##### Table of Contents



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 January 1, 2011.
 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, LLC
  
 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
 Yes o No þ
 Yes o No þ
 o þ
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. (REMOVED AND RESERVED)PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESEXHIBIT INDEXExhibit 3.2Exhibit 4.1Exhibit 4.3Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 10.4Exhibit 10.5Exhibit 10.6Exhibit 10.7Exhibit 10.8Exhibit 10.9Exhibit 10.10Exhibit 10.11Exhibit 10.12Exhibit 10.13Exhibit 10.14Exhibit 10.15Exhibit 10.16Exhibit 10.17Exhibit 10.18Exhibit 10.19Exhibit 10.20Exhibit 10.21Exhibit 10.22Exhibit 12.1Exhibit 21.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents  
 PART I
 
 ITEM 1.
    
    BUSINESS
 OVERVIEW
   ® ® ®
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FINANCIAL INFORMATION ABOUT SEGMENTS
  DESCRIPTION OF BUSINESS
 Our Competitive Strengths
  Dual-Distribution Network
  
    
    Company-Operated Supply Centers.We believe that our U.S. and Canadian supply center
network offers a superior distribution channel compared to our competitors who rely
principally on local third-party distributors and dealers who carry an assortment of brands
and may not focus on any particular brand. We believe that distributing our products through
our network of 119 company-operated supply centers enables us to: (1) build direct
long-standing customer relationships; (2) maintain control of the customer value proposition
(i.e., product availability and quality, one-stop shopping, sales support and service)
through integrated logistics between our manufacturing and distribution facilities; (3)
monitor developments in local customer preferences; (4) bring new products to market
quickly, shortening customary product development cycles; and (5) target our marketing
efforts.
 
    
    Direct Sales Channel.We believe that our strength in selling to independent
distributors and dealers provides us with exceptional operational flexibility because it
allows us to penetrate key markets and expand our geographic reach without deploying the
necessary capital to establish a company-operated supply center. This reach also allows us
to service larger customers with a broader geographic scope, which we believe results in
additional sales. In addition, we utilize our vertical integration in this channel by
selling and shipping directly to our contractor customers in many cases, as evidenced by our
approximately 1,000 ship-to locations, which we believe enhances our value proposition to
both the distributors and dealers as well as the contractor customer.
 Comprehensive Product Offering
  Strong Brands
 ® ® ® ®
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##### Table of Contents



Deep Customer Relationships
  Low-Cost, Vertically Integrated Operations
  Diversified Operations
  Our Industry
  Opportunity for Growth
 Impact of Macroeconomic Drivers/Overall Contraction of the U.S. Economy
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Impact on Volumes
  Long-Term Drivers of Growth
  
    
    Aging of the Housing Stock.The median estimated home age increased from 23 years in
1985 to 35 years in 2009, and more than 62% of the current housing stock was built prior to
1980, according to the American Housing Survey by the U.S. Census and the U.S. Department of
Housing and Urban Development. We believe the aging housing stock trend will continue to
drive demand for residential repair and remodeling projects.
 
    
    Long-Term Demand for New Construction.We believe that household formation is an
important driver of both new housing starts and repair and remodel spending. We expect that
a combination of population growth and teardowns of existing homes will necessitate
continued construction of new homes at rates in excess of the low levels we are currently
experiencing. On a historical basis, seasonally-adjusted total housing starts have averaged
1.53 million since 1970 according to the U.S. Census Bureau. The foregoing household
formation projections suggest that total housing starts will return to levels closer to
long-term historical averages than recent levels.
 
    
    Energy Efficiency.There is favorable demand for energy efficient building products
given measurable payback periods and strong environmentally focused trends. For example, a
National Association of Home Builders Consumer Preferences Survey found that home buyers
were willing to make an average upfront investment of nearly $9,000 to save $1,000 annually
in utility costs, which implies a nine-year payback period. We expect that this increased
demand for energy efficientor greenbuilding products will benefit companies like ours
with products that meet energy efficiency standards. Additionally, many of our window
product lines have earned the ENERGY STAR® rating and meet or exceed the
requirements for the energy efficiency home improvement tax credit established by the
federal government.
 
    
    Advantages of Vinyl Products.We believe vinyl siding and vinyl windows possess
preferred product attributes compared to other types of exterior windows and siding
products. Vinyl has greater durability, requires less maintenance, and provides greater
energy efficiency than many competing window and siding products. In addition, we believe
vinyl products have a material price advantage over other product types. Vinyl has become an
increasingly popular material in both the windows and siding markets. Vinyl windows grew
from 59% of the total U.S. window market in 2006 to 64% in 2009, and vinyl siding grew from
40% of the total U.S. siding market in 2006 to 42% in 2009, according to Ducker Worldwide.
We believe the advantages of vinyl will continue to drive further penetration.
 Growth Forecast
  
    
    Repair and Remodeling Expenditure.According to Ducker Worldwide, U.S. total improvement
expenditures reached lows of $115.8 billion in 2009, but are projected to grow to $151.0
billion in 2013, a 6.9% compound annual growth rate. According to the Joint Center for
Housing Studies of Harvard University (JCHS), remodeling spending is expected to increase
on an annual basis by the end of the year; year-over-year growth in the Leading Indicator of
Remodeling Activity (LIRA) is projected to be 9.1% in the first quarter of 2011 and 12.7% in
the second quarter of 2011.
 
    
    Existing Home Sales. According to the National Association of Realtors, annualized, seasonally-adjusted existing home sales reached lows of
4.9 million in 2010, but are projected to grow to 5.6 million in 2012, a 6% compound
annual growth rate.
 
    
    Single Family Housing Starts.National Association of Realtors housing start forecasts
suggest single-family housing starts will grow from 472,000 in 2010 to
750,000 in 2012, a 26% compound annual growth rate. A JCHS study projects that 11.8
million to 13.8 million households will be formed from 2010 through 2020.
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Products
  ® ® ® ® ® tm ®
 ® ® ® ® tm ® ®
  ® ®
  6




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® ® ®
 Product Line
    
    Window
    
    Vinyl Siding
    
    Steel Siding
    
    Aluminum SidingPremium
    
    Preservation
Regency
Sequoia Select
Sheffield
Sovereign
UltraMaxx
Westbridge
    
    Bennington 
Board and Batten 
Berkshire Beaded 
Centennial Beaded 
CenterLock 
Charter Oak 
Cyprus Creek 
Northern Forest 
Preservation 
Prodigy 
Sequoia Select 
Sovereign Select 
Williamsport
    
    Cedarwood
Driftwood
Gallery Series
SuperGuard
SteelTek
SteelSide
Universal
    
    Cedarwood 
Vin.Al.Wood DeluxeStandard
    
    Alpine 80 Series
Berkshire
Excalibur
Fairfield 80 Series
Sierra
Signature
    
    Advantage III
Advantage Plus
Amherst
Berkshire Classic
Concord
Coventry
Fair Oaks
Odyssey Plus
Signature Supreme
Somerville IIIEconomy
    
    Alpine 70 Series
Amherst
Blue Print Series
Builder Series
Centurion
Concord
Fairfield 70 Series
Geneva
Performance Series
    
    Aurora
Conquest
Driftwood
    
    
    
    Woodgrain Series
 ®
  Marketing and Distribution
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Manufacturing
     8




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Raw Materials
  COMPETITION
   SEASONALITY
  BACKLOG
  TRADEMARKS AND OTHER INTANGIBLE ASSETS
  GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
    9




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EMPLOYEES
   FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
  AVAILABLE INFORMATION
 www.associatedmaterials.com
 
 ITEM 1A.
    
    RISK FACTORS
  Conditions in the housing market and economic conditions generally have affected and may continue
to affect our operating performance.
  Our substantial level of indebtedness could adversely affect our financial condition.
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
    
    We must use a substantial portion of our cash flow from operations to pay interest
and principal on our senior secured asset-based revolving credit facilities (the ABL
facilities) and 9.125% Senior Secured Notes due 2017 (the 9.125%
notes) and other indebtedness, which reduces funds available to us for other purposes,
such as working capital, capital expenditures, other general corporate purposes and
potential acquisitions;
 
    
    our ability to refinance such indebtedness or to obtain additional financing for
working capital, capital expenditures, acquisitions or general corporate purposes may be
impaired;
 
    
    we are exposed to fluctuations in interest rates because the ABL facilities have a
variable rate of interest;
 
    
    our leverage may be greater than that of some of our competitors, which may put us at
a competitive disadvantage and reduce our flexibility in responding to current and
changing industry and financial market conditions;
 
    
    we may be more vulnerable to the current economic downturn and adverse developments
in our business; and
 
    
    we may be unable to comply with financial and other restrictive covenants in the ABL
facilities, the 9.125% notes and other indebtedness, as applicable, some of which
requires the obligor to maintain specified financial ratios and limits our ability to
incur additional debt and sell assets, which could result in an event of default that,
if not cured or waived, would have an adverse effect on our business and prospects and
could result in bankruptcy.
   We may be able to incur more indebtedness, in which case the risks associated with our substantial
leverage, including our ability to service our indebtedness, would increase.
  The indenture for the 9.125% notes and the ABL facilities impose significant operating and
financial restrictions on us.
  
    
    pay dividends or distributions, repurchase equity, prepay junior debt and make
certain investments;
 
    
    incur additional debt or issue certain disqualified stock and preferred stock;
 
    
    sell or otherwise dispose of assets, including capital stock of subsidiaries;
 
    
    incur liens on assets;
 
    
    merge or consolidate with another company or sell all or substantially all assets;
 
    
    enter into transactions with affiliates; and
 
    
    allow to exist certain restrictions on the ability of subsidiaries to pay dividends
or make other payments to us.
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Continued disruption in the financial markets could negatively affect us.
  We have substantial fixed costs and, as a result, operating income is sensitive to changes in net
sales.
  Changes in raw material costs and the availability of raw materials and finished goods could
adversely affect our profit margins.
   The unavailability, further reduction or elimination of government and economic incentives could
adversely affect demand for our products.
   12




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Risks associated with our ability to continuously improve organizational productivity and supply
chain efficiency and flexibility could adversely affect our business, either in an environment of
potentially declining market demand or one that is volatile or resurging.
  Our business is seasonal and can be affected by inclement weather conditions, which could affect
the timing of the demand for our products and cause reduced profit margins when such conditions
exist.
  Our
industry is highly competitive, and competitive pressures could have
an adverse effect on us.
  Consolidation of our customers could adversely affect our business, financial condition and results
of operations.
  Our failure to attract and retain qualified personnel could adversely affect our business.
  We have significant goodwill and other intangible assets, which if impaired, could require us to
incur significant charges.
   13




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The future recognition of our deferred tax assets is uncertain, and assumptions used to determine
the amount of our deferred tax asset valuation allowance are subject to revision based on changes
in tax laws and variances between future expected operating performance and actual results.
    We are subject to foreign exchange risk as a result of exposures to changes in currency exchange
rates between the United States and Canada.
  We are controlled by investment funds affiliated with Hellman & Friedman LLC, whose
interests may be different than the interests of other holders of our securities.
  We could face potential product liability claims relating to products we manufacture or distribute.
   14




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We may incur significant, unanticipated warranty claims.
  Potential liabilities and costs from litigation could adversely affect our business, financial
condition and results of operations.
      If we fail to maintain effective internal control over financial reporting
at a reasonable assurance level, we may not be able to accurately report our financial results or
prevent fraud, which could have a material adverse effect on our operations, investor confidence in
our business and the trading prices of our securities.
   15




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We are subject to various environmental statutes and regulations, which may result in significant
costs.
   Legislative or regulatory initiatives related to global warming / climate change concerns may
negatively impact our business.
   16




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Declining returns in the investment portfolio of our defined benefit pension plans and changes in
actuarial assumptions could increase the volatility in our pension expense and require us to
increase cash contributions to the plans.
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
  Location
    
    Principal Use
    
    Square FeetCuyahoga Falls, Ohio
    
    Corporate 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)(4)Cedar Rapids, Iowa
    
    Vinyl Windows
    
    
    259,000
    (1)Kinston, North Carolina
    
    Vinyl Windows
    
    
    319,000
    (1)London, Ontario
    
    Vinyl Windows
    
    
    60,000Burlington, Ontario
    
    Vinyl Siding Products
    
    
    394,000
    (2)Ennis, Texas
    
    Vinyl Siding Products
    
    
    538,000
    (3)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)Ashtabula, Ohio
    
    Distribution Center
    
    
    297,000
    (1)
 
 (1)
    
    Leased facilities.(2)
    
    We lease a portion of our warehouse space in this facility.(3)
    
    Includes a 237,000 square foot warehouse that was built during 2005 and is leased. We own the remainder of the facility.(4)
    
    The land for this facility is owned by us, but we lease the use of the building.    17




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ITEM 3.
    
    LEGAL PROCEEDINGS
  Environmental Claims
  Product Liability Claims
    18




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ITEM 4.
    
    (REMOVED AND RESERVED)
 
 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
   19




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ITEM 6.
    
    SELECTED FINANCIAL DATA
  Successor
    
    
    
    PredecessorOctober 13,
    
    
    
    January 3,2010 to
    
    
    
    2010 to
    
    
    Years EndedJanuary 1,
    
    
    
    October 12,
    
    
    January 2,
    
    
    January 3,
    
    
    December 29,
    
    
    December 30,2011
    
    
    
    2010
    
    
    2010
    
    
    2009
    
    
    2007
    
    
    2006(in thousands)Income Statement Data:Net sales
    
    $
    269,249
    
    
    
    $
    897,938
    
    
    $
    1,046,107
    
    
    $
    1,133,956
    
    
    $
    1,204,056
    
    
    $
    1,250,054Cost of sales
    
    
    222,737
    
    
    
    
    658,509
    
    
    
    765,691
    
    
    
    859,107
    
    
    
    899,839
    
    
    
    947,776Gross profit
    
    
    46,512
    
    
    
    
    239,429
    
    
    
    280,416
    
    
    
    274,849
    
    
    
    304,217
    
    
    
    302,278Selling, general and
administrative expenses
    
    
    53,543
    
    
    
    
    159,448
    
    
    
    204,610
    
    
    
    212,025
    
    
    
    208,001
    
    
    
    203,844Merger costs
    
    
    7,411
    
    
    
    
    102,661
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Manufacturing restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    5,255
    
    
    
    1,783
    
    
    
    
    
    
    
    Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,423Facility closure costs, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92
    )(Loss) income from operations
    
    
    (14,442
    )
    
    
    
    (22,680
    )
    
    
    70,551
    
    
    
    61,041
    
    
    
    96,216
    
    
    
    95,103Interest expense, net
    
    
    16,120
    
    
    
    
    58,759
    
    
    
    77,352
    
    
    
    82,567
    
    
    
    81,087
    
    
    
    80,947Net loss (gain) on debt
extinguishments
    
    
    25,129
    
    
    
    
    (15,201
    )
    
    
    (29,665
    )
    
    
    
    
    
    
    
    
    
    
    Foreign currency loss (gain)
    
    
    771
    
    
    
    
    (184
    )
    
    
    (184
    )
    
    
    1,809
    
    
    
    (227
    )
    
    
    (703
    )(Loss) income before income taxes
    
    
    (56,462
    )
    
    
    
    (66,054
    )
    
    
    23,048
    
    
    
    (23,335
    )
    
    
    15,356
    
    
    
    14,859Income taxes
    
    
    8,553
    
    
    
    
    5,220
    
    
    
    2,390
    
    
    
    53,062
    
    
    
    7,051
    
    
    
    13,989Net income (loss)
    
    $
    (65,015
    )
    
    
    $
    (71,274
    )
    
    $
    20,658
    
    
    $
    (76,397
    )
    
    $
    8,305
    
    
    $
    870
 Successor
    
    
    
    PredecessorJanuary 1,
    
    
    
    January 2,
    
    
    January 3,
    
    
    December 29,
    
    
    December 30,2011
    
    
    
    2010
    
    
    2009
    
    
    2007
    
    
    2006(in thousands)Balance Sheet Data (end of period):Cash and cash equivalents
    
    $
    13,789
    
    
    
    $
    55,905
    
    
    $
    6,709
    
    
    $
    21,603
    
    
    $
    15,015Working capital
    
    
    98,694
    
    
    
    
    139,334
    
    
    
    172,857
    
    
    
    163,444
    
    
    
    152,752Total assets
    
    
    1,755,904
    
    
    
    
    762,129
    
    
    
    752,466
    
    
    
    802,461
    
    
    
    796,198Total debt
    
    
    788,000
    
    
    
    
    675,360
    
    
    
    745,762
    
    
    
    702,285
    
    
    
    703,625Members equity / Shareholders
(deficit)
    
    
    498,477
    
    
    
    
    (325,205
    )
    
    
    (356,866
    )
    
    
    (254,477
    )
    
    
    (273,156
    )
  20




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
 ® ® ®
      21




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The Merger
      22




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RESULTS OF OPERATIONS
   January 3, 2010
    
    
    October 13, 2010
    
    
    Years Endedto
    
    
    to
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,October 12, 2010
    
    
    January 1, 2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    Predecessor(dollars in thousands)% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofNet
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    NetAmount
    
    
    Amount
    
    
    Amount
    
    
    Sales
    
    
    Amount
    
    
    Sales
    
    
    Amount
    
    
    SalesNet sales (1)
    
    $
    897,938
    
    
    $
    269,249
    
    
    $
    1,167,187
    
    
    
    100.0
    %
    
    $
    1,046,107
    
    
    
    100.0
    %
    
    $
    1,133,956
    
    
    
    100.0
    %Gross profit
    
    
    239,429
    
    
    
    46,512
    
    
    
    285,941
    
    
    
    24.5
    
    
    
    280,416
    
    
    
    26.8
    
    
    
    274,849
    
    
    
    24.2Selling, general and administrative
expense
    
    
    159,448
    
    
    
    53,543
    
    
    
    212,991
    
    
    
    18.3
    
    
    
    204,610
    
    
    
    19.6
    
    
    
    212,025
    
    
    
    18.7Merger costs
    
    
    102,661
    
    
    
    7,411
    
    
    
    110,072
    
    
    
    9.4
    
    
    
    
    
    
    
    0.0
    
    
    
    
    
    
    
    0.0Manufacturing restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,255
    
    
    
    0.5
    
    
    
    1,783
    
    
    
    0.2(Loss) income from operations
    
    
    (22,680
    )
    
    
    (14,442
    )
    
    
    (37,122
    )
    
    
    (3.2
    )
    
    
    70,551
    
    
    
    6.7
    
    
    
    61,041
    
    
    
    5.4Interest expense, net
    
    
    58,759
    
    
    
    16,120
    
    
    
    74,879
    
    
    
    
    
    
    
    77,352
    
    
    
    
    
    
    
    82,567(Gain) loss on debt extinguishment
    
    
    (15,201
    )
    
    
    25,129
    
    
    
    9,928
    
    
    
    
    
    
    
    (29,665
    )
    
    
    
    
    
    
    Foreign currency (gain) loss
    
    
    (184
    )
    
    
    771
    
    
    
    587
    
    
    
    
    
    
    
    (184
    )
    
    
    
    
    
    
    1,809(Loss) income before income taxes
    
    
    (66,054
    )
    
    
    (56,462
    )
    
    
    (122,516
    )
    
    
    
    
    
    
    23,048
    
    
    
    
    
    
    
    (23,335
    )Income taxes
    
    
    5,220
    
    
    
    8,553
    
    
    
    13,773
    
    
    
    
    
    
    
    2,390
    
    
    
    
    
    
    
    53,062Net income (loss)
    
    $
    (71,274
    )
    
    $
    (65,015
    )
    
    $
    (136,289
    )
    
    
    
    
    
    $
    20,658
    
    
    
    
    
    
    $
    (76,397
    )Other Data:EBITDA (2)
    
    $
    10,287
    
    
    $
    (29,844
    )
    
    $
    (19,557
    )
    
    
    
    
    
    $
    122,569
    
    
    
    
    
    
    $
    81,930Adjusted EBITDA (2)
    
    
    103,259
    
    
    
    30,583
    
    
    
    133,842
    
    
    
    
    
    
    
    116,830
    
    
    
    
    
    
    
    89,813Depreciation and amortization
    
    
    17,582
    
    
    
    10,498
    
    
    
    28,080
    
    
    
    
    
    
    
    22,169
    
    
    
    
    
    
    
    22,698Capital expenditures
    
    
    (10,302
    )
    
    
    (5,160
    )
    
    
    (15,462
    )
    
    
    
    
    
    
    (8,733
    )
    
    
    
    
    
    
    (11,498
    )
 
 (1)
    
    The following table sets forth for the periods presented a summary of net sales by
principal product offering: January 3, 2010
    
    
    October 13, 2010
    
    
    Years Endedto
    
    
    to
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,October 12, 2010
    
    
    January 1, 2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    Predecessor(in thousands)Vinyl windows
    
    $
    316,102
    
    
    $
    118,778
    
    
    $
    434,880
    
    
    $
    389,293
    
    
    $
    380,260Vinyl siding products
    
    
    181,904
    
    
    
    41,504
    
    
    
    223,408
    
    
    
    210,212
    
    
    
    254,563Metal products
    
    
    147,321
    
    
    
    35,226
    
    
    
    182,547
    
    
    
    167,749
    
    
    
    213,163Third-party manufactured products
    
    
    196,587
    
    
    
    55,511
    
    
    
    252,098
    
    
    
    210,806
    
    
    
    210,633Other products and services
    
    
    56,024
    
    
    
    18,230
    
    
    
    74,254
    
    
    
    68,047
    
    
    
    75,337$
    897,938
    
    
    $
    269,249
    
    
    $
    1,167,187
    
    
    $
    1,046,107
    
    
    $
    1,133,956
 
 (2)
    
    EBITDA is calculated as net income plus interest, taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA adjusted to reflect certain adjustments that are used in
calculating covenant compliance under our revolving credit agreement and the indenture
governing the 9.125% notes. We consider EBITDA and Adjusted EBITDA to be important indicators
of our operational strength and performance of our business. We have included Adjusted EBITDA
because it is a key financial measure used by our management to (i) assess our ability to
service our debt or incur debt and meet our capital expenditure requirements; (ii) internally
measure our operating performance; and (iii) determine our incentive compensation programs. In
addition, our ABL facilities and the indenture governing the 9.125% notes have certain
covenants that apply ratios utilizing this measure of Adjusted EBITDA. EBITDA and Adjusted
EBITDA have not been prepared in accordance with U.S. generally accepted accounting principles
(GAAP). Adjusted EBITDA as presented by us may not be comparable to similarly titled
measures reported by other companies. EBITDA and Adjusted EBITDA are not measures determined
in accordance with GAAP and should not be considered as an alternative to, or more meaningful
than, net income (as determined in accordance with GAAP) as a measure of
our operating results or net cash provided by operating activities (as determined in accordance
with GAAP) as a measure of our liquidity.  23




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##### Table of Contents



Prior year Adjusted EBITDA amounts are presented to conform to the current years presentation
of the computation of Adjusted EBITDA, which is in conformity with the Adjusted EBITDA as
defined in our revolving credit agreement and the indenture governing the 9.125% notes.The reconciliation of our net income (loss) to EBITDA and Adjusted EBITDA is as follows: January 3, 2010
    
    
    October 13, 2010to
    
    
    to
    
    
    Years EndedOctober 12,
    
    
    January 1,
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,2010
    
    
    2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    Predecessor(in thousands)Net income (loss)
    
    $
    (71,274
    )
    
    $
    (65,015
    )
    
    $
    (136,289
    )
    
    $
    20,658
    
    
    $
    (76,397
    )Interest expense, net
    
    
    58,759
    
    
    
    16,120
    
    
    
    74,879
    
    
    
    77,352
    
    
    
    82,567Income taxes
    
    
    5,220
    
    
    
    8,553
    
    
    
    13,773
    
    
    
    2,390
    
    
    
    53,062Depreciation and amortization
    
    
    17,582
    
    
    
    10,498
    
    
    
    28,080
    
    
    
    22,169
    
    
    
    22,698EBITDA
    
    
    10,287
    
    
    
    (29,844
    )
    
    
    (19,557
    )
    
    
    122,569
    
    
    
    81,930Merger costs (a)
    
    
    103,467
    
    
    
    7,411
    
    
    
    110,878
    
    
    
    
    
    
    
    Net (gain) loss on debt extinguishments (b)
    
    
    (15,201
    )
    
    
    25,129
    
    
    
    9,928
    
    
    
    (29,665
    )
    
    
    Purchase accounting related adjustments (c)
    
    
    
    
    
    
    21,427
    
    
    
    21,427
    
    
    
    
    
    
    
    Management fees (d)
    
    
    681
    
    
    
    
    
    
    
    681
    
    
    
    1,400
    
    
    
    1,372Restructuring costs (e)
    
    
    88
    
    
    
    
    
    
    
    88
    
    
    
    5,762
    
    
    
    2,642Impairment and write-offs (f)
    
    
    43
    
    
    
    1,230
    
    
    
    1,273
    
    
    
    1,130
    
    
    
    2,060Employee termination costs (g)
    
    
    
    
    
    
    1,397
    
    
    
    1,397
    
    
    
    1,182
    
    
    
    Bank fees (h)
    
    
    56
    
    
    
    
    
    
    
    56
    
    
    
    142
    
    
    
    Other normalizing and unusual items (i)
    
    
    3,419
    
    
    
    3,062
    
    
    
    6,481
    
    
    
    6,505
    
    
    
    Foreign currency (gain) loss (j)
    
    
    (184
    )
    
    
    771
    
    
    
    587
    
    
    
    (184
    )
    
    
    1,809Pro forma cost savings (k)
    
    
    603
    
    
    
    
    
    
    
    603
    
    
    
    7,989
    
    
    
    Adjusted EBITDA
    
    $
    103,259
    
    
    $
    30,583
    
    
    $
    133,842
    
    
    $
    116,830
    
    
    $
    89,813
 
 (a)
    
    Represents the following: January 3, 2010
    
    
    October 13, 2010to
    
    
    to
    
    
    Years EndedOctober 12,
    
    
    January 1,
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,2010
    
    
    2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    Predecessor(in thousands)Transaction costs (i)
    
    $
    38,416
    
    
    $
    7,411
    
    
    $
    45,827
    
    
    $
    
    
    
    $
    Transaction bonuses (ii)
    
    
    26,231
    
    
    
    
    
    
    
    26,231
    
    
    
    
    
    
    
    Stock option compensation (iii)
    
    
    38,014
    
    
    
    
    
    
    
    38,014
    
    
    
    
    
    
    
    Stock warrants expense (iv)
    
    
    806
    
    
    
    
    
    
    
    806
    
    
    
    
    
    
    
    Total
    
    $
    103,467
    
    
    $
    7,411
    
    
    $
    110,878
    
    
    $
    
    
    
    $
    
 
 (i)
    
    Predecessor expenses include investment banking, legal and other expenses, including
$16.2 million of expense accrued and payable to affiliates of Investcorp and Harvest
Partners in connection with the amended and restated management agreement between Harvest
Partners and our company. Successor expenses primarily include fees paid on behalf of
Merger Sub related to due diligence activities.(ii)
    
    Represents transaction bonuses paid to senior management and certain employees in
connection with the Merger.(iii)
    
    Represents stock option compensation expense recognized as a result of the
modification of certain stock option awards in connection with the Merger and the fair
value of an in-the-money stock option award granted immediately prior to the Merger.(iv)
    
    Represents expense for stock warrants, which were redeemed for cash in connection
with the Merger. The expense associated with the stock warrants has been recognized in our
statement of operations as a reduction in net sales in accordance
with Financial Accounting Standards Board (FASB)
Accounting Standards Codification (ASC) 505-50,
Equity-Based Payments to Non-Employees(ASC 505-50).
  24




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##### Table of Contents



(b)
    
    Expenses recorded by the Predecessor for the period ended October 12, 2010 include the
write-off of deferred financing fees associated with the prior ABL Facility and the write-off
of an accrual for all future interest payments on the 20% notes, which was recorded during the
year ended January 2, 2010, in accordance with FASB ASC 470-60, Troubled Debt Restructurings
by Debtors(ASC 470-60). Expenses recorded by the Successor include the loss on the
extinguishment of the 9.875% notes and the 11.25% notes totaling $13.6 million and fees of
$11.5 million related to an interim financing facility, which was negotiated, but ultimately
not utilized, in conjunction with the financing for the Merger.Net gain on debt extinguishment recognized during the year ended January 2, 2010 represents a
$29.6 million gain on troubled debt restructuring of the 13.625% notes and an $8.9 million
gain on debt extinguishment in connection with AMH IIs purchase of $15.0 million par value of
the 11.25% notes directly from the AMH noteholders with funds loaned from us for approximately
$5.9 million, partially offset by debt extinguishment costs of $8.8 million incurred with the
redemption of the 9.75% notes and the 15% notes and the issuance of the 9.875% notes.(c)
    
    Represents the elimination of the impact of adjustments related to purchase accounting
recorded as a result of the Merger, which include the following: $23.1 million of amortization
for the step-up in basis of inventory, partially offset by $0.8 million of other purchase
accounting related adjustments to inventory included in cost of sales, $0.6 million of reduced
pension expense as a result of purchase accounting adjustments and amortization related to net
liabilities recorded in purchase accounting for the fair value of certain of our leased
facilities and warranty liabilities of $0.1 million and $0.2 million, respectively.(d)
    
    Represents (i) amortization of a prepaid management fee paid to Investcorp International Inc.
in connection with a December 2004 recapitalization transaction of $0.5 million for each of
the fiscal years ended January 2, 2010 and January 3, 2009 and (ii) annual management fees
paid to Harvest Partners.(e)
    
    Represents the following (in thousands):
 January 3, 2010
    
    
    October 13, 2010to
    
    
    to
    
    
    Years EndedOctober 12,
    
    
    January 1,
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,2010
    
    
    2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    PredecessorManufacturing restructuring charges (i)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,255
    
    
    $
    2,642Tax restructuring charges (ii)
    
    
    88
    
    
    
    
    
    
    
    88
    
    
    
    507
    
    
    
    Total
    
    $
    88
    
    
    $
    
    
    
    $
    88
    
    
    $
    5,762
    
    
    $
    2,642
 
 (i)
    
    During 2008, we relocated a portion of our vinyl siding production from Ennis, Texas
to West Salem, Ohio and Burlington, Ontario. In connection with this change, during 2009,
we discontinued the use of the warehouse facility adjacent to the Ennis manufacturing
plant. Expenses during 2009 represent lease costs associated with our discontinued use of
the warehouse facility adjacent to the Ennis manufacturing plant. Expense in 2008
represents asset impairment costs, inventory markdown costs ($0.9 million included in cost
of sales) and manufacturing equipment relocation costs totaling $2.6 million in connection
with relocating a portion of our vinyl siding production.(ii)
    
    Represents legal and accounting fees in connection with tax restructuring projects.
 (f)
    
    Represents impairments and write-offs of assets other than by sale principally including (i)
$1.2 million and $0.6 million incurred during the successor period ended January 1, 2011 and
the year ended January 2, 2010, respectively, related to issues with a new product line, and
the ultimate discontinuation of the product line by the Successor, (ii) $0.4 million expensed
during the year ended January 2, 2010 for software write-offs due to changes in our
information technology and business strategies during 2009, and (iii) $2.1 million for the
year ended January 3, 2009 principally related to loss upon disposal of assets other than by
sale as a result of executing enhanced controls surrounding the physical verification of
assets.
 (g)
    
    Represents separation costs, including payroll taxes and certain benefits, as follows: (i)
$1.4 million in the successor period ended January 1, 2011 related to the termination of Mr.
Franco, our former President of AMI Distribution, and (ii) $1.2 million for the year ended
January 2, 2010 related to a workforce reduction in connection with our overall cost reduction
initiatives.
 (h)
    
    Represents bank audit fees incurred under our prior ABL Facility and new ABL facilities.
  25




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##### Table of Contents



(i)
    
    Represents the following:
 January 3, 2010
    
    
    October 13, 2010to
    
    
    to
    
    
    Years EndedOctober 12,
    
    
    January 1,
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,2010
    
    
    2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    Predecessor(in thousands)Professional fees (i)
    
    $
    2,734
    
    
    $
    2,973
    
    
    $
    5,707
    
    
    $
    1,285
    
    
    $
    Accretion on lease liability (ii)
    
    
    296
    
    
    
    89
    
    
    
    385
    
    
    
    76
    
    
    
    Excess severance costs (iii)
    
    
    389
    
    
    
    
    
    
    
    389
    
    
    
    910
    
    
    
    Unusual bad debt expense (iv)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,234
    
    
    
    Total
    
    $
    3,419
    
    
    $
    3,062
    
    
    $
    6,481
    
    
    $
    6,505
    
    
    $
    
 
 (i)
    
    Represents managements estimate of unusual or non-recurring consulting fees
primarily associated with cost savings initiatives.(ii)
    
    Represents accretion on the liability recorded at present value for future lease
costs in connection with our warehouse facility adjacent to the Ennis manufacturing,
which we discontinued using during 2009.(iii)
    
    Represents managements estimates for excess severance expense due primarily to
unusual changes within senior management.(iv)
    
    Represents managements estimate of unusual bad debt expense based on historical
averages from 2004 through 2008.
 (j)
    
    Represents currency transaction/translation (gains)/losses, including on currency exchange
hedging agreements.(k)
    
    Represents the following:
 January 3, 2010
    
    
    October 13, 2010to
    
    
    to
    
    
    Years EndedOctober 12,
    
    
    January 1,
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,2010
    
    
    2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    Predecessor(in thousands)Savings from headcount reductions (i)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,975
    
    
    $
    Insourcing glass production savings (ii)
    
    
    462
    
    
    
    
    
    
    
    462
    
    
    
    3,735
    
    
    
    Procurement savings (iii)
    
    
    141
    
    
    
    
    
    
    
    141
    
    
    
    1,279
    
    
    
    Total
    
    $
    603
    
    
    $
    
    
    
    $
    603
    
    
    $
    7,989
    
    
    $
    
 
 (i)
    
    Represents savings from headcount reductions as a result of general economic
conditions.(ii)
    
    Represents managements estimates of cost savings that could have resulted from
producing glass in-house at our Cuyahoga Falls, Ohio window facility had such production
started on January 4, 2009.(iii)
    
    Represents managements estimate of cost savings that could have resulted from
entering into our leveraged procurement program with an outside consulting firm had such
program been entered into on January 4, 2009.
 Notes Regarding Combined Results of Operations and Selected Financial and Operating Information due
to the Acquisition
    26




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##### Table of Contents



YEAR ENDED JANUARY 1, 2011 COMPARED TO YEAR ENDED JANUARY 2, 2010
        27




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##### Table of Contents



YEAR ENDED JANUARY 2, 2010 COMPARED TO YEAR ENDED JANUARY 3, 2009
       28




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##### Table of Contents



QUARTERLY FINANCIAL DATA
   Periods EndedOctober 3, 2010
    
    
    
    October 13, 2010Three Months Ended
    
    
    to
    
    
    
    toApril 3
    
    
    July 3
    
    
    October 2
    
    
    October 12, 1010
    
    
    
    January 1, 2011Predecessor
    
    
    Predecessor
    
    
    Predecessor
    
    
    Predecessor
    
    
    
    Successor(in
thousands)2010Net sales
    
    $
    204,237
    
    
    $
    328,322
    
    
    $
    329,547
    
    
    $
    35,832
    
    
    
    $
    269,249Gross profit (1)
    
    
    48,439
    
    
    
    91,858
    
    
    
    91,039
    
    
    
    8,093
    
    
    
    
    46,512Selling, general and administrative expenses (2)
    
    
    47,481
    
    
    
    53,589
    
    
    
    51,734
    
    
    
    6,644
    
    
    
    
    53,543Income (loss) from operations
    
    
    958
    
    
    
    38,269
    
    
    
    37,853
    
    
    
    (99,760
    )
    
    
    
    (14,442
    )Net income (loss)
    
    
    (18,692
    )
    
    
    19,728
    
    
    
    10,563
    
    
    
    (82,873
    )
    
    
    
    (65,015
    )
 Three Months EndedApril 4
    
    
    July 4
    
    
    October 3
    
    
    January 2Predecessor
    
    
    Predecessor
    
    
    Predecessor
    
    
    Predecessor2009Net sales
    
    $
    172,332
    
    
    $
    274,969
    
    
    $
    324,807
    
    
    $
    273,999Gross profit (3)
    
    
    30,253
    
    
    
    77,981
    
    
    
    97,809
    
    
    
    74,373Selling, general and administrative expenses (4)
    
    
    48,498
    
    
    
    51,297
    
    
    
    53,323
    
    
    
    51,492(Loss) income from operations
    
    
    (18,245
    )
    
    
    21,429
    
    
    
    44,486
    
    
    
    22,881Net income (loss)
    
    
    (38,005
    )
    
    
    25,572
    
    
    
    20,112
    
    
    
    12,979
  29




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##### Table of Contents



(1)
    
    Gross profit for the period October 13, 2010 to January 1, 2011 reflects $23.1 million of
amortization of the step-up in basis of inventory related to purchase accounting, partially
offset by $1.2 million of other purchase accounting related adjustments, and $1.2
million for the impairment related to issues with and the ultimate discontinuation of a new
product line.(2)
    
    Selling, general and administrative expenses include professional fees associated with cost
savings initiatives of $5.7 million, employee termination costs and excess severance of $1.8
million, and management fees expense of $0.7 million.(3)
    
    Gross profit includes $0.6 million of costs related to issues with a new product line.(4)
    
    Selling, general and administrative expenses include excess bad debt expense resulting from
the 2009 economic conditions of $4.2 million, employee termination costs and excess severance
of $2.1 million, management fees expense of $1.4 million, professional fees associated with
cost savings initiatives of $1.3 million, tax restructuring costs of $0.5 million, and software
impairment costs of $0.4 million. LIQUIDITY AND CAPITAL RESOURCES
  January 3, 2010
    
    
    
    October 13, 2010
    
    
    Years Endedto
    
    
    
    to
    
    
    January 1,
    
    
    January 2,
    
    
    January 3,October 12, 2010
    
    
    
    January 1, 2011
    
    
    2011
    
    
    2010
    
    
    2009Predecessor
    
    
    
    Successor
    
    
    Combined
    
    
    Predecessor
    
    
    Predecessor(in thousands)Net cash provided by (used in) operating activities
    
    $
    28,569
    
    
    
    $
    (72,141
    )
    
    $
    (43,572
    )
    
    $
    118,701
    
    
    $
    7,951Net cash used in investing activities
    
    
    (10,302
    )
    
    
    
    (562,751
    )
    
    
    (573,053
    )
    
    
    (8,733
    )
    
    
    (11,473
    )Net cash (used in) provided by financing activities
    
    
    (8,406
    )
    
    
    
    582,324
    
    
    
    573,918
    
    
    
    (62,338
    )
    
    
    (10,371
    )
 CASH FLOWS
  CASH FLOWS FROM OPERATING ACTIVITIES
    30




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##### Table of Contents



CASH FLOWS FROM INVESTING ACTIVITIES
    CASH FLOWS FROM FINANCING ACTIVITIES
     DESCRIPTION OF OUR OUTSTANDING INDEBTEDNESS
 9.125%
Senior Secured Notes due 2017
     31




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Guarantees
 Collateral
   Ranking.
  32




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##### Table of Contents



Optional Redemption
  Year
    
    Percentage2013
    
    
    106.844
    %2014
    
    
    104.563
    %2015
    
    
    102.281
    %2016 and thereafter
    
    
    100.000
    %
   Change of Control
 Asset Sale Proceeds.
 Covenants
 
    
    pay dividends or distributions, repurchase equity, prepay junior debt and make
certain investments;
 
    
    incur additional debt or issue certain disqualified stock and preferred stock;
 
    
    incur liens on assets;
 
    
    merge or consolidate with another company or sell all or substantially all assets;
 
    
    enter into transactions with affiliates; and
 
    
    allow to exist certain restrictions on the ability of subsidiaries to pay dividends
or make other payments to the Issuers.
  Events of Default
  33




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##### Table of Contents



Exchange Offer; Registration Rights
 ABL Facilities
   Interest Rate and Fees
 
    
    a rate equal to (i) the London Interbank Offered Rate, or LIBOR, with respect to
eurodollar loans under the U.S. facility or (ii) the Canadian Deposit Offered Rate, or
CDOR, with respect to loans under the Canadian facility, plus an applicable margin of
2.75%, which margin can vary quarterly in 0.25% increments between three pricing levels,
ranging from 2.50% to 3.00%, based on excess availability, which is defined in the
Revolving Credit Agreement as (a) the sum of (x) the lesser of (1) the aggregate
commitments under the U.S. sub-facility at such time and (2) the then applicable U.S.
borrowing base and (y) the lesser of (1) the aggregate commitments under the Canadian
sub-facility at such time and (2) the then applicable Canadian borrowing base less (b)
the sum of the aggregate principal amount of the revolving credit loans (including
swingline loans) and letters of credit outstanding at such time;
 
    
    the alternate base rate which will be the highest of (i) the prime commercial lending
rate published by The Wall Street Journal as the prime rate, (ii) the Federal Funds
Effective Rate plus 0.50% and (iii) the one-month Published LIBOR rate plus 1.0% per
annum, plus, in each case, an applicable margin of 1.75%, which margin can vary
quarterly in 0.25% increments between three pricing levels, ranging from 1.50% to 2.00%,
based on excess availability, as set forth in the preceding paragraph; or
 
    
    the alternate Canadian base rate which will be the higher of (i) the annual rate from
time to time publicly announced by Toronto Dominion Bank (Toronto) as its prime rate in
effect for determining interest rates on Canadian Dollar denominated commercial loans in
Canada and (ii) the 30-day CDOR Rate plus 1.0%, plus, in each case, an applicable margin
of 1.75%, which margin can vary quarterly in 0.25% increments between three pricing
levels, ranging from 1.50% to 2.00%, based on excess availability, as set forth in the
second preceding paragraph.
  34




---



##### Table of Contents



Prepayments
    Guarantors.
  35




---



##### Table of Contents



Security.
 
    
    a first-priority perfected security interest in all present and after-acquired
inventory and accounts receivable of the U.S. borrowers and the U.S. guarantors and all
investment property, general intangibles, books and records, documents and instruments
and supporting obligations relating to such inventory, such accounts receivable and such
other receivables, and all proceeds of the foregoing, including all deposit accounts,
other bank and securities accounts, cash and cash equivalents (other than certain
excluded deposit, securities and commodities accounts), investment property and other
general intangibles, in each case arising from such inventory, such accounts receivable
and such other receivables, subject to certain exceptions to be agreed and a first
priority security interest in our capital stock (the U.S. first priority collateral);
and
 
    
    a second-priority security interest in the capital stock of each direct, material
wholly-owned restricted subsidiary of our company and of each guarantor of the notes and
substantially all tangible and intangible assets of our company and each
guarantor of the notes (to the extent not included in the U.S. first priority collateral)
and proceeds of the foregoing (the U.S. second priority collateral, and together with
the U.S. first priority collateral, the U.S. ABL collateral).
  
    
    the U.S. ABL collateral; and
 
    
    a first-priority perfected security interest in all of the capital stock of the
Canadian borrowers and the capital stock of each direct, material restricted subsidiary
of the Canadian borrowers and the Canadian guarantors and substantially all tangible and
intangible assets of the Canadian borrowers and Canadian guarantors and proceeds of the
foregoing and all present and after-acquired inventory and accounts receivable of the
Canadian borrowers and the Canadian guarantors and all investment property, general
intangibles, books and records, documents and instruments and supporting obligations
relating to such inventory, such accounts receivable and such other receivables, and all
proceeds of the foregoing, including all deposit accounts, other bank and securities
accounts, cash and cash equivalents (other than certain excluded deposit, securities and
commodities accounts), investment property and other general intangibles, in each case
arising from such inventory, such accounts receivable and such other receivables,
subject to certain exceptions to be agreed (the Canadian ABL collateral).
 Covenants, Representations and Warranties.
 Events of Default
 Covenant Compliance
   36




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##### Table of Contents



POTENTIAL IMPLICATIONS OF CURRENT TRENDS AND CONDITIONS IN THE BUILDING PRODUCTS INDUSTRY ON OUR
LIQUIDITY AND CAPITAL RESOURCES
    CONTRACTUAL OBLIGATIONS
  Payments Due by Fiscal YearAfterTotal
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    2015(in thousands)Long-term debt (1)
    
    $
    788,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    58,000
    
    
    $
    730,000Interest payments on 9.125% notes
    
    
    469,618
    
    
    
    69,943
    
    
    
    66,613
    
    
    
    66,613
    
    
    
    66,613
    
    
    
    66,613
    
    
    
    133,223Operating leases (2)
    
    
    132,976
    
    
    
    33,231
    
    
    
    27,830
    
    
    
    23,157
    
    
    
    17,706
    
    
    
    10,349
    
    
    
    20,703Expected pension contributions (3)
    
    
    49,310
    
    
    
    10,213
    
    
    
    10,737
    
    
    
    10,581
    
    
    
    9,994
    
    
    
    7,785
    
    
    
    Total
    
    $
    1,439,904
    
    
    $
    113,387
    
    
    $
    105,180
    
    
    $
    100,351
    
    
    $
    94,313
    
    
    $
    142,747
    
    
    $
    883,926
 
 (1)
    
    Represents principal amounts, but not interest. Our long-term debt consists of the $58.0
million outstanding balance under the ABL facilities as of January 1, 2011 and $730.0 million
aggregate principal amount of 9.125% notes. We are not able to estimate reasonably the cash
payments for interest associated with the ABL facilities due to the significant estimation
required related to both market rates as well as projected principal payments. The stated
maturity date of our 9.125% notes is November 1, 2017. See Note 8 to the consolidated
financial statements included in Item 8. Financial Statements
and Supplemental Data for further details.  37




---



##### Table of Contents



(2)
    
    For additional information on our operating leases, see Note 9 to the consolidated financial
statements.(3)
    
    Although subject to change, the amounts set forth in the table above represent the estimated
minimum funding requirements under current law. Due to uncertainties regarding significant
assumptions involved in estimating future required contributions to our pension plans,
including: (i) interest rate levels, (ii) the amount and timing of asset returns, and (iii)
what, if any, changes may occur in pension funding legislation, the estimates in the table may
differ materially from actual future payments. We cannot reasonably estimate payments beyond
2015.    OFF-BALANCE SHEET ARRANGEMENTS
    EFFECTS OF INFLATION
   38




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##### Table of Contents



RECENT ACCOUNTING PRONOUNCEMENTS
 Disclosure of Supplementary Pro Forma Information
for Business Combinations
 Improving
Disclosures about Fair Value Measurements
 APPLICATION OF CRITICAL ACCOUNTING POLICIES
   Revenue Recognition
    39




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##### Table of Contents



Accounts Receivable
 Inventories.
 Goodwill and Other
Intangible Assets. IntangiblesGoodwill and Other Business Combinations, Fair Value Measurements and Disclosures
   Pensions
  40




---



##### Table of Contents



Product Warranty Costs and Service Returns
  CERTAIN FORWARD-LOOKING STATEMENTS
  
    
    our operations and results of operations;
 
    
    declines in remodeling and home building industries, economic conditions and changes in
interest rates, foreign currency exchange rates and other conditions;
 
    
    deteriorations in availability of consumer credit, employment trends, levels of consumer
confidence and spending and consumer preferences;
 
    
    changes in raw material costs and availability of raw materials and finished goods;
 
    
    the unavailability, reduction or elimination of government and economic home buying and
remodeling incentives;
 
    
    our ability to continuously improve organizational productivity and global supply chain
efficiency and flexibility;
 
    
    market acceptance of price increases;
 
    
    declines in national and regional trends in home remodeling and new housing starts;
 
    
    increases in competition from other manufacturers of vinyl and metal exterior residential
building products as well as alternative building products;
 
    
    changes in weather conditions;
 
    
    consolidation of our customers;
  41




---



##### Table of Contents




    
    our ability to attract and retain qualified personnel;
 
    
    our ability to comply with certain financial covenants in the indenture governing our
notes and ABL facilities;
 
    
    declines in market demand;
 
    
    our substantial level of indebtedness;
 
    
    increases in our indebtedness;
 
    
    increases in costs of environmental compliance or environmental liabilities;
    
    increases in warranty or product liability claims;
 
    
    increases in capital expenditure requirements; 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
   42




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##### Table of Contents



COMMODITY PRICE RISK
   43




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##### Table of Contents



ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 ASSOCIATED MATERIALS, LLC
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReports of Independent Registered Public Accounting Firms
    
    45Consolidated Balance Sheets as of January 1, 2011 (Successor) and January 2, 2010 (Predecessor)
    
    47Consolidated Statements of Operations
    
    48October 13, 2010 through January 1, 2011 (Successor)January 3, 2010 through October 12, 2010 (Predecessor)Years Ended January 2, 2010 and January 3, 2009 (Predecessor)Consolidated Statements of Members Equity / Stockholders (Deficit) and Comprehensive Income (Loss)
    
    49October 13, 2010 through January 1, 2011 (Successor)January 3, 2010 through October 12, 2010 (Predecessor)Years Ended January 2, 2010 and January 3, 2009 (Predecessor)Consolidated Statements of Cash Flows
    
    50October 13, 2010 through January 1, 2011 (Successor)January 3, 2010 through October 12, 2010 (Predecessor)Years Ended January 2, 2010 and January 3, 2009 (Predecessor)Notes to Consolidated Financial Statements
    
    51
  44




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    
  45




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  46




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##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
   January 1,
    
    
    
    January 2,2011
    
    
    
    2010Successor
    
    
    
    PredecessorASSETSCurrent assets:Cash and cash equivalents
    
    $
    13,789
    
    
    
    $
    55,905Accounts receivable, net of allowance for doubtful accounts of $9,203 at
January 1, 2011 and $8,015 at January 2, 2010
    
    
    118,408
    
    
    
    
    114,355Inventories
    
    
    146,215
    
    
    
    
    115,394Income taxes receivable
    
    
    3,291
    
    
    
    
    3,905Deferred income taxes
    
    
    
    
    
    
    
    4,921Prepaid expenses
    
    
    8,995
    
    
    
    
    8,945Total current assets
    
    
    290,698
    
    
    
    
    303,425Property, plant and equipment, net
    
    
    137,862
    
    
    
    
    109,037Goodwill
    
    
    566,423
    
    
    
    
    231,263Other intangible assets, net
    
    
    731,014
    
    
    
    
    96,081Other assets
    
    
    29,907
    
    
    
    
    22,323Total assets
    
    $
    1,755,904
    
    
    
    $
    762,129LIABILITIES AND MEMBERS EQUITY / STOCKHOLDERS (DEFICIT)Current liabilities:Accounts payable
    
    $
    90,190
    
    
    
    $
    87,580Accrued liabilities
    
    
    79,319
    
    
    
    
    73,087Deferred income taxes
    
    
    19,989
    
    
    
    
    2,312Income taxes payable
    
    
    2,506
    
    
    
    
    1,112Total current liabilities
    
    
    192,004
    
    
    
    
    164,091Deferred income taxes
    
    
    144,668
    
    
    
    
    36,557Other liabilities
    
    
    132,755
    
    
    
    
    61,326Long-term debt
    
    
    788,000
    
    
    
    
    675,360Commitments and contingenciesConvertible preferred stock, $.01 par value
    
    
    
    
    
    
    
    150,000Members Equity / Stockholders (Deficit)Members equity:Membership interest
    
    
    553,507
    
    
    
    
    Accumulated other comprehensive income
    
    
    9,985
    
    
    
    
    Accumulated deficit
    
    
    (65,015
    )
    
    
    
    Total members equity
    
    
    498,477
    
    
    
    
    Stockholders deficit:Class B common stock, $.01 par value:Series I; Authorized shares  2,583,801; issued shares  500,000
    
    
    
    
    
    
    
    5Series II; Authorized shares  2,083,801; issued shares  1,221,076
    
    
    
    
    
    
    
    11Capital in excess of par
    
    
    
    
    
    
    
    15Accumulated other comprehensive loss
    
    
    
    
    
    
    
    (7,810
    )Accumulated deficit
    
    
    
    
    
    
    
    (317,426
    )Total stockholders deficit
    
    
    
    
    
    
    
    (325,205
    )Total liabilities and members equity / stockholders (deficit)
    
    $
    1,755,904
    
    
    
    $
    762,129
   47




---



##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
   October 13, 2010
    
    
    
    January 3, 2010to
    
    
    
    to
    
    
    Years EndedJanuary 1, 2011
    
    
    
    October 12, 2010
    
    
    January 2, 2010
    
    
    January 3, 2009Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorNet sales
    
    $
    269,249
    
    
    
    $
    897,938
    
    
    $
    1,046,107
    
    
    $
    1,133,956Cost of sales
    
    
    222,737
    
    
    
    
    658,509
    
    
    
    765,691
    
    
    
    859,107Gross profit
    
    
    46,512
    
    
    
    
    239,429
    
    
    
    280,416
    
    
    
    274,849Selling, general and administrative expenses
    
    
    53,543
    
    
    
    
    159,448
    
    
    
    204,610
    
    
    
    212,025Merger costs:Transaction costs
    
    
    7,411
    
    
    
    
    38,416
    
    
    
    
    
    
    
    Transaction bonuses
    
    
    
    
    
    
    
    26,231
    
    
    
    
    
    
    
    Stock option compensation
    
    
    
    
    
    
    
    38,014
    
    
    
    
    
    
    
    Manufacturing restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    5,255
    
    
    
    1,783(Loss) income from operations
    
    
    (14,442
    )
    
    
    
    (22,680
    )
    
    
    70,551
    
    
    
    61,041Interest expense, net
    
    
    16,120
    
    
    
    
    58,759
    
    
    
    77,352
    
    
    
    82,567Loss (gain) on debt extinguishment
    
    
    25,129
    
    
    
    
    (15,201
    )
    
    
    (29,665
    )
    
    
    Foreign currency loss (gain)
    
    
    771
    
    
    
    
    (184
    )
    
    
    (184
    )
    
    
    1,809(Loss) income before income taxes
    
    
    (56,462
    )
    
    
    
    (66,054
    )
    
    
    23,048
    
    
    
    (23,335
    )Income taxes
    
    
    8,553
    
    
    
    
    5,220
    
    
    
    2,390
    
    
    
    53,062Net income (loss)
    
    $
    (65,015
    )
    
    
    $
    (71,274
    )
    
    $
    20,658
    
    
    $
    (76,397
    )
   48




---



##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
    Accumulated
    
    
    
    
    
    
    TotalOther
    
    
    Accumulated
    
    
    MembersCapital in
    
    
    
    
    
    
    Comprehensive
    
    
    (Deficit) /
    
    
    Equity/Common Stock
    
    
    Excess
    
    
    Membership
    
    
    Income
    
    
    Retained
    
    
    StockholdersPredecessor
    
    Shares
    
    
    Amount
    
    
    Of Par
    
    
    Interest
    
    
    (Loss)
    
    
    Earnings
    
    
    (Deficit)Balance at December 29, 2007
    
    
    1,721,076
    
    
    $
    16
    
    
    $
    15
    
    
    $
    
    
    
    $
    7,179
    
    
    $
    (261,687
    )
    
    $
    (254,477
    )Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76,397
    )
    
    
    (76,397
    )Unrecognized prior service
cost and net loss, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,377
    )
    
    
    
    
    
    
    (9,377
    )Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,615
    )
    
    
    
    
    
    
    (16,615
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (102,389
    )Balance at January 3, 2009
    
    
    1,721,076
    
    
    
    16
    
    
    
    15
    
    
    
    
    
    
    
    (18,813
    )
    
    
    (338,084
    )
    
    
    (356,866
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,658
    
    
    
    20,658Unrecognized prior service
cost and net gain, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    217Foreign currency translation
adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,786
    
    
    
    
    
    
    
    10,786Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,661Balance at January 2, 2010
    
    
    1,721,076
    
    
    
    16
    
    
    
    15
    
    
    
    
    
    
    
    (7,810
    )
    
    
    (317,426
    )
    
    
    (325,205
    )Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (71,274
    )
    
    
    (71,274
    )Unrecognized prior service
cost and net loss, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,663
    )
    
    
    
    
    
    
    (12,663
    )Foreign currency translation
adjustments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,023
    
    
    
    
    
    
    
    3,023Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (80,914
    )Accrued stock options
    
    
    
    
    
    
    
    
    
    
    38,014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,014Accrued warrants
    
    
    
    
    
    
    
    
    
    
    806
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    806Excess tax benefit on stock
options
    
    
    
    
    
    
    
    
    
    
    1,817
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,817Balance at October 12, 2010
    
    
    1,721,076
    
    
    $
    16
    
    
    $
    40,652
    
    
    $
    
    
    
    $
    (17,450
    )
    
    $
    (388,700
    )
    
    $
    (365,482
    )SuccessorBalance at October 13, 2010
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Equity contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    553,507
    
    
    
    
    
    
    
    
    
    
    
    553,507Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (65,015
    )
    
    
    (65,015
    )Unrecognized prior service
cost and net gain, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,799
    
    
    
    
    
    
    
    4,799Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,186
    
    
    
    
    
    
    
    5,186Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55,030
    )Balance at January 1, 2011
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    553,507
    
    
    $
    9,985
    
    
    $
    (65,015
    )
    
    $
    498,477
   49




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##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
   October 13, 2010
    
    
    
    January 3, 2010
    
    
    Years Endedto
    
    
    
    to
    
    
    January 2,
    
    
    January 3,January 1, 2011
    
    
    
    October 12, 2010
    
    
    2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorOPERATING ACTIVITIESNet income (loss)
    
    $
    (65,015
    )
    
    
    $
    (71,274
    )
    
    $
    20,658
    
    
    $
    (76,397
    )Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:Depreciation and amortization
    
    
    10,498
    
    
    
    
    17,582
    
    
    
    22,169
    
    
    
    22,698Deferred income taxes
    
    
    8,267
    
    
    
    
    4,278
    
    
    
    1,444
    
    
    
    41,905Impact of inventory step-up
    
    
    23,091
    
    
    
    
    
    
    
    
    
    
    
    
    Provision for losses on accounts receivable
    
    
    1,343
    
    
    
    
    3,292
    
    
    
    10,363
    
    
    
    8,000Loss on sale or disposal of assets other than by sale
    
    
    
    
    
    
    
    43
    
    
    
    509
    
    
    
    2,060Loss (gain) on debt extinguishment
    
    
    25,129
    
    
    
    
    (15,201
    )
    
    
    (29,665
    )
    
    
    Amortization of deferred financing costs
    
    
    914
    
    
    
    
    3,203
    
    
    
    12,843
    
    
    
    53,182Compensation expense related to stock options
    
    
    
    
    
    
    
    38,014
    
    
    
    
    
    
    
    Compensation expense related to warrants
    
    
    
    
    
    
    
    806
    
    
    
    
    
    
    
    Debt accretion
    
    
    
    
    
    
    
    201
    
    
    
    
    
    
    
    Non-cash portion of manufacturing restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    5,255
    
    
    
    1,577Amortization of management fee
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    500Changes in operating assets and liabilities:Accounts receivable
    
    
    42,933
    
    
    
    
    (49,940
    )
    
    
    (2,909
    )
    
    
    5,679Inventories
    
    
    13,128
    
    
    
    
    (41,998
    )
    
    
    30,392
    
    
    
    (13,532
    )Prepaid expenses
    
    
    (1,258
    )
    
    
    
    1,712
    
    
    
    1,326
    
    
    
    (391
    )Accounts payable
    
    
    (67,762
    )
    
    
    
    68,507
    
    
    
    28,794
    
    
    
    (18,517
    )Accrued liabilities
    
    
    (63,501
    )
    
    
    
    69,282
    
    
    
    16,861
    
    
    
    (8,567
    )Income taxes receivable/payable
    
    
    (98
    )
    
    
    
    (1,204
    )
    
    
    (4,416
    )
    
    
    (5,370
    )Other assets
    
    
    (32
    )
    
    
    
    (566
    )
    
    
    2,315
    
    
    
    (1,739
    )Other liabilities
    
    
    222
    
    
    
    
    1,832
    
    
    
    2,262
    
    
    
    (3,137
    )Net cash (used in) provided by operating activities
    
    
    (72,141
    )
    
    
    
    28,569
    
    
    
    118,701
    
    
    
    7,951INVESTING ACTIVITIESAcquisition, net of assumed debt
    
    
    (557,591
    )
    
    
    
    
    
    
    
    
    
    
    
    Capital expenditures
    
    
    (5,160
    )
    
    
    
    (10,302
    )
    
    
    (8,733
    )
    
    
    (11,498
    )Proceeds from sale of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25Net cash used in investing activities
    
    
    (562,751
    )
    
    
    
    (10,302
    )
    
    
    (8,733
    )
    
    
    (11,473
    )FINANCING ACTIVITIESNet borrowings under ABL facilities
    
    
    58,000
    
    
    
    
    
    
    
    
    
    
    
    
    Net (repayments) borrowings under prior ABL Facility
    
    
    
    
    
    
    
    (10,000
    )
    
    
    (46,000
    )
    
    
    56,000Repayment of Predecessor long-term debt, including
redemption premiums and interest
    
    
    (719,972
    )
    
    
    
    
    
    
    
    
    
    
    
    Repayment of term loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (61,000
    )Excess tax benefit from redemption of options
    
    
    
    
    
    
    
    1,817
    
    
    
    
    
    
    
    Issuance of senior notes
    
    
    730,000
    
    
    
    
    
    
    
    
    217,514
    
    
    
    Equity contribution
    
    
    553,507
    
    
    
    
    
    
    
    
    
    
    
    
    Financing costs
    
    
    (39,211
    )
    
    
    
    (223
    )
    
    
    (16,802
    )
    
    
    (5,371
    )Cash paid to redeem senior notes
    
    
    
    
    
    
    
    
    
    
    
    (216,013
    )
    
    
    Troubled debt interest payments
    
    
    
    
    
    
    
    
    
    
    
    (1,037
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    582,324
    
    
    
    
    (8,406
    )
    
    
    (62,338
    )
    
    
    (10,371
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    75
    
    
    
    
    516
    
    
    
    1,566
    
    
    
    (1,001
    )Net (decrease) increase in cash and cash equivalents
    
    
    (52,493
    )
    
    
    
    10,377
    
    
    
    49,196
    
    
    
    (14,894
    )Cash and cash equivalents at beginning of the period
    
    
    66,282
    
    
    
    
    55,905
    
    
    
    6,709
    
    
    
    21,603Cash and cash equivalents at end of the period
    
    $
    13,789
    
    
    
    $
    66,282
    
    
    $
    55,905
    
    
    $
    6,709Supplemental Information:Cash paid for interest
    
    $
    8,729
    
    
    
    $
    60,601
    
    
    $
    49,159
    
    
    $
    29,402Cash paid for income taxes
    
    $
    280
    
    
    
    $
    292
    
    
    $
    6,064
    
    
    $
    16,860
   50




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##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
  1. ACCOUNTING POLICIES
 NATURE OF OPERATIONS
  BASIS OF PRESENTATION
     PRINCIPLES OF CONSOLIDATION
   51




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##### Table of Contents



USE OF ESTIMATES
  REVENUE RECOGNITION
    CASH AND CASH EQUIVALENTS
   52




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##### Table of Contents



ACCOUNTS RECEIVABLE
  October 13, 2010
    
    
    
    January 3, 2010
    
    
    Years Endedto
    
    
    
    to
    
    
    January 2,
    
    
    January 3,January 1, 2011
    
    
    
    October 12, 2010
    
    
    2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorBalance at beginning of period
    
    $
    9,471
    
    
    
    $
    8,015
    
    
    $
    13,160
    
    
    $
    9,363Provision for losses
    
    
    1,343
    
    
    
    
    3,292
    
    
    
    10,363
    
    
    
    8,000Losses sustained (net of recoveries)
    
    
    (1,611
    )
    
    
    
    (1,836
    )
    
    
    (15,508
    )
    
    
    (4,203
    )Balance at end of period
    
    $
    9,203
    
    
    
    $
    9,471
    
    
    $
    8,015
    
    
    $
    13,160
 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
  Business Combinations, Fair Value Measurements and Disclosures
   53




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GOODWILL AND OTHER INTANGIBLE ASSETS WITH INDEFINITE LIVES
 IntangiblesGoodwill and Other
 PRODUCT WARRANTY COSTS AND SERVICE RETURNS
    54




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October 13, 2010
    
    
    
    January 3, 2010
    
    
    Years Endedto
    
    
    
    to
    
    
    January 2,
    
    
    January 3,January 1, 2011
    
    
    
    October 12, 2010
    
    
    2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorBalance at beginning of period
    
    $
    93,387
    
    
    
    $
    33,016
    
    
    $
    29,425
    
    
    $
    28,684Provision for warranties issued
and changes in estimates for
pre-existing warranties
    
    
    2,599
    
    
    
    
    7,602
    
    
    
    9,421
    
    
    
    8,658Claims paid
    
    
    (1,441
    )
    
    
    
    (5,675
    )
    
    
    (6,603
    )
    
    
    (6,922
    )Foreign currency translation
    
    
    167
    
    
    
    
    210
    
    
    
    773
    
    
    
    (995
    )Balance at end of period
    
    $
    94,712
    
    
    
    $
    35,153
    
    
    $
    33,016
    
    
    $
    29,425
 INCOME TAXES
 Income Taxes
 DERIVATIVES AND HEDGING ACTIVITIES
 Derivatives and Hedging
 STOCK PLANS
 Compensation 
Stock Compensation
  55




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COST OF SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    LEASE OBLIGATIONS
 .
   56




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##### Table of Contents



MARKETING AND ADVERTISING
  FOREIGN CURRENCY TRANSLATION
  RECENT ACCOUNTING PRONOUNCEMENTS
 Disclosure of Supplementary Pro Forma
Information for Business Combinations
 Improving
Disclosures about Fair Value Measurements
 2. BUSINESS COMBINATION
   57




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##### Table of Contents



Total current assets
    
    $
    423,548Property, plant and equipment
    
    
    137,152Goodwill
    
    
    564,072Other intangible assets
    
    
    734,100Other assets
    
    
    3,504Total assets acquired
    
    
    1,862,376Total current liabilities
    
    
    310,465Deferred income taxes
    
    
    147,796Other liabilities
    
    
    140,239Long-term debt
    
    
    706,285Total liabilities assumed
    
    
    1,304,785Net assets acquired
    
    $
    557,591
  58




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##### Table of Contents



Equity-Based Payments to Non-Employees
  Year EndedJanuary 1,
    
    
    January 2,2011
    
    
    2010Net sales (1)
    
    $
    1,167,993
    
    
    $
    1,046,107Net income (loss) (2)
    
    
    (58,456
    )
    
    
    9,041
 
 (1)
    
    Does not include $0.8 million of expense for stock warrants, which were
redeemed for cash in connection with the Merger.(2)
    
    Does not include $143.9 million of non-recurring expenses directly related to the
Merger as follows: (i) $38.4 million of Predecessor expenses including investment
banking, legal and other expenses; (ii) $7.4 million of Successor expenses primarily
including fees paid on behalf of Merger Sub related to due diligence activities; (iii)
$26.2 million of transaction bonuses paid to senior management and certain employees in
connection with the Merger; (iv) $38.0 million of stock option compensation expense
recognized as a result of the modification of certain stock option awards in connection
with the Merger and the fair value of an in-the-money stock option award granted
immediately prior to the Merger; (v) $0.8 million of expense for stock warrants, which
were redeemed for cash in connection with the Merger; (vi) $23.1 million for the
amortization of the step-up in basis of inventory related to purchase accounting which
is non-recurring; (vii) a $15.2 million net gain on debt extinguishment recorded by the
Predecessor in connection with the Merger, which was related to the write-off of the
troubled debt accrued interest associated with the redemption of the previously
outstanding 13.625% notes and the write-off of the financing fees related to the prior
ABL Facility; and (viii) a $25.1 million loss on debt extinguishment recorded by the
Successor, which is comprised of $13.6 million related to the redemption of the
previously outstanding 9.875% notes and 11.25% notes and $11.5 million of expense
related to an interim financing facility, which was negotiated but ultimately not
utilized, related to financing for the Merger. 3. RELATED PARTIES
     59




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4. INVENTORIES
  January 1,
    
    
    
    January 2,2011
    
    
    
    2010Successor
    
    
    
    PredecessorRaw materials
    
    $
    39,729
    
    
    
    $
    28,693Work-in-progress
    
    
    10,746
    
    
    
    
    8,552Finished goods and purchased products
    
    
    95,740
    
    
    
    
    78,149$
    146,215
    
    
    
    $
    115,394
 5. GOODWILL AND OTHER INTANGIBLE ASSETS
 Business Combinations, Fair Value Measurements and
Disclosures
  60




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##### Table of Contents



January 1, 2011 - Successor
    
    
    
    January 2, 2010 - PredecessorAverage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AverageAmortization
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    Amortization
    
    
    
    
    
    
    
    
    
    
    NetPeriod
    
    
    
    
    
    
    Accumulated
    
    
    Carrying
    
    
    
    Period
    
    
    
    
    
    
    Accumulated
    
    
    Carrying(In Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    
    (In Years)
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    
    15
    
    
    $
    28,070
    
    
    $
    14,087
    
    
    $
    13,983Patents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    6,230
    
    
    
    4,781
    
    
    
    1,449Customer bases
    
    
    13
    
    
    
    330,915
    
    
    
    5,453
    
    
    
    325,462
    
    
    
    
    7
    
    
    
    5,137
    
    
    
    4,498
    
    
    
    639Total amortized
intangible assets
    
    
    
    
    
    
    330,915
    
    
    
    5,453
    
    
    
    325,462
    
    
    
    
    
    
    
    
    39,437
    
    
    
    23,366
    
    
    
    16,071Non-amortized trade
names
    
    
    
    
    
    
    405,552
    
    
    
    
    
    
    
    405,552
    
    
    
    
    
    
    
    
    80,010
    
    
    
    
    
    
    
    80,010Total intangible assets
    
    
    
    
    
    $
    736,467
    
    
    $
    5,453
    
    
    $
    731,014
    
    
    
    
    
    
    
    $
    119,447
    
    
    $
    23,366
    
    
    $
    96,081
 ® ® ®
  6. PROPERTY, PLANT AND EQUIPMENT
  January 1,
    
    
    
    January 2,2011
    
    
    
    2010Successor
    
    
    
    PredecessorLand
    
    $
    15,697
    
    
    
    $
    5,963Buildings
    
    
    38,933
    
    
    
    
    59,277Machinery and equipment
    
    
    82,516
    
    
    
    
    144,866Construction in process
    
    
    5,660
    
    
    
    
    1,099142,806
    
    
    
    
    211,205Less accumulated depreciation
    
    
    4,944
    
    
    
    
    102,168$
    137,862
    
    
    
    $
    109,037
  61




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Building and improvements
    
    
    1 to 28 yearsComputer equipment
    
    
    2 to 5 yearsMachinery and equipment
    
    
    1 to 25 years
   7. ACCRUED AND OTHER LIABILITIES
  January 1,
    
    
    
    January 2,2011
    
    
    
    2010Successor
    
    
    
    PredecessorEmployee compensation
    
    $
    20,825
    
    
    
    $
    16,648Sales promotions and incentives
    
    
    17,704
    
    
    
    
    14,810Warranty reserves
    
    
    7,005
    
    
    
    
    6,415Employee benefits
    
    
    5,830
    
    
    
    
    5,769Interest
    
    
    14,868
    
    
    
    
    19,397Taxes other than income
    
    
    3,949
    
    
    
    
    3,107Other
    
    
    9,138
    
    
    
    
    6,941$
    79,319
    
    
    
    $
    73,087
  January 1,
    
    
    
    January 2,2011
    
    
    
    2010Successor
    
    
    
    PredecessorPensions and other postretirement plans
    
    $
    36,323
    
    
    
    $
    30,099Warranty reserves
    
    
    87,707
    
    
    
    
    26,601Other
    
    
    8,725
    
    
    
    
    4,626$
    132,755
    
    
    
    $
    61,326
  62




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##### Table of Contents



8. LONG-TERM DEBT
  January 1,
    
    
    
    January 2,2011
    
    
    
    2010Successor
    
    
    
    Predecessor9.125% notes
    
    $
    730,000
    
    
    
    $
    9.875% notes
    
    
    
    
    
    
    
    197,55211.25% notes
    
    
    
    
    
    
    
    431,00020% notes
    
    
    
    
    
    
    
    36,808Borrowings under the ABL facilities
    
    
    58,000
    
    
    
    
    Borrowings under the prior ABL Facility
    
    
    
    
    
    
    
    10,000Total long-term debt
    
    $
    788,000
    
    
    
    $
    675,360
    9.125% Senior Secured Notes due 2017
     63




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Guarantees
 Collateral
   Ranking.
  64




---



##### Table of Contents



Optional Redemption
  Year
    
    Percentage2013
    
    
    106.844
    %2014
    
    
    104.563
    %2015
    
    
    102.281
    %2016 and thereafter
    
    
    100.000
    %
   Change of Control
 Asset Sale Proceeds.
  65




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##### Table of Contents



Covenants
 
    
    pay dividends or distributions, repurchase equity, prepay junior debt and make
certain investments;
 
    
    incur additional debt or issue certain disqualified stock and preferred stock;
 
    
    incur liens on assets;
 
    
    merge or consolidate with another company or sell all or substantially all assets;
 
    
    enter into transactions with affiliates; and
 
    
    allow to exist certain restrictions on the ability of subsidiaries to pay dividends
or make other payments to the Issuers.
  Events of Default
 Exchange Offer; Registration Rights
  ABL Facilities
   66




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##### Table of Contents



Interest Rate and Fees
 
    
    a rate equal to (i) the London Interbank Offered Rate, or LIBOR, with respect to
eurodollar loans under the U.S. facility or (ii) the Canadian Deposit Offered Rate, or
CDOR, with respect to loans under the Canadian facility, plus an applicable margin of
2.75%, which margin can vary quarterly in 0.25% increments between three pricing
levels, ranging from 2.50% to 3.00%, based on excess availability, which is defined in
the Revolving Credit Agreement as (a) the sum of (x) the lesser of (1) the aggregate
commitments under the U.S. sub-facility at such time and (2) the then applicable U.S.
borrowing base and (y) the lesser of (1) the aggregate commitments under the Canadian
sub-facility at such time and (2) the then applicable Canadian borrowing base less (b)
the sum of the aggregate principal amount of the revolving credit loans (including
swingline loans) and letters of credit outstanding at such time;
 
    
    the alternate base rate which will be the highest of (i) the prime commercial
lending rate published by The Wall Street Journal as the prime rate, (ii) the
Federal Funds Effective Rate plus 0.50% and (iii) the one-month Published LIBOR rate
plus 1.0% per annum, plus, in each case, an applicable margin of 1.75%, which margin
can vary quarterly in 0.25% increments between three pricing levels, ranging from
1.50% to 2.00%, based on excess availability, as set forth in the preceding paragraph;
or
 
    
    the alternate Canadian base rate which will be the higher of (i) the annual rate
from time to time publicly announced by Toronto Dominion Bank (Toronto) as its prime
rate in effect for determining interest rates on Canadian Dollar denominated
commercial loans in Canada and (ii) the 30-day CDOR Rate plus 1.0%, plus, in each
case, an applicable margin of 1.75%, which margin can vary quarterly in 0.25%
increments between three pricing levels, ranging from 1.50% to 2.00%, based on excess
availability, as set forth in the second preceding paragraph.
   67




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Prepayments
    Guarantors.
  68




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Security.
 
    
    a first-priority perfected security interest in all present and after-acquired
inventory and accounts receivable of the U.S. borrowers and the U.S. guarantors and
all investment property, general intangibles, books and records, documents and
instruments and supporting obligations relating to such inventory, such accounts
receivable and such other receivables, and all proceeds of the foregoing, including
all deposit accounts, other bank and securities accounts, cash and cash equivalents
(other than certain excluded deposit, securities and commodities accounts), investment
property and other general intangibles, in each case arising from such inventory, such
accounts receivable and such other receivables, subject to certain exceptions to be
agreed and a first priority security interest in the capital stock of the Company (the
U.S. first priority collateral); and
 
    
    a second-priority security interest in the capital stock of each direct, material
wholly-owned restricted subsidiary of the Company and of each guarantor of the notes
and substantially all tangible and intangible assets of the Company and each guarantor
of the notes (to the extent not included in the U.S. first priority collateral) and
proceeds of the foregoing (the U.S. second priority collateral, and together with
the U.S. first priority collateral, the U.S. ABL collateral).
  
    
    the U.S. ABL collateral; and
 
    
    a first-priority perfected security interest in all of the capital stock of the
Canadian borrowers and the capital stock of each direct, material restricted
subsidiary of the Canadian borrowers and the Canadian guarantors and substantially all
tangible and intangible assets of the Canadian borrowers and Canadian guarantors and
proceeds of the foregoing and all present and after-acquired inventory and accounts
receivable of the Canadian borrowers and the Canadian guarantors and all investment
property, general intangibles, books and records, documents and instruments and
supporting obligations relating to such inventory, such accounts receivable and such
other receivables, and all proceeds of the foregoing, including all deposit accounts,
other bank and securities accounts, cash and cash equivalents (other than certain
excluded deposit, securities and commodities accounts), investment property and other
general intangibles, in each case arising from such inventory, such accounts
receivable and such other receivables, subject to certain exceptions to be agreed (the
Canadian ABL collateral).
 Covenants, Representations and Warranties.
  69




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Events of Default
 Prior ABL Facility
  9.875% Senior Secured Second Lien Notes due 2016
     70




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11.25% Senior Discount Notes due 2014
   20% Senior Notes due 2014
 Troubled Debt Restructurings by
Debtors
  9. COMMITMENTS AND CONTINGENCIES
  2011
    
    $
    33,2312012
    
    
    27,8302013
    
    
    23,1572014
    
    
    17,7062015
    
    
    10,349Thereafter
    
    
    20,703Total future minimum lease payments
    
    $
    132,976
  71




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72




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10. INCOME TAXES
  October 13, 2010
    
    
    
    January 3, 2010to
    
    
    
    to
    
    
    Years EndedJanuary 1, 2011
    
    
    
    October 12, 2010
    
    
    January 2, 2010
    
    
    January 3, 2009Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorCurrent
    
    
    Deferred
    
    
    
    Current
    
    
    Deferred
    
    
    Current
    
    
    Deferred
    
    
    Current
    
    
    DeferredFederal
    
    $
    
    
    
    $
    10,036
    
    
    
    $
    (3,218
    )
    
    $
    452
    
    
    $
    (5,401
    )
    
    $
    (803
    )
    
    $
    2,806
    
    
    $
    36,130State
    
    
    92
    
    
    
    66
    
    
    
    
    477
    
    
    
    (2,060
    )
    
    
    1,680
    
    
    
    (17
    )
    
    
    101
    
    
    
    5,787Foreign
    
    
    194
    
    
    
    (1,835
    )
    
    
    
    3,683
    
    
    
    5,886
    
    
    
    4,667
    
    
    
    2,264
    
    
    
    8,250
    
    
    
    (12
    )$
    286
    
    
    $
    8,267
    
    
    
    $
    942
    
    
    $
    4,278
    
    
    $
    946
    
    
    $
    1,444
    
    
    $
    11,157
    
    
    $
    41,905
   January 1,
    
    
    
    January 2,2011
    
    
    
    2010Successor
    
    
    
    PredecessorDeferred income tax assets:Medical benefits
    
    $
    2,091
    
    
    
    $
    2,152Allowance for doubtful accounts
    
    
    4,038
    
    
    
    
    3,322Pension and other postretirement plans
    
    
    10,085
    
    
    
    
    8,377Inventory costs
    
    
    1,635
    
    
    
    
    1,397Interest
    
    
    
    
    
    
    
    79,286Warranty costs
    
    
    35,355
    
    
    
    
    11,712Net operating loss carryforwards
    
    
    119,076
    
    
    
    
    Foreign tax credit carryforwards
    
    
    8,427
    
    
    
    
    8,427Accrued expenses and other
    
    
    14,911
    
    
    
    
    5,344Total deferred income tax assets
    
    
    195,618
    
    
    
    
    120,017Valuation allowance
    
    
    (29,460
    )
    
    
    
    (62,391
    )Net deferred income tax assets
    
    
    166,158
    
    
    
    
    57,626Deferred income tax liabilities:Depreciation
    
    
    28,230
    
    
    
    
    22,657Intangible assets
    
    
    258,425
    
    
    
    
    37,117Tax liability on unremitted foreign earnings
    
    
    4,157
    
    
    
    
    7,346Gain on debt extinguishment
    
    
    23,398
    
    
    
    
    21,203Other
    
    
    16,605
    
    
    
    
    3,251Total deferred income tax liabilities
    
    
    330,815
    
    
    
    
    91,574Net deferred income tax liabilities
    
    $
    (164,657
    )
    
    
    $
    (33,948
    )
  73




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October 13, 2010

    
    
    January 3, 2010

    
    Years Endedto

    
    
    to

    
    January 2,

    
    January 3,January 1, 2011

    
    
    October 12, 2010

    
    2010

    
    2009Successor

    
    
    Predecessor

    
    Predecessor

    
    PredecessorStatutory rate
    
    
    35.0
    %
    
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income tax, net of federal income tax benefit
    
    
    3.3
    
    
    
    
    4.4
    
    
    
    4.1
    
    
    
    (0.1
    )Tax liability on remitted and unremitted foreign earnings
    
    
    4.2
    
    
    
    
    (36.8
    )
    
    
    6.9
    
    
    
    (10.2
    )Foreign rate differential
    
    
    (0.6
    )
    
    
    
    2.3
    
    
    
    (3.4
    )
    
    
    3.3Valuation allowance
    
    
    (53.2
    )
    
    
    
    (9.0
    )
    
    
    (38.8
    )
    
    
    (255.2
    )Non-deductible merger transaction costs
    
    
    (3.2
    )
    
    
    
    (3.3
    )
    
    
    
    
    
    
    Other
    
    
    (0.6
    )
    
    
    
    (0.5
    )
    
    
    6.6
    
    
    
    (0.2
    )Effective rate
    
    
    (15.1
    )%
    
    
    
    (7.9
    )%
    
    
    10.4
    %
    
    
    (227.4
    )%
   74




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##### Table of Contents



October 13, 2010
    
    
    
    January 3, 2010to
    
    
    
    to
    
    
    January 2,
    
    
    January 3,January 1, 2011
    
    
    
    October 12, 2010
    
    
    2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorUnrecognized tax benefits, beginning of year
    
    $
    2,775
    
    
    
    $
    964
    
    
    $
    914
    
    
    $
    513Gross increases for tax positions of prior years
    
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    914Gross increases for tax positions of the current year
    
    
    1,690
    
    
    
    
    2,140
    
    
    
    
    
    
    
    Gross decreases for tax positions of prior years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlements
    
    
    
    
    
    
    
    (329
    )
    
    
    
    
    
    
    (513
    )Unrecognized tax benefits, end of year
    
    $
    4,465
    
    
    
    $
    2,775
    
    
    $
    964
    
    
    $
    914
    11. PREFERRED STOCK
  12.
MEMBERS EQUITY / STOCKHOLDERS (DEFICIT)
    75




---



##### Table of Contents



Pension
    
    
    Foreign Currency
    
    
    AccumulatedLiability
    
    
    Translation
    
    
    OtherAdjustments,
    
    
    Adjustments,
    
    
    ComprehensiveNet of Tax
    
    
    Net of Tax
    
    
    Income (Loss)PredecessorDecember 29, 2007
    
    $
    (12,463
    )
    
    $
    19,642
    
    
    $
    7,179Net change through January 3, 2009
    
    
    (9,377
    )
    
    
    (16,615
    )
    
    
    (25,992
    )January 3, 2009
    
    
    (21,840
    )
    
    
    3,027
    
    
    
    (18,813
    )Net change through January 2, 2010
    
    
    217
    
    
    
    10,786
    
    
    
    11,003January 2, 2010
    
    
    (21,623
    )
    
    
    13,813
    
    
    
    (7,810
    )Net change through October 12, 2010
    
    
    (12,663
    )
    
    
    3,023
    
    
    
    (9,640
    )October 12, 2010
    
    $
    (34,286
    )
    
    $
    16,836
    
    
    $
    (17,450
    )SuccessorOctober 13, 2010
    
    $
    
    
    
    $
    
    
    
    $
    Net change through January 1, 2011
    
    
    4,799
    
    
    
    5,186
    
    
    
    9,985January 1, 2011
    
    $
    4,799
    
    
    $
    5,186
    
    
    $
    9,985
 13. STOCK PLANS
 Compensation  Stock Compensation
   76




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##### Table of Contents



Weighted
    
    
    RemainingAverage
    
    
    Contractual TermShares
    
    
    Exercise Price
    
    
    (years)PredecessorOptions outstanding January 2, 2010
    
    
    347,671
    
    
    $
    6.58Granted under Predecessor equity plans
    
    
    20,998
    
    
    
    1.00Redeemed for cash
    
    
    (342,451
    )
    
    
    5.87Forfeited
    
    
    (5,324
    )
    
    
    3.63Cancelled
    
    
    (20,894
    )
    
    
    13.33Options outstanding October 12, 2010
    
    
    
    
    
    $
    
    
    
    
    SuccessorOptions outstanding October 13, 2010
    
    
    
    
    
    $
    Granted under 2010 Plan
    
    
    5,873,948
    
    
    
    17.50Exercised
    
    
    
    
    
    
    Options outstanding January 1, 2011
    
    
    5,873,948
    
    
    $
    17.50
    
    
    
    9.8Options exercisable January 1, 2011
    
    
    
    
    
    $
    
    
    
    
    
  77




---



##### Table of Contents



WeightedAverageGrant Date FairShares
    
    
    Value Per SharePredecessorNonvested at January 2, 2010
    
    
    305,599
    
    
    $
    Granted
    
    
    20,998
    
    
    
    87.53Vesting based on time
    
    
    (19,406
    )
    
    
    Vesting in connection with Merger
    
    
    (288,512
    )
    
    
    6.37Forfeited
    
    
    (4,959
    )
    
    
    Cancelled
    
    
    (13,720
    )
    
    
    Nonvested at October 12, 2010
    
    
    
    
    
    $
    SuccessorNonvested at October 13, 2010
    
    
    
    
    
    $
    Granted
    
    
    5,873,948
    
    
    
    3.88Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Nonvested at January 1, 2011
    
    
    5,873,948
    
    
    $
    3.88
  October 13, 2010
    
    
    
    Years Endedto
    
    
    
    January 2,
    
    
    January 3,January 1, 2011
    
    
    
    2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    PredecessorDividend yield
    
    
    0.0%
    
    
    
    
    0.0%
    
    
    
    0.0%Annual risk free rate
    
    
    2.17%
    
    
    
    
    3.37%
    
    
    
    3.46%Expected life of options (years)
    
    
    8.37
    
    
    
    
    6.0
    
    
    
    6.5Volatility
    
    
    52.3%
    
    
    
    
    49.1%
    
    
    
    39.0%Weighted average fair value of options granted per share
    
    
    $3.88
    
    
    
    
    $0.00
    
    
    
    $0.00
    78




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##### Table of Contents



14. MANUFACTURING RESTRUCTURING COSTS
    October 13, 2010
    
    
    
    January 3, 2010
    
    
    Year Endedto
    
    
    
    to
    
    
    January 2,January 1, 2011
    
    
    
    October 12, 2010
    
    
    2010Successor
    
    
    
    Predecessor
    
    
    PredecessorBeginning liability
    
    $
    4,728
    
    
    
    $
    5,036
    
    
    $
    Additions
    
    
    
    
    
    
    
    
    
    
    
    5,332Reclass of related lease obligations
    
    
    
    
    
    
    
    389
    
    
    
    Accretion of related lease obligations
    
    
    89
    
    
    
    
    295
    
    
    
    76Payments
    
    
    (234
    )
    
    
    
    (992
    )
    
    
    (372
    )Ending liability
    
    $
    4,583
    
    
    
    $
    4,728
    
    
    $
    5,036
  15. EMPLOYEE TERMINATION COSTS
    79




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##### Table of Contents



16. BUSINESS SEGMENTS
  October 13, 2010
    
    
    
    January 3, 2010
    
    
    Years Endedto
    
    
    
    to
    
    
    January 2,
    
    
    January 3,January 1, 2011
    
    
    
    October 12, 2010
    
    
    2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorVinyl windows
    
    $
    118,778
    
    
    
    $
    316,102
    
    
    $
    389,293
    
    
    $
    380,260Vinyl siding products
    
    
    41,504
    
    
    
    
    181,904
    
    
    
    210,212
    
    
    
    254,563Metal products
    
    
    35,226
    
    
    
    
    147,321
    
    
    
    167,749
    
    
    
    213,163Third-party manufactured products
    
    
    55,511
    
    
    
    
    196,587
    
    
    
    210,806
    
    
    
    210,633Other products and services
    
    
    18,230
    
    
    
    
    56,024
    
    
    
    68,047
    
    
    
    75,337$
    269,249
    
    
    
    $
    897,938
    
    
    $
    1,046,107
    
    
    $
    1,133,956
  17. RETIREMENT PLANS
    81




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##### Table of Contents



October 13, 2010
    
    
    
    January 3, 2010to
    
    
    
    to
    
    
    Year  EndedJanuary 1, 2011
    
    
    
    October 12, 2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    PredecessorDomestic
    
    
    Foreign
    
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansAccumulated Benefit Obligation
    
    $
    59,435
    
    
    $
    60,465
    
    
    
    $
    64,061
    
    
    $
    58,148
    
    
    $
    55,107
    
    
    $
    54,978Change In Projected Benefit ObligationProjected benefit obligation at beginning of period
    
    $
    64,061
    
    
    $
    66,620
    
    
    
    $
    55,243
    
    
    $
    54,978
    
    
    $
    51,093
    
    
    $
    39,218Service cost
    
    
    165
    
    
    
    560
    
    
    
    
    567
    
    
    
    1,568
    
    
    
    572
    
    
    
    1,440Interest cost
    
    
    647
    
    
    
    809
    
    
    
    
    2,447
    
    
    
    2,801
    
    
    
    3,127
    
    
    
    3,205Plan amendments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    267Actuarial (gain) loss
    
    
    (4,685
    )
    
    
    (870
    )
    
    
    
    8,223
    
    
    
    5,676
    
    
    
    3,257
    
    
    
    6,458Employee contributions
    
    
    
    
    
    
    101
    
    
    
    
    
    
    
    
    317
    
    
    
    
    
    
    
    360Benefits paid
    
    
    (753
    )
    
    
    (962
    )
    
    
    
    (2,419
    )
    
    
    (1,182
    )
    
    
    (2,806
    )
    
    
    (2,767
    )Effect of foreign exchange
    
    
    
    
    
    
    861
    
    
    
    
    
    
    
    
    2,462
    
    
    
    
    
    
    
    6,797Projected benefit obligation at end of period
    
    
    59,435
    
    
    
    67,119
    
    
    
    
    64,061
    
    
    
    66,620
    
    
    
    55,243
    
    
    
    54,978Change In Plan AssetsFair value of assets at beginning of period
    
    $
    40,383
    
    
    $
    51,892
    
    
    
    $
    38,440
    
    
    $
    47,475
    
    
    $
    31,946
    
    
    $
    34,768Actual return on plan assets
    
    
    1,934
    
    
    
    1,473
    
    
    
    
    2,988
    
    
    
    593
    
    
    
    7,513
    
    
    
    5,858Employer contributions
    
    
    474
    
    
    
    803
    
    
    
    
    1,374
    
    
    
    2,707
    
    
    
    1,787
    
    
    
    3,318Employee contributions
    
    
    
    
    
    
    101
    
    
    
    
    
    
    
    
    317
    
    
    
    
    
    
    
    360Benefits paid
    
    
    (753
    )
    
    
    (962
    )
    
    
    
    (2,419
    )
    
    
    (1,182
    )
    
    
    (2,806
    )
    
    
    (2,767
    )Effect of foreign exchange
    
    
    
    
    
    
    676
    
    
    
    
    
    
    
    
    1,982
    
    
    
    
    
    
    
    5,938Fair value of assets at end of period
    
    
    42,038
    
    
    
    53,983
    
    
    
    
    40,383
    
    
    
    51,892
    
    
    
    38,440
    
    
    
    47,475Funded status
    
    $
    (17,397
    )
    
    $
    (13,136
    )
    
    
    $
    (23,678
    )
    
    $
    (14,728
    )
    
    $
    (16,803
    )
    
    $
    (7,503
    )Amounts Recognized in Consolidated Balance SheetsNon-current liabilities
    
    $
    (17,397
    )
    
    $
    (13,136
    )
    
    
    $
    (23,678
    )
    
    $
    (14,728
    )
    
    $
    (16,803
    )
    
    $
    (7,503
    )
  October 13, 2010
    
    
    
    January 3, 2010to
    
    
    
    to
    
    
    Year EndedJanuary 1, 2011
    
    
    
    October 12, 2010
    
    
    2009Successor
    
    
    
    Predecessor
    
    
    PredecessorDomestic
    
    
    Foreign
    
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansDiscount rate
    
    
    5.31
    %
    
    
    5.40
    %
    
    
    
    4.70
    %
    
    
    5.30
    %
    
    
    5.77
    %
    
    
    6.25
    %Salary increases
    
    
    N/A
    
    
    
    3.50
    %
    
    
    
    N/A
    
    
    
    3.50
    %
    
    
    3.75
    %
    
    
    3.50
    %
  80




---



##### Table of Contents



October 13, 2010
    
    
    
    January 3, 2010to
    
    
    
    to
    
    
    Years EndedJanuary 1, 2011
    
    
    
    October 12, 2010
    
    
    2009
    
    
    2008Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorDomestic
    
    
    Foreign
    
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansDiscount rate
    
    
    4.70
    %
    
    
    5.30
    %
    
    
    
    5.77
    %
    
    
    6.25
    %
    
    
    6.28
    %
    
    
    7.36
    %
    
    
    5.94
    %
    
    
    5.50
    %Long-term rate of return on assets
    
    
    8.00
    %
    
    
    7.00
    %
    
    
    
    8.00
    %
    
    
    7.00
    %
    
    
    8.50
    %
    
    
    7.00
    %
    
    
    8.50
    %
    
    
    7.00
    %Salary increases
    
    
    N/A
    
    
    
    3.50
    %
    
    
    
    3.75
    %
    
    
    3.50
    %
    
    
    3.75
    %
    
    
    3.50
    %
    
    
    3.75
    %
    
    
    3.50
    %
     October 13, 2010
    
    
    
    January 3, 2010to
    
    
    
    to
    
    
    Years EndedJanuary 1, 2011
    
    
    
    October 12, 2010
    
    
    2009
    
    
    2008Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorDomestic
    
    
    Foreign
    
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansService cost
    
    $
    165
    
    
    $
    560
    
    
    
    $
    567
    
    
    $
    1,568
    
    
    $
    572
    
    
    $
    1,440
    
    
    $
    574
    
    
    $
    2,073Interest cost
    
    
    647
    
    
    
    809
    
    
    
    
    2,447
    
    
    
    2,801
    
    
    
    3,127
    
    
    
    3,205
    
    
    
    2,972
    
    
    
    3,003Expected return on assets
    
    
    (688
    )
    
    
    (836
    )
    
    
    
    (2,364
    )
    
    
    (2,695
    )
    
    
    (2,687
    )
    
    
    (2,701
    )
    
    
    (3,477
    )
    
    
    (3,514
    )Amortization of unrecognized:Prior service cost
    
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    35
    
    
    
    30
    
    
    
    40
    
    
    
    30
    
    
    
    31Cumulative net loss
    
    
    
    
    
    
    
    
    
    
    
    1,003
    
    
    
    151
    
    
    
    1,512
    
    
    
    58
    
    
    
    572
    
    
    
    96Net periodic pension cost
    
    $
    124
    
    
    $
    533
    
    
    
    $
    1,676
    
    
    $
    1,860
    
    
    $
    2,554
    
    
    $
    2,042
    
    
    $
    671
    
    
    $
    1,689
  82




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##### Table of Contents



December 31, 2010Quoted Prices in
    
    
    SignificantActive Markets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets/Liabilities
    
    
    Inputs
    
    
    InputsAsset Category
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalEquity Securities
    
    $
    27,637
    
    
    $
    
    
    
    $
    
    
    
    $
    27,637Mutual Funds
    
    
    
    
    
    
    5,166
    
    
    
    
    
    
    
    5,166Government Securities
    
    
    
    
    
    
    7,972
    
    
    
    
    
    
    
    7,972Money Funds
    
    
    
    
    
    
    1,230
    
    
    
    
    
    
    
    1,230Cash
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    33Total
    
    $
    27,670
    
    
    $
    14,368
    
    
    $
    
    
    
    $
    42,038
  83




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##### Table of Contents



December 31, 2009Quoted Prices in
    
    
    SignificantActive Markets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets/Liabilities
    
    
    Inputs
    
    
    InputsAsset Category
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalEquity Securities
    
    $
    25,232
    
    
    $
    
    
    
    $
    
    
    
    $
    25,232Mutual Funds
    
    
    
    
    
    
    4,447
    
    
    
    
    
    
    
    4,447Government Securities
    
    
    
    
    
    
    6,530
    
    
    
    
    
    
    
    6,530Money Funds
    
    
    
    
    
    
    2,177
    
    
    
    
    
    
    
    2,177Cash
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    54Total
    
    $
    25,286
    
    
    $
    13,154
    
    
    $
    
    
    
    $
    38,440
  December 31, 2010Quoted Prices in
    
    
    SignificantActive Markets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets/Liabilities
    
    
    Inputs
    
    
    InputsAsset Category
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalPooled Funds
    
    $
    
    
    
    $
    53,717
    
    
    $
    
    
    
    $
    53,717Cash
    
    
    266
    
    
    
    
    
    
    
    
    
    
    
    266Total
    
    $
    266
    
    
    $
    53,717
    
    
    $
    
    
    
    $
    53,983
  December 31, 2009Quoted Prices in
    
    
    SignificantActive Markets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets/Liabilities
    
    
    Inputs
    
    
    InputsAsset Category
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalPooled Funds
    
    $
    
    
    
    $
    47,162
    
    
    $
    
    
    
    $
    47,162Cash
    
    
    313
    
    
    
    
    
    
    
    
    
    
    
    313Total
    
    $
    313
    
    
    $
    47,162
    
    
    $
    
    
    
    $
    47,475
  Equity Securities
   84




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##### Table of Contents



Mutual Funds and Government Securities
  Money Funds
  Pooled Funds
   Domestic
    
    
    ForeignPlans
    
    
    Plans2011
    
    $
    2,674
    
    
    $
    2,2062012
    
    
    2,901
    
    
    
    2,1622013
    
    
    3,071
    
    
    
    2,8042014
    
    
    3,230
    
    
    
    2,7572015
    
    
    3,409
    
    
    
    2,7852016  2020
    
    
    19,051
    
    
    
    17,397
    85




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##### Table of Contents



Percentage
    
    Effect on Fiscal Year 2011Point
    
    Annual
    
    CashAssumption
    
    Change
    
    Expense
    
    ContributionsDomestic PlansFunding interest rate
    
    +/- 100 basis point
    
    $0 /  $0
    
    $0 /  $0Discount rate
    
    +/- 100 basis point
    
    170 /(249)
    
    0 / 0Long-term rate of return on assets
    
    +/- 100 basis point
    
    (424) / 423
    
    0 / 0Foreign PlansFunding interest rate
    
    +/- 100 basis point
    
    $0 /  $0
    
    $(467) / $610Discount rate
    
    +/- 100 basis point
    
    (444) / 526
    
    0 / 0Long-term rate of return on assets
    
    +/- 100 basis point
    
    (560) / 560
    
    0 / 0
  18. SUBSIDIARY GUARANTORS
    86




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
  Subsidiary
    
    
    Non-Guarantor
    
    
    Reclassification/Company
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    5,911
    
    
    $
    
    
    
    $
    
    
    
    $
    7,878
    
    
    $
    
    
    
    $
    13,789Accounts receivable, net
    
    
    85,496
    
    
    
    
    
    
    
    11,107
    
    
    
    21,805
    
    
    
    
    
    
    
    118,408Intercompany receivables
    
    
    406,309
    
    
    
    
    
    
    
    9,257
    
    
    
    2,264
    
    
    
    (417,830
    )
    
    
    Inventories
    
    
    99,228
    
    
    
    
    
    
    
    10,870
    
    
    
    36,117
    
    
    
    
    
    
    
    146,215Income taxes receivable
    
    
    19,731
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,440
    )
    
    
    3,291Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    1,629
    
    
    
    
    
    
    
    (1,629
    )
    
    
    Prepaid expenses
    
    
    6,622
    
    
    
    
    
    
    
    1,174
    
    
    
    1,199
    
    
    
    
    
    
    
    8,995Total current assets
    
    
    623,297
    
    
    
    
    
    
    
    34,037
    
    
    
    69,263
    
    
    
    (435,899
    )
    
    
    290,698Property, plant and equipment, net
    
    
    86,636
    
    
    
    
    
    
    
    4,014
    
    
    
    47,212
    
    
    
    
    
    
    
    137,862Goodwill
    
    
    353,434
    
    
    
    
    
    
    
    28,978
    
    
    
    184,011
    
    
    
    
    
    
    
    566,423Other intangible assets, net
    
    
    495,850
    
    
    
    
    
    
    
    51,006
    
    
    
    184,158
    
    
    
    
    
    
    
    731,014Investment in subsidiaries
    
    
    5,256
    
    
    
    
    
    
    
    (42,289
    )
    
    
    
    
    
    
    37,033
    
    
    
    Intercompany receivable
    
    
    
    
    
    
    788,000
    
    
    
    
    
    
    
    
    
    
    
    (788,000
    )
    
    
    Other assets
    
    
    26,662
    
    
    
    
    
    
    
    (1
    )
    
    
    3,246
    
    
    
    
    
    
    
    29,907Total assets
    
    $
    1,591,135
    
    
    $
    788,000
    
    
    $
    75,745
    
    
    $
    487,890
    
    
    $
    (1,186,866
    )
    
    $
    1,755,904Liabilities and Members EquityCurrent liabilities:Accounts payable
    
    $
    66,087
    
    
    $
    
    
    
    $
    5,761
    
    
    $
    18,342
    
    
    $
    
    
    
    $
    90,190Intercompany payables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    417,830
    
    
    
    (417,830
    )
    
    
    Payable to parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    63,116
    
    
    
    
    
    
    
    7,057
    
    
    
    9,146
    
    
    
    
    
    
    
    79,319Deferred income taxes
    
    
    11,454
    
    
    
    
    
    
    
    
    
    
    
    10,164
    
    
    
    (1,629
    )
    
    
    19,989Income taxes payable
    
    
    
    
    
    
    
    
    
    
    16,440
    
    
    
    2,506
    
    
    
    (16,440
    )
    
    
    2,506Total current liabilities
    
    
    140,657
    
    
    
    
    
    
    
    29,258
    
    
    
    457,988
    
    
    
    (435,899
    )
    
    
    192,004Deferred income taxes
    
    
    85,191
    
    
    
    
    
    
    
    14,661
    
    
    
    44,816
    
    
    
    
    
    
    
    144,668Other liabilities
    
    
    78,810
    
    
    
    
    
    
    
    26,570
    
    
    
    27,375
    
    
    
    
    
    
    
    132,755Long-term debt
    
    
    788,000
    
    
    
    788,000
    
    
    
    
    
    
    
    
    
    
    
    (788,000
    )
    
    
    788,000Members equity
    
    
    498,477
    
    
    
    
    
    
    
    5,256
    
    
    
    (42,289
    )
    
    
    37,033
    
    
    
    498,477Total liabilities and members equity
    
    $
    1,591,135
    
    
    $
    788,000
    
    
    $
    75,745
    
    
    $
    487,890
    
    
    $
    (1,186,866
    )
    
    $
    1,755,904
  87




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-Guarantor
    
    
    Reclassification/Company
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    210,944
    
    
    $
    
    
    
    $
    30,795
    
    
    $
    56,269
    
    
    $
    (28,759
    )
    
    $
    269,249Cost of sales
    
    
    170,252
    
    
    
    
    
    
    
    30,133
    
    
    
    51,111
    
    
    
    (28,759
    )
    
    
    222,737Gross profit
    
    
    40,692
    
    
    
    
    
    
    
    662
    
    
    
    5,158
    
    
    
    
    
    
    
    46,512Selling, general and
administrative expense
    
    
    43,206
    
    
    
    
    
    
    
    555
    
    
    
    9,782
    
    
    
    
    
    
    
    53,543Transaction costs
    
    
    7,411
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,411Income from operations
    
    
    (9,925
    )
    
    
    
    
    
    
    107
    
    
    
    (4,624
    )
    
    
    
    
    
    
    (14,442
    )Interest expense, net
    
    
    15,860
    
    
    
    
    
    
    
    
    
    
    
    260
    
    
    
    
    
    
    
    16,120Loss on debt extinguishment
    
    
    25,117
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    25,129Foreign
currency loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    771
    
    
    
    
    
    
    
    771(Loss) income before income taxes
    
    
    (50,902
    )
    
    
    
    
    
    
    107
    
    
    
    (5,667
    )
    
    
    
    
    
    
    (56,462
    )Income taxes
(benefit)
    
    
    12,477
    
    
    
    
    
    
    
    (2,286
    )
    
    
    (1,638
    )
    
    
    
    
    
    
    8,553Income before equity income
from subsidiaries
    
    
    (63,379
    )
    
    
    
    
    
    
    2,393
    
    
    
    (4,029
    )
    
    
    
    
    
    
    (65,015
    )Equity  loss
from subsidiaries
    
    
    (1,636
    )
    
    
    
    
    
    
    (4,029
    )
    
    
    
    
    
    
    5,665
    
    
    
    Net income (loss)
    
    $
    (65,015
    )
    
    $
    
    
    
    $
    (1,636
    )
    
    $
    (4,029
    )
    
    $
    5,665
    
    
    $
    (65,015
    )
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-GuarantorCompany
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    (58,847
    )
    
    $
    
    
    
    $
    (12,153
    )
    
    $
    (1,141
    )
    
    $
    (72,141
    )Investing ActivitiesAcquisition,
net of assumed debt
    
    
    (557,591
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (557,591
    )Capital
expenditures
    
    
    (3,973
    )
    
    
    
    
    
    
    (18
    )
    
    
    (1,169
    )
    
    
    (5,160
    )Net
 cash used in   investing activities
    
    
    (561,564
    )
    
    
    
    
    
    
    (18
    )
    
    
    (1,169
    )
    
    
    (562,751
    )Financing ActivitiesNet
borrowings under ABL facilities
    
    
    58,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,000Issuance of senior notes
    
    
    730,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    730,000Repayment of Predecessor long-term debt, including redemption
premiums and interest
    
    
    (719,972
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (719,972
    )Equity contribution
    
    
    553,507
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    553,507Financing costs
    
    
    (39,211
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39,211
    )Dividends paid
    
    
    
    
    
    
    
    
    
    
    44,500
    
    
    
    (44,500
    )
    
    
    Intercompany transactions
    
    
    (16,774
    )
    
    
    
    
    
    
    (32,046
    )
    
    
    48,820
    
    
    
    Net cash (used in) provided by financing activities
    
    
    565,550
    
    
    
    
    
    
    
    12,454
    
    
    
    4,320
    
    
    
    582,324Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    75Net
(decrease) increase in cash and cash equivalents
    
    
    (54,861
    )
    
    
    
    
    
    
    283
    
    
    
    2,085
    
    
    
    (52,493
    )Cash and
cash equivalents at beginning of period
    
    
    60,772
    
    
    
    
    
    
    
    (283
    )
    
    
    5,793
    
    
    
    66,282Cash and cash equivalents at
 end of period
    
    $
    5,911
    
    
    $
    
    
    
    $
    
    
    
    $
    7,878
    
    
    $
    13,789
  88




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-Guarantor
    
    
    Reclassification/Company
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    648,331
    
    
    $
    
    
    
    $
    130,099
    
    
    $
    246,842
    
    
    $
    (127,334
    )
    
    $
    897,938Cost of sales
    
    
    477,674
    
    
    
    
    
    
    
    124,682
    
    
    
    183,487
    
    
    
    (127,334
    )
    
    
    658,509Gross profit
    
    
    170,657
    
    
    
    
    
    
    
    5,417
    
    
    
    63,355
    
    
    
    
    
    
    
    239,429Selling, general and
administrative expense
    
    
    127,453
    
    
    
    
    
    
    
    2,602
    
    
    
    29,393
    
    
    
    
    
    
    
    159,448Transaction costs
    
    
    38,416
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,416Transaction bonuses
    
    
    26,231
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,231Stock comp expense
    
    
    38,014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,014(Loss) income from operations
    
    
    (59,457
    )
    
    
    
    
    
    
    2,815
    
    
    
    33,962
    
    
    
    
    
    
    
    (22,680
    )Interest expense, net
    
    
    58,104
    
    
    
    
    
    
    
    1
    
    
    
    654
    
    
    
    
    
    
    
    58,759(Gain) loss on debt extinguishment
    
    
    (16,306
    )
    
    
    
    
    
    
    
    
    
    
    1,105
    
    
    
    
    
    
    
    (15,201
    )Foreign currency (gain)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (184
    )
    
    
    
    
    
    
    (184
    )(Loss)
income before income taxes
    
    
    (101,255
    )
    
    
    
    
    
    
    2,814
    
    
    
    32,387
    
    
    
    
    
    
    
    (66,054
    )Income taxes
(benefit)
    
    
    (30,068
    )
    
    
    
    
    
    
    25,720
    
    
    
    9,568
    
    
    
    
    
    
    
    5,220(Loss) income
before equity (loss) income from
subsidiaries
    
    
    (71,187
    )
    
    
    
    
    
    
    (22,906
    )
    
    
    22,819
    
    
    
    
    
    
    
    (71,274
    )Equity
(loss) income from subsidiaries
    
    
    (87
    )
    
    
    
    
    
    
    22,819
    
    
    
    
    
    
    
    (22,732
    )
    
    
    Net income (loss)
    
    $
    (71,274
    )
    
    $
    
    
    
    $
    (87
    )
    
    $
    22,819
    
    
    $
    (22,732
    )
    
    $
    (71,274
    )
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-GuarantorCompany
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    1,946
    
    
    $
    
    
    
    $
    (2,069
    )
    
    $
    28,692
    
    
    $
    28,569Investing ActivitiesCapital
expenditures
    
    
    (7,869
    )
    
    
    
    
    
    
    (55
    )
    
    
    (2,378
    )
    
    
    (10,302
    )Other
    
    
    385
    
    
    
    
    
    
    
    
    
    
    
    (385
    )
    
    
    Net cash used in
 investing activities
    
    
    (7,484
    )
    
    
    
    
    
    
    (55
    )
    
    
    (2,763
    )
    
    
    (10,302
    )Financing ActivitiesNet repayments under prior ABL Facility
    
    
    (10,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,000
    )Excess tax
benefit  from redemption
 of options
    
    
    1,817
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,817Dividends
paid
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    (20,000
    )
    
    
    Financing costs
    
    
    (223
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (223
    )Intercompany transactions
    
    
    68,799
    
    
    
    
    
    
    
    (18,241
    )
    
    
    (50,558
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    60,393
    
    
    
    
    
    
    
    1,759
    
    
    
    (70,558
    )
    
    
    (8,406
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    516
    
    
    
    516Net increase (decrease) in cash and cash equivalents
    
    
    54,855
    
    
    
    
    
    
    
    (365
    )
    
    
    (44,113
    )
    
    
    10,377Cash and cash equivalents at beginning of period
    
    
    5,917
    
    
    
    
    
    
    
    82
    
    
    
    49,906
    
    
    
    55,905Cash and cash equivalents at end of period
    
    $
    60,772
    
    
    $
    
    
    
    $
    (283
    )
    
    $
    5,793
    
    
    $
    66,282
  89




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-Guarantor
    
    
    Reclassification/Company
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    5,917
    
    
    $
    
    
    
    $
    82
    
    
    $
    49,906
    
    
    $
    
    
    
    $
    55,905Accounts receivable, net
    
    
    81,178
    
    
    
    
    
    
    
    8,728
    
    
    
    24,449
    
    
    
    
    
    
    
    114,355Intercompany receivables
    
    
    
    
    
    
    
    
    
    
    76,138
    
    
    
    3,045
    
    
    
    (79,183
    )
    
    
    Inventories
    
    
    80,654
    
    
    
    
    
    
    
    6,613
    
    
    
    28,127
    
    
    
    
    
    
    
    115,394Income taxes receivable
    
    
    3,905
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,905Deferred income taxes
    
    
    5,109
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (188
    )
    
    
    4,921Prepaid expenses
    
    
    6,542
    
    
    
    
    
    
    
    1,263
    
    
    
    1,140
    
    
    
    
    
    
    
    8,945Total current assets
    
    
    183,305
    
    
    
    
    
    
    
    92,824
    
    
    
    106,667
    
    
    
    (79,371
    )
    
    
    303,425Property, plant and equipment, net
    
    
    73,086
    
    
    
    
    
    
    
    2,033
    
    
    
    33,918
    
    
    
    
    
    
    
    109,037Goodwill
    
    
    194,813
    
    
    
    
    
    
    
    36,450
    
    
    
    
    
    
    
    
    
    
    
    231,263Other intangible assets, net
    
    
    86,561
    
    
    
    
    
    
    
    9,465
    
    
    
    55
    
    
    
    
    
    
    
    96,081Investment in subsidiaries
    
    
    197,163
    
    
    
    
    
    
    
    92,409
    
    
    
    
    
    
    
    (289,572
    )
    
    
    Intercompany receivable
    
    
    
    
    
    
    197,552
    
    
    
    
    
    
    
    
    
    
    
    (197,552
    )
    
    
    Other assets
    
    
    20,524
    
    
    
    
    
    
    
    
    
    
    
    1,799
    
    
    
    
    
    
    
    22,323Total assets
    
    $
    755,452
    
    
    $
    197,552
    
    
    $
    233,181
    
    
    $
    142,439
    
    
    $
    (566,495
    )
    
    $
    762,129Liabilities and Stockholders (Deficit)Current liabilities:Accounts payable
    
    $
    54,618
    
    
    $
    
    
    
    $
    9,111
    
    
    $
    23,851
    
    
    $
    
    
    
    $
    87,580Intercompany payables
    
    
    79,183
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (79,183
    )
    
    
    Payable to parent
    
    
    (1,535
    )
    
    
    
    
    
    
    1,535
    
    
    
    
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    57,861
    
    
    
    
    
    
    
    6,118
    
    
    
    9,108
    
    
    
    
    
    
    
    73,087Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    2,312
    
    
    
    (188
    )
    
    
    2,312Income taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,112
    
    
    
    
    
    
    
    1,112Total current liabilities
    
    
    190,127
    
    
    
    
    
    
    
    16,952
    
    
    
    36,383
    
    
    
    (79,371
    )
    
    
    164,091Deferred income taxes
    
    
    33,227
    
    
    
    
    
    
    
    2,314
    
    
    
    1,016
    
    
    
    
    
    
    
    36,557Other liabilities
    
    
    31,943
    
    
    
    
    
    
    
    16,752
    
    
    
    12,631
    
    
    
    
    
    
    
    61,326Long-term debt
    
    
    675,360
    
    
    
    197,552
    
    
    
    
    
    
    
    
    
    
    
    (197,552
    )
    
    
    675,360Convertible preferred stock
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000Stockholders (deficit)
    
    
    (325,205
    )
    
    
    
    
    
    
    197,163
    
    
    
    92,409
    
    
    
    (289,572
    )
    
    
    (325,205
    )Total liabilities and stockholders (deficit)
    
    $
    755,452
    
    
    $
    197,552
    
    
    $
    233,181
    
    
    $
    142,439
    
    
    $
    (566,495
    )
    
    $
    762,129
  90




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-Guarantor
    
    
    Reclassification/Company
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    772,653
    
    
    $
    
    
    
    $
    144,365
    
    
    $
    270,317
    
    
    $
    (141,228
    )
    
    $
    1,046,107Cost of sales
    
    
    562,715
    
    
    
    
    
    
    
    137,821
    
    
    
    206,383
    
    
    
    (141,228
    )
    
    
    765,691Gross profit
    
    
    209,938
    
    
    
    
    
    
    
    6,544
    
    
    
    63,934
    
    
    
    
    
    
    
    280,416Selling, general and
administrative expense
    
    
    164,202
    
    
    
    
    
    
    
    2,693
    
    
    
    37,715
    
    
    
    
    
    
    
    204,610Manufacturing restructuring costs
    
    
    5,255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,255Income from operations
    
    
    40,481
    
    
    
    
    
    
    
    3,851
    
    
    
    26,219
    
    
    
    
    
    
    
    70,551Interest expense, net
    
    
    76,585
    
    
    
    
    
    
    
    
    
    
    
    767
    
    
    
    
    
    
    
    77,352Gain on debt extinguishment
    
    
    (29,665
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,665
    )Foreign currency (gain)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (184
    )
    
    
    
    
    
    
    (184
    )Income before income taxes
    
    
    (6,439
    )
    
    
    
    
    
    
    3,851
    
    
    
    25,636
    
    
    
    
    
    
    
    23,048Income taxes
    
    
    (6,504
    )
    
    
    
    
    
    
    1,964
    
    
    
    6,930
    
    
    
    
    
    
    
    2,390Income before equity income from
subsidiaries
    
    
    65
    
    
    
    
    
    
    
    1,887
    
    
    
    18,706
    
    
    
    
    
    
    
    20,658Equity income from subsidiaries
    
    
    20,593
    
    
    
    
    
    
    
    18,706
    
    
    
    
    
    
    
    (39,299
    )
    
    
    Net income
    
    $
    20,658
    
    
    $
    
    
    
    $
    20,593
    
    
    $
    18,706
    
    
    $
    (39,299
    )
    
    $
    20,658
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-GuarantorCompany
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    57,211
    
    
    $
    
    
    
    $
    18,418
    
    
    $
    43,072
    
    
    $
    118,701Investing ActivitiesCapital
expenditures
    
    
    (7,643
    )
    
    
    
    
    
    
    (32
    )
    
    
    (1,058
    )
    
    
    (8,733
    )Other
    
    
    (383
    )
    
    
    
    
    
    
    383
    
    
    
    
    
    
    
    Net cash (used in) provided by investing activities
    
    
    (8,026
    )
    
    
    
    
    
    
    351
    
    
    
    (1,058
    )
    
    
    (8,733
    )Financing ActivitiesNet repayments under prior ABL Facility
    
    
    (46,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46,000
    )Issuance of senior notes
    
    
    217,514
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217,514Cash paid to redeem senior notes
    
    
    (216,013
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (216,013
    )Financing costs
    
    
    (16,708
    )
    
    
    
    
    
    
    
    
    
    
    (94
    )
    
    
    (16,802
    )Troubled debt interest payments
    
    
    (1,037
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,037
    )Intercompany transactions
    
    
    14,012
    
    
    
    
    
    
    
    (18,784
    )
    
    
    4,772
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (48,232
    )
    
    
    
    
    
    
    (18,784
    )
    
    
    4,678
    
    
    
    (62,338
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,566
    
    
    
    1,566Net increase (decrease) in cash and cash equivalents
    
    
    953
    
    
    
    
    
    
    
    (15
    )
    
    
    48,258
    
    
    
    49,196Cash and cash equivalents at beginning of year
    
    
    4,964
    
    
    
    
    
    
    
    97
    
    
    
    1,648
    
    
    
    6,709Cash and cash equivalents at end of year
    
    $
    5,917
    
    
    $
    
    
    
    $
    82
    
    
    $
    49,906
    
    
    $
    55,905
  91




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-Guarantor
    
    
    Reclassification/Company
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    792,190
    
    
    $
    
    
    
    $
    217,002
    
    
    $
    315,171
    
    
    $
    (190,407
    )
    
    $
    1,133,956Cost of sales
    
    
    596,894
    
    
    
    
    
    
    
    208,886
    
    
    
    243,734
    
    
    
    (190,407
    )
    
    
    859,107Gross profit
    
    
    195,296
    
    
    
    
    
    
    
    8,116
    
    
    
    71,437
    
    
    
    
    
    
    
    274,849Selling, general and
administrative expense
    
    
    161,443
    
    
    
    
    
    
    
    10,374
    
    
    
    40,208
    
    
    
    
    
    
    
    212,025Manufacturing restructuring costs
    
    
    1,133
    
    
    
    
    
    
    
    
    
    
    
    650
    
    
    
    
    
    
    
    1,783Income (loss) from operations
    
    
    32,720
    
    
    
    
    
    
    
    (2,258
    )
    
    
    30,579
    
    
    
    
    
    
    
    61,041Interest expense (income), net
    
    
    82,238
    
    
    
    
    
    
    
    (12
    )
    
    
    341
    
    
    
    
    
    
    
    82,567Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,809
    
    
    
    
    
    
    
    1,809Income (loss) before income taxes
    
    
    (49,518
    )
    
    
    
    
    
    
    (2,246
    )
    
    
    28,429
    
    
    
    
    
    
    
    (23,335
    )Income taxes
    
    
    42,184
    
    
    
    
    
    
    
    2,601
    
    
    
    8,277
    
    
    
    
    
    
    
    53,062Income (loss) before equity
income from subsidiaries
    
    
    (91,702
    )
    
    
    
    
    
    
    (4,847
    )
    
    
    20,152
    
    
    
    
    
    
    
    (76,397
    )Equity income from subsidiaries
    
    
    15,305
    
    
    
    
    
    
    
    20,152
    
    
    
    
    
    
    
    (35,457
    )
    
    
    Net income (loss)
    
    $
    (76,397
    )
    
    $
    
    
    
    $
    15,305
    
    
    $
    20,152
    
    
    $
    (35,457
    )
    
    $
    (76,397
    )
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Subsidiary
    
    
    Non-GuarantorCompany
    
    
    Co-Issuer
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    3,452
    
    
    $
    
    
    
    $
    (1,539
    )
    
    $
    6,038
    
    
    $
    7,951Investing ActivitiesCapital expenditures
    
    
    (6,773
    )
    
    
    
    
    
    
    (217
    )
    
    
    (4,508
    )
    
    
    (11,498
    )Proceeds from sale of assets
    
    
    20
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    25Net cash used in investing activities
    
    
    (6,753
    )
    
    
    
    
    
    
    (212
    )
    
    
    (4,508
    )
    
    
    (11,473
    )Financing ActivitiesBorrowings under prior ABL Facility
    
    
    56,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56,000Repayments of term loan
    
    
    (61,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (61,000
    )Dividends
    
    
    
    
    
    
    
    
    
    
    8,873
    
    
    
    (8,873
    )
    
    
    Financing costs
    
    
    (3,913
    )
    
    
    
    
    
    
    
    
    
    
    (1,458
    )
    
    
    (5,371
    )Intercompany transactions
    
    
    10,771
    
    
    
    
    
    
    
    (7,396
    )
    
    
    (3,375
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    1,858
    
    
    
    
    
    
    
    1,477
    
    
    
    (13,706
    )
    
    
    (10,371
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,001
    )
    
    
    (1,001
    )Net decrease in cash and cash equivalents
    
    
    (1,443
    )
    
    
    
    
    
    
    (274
    )
    
    
    (13,177
    )
    
    
    (14,894
    )Cash and cash equivalents at beginning of year
    
    
    6,407
    
    
    
    
    
    
    
    371
    
    
    
    14,825
    
    
    
    21,603Cash and cash equivalents at end of year
    
    $
    4,964
    
    
    $
    
    
    
    $
    97
    
    
    $
    1,648
    
    
    $
    6,709
  92




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Managements Annual Report on Internal Control over Financial Reporting
    Changes in Internal Control over Financial Reporting
   93




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##### Table of Contents



ITEM 9B.
    
    OTHER INFORMATION
   94




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##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  Name
    
    Age
    
    Position(s)Thomas N. Chieffe
    
    53
    
    President, Chief Executive Officer and DirectorStephen E. Graham
    
    53
    
    Vice President  Chief Financial Officer and SecretaryWarren J. Arthur
    
    43
    
    Senior Vice President of OperationsJohn F. Haumesser
    
    46
    
    Vice President of Human ResourcesErik Ragatz
    
    38
    
    Director, Chairman of the Board of Directors and Compensation CommitteeCharles A. Carroll
    
    61
    
    DirectorDana R. Snyder
    
    64
    
    Director and Former Interim President and Chief Executive OfficerRobert B. Henske
    
    49
    
    DirectorStefan Goetz
    
    40
    
    DirectorAdam B. Durrett
    
    30
    
    Director, Chairman of the Audit Committee
  Thomas N. Chieffe, Age 53 .
 Stephen E. Graham, Age 53.
 Warren J. Arthur, Age 43.
 John F. Haumesser, Age 46
  95




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##### Table of Contents



Erik Ragatz,
Age 38 .
 Charles A. Carroll, Age 61 .
 Dana R. Snyder,
Age 64.
 Robert B. Henske, Age 49 .
 Stefan Goetz, Age 40 .
  96




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##### Table of Contents



Adam B. Durrett, Age 30
 BOARD COMPOSITION AND GOVERNANCE
         97




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##### Table of Contents



Audit Committee
  Compensation Committee
  Compensation Committee Interlocks and Insider Participation
   Director Compensation
  SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  CODE OF ETHICS
 http://www.associatedmaterials.com
  98




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##### Table of Contents



ITEM 11.
    
    EXECUTIVE COMPENSATION
 COMPENSATION DISCUSSION AND ANALYSIS
  
    
    Thomas N. Chieffe, President and Chief Executive Officer
 
    
    Stephen E. Graham, Vice President-Chief Financial Officer and Secretary
 
    
    Warren J. Arthur, Senior Vice President of Operations
 
    
    Robert M. Franco, President of AMI Distribution
 
    
    John F. Haumesser, Vice President of Human Resources
  Objectives of Our Executive Compensation Program
  i.e
 Elements of Compensation
    99




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##### Table of Contents



Setting Executive Compensation
  Compensation Mix
  Salary and Bonus as a% of Total CompensationThomas N. Chieffe
    
    
    8
    %Stephen E. Graham
    
    
    13
    %Warren J. Arthur
    
    
    8
    %Robert M. Franco
    
    
    9
    %John F. Haumesser
    
    
    9
    %
  Base Salary
    100




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##### Table of Contents



Bonus Awards
  Annual Incentive Bonus
    101




---



##### Table of Contents



2010 Annual IncentiveBonus Payout PercentageThreshold
    
    
    Target
    
    
    MaximumThomas N. Chieffe
    
    
    20%
    
    
    
    100%
    
    
    
    150%Stephen E. Graham
    
    
    20%
    
    
    
    60%
    
    
    
    100%Warren J. Arthur
    
    
    20%
    
    
    
    60%
    
    
    
    100%Robert M. Franco
    
    
    20%
    
    
    
    60%
    
    
    
    100%John F. Haumesser
    
    
    20%
    
    
    
    60%
    
    
    
    100%
   Equity-Based Compensation  Stock Options
   Severance Compensation/Change in Control Benefits
 Severance and Change in Control Benefits under Employment Agreements i.e
  102




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##### Table of Contents



Change in Control Benefits under Stock Option Award Agreements
 Transaction Bonuses i.e
  Stock Option Cash Out
  103




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##### Table of Contents



SUMMARY COMPENSATION TABLE
  Change inPensionValue andNon-Equity
    
    
    NonqualifiedOption
    
    
    Incentive Plan
    
    
    DeferredBonus
    
    
    Awards
    
    
    Compensation
    
    
    Compensation
    
    
    All OtherName and Principal Position
    
    Year
    
    
    Salary
    
    
    (1)
    
    
    (4)
    
    
    (2)
    
    
    Earnings
    
    
    Compensation
    
    
    TotalThomas N. Chieffe,
    
    
    2010
    
    
    $
    587,502
    
    
    $
    500,000
    (3)
    
    $
    14,100,490
    
    
    $
    900,000
    
    
    $
    
    
    
    $
    9,570,246
    (5)
    
    $
    25,658,238President and Chief
    
    
    2009
    
    
    
    550,000
    
    
    
    500,000
    
    
    
    
    
    
    
    825,000
    
    
    
    
    
    
    
    13,999
    
    
    
    1,888,999Executive Officer
    
    
    2008
    
    
    
    537,507
    
    
    
    555,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,594
    
    
    
    1,104,101Stephen E. Graham,
    
    
    2010
    
    
    
    304,500
    
    
    
    
    
    
    
    2,726,365
    
    
    
    312,000
    
    
    
    
    
    
    
    1,577,529
    (5)
    
    
    4,920,394Vice PresidentChief
    
    
    2009
    
    
    
    158,077
    
    
    
    
    
    
    
    
    
    
    
    300,000
    
    
    
    
    
    
    
    633
    
    
    
    458,710Financial Officer and SecretaryWarren J. Arthur,
    
    
    2010
    
    
    
    253,754
    
    
    
    
    
    
    
    3,270,016
    
    
    
    260,000
    
    
    
    
    
    
    
    3,061,541
    (5)
    
    
    6,845,311Senior Vice President of
    
    
    2009
    
    
    
    234,378
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    
    
    
    
    
    774
    
    
    
    485,152Operations
    
    
    2008
    
    
    
    218,876
    
    
    
    13,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    705
    
    
    
    233,081Robert M. Franco,
    
    
    2010
    
    
    
    335,720
    
    
    
    
    
    
    
    5,450,071
    
    
    
    343,980
    
    
    
    
    
    
    
    3,162,985
    (5)
    
    
    9,292,756President of
    
    
    2009
    
    
    
    330,000
    
    
    
    
    
    
    
    
    
    
    
    330,000
    
    
    
    
    
    
    
    22,977
    
    
    
    682,977AMI Distribution
    
    
    2008
    
    
    
    326,817
    
    
    
    19,845
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,948
    
    
    
    370,610John F. Haumesser,
    
    
    2010
    
    
    
    255,780
    
    
    
    
    
    
    
    3,406,294
    
    
    
    262,080
    
    
    
    
    
    
    
    1,969,571
    (5)
    
    
    5,893,725Vice President of
    
    
    2009
    
    
    
    252,000
    
    
    
    
    
    
    
    
    
    
    
    252,000
    
    
    
    
    
    
    
    4,474
    
    
    
    508,474Human Resources
    
    
    2008
    
    
    
    249,000
    
    
    
    15,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,032
    
    
    
    274,152
 
 (1)
    
    Except as described in footnote (3), amounts characterized as Bonus payments were
discretionary awards authorized by the Committee.(2)
    
    Amounts included in the column Non-Equity Incentive Plan Compensation reflect the annual
cash incentive bonus approved by the Committee.(3)
    
    As set forth in his employment agreement, Mr. Chieffe is entitled to a special retention
incentive bonus of $2,000,000 payable in four equal annual installments commencing on October
1, 2010. He received the first installment of $500,000 on October 1, 2010.(4)
    
    The dollar amount provided herein reflects the dollar amount recognized for financial
statement reporting purposes for the 2010 fiscal year in accordance with FASB Accounting
Standards Codification Topic 718, Compensation  Stock Compensation (ASC 718), due to the
modification of the options referred to in footnote 5 immediately below to eliminate
provisions which caused variability in the number of shares underlying the options. For Mr.
Chieffe, the dollar amount also includes the amount recognized for financial statement
reporting purposes for the 2010 fiscal year in accordance with ASC 718 for the option granted
on September 7, 2010 in connection with the Merger.(5)
    
    The dollar amount provided herein includes a cash payment made in lieu of adjusting the
number of shares subject to an option granted under the 2004 Plan, which option was subject to
adjustment in the event our previous investor, Investcorp, converted its preferred stock of
AMH II into common stock as described in more detail below under the caption Outstanding
Equity Awards At Fiscal Year-End  AMH Holdings II, Inc. 2004 Stock Option Plan. The amount
of the payment was determined by the product of the number of shares that would have been
received had the option been adjusted upwards multiplied by (2) the excess, if any, of $133.95
(the fair market value of the underlying stock at the time of such conversion) over the
exercise price per share of the common stock subject to such option. The cash payment amount
per executive officer was: Mr. Chieffe  $8,151,031, Mr. Graham  $1,576,011, Mr. Arthur -
$1,890,255, Mr. Franco  $3,150,382 and Mr. Haumesser  $1,968,988. Also included in the
amounts provided were one-time cash transaction bonus payments made to Mr. Chieffe and Mr.
Arthur of $1,416,000 and $1,167,000, respectively, related to the consummation of the Merger.
Amounts include imputed income from group term life coverage provided by us in excess
of $50,000. The amounts also include the value of
customer incentive trips attended by the executives spouse, including the related tax
liability, for Messrs. Arthur and Franco in the amounts of $3,746 and $9,223, respectively.  104




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##### Table of Contents



EMPLOYMENT AGREEMENTS
  Mr. Chieffe
  st
 i.e., st
  105




---



##### Table of Contents



Mr. Graham
  st i.e st
  106




---



##### Table of Contents



Mr. Arthur
  st i.e st
  107




---



##### Table of Contents



Mr. Franco
   st i.e., st
  108




---



##### Table of Contents



Mr. Haumesser
  st i.e st
  109




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##### Table of Contents



GRANTS OF PLAN-BASED AWARDS
  All OtherOptionAwards:
    
    
    
    
    
    
    
    
    
    
    GrantNumber
    
    
    Exercise
    
    
    Fair
    
    
    Dateof
    
    
    or Base
    
    
    Market
    
    
    FairEstimated Future Payouts Under
    
    
    Estimated Future Payouts Under
    
    
    Securities
    
    
    Price of
    
    
    Value
    
    
    Value ofNon-Equity Incentive Plan Awards (1)
    
    
    Equity Incentive Plan Awards
    
    
    Underlying
    
    
    Option
    
    
    on
    
    
    OptionThreshold
    
    
    Target
    
    
    Maximum
    
    
    Threshold
    
    
    Target
    
    
    Maximum
    
    
    Options
    
    
    Awards
    
    
    Grant
    
    
    AwardsName
    
    Grant Date
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    (#)
    
    
    (#) (2)
    
    
    (#)
    
    
    (#)
    
    
    ($/Sh)
    
    
    Date ($)
    
    
    ($) (3)Thomas N. Chieffe
    
    
    
    
    
    
    125,000
    
    
    
    625,000
    
    
    
    1,875,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9/7/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,824
    (4)
    
    
    1.00
    
    
    
    133.9510/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,055
    (5)
    
    
    
    
    
    
    
    
    
    
    14,100,490
    (6)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    576,099
    (7)
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    480,082
    (7)
    
    
    20.00
    (8)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    480,082
    (7)
    
    
    30.00
    (9)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    384,066
    
    
    
    
    
    
    
    
    
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)Stephen E. Graham
    
    
    
    
    
    
    99,840
    
    
    
    187,200
    
    
    
    449,28010/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,506
    (5)
    
    
    
    
    
    
    
    
    
    
    2,726,365
    (6)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,553
    (7)
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,961
    (7)
    
    
    20.00
    (8)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,961
    (7)
    
    
    30.00
    (9)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,368
    
    
    
    
    
    
    
    
    
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)Warren J. Arthur
    
    
    
    
    
    
    83,200
    
    
    
    156,000
    
    
    
    374,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,595
    (5)
    
    
    
    
    
    
    
    
    
    
    3,270,016
    (6)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    169,441
    (7)
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141,201
    (7)
    
    
    20.00
    (8)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141,201
    (7)
    
    
    30.00
    (9)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,961
    
    
    
    
    
    
    
    
    
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)Robert M. Franco
    
    
    
    
    
    
    110,074
    
    
    
    206,388
    
    
    
    495,331
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,992
    (5)
    
    
    
    
    
    
    
    
    
    
    5,450,071
    (6)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    203,329
    (7)
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    169,441
    (7)
    
    
    20.00
    (8)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    169,441
    (7)
    
    
    30.00
    (9)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,553
    
    
    
    
    
    
    
    
    
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)John F. Haumesser
    
    
    
    
    
    
    83,866
    
    
    
    157,248
    
    
    
    377,395
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,620
    (5)
    
    
    
    
    
    
    
    
    
    
    3,406,294
    (6)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,553
    (7)
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,961
    (7)
    
    
    20.00
    (8)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,961
    (7)
    
    
    30.00
    (9)
    
    
    
    
    
    
    
    (10)10/13/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,368
    
    
    
    
    
    
    
    
    
    
    
    10.00
    
    
    
    
    
    
    
    
    (10)
 
 (1)
    
    Amounts in the table above under Estimated Future Payouts Under Non-Equity Incentive
Plan Awards reflect the annual cash incentive bonuses payable to each of our named executive
officers upon the achievement of defined EBITDA performance goals and other operating metrics
designed to measure short-term initiatives for 2011 at threshold, target and maximum levels of
performance.(2)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Investment Holdings Corp. 2010 Stock Incentive Plan, of the total number of options
granted on October 13, 2010, eighty percent are subject to time-based vesting and the
remaining twenty percent are subject to performance-based vesting. The performance-based
options vest upon the attainment of specified annual EBITDA-based performance targets over a
5-year period, subject to the executives continued service over such period. If the target
for a given year is not achieved, the performance-based option may vest if the applicable
EBITDA target is achieved in the next succeeding year. In the
event of a change in control, that portion of the performance-based option that was scheduled
to vest in the year in which such change in control occurs and the portion that was scheduled
to vest in any subsequent years shall become vested immediately prior to such change in
control. If a liquidity event occurs (defined as the first to occur of either a change in
control of us or an initial public offering of our common stock), any portion of the
performance-based option that did not vest in any prior year because the applicable EBITDA
target was not met will vest if and only if the H&F Investors receive a three times return on
their initial cash investment in Parent.(3)
    
    The dollar amount provided herein reflects the dollar amount recognized for financial
statement reporting purposes for the 2010 fiscal year in accordance ASC 718.  110




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##### Table of Contents



(4)
    
    As part of his transaction bonus, Mr. Chieffe was granted an option on September 7, 2010 with
an exercise price per share equal to $1.00. The exercise price was lower than the fair market
value of our common stock on the date of grant. The option, however, could only be exercised
within two and one-half months following the end of the year in which it first became
exercisable.(5)
    
    Represents the number of options modified in connection with the Merger to eliminate
provisions which caused variability in the number of shares underlying the options described
in footnote 6 below.(6)
    
    The dollar amount provided herein reflects the dollar amount recognized for financial
statement reporting purposes for the 2010 fiscal year in accordance with ASC 718, due to the
modification of the options granted under the 2004 Plan, which option was subject to
adjustment in the event our previous investor, Investcorp, converted its preferred stock of
AMH II into common stock as described in more detail below under the caption Outstanding
Equity Awards At Fiscal Year-End  AMH Holdings II, Inc. 2004 Stock Option Plan to eliminate
provisions which caused variability in the number of shares underlying the options.(7)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Investment Holdings Corp. 2010 Stock Incentive Plan, of the total number of options
granted on October 13, 2010, eighty percent are subject to time-based vesting and the
remaining twenty percent are subject to performance-based vesting. Thirty percent of the
total number of options granted have an exercise price equal to the grant date fair market
value of the underlying common stock; twenty-five percent of the total number of options
granted have an exercise price equal to two times the grant date fair market value of such
stock; and the remaining twenty-five percent of the total number of options granted have an
exercise price equal to three times the grant date fair market value of such stock. Each of
the time-based options vest solely upon the executives continued service over a five year
period. The vesting of such time-based options accelerates in full if there is a change in
control.(8)
    
    The exercise price equals two times the grant date fair market value of Parents common
stock.(9)
    
    The exercise price equals three times the grant date fair market value of Parents common
stock.(10)
    
    The grant date fair value is zero. The stock underlying the options awarded by Parent is
governed by the stockholders agreement of Parent. Stock purchased as a
result of the exercise of options is subject to a call right by Parent, and as a result, other
than in limited circumstances, stock issued upon the exercise of the option may be repurchased
at the right of Parent. This repurchase feature results in no compensation expense recognized
in connection with options granted by Parent, until such time as the exercise of the options
could occur without repurchase of the shares by the Parent, which is only likely to occur upon
a liquidity event, change in control or IPO.  111




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##### Table of Contents



OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 Option AwardsEquityIncentiveNumber
    
    
    
    
    
    
    Plan Awards:of
    
    
    Number of
    
    
    NumberSecurities
    
    
    Securities
    
    
    of SecuritiesUnderlying
    
    
    Underlying
    
    
    UnderlyingUnexercised
    
    
    Unexercised
    
    
    Unexercised
    
    
    OptionOptions
    
    
    Options
    
    
    Unearned
    
    
    Exercise
    
    
    Option(#)
    
    
    (#)
    
    
    Options
    
    
    Price
    
    
    ExpirationName
    
    Exercisable
    
    
    Unexercisable
    
    
    (#)
    
    
    ($)
    
    
    DateThomas N. Chieffe
    
    
    
    
    
    
    576,099
    (1)
    
    
    
    (2)
    
    
    10.00
    
    
    
    10/13/2020
    
    
    
    480,082
    (1)
    
    
    
    (2)
    
    
    20.00
    
    
    
    10/13/2020
    
    
    
    480,082
    (1)
    
    
    
    (2)
    
    
    30.00
    
    
    
    10/13/2020
    
    
    
    
    
    
    
    384,066
    (2)
    
    
    10.00
    
    
    
    10/13/2020Stephen E. Graham
    
    
    
    
    
    
    135,553
    (1)
    
    
    
    (2)
    
    
    10.00
    
    
    
    10/13/2020
    
    
    
    112,961
    (1)
    
    
    
    (2)
    
    
    20.00
    
    
    
    10/13/2020
    
    
    
    112,961
    (1)
    
    
    
    (2)
    
    
    30.00
    
    
    
    10/13/2020
    
    
    
    
    
    
    
    90,368
    (2)
    
    
    10.00
    
    
    
    10/13/2020Warren J. Arthur
    
    
    
    
    
    
    169,441
    (1)
    
    
    
    (2)
    
    
    10.00
    
    
    
    10/13/2020
    
    
    
    141,201
    (1)
    
    
    
    (2)
    
    
    20.00
    
    
    
    10/13/2020
    
    
    
    141,201
    (1)
    
    
    
    (2)
    
    
    30.00
    
    
    
    10/13/2020
    
    
    
    
    
    
    
    112,961
    (2)
    
    
    10.00
    
    
    
    10/13/2020Robert M. Franco
    
    
    
    
    
    
    203,329
    (1)
    
    
    
    (2)
    
    
    10.00
    
    
    
    10/13/2020
    
    
    
    169,441
    (1)
    
    
    
    (2)
    
    
    20.00
    
    
    
    10/13/2020
    
    
    
    169,441
    (1)
    
    
    
    (2)
    
    
    30.00
    
    
    
    10/13/2020
    
    
    
    
    
    
    
    135,553
    (2)
    
    
    10.00
    
    
    
    10/13/2020John F. Haumesser
    
    
    
    
    
    
    135,553
    (1)
    
    
    
    (2)
    
    
    10.00
    
    
    
    10/13/2020
    
    
    
    112,961
    (1)
    
    
    
    (2)
    
    
    20.00
    
    
    
    10/13/2020
    
    
    
    112,961
    (1)
    
    
    
    (2)
    
    
    30.00
    
    
    
    10/13/2020
    
    
    
    
    
    
    
    90,368
    (2)
    
    
    10.00
    
    
    
    10/13/2020
 
 (1)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Investment Holdings Corp. 2010 Stock Incentive Plan, of the total number of options
granted on October 13, 2010, eighty percent are subject to
time-based vesting and 20% are performance-based vesting. Of the total number of options granted, thirty percent have an exercise price equal to the grant date fair
market value of the underlying common stock; twenty-five percent of the total number of
options granted have an exercise price equal to two times the grant date fair market value of
such stock; and the remaining twenty-five percent of the total number of options granted have
an exercise price equal to three times the grant date fair market value of such stock. Each
of the time-based options vest solely upon the executives continued service over a five year
period. The vesting accelerates in full if there is a change in control.(2)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Investment Holdings Corp. 2010 Stock Incentive Plan, of the total number of options
granted on October 13, 2010, twenty percent are subject to performance-based vesting. The
performance-based options were granted with an exercise price equal
to the grant date fair
market value of the underlying stock and vest upon the attainment of specified annual
EBITDA-based performance goals over a five year period, subject to the executives continued
service over such period. If the goal for a given year is not achieved, the performance-based
option may vest if the applicable EBITDA goal is achieved in the next succeeding year. In the
event of a change in control, that portion of the performance-based option that was scheduled
to vest in the year in which such change in control occurs and the portion that was scheduled
to vest in any subsequent years shall become vested immediately prior to such change in
control. If a liquidity event occurs (defined as the first to occur of either a change in
control of us or an initial public offering of our common stock), any portion of the
performance-based option that did not vest in any prior year because the applicable EBITDA
target was not met will vest if and only if the H&F Investors receive a three times return on
their initial cash investment in Parent.   112




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AMH Investment Holdings Corp. 2010 Stock Incentive Plan
    113




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##### Table of Contents



AMH Holdings II, Inc. 2004 Stock Option Plan
  i.e
  Associated Materials Holdings Inc. 2002 Stock Option Plan
  OPTIONS EXERCISES AND STOCK VESTED
 Option AwardsNumber of Shares
    
    
    Value Realized onAcquired on Exercise
    
    
    ExerciseName
    
    (#) (1)
    
    
    ($) (2)Thomas N. Chieffe
    
    
    
    
    
    
    14,100,490Stephen E. Graham
    
    
    
    
    
    
    2,726,365Warren J. Arthur
    
    
    
    
    
    
    3,270,016Robert M. Franco
    
    
    
    
    
    
    5,450,071John F. Haumesser
    
    
    
    
    
    
    3,406,294
 (1)
    
    No shares of common stock were acquired upon option exercise. Rather the options were
cancelled and cashed out in connection with the Merger and the named executive officer received the
applicable value set forth herein.(2)
    
    The dollar amount provided herein reflects the cash payment for cancellation of the option in
connection with the Merger, which amount was calculated as the product of (1) the number of shares
of common stock subject to the option as of the effective time of the Merger multiplied by (2) the
excess, if any, of $133.95 (which was the per share Merger consideration) over the exercise price
per share of the common stock subject to such option.  114




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##### Table of Contents



PENSION BENEFITS
  NON-QUALIFIED DEFERRED COMPENSATION
  POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
 Severance Benefits.
 Individual Agreements.
 Option Agreements
  115




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##### Table of Contents



Change in Control SeveranceSeverance
    
    
    BenefitsName
    
    Payments (1)
    
    
    (3)
    
    
    TotalThomas N. Chieffe
    
    $
    4,500,000
    (2)
    
    $
    43,080
    
    
    $
    4,543,080
    (2)Stephen E. Graham
    
    
    1,248,000
    
    
    
    43,080
    
    
    
    1,291,080Warren J. Arthur
    
    
    1,040,000
    
    
    
    43,080
    
    
    
    1,083,080Robert M. Franco
    
    
    1,375,920
    
    
    
    43,080
    
    
    
    1,419,000John F. Haumesser
    
    
    1,048,320
    
    
    
    43,080
    
    
    
    1,091,400
 
 (1)
    
    Based on the terms of the employment agreements for each of our executives other than Mr.
Chieffe, such amount is equal to the sum of two times the executives current annual base
salary and two times the executives annual incentive bonus (based on the highest amount of
annual incentive bonus earned by the executive in any calendar year during the three calendar
years immediately preceding the year in which the Merger occurred). No pro rata bonus would
be payable if an executive was terminated on January 1, 2011 because the applicable employment
agreement provides that a pro-rata bonus is payable only if such termination occurs on or
after June 30th of the same calendar year.(2)
    
    Based on the terms of Mr. Chieffes employment agreement, such amount is equal to the sum of
two times his current annual base salary of $600,000; two times his annual incentive bonus of
$600,000 (based on the highest amount of annual incentive bonus earned by Mr. Chieffe in any
calendar year during the three calendar years immediately preceding the year in which the
Merger occurred), and the remaining unpaid portion of his special retention incentive bonus in
the amount of $1,500,000. No pro rata bonus would be payable if Mr. Chieffe was terminated on
January 1, 2011 because his employment agreement provides that a pro-rata bonus is payable
only if such termination occurs on or after June 30th of the same calendar year.(3)
    
    Represents an estimate of the medical benefits, based on our current cost per employee, to
which the executives would be entitled in the event of a change in control and termination in
addition to amounts due for employee outplacement services.  116




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##### Table of Contents



DIRECTOR COMPENSATION
 Changein PensionValue andFees
    
    
    
    
    
    
    
    
    
    
    Non-Equity
    
    
    NonqualifiedEarned
    
    
    
    
    
    
    
    
    
    
    Incentive
    
    
    Deferredor Paid
    
    
    Stock
    
    
    Option
    
    
    Plan
    
    
    Compensation
    
    
    All OtherName
    
    in Cash
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Earnings
    
    
    Compensation
    
    
    Total (1)Erik Ragatz
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Charles A. Carroll
    
    
    16,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,500Dana R. Snyder (2)
    
    
    31,000
    
    
    
    
    
    
    
    817,537
    (3)
    
    
    
    
    
    
    
    
    
    
    472,531
    (4)
    
    
    1,321,068Robert B. Henske
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stefan Goetz
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adam B. Durrett
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lars C. Haegg (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ira D. Kleinman (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kevin C. Nickelberry (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dennis W. Vollmershausen (2)
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000Christopher D. Whalen (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Mr. Chieffe, our Chief Executive Officer, is not included in this table as he is our employee
and thus receives no compensation for his services as a director. The compensation received
by Mr. Chieffe is shown in the Summary Compensation Table.(2)
    
    Messrs. Snyder, Haegg, Kleinman, Nickelberry, Vollmershausen and Whalen were members of the
Board of Directors of AMH II prior to the Merger. Mr. Haegg was the Chairman of the Board of
Directors of AMH II.(3)
    
    The dollar amount provided herein reflects the dollar amount recognized for financial
statement reporting purposes for the 2010 fiscal year in accordance with ASC 718, due to the
modification of the options referred to in footnote 4 immediately below to eliminate
provisions which caused variability in the number of shares underlying the options.(4)
    
    The dollar amount provided herein includes a cash payment made in lieu of adjusting the
number of shares subject to an option granted under the 2004 Plan, which option was subject to
adjustment in the event our previous investor, Investcorp, converted its preferred stock of
AMH II into common stock as described in more detail below under the caption Outstanding
Equity Awards At Fiscal Year-End  AMH Holdings II, Inc. 2004 Stock Option Plan. The amount
of the payment was determined by the product of the number of shares that would have been
received had the option been adjusted upwards multiplied by (2) the excess, if any, of $133.95
(the fair market value of the underlying stock at the time of such conversion) over the
exercise price per share of the common stock subject to such option.    117




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##### Table of Contents



COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
  COMPENSATION COMMITTEE REPORT
  THE COMPENSATION COMMITTEEErik D. Ragatz, ChairmanCharles A. CarrollDana R. SnyderRobert B. Henske
  118




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##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
      119




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##### Table of Contents




    
    each person known by us to own beneficially 5% or more of the outstanding
voting preferred stock or voting common stock of Parent;
 
    
    the directors and named executive officers of Parent and our company; and
 
    
    all directors and named executive officers of Parent and our company as a group.
  Common StockNumber of Shares
    
    
    % of ClassInvestment funds affiliated with
Hellman & Friedman LLC (1) (2)
    
    
    53,995,650
    
    
    
    97.83
    %Executive Officers and Directors
    
    
    
    
    
    
    *Thomas N. Chieffe
    
    
    338,114
    
    
    
    *Stephen E. Graham
    
    
    61,463
    
    
    
    *Warren J. Arthur
    
    
    90,391
    
    
    
    *Robert M. Franco
    
    
    122,866
    
    
    
    *John F. Haumesser
    
    
    76,791
    
    
    
    *Erik D. Ragatz (1)
    
    
    
    
    
    
    *Charles A. Carroll
    
    
    500,000
    
    
    
    *Dana R. Snyder
    
    
    10,000
    
    
    
    *Robert B. Henske (1)
    
    
    
    
    
    
    *Stefan Goetz (1)
    
    
    
    
    
    
    *Adam B. Durrett (1)
    
    
    
    
    
    
    *All directors and executive officers as a
group
    
    
    1,199,625
    
    
    
    2.17
    %
 
 *
    
    Indicates ownership of less than 1%(1)
    
    Hellman & Friedman Capital Partners VI, L.P. (HFCP VI), Hellman & Friedman Capital
Partners VI (Parallel), L.P. (HFCP VI (Parallel)), Hellman & Friedman Capital Executives VI,
L.P. (HFCE VI) and Hellman & Friedman Capital Associates VI, L.P. (HFCA VI, and
together with HFCP VI, HFCP VI (Parallel) and HFCE VI, the H&F Entities) beneficially own
53,995,650 shares of Parent common stock. The address for each of the H&F Entities is c/o
Hellman & Friedman LLC, One Maritime Plaza, 12th Floor, San Francisco, CA 94111. Such
shares of Parent common stock are owned of record by HFCP VI, which owns 42,196,797
shares, HFCP VI (Parallel), which owns 11,077,555 shares, HFCE VI, which owns 174,424
shares, and HFCA VI, which owns 55,645 shares. Hellman & Friedman Investors VI, L.P.
(H&F Investors VI) is the general partner of each of the H&F Entities. Hellman & Friedman
LLC (H&F) is the general partner of H&F Investors VI. As the general partner of H&F
Investors VI, H&F may be deemed to have beneficial ownership of the shares over which any of
the H&F Entities has voting or dispositive power. An investment committee of H&F has sole
voting and dispositive control over such shares of Parent common stock. Messrs. Ragatz, Henske
and Goetz serve as Managing Directors of Hellman & Friedman, but none of them serves on the
investment committee. Each of the members of the investment committee, as well as Messrs.
Ragatz, Henske, Goetz and Durrett, disclaim beneficial ownership of such shares of Parent
common stock, except to the extent of their respective pecuniary interest therein.(2)
    
    Includes shares issuable to the H&F Entities pursuant to convertible notes of Parent that
mature on April 13, 2011 in the amounts of 387,414 shares to HFCP VI, 101,704 shares to HFCP
VI (Parallel), 1,601 shares to HFCE VI and 510 shares to HFCA VI.  120




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##### Table of Contents



ITEM 13.
    
    CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
 AGREEMENTS RELATED TO THE MERGER
  Stockholders Agreement
  Board of Directors
 
    
    our Chief Executive Officer (unless otherwise determined in writing by the H&F
Investors); and
 
    
    such other directors as shall be designated from time to time by the H&F Investors.
  Indemnification
 
    
    an H&F Investors or its affiliates ownership of equity interests or other
securities of Parent or their control of or ability to influence Parent or any of its
subsidiaries; or
 
    
    the business, operations, properties, assets or other rights or liabilities of
Parent or any of its subsidiaries.
 Transfer Restrictions
  121




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##### Table of Contents



Registration Rights
 Tag-Along Rights
 Drag-Along Rights
 Preemptive Rights
 Call Rights
 Indemnification of Directors and Officers
    122




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##### Table of Contents



AGREEMENTS WITH HARVEST PARTNERS AND INVESTCORP
 AMH II Stockholders Agreement
  Management Advisory Agreement
   OTHER RELATIONSHIPS
 Intercompany Loan Agreement
  Employment Agreements with Our Executive Officers
  AlixPartners
   123




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##### Table of Contents



Other
  POLICIES AND PROCEDURES FOR REVIEW AND APPROVAL OF RELATED PARTY TRANSACTIONS
  DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
  2010
    
    
    2009Audit Fees
    
    $
    841
    
    
    $
    996Audit-Related Fees
    
    
    301
    
    
    
    85Tax Fees
    
    
    210
    
    
    
    64Other Fees
    
    
    429
    
    
    
    358Total Fees
    
    $
    1,781
    
    
    $
    1,503
  AUDIT FEES
   124




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##### Table of Contents



AUDIT-RELATED FEES
  TAX FEES
  ALL OTHER FEES
   125




---



##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  (A)(1) FINANCIAL STATEMENTS
  (A)(2) FINANCIAL STATEMENT SCHEDULES
  (A)(3) EXHIBITS
   126




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##### Table of Contents



SIGNATURES
  ASSOCIATED MATERIALS, LLCBy:
    
    /s/ Thomas N. Chieffe

Thomas N. ChieffePresident and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ Stephen E. Graham

Stephen E. GrahamVice President-Chief Financial Officer and Secretary(Principal Financial Officer and PrincipalAccounting Officer)
   Signature
    
    Title
    
    Date/s/ Thomas N. Chieffe

Thomas N. Chieffe
    
    President and Chief Executive Officer 
(Principal
Executive Officer)
    
    April 1, 2011/s/ Stephen E. Graham

Stephen E. Graham
    
    Vice President-Chief Financial Officer
and Secretary (Principal
Financial Officer and Principal
Accounting Officer)
    
    April 1, 2011/s/ Erik Ragatz

Erik Ragatz
    
    Chairman of the Board of Directors
    
    April 1, 2011/s/ Charles A. Carroll

Charles A. Carroll
    
    Director
    
    April 1, 2011/s/ Dana R. Snyder

Dana R. Snyder
    
    Director
    
    April 1, 2011/s/ Robert B. Henske

Robert B. Henske
    
    Director
    
    April 1, 2011/s/ Stefan Goetz

Stefan Goetz
    
    Director
    
    April 1, 2011/s/ Adam B. Durrett

Adam B. Durrett
    
    Director
    
    April 1, 2011
  127




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Number
    
    Description2.1
    
    
    Agreement and Plan of Merger, dated as of September 8, 2010, among AMH
Holdings II, Inc., Carey Investment Holdings Corp., Carey Intermediate
Holdings Corp. and Carey Acquisition Corp. (incorporated by reference to
Exhibit 2.1 to Associated Materials, LLCs Form 8-K, filed with the SEC on
September 13, 2010).3.1
    
    
    Certificate of Formation of Associated Materials, LLC (incorporated by
reference to Exhibit 3.1 to Associated Materials, LLCs Annual Report on
Form 10-K, filed with the SEC on March 25, 2008).3.2
    
    
    Amended and Restated Limited Liability Company Agreement of Associated
Materials, LLC.4.1
    
    
    Indenture, dated as of October 13, 2010, among Carey Acquisition Corp.,
Carey New Finance, Inc., Associated Materials, LLC, the guarantors named
therein and Wells Fargo Bank, National Association, as trustee and notes
collateral agent.4.2
    
    
    Form of 9.125% Senior Secured Note due 2017 (included in Exhibit 4.1 hereto).4.3
    
    
    Registration Rights Agreement, dated as of October 13, 2010, among Carey
Acquisition Corp., Carey New Finance, Inc., Associated Materials, LLC, the
guarantors named therein, Deutsche Bank Securities Inc., UBS Securities LLC
and Barclays Capital Inc.10.1
    
    
    Revolving Credit Agreement, dated as of October 13, 2010, among Associated
Materials, LLC, Carey Intermediate Holdings Corp., Gentek Holdings, LLC,
Gentek Building Products, Inc., Gentek Canada Holdings Limited, Associated
Materials Canada Limited, Gentek Building Products Limited Partnership, the
lenders party thereto and the agents party thereto.10.2
    
    
    US Security Agreement, dated as of October 13, 2010, among Carey
Intermediate Holdings Corp., Associated Materials, LLC, the other grantors
named therein and UBS AG, Stamford Branch, as US collateral agent.10.3
    
    
    US Pledge Agreement, dated as of October 13, 2010, among Carey Intermediate
Holdings Corp., Associated Materials, LLC, the other pledgors named therein
and UBS AG, Stamford Branch, as US collateral agent.10.4
    
    
    US Guarantee, dated as of October 13, 2010, among Carey Intermediate
Holdings Corp., Associated Materials, LLC, the other guarantors named
therein and UBS AG, Stamford Branch, as US collateral agent.10.5
    
    
    Canadian Security Agreement, dated as of October 13, 2010, among Associated
Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building
Products Limited Partnership, the other grantors named therein and UBS AG
Canada Branch, as Canadian collateral agent.
  128




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##### Table of Contents



Exhibit Number
    
    Description10.6
    
    
    Canadian Pledge Agreement, dated as of October 13, 2010, among Associated
Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building
Products Limited Partnership, the other pledgors named therein and UBS AG
Canada Branch, as Canadian collateral agent.10.7
    
    
    Canadian Pledge Agreement, dated as of October 13, 2010, between Gentek
Building Products, Inc. and UBS AG, Stamford Branch, as US collateral agent.10.8
    
    
    Canadian Guarantee, dated as of October 13, 2010, among Associated Materials
Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products
Limited Partnership, the other guarantors named therein and UBS AG Canada
Branch, as Canadian collateral agent.10.9
    
    
    Intercreditor Agreement, dated as of October 13, 2010, between UBS AG,
Stamford Branch, as collateral agent under the revolving loan documents, and
Wells Fargo Bank, National Association, as collateral agent under the
indenture and notes collateral documents.10.10
    
    
    Notes Security Agreement, dated as of October 13, 2010, among Associated
Materials, LLC, the other grantors named therein and Wells Fargo Bank,
National Association, as notes collateral agent.10.11
    
    
    Notes Pledge Agreement, dated as of October 13, 2010, among Associated
Materials, LLC, the other pledgors named therein and Wells Fargo Bank,
National Association, as collateral agent.10.12
    *
    
    Stockholders Agreement, dated as of October 13, 2010, among Carey Investment
Holdings Corp., Carey Intermediate Holdings Corp., Associated Materials, LLC
and the stockholders and holders of options signatory thereto.10.13
    *
    
    Carey Investment Holdings Corp. 2010 Stock Incentive Plan.10.14
    *
    
    Form of Stock Option Agreement (Time Vesting Option) for awards made under
the 2010 Stock Incentive Plan.10.15
    *
    
    Form of Stock Option Agreement (Performance Vesting Option) for awards made
under the 2010 Stock Incentive Plan.10.16
    *
    
    Employment Agreement, dated as of October 13, 2010, between Associated
Materials, LLC and Thomas N. Chieffe.10.17
    *
    
    Employment Agreement, dated as of October 13, 2010, between Associated
Materials, LLC and Stephen Graham.10.18
    *
    
    Employment Agreement, dated as of October 13, 2010, between Associated
Materials, LLC and Warren J. Arthur.10.19
    *
    
    Employment Agreement, dated as of December 20, 2010, between Associated
Materials, LLC and Brad Beard.
  129




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##### Table of Contents



Exhibit Number
    
    Description10.20
    *
    
    Employment Agreement, dated as of October 13, 2010, between Associated
Materials, LLC and John F. Haumesser.10.21
    *
    
    Employment Agreement, dated as of October 13, 2010, between Associated
Materials, LLC and Robert M. Franco.10.22
    *
    
    Form of Indemnification Agreement between Associated Materials, LLC and
certain of the directors and executive officers of Associated Materials,
LLC.12.1
    
    
    Statement of Computation of Ratio of Earnings to Fixed Charges.21.1
    
    
    Subsidiaries of the Registrant.31.1
    
    
    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.
  *
    
    Management contract or compensatory plan or arrangement.  130