
    
    32
    %
    
    
    36
    %Other
    
    
    1
    %
    
    
    5
    %
    
    
    
    
    
    
    6
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  58




---



##### 



2005
    
    
    2004
    
    
    2003Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansNET PERIODIC PENSION COSTService cost
    
    $
    478
    
    
    $
    1,364
    
    
    $
    437
    
    
    $
    1,139
    
    
    $
    262
    
    
    $
    427Interest cost
    
    
    2,651
    
    
    
    2,071
    
    
    
    2,565
    
    
    
    1,812
    
    
    
    2,201
    
    
    
    558Expected return on assets
    
    
    (2,917
    )
    
    
    (2,177
    )
    
    
    (2,818
    )
    
    
    (1,785
    )
    
    
    (2,268
    )
    
    
    (513
    )Amortization of unrecognized:Prior service cost
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative net loss
    
    
    611
    
    
    
    2
    
    
    
    327
    
    
    
    
    
    
    
    397
    
    
    
    Net periodic pension cost
    
    $
    823
    
    
    $
    1,287
    
    
    $
    511
    
    
    $
    1,166
    
    
    $
    592
    
    
    $
    472WEIGHTED AVERAGE ASSUMPTIONS USED
TO DETERMINE NET PERIOD BENEFIT
COST
FOR YEARS ENDED DECEMBER 31Discount rate
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    6.70
    %
    
    
    6.25
    %Long-term rate of return on assets
    
    
    8.75
    %
    
    
    8.00
    %
    
    
    8.75
    %
    
    
    8.00
    %
    
    
    8.98
    %
    
    
    8.00
    %Salary increases
    
    
    
    
    
    
    3.50
    %
    
    
    
    
    
    
    3.50
    %
    
    
    
    
    
    
    3.50
    %
   Domestic
    
    ForeignPlans
    
    Plans2006
    
    
    2,072
    
    
    
    5682007
    
    
    2,130
    
    
    
    6112008
    
    
    2,234
    
    
    
    7052009
    
    
    2,373
    
    
    
    7742010
    
    
    2,446
    
    
    
    8602011 - 2015
    
    
    14,998
    
    
    
    7,482
  20. SUBSIDIARY GUARANTORS
  59




---



##### 



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Non-Guarantor
    
    
    Guarantor
    
    
    ReclassificationParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    /Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    7,010
    
    
    $
    1,046
    
    
    $
    4,244
    
    
    $
    
    
    
    $
    12,300Accounts receivable, net
    
    
    100,679
    
    
    
    26,506
    
    
    
    20,479
    
    
    
    
    
    
    
    147,664Intercompany receivables
    
    
    
    
    
    
    34,843
    
    
    
    18,787
    
    
    
    (53,630
    )
    
    
    Receivable from parent
    
    
    3,908
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,908Inventories
    
    
    90,773
    
    
    
    14,672
    
    
    
    28,079
    
    
    
    
    
    
    
    133,524Income taxes receivable
    
    
    
    
    
    
    2,860
    
    
    
    
    
    
    
    (2,860
    )
    
    
    Deferred income taxes
    
    
    17,560
    
    
    
    9,069
    
    
    
    
    
    
    
    
    
    
    
    26,629Other current assets
    
    
    7,987
    
    
    
    1,062
    
    
    
    1,171
    
    
    
    
    
    
    
    10,220Total current assets
    
    
    227,917
    
    
    
    90,058
    
    
    
    72,760
    
    
    
    (56,490
    )
    
    
    334,245Property, plant and equipment,
net
    
    
    106,887
    
    
    
    4,167
    
    
    
    32,534
    
    
    
    
    
    
    
    143,588Goodwill
    
    
    194,174
    
    
    
    36,517
    
    
    
    
    
    
    
    
    
    
    
    230,691Other intangible assets, net
    
    
    96,803
    
    
    
    11,819
    
    
    
    1,245
    
    
    
    
    
    
    
    109,867Investment in subsidiaries
    
    
    137,480
    
    
    
    36,497
    
    
    
    
    
    
    
    (173,977
    )
    
    
    Other assets
    
    
    15,999
    
    
    
    
    
    
    
    501
    
    
    
    
    
    
    
    16,500Total assets
    
    $
    779,260
    
    
    $
    179,058
    
    
    $
    107,040
    
    
    $
    (230,467
    )
    
    $
    834,891Liabilities And Stockholders
EquityCurrent liabilities:Accounts payable
    
    $
    57,820
    
    
    $
    13,073
    
    
    $
    26,040
    
    
    $
    
    
    
    $
    96,933Intercompany payables
    
    
    29,311
    
    
    
    
    
    
    
    24,319
    
    
    
    (53,630
    )
    
    
    Accrued liabilities
    
    
    41,568
    
    
    
    9,162
    
    
    
    6,981
    
    
    
    
    
    
    
    57,711Income taxes payable
    
    
    10,263
    
    
    
    
    
    
    
    368
    
    
    
    (2,860
    )
    
    
    7,771Total current liabilities
    
    
    138,962
    
    
    
    22,235
    
    
    
    57,708
    
    
    
    (56,490
    )
    
    
    162,415Deferred income taxes
    
    
    62,208
    
    
    
    1,549
    
    
    
    3,344
    
    
    
    
    
    
    
    67,101Other liabilities
    
    
    16,589
    
    
    
    17,794
    
    
    
    9,491
    
    
    
    
    
    
    
    43,874Long-term debt
    
    
    317,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317,000Stockholders equity
    
    
    244,501
    
    
    
    137,480
    
    
    
    36,497
    
    
    
    (173,977
    )
    
    
    244,501Total liabilities and
stockholders equity
    
    $
    779,260
    
    
    $
    179,058
    
    
    $
    107,040
    
    
    $
    (230,467
    )
    
    $
    834,891
 60




---



##### 



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    ConsolidatedNet sales
    
    $
    831,495
    
    
    $
    236,594
    
    
    $
    269,453
    
    
    $
    (163,951
    )
    
    $
    1,173,591Cost of sales
    
    
    623,226
    
    
    
    223,672
    
    
    
    223,320
    
    
    
    (163,951
    )
    
    
    906,267Gross profit
    
    
    208,269
    
    
    
    12,922
    
    
    
    46,133
    
    
    
    
    
    
    
    267,324Selling, general and
administrative expense
    
    
    152,773
    
    
    
    20,528
    
    
    
    25,192
    
    
    
    
    
    
    
    198,493Facility closure costs
    
    
    3,956
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,956Income from operations
    
    
    51,540
    
    
    
    (7,606
    )
    
    
    20,941
    
    
    
    
    
    
    
    64,875Interest expense, net
    
    
    31,339
    
    
    
    
    
    
    
    583
    
    
    
    
    
    
    
    31,922Foreign currency (gain) loss
    
    
    
    
    
    
    
    
    
    
    781
    
    
    
    
    
    
    
    781Income before income taxes
    
    
    20,201
    
    
    
    (7,606
    )
    
    
    19,577
    
    
    
    
    
    
    
    32,172Income taxes
    
    
    2,748
    
    
    
    538
    
    
    
    6,423
    
    
    
    
    
    
    
    9,709Income before equity income
from subsidiaries
    
    
    17,453
    
    
    
    (8,144
    )
    
    
    13,154
    
    
    
    
    
    
    
    22,463Equity income from
subsidiaries
    
    
    5,010
    
    
    
    13,154
    
    
    
    
    
    
    
    (18,164
    )
    
    
    Net income (loss)
    
    $
    22,463
    
    
    $
    5,010
    
    
    $
    13,154
    
    
    $
    (18,164
    )
    
    $
    22,463
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash provided by
(used in) operating
activities
    
    $
    33,415
    
    
    $
    (9,045
    )
    
    $
    23,527
    
    
    $
    47,897Investing ActivitiesAdditions to property, plant
and equipment
    
    
    (19,539
    )
    
    
    (465
    )
    
    
    (955
    )
    
    
    (20,959
    )Proceeds from sale of assets
    
    
    40
    
    
    
    4
    
    
    
    38
    
    
    
    82Net cash used in investing
activities
    
    
    (19,499
    )
    
    
    (461
    )
    
    
    (917
    )
    
    
    (20,877
    )Financing ActivitiesRepayments of term loan
    
    
    (23,000
    )
    
    
    
    
    
    
    
    
    
    
    (23,000
    )Dividends
    
    
    (38,275
    )
    
    
    40,000
    
    
    
    (40,000
    )
    
    
    (38,275
    )Settlement of promissory notes
    
    
    (11,607
    )
    
    
    
    
    
    
    
    
    
    
    (11,607
    )Intercompany transactions
    
    
    22,283
    
    
    
    (36,331
    )
    
    
    14,048
    
    
    
    Net cash provided by (used
in) financing activities
    
    
    (50,599
    )
    
    
    3,669
    
    
    
    (25,952
    )
    
    
    (72,882
    )Net decrease in cash
    
    
    (36,683
    )
    
    
    (5,837
    )
    
    
    (3,342
    )
    
    
    (45,862
    )Effect of exchange rate
changes on cash
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    108Cash at beginning of period
    
    
    43,693
    
    
    
    6,883
    
    
    
    7,478
    
    
    
    58,054Cash at end of period
    
    $
    7,010
    
    
    $
    1,046
    
    
    $
    4,244
    
    
    $
    12,300
 61




---



##### 



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Non-Guarantor
    
    
    Guarantor
    
    
    ReclassificationParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    /Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    43,693
    
    
    $
    6,883
    
    
    $
    7,478
    
    
    $
    
    
    
    $
    58,054Accounts receivable, net
    
    
    88,930
    
    
    
    20,803
    
    
    
    18,569
    
    
    
    
    
    
    
    128,302Intercompany receivables
    
    
    
    
    
    
    
    
    
    
    8,582
    
    
    
    (8,582
    )
    
    
    Receivable from parent
    
    
    3,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,490Inventories
    
    
    65,854
    
    
    
    19,435
    
    
    
    29,498
    
    
    
    
    
    
    
    114,787Deferred income taxes
    
    
    
    
    
    
    16,471
    
    
    
    3,393
    
    
    
    (1,611
    )
    
    
    18,253Income taxes receivable
    
    
    10,347
    
    
    
    
    
    
    
    
    
    
    
    (1,487
    )
    
    
    8,860Other current assets
    
    
    10,844
    
    
    
    1,302
    
    
    
    792
    
    
    
    
    
    
    
    12,938Total current assets
    
    
    223,158
    
    
    
    64,894
    
    
    
    68,312
    
    
    
    (11,680
    )
    
    
    344,684Property, plant and equipment,
net
    
    
    100,184
    
    
    
    5,033
    
    
    
    33,480
    
    
    
    
    
    
    
    138,697Goodwill
    
    
    198,270
    
    
    
    36,526
    
    
    
    
    
    
    
    
    
    
    
    234,796Other intangible assets, net
    
    
    99,038
    
    
    
    12,510
    
    
    
    1,496
    
    
    
    
    
    
    
    113,044Investment in subsidiaries
    
    
    130,881
    
    
    
    59,996
    
    
    
    
    
    
    
    (190,877
    )
    
    
    Other assets
    
    
    19,460
    
    
    
    
    
    
    
    174
    
    
    
    
    
    
    
    19,634Total assets
    
    $
    770,991
    
    
    $
    178,959
    
    
    $
    103,462
    
    
    $
    (202,557
    )
    
    $
    850,855Liabilities And Stockholders
EquityCurrent liabilities:Accounts payable
    
    $
    41,446
    
    
    $
    13,753
    
    
    $
    19,940
    
    
    $
    
    
    
    $
    75,139Intercompany payables
    
    
    7,028
    
    
    
    1,554
    
    
    
    
    
    
    
    (8,582
    )
    
    
    Accrued liabilities
    
    
    39,569
    
    
    
    9,782
    
    
    
    7,664
    
    
    
    
    
    
    
    57,015Notes payable
    
    
    11,607
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,607Current portion of
long-term debt
    
    
    875
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    875Deferred income taxes
    
    
    1,611
    
    
    
    
    
    
    
    
    
    
    
    (1,611
    )
    
    
    Income taxes payable
    
    
    
    
    
    
    855
    
    
    
    632
    
    
    
    (1,487
    )
    
    
    Total current liabilities
    
    
    102,136
    
    
    
    25,944
    
    
    
    28,236
    
    
    
    (11,680
    )
    
    
    144,636Deferred income taxes
    
    
    50,264
    
    
    
    5,711
    
    
    
    6,745
    
    
    
    
    
    
    
    62,720Other liabilities
    
    
    19,150
    
    
    
    16,423
    
    
    
    8,485
    
    
    
    
    
    
    
    44,058Long-term debt
    
    
    339,125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    339,125Stockholders equity
    
    
    260,316
    
    
    
    130,881
    
    
    
    59,996
    
    
    
    (190,877
    )
    
    
    260,316Total liabilities and
stockholders equity
    
    $
    770,991
    
    
    $
    178,959
    
    
    $
    103,462
    
    
    $
    (202,557
    )
    
    $
    850,855
 62




---



##### 



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    ConsolidatedNet sales
    
    $
    773,546
    
    
    $
    175,322
    
    
    $
    217,744
    
    
    $
    (72,653
    )
    
    $
    1,093,959Cost of sales
    
    
    550,177
    
    
    
    150,303
    
    
    
    177,124
    
    
    
    (72,653
    )
    
    
    804,951Gross profit
    
    
    223,369
    
    
    
    25,019
    
    
    
    40,620
    
    
    
    
    
    
    
    289,008Selling, general and
administrative expense
    
    
    141,455
    
    
    
    20,714
    
    
    
    22,355
    
    
    
    
    
    
    
    184,524Transaction costs
    
    
    67,649
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,649Facility closure costs
    
    
    4,535
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,535Income from operations
    
    
    9,730
    
    
    
    4,305
    
    
    
    18,265
    
    
    
    
    
    
    
    32,300Interest expense, net
    
    
    27,337
    
    
    
    8
    
    
    
    439
    
    
    
    
    
    
    
    27,784Transaction costs
    
    
    16,297
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,297Foreign currency (gain) loss
    
    
    
    
    
    
    
    
    
    
    387
    
    
    
    
    
    
    
    387Income before income taxes
    
    
    (33,904
    )
    
    
    4,297
    
    
    
    17,439
    
    
    
    
    
    
    
    (12,168
    )Income taxes
    
    
    (8,700
    )
    
    
    1,615
    
    
    
    5,851
    
    
    
    
    
    
    
    (1,234
    )Income before equity income
from subsidiaries
    
    
    (25,204
    )
    
    
    2,682
    
    
    
    11,588
    
    
    
    
    
    
    
    (10,934
    )Equity income from
subsidiaries
    
    
    14,270
    
    
    
    11,588
    
    
    
    
    
    
    
    (25,858
    )
    
    
    Net income (loss)
    
    $
    (10,934
    )
    
    $
    14,270
    
    
    $
    11,588
    
    
    $
    (25,858
    )
    
    $
    (10,934
    )
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    ReclassificationParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    /Elimination
    
    
    ConsolidatedNet cash provided by (used
in) operating activities
    
    $
    5,006
    
    
    $
    (742
    )
    
    $
    13,374
    
    
    $
    1,099
    
    
    $
    18,737Investing ActivitiesAdditions to property, plant
and equipment
    
    
    (16,478
    )
    
    
    (1,431
    )
    
    
    (832
    )
    
    
    
    
    
    
    (18,741
    )Proceeds from sale of assets
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90Net cash provided by (used in)
investing activities
    
    
    (16,388
    )
    
    
    (1,431
    )
    
    
    (832
    )
    
    
    
    
    
    
    (18,651
    )Financing ActivitiesNet equity contributions
    
    
    60,691
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,691Distribution of Investcorp
proceeds to management
shareholders
    
    
    (30,406
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,406
    )Proceeds from borrowings under
term loan
    
    
    175,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175,000Repayments of term loan
    
    
    (140,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (140,000
    )Financing costs
    
    
    (12,008
    )
    
    
    
    
    
    
    (101
    )
    
    
    
    
    
    
    (12,109
    )Intercompany transactions
    
    
    (601
    )
    
    
    6,074
    
    
    
    (5,473
    )
    
    
    
    
    
    
    Net cash provided by (used in)
financing activities
    
    
    52,676
    
    
    
    6,074
    
    
    
    (5,574
    )
    
    
    
    
    
    
    53,176Net increase (decrease) in cash
    
    
    41,294
    
    
    
    3,901
    
    
    
    6,968
    
    
    
    1,099
    
    
    
    53,262Effect of exchange rate
changes on cash
    
    
    
    
    
    
    
    
    
    
    510
    
    
    
    
    
    
    
    510Cash at beginning of period
    
    
    2,399
    
    
    
    2,982
    
    
    
    
    
    
    
    (1,099
    )
    
    
    4,282Cash at end of period
    
    $
    43,693
    
    
    $
    6,883
    
    
    $
    7,478
    
    
    $
    
    
    
    $
    58,054
 63




---



##### 



ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    ConsolidatedNet sales
    
    $
    676,473
    
    
    $
    55,303
    
    
    $
    65,822
    
    
    $
    (17,762
    )
    
    $
    779,836Cost of sales
    
    
    478,912
    
    
    
    45,594
    
    
    
    54,781
    
    
    
    (17,762
    )
    
    
    561,525Gross profit
    
    
    197,561
    
    
    
    9,709
    
    
    
    11,041
    
    
    
    
    
    
    
    218,311Selling, general and
administrative expense
    
    
    133,468
    
    
    
    9,031
    
    
    
    7,072
    
    
    
    
    
    
    
    149,571Income from operations
    
    
    64,093
    
    
    
    678
    
    
    
    3,969
    
    
    
    
    
    
    
    68,740Interest expense, net
    
    
    26,933
    
    
    
    34
    
    
    
    402
    
    
    
    
    
    
    
    27,369Foreign currency loss (gain)
    
    
    
    
    
    
    34
    
    
    
    (582
    )
    
    
    
    
    
    
    (548
    )Income before income taxes
    
    
    37,160
    
    
    
    610
    
    
    
    4,149
    
    
    
    
    
    
    
    41,919Income taxes
    
    
    15,723
    
    
    
    221
    
    
    
    1,444
    
    
    
    
    
    
    
    17,388Income before equity income
from subsidiaries
    
    
    21,437
    
    
    
    389
    
    
    
    2,705
    
    
    
    
    
    
    
    24,531Equity income from subsidiaries
    
    
    3,094
    
    
    
    2,705
    
    
    
    
    
    
    
    (5,799
    )
    
    
    Net income (loss)
    
    $
    24,531
    
    
    $
    3,094
    
    
    $
    2,705
    
    
    $
    (5,799
    )
    
    $
    24,531
 ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    ConsolidatedNet cash provided by (used
in) operating activities
    
    $
    40,455
    
    
    $
    9,132
    
    
    $
    7,488
    
    
    $
    (1,099
    )
    
    $
    55,976Investing ActivitiesAcquisition of Gentek
Holdings, net of cash acquired
    
    
    (113,255
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113,255
    )Additions to property, plant
and equipment
    
    
    (11,746
    )
    
    
    (189
    )
    
    
    (754
    )
    
    
    
    
    
    
    (12,689
    )Proceeds from sale of assets
    
    
    2,104
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,104Other investing activities
    
    
    
    
    
    
    369
    
    
    
    (39
    )
    
    
    
    
    
    
    330Net cash provided by (used in)
investing activities
    
    
    (122,897
    )
    
    
    180
    
    
    
    (793
    )
    
    
    
    
    
    
    (123,510
    )Financing ActivitiesProceeds from borrowings under
term loan
    
    
    182,500
    
    
    
    
    
    
    
    7,500
    
    
    
    
    
    
    
    190,000Repayments of term loan
    
    
    (119,000
    )
    
    
    
    
    
    
    (7,500
    )
    
    
    
    
    
    
    (126,500
    )Redemption of 9 1/4% senior
subordinated notes
    
    
    (908
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (908
    )Financing costs
    
    
    (3,854
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,854
    )Intercompany transactions
    
    
    13,081
    
    
    
    (6,330
    )
    
    
    (6,751
    )
    
    
    
    
    
    
    Net cash provided by (used in)
financing activities
    
    
    71,819
    
    
    
    (6,330
    )
    
    
    (6,751
    )
    
    
    
    
    
    
    58,738Net increase (decrease) in cash
    
    
    (10,623
    )
    
    
    2,982
    
    
    
    (56
    )
    
    
    (1,099
    )
    
    
    (8,796
    )Effect of exchange rate
changes on cash
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    56Cash at beginning of period
    
    
    13,022
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,022Cash at end of period
    
    $
    2,399
    
    
    $
    2,982
    
    
    $
    
    
    
    $
    (1,099
    )
    
    $
    4,282
 21. CONTINGENCIES
  64




---



##### 



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  ITEM 9A. CONTROLS AND PROCEDURES
    ITEM 9B. OTHER INFORMATION
  PART III
 ITEM 10 . DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  Name
    
    Age
    
    Position(s)Michael Caporale, Jr
    
    
    54
    
    
    Chairman of the Board, President and Chief Executive OfficerD. Keith LaVanway
    
    
    41
    
    
    Vice President-Chief Financial Officer, Treasurer and SecretaryTrevor Deighton
    
    
    42
    
    
    Vice President-Chief Operating OfficerRobert M. Franco
    
    
    52
    
    
    President of Alside Supply CentersJohn F. Haumesser
    
    
    41
    
    
    Vice President-Human ResourcesKevin M. Hayes
    
    
    37
    
    
    DirectorIra D. Kleinman
    
    
    49
    
    
    DirectorThomas J. Sullivan
    
    
    43
    
    
    DirectorDana R. Snyder
    
    
    59
    
    
    DirectorChristopher J. Stadler
    
    
    41
    
    
    DirectorDennis W. Vollmershausen
    
    
    62
    
    
    Director
  65




---



##### 



Michael Caporale, Jr., Age 54
 D. Keith LaVanway, Age 41
 Trevor Deighton, Age 42
 Robert M. Franco, Age 52
 John F. Haumesser, Age 41
 Kevin M. Hayes, Age 37
 Ira D. Kleinman, Age 49
 Thomas J. Sullivan, Age 43
 66




---



##### 



Dana R. Snyder, Age 59
 Christopher J. Stadler, Age 41
 Dennis W. Vollmershausen, Age 62
  Name
    
    Position(s)Simon C. Moore
    
    Director (from December 2004 to November 2005)
   Name
    
    Position(s)Kenneth L.
Bloom
    
    Joined the Company in 2000 as Alsides Vice
President of Window Manufacturing, named
President of Alside Window Company in 2001,
named President of Alside Siding & Window
Company in 2002 and named President,
Manufacturing and Supply Chain Management in
2005.
  AUDIT COMMITTEE
  67




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##### 



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  CODE OF ETHICS
  68




---



##### 



ITEM 11. EXECUTIVE COMPENSATION
 SUMMARY COMPENSATION TABLE
  Long-TermCompensationAnnual Compensation
    
    AwardsOther Annual
    
    SecuritiesFiscal
    
    
    
    
    
    
    
    
    
    Compensation
    
    Underlying
    
    All OtherName and Principal Position
    
    Year
    
    Salary
    
    Bonus (1)
    
    (2)
    
    Options/SARs(#)(3)
    
    CompensationMichael Caporale, Jr
    
    
    2005
    
    
    $
    645,000
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    11,022
    (18)Chairman, President and
    
    
    2004
    
    
    $
    575,001
    
    
    $
    17,523,000
    (6)
    
    
    
    
    
    
    176,168
    (12)
    
    $
    10,431Chief Executive Officer
    
    
    2003
    
    
    $
    500,004
    
    
    $
    1,000,000
    
    
    
    
    
    
    
    
    
    
    $
    109,932D. Keith LaVanway
    
    
    2005
    
    
    $
    332,508
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    9,512
    (18)Vice President, Chief
    
    
    2004
    
    
    $
    301,257
    
    
    $
    6,935,000
    (7)
    
    
    
    
    
    
    86,910
    (13)
    
    $
    9,070Financial Officer
    
    
    2003
    
    
    $
    275,004
    
    
    $
    275,000
    
    
    
    
    
    
    
    
    
    
    $
    33,601Trevor Deighton (4)
    
    
    2005
    
    
    $
    45,642
    
    
    $
    320,420
    (8)
    
    
    
    
    
    
    
    
    
    $
    4,232
    (19)Vice President, Chief
    
    
    2004
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    Operating Officer
    
    
    2003
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    Robert M. Franco
    
    
    2005
    
    
    $
    292,500
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    10,787
    (18)President, Supply
    
    
    2004
    
    
    $
    267,501
    
    
    $
    1,765,000
    (9)
    
    
    
    
    
    
    58,723
    (14)
    
    $
    9,916Centers
    
    
    2003
    
    
    $
    257,505
    
    
    $
    165,000
    
    
    
    
    
    
    
    
    
    
    $
    84,650John F. Haumesser
    
    
    2005
    
    
    $
    216,252
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    8,996
    (18)Vice President,
    
    
    2004
    
    
    $
    185,256
    
    
    $
    1,970,000
    (10)
    
    
    
    
    
    
    23,489
    (15)
    
    $
    8,623Human Resources
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    21,254
    (16)2003
    
    
    $
    168,252
    
    
    $
    120,000
    
    
    
    
    
    
    
    
    
    
    $
    8,294Kenneth L. Bloom (5)
    
    
    2005
    
    
    $
    293,751
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    115,877
    (20)Former President,
    
    
    2004
    
    
    $
    271,254
    
    
    $
    5,210,000
    (11)
    
    
    
    
    
    
    70,467
    (17)
    
    $
    9,113Manufacturing
    
    
    2003
    
    
    $
    250,005
    
    
    $
    210,000
    
    
    
    
    
    
    
    
    
    
    $
    8,541and Supply Chain
Management
 
 (1)
    
    Bonuses paid include annual bonuses paid in connection with the Companys Incentive Bonus
Plan and bonuses paid in connection with the March 2004 dividend recapitalization and the
December 2004 recapitalization transaction. Bonuses paid in connection with the March 2004
dividend recapitalization were paid in recognition of the successful acquisition of Gentek,
the Companys performance since the April 2002 merger transaction and the completion of the 11
1/4% senior notes offering. The bonuses paid in connection with the December 2004
recapitalization transaction were paid in recognition of the Companys performance for 2004
and the completion of the related transaction.(2)
    
    Perquisites and other personal benefits received by the Companys executive officers are not
included in the Summary Compensation Table because the aggregate amount of this compensation,
if any, did not meet disclosure thresholds established under current SEC regulations.(3)
    
    Options granted through March 2004 were granted in accordance with the 2002 Plan. All such
options granted under the 2002 Plan were granted prior to the March 2004 dividend
recapitalization. The options granted include the following: 
    
    Options to purchase shares of Holdings common stock at the fair market value on the
date of grant, which will vest over time (Time-Based Options). All Time-Based Options
granted to executives during September 2002 were immediately vested 16% on the date of
grant, representing 10% vesting upon grant plus four months of vesting from May 2002
through August 2002, with remaining vesting of 1.5% per month over 56 months. Options
granted during February 2004 were immediately vested 11.5% on the
 69




---



##### 



date of grant, representing 10% vesting upon grant plus one month vesting from January
2004 to February 2004, with remaining vesting of 1.5% per month over 59 months;
 
    
    Options to purchase shares of Holdings common stock at the fair market value on the
date of grant, which will vest 100% on the eighth anniversary from the date of grant,
provided that the option vesting may be accelerated upon the occurrence of a liquidity
event and the achievement of a specified internal rate of return (IRR) on the
investment by Harvest Partners in Holdings (IRR Options). A liquidity event is defined
as the occurrence of (a) a transaction or series of transactions which results in the
sale or transfer of (i) more than a majority of the assets of Holdings and its
subsidiaries or (ii) a majority of the capital stock of Holdings or a widely distributed
sale of the common stock of Holdings in an underwritten public offering which yields a
minimum required amount of net proceeds to Holdings and (b) the funds of Harvest Partners
receive a minimum required aggregate net cash proceeds for its investment in Holdings
(2002 Plan Liquidity Event);
    
    Options to purchase shares of Holdings common stock and preferred stock as a unit,
comprised of one share of preferred stock and a specified fraction of a share of common
stock (Roll-Over Options). These options were granted in exchange for the outstanding
options to purchase Associated Materials Incorporated common stock (Predecessor Company
Options). Roll-Over Options were granted at an exercise price, which preserves the
intrinsic value of the Predecessor Company Options. Each Roll-Over Option grant was 100%
vested as of the date of grant.
    (4)
    
    Mr. Deighton joined the Company in November 2005.
 70




---



##### 



(5)
    
    Mr. Bloom resigned from the Company effective December 31, 2005.
 (6)
    
    The bonus amount shown includes $1,200,000 of annual bonus from the Incentive Bonus Plan,
$6,323,000 of bonus paid in connection with the March 2004 dividend recapitalization and
$10,000,000 of bonus paid in connection with the December 2004 recapitalization transaction.
 (7)
    
    The bonus amount shown includes $310,000 of annual bonus from the Incentive Bonus Plan,
$2,750,000 of bonus paid in connection with the March 2004 dividend recapitalization and
$3,875,000 of bonus paid in connection with the December 2004 recapitalization transaction.
 (8)
    
    The bonus amount shown includes $280,000 of bonus paid pursuant to Mr. Deightons employment
agreement and $40,420 for a sign-on bonus paid in connection with Mr. Deighton joining the
Company.
 (9)
    
    The bonus amount shown includes $165,000 of annual bonus from the Incentive Bonus Plan,
$500,000 of bonus paid in connection with the March 2004 dividend recapitalization and
$1,100,000 of bonus paid in connection with the December 2004 recapitalization transaction.
 (10)
    
    The bonus amount shown includes $120,000 of annual bonus from the Incentive Bonus Plan,
$750,000 of bonus paid in connection with the March 2004 dividend recapitalization and
$1,100,000 of bonus paid in connection with the December 2004 recapitalization transaction.
 (11)
    
    The bonus amount shown includes $210,000 of annual bonus from the Incentive Bonus Plan,
$2,000,000 of bonus paid in connection with the March 2004 dividend recapitalization and
$3,000,000 of bonus paid in connection with the December 2004 recapitalization transaction.
 (12)
    
    In December 2004, in accordance with the 2004 Plan, Mr. Caporale was granted an option to
purchase 176,168 shares of AMH II Class B non-voting common stock.
 (13)
    
    In December 2004, in accordance with the 2004 Plan, Mr. LaVanway was granted an option to
purchase 86,910 shares of AMH II Class B non-voting common stock.
 (14)
    
    In December 2004, in accordance with the 2004 Plan, Mr. Franco was granted an option to
purchase 58,723 shares of AMH II Class B non-voting common stock.
 (15)
    
    In December 2004, in accordance with the 2004 Plan, Mr. Haumesser was granted an option to
purchase 23,489 shares of AMH II Class B non-voting common stock.
 (16)
    
    In February 2004, Mr. Haumesser was granted an option to purchase 10,627 shares of Holdings
common stock. In conjunction with the December 2004 recapitalization transaction, all of the
IRR Options and a portion of the Time-Based Options were exercised, with the remaining
Time-Based options to purchase common stock of Holdings being converted into options to
purchase shares of AMH Class B non-voting stock, which, upon exercise, will be contributed to
AMH II in exchange for an equivalent number of shares of Class B non-voting common stock of
AMH II. In recognition of the dilutive effect of the December 2004 recapitalization
transaction, the option grants presented have been restated to reflect that shares underlying
each original option grant to purchase one common share of Holdings is now the equivalent of
an option grant to purchase two shares of AMH common stock. As such Mr. Haumessers options
represent a grant to purchase 21,254 shares of AMH Class B non-voting stock, which is
comprised of the following (restated to reflect the impact of the dilutive effect):
 
    
    Time-Based Options granted with the option to purchase 13,284 shares of AMH common
stock at $33.09 per share;
    
    IRR Options granted with the option to purchase 7,970 shares of AMH common stock at
$33.09 per share.
 (17)
    
    In December 2004, in accordance with the 2004 Plan, Mr. Bloom was granted an option to
purchase 70,467 shares of AMH II Class B non-voting common stock.
 71




---



##### 



(18)
    
    Includes amounts accrued or allocated under a defined contribution plan of $8,400 and imputed
income from group term life coverage provided by the Company in excess of $50,000.
 (19)
    
    The amount shown represents relocation expenses incurred by Mr. Deighton and paid by the
Company.
 (20)
    
    Includes amounts accrued or allocated under a defined contribution plan of $8,400, a vacation
pay-out of $6,346, amounts accrued for severance payments of $100,000 and imputed income of
$1,131 from group term life coverage provided by the Company in excess of $50,000.
 COMPENSATION AND INCENTIVE PROGRAMS
 INCENTIVE BONUS PLAN
  EMPLOYMENT AGREEMENTS
   72




---



##### 



73




---



##### 



74




---



##### 



ASSOCIATED MATERIALS HOLDINGS INC. 2002 STOCK OPTION PLAN
   AMH HOLDINGS II, INC. 2004 STOCK OPTION PLAN
  75




---



##### 



STOCK OPTION AWARD AGREEMENTS
  COMPENSATION COMMITTEE
  CHIEF EXECUTIVE OFFICER COMPENSATION
  COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
  DIRECTOR COMPENSATION
  OPTION/SAR GRANTS IN 2005
  76




---



##### 



AGGREGATED OPTION/SAR EXERCISES IN 2005
AND DECEMBER 31, 2005 OPTION/SAR VALUES
  Number Of Securities Underlying
    
    Value Of UnexercisedSecurities
    
    
    
    
    
    Unexercised Options/SARs At
    
    In-The-Money Options/SARs AtAcquired On
    
    Value
    
    December 31, 2005 (2)
    
    December 31, 2005 (3)Name
    
    Exercise (#) (1)
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableMichael Caporale, Jr
    
    
    
    
    
    $
    
    
    
    
    80,001
    
    
    
    230,371
    
    
    $
    
    
    
    $
    D. Keith LaVanway
    
    
    
    
    
    $
    
    
    
    
    40,228
    
    
    
    107,237
    
    
    $
    
    
    
    $
    Robert M. Franco
    
    
    
    
    
    $
    
    
    
    
    14,480
    
    
    
    65,499
    
    
    $
    
    
    
    $
    John F. Haumesser
    
    
    
    
    
    $
    
    
    
    
    10,493
    
    
    
    34,250
    
    
    $
    
    
    
    $
    Trevor Deighton
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    Kenneth L. Bloom
    
    
    
    
    
    $
    
    
    
    
    29,867
    
    
    
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    There were no exercises of options by the Companys executive officers during 2005.(2)
    
    Options outstanding as of December 31, 2005 include those options granted from the 2002 Plan
and the 2004 Plan. The number of options shown has been adjusted to reflect that each option
grant from the 2002 Plan is currently exercisable for two shares of common stock of AMH.(3)
    
    There were no in-the-money options at December 31, 2005. 77




---



##### 



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
      
    
    each person known by the Company to own beneficially 5% or more of the outstanding voting
preferred stock or voting common stock of AMH II;
    
    the directors and named executive officers of the Company; and
    
    all directors and named executive officers of the Company as a group.
  78




---



##### 



Class A Preferred Stock
    
    Class B Common StockNumber ofShares 
    
    
    
    
    
    Number ofSeries
    
    % of
    
    Shares  Series
    
    % ofI (voting)
    
    Class
    
    I (voting)
    
    ClassInvestcorp S.A.(1)
    
    
    500,000
    
    
    
    100
    %
    
    
    
    
    
    
    Sipco Limited(2)
    
    
    500,000
    
    
    
    100
    %
    
    
    
    
    
    
    AM Equity Limited(3)
    
    
    95,835
    
    
    
    19.2
    %
    
    
    
    
    
    
    AM Investments Limited(4)
    
    
    95,835
    
    
    
    19.2
    %
    
    
    
    
    
    
    Associated Equity Limited(5)
    
    
    95,835
    
    
    
    19.2
    %
    
    
    
    
    
    
    Associated Investments Limited(6)
    
    
    95,835
    
    
    
    19.2
    %
    
    
    
    
    
    
    Investcorp 2005 AMH Holdings II Portfolio
Limited Partnership(7)
    
    
    46,661
    
    
    
    9.3
    %
    
    
    
    
    
    
    Investcorp Coinvestment Partners II, L.P.(8)
    
    
    36,666
    
    
    
    7.3
    %
    
    
    
    
    
    
    Investcorp Coinvestment Partners I, L.P.(9).
    
    
    33,333
    
    
    
    6.7
    %
    
    
    
    
    
    
    Harvest Funds(10)(11)(12)
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    100
    %
 Class B Common Stock
    
    Class B Common StockNumber ofShares 
    
    
    
    
    
    Number ofSeries
    
    % of
    
    Shares  Series
    
    % ofI (voting)
    
    Class
    
    II (non-voting)
    
    ClassExecutive Officers and DirectorsMichael Caporale, Jr. (13)
    
    
    
    
    
    
    
    
    
    
    164,442
    
    
    
    12.5
    %D. Keith LaVanway (14)
    
    
    
    
    
    
    
    
    
    
    51,437
    
    
    
    4.0
    %Trevor Deighton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert M. Franco (15)
    
    
    
    
    
    
    
    
    
    
    16,074
    
    
    
    1.3
    %John F. Haumesser (16)
    
    
    
    
    
    
    
    
    
    
    12,087
    
    
    
    1.0
    %Kevin M. Hayes (17)
    
    
    
    
    
    
    
    
    
    
    228,719
    
    
    
    18.6
    %Ira D. Kleinman (18)
    
    
    500,000
    
    
    
    100
    %
    
    
    
    
    
    
    Thomas Sullivan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dana R. Snyder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Christopher J. Stadler
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dennis W. Vollmershausen (19)
    
    
    
    
    
    
    
    
    
    
    2,945
    
    
    
    *All directors and executive officers
as a group
    
    
    500,000
    
    
    
    100
    %
    
    
    475,704
    
    
    
    34.1
    %
 
 *
    
    less than 1% (1)
    
    Investcorp S.A. does not directly own any shares of stock of AMH II. With respect to the shares of Series I Class A Preferred Stock held by Investcorp 2005 AMH Holdings II Portfolio
Limited Partnership (46,661 shares), Investcorp Coinvestment Partners II, L.P. (36,666 shares)
and Investcorp Coinvestment Partners I, L.P. (33,333 shares), an indirect subsidiary of
Investcorp S.A. is the general partner of each of those partnerships and, therefore,
Investcorp S.A. may be deemed to share beneficial ownership of those shares. The balance of
the shares of Series I Class A Preferred Stock is owned by AM Equity Limited, AM Investments
Limited, Associated Equity Limited and Associated Investments Limited (collectively, the AMH
Investors). Investcorp S.A. does not own any of the shares of the AMH Investors. Investcorp
may be deemed to share beneficial ownership of the shares of Series I Class A Preferred Stock
held by the AMH Investors because the owners of the voting stock of the AMH Investors have
entered into revocable management services or similar agreements with an affiliate of
Investcorp S.A. pursuant to which each of the entities owning the voting stock of the AMH
Investors, or such entities stockholders, has granted such affiliate the authority to direct
the voting and disposition of the voting shares issued by such entity, which permits
Investcorp S.A. to control the voting and disposition of the Series I Class A Preferred Stock
owned by each AMH Investor for so long as such agreements are in effect. The address for
Investcorp Bank S.A. is 6 rue Adolphe Fischer, Luxembourg.(2)
    
    Sipco Limited may be deemed to control Investcorp S.A. through its ownership of a majority of
a companys stock that indirectly owns a majority of Investcorp S.A.s shares. Sipco Limited
is a Cayman Islands company with its address at P.O. Box 1111, West Wind Building, George
Town, Grand Cayman, Cayman Islands.
 79




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##### 



(3)
    
    AM Equity Limited is a Cayman Islands company with its address at P.O. Box 2197, West Wind
Building, George Town, Grand Cayman, Cayman Islands.(4)
    
    AM Investments Limited is a Cayman Islands company with its address at P.O. Box 2197, West
Wind Building, George Town, Grand Cayman, Cayman Islands.(5)
    
    Associated Equity Limited is a Cayman Islands company with its address at P.O. Box 2197, West
Wind Building, George Town, Grand Cayman, Cayman Islands.(6)
    
    Associated Investments Limited is a Cayman Islands company with its address at P.O. Box 2197,
West Wind Building, George Town, Grand Cayman, Cayman Islands.(7)
    
    Investcorp 2005 AMH Holdings II Portfolio Limited Partnership is a Cayman Islands exempted
limited partnership with its address at P.O. Box 1111, West Wind Building, George Town, Grand
Cayman, Cayman Islands.(8)
    
    Investcorp Coinvestment Partners II, L.P. is a Delaware limited partnership with its address
at 280 Park Avenue, New York, New York 10017.(9)
    
    Investcorp Coinvestment Partners I, L.P. is a Delaware limited partnership with its address
at 280 Park Avenue, New York, New York 10017.(10)
    
    Harvest Funds are Harvest Partners III, L.P., Harvest Partners III Beteilingungsgesellschaft
Burgerlichen Rechts (mit Haftungsbeschrankung) (Harvest Partners III, GbR), Harvest Partners
IV, L.P. and Harvest Partners IV GmbH & Co. KG (Harvest Partners IV KG). Harvest Associates
III, L.L.C., which has five voting members, is the general partner of Harvest Partners III,
L.P. and Harvest Partners III, GbR. Harvest Associates IV, L.L.C., which has five voting
members, is the general partner of Harvest Partners IV, L.P. and Harvest Partners IV KG.
Harvest Partners, Inc. provides management services for Harvest Associates III, L.L.C. in
connection with Harvest Partners III, L.P. and Harvest Partners III, GbR and for Harvest
Associates IV, L.L.C. in connection with Harvest Partners IV, L.P. and Harvest Partners IV KG.(11)
    
    Includes 131,978 shares of Class B Series I (voting) common stock owned by Harvest Partners
III, L.P. and 18,022 shares of Class B Series I (voting) common stock owned by Harvest
Partners III, GbR for each of which Harvest Associates III, L.L.C. is the general partner.
Harvest Associates III, L.L.C. has five voting members, each of whom has equal voting rights
and who may be deemed to share beneficial ownership of the shares of common stock of AMH. The
five members are Ira Kleinman, Harvey Mallement, Stephen Eisenstein, Harvey Wertheim, and
Thomas Arenz. Mr. Kleinman is on the boards of directors of AMI, Holdings, AMH and AMH II.
Each of Messrs. Kleinman, Mallement, Eisenstein, Wertheim and Arenz disclaims beneficial
ownership of the shares of Class A common stock owned by Harvest Partners III, L.P. and
Harvest Partners III GbR.(12)
    
    Includes 286,465 shares of Class B Series I (voting) common stock owned by Harvest Partners
IV, L.P. and 63,535 shares of Class B Series I (voting) common stock owned by Harvest Partners
IV KG, for each of which Harvest Associates IV, L.L.C. is the general partner. Harvest
Associates IV, L.L.C. has five voting members, each of whom has equal voting rights and who
may be deemed to share beneficial ownership of the shares of Class B common stock of AMH
beneficially owned by it. The five members are Ira Kleinman, Harvey Mallement, Stephen
Eisenstein, Harvey Wertheim and Thomas Arenz. Mr. Kleinman is on the boards of directors of
AMI, Holdings, AMH and AMH II. Each of Messrs. Kleinman, Mallement, Eisenstein, Wertheim and
Arenz disclaims beneficial ownership of the shares of Class A common stock owned by Harvest
Partners IV, L.P., Harvest Partners IV KG. Harvest Partners III, L.P., Harvest Partners III
GbR, Harvest Partners IV, L.P. and Harvest Partners IV KG are collectively referred to as the
Harvest Funds. The address of the named entities is 280 Park Avenue, 33rd Floor, New York,
New York 10017.(13)
    
    Includes 71,688 shares of Class B Series II (non-voting) common stock owned by Mr. Caporale
and options to purchase 92,754 shares of Class B Series II (non-voting) common stock.
 80




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##### 



(14)
    
    Includes 6,426 shares of Class B Series II (non-voting) common stock owned by Mr. LaVanway
and options to purchase 45,011 shares of Class B Series II (non-voting) common stock.(15)
    
    Includes options to purchase 16,074 shares of Class B Series II (non-voting) common stock.(16)
    
    Includes options to purchase 12,087 shares of Class B Series II (non-voting) common stock.(17)
    
    Mr. Hayes is a director for AMH II, AMH, Holdings and AMI, representing four of AMH IIs
stockholders, Weston Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC
Entrepreneur Fund, L.P. and WPC Entrepreneur Fund II, L.P., which are collectively referred to
as the Weston Funds. Mr. Hayes election as a director is prescribed by the stockholders
agreement. See Item 13. Certain Relationships and Related Transactions  The Stockholders
Agreement. The shares included in the table above includes shares held by the Weston Funds as
follows: Weston Presidio Capital III, L.P. holds 65,992 shares of Class B Series II
(non-voting) common stock; Weston Presidio Capital IV holds 156,986 shares of Class B Series
II (non-voting) common stock; WPC Entrepreneur Fund, L.P. holds 3,256 shares of Class B Series
II (non-voting) common stock; and WPC Entrepreneur Fund II, L.P. holds 2,485 shares of Class B
Series II (non-voting) common stock. Mr. Hayes is a member or partner, as the case may be, of
the general partner of the Weston Funds. Mr. Hayes disclaims beneficial ownership of the
shares held by the Weston Funds, except to the extent of his pecuniary interest therein.(18)
    
    Includes shares of Class B Series I (voting) common stock owned by Harvest Partners III, L.P.
and shares of Class B Series I (voting) common stock owned by Harvest Partners III GbR, for
each of which Harvest Associates III, L.L.C. is the general partner. Also includes shares of
Class B Series I (voting) common stock owned by Harvest Partners IV, L.P. and Harvest Partners
IV KG, for each of which Harvest Partners IV, L.L.C. is the general partner. Mr. Kleinman is a
voting member of Harvest Associates, III, L.L.C. and Harvest Partners IV, L.L.C. and may be
deemed to share beneficial ownership of the shares of common stock of AMH beneficially owned
by them. Mr. Kleinman disclaims beneficial ownership of common shares owned by Harvest
Partners III, L.P., Harvest Partners III GbR, Harvest Partners IV, L.P. and Harvest Partners
IV KG.(19)
    
    Includes 1,319 shares of Class B Series II (non-voting) common stock owned through a personal
holding company in the name of 3755428 Canada Inc., a Canadian corporation. Mr. Vollmershausen
is the sole shareholder of this corporation. Mr. Vollmershausen also holds options to purchase
1,626 shares of Class B Series II (non-voting) common stock.
 CHANGES IN CONTROL
 STOCKHOLDERS AGREEMENT
  PLEDGE AND SECURITY AGREEMENT
  81




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##### 



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 THE RESTRUCTURING AGREEMENTS
   THE STOCKHOLDERS AGREEMENT
     82




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##### 



MANAGEMENT AGREEMENT
  83




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##### 



MANAGEMENT BONUS
   ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  2005
    
    
    2004Audit Fees
    
    $
    789
    
    
    $
    1,350Audit-Related Fees
    
    
    35
    
    
    
    35Tax Fees
    
    
    301
    
    
    
    361Total Fees
    
    $
    1,125
    
    
    $
    1,746
  AUDIT FEES
  AUDIT-RELATED FEES
  84




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##### 



TAX FEES
  PART IV
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
  (A)(1) FINANCIAL STATEMENTS
  85




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##### 



(A)(2) FINANCIAL STATEMENT SCHEDULES
  (C) EXHIBITS
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger, dated as of March 16, 2002, by and among Associated Materials Holdings
Inc. (formerly known as Harvest/AMI Holdings Inc.), Simon Acquisition Corp. and the Company
(incorporated by reference to Exhibit 99(d)(1) of Schedule TO filed by Associated Materials
Holdings, Inc. and certain affiliates, Commission File No. 005-53705, filed on March 22, 2002).3.1
    
    Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Companys Registration Statement on Form S-4, Commission File No. 333-92010,
filed on July 3, 2002).3.2
    
    Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the
Companys Registration Statement on Form S-4, Commission File No. 333-92010, filed on July 3, 2002).3.3
    
    Certificate of Incorporation of Alside, Inc. (incorporated by reference to Exhibit 3.3 to the
Companys Registration Statement on Form S-4/A, Commission File No. 333-92010, filed on September
12, 2002).3.4
    
    Amended and Restated Bylaws of Alside, Inc. (incorporated by reference to Exhibit 3.4 to the
Companys Registration Statement on Form S-4/A, Commission File No. 333-92010, filed on September
12, 2002).4.1
    
    Indenture governing the Companys 9 3/4% Senior Subordinated Notes Due 2012, dated as of April 23,
2002, by and among the Company, AMI Management Company and Wilmington Trust Company(incorporated by
reference to Exhibit 4.2 to the Companys Registration Statement on Form S-4, Commission File No.
333-92010, filed on July 3, 2002).4.2
    
    Supplemental Indenture governing the Companys 9 3/4% Senior Subordinated Notes Due 2012, dated as
of May 10, 2002 by and among the Company, AMI Management Company, Al side, Inc. and Wilmington Trust
Company (incorporated by reference to Exhibit 4.3 to the Companys Registration Statement on Form
S-4, Commission File No. 333-92010, filed on July 3, 2002).4.3
    
    Second Supplemental Indenture, dated as of August 29, 2003, among the Company, Alside, Inc., Gentek
Holdings, Inc., Gentek Building Products, Inc. and Wilmington Trust Company (incorporated by
reference to Exhibit 4.3 to the Companys Annual Report on Form 10-K for fiscal year ended January
3, 2004.)4.4
    
    Form of the Companys 9 3/4% Senior Subordinated Note Due 2012 (incorporated by reference to Exhibit
4.4 to the Companys Registration Statement on Form S-4, Commission File No. 333-92010, filed on
July 3, 2002).10.1
    
    Second Amended and Restated Credit Agreement (the Credit Agreement), dated December 22, 2004,
among Associated Materials Incorporated and Gentek Building Products Limited, as borrowers, AMH
Holdings, Inc. and Associated Materials Holdings, Inc., as guarantors, the lenders party thereto,
UBS AG, Stamford Branch, as the U.S. Administrative Agent, Canadian Imperial Bank of Commerce, as
the Canadian Administrative Agent, Citigroup Global Markets Inc., as syndication agent, General
Electric Capital Corporation and National City Bank, as Co-Documentation Agents, and UBS Securities,
LLC and Citigroup Global Markets Inc., as joint lead arrangers (incorporated by reference to Exhibit
10.3 to the Current Report on Form 8-K/A, filed with the Securities and Exchange Commission on
December 23, 2004).
 86




---



##### 



ExhibitNumber
    
    Description10.2
    
    Borrower Security and Pledge Agreement of the Company, dated as of April 19, 2002, by the Company,
in favor of UBS AG, Stamford Branch, as administrative agent (incorporated by reference to Exhibit
10.2 to the Companys Registration Statement on Form S-4, Commission File No. 333-92010, filed on
July 3, 2002).10.3
    
    Form of Subsidiary Security and Pledge Agreement, by each subsidiary of the Company from time to
time party thereto in favor of UBS AG, Stamford Branch, as administrative agent, on behalf of the
Secured Parties (as defined in the Credit Agreement) (incorporated by reference to Exhibit 10.3 to
the Companys Registration Statement on Form S-4, Commission File No. 333-92010, filed on July 3,
2002).10.4
    
    Form of Subsidiary Guaranty, by each subsidiary of the Company from time to time party thereto in
favor of UBS AG, Stamford Branch, as administrative agent, on behalf of the Secured Parties (as
defined in the Credit Agreement) (incorporated by reference to Exhibit 10.4 to the Companys
Registration Statement on Form S-4, Commission File No. 333-92010, filed on July 3, 2002).10.5
    
    Assumption Agreement, dated as of April 19, 2002, by and among the Company and AMI Management
Company, as guarantors (incorporated by reference to Exhibit 10.5 to the Companys Registration
Statement on Form S-4, Commission File No. 333-92010, filed on July 3, 2002).10.6
    
    Agreement of Sale, dated as of January 30, 1984, between USX Corporation (formerly United States
Steel Corporation) (USX) and the Company (incorporated by reference to Exhibit 10.1 to the
Companys Registration Statement on Form S-1, Commission File No. 33-64788).10.7
    
    Amendment Agreement, dated as of February 29, 1984, between USX and the Company (incorporated by
reference to Exhibit 10.2 to the Companys Registration Statement on Form S-1, File No. 33-64788).10.8
    
    Form of Indemnification Agreement between the Company and each of the directors and executive
officers of the Company (incorporated by reference to Exhibit 10.14 to the Companys Registration
Statement on Form S-1, File No. 33-84110).10.9
    
    Amended and Restated Management Agreement, dated December 22, 2004, by and between Harvest Partners,
Inc. and Associated Materials Incorporated (incorporated by reference to Exhibit 10.7 to the Current
Report on Form 8-K/A, filed with the Securities and Exchange Commission on December 23, 2004).10.10
    
    Asset Purchase Agreement, dated as of June 24, 2002, between the Company and Amer Cable Incorporated
(incorporated by reference to Exhibit 10.12 to the Companys Registration Statement on Form S-4,
Commission File No. 333-92010, filed on July 3, 2002).10.11
    
    Associated Materials Holdings Inc. 2002 Stock Option Plan (incorporated by reference to Exhibit
10.13 to the Companys Registration Statement on Form S-4, Commission File No. 333-92010, filed on
July 3, 2002).10.12
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between the Company and
Michael Caporale, Jr. (incorporated by reference to Exhibit 10.12 to the
Companys Annual Report on  Form 10-K, filed with the Securities and Exchange Commission on April 1, 2005).10.13
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between the Company and D.
Keith LaVanway(incorporated by reference to Exhibit 10.13 to the
Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 1, 2005).10.14
    
    Associated Materials Holding Inc. Stock Option Award Agreement, dated September 4, 2002, between
Associated Materials Holdings Inc. and Michael Caporale, Jr. (incorporated by reference to Exhibit
10.17 to the Companys Registration Statement on Form S-4/A, Commission File No. 333-92010, filed on
October 10, 2002).10.15
    
    Associated Materials Holding Inc. Stock Option Award Agreement, dated September 4, 2002, between
Associated Materials Holdings Inc. and Michael Caporale, Jr. (incorporated by reference to Exhibit
10.18 to the Companys Registration Statement on Form S-4/A, Commission File No. 333-92010, filed on
September 12, 2002).10.16
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between the Company and
Kenneth L. Bloom (incorporated by reference to Exhibit 10.16 to the
Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 1, 2005).
 87




---



##### 



ExhibitNumber
    
    Description10.17
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between the Company and Robert
M. Franco (incorporated by reference to Exhibit 10.17 to the
Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 1, 2005).10.18
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between the Company and John
F. Haumesser (incorporated by reference to Exhibit 10.18 to the
Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 1, 2005).10.19
    
    Stock Purchase Agreement (the Stock Purchase Agreement), dated July 31, 2003, by and among the
Company, Gentek Holdings, Inc., Gentek Building Products, Inc., Gentek Building Products Limited,
The Sherwin-Williams Claims Trust, Genstar Capital Corporation, Ontario Teachers Pension Plan Board
and other stockholders listed therein (incorporated by reference to Exhibit 2.1 to the Companys
current report on Form 8-K filed on July 31, 2003).10.20
    
    Amendment No. 1 to the Stock Purchase Agreement, dated as of August 29, 2003, by and among the
Company, Gentek Holdings, Inc., Gentek Building Products, Inc., Gentek Building Products Limited,
The Sherwin-Williams Claims Trust, Genstar Capital Corporation, Ontario Teachers Pension Plan Board
and other stockholders listed therein (incorporated by reference to Exhibit 2.2 to the Companys
current report on Form 8-K filed on September 12, 2003).10.21
    
    Amendment Agreement, dated December 22, 2004, by and between Associated Materials Incorporated,
Gentek Building Products Limited, as borrowers, AMH Holdings, Inc. and Associated Materials
Holdings, Inc., the lenders party thereto, UBS AG, Stamford Branch, as the U.S. Administrative
Agent, Canadian Imperial Bank of Commerce, as the Canadian Administrative Agent, Citigroup Global
Markets Inc., as syndication agent, and UBS Securities, LLC and Citigroup Global Markets Inc., as
joint lead arrangers (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K/A,
filed with the Securities and Exchange Commission on December 23, 2004).10.22
    
    Management Advisory Agreement, dated December 22, 2004, by and between Investcorp International,
Inc. and Associated Materials Incorporated (incorporated by reference to Exhibit 10.8 to the Current
Report on Form 8-K/A, filed with the Securities and Exchange Commission on December 23, 2004).10.23
    
    Financing Advisory Agreement, dated December 5, 2004, by and between Investcorp International, Inc.
and Associated Materials Incorporated (incorporated by reference to Exhibit 10.9 to the Current
Report on Form 8-K/A, filed with the Securities and Exchange Commission on December 23, 2004).10.24
    
    M&A Advisory Services Agreement, dated December 5, 2004, by and between Investcorp International,
Inc. and Associated Materials Incorporated (incorporated by reference to Exhibit 10.10 to the
Current Report on Form 8-K/A, filed with the Securities and Exchange Commission on December 23,
2004)10.25
    
    AMH Holdings II, Inc. 2004 Stock Option Plan (incorporated by reference to Exhibit 10.11 to the
Current Report on Form 8-K/A, filed with the Securities and Exchange Commission on December 23,
2004)10.26
    
    Superholdco Pledge and Security Agreement, dated December 22, 2004, by and between AMH, as Pledgor
in favor of UBS AG, Stamford Branch, as the Administrative Agent (incorporated by reference to
Exhibit 10.5 of the Companys Current Report on Form 8-K/A, filed with the Securities and Exchange
Commission on December 23, 2004).10.27
    
    Form of Superholdco Guaranty, dated December 22, 2004, by and between AMH, as Guarantor, in favor of
UBS AG, Stamford Branch, as the Administrative Agent (incorporated by reference to Exhibit 10.6 of
the Companys Current Report on Form 8-K/A, filed with the Securities and Exchange Commission on
December 23, 2004).10.28
    
    Stock Purchase Agreement, dated December 5, 2004, by and between AMH and the other parties signatory
hereto (incorporated by reference to Exhibit 2.1 to the Companys Current Report on Form 8-K, filed
with the Securities and Exchange Commission on December 7, 2004).10.29
    
    Stockholders Agreement, dated December 22, 2004, by and between the stockholders of AMH
(incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K/A, filed with
the Securities and Exchange Commission on December 23, 2004).10.30
    
    Tax Sharing Agreement, dated March 4, 2004, by and among AMH, Holdings and AMI (incorporated by reference to Exhibit 10.30 to the
Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 1, 2005).
 88




---



##### 



ExhibitNumber
    
    Description10.31
    
    Employment Agreement, dated as of December 14, 2005, between the Company and Trevor Deighton
(incorporated by reference to exhibit 10.1 to the Current Report on Form 8-K/A filed with the
Securities and Exchange Commission on December 16, 2005).10.32
    
    Separation Agreement and General Release Between the Company and Kenneth L. Bloom, dated as of
January 2, 2006.10.33
    
    Repurchase Agreement Between Kenneth L. Bloom and AMH Holdings II, Inc., dated as of January 2, 2006.10.34
    
    Amendment No. 1, dated as of February 1, 2006, to the Second Amended and Restated Credit Agreement,
dated as of December 22, 2004, by and among the Company and Gentek Building Products Limited, as
borrowers, AMH Holdings, Inc. and Associated Materials Holdings, Inc., the lenders party thereto,
UBS AG, Stamford Branch, as the U.S. Administrative Agent, Canadian Imperial Bank of Commerce, as
the Canadian Administrative Agent, Citigroup Global Markets Inc., as syndication agent, and UBS
Securities, LLC and Citigroup Global Markets Inc., as joint lead arrangers (incorporated by
reference to exhibit 10.1 to the Current Report on Form 8-K, filed with the Securities and Exchange
Commission on February 6, 2006).21.1
    
    Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the
Companys Annual Report on Form 10-K, filed with the Securities
and Exchange Commission on April 1, 2005).24.1
    
    Power of Attorney31.1
    
    Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the
Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Principal Financial Officer pursuant to Rule 13a-14 or 15d-14(a) of the
Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to section 906 of the Sarbanes-Oxley Act of 2002.
 89




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##### 



SIGNATURES
  ASSOCIATED MATERIALS INCORPORATEDBy:
    
    /s/ MICHAEL CAPORALE, JR.Michael Caporale, Jr.Chairman, President and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ D. KEITH LAVANWAYD. Keith LaVanwayVice President-Chief Financial Officer,Treasurer and Secretary(Principal Financial Officer andPrincipal Accounting Officer)Date: March 24, 2006
  Signature
    
    Title
    
    Date/s/ MICHAEL CAPORALE, JR.
    
    Chairman, President and Chief Executive
    
    March 24, 2006Michael Caporale, Jr.
    
    Officer(Principal Executive Officer)/s/ D. KEITH LAVANWAY
    
    Vice President-Chief Financial Officer,
    
    March 24, 2006D. Keith LaVanway
    
    Treasurer
and Secretary(Principal Financial Officer andPrincipal Accounting Officer)Kevin M. Hayes *
    
    DirectorIra D. Kleinman *
    
    DirectorThomas Sullivan *
    
    DirectorDana R. Snyder *
    
    DirectorChristopher J. Stadler *
    
    DirectorDennis W. Vollmershausen *
    
    Director
 * By:
    
    /s/ D. KEITH LAVANWAY
    
    
    
    March 24, 2006D. Keith LaVanwayAttorney-in-Fact
   90




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##### 



EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger, dated as of March 16, 2002, by and among
Associated Materials Holdings Inc. (formerly known as Harvest/AMI Holdings
Inc.), Simon Acquisition Corp. and the Company (incorporated by reference to
Exhibit 99(d)(1) of Schedule TO filed by Associated Materials Holdings, Inc.
and certain affiliates, Commission File No. 005-53705, filed on March 22,
2002).3.1
    
    Amended and Restated Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.1 to the Companys Registration Statement on Form
S-4, Commission File No. 333-92010, filed on July 3, 2002).3.2
    
    Amended and Restated By-Laws of the Company (incorporated by reference to
Exhibit 3.2 to the Companys Registration Statement on Form S-4, Commission
File No. 333-92010, filed on July 3, 2002).3.3
    
    Certificate of Incorporation of Alside, Inc. (incorporated by reference to
Exhibit 3.3 to the Companys Registration Statement on Form S-4/A, Commission
File No. 333-92010, filed on September 12, 2002).3.4
    
    Amended and Restated Bylaws of Alside, Inc. (incorporated by reference to
Exhibit 3.4 to the Companys Registration Statement on Form S-4/A, Commission
File No. 333-92010, filed on September 12, 2002).4.1
    
    Indenture governing the Companys 9 3/4% Senior Subordinated Notes Due 2012,
dated as of April 23, 2002, by and among the Company, AMI Management Company
and Wilmington Trust Company(incorporated by reference to Exhibit 4.2 to the
Companys Registration Statement on Form S-4, Commission File No. 333-92010,
filed on July 3, 2002).4.2
    
    Supplemental Indenture governing the Companys 9 3/4% Senior Subordinated Notes
Due 2012, dated as of May 10, 2002 by and among the Company, AMI Management
Company, Al side, Inc. and Wilmington Trust Company (incorporated by reference
to Exhibit 4.3 to the Companys Registration Statement on Form S-4, Commission
File No. 333-92010, filed on July 3, 2002).4.3
    
    Second Supplemental Indenture, dated as of August 29, 2003, among the Company,
Alside, Inc., Gentek Holdings, Inc., Gentek Building Products, Inc. and
Wilmington Trust Company (incorporated by reference to Exhibit 4.3 to the
Companys Annual Report on Form 10-K for fiscal year ended January 3, 2004.)4.4
    
    Form of the Companys 9 3/4% Senior Subordinated Note Due 2012 (incorporated by
reference to Exhibit 4.4 to the Companys Registration Statement on Form S-4,
Commission File No. 333-92010, filed on July 3, 2002).10.1
    
    Second Amended and Restated Credit Agreement (the Credit Agreement), dated
December 22, 2004, among Associated Materials Incorporated and Gentek Building
Products Limited, as borrowers, AMH Holdings, Inc. and Associated Materials
Holdings, Inc., as guarantors, the lenders party thereto, UBS AG, Stamford
Branch, as the U.S. Administrative Agent, Canadian Imperial Bank of Commerce,
as the Canadian Administrative Agent, Citigroup Global Markets Inc., as
syndication agent, General Electric Capital Corporation and National City Bank,
as Co-Documentation Agents, and UBS Securities, LLC and Citigroup Global
Markets Inc., as joint lead arrangers (incorporated by reference to Exhibit
10.3 to the Current Report on Form 8-K/A, filed with the Securities and
Exchange Commission on December 23, 2004).10.2
    
    Borrower Security and Pledge Agreement of the Company, dated as of April 19,
2002, by the Company, in favor of UBS AG, Stamford Branch, as administrative
agent (incorporated by reference to Exhibit 10.2 to the Companys Registration
Statement on Form S-4, Commission File No. 333-92010, filed on July 3, 2002).10.3
    
    Form of Subsidiary Security and Pledge Agreement, by each subsidiary of the
Company from time to time party thereto in favor of UBS AG, Stamford Branch, as
administrative agent, on behalf of the Secured Parties (as defined in the
Credit Agreement) (incorporated by reference to Exhibit 10.3 to the Companys
Registration Statement on Form S-4, Commission File No. 333-92010, filed on
July 3, 2002).10.4
    
    Form of Subsidiary Guaranty, by each subsidiary of the Company from time to
time party thereto in favor of UBS AG, Stamford Branch, as administrative
agent, on behalf of the Secured Parties (as defined in the Credit Agreement)
(incorporated by reference to Exhibit 10.4 to the Companys Registration
Statement on Form S-4, Commission File No. 333-92010, filed on July 3, 2002).
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ExhibitNumber
    
    Description10.5
    
    Assumption Agreement, dated as of April 19, 2002, by and among the Company and
AMI Management Company, as guarantors (incorporated by reference to Exhibit
10.5 to the Companys Registration Statement on Form S-4, Commission File No.
333-92010, filed on July 3, 2002).10.6
    
    Agreement of Sale, dated as of January 30, 1984, between USX Corporation
(formerly United States Steel Corporation) (USX) and the Company
(incorporated by reference to Exhibit 10.1 to the Companys Registration
Statement on Form S-1, Commission File No. 33-64788).10.7
    
    Amendment Agreement, dated as of February 29, 1984, between USX and the Company
(incorporated by reference to Exhibit 10.2 to the Companys Registration
Statement on Form S-1, File No. 33-64788).10.8
    
    Form of Indemnification Agreement between the Company and each of the directors
and executive officers of the Company (incorporated by reference to Exhibit
10.14 to the Companys Registration Statement on Form S-1, File No. 33-84110).10.9
    
    Amended and Restated Management Agreement, dated December 22, 2004, by and
between Harvest Partners, Inc. and Associated Materials Incorporated
(incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K/A,
filed with the Securities and Exchange Commission on December 23, 2004).10.10
    
    Asset Purchase Agreement, dated as of June 24, 2002, between the Company and
Amer Cable Incorporated (incorporated by reference to Exhibit 10.12 to the
Companys Registration Statement on Form S-4, Commission File No. 333-92010,
filed on July 3, 2002).10.11
    
    Associated Materials Holdings Inc. 2002 Stock Option Plan (incorporated by
reference to Exhibit 10.13 to the Companys Registration Statement on Form S-4,
Commission File No. 333-92010, filed on July 3, 2002).10.12
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between
the Company and Michael Caporale, Jr. (incorporated by reference to
Exhibit 10.12 to the Companys Annual Report on  Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).10.13
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between
the Company and D. Keith LaVanway (incorporated by reference to
Exhibit 10.13 to the Companys Annual Report on  Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).10.14
    
    Associated Materials Holding Inc. Stock Option Award Agreement, dated September
4, 2002, between Associated Materials Holdings Inc. and Michael Caporale, Jr.
(incorporated by reference to Exhibit 10.17 to the Companys Registration
Statement on Form S-4/A, Commission File No. 333-92010, filed on October 10,
2002).10.15
    
    Associated Materials Holding Inc. Stock Option Award Agreement, dated September
4, 2002, between Associated Materials Holdings Inc. and Michael Caporale, Jr.
(incorporated by reference to Exhibit 10.18 to the Companys Registration
Statement on Form S-4/A, Commission File No. 333-92010, filed on September 12,
2002).10.16
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between
the Company and Kenneth L. Bloom (incorporated by reference to
Exhibit 10.16 to the Companys Annual Report on  Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).10.17
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between
the Company and Robert M. Franco (incorporated by reference to
Exhibit 10.17 to the Companys Annual Report on  Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).10.18
    
    Amended and Restated Employment Agreement, dated as of July 31, 2004, between
the Company and John F. Haumesser (incorporated by reference to
Exhibit 10.18 to the Companys Annual Report on  Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).10.19
    
    Stock Purchase Agreement (the Stock Purchase Agreement), dated July 31, 2003,
by and among the Company, Gentek Holdings, Inc., Gentek Building Products,
Inc., Gentek Building Products Limited, The Sherwin-Williams Claims Trust,
Genstar Capital Corporation, Ontario Teachers Pension Plan Board and other
stockholders listed therein (incorporated by reference to Exhibit 2.1 to the
Companys current report on Form 8-K filed on July 31, 2003).10.20
    
    Amendment No. 1 to the Stock Purchase Agreement, dated as of August 29, 2003,
by and among the Company, Gentek Holdings, Inc., Gentek Building Products,
Inc., Gentek Building Products Limited, The
 92




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ExhibitNumber
    
    DescriptionSherwin-Williams Claims Trust,
Genstar Capital Corporation, Ontario Teachers Pension Plan Board and other
stockholders listed therein (incorporated by reference to Exhibit 2.2 to the
Companys current report on Form 8-K filed on September 12, 2003).10.21
    
    Amendment Agreement, dated December 22, 2004, by and between Associated
Materials Incorporated, Gentek Building Products Limited, as borrowers, AMH
Holdings, Inc. and Associated Materials Holdings, Inc., the lenders party
thereto, UBS AG, Stamford Branch, as the U.S. Administrative Agent, Canadian
Imperial Bank of Commerce, as the Canadian Administrative Agent, Citigroup
Global Markets Inc., as syndication agent, and UBS Securities, LLC and
Citigroup Global Markets Inc., as joint lead arrangers (incorporated by
reference to Exhibit 10.4 to the Current Report on Form 8-K/A, filed with the
Securities and Exchange Commission on December 23, 2004).10.22
    
    Management Advisory Agreement, dated December 22, 2004, by and between
Investcorp International, Inc. and Associated Materials Incorporated
(incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K/A,
filed with the Securities and Exchange Commission on December 23, 2004).10.23
    
    Financing Advisory Agreement, dated December 5, 2004, by and between Investcorp
International, Inc. and Associated Materials Incorporated (incorporated by
reference to Exhibit 10.9 to the Current Report on Form 8-K/A, filed with the
Securities and Exchange Commission on December 23, 2004).10.24
    
    M&A Advisory Services Agreement, dated December 5, 2004, by and between
Investcorp International, Inc. and Associated Materials Incorporated
(incorporated by reference to Exhibit 10.10 to the Current Report on Form
8-K/A, filed with the Securities and Exchange Commission on December 23, 2004)10.25
    
    AMH Holdings II, Inc. 2004 Stock Option Plan (incorporated by reference to
Exhibit 10.11 to the Current Report on Form 8-K/A, filed with the Securities
and Exchange Commission on December 23, 2004)10.26
    
    Superholdco Pledge and Security Agreement, dated December 22, 2004, by and
between AMH, as Pledgor in favor of UBS AG, Stamford Branch, as the
Administrative Agent (incorporated by reference to Exhibit 10.5 of the
Companys Current Report on Form 8-K/A, filed with the Securities and Exchange
Commission on December 23, 2004).10.27
    
    Form of Superholdco Guaranty, dated December 22, 2004, by and between AMH, as
Guarantor, in favor of UBS AG, Stamford Branch, as the Administrative Agent
(incorporated by reference to Exhibit 10.6 of the Companys Current Report on
Form 8-K/A, filed with the Securities and Exchange Commission on December 23,
2004).10.28
    
    Stock Purchase Agreement, dated December 5, 2004, by and between AMH and the
other parties signatory hereto (incorporated by reference to Exhibit 2.1 to the
Companys Current Report on Form 8-K, filed with the Securities and Exchange
Commission on December 7, 2004).10.29
    
    Stockholders Agreement, dated December 22, 2004, by and between the
stockholders of AMH (incorporated by reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K/A, filed with the Securities and Exchange Commission
on December 23, 2004).10.30
    
    Tax Sharing Agreement, dated March 4, 2004, by and among AMH, Holdings and AMI
(incorporated by reference to
Exhibit 10.30 to the Companys Annual Report on  Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).10.31
    
    Employment Agreement, dated as of December 14, 2005, between the Company and
Trevor Deighton (incorporated by reference to exhibit 10.1 to the Current
Report on Form 8-K/A filed with the Securities and Exchange Commission on
December 16, 2005).10.32
    
    Separation Agreement and General Release Between the Company and Kenneth L.
Bloom, dated as of January 2, 2006.10.33
    
    Repurchase Agreement Between Kenneth L. Bloom and AMH Holdings II, Inc., dated
as of January 2, 2006.10.34
    
    Amendment No. 1, dated as of February 1, 2006, to the Second Amended and
Restated Credit Agreement, dated as of December 22, 2004, by and among the
Company and Gentek Building Products Limited, as borrowers, AMH Holdings, Inc.
and Associated Materials Holdings, Inc., the lenders party thereto, UBS AG,
Stamford Branch, as the U.S. Administrative Agent, Canadian Imperial Bank of
Commerce, as the Canadian Administrative Agent, Citigroup Global Markets Inc.,
as syndication agent, and UBS Securities, LLC and Citigroup Global Markets
Inc., as joint lead arrangers (incorporated by reference to exhibit 10.1 to the
Current Report on Form 8-K, filed with the Securities and Exchange Commission
on February 6, 2006).
 93




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ExhibitNumber
    
    Description21.1
    
    Subsidiaries of the Company (incorporated by reference to
Exhibit 21.1 to the Companys Annual Report on  Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).24.1
    
    Power of Attorney31.1
    
    Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or
15d-14(a) of the Exchange Act, as adopted, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Principal Financial Officer pursuant to Rule 13a-14 or
15d-14(a) of the Exchange Act, as adopted, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
 94