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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 3, 2009.
 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
 o þ
 þ o
 þ 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 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERSPART 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 AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERSITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESPART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-KSIGNATURESEXHIBIT INDEXExhibit 10.16Exhibit 21.1Exhibit 24.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents  
 
 PART I
 
 
 ITEM 1. BUSINESS
 GENERAL DEVELOPMENT OF BUSINESS
 ® ® ®
  ® ®
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##### Table of Contents



FINANCIAL INFORMATION ABOUT SEGMENTS
  INDUSTRY OVERVIEW
  
    
    Favorable demographics. The segment of the population age 45 years and above, which
generally favors professionally installed, low maintenance home improvements, is growing.
By 2010, this age segment is expected to represent approximately 40% of the United States
population.
 
    
    Aging of the housing stock. The median home age increased from 23 years in 1985 to 35
years in 2008, and more than 64% of the current housing stock was built prior to 1980.
 
    
    Increase in average home size. The average home size increased over 42% from 1,785
square feet in 1985 to 2,542 square feet in 2008.
 
    
    Favorable mortgage interest rates. Mortgage interest rates over the past few years have
been at historically low levels.
  2




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Products
 ® ® ® ® ® ®
 ® ® ® ® ® ®
  3




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®
  ®
  4




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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
Board and Batten 
Centennial Beaded
CenterLock 
Charter Oak
Cyprus Creek
Northern Forest
Preservation
Prodigy
Revolution (WPC)
Sequoia Select
Sovereign Select
Williamsport
    
    CedarwoodDriftwood
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
New Construction
Performance Series
    
    Aurora
Conquest
Driftwood
Homerun
    
    
    
    Woodgrain Series
 ®
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Marketing and Distribution
    Manufacturing.
  6




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Raw Materials.
 Competition.
  Seasonality.
 BACKLOG
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TRADEMARKS, PATENTS AND OTHER INTANGIBLE ASSETS
 ® ® ® ® ® ®
  GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
   EMPLOYEES
    8




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FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
  AVAILABLE INFORMATION
 www.associatedmaterials.com
  9




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##### Table of Contents



ITEM 1A . RISK FACTORS
   Conditions
in the housing market and economic conditions generally have affected and may continue to
affect the Companys operating performance.
  The Companys substantial level of indebtedness could adversely affect the Companys financial
condition.
   
    
    the Company must use a substantial portion of its cash flow from operations to pay
interest and principal on its credit facility, its notes and other indebtedness, which reduces funds available
to the Company for other purposes such as working capital, capital expenditures, other
general corporate purposes, potential acquisitions and for payment of dividends to its
parent companies;
 
    
    the Companys ability to refinance such indebtedness or to obtain additional financing
for working capital, capital expenditures, acquisitions or general corporate purposes may
be impaired;
 
    
    the Company is exposed to fluctuations in interest rates, because the Companys
asset-based credit facility (the ABL Facility) has a variable rate of interest;
 
    
    the Companys leverage may be greater than that of some of its competitors, which may
put it at a competitive disadvantage and reduce the Companys flexibility in responding to
current and changing industry and financial market conditions;
 
    
    the Company may be more vulnerable to the current economic downturn and adverse
developments in its business; and
 
    
    the Company may be unable to comply with financial and other restrictive covenants in
the ABL Facility, in the indenture governing its $165 million of 9 3/4% senior subordinated
notes due 2012 (9 3/4% notes) and other debt obligations, some of which require the
Company to maintain specified financial ratios, and limit the Companys ability to incur
additional debt and sell assets, which could result in an event of default that, if not
cured or waived, would have an adverse effect on the Companys business and prospects and
could result in bankruptcy.
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If AMH or AMH II defaults on its debt obligations, it could result in a change of control.
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The Company and its parent companies may be able to incur more indebtedness, in which case,
the risks associated with their substantial leverage, including their ability to service their
indebtedness, would increase.
  The right to receive payments on the Companys 9 3/4% notes and related guarantees is
subordinated to the Companys senior debt.
  The indenture for the Companys 9 3/4% notes and its ABL Facility, as well as the terms of the
debt of AMH and AMH II, impose significant operating and financial restrictions on the Company.
  
    
    incur or guarantee additional indebtedness;
    
    pay dividends or make other distributions;
    
    repurchase stock;
    
    make investments;
    
    sell or otherwise dispose of assets including capital stock of subsidiaries;
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
    
    create liens;
    
    enter into agreements restricting the Companys subsidiaries ability to pay dividends;
    
    enter into transactions with affiliates; and
    
    consolidate, merge or sell all of its assets.
    Continued disruption in the financial markets could negatively affect the Company.
  The Company has substantial fixed costs and, as a result, operating income is sensitive to
changes in net sales.
  Changes in raw material costs and availability can adversely affect the Companys profit
margins.
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The Companys industry is highly competitive.
  The Company has significant goodwill and other intangible assets, which if impaired, could
require the Company to incur significant charges.
  The Company is subject to foreign exchange risk as a result of exposures to changes in
currency exchange rates between the United States and Canada.
  The Company is controlled by affiliates of Investcorp S.A. and Harvest Partners, Inc., whose
interests may be different than other investors.
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The Company could face potential product liability claims relating to products it manufactures
or distributes.
  The Company may incur significant, unanticipated warranty claims.
  The Company is subject to various environmental statutes and regulations, which may result in
significant costs.
   
 
 ITEM 1B . UNRESOLVED STAFF COMMENTS
   15




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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)Cedar Rapids, Iowa
    
    Vinyl Windows
    
    
    257,000
    (1)Kinston, North Carolina
    
    Vinyl Windows
    
    
    319,000
    (1)London, Ontario
    
    Vinyl Windows
    
    
    60,000Burlington, Ontario
    
    Vinyl Siding Products
    
    
    538,000
    (2)Ennis, Texas
    
    Vinyl Siding Products
    
    
    237,000
    (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
    
    
    293,000
    (1)
 
 (1)
    
    Leased facilities.(2)
    
    The Company leases a portion of its warehouse space in this facility.(3)
    
    Includes a 237,000 square foot warehouse that was built during 2005 and is leased. The
Company owns the remainder of the facility.     16




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ITEM 3. LEGAL PROCEEDINGS
      17




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
   18




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PART II
 
 
 ITEM 5.
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 MARKET INFORMATION
  HOLDERS
  DIVIDENDS
   SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
  RECENT SALES OF UNREGISTERED SECURITIES
  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
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ITEM 6. SELECTED FINANCIAL DATA
  Years EndedJanuary 1,
    
    
    December 31,
    
    
    December 30,
    
    
    December 29,
    
    
    January 3,2005
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2009(In thousands)Income Statement Data:Net sales
    
    $
    1,093,959
    
    
    $
    1,173,591
    
    
    $
    1,250,054
    
    
    $
    1,204,056
    
    
    $
    1,133,956Cost of sales
    
    
    804,951
    
    
    
    906,267
    
    
    
    947,776
    
    
    
    899,839
    
    
    
    859,107Gross profit
    
    
    289,008
    
    
    
    267,324
    
    
    
    302,278
    
    
    
    304,217
    
    
    
    274,849Selling, general and administrative
expenses
    
    
    184,524
    
    
    
    198,493
    
    
    
    203,844
    
    
    
    208,001
    
    
    
    212,025Manufacturing restructuring costs (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,783Impairment of long-lived assets (2)
    
    
    
    
    
    
    
    
    
    
    3,423
    
    
    
    
    
    
    
    Transaction costs:Bonuses (3)
    
    
    36,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock option compensation expense
(4)
    
    
    30,838
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Facility closure costs, net (5)
    
    
    4,535
    
    
    
    3,956
    
    
    
    (92
    )
    
    
    
    
    
    
    Income from operations
    
    
    32,300
    
    
    
    64,875
    
    
    
    95,103
    
    
    
    96,216
    
    
    
    61,041Interest expense (6)
    
    
    27,784
    
    
    
    31,922
    
    
    
    32,413
    
    
    
    27,943
    
    
    
    24,307Foreign currency (gain) loss
    
    
    387
    
    
    
    781
    
    
    
    (703
    )
    
    
    (227
    )
    
    
    1,809Recapitalization transaction costs (7)
    
    
    16,297
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) before income taxes
    
    
    (12,168
    )
    
    
    32,172
    
    
    
    63,393
    
    
    
    68,500
    
    
    
    34,925Income taxes (benefit)
    
    
    (1,234
    )
    
    
    9,709
    
    
    
    30,096
    
    
    
    28,845
    
    
    
    13,689Net income (loss)
    
    $
    (10,934
    )
    
    $
    22,463
    
    
    $
    33,297
    
    
    $
    39,655
    
    
    $
    21,236Other Data:Cash provided by operating activities
    
    $
    18,737
    
    
    $
    47,897
    
    
    $
    68,300
    
    
    $
    71,351
    
    
    $
    16,262Capital expenditures
    
    
    18,741
    
    
    
    20,959
    
    
    
    14,648
    
    
    
    12,393
    
    
    
    11,498Cash used in investing activities
    
    
    (18,651
    )
    
    
    (20,877
    )
    
    
    (11,740
    )
    
    
    (13,175
    )
    
    
    (11,473
    )Cash provided by (used in) financing
activities
    
    
    53,176
    
    
    
    (72,882
    )
    
    
    (53,863
    )
    
    
    (53,018
    )
    
    
    (18,682
    )Balance Sheet Data (end of period):Working capital
    
    $
    200,048
    
    
    $
    154,536
    
    
    $
    151,022
    
    
    $
    157,550
    
    
    $
    162,149Total assets
    
    
    850,855
    
    
    
    817,597
    
    
    
    786,331
    
    
    
    793,939
    
    
    
    745,289Long-term debt, less current maturities
    
    
    339,125
    
    
    
    317,000
    
    
    
    271,000
    
    
    
    226,000
    
    
    
    221,000
 
 (1)
    
    During the first quarter of 2008, the Company committed to, and subsequently completed,
relocating a portion of its vinyl siding production from Ennis, Texas to its vinyl
manufacturing facilities in West Salem, Ohio and Burlington, Ontario. In addition, during
2008, the Company transitioned the majority of distribution of its U.S. vinyl siding products
to a center located in Ashtabula, Ohio and committed to a plan to discontinue use of its
warehouse facility adjacent to its Ennis, Texas vinyl manufacturing facility. For the fiscal
year ended January 3, 2009, the amount represents asset impairment costs, costs incurred to
relocate manufacturing equipment, and costs associated with the transition of distribution
operations. In addition, the Company recorded $0.9 million of inventory markdown costs
associated with these restructuring costs within cost of sales in the statement of operations
during the second quarter of 2008.(2)
    
    The Company recorded an impairment charge of $2.6 million against certain machinery and
equipment, trademarks, and patents used to manufacture its fence and rail products during 2006
as their carrying values exceed their fair value. In addition, due to changes in the Companys
information technology and business strategies, $0.8 million of software and other equipment
was considered impaired.  20




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(3)
    
    Represents bonuses paid to certain members of management and a director in conjunction with
the March 2004 dividend recapitalization and the December 2004 recapitalization transaction of
$14.5 million and $22.3 million, respectively.(4)
    
    Represents stock option compensation expense recognized in connection with the December 2004
recapitalization transaction resulting from the exercise and redemption of certain stock
options.(5)
    
    Represents one-time costs associated with the closure of the Freeport, Texas manufacturing
facility consisting primarily of asset impairments of approximately $3.7 million, equipment
relocation costs of approximately $0.3 million, severance benefits of approximately $0.3
million and contract termination costs of approximately $0.2 million for the year ended
January 1, 2005 and relocation costs for certain equipment of approximately $1.9 million,
inventory relocation costs of approximately $1.5 million, facility shut down costs of
approximately $0.4 million and contract termination costs of approximately $0.2 million for
the year ended December 31, 2005. Amounts recorded during 2006 resulted in a net gain of
approximately $0.1 million, including the gain realized upon the final sale of the facility,
partially offset by other non-recurring expenses associated with the closure of the facility.(6)
    
    The year ended January 3, 2009 includes the write-off of $1.3 million of deferred financing
costs related to the prior credit facility replaced by the ABL Facility. The year ended
January 1, 2005 includes the write-off of $2.8 million of deferred financing costs as a result
of amending and restating the Companys prior credit facility.(7)
    
    Recapitalization transaction costs include $16.3 million of investment banking, legal and
other expenses incurred as a result of the December 2004 recapitalization transaction. 
  21




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ITEM 7.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
 ® ® ®
 
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RESULTS OF OPERATIONS
  Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofTotal
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    TotalAmount
    
    
    Net Sales
    
    
    Amount
    
    
    Net Sales
    
    
    Amount
    
    
    Net SalesNet sales
    
    $
    1,133,956
    
    
    
    100.0
    %
    
    $
    1,204,056
    
    
    
    100.0
    %
    
    $
    1,250,054
    
    
    
    100.0
    %Gross profit
    
    
    274,849
    
    
    
    24.2
    
    
    
    304,217
    
    
    
    25.3
    
    
    
    302,278
    
    
    
    24.2Selling, general and
administrative expense
    
    
    212,025
    
    
    
    18.7
    
    
    
    208,001
    
    
    
    17.3
    
    
    
    203,844
    
    
    
    16.3Manufacturing
restructuring costs
    
    
    1,783
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment of long-lived
assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,423
    
    
    
    0.3Facility closure costs, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92
    )
    
    
    0.0Income from operations
    
    
    61,041
    
    
    
    5.4
    
    
    
    96,216
    
    
    
    8.0
    
    
    
    95,103
    
    
    
    7.6Interest expense, net
    
    
    24,307
    
    
    
    
    
    
    
    27,943
    
    
    
    
    
    
    
    32,413Foreign currency (gain)
loss
    
    
    1,809
    
    
    
    
    
    
    
    (227
    )
    
    
    
    
    
    
    (703
    )Income before income taxes
    
    
    34,925
    
    
    
    
    
    
    
    68,500
    
    
    
    
    
    
    
    63,393Income taxes
    
    
    13,689
    
    
    
    
    
    
    
    28,845
    
    
    
    
    
    
    
    30,096Net income
    
    $
    21,236
    
    
    
    
    
    
    $
    39,655
    
    
    
    
    
    
    $
    33,297Other Data:EBITDA (1)
    
    $
    81,930
    
    
    
    
    
    
    $
    118,505
    
    
    
    
    
    
    $
    117,953Adjusted EBITDA (1)
    
    
    86,876
    
    
    
    
    
    
    
    121,833
    
    
    
    
    
    
    
    123,896Depreciation and
amortization
    
    
    22,698
    
    
    
    
    
    
    
    22,062
    
    
    
    
    
    
    
    22,147Capital expenditures
    
    
    11,498
    
    
    
    
    
    
    
    12,393
    
    
    
    
    
    
    
    14,648
  Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Vinyl windows
    
    $
    380,260
    
    
    $
    410,164
    
    
    $
    411,295Vinyl siding products
    
    
    254,563
    
    
    
    285,303
    
    
    
    327,961Metal products
    
    
    213,163
    
    
    
    225,846
    
    
    
    224,676Third party manufactured products
    
    
    210,633
    
    
    
    205,445
    
    
    
    194,126Other products and services
    
    
    75,337
    
    
    
    77,298
    
    
    
    91,996$
    1,133,956
    
    
    $
    1,204,056
    
    
    $
    1,250,054
 
 (1)
    
    EBITDA is calculated as net income plus interest, taxes, depreciation and amortization.
Adjusted EBITDA excludes certain items. The Company considers adjusted EBITDA to be an
important indicator of its operational strength and performance of its business. The Company
has included adjusted EBITDA because it is a key financial measure used by management to (i)
assess the Companys ability to service its debt and / or incur debt and meet the Companys
capital expenditure requirements; (ii) internally measure the Companys operating performance;
and (iii) determine the Companys incentive compensation programs. In addition, the Companys
ABL Facility has 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  24




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accepted accounting principles (GAAP). Adjusted EBITDA as presented by the Company 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 the Companys operating
results or cash flows from operations (as determined in accordance with GAAP) as a measure of
the Companys liquidity.The reconciliation of the Companys net income to EBITDA and adjusted
EBITDA is as follows (in thousands): Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Net income
    
    $
    21,236
    
    
    $
    39,655
    
    
    $
    33,297Interest expense, net
    
    
    24,307
    
    
    
    27,943
    
    
    
    32,413Income taxes
    
    
    13,689
    
    
    
    28,845
    
    
    
    30,096Depreciation and amortization
    
    
    22,698
    
    
    
    22,062
    
    
    
    22,147EBITDA
    
    
    81,930
    
    
    
    118,505
    
    
    
    117,953Amortization of management fee (i)
    
    
    500
    
    
    
    500
    
    
    
    500Manufacturing restructuring costs (ii)
    
    
    2,642
    
    
    
    
    
    
    
    Loss upon disposal of assets other than by sale (iii)
    
    
    1,804
    
    
    
    
    
    
    
    Transaction costs (iv)
    
    
    
    
    
    
    1,168
    
    
    
    Tax restructuring costs (v)
    
    
    
    
    
    
    961
    
    
    
    Separation costs (vi)
    
    
    
    
    
    
    699
    
    
    
    2,085Impairment charges (vii)
    
    
    
    
    
    
    
    
    
    
    3,423Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    27Facility closure costs, net (viii)
    
    
    
    
    
    
    
    
    
    
    (92
    )Adjusted EBITDA (ix)
    
    $
    86,876
    
    
    $
    121,833
    
    
    $
    123,896
 
 (i)
    
    Represents amortization of a prepaid management fee paid to Investcorp International Inc. in
connection with the December 2004 recapitalization transaction.(ii)
    
    During the first quarter of 2008, the Company committed to, and subsequently completed,
relocating a portion of its vinyl siding production from Ennis, Texas to its vinyl
manufacturing facilities in West Salem, Ohio and Burlington, Ontario. In addition, during
2008, the Company transitioned the majority of distribution of its U.S. vinyl siding products
to a center located in Ashtabula, Ohio and committed to a plan to discontinue use of its
warehouse facility adjacent to its Ennis, Texas vinyl manufacturing facility. For the fiscal
year ended January 3, 2009, the amount represents asset impairment costs, costs incurred to
relocate manufacturing equipment, costs associated with the transition of distribution
operations, and inventory markdown costs. The inventory markdown costs of $0.9 million are
included in cost of sales in the statement of operations.(iii)
    
    As part of the Companys ongoing efforts to improve its internal controls, the Company
enhanced its controls surrounding the physical verification of property, plant and equipment
during the second quarter of 2008. The amount recorded represents the loss upon disposal of
assets other than by sale as a result of executing these enhanced controls.(iv)
    
    Represents legal and accounting fees incurred in connection with an unsuccessful bid for an
acquisition target.(v)
    
    Represents legal and accounting fees incurred in connection with a tax restructuring project
to reduce AMH IIs consolidated income tax obligations.(vi)
    
    For the fiscal year ended December 29, 2007, amount represents separation costs, including
payroll taxes, related to the resignation of Mr. Deighton, former Chief Operating Officer of
the Company. For the fiscal year ended December 30, 2006, amount represents separation costs,
including payroll taxes and benefits, related to the resignation of Mr. Caporale, former
Chairman, President and Chief Executive Officer of the Company by mutual agreement with the
Board of Directors.  25




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##### Table of Contents



(vii)
    
    Based on current and projected operating results for its vinyl fencing and railing product
lines, the Company concluded that certain machinery and equipment, trademarks, and patents
used to manufacture these products were impaired during the fourth quarter of 2006 as their
carrying values exceeded their fair value by $2.6
million. In addition, due to changes in the Companys information technology and business
strategies, $0.8 million of software and other equipment was considered impaired.(viii)
    
    Represents net gain of approximately $0.1 million, including the gain realized upon the
final sale of the Freeport, Texas facility, partially offset by other non-recurring expenses
associated with the closure of the facility.(ix)
    
    Prior year adjusted EBITDA amounts have been reclassified to conform to the current years
presentation, which, in conformity with the computation of adjusted EBITDA under the Companys
ABL Facility, excludes any adjustment for foreign currency (gain) loss. YEAR ENDED JANUARY 3, 2009 COMPARED TO YEAR ENDED DECEMBER 29, 2007
         26




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YEAR ENDED DECEMBER 29, 2007 COMPARED TO YEAR ENDED DECEMBER 30, 2006
        27




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QUARTERLY FINANCIAL DATA
   Three Months EndedMarch 29
    
    
    June 28
    
    
    September 27
    
    
    January 32008Net sales
    
    $
    200,878
    
    
    $
    314,812
    
    
    $
    342,678
    
    
    $
    275,588Gross profit
    
    
    44,613
    
    
    
    78,992
    
    
    
    86,586
    
    
    
    64,658Selling, general and administrative expenses (1)
    
    
    50,128
    
    
    
    52,862
    
    
    
    55,898
    
    
    
    53,137Income (loss) from operations
    
    
    (6,360
    )
    
    
    25,192
    
    
    
    30,688
    
    
    
    11,521Net income (loss)
    
    
    (7,753
    )
    
    
    12,041
    
    
    
    15,490
    
    
    
    1,458
 Three Months EndedMarch 31
    
    
    June 30
    
    
    September 29
    
    
    December 292007Net sales
    
    $
    218,164
    
    
    $
    337,951
    
    
    $
    349,603
    
    
    $
    298,338Gross profit
    
    
    47,716
    
    
    
    91,066
    
    
    
    91,557
    
    
    
    73,878Selling, general and administrative expenses (2)
    
    
    49,100
    
    
    
    53,244
    
    
    
    53,128
    
    
    
    52,529Income (loss) from operations
    
    
    (1,384
    )
    
    
    37,822
    
    
    
    38,429
    
    
    
    21,349Net income (loss)
    
    
    (4,638
    )
    
    
    17,019
    
    
    
    17,399
    
    
    
    9,875
 
 (1)
    
    Selling, general and administrative expenses include $1.8 million of a loss upon the disposal
of assets other than by sale during the second quarter of fiscal 2008.(2)
    
    Selling, general and administrative expenses includes $0.7 million of separation costs
related to the resignation of the Companys former Chief Operating Officer during the first
quarter of fiscal 2007, $1.2 million of transaction costs during the third quarter of fiscal
2007, and $1.0 million of tax restructuring costs during the fourth quarter of fiscal 2007.  28




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Net cash provided by operating activities
    
    $
    16,262
    
    
    $
    71,351
    
    
    $
    68,300Net cash used in investing activities
    
    
    (11,473
    )
    
    
    (13,175
    )
    
    
    (11,740
    )Net cash used in financing activities
    
    
    (18,682
    )
    
    
    (53,018
    )
    
    
    (53,863
    )
 CASH FLOWS
  CASH FLOWS FROM OPERATING ACTIVITIES
   CASH FLOWS FROM INVESTING ACTIVITIES
    29




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CASH FLOWS FROM FINANCING ACTIVITIES
     DESCRIPTION OF THE COMPANYS OUTSTANDING INDEBTEDNESS
 ABL Facility
 General
    30




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##### Table of Contents



Covenants
   
    
    excess availability under the ABL Facility exceeds $45.0 million for the total
facility, and $24.8 million and $9.0 million for the U.S. and Canadian facilities,
respectively, if the fixed asset availability (as defined) is greater than zero; or if
the fixed asset availability is equal to zero, $33.8 million for the total facility,
and $20.6 million and $7.5 million for the U.S. and Canadian facilities, respectively;
  31




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##### Table of Contents




    
    the consolidated EBITDA (as defined under the ABL Facility) of Holdings and its
subsidiaries in the most recent fiscal quarter for which financial statements have been
delivered (or, if such quarter is the first fiscal quarter of Holdings and its subsidiaries of such year, then the fiscal quarter immediately
preceding such quarter) is at least 50% of the consolidated EBITDA of such entities for
the same quarter in the prior year; and
    
    no default has occurred and is continuing under the ABL facility.
   Events of Default
  9 3/4% Notes
 General.
  32




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##### Table of Contents



Covenants.
   Events of default.
  Change of control.
 Parent Company Indebtedness
   33




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POTENTIAL IMPLICATIONS OF CURRENT TRENDS AND CONDITIONS IN THE BUILDING PRODUCTS INDUSTRY ON
THE COMPANYS LIQUIDITY AND CAPITAL RESOURCES
     34




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##### Table of Contents



CONTRACTUAL OBLIGATIONS
  Payments Due by PeriodAfterTotal
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2013Long-term debt (1)
    
    $
    221,000
    
    
    $
    
    
    
    $
    
    
    
    $
    56,000
    
    
    $
    165,000
    
    
    $
    
    
    
    $
    Interest payments on 9 3/4% notes
    
    
    56,306
    
    
    
    16,088
    
    
    
    16,087
    
    
    
    16,087
    
    
    
    8,044
    
    
    
    
    
    
    
    Operating leases (2)
    
    
    129,449
    
    
    
    32,273
    
    
    
    24,907
    
    
    
    19,270
    
    
    
    16,679
    
    
    
    12,970
    
    
    
    23,350Expected pension contributions (3)
    
    
    33,718
    
    
    
    5,468
    
    
    
    7,261
    
    
    
    7,265
    
    
    
    6,931
    
    
    
    6,793
    
    
    
    
 
 (1)
    
    Represents principal amounts, but not interest. The Companys long-term debt consists of the
outstanding balance under the ABL Facility as of January 3, 2009 and the 9 3/4% notes. See
Note 7 to the consolidated financial statements.(2)
    
    For additional information on the Companys operating leases, see Note 8 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 the Companys 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. The
Company cannot reasonably estimate payments beyond 2013.     35




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##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS
    RELATED PARTY TRANSACTIONS
      36




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##### Table of Contents



EFFECTS OF INFLATION
  RECENT ACCOUNTING PRONOUNCEMENTS
  Level 1
    
    Unadjusted quoted prices in active markets for identical assets or liabilities.Level 2
    
    Unadjusted quoted prices in active markets for similar assets or liabilities, or
unadjusted quoted prices for identical or similar assets or liabilities in markets that are
not active, or inputs other than quoted prices that are observable for the asset or
liability.Level 3
    
    Unobservable inputs for the asset or liability.
     37




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##### Table of Contents



APPLICATION OF CRITICAL ACCOUNTING POLICIES
   Revenue Recognition
   Accounts Receivable
  38




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##### Table of Contents



Inventories.
 Goodwill and Other Intangible Assets.
     Pensions
  39




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##### Table of Contents



Product Warranty Costs and Service Returns
 CERTAIN FORWARD-LOOKING STATEMENTS
  
    
    the Companys operations and results of operations;
    
    changes in home building and remodeling industries, economic conditions, interest
rates, foreign currency exchange rates and other conditions;
    
    changes in availability of consumer credit, employment trends, levels of consumer
confidence and spending, and consumer preferences;
    
    changes in raw material costs and availability;
    
    market acceptance of price increases;
    
    changes in national and regional trends in new housing starts and home remodeling;
    
    changes in weather conditions;
    
    the Companys ability to comply with certain financial covenants in its ABL Facility
and indenture governing its 9 3/4% notes;
    
    the Companys ability to make distributions, payments or loans to its parent companies
to allow them to make required payments on their debt;
    
    the ability of the Company and its parent companies to
refinance indebtedness when required;
    
    increases in competition from other manufacturers of vinyl and metal exterior
residential building products as well as alternative building products;
    
    shifts in market demand;
    
    increases in the Companys indebtedness;
    
    increases in costs of environmental compliance;
  40




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##### Table of Contents




    
    increases in unanticipated warranty or product liability claims;
    
    increases in capital expenditure requirements;
    
    potential conflict between existing Alside and Gentek distribution channels; and
    
    the other factors discussed under Item 1A. Risk Factors and elsewhere in this report.
  
 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 INTEREST RATE RISK
   FOREIGN CURRENCY EXCHANGE RATE RISK
  COMMODITY PRICE RISK
   41




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 ASSOCIATED MATERIALS, LLC
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    43Consolidated Balance Sheets as of January 3, 2009 and December 29, 2007
    
    44Consolidated Statements of Operations for the Years Ended January 3,
2009, December 29, 2007 and December 30, 2006
    
    45Consolidated Statements of Members Equity and Comprehensive Income
for the Years Ended January 3, 2009, December 29, 2007 and December
30, 2006
    
    46Consolidated Statements of Cash Flows for the Years Ended January 3,
2009, December 29, 2007 and December 30, 2006
    
    47Notes to Consolidated Financial Statements
    
    48
   42




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
  43




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##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
   January 3,
    
    
    December 29,2009
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    6,709
    
    
    $
    21,603Accounts receivable, net of allowance for
doubtful accounts of $13,160 at January 3,
2009 and $9,363 at December 29, 2007
    
    
    116,878
    
    
    
    138,653Inventories
    
    
    141,170
    
    
    
    137,015Deferred income taxes
    
    
    12,183
    
    
    
    9,983Prepaid expenses
    
    
    10,486
    
    
    
    11,686Total current assets
    
    
    287,426
    
    
    
    318,940Property, plant and equipment, net
    
    
    115,156
    
    
    
    133,531Goodwill
    
    
    231,358
    
    
    
    231,213Other intangible assets, net
    
    
    99,131
    
    
    
    102,424Other assets
    
    
    12,218
    
    
    
    7,831Total assets
    
    $
    745,289
    
    
    $
    793,939LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    54,520
    
    
    $
    80,082Payable to parent
    
    
    9,326
    
    
    
    5,029Accrued liabilities
    
    
    54,449
    
    
    
    64,618Income taxes payable
    
    
    6,982
    
    
    
    11,661Total current liabilities
    
    
    125,277
    
    
    
    161,390Deferred income taxes
    
    
    46,427
    
    
    
    50,837Other liabilities
    
    
    53,655
    
    
    
    47,615Long-term debt
    
    
    221,000
    
    
    
    226,000Commitments and contingenciesMembers equity:Membership interest
    
    
    233,750
    
    
    
    233,750Accumulated other comprehensive income (loss)
    
    
    (14,913
    )
    
    
    7,179Retained earnings
    
    
    80,093
    
    
    
    67,168Total members equity
    
    
    298,930
    
    
    
    308,097Total liabilities and members equity
    
    $
    745,289
    
    
    $
    793,939
   44




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##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
   Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Net sales
    
    $
    1,133,956
    
    
    $
    1,204,056
    
    
    $
    1,250,054Cost of sales
    
    
    859,107
    
    
    
    899,839
    
    
    
    947,776Gross profit
    
    
    274,849
    
    
    
    304,217
    
    
    
    302,278Selling, general and administrative expenses
    
    
    212,025
    
    
    
    208,001
    
    
    
    203,844Manufacturing restructuring costs
    
    
    1,783
    
    
    
    
    
    
    
    Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    3,423Facility closure costs, net
    
    
    
    
    
    
    
    
    
    
    (92
    )Income from operations
    
    
    61,041
    
    
    
    96,216
    
    
    
    95,103Interest expense, net
    
    
    24,307
    
    
    
    27,943
    
    
    
    32,413Foreign currency (gain) loss
    
    
    1,809
    
    
    
    (227
    )
    
    
    (703
    )Income before income taxes
    
    
    34,925
    
    
    
    68,500
    
    
    
    63,393Income taxes
    
    
    13,689
    
    
    
    28,845
    
    
    
    30,096Net income
    
    $
    21,236
    
    
    $
    39,655
    
    
    $
    33,297
   45




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##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
    AccumulatedOtherCapital in
    
    
    
    
    
    
    Comprehensive
    
    
    TotalCommon Stock
    
    
    Members
    
    
    Excess
    
    
    Retained
    
    
    Income
    
    
    MembersShares
    
    
    Amount
    
    
    Interest
    
    
    Of Par
    
    
    Earnings
    
    
    (Loss)
    
    
    EquityBalance at January 1, 2006
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    233,723
    
    
    $
    9,969
    
    
    $
    809
    
    
    $
    244,501Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,297
    
    
    
    
    
    
    
    33,297Minimum pension
liability adjustment,
prior to adoption of
SFAS No. 158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,237
    
    
    
    1,237Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (991
    )
    
    
    (991
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,543Effect of adoption of SFAS
No. 158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,262
    )
    
    
    (4,262
    )Stock option compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    27Dividends to parent company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,735
    )
    
    
    
    
    
    
    (7,735
    )Balance at December 30, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233,750
    
    
    
    35,531
    
    
    
    (3,207
    )
    
    
    266,074Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,655
    
    
    
    
    
    
    
    39,655Unrecognized prior
service cost and net
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (755
    )
    
    
    (755
    )Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,141
    
    
    
    11,141Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,041Conversion to limited
liability corporation
    
    
    
    
    
    
    
    
    
    
    233,750
    
    
    
    (233,750
    )
    
    
    
    
    
    
    
    
    
    
    Dividends to parent company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,018
    )
    
    
    
    
    
    
    (8,018
    )Balance at December 29, 2007
    
    
    
    
    
    
    
    
    
    
    233,750
    
    
    
    
    
    
    
    67,168
    
    
    
    7,179
    
    
    
    308,097Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,236
    
    
    
    
    
    
    
    21,236Unrecognized prior
service cost and net
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,477
    )
    
    
    (5,477
    )Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,615
    )
    
    
    (16,615
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (856
    )Dividends to parent company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,311
    )
    
    
    
    
    
    
    (8,311
    )Balance at January 3, 2009
    
    
    
    
    
    $
    
    
    
    $
    233,750
    
    
    $
    
    
    
    $
    80,093
    
    
    $
    (14,913
    )
    
    $
    298,930
   46




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##### Table of Contents



ASSOCIATED MATERIALS, LLC
 
   Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    21,236
    
    
    $
    39,655
    
    
    $
    33,297Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    22,698
    
    
    
    22,062
    
    
    
    22,147Deferred income taxes
    
    
    (2,408
    )
    
    
    (1,310
    )
    
    
    3,022Provision for losses on accounts receivable
    
    
    8,000
    
    
    
    3,316
    
    
    
    3,043(Gain) loss on sale or disposal of assets other than by sale
    
    
    2,060
    
    
    
    481
    
    
    
    (315
    )Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    3,423Stock option compensation expense
    
    
    
    
    
    
    
    
    
    
    27Non-cash portion of manufacturing restructuring costs
    
    
    1,577
    
    
    
    
    
    
    
    Amortization of deferred financing costs
    
    
    3,358
    
    
    
    3,406
    
    
    
    4,206Amortization of management fee
    
    
    500
    
    
    
    500
    
    
    
    500Changes in operating assets and liabilities, adjusted for
the effects of the acquisition of supply center:Accounts receivable
    
    
    5,679
    
    
    
    (2,168
    )
    
    
    9,005Inventories
    
    
    (13,532
    )
    
    
    3,619
    
    
    
    (1,002
    )Prepaid expenses
    
    
    (391
    )
    
    
    (2,134
    )
    
    
    471Accounts payable
    
    
    (18,642
    )
    
    
    (2,474
    )
    
    
    (19,406
    )Accrued liabilities
    
    
    (8,567
    )
    
    
    (1,487
    )
    
    
    7,133Income taxes receivable/payable
    
    
    (430
    )
    
    
    7,576
    
    
    
    4,511Other assets
    
    
    (1,739
    )
    
    
    1,516
    
    
    
    (572
    )Other liabilities
    
    
    (3,137
    )
    
    
    (1,207
    )
    
    
    (1,190
    )Net cash provided by operating activities
    
    
    16,262
    
    
    
    71,351
    
    
    
    68,300INVESTING ACTIVITIESAdditions to property, plant and equipment
    
    
    (11,498
    )
    
    
    (12,393
    )
    
    
    (14,648
    )Acquisition of supply center
    
    
    
    
    
    
    (801
    )
    
    
    Proceeds from sale of assets
    
    
    25
    
    
    
    19
    
    
    
    2,908Net cash used in investing activities
    
    
    (11,473
    )
    
    
    (13,175
    )
    
    
    (11,740
    )FINANCING ACTIVITIESBorrowings under ABL Facility
    
    
    56,000
    
    
    
    
    
    
    
    Repayments of term loan
    
    
    (61,000
    )
    
    
    (45,000
    )
    
    
    (46,000
    )Financing costs
    
    
    (5,371
    )
    
    
    
    
    
    
    (128
    )Dividends paid
    
    
    (8,311
    )
    
    
    (8,018
    )
    
    
    (7,735
    )Net cash used in financing activities
    
    
    (18,682
    )
    
    
    (53,018
    )
    
    
    (53,863
    )Effect of exchange rate changes on cash
    
    
    (1,001
    )
    
    
    1,430
    
    
    
    18Net increase (decrease) in cash
    
    
    (14,894
    )
    
    
    6,588
    
    
    
    2,715Cash at beginning of period
    
    
    21,603
    
    
    
    15,015
    
    
    
    12,300Cash at end of period
    
    $
    6,709
    
    
    $
    21,603
    
    
    $
    15,015Supplemental Information:Cash paid for interest
    
    $
    21,091
    
    
    $
    24,741
    
    
    $
    28,649Cash paid for income taxes
    
    $
    16,860
    
    
    $
    22,594
    
    
    $
    22,423
   47




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ASSOCIATED MATERIALS, LLC
 
  1. ACCOUNTING POLICIES
 NATURE OF OPERATIONS
  BASIS OF PRESENTATION
    PRINCIPLES OF CONSOLIDATION
  USE OF ESTIMATES
  REVENUE RECOGNITION
   48




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CASH AND CASH EQUIVALENTS
  ACCOUNTS RECEIVABLE
  Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Balance at beginning of period
    
    $
    9,363
    
    
    $
    8,698
    
    
    $
    8,567Provision for losses
    
    
    8,000
    
    
    
    3,316
    
    
    
    3,043Losses sustained (net of recoveries)
    
    
    (4,203
    )
    
    
    (2,651
    )
    
    
    (2,912
    )Balance at end of period
    
    $
    13,160
    
    
    $
    9,363
    
    
    $
    8,698
 INVENTORIES
   PROPERTY, PLANT AND EQUIPMENT
  Building and improvements
    
    7 to 40 yearsComputer equipment
    
    
    3 to 5 yearsMachinery and equipment
    
    
    3 to 15 years
  49




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LONG-LIVED ASSETS WITH DEPRECIABLE OR AMORTIZABLE LIVES
  GOODWILL AND OTHER INTANGIBLE ASSETS WITH INDEFINITE LIVES
  PRODUCT WARRANTY COSTS AND SERVICE RETURNS
   Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Balance at the beginning of the year
    
    $
    28,684
    
    
    $
    25,035
    
    
    $
    21,739Provision for warranties issued
    
    
    8,658
    
    
    
    12,395
    
    
    
    11,307Claims paid
    
    
    (6,922
    )
    
    
    (9,570
    )
    
    
    (7,993
    )Foreign currency translation
    
    
    (995
    )
    
    
    824
    
    
    
    (18
    )Balance at the end of the year
    
    $
    29,425
    
    
    $
    28,684
    
    
    $
    25,035
 INCOME TAXES
   50




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DERIVATIVES AND HEDGING ACTIVITIES
  STOCK PLANS
  COST OF SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
   LEASE OBLIGATIONS
 .
  51




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MARKETING AND ADVERTISING
  FOREIGN CURRENCY TRANSLATION
  RECENT ACCOUNTING PRONOUNCEMENTS
  Level 1
    
    Unadjusted quoted prices in active markets for identical assets or liabilities.Level 2
    
    Unadjusted quoted prices in active markets for similar assets or liabilities, or
unadjusted quoted prices for identical or similar assets or liabilities in markets that are
not active, or inputs other than quoted prices that are observable for the asset or
liability.Level 3
    
    Unobservable inputs for the asset or liability.
     52




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2. RELATED PARTIES
     3. INVENTORIES
  January 3,
    
    
    December 29,2009
    
    
    2007Raw materials
    
    $
    25,779
    
    
    $
    28,706Work-in-progress
    
    
    17,316
    
    
    
    13,993Finished goods and purchased stock
    
    
    98,075
    
    
    
    94,316$
    141,170
    
    
    $
    137,015
  53




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4. GOODWILL AND OTHER INTANGIBLE ASSETS
  Average
    
    
    January 3, 2009
    
    
    December 29, 2007Amortization
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    NetPeriod
    
    
    
    
    
    
    Accumulated
    
    
    Carrying
    
    
    
    
    
    
    Accumulated
    
    
    Carrying(In Years)
    
    
    Cost
    
    
    Amortization
    
    
    Value
    
    
    Cost
    
    
    Amortization
    
    
    ValueTrademarks and trade names
    
    15
    
    
    $
    108,080
    
    
    $
    12,187
    
    
    $
    95,893
    
    
    $
    108,080
    
    
    $
    10,283
    
    
    $
    97,797Patents
    
    10
    
    
    
    6,230
    
    
    
    4,160
    
    
    
    2,070
    
    
    
    6,230
    
    
    
    3,540
    
    
    
    2,690Customer base
    
    7
    
    
    
    4,836
    
    
    
    3,668
    
    
    
    1,168
    
    
    
    5,298
    
    
    
    3,361
    
    
    
    1,937Total other intangible assets
    
    
    
    
    $
    119,146
    
    
    $
    20,015
    
    
    $
    99,131
    
    
    $
    119,608
    
    
    $
    17,184
    
    
    $
    102,424
 ® ® ® ® ® ®
  5. PROPERTY, PLANT AND EQUIPMENT
  January 3,
    
    
    December 29,2009
    
    
    2007Land
    
    $
    5,533
    
    
    $
    6,191Buildings
    
    
    54,239
    
    
    
    57,327Machinery and equipment
    
    
    135,831
    
    
    
    145,876Construction in process
    
    
    1,065
    
    
    
    4,567196,668
    
    
    
    213,961Less accumulated depreciation
    
    
    81,512
    
    
    
    80,430$
    115,156
    
    
    $
    133,531
  54




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6. ACCRUED AND OTHER LIABILITIES
  January 3,
    
    
    December 29,2009
    
    
    2007Employee compensation
    
    $
    11,600
    
    
    $
    17,247Sales promotions and incentives
    
    
    15,639
    
    
    
    18,575Warranty reserves
    
    
    7,288
    
    
    
    7,976Employee benefits
    
    
    6,314
    
    
    
    6,280Interest
    
    
    3,461
    
    
    
    3,611Taxes other than income
    
    
    3,507
    
    
    
    3,727Other
    
    
    6,640
    
    
    
    7,202$
    54,449
    
    
    $
    64,618
  January 3,
    
    
    December 29,2009
    
    
    2007Pensions and other postretirement plans
    
    $
    29,291
    
    
    $
    26,846Warranty reserves
    
    
    22,137
    
    
    
    20,708Other
    
    
    2,227
    
    
    
    61$
    53,655
    
    
    $
    47,615
 7. LONG-TERM DEBT
  January 3,
    
    
    December 29,2009
    
    
    20079 3/4% notes
    
    $
    165,000
    
    
    $
    165,000Borrowings under the ABL Facility
    
    
    56,000
    
    
    
    Term loan under prior credit facility
    
    
    
    
    
    
    61,000Total long-term debt
    
    $
    221,000
    
    
    $
    226,000
   55




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56




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11 1/4%
   8. COMMITMENTS AND CONTINGENCIES
  2009
    
    $
    32,2732010
    
    
    24,9072011
    
    
    19,2702012
    
    
    16,6792013
    
    
    12,970Thereafter
    
    
    23,350Total future minimum lease payments
    
    $
    129,449
  57




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58




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9. INCOME TAXES
  Years EndedJanuary 3, 2009
    
    
    December 29, 2007
    
    
    December 30, 2006Current
    
    
    Deferred
    
    
    Current
    
    
    Deferred
    
    
    Current
    
    
    DeferredFederal
    
    $
    7,060
    
    
    $
    (2,358
    )
    
    $
    16,024
    
    
    $
    (2,419
    )
    
    $
    13,348
    
    
    $
    4,385State
    
    
    787
    
    
    
    (38
    )
    
    
    1,711
    
    
    
    544
    
    
    
    3,216
    
    
    
    (775
    )Foreign
    
    
    8,250
    
    
    
    (12
    )
    
    
    12,420
    
    
    
    565
    
    
    
    10,510
    
    
    
    (588
    )$
    16,097
    
    
    $
    (2,408
    )
    
    $
    30,155
    
    
    $
    (1,310
    )
    
    $
    27,074
    
    
    $
    3,022
   59




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January 3,
    
    
    December 29,2009
    
    
    2007Deferred tax assets:Medical benefits
    
    $
    2,120
    
    
    $
    2,373Bad debt expense
    
    
    5,272
    
    
    
    3,802Pension and other postretirement plans
    
    
    8,478
    
    
    
    7,087Inventory costs
    
    
    1,832
    
    
    
    1,854Interest
    
    
    890
    
    
    
    1,691Warranty costs
    
    
    10,709
    
    
    
    10,719Net operating loss carryforward
    
    
    554
    
    
    
    1,786Foreign tax credit carryforward
    
    
    8,035
    
    
    
    4,435Accrued expenses and other
    
    
    3,254
    
    
    
    2,686Valuation allowance
    
    
    (8,035
    )
    
    
    (4,435
    )Total deferred tax assets
    
    
    33,109
    
    
    
    31,998Deferred tax liabilities:Depreciation
    
    
    24,113
    
    
    
    27,006Intangible assets
    
    
    38,250
    
    
    
    39,536Tax liability on unremitted foreign earnings
    
    
    4,990
    
    
    
    6,310Total deferred tax liabilities
    
    
    67,353
    
    
    
    72,852Net deferred tax liabilities
    
    $
    (34,244
    )
    
    $
    (40,854
    )
    Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income tax, net of federal income tax benefit
    
    
    1.4
    
    
    
    2.3
    
    
    
    2.5Tax liability on remitted and unremitted foreign earnings
    
    
    6.8
    
    
    
    7.3
    
    
    
    10.3Foreign rate differential
    
    
    (2.2
    )
    
    
    (0.2
    )
    
    
    (0.4
    )Other
    
    
    (1.8
    )
    
    
    (2.3
    )
    
    
    0.1Effective rate
    
    
    39.2
    %
    
    
    42.1
    %
    
    
    47.5
    %
   60




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January 3,
    
    
    December 29,2009
    
    
    2007Unrecognized tax benefits, beginning of year
    
    $
    513
    
    
    $
    1,596Gross increases for tax positions of prior years
    
    
    914
    
    
    
    Gross decreases for tax positions of prior years
    
    
    
    
    
    
    (874
    )Settlements
    
    
    (513
    )
    
    
    (209
    )Unrecognized tax benefits, end of year
    
    $
    914
    
    
    $
    513
    10. MEMBERS EQUITY
    61




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January 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Pension liability adjustments
    
    $
    (17,940
    )
    
    $
    (12,463
    )
    
    $
    (11,708
    )Foreign currency translation adjustments
    
    
    3,027
    
    
    
    19,642
    
    
    
    8,501Accumulated other comprehensive income (loss)
    
    $
    (14,913
    )
    
    $
    7,179
    
    
    $
    (3,207
    )
 11. STOCK PLANS
     62




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63




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Weighted
    
    
    RemainingAverage
    
    
    Contractual TermShares
    
    
    Exercise Price
    
    
    (years)Options outstanding January 1, 2006
    
    
    728,853
    
    
    $
    41.33Granted under 2004 Plan
    
    
    25,117
    
    
    
    5.00Exercised
    
    
    
    
    
    
    Expired or canceled
    
    
    (244,958
    )
    
    
    53.40Options outstanding December 30, 2006
    
    
    509,012
    
    
    
    33.73Granted under 2004 Plan
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Expired or canceled
    
    
    (259,410
    )
    
    
    27.72Options outstanding December 29, 2007
    
    
    249,602
    
    
    
    39.97Granted under 2004 Plan
    
    
    287,455
    
    
    
    1.00Exercised
    
    
    
    
    
    
    Share exchange
    
    
    (165,971
    )
    
    
    46.59Expired or canceled
    
    
    (5,499
    )
    
    
    18.81Options outstanding January 3, 2009
    
    
    365,587
    
    
    $
    6.64
    
    
    
    8.6Options exercisable January 3, 2009
    
    
    35,245
    
    
    $
    13.86
    
    
    
    3.9
   12. MANUFACTURING RESTRUCTURING AND FACILITY CLOSURE COSTS
   64




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13. BUSINESS SEGMENTS
  Years EndedJanuary 3,
    
    
    December 29,
    
    
    December 30,2009
    
    
    2007
    
    
    2006Vinyl windows
    
    $
    380,260
    
    
    $
    410,164
    
    
    $
    411,295Vinyl siding products
    
    
    254,563
    
    
    
    285,303
    
    
    
    327,961Metal products
    
    
    213,163
    
    
    
    225,846
    
    
    
    224,676Third party manufactured products
    
    
    210,633
    
    
    
    205,445
    
    
    
    194,126Other products and services
    
    
    75,337
    
    
    
    77,298
    
    
    
    91,996$
    1,133,956
    
    
    $
    1,204,056
    
    
    $
    1,250,054
  14. RETIREMENT PLANS
    65




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Prior toAdoptingSFAS
    
    
    Effect ofSFASNo. 158
    
    
    As Reported atDecember 30,No. 158
    
    
    Adoption
    
    
    2006Other assets
    
    $
    12,236
    
    
    $
    (373)
    
    
    $
    11,863Accrued employee benefits
    
    
    6,611
    
    
    
    792
    
    
    
    7,403Pension and other postretirement plans
    
    
    21,957
    
    
    
    5,302
    
    
    
    27,259Current deferred income taxes
    
    
    8,483
    
    
    
    304
    
    
    
    8,787Long-term deferred income taxes
    
    
    52,829
    
    
    
    (1,901)
    
    
    
    50,928Accumulated other comprehensive income (loss)
    
    
    1,055
    
    
    
    (4,262)
    
    
    
    (3,207)
  66




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2008
    
    
    2007Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansAccumulated Benefit Obligation
    
    $
    50,958
    
    
    $
    34,836
    
    
    $
    51,053
    
    
    $
    49,716Change In Projected Benefit ObligationProjected benefit obligation at beginning of year
    
    $
    51,464
    
    
    $
    57,188
    
    
    $
    50,873
    
    
    $
    46,746Service cost
    
    
    574
    
    
    
    2,073
    
    
    
    533
    
    
    
    2,188Interest cost
    
    
    2,973
    
    
    
    3,003
    
    
    
    2,913
    
    
    
    2,813Plan amendments
    
    
    27
    
    
    
    
    
    
    
    190
    
    
    
    Actuarial gain
    
    
    (1,313
    )
    
    
    (11,770
    )
    
    
    (491
    )
    
    
    (2,177
    )Employee contributions
    
    
    
    
    
    
    333
    
    
    
    
    
    
    
    340Benefits paid
    
    
    (2,632
    )
    
    
    (1,567
    )
    
    
    (2,554
    )
    
    
    (1,681
    )Effect of foreign exchange
    
    
    
    
    
    
    (10,042
    )
    
    
    
    
    
    
    8,959Projected benefit obligation at end of year
    
    
    51,093
    
    
    
    39,218
    
    
    
    51,464
    
    
    
    57,188Change In Plan AssetsFair value of assets at beginning of year
    
    $
    40,712
    
    
    $
    47,517
    
    
    $
    39,813
    
    
    $
    37,708Actual return on plan assets
    
    
    (9,430
    )
    
    
    (6,764
    )
    
    
    2,335
    
    
    
    (229
    )Employer contributions
    
    
    3,296
    
    
    
    3,914
    
    
    
    1,118
    
    
    
    4,049Employee contributions
    
    
    
    
    
    
    333
    
    
    
    
    
    
    
    340Benefits paid
    
    
    (2,632
    )
    
    
    (1,567
    )
    
    
    (2,554
    )
    
    
    (1,681
    )Effect of foreign exchange
    
    
    
    
    
    
    (8,665
    )
    
    
    
    
    
    
    7,330Fair value of assets at end of year
    
    
    31,946
    
    
    
    34,768
    
    
    
    40,712
    
    
    
    47,517Funded status
    
    $
    (19,147
    )
    
    $
    (4,450
    )
    
    $
    (10,752
    )
    
    $
    (9,671
    )
  2008
    
    
    2007Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansDiscount rate
    
    
    6.28%
    
    
    
    7.36%
    
    
    
    5.93%
    
    
    
    5.50%Salary increases
    
    
    3.75%
    
    
    
    3.50%
    
    
    
    3.75%
    
    
    
    3.50%
   67




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2008
    
    
    2007
    
    
    2006Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansService cost
    
    $
    574
    
    
    $
    2,073
    
    
    $
    533
    
    
    $
    2,188
    
    
    $
    510
    
    
    $
    2,007Interest cost
    
    
    2,972
    
    
    
    3,003
    
    
    
    2,913
    
    
    
    2,813
    
    
    
    2,784
    
    
    
    2,404Expected return on assets
    
    
    (3,477
    )
    
    
    (3,514
    )
    
    
    (3,323
    )
    
    
    (3,342
    )
    
    
    (2,982
    )
    
    
    (2,656
    )Amortization of unrecognized:Prior service cost
    
    
    30
    
    
    
    31
    
    
    
    23
    
    
    
    31
    
    
    
    10
    
    
    
    29Cumulative net loss
    
    
    572
    
    
    
    96
    
    
    
    635
    
    
    
    19
    
    
    
    851
    
    
    
    40Net periodic pension cost
    
    $
    671
    
    
    $
    1,689
    
    
    $
    781
    
    
    $
    1,709
    
    
    $
    1,173
    
    
    $
    1,824
  2008
    
    
    2007
    
    
    2006Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansDiscount rate
    
    
    5.94%
    
    
    
    5.50%
    
    
    
    5.76%
    
    
    
    5.25%
    
    
    
    5.50%
    
    
    
    5.25%Long-term rate of return on assets
    
    
    8.50%
    
    
    
    7.00%
    
    
    
    8.50%
    
    
    
    7.75%
    
    
    
    8.50%
    
    
    
    7.75%Salary increases
    
    
    3.75%
    
    
    
    3.50%
    
    
    
    3.75%
    
    
    
    3.50%
    
    
    
    3.75%
    
    
    
    3.50%
   2008
    
    
    2007Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    PlansASSET ALLOCATIONSEquity securities
    
    
    54%
    
    
    
    58%
    
    
    
    61%
    
    
    
    58%Debt securities
    
    
    38%
    
    
    
    37%
    
    
    
    34%
    
    
    
    35%Other
    
    
    8%
    
    
    
    5%
    
    
    
    5%
    
    
    
    7%Total
    
    
    100%
    
    
    
    100%
    
    
    
    100%
    
    
    
    100%
   Domestic
    
    
    ForeignPlans
    
    
    Plans2009
    
    $
    2,447
    
    
    $
    1,3452010
    
    
    2,530
    
    
    
    1,5862011
    
    
    2,682
    
    
    
    1,8082012
    
    
    2,904
    
    
    
    1,9902013
    
    
    3,113
    
    
    
    2,1062014  2018
    
    
    18,070
    
    
    
    16,554
  68




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##### Table of Contents



Percentage
    
    
    Effect on Fiscal Year 2009Point
    
    
    Annual
    
    
    CashAssumption
    
    Change
    
    
    Expense
    
    
    ContributionsDomestic PlansFunding interest rate
    
    +/- 100 basis point
    
    
    $14 / $(24)
    
    
    
    $(263) / $407Discount rate
    
    +/- 100 basis point
    
    
    (406) / 477
    
    
    
     / Long-term rate of return on assets
    
    +/- 100 basis point
    
    
    (311) / 311
    
    
    
     / Foreign PlansFunding interest rate
    
    +/- 100 basis point
    
    
     / 
    
    
    
    (224) / 308Discount rate
    
    +/- 100 basis point
    
    
    (434) / 694
    
    
    
     / Long-term rate of return on assets
    
    +/- 100 basis point
    
    
    (411) / 411
    
    
    
     / 
   69




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##### Table of Contents



15. SUBSIDIARY GUARANTORS
  ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    4,964
    
    
    $
    97
    
    
    $
    1,648
    
    
    $
    
    
    
    $
    6,709Accounts receivable, net
    
    
    82,479
    
    
    
    13,251
    
    
    
    21,148
    
    
    
    
    
    
    
    116,878Intercompany receivables
    
    
    
    
    
    
    57,426
    
    
    
    7,742
    
    
    
    (65,168
    )
    
    
    Inventories
    
    
    92,802
    
    
    
    14,892
    
    
    
    33,476
    
    
    
    
    
    
    
    141,170Income taxes receivable
    
    
    
    
    
    
    
    
    
    
    1,057
    
    
    
    (1,057
    )
    
    
    Deferred income taxes
    
    
    9,196
    
    
    
    2,482
    
    
    
    505
    
    
    
    
    
    
    
    12,183Prepaid expenses
    
    
    7,887
    
    
    
    1,194
    
    
    
    1,405
    
    
    
    
    
    
    
    10,486Total current assets
    
    
    197,328
    
    
    
    89,342
    
    
    
    66,981
    
    
    
    (66,225
    )
    
    
    287,426Property, plant and equipment, net
    
    
    80,567
    
    
    
    2,975
    
    
    
    31,614
    
    
    
    
    
    
    
    115,156Goodwill
    
    
    194,814
    
    
    
    36,544
    
    
    
    
    
    
    
    
    
    
    
    231,358Other intangible assets, net
    
    
    88,828
    
    
    
    9,970
    
    
    
    333
    
    
    
    
    
    
    
    99,131Investment in subsidiaries
    
    
    169,112
    
    
    
    65,508
    
    
    
    
    
    
    
    (234,620
    )
    
    
    Other assets
    
    
    10,448
    
    
    
    19
    
    
    
    1,751
    
    
    
    
    
    
    
    12,218Total assets
    
    $
    741,097
    
    
    $
    204,358
    
    
    $
    100,679
    
    
    $
    (300,845
    )
    
    $
    745,289Liabilities And Members EquityCurrent liabilities:Accounts payable
    
    $
    32,150
    
    
    $
    5,191
    
    
    $
    17,179
    
    
    $
    
    
    
    $
    54,520Intercompany payables
    
    
    65,168
    
    
    
    
    
    
    
    
    
    
    
    (65,168
    )
    
    
    Payable to parent
    
    
    9,326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,326Accrued liabilities
    
    
    37,030
    
    
    
    9,252
    
    
    
    8,167
    
    
    
    
    
    
    
    54,449Income taxes payable
    
    
    6,494
    
    
    
    1,545
    
    
    
    
    
    
    
    (1,057
    )
    
    
    6,982Total current liabilities
    
    
    150,168
    
    
    
    15,988
    
    
    
    25,346
    
    
    
    (66,225
    )
    
    
    125,277Deferred income taxes
    
    
    40,710
    
    
    
    3,486
    
    
    
    2,231
    
    
    
    
    
    
    
    46,427Other liabilities
    
    
    30,289
    
    
    
    15,772
    
    
    
    7,594
    
    
    
    
    
    
    
    53,655Long-term debt
    
    
    221,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221,000Members equity
    
    
    298,930
    
    
    
    169,112
    
    
    
    65,508
    
    
    
    (234,620
    )
    
    
    298,930Total
liabilities and members equity
    
    $
    741,097
    
    
    $
    204,358
    
    
    $
    100,679
    
    
    $
    (300,845
    )
    
    $
    745,289
  70




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    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
    
    
    23,978
    
    
    
    (12
    )
    
    
    341
    
    
    
    
    
    
    
    24,307Foreign currency loss
    
    
    
    
    
    
    
    
    
    
    1,809
    
    
    
    
    
    
    
    1,809Income (loss) before income taxes
    
    
    8,742
    
    
    
    (2,246
    )
    
    
    28,429
    
    
    
    
    
    
    
    34,925Income taxes
    
    
    2,811
    
    
    
    2,601
    
    
    
    8,277
    
    
    
    
    
    
    
    13,689Income (loss) before equity
income from subsidiaries
    
    
    5,931
    
    
    
    (4,847
    )
    
    
    20,152
    
    
    
    
    
    
    
    21,236Equity income from subsidiaries
    
    
    15,305
    
    
    
    20,152
    
    
    
    
    
    
    
    (35,457
    )
    
    
    Net income
    
    $
    21,236
    
    
    $
    15,305
    
    
    $
    20,152
    
    
    $
    (35,457
    )
    
    $
    21,236
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    11,763
    
    
    $
    (1,539
    )
    
    $
    6,038
    
    
    $
    16,262Investing ActivitiesAdditions to property, plant and equipment
    
    
    (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 the ABL Facility
    
    
    56,000
    
    
    
    
    
    
    
    
    
    
    
    56,000Repayments of term loan
    
    
    (61,000
    )
    
    
    
    
    
    
    
    
    
    
    (61,000
    )Dividends
    
    
    (8,311
    )
    
    
    8,873
    
    
    
    (8,873
    )
    
    
    (8,311
    )Financing costs
    
    
    (3,913
    )
    
    
    
    
    
    
    (1,458
    )
    
    
    (5,371
    )Intercompany transactions
    
    
    10,771
    
    
    
    (7,396
    )
    
    
    (3,375
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (6,453
    )
    
    
    1,477
    
    
    
    (13,706
    )
    
    
    (18,682
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (1,001
    )
    
    
    (1,001
    )Net decrease in cash
    
    
    (1,443
    )
    
    
    (274
    )
    
    
    (13,177
    )
    
    
    (14,894
    )Cash at beginning of period
    
    
    6,407
    
    
    
    371
    
    
    
    14,825
    
    
    
    21,603Cash at end of period
    
    $
    4,964
    
    
    $
    97
    
    
    $
    1,648
    
    
    $
    6,709
  71




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    6,407
    
    
    $
    371
    
    
    $
    14,825
    
    
    $
    
    
    
    $
    21,603Accounts receivable, net
    
    
    92,314
    
    
    
    17,999
    
    
    
    28,340
    
    
    
    
    
    
    
    138,653Intercompany receivables
    
    
    
    
    
    
    33,341
    
    
    
    21,052
    
    
    
    (54,393
    )
    
    
    Inventories
    
    
    85,876
    
    
    
    14,083
    
    
    
    37,056
    
    
    
    
    
    
    
    137,015Income taxes receivable
    
    
    
    
    
    
    3,375
    
    
    
    
    
    
    
    (3,375
    )
    
    
    Deferred income taxes
    
    
    6,886
    
    
    
    2,674
    
    
    
    423
    
    
    
    
    
    
    
    9,983Prepaid expenses
    
    
    8,683
    
    
    
    878
    
    
    
    2,125
    
    
    
    
    
    
    
    11,686Total current assets
    
    
    200,166
    
    
    
    72,721
    
    
    
    103,821
    
    
    
    (57,768
    )
    
    
    318,940Property, plant and equipment, net
    
    
    92,920
    
    
    
    3,592
    
    
    
    37,019
    
    
    
    
    
    
    
    133,531Goodwill
    
    
    194,814
    
    
    
    36,399
    
    
    
    
    
    
    
    
    
    
    
    231,213Other intangible assets, net
    
    
    91,098
    
    
    
    10,559
    
    
    
    767
    
    
    
    
    
    
    
    102,424Investment in subsidiaries
    
    
    170,682
    
    
    
    86,692
    
    
    
    
    
    
    
    (257,374
    )
    
    
    Other assets
    
    
    7,831
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,831Total assets
    
    $
    757,511
    
    
    $
    209,963
    
    
    $
    141,607
    
    
    $
    (315,142
    )
    
    $
    793,939Liabilities And Members EquityCurrent liabilities:Accounts payable
    
    $
    42,268
    
    
    $
    9,981
    
    
    $
    27,833
    
    
    $
    
    
    
    $
    80,082Intercompany payables
    
    
    54,393
    
    
    
    
    
    
    
    
    
    
    
    (54,393
    )
    
    
    Payable to parent
    
    
    5,029
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,029Accrued liabilities
    
    
    43,299
    
    
    
    11,476
    
    
    
    9,843
    
    
    
    
    
    
    
    64,618Income taxes payable
    
    
    13,573
    
    
    
    
    
    
    
    1,463
    
    
    
    (3,375
    )
    
    
    11,661Total current liabilities
    
    
    158,562
    
    
    
    21,457
    
    
    
    39,139
    
    
    
    (57,768
    )
    
    
    161,390Deferred income taxes
    
    
    44,126
    
    
    
    4,316
    
    
    
    2,395
    
    
    
    
    
    
    
    50,837Other liabilities
    
    
    20,726
    
    
    
    13,508
    
    
    
    13,381
    
    
    
    
    
    
    
    47,615Long-term debt
    
    
    226,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226,000Members equity
    
    
    308,097
    
    
    
    170,682
    
    
    
    86,692
    
    
    
    (257,374
    )
    
    
    308,097Total liabilities and members equity
    
    $
    757,511
    
    
    $
    209,963
    
    
    $
    141,607
    
    
    $
    (315,142
    )
    
    $
    793,939
  72




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    ConsolidatedNet sales
    
    $
    840,742
    
    
    $
    216,378
    
    
    $
    312,217
    
    
    $
    (165,281
    )
    
    $
    1,204,056Cost of sales
    
    
    621,439
    
    
    
    203,620
    
    
    
    240,061
    
    
    
    (165,281
    )
    
    
    899,839Gross profit
    
    
    219,303
    
    
    
    12,758
    
    
    
    72,156
    
    
    
    
    
    
    
    304,217Selling, general and
administrative expense
    
    
    155,549
    
    
    
    17,777
    
    
    
    34,675
    
    
    
    
    
    
    
    208,001Income (loss) from operations
    
    
    63,754
    
    
    
    (5,019
    )
    
    
    37,481
    
    
    
    
    
    
    
    96,216Interest expense, net
    
    
    27,645
    
    
    
    69
    
    
    
    229
    
    
    
    
    
    
    
    27,943Foreign currency gain
    
    
    
    
    
    
    
    
    
    
    (227
    )
    
    
    
    
    
    
    (227
    )Income (loss) before income taxes
    
    
    36,109
    
    
    
    (5,088
    )
    
    
    37,479
    
    
    
    
    
    
    
    68,500Income taxes
    
    
    12,699
    
    
    
    3,161
    
    
    
    12,985
    
    
    
    
    
    
    
    28,845Income (loss) before equity
income from subsidiaries
    
    
    23,410
    
    
    
    (8,249
    )
    
    
    24,494
    
    
    
    
    
    
    
    39,655Equity income from subsidiaries
    
    
    16,245
    
    
    
    24,494
    
    
    
    
    
    
    
    (40,739
    )
    
    
    Net income
    
    $
    39,655
    
    
    $
    16,245
    
    
    $
    24,494
    
    
    $
    (40,739
    )
    
    $
    39,655
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    42,537
    
    
    $
    (591
    )
    
    $
    29,405
    
    
    $
    71,351Investing ActivitiesAcquisition of supply center
    
    
    (801
    )
    
    
    
    
    
    
    
    
    
    
    (801
    )Additions to property, plant and equipment
    
    
    (8,991
    )
    
    
    (1,220
    )
    
    
    (2,182
    )
    
    
    (12,393
    )Proceeds from sale of assets
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    19Net cash used in investing activities
    
    
    (9,773
    )
    
    
    (1,220
    )
    
    
    (2,182
    )
    
    
    (13,175
    )Financing ActivitiesRepayments of term loan
    
    
    (45,000
    )
    
    
    
    
    
    
    
    
    
    
    (45,000
    )Dividends
    
    
    (8,018
    )
    
    
    
    
    
    
    
    
    
    
    (8,018
    )Intercompany transactions
    
    
    16,647
    
    
    
    490
    
    
    
    (17,137
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (36,371
    )
    
    
    490
    
    
    
    (17,137
    )
    
    
    (53,018
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    1,430
    
    
    
    1,430Net increase (decrease) in cash
    
    
    (3,607
    )
    
    
    (1,321
    )
    
    
    11,516
    
    
    
    6,588Cash at beginning of period
    
    
    10,014
    
    
    
    1,692
    
    
    
    3,309
    
    
    
    15,015Cash at end of period
    
    $
    6,407
    
    
    $
    371
    
    
    $
    14,825
    
    
    $
    21,603
  73




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##### Table of Contents



ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-Guarantor
    
    
    Reclassification/Parent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    Elimination
    
    
    ConsolidatedNet sales
    
    $
    883,676
    
    
    $
    241,894
    
    
    $
    291,423
    
    
    $
    (166,939
    )
    
    $
    1,250,054Cost of sales
    
    
    655,071
    
    
    
    226,360
    
    
    
    233,284
    
    
    
    (166,939
    )
    
    
    947,776Gross profit
    
    
    228,605
    
    
    
    15,534
    
    
    
    58,139
    
    
    
    
    
    
    
    302,278Selling, general and
administrative expense
    
    
    157,264
    
    
    
    18,111
    
    
    
    28,469
    
    
    
    
    
    
    
    203,844Impairment of long-lived assets
    
    
    3,423
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,423Facility closure costs, net
    
    
    (92
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92
    )Income (loss) from operations
    
    
    68,010
    
    
    
    (2,577
    )
    
    
    29,670
    
    
    
    
    
    
    
    95,103Interest expense, net
    
    
    31,540
    
    
    
    
    
    
    
    873
    
    
    
    
    
    
    
    32,413Foreign currency gain
    
    
    
    
    
    
    
    
    
    
    (703
    )
    
    
    
    
    
    
    (703
    )Income (loss) before income taxes
    
    
    36,470
    
    
    
    (2,577
    )
    
    
    29,500
    
    
    
    
    
    
    
    63,393Income taxes
    
    
    13,967
    
    
    
    6,207
    
    
    
    9,922
    
    
    
    
    
    
    
    30,096Income (loss) before equity
income from subsidiaries
    
    
    22,503
    
    
    
    (8,784
    )
    
    
    19,578
    
    
    
    
    
    
    
    33,297Equity income from subsidiaries
    
    
    10,794
    
    
    
    19,578
    
    
    
    
    
    
    
    (30,372
    )
    
    
    Net income
    
    $
    33,297
    
    
    $
    10,794
    
    
    $
    19,578
    
    
    $
    (30,372
    )
    
    $
    33,297
 ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiary
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    57,778
    
    
    $
    (637
    )
    
    $
    11,159
    
    
    $
    68,300Investing ActivitiesAdditions to property, plant and equipment
    
    
    (12,193
    )
    
    
    (136
    )
    
    
    (2,319
    )
    
    
    (14,648
    )Proceeds from sale of assets
    
    
    2,849
    
    
    
    
    
    
    
    59
    
    
    
    2,908Net cash used in investing activities
    
    
    (9,344
    )
    
    
    (136
    )
    
    
    (2,260
    )
    
    
    (11,740
    )Financing ActivitiesRepayments of term loan
    
    
    (46,000
    )
    
    
    
    
    
    
    
    
    
    
    (46,000
    )Financing costs
    
    
    (128
    )
    
    
    
    
    
    
    
    
    
    
    (128
    )Dividends
    
    
    (7,735
    )
    
    
    
    
    
    
    
    
    
    
    (7,735
    )Intercompany transactions
    
    
    8,433
    
    
    
    1,419
    
    
    
    (9,852
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (45,430
    )
    
    
    1,419
    
    
    
    (9,852
    )
    
    
    (53,863
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    18Net increase (decrease) in cash
    
    
    3,004
    
    
    
    646
    
    
    
    (935
    )
    
    
    2,715Cash at beginning of period
    
    
    7,010
    
    
    
    1,046
    
    
    
    4,244
    
    
    
    12,300Cash at end of period
    
    $
    10,014
    
    
    $
    1,692
    
    
    $
    3,309
    
    
    $
    15,015
  74




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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 Report on Internal Control over Financial Reporting
    Changes in Internal Control over Financial Reporting
  
 
 ITEM 9B. OTHER INFORMATION
   75




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##### Table of Contents



PART III
 
 
 ITEM 10 . DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  Name
    
    Age
    
    Position(s)Thomas N. Chieffe
    
    51
    
    President and Chief Executive OfficerWarren J. Arthur
    
    41
    
    Senior Vice President, OperationsCynthia L. Sobe
    
    41
    
    Vice President-Chief Financial Officer, Treasurer and SecretaryRobert M. Franco
    
    55
    
    President of Alside Supply CentersJohn F. Haumesser
    
    44
    
    Vice President of Human ResourcesLars C. Haegg
    
    43
    
    Director, Chairman of the Audit CommitteeIra D. Kleinman
    
    52
    
    Director, Chairman of the Board of DirectorsKevin C. Nickelberry
    
    38
    
    DirectorDana R. Snyder
    
    62
    
    Director and Former Interim President and Chief Executive OfficerDennis W. Vollmershausen
    
    65
    
    DirectorChristopher D. Whalen
    
    34
    
    Director
  Thomas N. Chieffe, Age 51.
 Warren J. Arthur, 41.
 Cynthia L. Sobe, Age 41
 Robert M. Franco, Age 55
 John F. Haumesser, Age 44 .
  76




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##### Table of Contents



Lars C. Haegg, Age 43
 Ira D. Kleinman, Age 52
 Kevin C. Nickelberry, Age 38
 Dana R. Snyder, Age 62.
 Dennis W. Vollmershausen, Age 65
 Christopher D. Whalen, Age 34
 AUDIT COMMITTEE
  SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  CODE OF ETHICS
 http://www.associatedmaterials.com
  77




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##### Table of Contents



ITEM 11. EXECUTIVE COMPENSATION
 COMPENSATION DISCUSSION AND ANALYSIS
 Objectives of the Companys Executive Compensation Program
   Elements of Compensation
   Setting Executive Compensation
   78




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##### Table of Contents



Base Salary
  Bonus Awards
  Annual Incentive Bonus
   Equity-Based Compensation  Stock Options
   79




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##### Table of Contents



Other Long-Term Incentives
  Separation Compensation
  COMPENSATION COMMITTEE REPORT
   
  80




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##### Table of Contents



SUMMARY COMPENSATION TABLE
  Change inPensionValue andNon-Equity
    
    
    NonqualifiedIncentive Plan
    
    
    DeferredBonus
    
    
    Stock
    
    
    Option
    
    
    Compensation
    
    
    Compensation
    
    
    All OtherName and Principal Position
    
    Year
    
    
    Salary
    
    
    (1)
    
    
    Awards
    
    
    Awards
    
    
    (2)
    
    
    Earnings
    
    
    Compensation
    
    TotalThomas N. Chieffe,
    
    
    2008
    
    
    $
    537,507
    
    
    $
    555,000
    (3)
    
    $
    
    
    
    $
    
    (4)
    
    
    $
    
    
    
    $
    
    
    
    $
    11,594
    (6)
    
    $
    1,104,101President and Chief
    
    
    2007
    
    
    
    500,000
    
    
    
    250,000
    (3)
    
    
    
    
    
    
    
    
    
    
    
    237,220
    
    
    
    
    
    
    
    10,710
    (6)
    
    
    997,930Executive Officer
    
    
    2006
    
    
    
    125,000
    
    
    
    250,000
    (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375,000Warren J. Arthur,
    
    
    2008
    
    
    
    218,876
    
    
    
    13,500
    
    
    
    
    
    
    
    
    (4)
    
    
    
    
    
    
    
    
    
    
    
    705
    (6)
    
    
    233,081Senior Vice President,
Operations
    
    
    2007
    
    
    
    172,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127,502
    
    
    
    
    
    
    
    27,581
    (7)
    
    
    327,083Cynthia L. Sobe,
    
    
    2008
    
    
    
    225,000
    
    
    
    13,500
    
    
    
    
    
    
    
    
    (5)
    
    
    
    
    
    
    
    
    
    
    
    9,691
    (6)
    
    
    248,191Vice President 
Chief Financial Officer,
    
    
    2007
    
    
    
    168,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,641
    
    
    
    
    
    
    
    6,008
    (6)
    
    
    233,399Treasurer and SecretaryRobert M. Franco,
    
    
    2008
    
    
    
    326,817
    
    
    
    19,845
    
    
    
    
    
    
    
    
    (5)
    
    
    
    
    
    
    
    
    
    
    
    23,948
    (8)
    
    
    370,610President of Alside
    
    
    2007
    
    
    
    311,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    201,352
    
    
    
    
    
    
    
    20,508
    (8)
    
    
    533,110Supply Centers
    
    
    2006
    
    
    
    300,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180,000
    
    
    
    
    
    
    
    18,337
    (8)
    
    
    498,337John F. Haumesser,
    
    
    2008
    
    
    
    249,000
    
    
    
    15,120
    
    
    
    
    
    
    
    
    (5)
    
    
    
    
    
    
    
    
    
    
    
    10,032
    (6)
    
    
    274,152Vice President of
Human Resources
 
 (1)
    
    Amounts characterized as Bonus payments were discretionary awards authorized by the
Committee. For 2008, the Companys EBITDA was below the threshold, therefore, not generating a
bonus payout under the Non-Equity Incentive Plan Compensation. In recognition of the
Companys performance in 2008, the Compensation Committee of the Board of Directors elected to
grant a discretionary bonus to management.(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 was entitled to a special retention
incentive bonus of $1,500,000 payable in three equal annual installments commencing on October
1, 2008. In addition, Mr. Chieffe was granted a discretionary bonus of $55,000 in 2008. His
2007 and 2006 bonus awards were based on 50% of his base annual salary.(4)
    
    As described in detail below under the caption Outstanding Equity Awards at Fiscal Year-End
 AMH Holdings II, Inc. 2004 Stock Option Plan, in May 2008, Mr. Chieffe and Mr. Arthur were
granted certain options under the 2004 Stock Option Plan. These option grants had no value on
the date of grant as determined in accordance with SFAS No. 123 (Revised).(5)
    
    As described in detail below under the caption Outstanding Equity Awards at Fiscal Year-End
 AMH Holdings II, Inc. 2004 Stock Option Plan, in May 2008, Ms. Sobe, Mr. Franco and Mr.
Haumesser, as well as certain other employees, each exchanged certain previously issued
options under the 2002 and 2004 Stock Option Plan for new options under the 2004 Stock Option
Plan. These option grants had no value on the date of grant as determined in accordance with
SFAS No. 123 (Revised).(6)
    
    Includes amounts accrued or allocated under a qualified defined contribution plan available
to all Company employees, and imputed income from group term life coverage provided by the
Company in excess of $50,000.(7)
    
    Includes imputed income from group term life coverage provided by the Company in excess of
$50,000 and $27,189 of relocation assistance in conjunction with Mr. Arthur joining the
Company in December 2006.(8)
    
    Includes amounts accrued or allocated under a qualified defined contribution plan available
to all Company employees, imputed income from group term life coverage provided by the Company
in excess of $50,000 and the value of customer incentive trips attended by the executives
spouse including the related tax liability.  81




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##### Table of Contents



GRANTS OF PLAN-BASED AWARDS
  All Other
    
    
    
    
    
    
    GrantAll Other
    
    
    Option
    
    
    
    
    
    
    DateEstimated Future
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock
    
    
    Awards:
    
    
    
    
    
    
    FairPayouts Under
    
    
    Estimated Future
    
    
    Awards:
    
    
    Number
    
    
    Exercise
    
    
    Value ofNon-Equity
    
    
    Payouts Under
    
    
    Number
    
    
    of
    
    
    or Base
    
    
    StockIncentive Plan
    
    
    Equity Incentive
    
    
    of Shares
    
    
    Securities
    
    
    Price of
    
    
    andAwards
    
    
    Plan Awards (1)
    
    
    of Stock
    
    
    Underlying
    
    
    Option
    
    
    OptionThreshold
    
    
    Target
    
    
    Maximum
    
    
    Threshold
    
    
    Target
    
    
    Maximum
    
    
    or Units
    
    
    Options
    
    
    Awards
    
    
    AwardsName
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    (#) (2)
    
    
    (#) (3)
    
    
    (#) (4)
    
    
    (#)
    
    
    (#)
    
    
    ($/Sh) (1)
    
    
    ($) (1) (5)Thomas N. Chieffe
    
    
    110,000
    
    
    
    550,000
    
    
    
    825,000
    
    
    
    32,894
    
    
    
    92,231
    
    
    
    (4)
    
    
    
    
    
    
    
    
    
    
    
    1.00
    
    
    
    0.00Warren J. Arthur
    
    
    45,000
    
    
    
    135,000
    
    
    
    225,000
    
    
    
    8,772
    
    
    
    24,595
    
    
    
    (4)
    
    
    
    
    
    
    
    
    
    
    
    1.00
    
    
    
    0.00Cynthia L. Sobe
    
    
    45,000
    
    
    
    135,000
    
    
    
    225,000
    
    
    
    10,965
    
    
    
    30,744
    
    
    
    (4)
    
    
    
    
    
    
    
    
    
    
    
    1.00
    
    
    
    0.00Robert M. Franco
    
    
    66,000
    
    
    
    198,000
    
    
    
    330,000
    
    
    
    14,619
    
    
    
    40,992
    
    
    
    (4)
    
    
    
    
    
    
    
    
    
    
    
    1.00
    
    
    
    0.00John F. Haumesser
    
    
    50,400
    
    
    
    151,200
    
    
    
    252,000
    
    
    
    9,137
    
    
    
    25,620
    
    
    
    (4)
    
    
    
    
    
    
    
    
    
    
    
    1.00
    
    
    
    0.00
 
 (1)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Holdings II, Inc. 2004 Stock Option Plan, in May 2008, Ms. Sobe, Mr. Franco and Mr.
Haumesser, as well as certain other employees, each exchanged certain previously issued
options under the 2002 Stock Option Plan and the 2004 Stock Option Plan for new options under
the 2004 Stock Option Plan. At the same time, Mr. Chieffe and Mr. Arthur were awarded new
options under the 2004 Stock Option Plan having terms similar to those issued in the exchange.
All amounts presented under columns in this table referring to this footnote relate to such
stock option grants and exchanges.(2)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Holdings II, Inc. 2004 Stock Option Plan, each 2008 option grant contains both
time-based and performance vesting options. Approximately 35% of the options (time-based
options) vest ratably over a five year period, subject to such time-based options immediately
vesting upon the occurrence of a change of control, as defined in the 2004 Plan. The
threshold amount presented in this column represents the number of shares currently
underlying such time-based options, assuming that no adjustment (as described in note 4 below)
is made to the number of shares underlying such options. This amount is equivalent to the
minimum number of shares for which options could be exercised, either upon the expiration of
the five-year vesting period or upon the occurrence of a change of control, assuming that no
performance criteria have been met.(3)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Holdings II, Inc. 2004 Stock Option Plan, approximately 65% of the options
(performance-based options) in each 2008 option grant become exercisable if a liquidity
event, as defined in the option agreements, occurs and certain specified returns on investment
are realized by the stockholders of AMH II in connection with such liquidity event; provided
that if a liquidity event occurs on or prior to December 31, 2009, the performance-based
options (along with the time-based options) immediately vest without regard to realized
investment returns. The target amount presented in this column represents the total
aggregate number of shares currently underlying the time-based options and the
performance-based options collectively. Such target amount assumes that no adjustment (as
described in note 4 below) is made to the number of shares underlying such options.(4)
    
    As described in detail below under the caption Outstanding Equity Awards At Fiscal Year-End
 AMH Holdings II, Inc. 2004 Stock Option Plan, the number of shares underlying the
time-based options and the performance-based options is subject to upwards adjustment, in the
event Investcorp converts its preferred stock of AMH II into common stock, with the adjusted
number of shares dependent on the fair market value of AMH II common stock at the time of such
conversion. Because the future fair market value of AMH II is not currently determinable, the
maximum number of shares underlying the options, after accounting for such adjustment, is similarly
not determinable.(5)
    
    In accordance with SFAS No. 123 (Revised), (i) the amounts presented in this column for Ms.
Sobe, Mr. Franco and Mr. Haumesser reflect the incremental fair value of the newly issued
options, above the fair value of the previously issued options for which they were exchanged,
and (ii) the amounts presented in this column for Mr. Chieffe and Mr. Arthur reflect the grant
date fair value of the newly issued options.  82




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2008 Annual IncentiveBonus Payout PercentageThreshold
    
    
    Target
    
    
    MaximumThomas N. Chieffe
    
    
    20%
    
    
    
    100%
    
    
    
    150%Warren J. Arthur
    
    
    20%
    
    
    
    60%
    
    
    
    100%Cynthia L. Sobe
    
    
    20%
    
    
    
    60%
    
    
    
    100%Robert M. Franco
    
    
    20%
    
    
    
    60%
    
    
    
    100%John F. Haumesser
    
    
    20%
    
    
    
    60%
    
    
    
    100%
  Salary and Bonus as a% of Total CompensationThomas N. Chieffe
    
    
    99%Warren J. Arthur
    
    
    99%Cynthia L. Sobe
    
    
    96%Robert M. Franco
    
    
    94%John F. Haumesser
    
    
    96%
 EMPLOYMENT AGREEMENTS
  Mr. Chieffe
   83




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Mr. Arthur
  Ms. Sobe
   84




---



##### Table of Contents



Mr. Franco
  Mr. Haumesser
   85




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##### Table of Contents



OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 Option Awards
    
    
    Stock AwardsEquityIncentive
    
    
    EquityPlan
    
    
    IncentiveAwards:
    
    
    Plan Awards:Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number
    
    
    MarketIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    of Unearned
    
    
    or PayoutNumber
    
    
    
    
    
    
    Plan Awards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    
    Shares,
    
    
    Value ofof
    
    
    Number of
    
    
    Number
    
    
    
    
    
    
    
    
    
    
    Number of
    
    
    Value of
    
    
    Units or
    
    
    UnearnedSecurities
    
    
    Securities
    
    
    of Securities
    
    
    
    
    
    
    
    
    
    
    Shares or
    
    
    Shares or
    
    
    Other
    
    
    Shares,Underlying
    
    
    Underlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    Units of
    
    
    Units of
    
    
    Rights That
    
    
    Units orUnexercised
    
    
    Unexercised
    
    
    Unexercised
    
    
    Option
    
    
    
    
    
    
    Stock That
    
    
    Stock That
    
    
    Have
    
    
    OtherOptions
    
    
    Options
    
    
    Unearned
    
    
    Exercise
    
    
    Option
    
    
    Have Not
    
    
    Have Not
    
    
    Not
    
    
    Rights That(#)
    
    
    (#)
    
    
    Options
    
    
    Price
    
    
    Expiration
    
    
    Vested
    
    
    Vested
    
    
    Vested
    
    
    Have NotName
    
    Exercisable
    
    
    Unexercisable (1)
    
    
    (#)
    
    
    ($)
    
    
    Date
    
    
    (#)
    
    
    ($)
    
    
    (#)
    
    
    Vested ($)Thomas N. Chieffe
    
    
    
    
    
    
    92,231
    
    
    
    
    
    
    
    1.00
    
    
    
    5/30/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Warren J. Arthur
    
    
    
    
    
    
    24,595
    
    
    
    
    
    
    
    1.00
    
    
    
    5/30/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cynthia L. Sobe
    
    
    
    
    
    
    30,744
    
    
    
    
    
    
    
    1.00
    
    
    
    5/30/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert M. Franco
    
    
    
    
    
    
    40,992
    
    
    
    
    
    
    
    1.00
    
    
    
    5/30/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John F. Haumesser
    
    
    
    
    
    
    25,620
    
    
    
    
    
    
    
    1.00
    
    
    
    5/30/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Approximately 35% of the new options issued vest ratably over a five year period (time-based
options), subject to such options immediately vesting upon a change of control, as defined in
the 2004 Plan. The remainder of the new options become exercisable if a liquidity event, as
defined in the option agreements, occurs and certain specified returns on investment are
realized by the stockholders of AMH II in connection with the liquidity event (provided
that if a liquidity event occurs prior to December 31, 2009, these options (together with the
time-based options) will immediately vest without regard to realized investment returns). The
number of shares underlying the new options is subject to adjustment in the event Investcorp
converts its preferred shares of AMH II into common shares, with the adjusted number of shares
dependent on the level of achieved investment hurdles.  Associated Materials Holdings Inc. 2002 Stock Option Plan
    86




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##### Table of Contents



AMH Holdings II, Inc. 2004 Stock Option Plan
   OPTIONS EXERCISES AND STOCK VESTED
  PENSION BENEFITS
  NON-QUALIFIED DEFERRED COMPENSATION
  POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
 Separation and Severance Benefits.
  87




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##### Table of Contents



Individual Agreements.
  Severance Benefits
    
    
    Change in Control SeveranceStock and
    
    
    
    
    
    
    
    
    
    
    Stock andstock
    
    
    
    
    
    
    
    
    
    
    stockSeverance
    
    
    Benefits
    
    
    options
    
    
    Severance
    
    
    Benefits
    
    
    optionsName
    
    Payments (1)
    
    
    (2)
    
    
    (3)
    
    
    Payments (1)
    
    
    (4)
    
    
    (3)Thomas N. Chieffe
    
    $
    2,100,000
    
    
    $
    13,080
    
    
    $
    
    
    
    $
    3,074,440
    
    
    $
    43,080
    
    
    $
    Warren J. Arthur
    
    
    225,000
    
    
    
    6,540
    
    
    
    
    
    
    
    705,004
    
    
    
    43,080
    
    
    
    Cynthia L. Sobe
    
    
    225,000
    
    
    
    6,540
    
    
    
    
    
    
    
    567,282
    
    
    
    43,080
    
    
    
    Robert M. Franco
    
    
    412,305
    
    
    
    8,153
    
    
    
    
    
    
    
    1,064,204
    
    
    
    43,080
    
    
    
    John F. Haumesser
    
    
    252,000
    
    
    
    6,540
    
    
    
    
    
    
    
    810,822
    
    
    
    43,080
    
    
    
    
 
 (1)
    
    Based on the terms of Mr. Chieffes employment agreement, Mr. Chieffe would be entitled to
the remaining unpaid portion of his special retention incentive bonus in the event of
termination or a change in control.(2)
    
    Represents an estimate of the medical benefits, based on the Companys current cost per
employee, to which the executives would be entitled in the event of a termination.(3)
    
    Based on the Companys estimated equity value at January 3, 2009, there was no assumed value
of the outstanding Class B common stock of AMH II and stock options held by executives.(4)
    
    Represents an estimate of the medical benefits, based on the Companys 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. DIRECTOR COMPENSATION
 Changein PensionValue andNon-Equity
    
    
    NonqualifiedFees Earned
    
    
    
    
    
    
    
    
    
    
    Incentive
    
    
    Deferredor Paid
    
    
    Stock
    
    
    Option
    
    
    Plan
    
    
    Compensation
    
    
    All OtherName
    
    in Cash
    
    
    Awards
    
    
    Awards (1)
    
    
    Compensation
    
    
    Earnings
    
    
    Compensation
    
    
    TotalThomas N. Chieffe
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Lars C. Haegg (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ira D. Kleinman
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kevin C. Nickelberry
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dana R. Snyder
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000Dennis W. Vollmershausen
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000Christopher D. Whalen (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    At January 3, 2009, the aggregate number of options awards outstanding to directors was: Mr.
Vollmershausen  2,870 shares and Mr. Snyder  6,149 shares.  88




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(2)
    
    On December 16, 2008, Lars C. Haegg replaced Thomas Sullivan on the Board of Directors. Mr.
Sullivan did not receive any compensation for his services on the Board of Directors in 2008.(3)
    
    On December 8, 2008, Christopher D. Whalen replaced Kevin M. Hayes on the Board of Directors.
Mr. Hayes did not receive any compensation for his services on the Board of Directors in
2008.   89




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ITEM 12.
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
        90




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
    
    each person known by the Company to own beneficially 5% or more of the outstanding
voting preferred stock or voting common stock of AMH II;
    
    the directors and named executive officers of AMH II; and
    
    all directors and named executive officers of AMH II as a group.
  Class A Preferred Stock
    
    
    Class B Common StockNumber of
    
    
    
    
    
    
    Number ofSharesSeries
    
    
    % of
    
    
    SharesSeries
    
    
    % ofI (voting)
    
    
    Class
    
    
    I (voting)
    
    
    ClassInvestcorp S.A. (1)
    
    
    500,000
    
    
    
    100.0%
    
    
    
    
    
    
    
    Sipco Limited (2)
    
    
    500,000
    
    
    
    100.0%
    
    
    
    
    
    
    
    AM Equity Limited (3)
    
    
    80,117
    
    
    
    16.0%
    
    
    
    
    
    
    
    AM Investments Limited (4)
    
    
    80,117
    
    
    
    16.0%
    
    
    
    
    
    
    
    Associated Equity Limited (5)
    
    
    80,117
    
    
    
    16.0%
    
    
    
    
    
    
    
    Associated Investments Limited (6)
    
    
    80,117
    
    
    
    16.0%
    
    
    
    
    
    
    
    Investcorp 2005 AMH Holdings II Portfolio
Limited Partnership (7)
    
    
    109,533
    
    
    
    21.9%
    
    
    
    
    
    
    
    Investcorp Coinvestment Partners II, L.P. (8)
    
    
    36,666
    
    
    
    7.3%
    
    
    
    
    
    
    
    Investcorp Coinvestment Partners I, L.P. (9)
    
    
    33,333
    
    
    
    6.7%
    
    
    
    
    
    
    
    Harvest Funds (10) (11) (12)
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    100.0%
 Class B Common Stock
    
    
    Class B Common StockNumber of
    
    
    
    
    
    
    Number ofSharesSeries
    
    
    % of
    
    
    SharesSeries
    
    
    % ofI (voting)
    
    
    Class
    
    
    II (non-voting)
    
    
    ClassExecutive Officers and DirectorsThomas N. Chieffe
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Warren J. Arthur
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cynthia L. Sobe (13)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert M. Franco (14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John F. Haumesser
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lars C. Haegg
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ira D. Kleinman (15)
    
    
    500,000
    
    
    
    100.0%
    
    
    
    
    
    
    
    Kevin C. Nickelberry
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dana R. Snyder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dennis W. Vollmershausen (16)
    
    
    
    
    
    
    
    
    
    
    4,189
    
    
    
    *Christopher D. Whalen
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    All directors and executive officers as a
group
    
    
    500,000
    
    
    
    100.0%
    
    
    
    4,189
    
    
    
    *
 
 *
    
    less than 1%(1)
    
    Investcorp S.A. does not directly own any shares of stock of AMH II. With respect to the
shares of Series I Class A Preferred Stock held by Investcorp 2005 AMH Holdings II Portfolio
Limited Partnership (109,533 shares), Investcorp Coinvestment Partners II, L.P. (36,666
shares) and Investcorp Coinvestment Partners I, L.P. (33,333 shares), Investcorp S.A. is the
general partner of each of those partnerships and, therefore, Investcorp S.A. may be deemed to
share beneficial ownership of those shares. The balance of the shares of Series I Class A
Preferred Stock is owned by AM Equity Limited, AM Investments Limited, Associated Equity
Limited and Associated Investments Limited (collectively, the AMH Investors). Investcorp
S.A. does not own any of the shares of the AMH Investors. Investcorp S.A. may be deemed to
share  91




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beneficial ownership of the shares of Series I Class A Preferred Stock held by the AMH Investors because
the owners of the voting stock of the AMH Investors have entered into revocable management
services or similar agreements with an affiliate of Investcorp S.A. pursuant to which each of
the entities owning the voting stock of the AMH Investors, or such entities stockholders, has
granted such affiliate the authority to direct the voting and disposition of the voting shares
issued by such entity, which permits Investcorp S.A. to control the voting and disposition of
the Series I Class A Preferred Stock owned by each AMH Investor for so long as such agreements
are in effect. The address for Investcorp Bank S.A. is 6 rue Adolphe Fischer, Luxembourg.(2)
    
    Sipco Limited may be deemed to control Investcorp S.A. through its ownership of a majority of
a companys stock that indirectly owns a majority of Investcorp S.A.s shares. Sipco Limited
is a Cayman Islands company with its address at P.O. Box 1111, West Wind Building, George
Town, Grand Cayman, Cayman Islands.(3)
    
    AM Equity Limited is a Cayman Islands company with its address at P.O. Box 2197, West Wind
Building, George Town, Grand Cayman, Cayman Islands.(4)
    
    AM Investments Limited is a Cayman Islands company with its address at P.O. Box 2197, West
Wind Building, George Town, Grand Cayman, Cayman Islands.(5)
    
    Associated Equity Limited is a Cayman Islands company with its address at P.O. Box 2197, West
Wind Building, George Town, Grand Cayman, Cayman Islands.(6)
    
    Associated Investments Limited is a Cayman Islands company with its address at P.O. Box 2197,
West Wind Building, George Town, Grand Cayman, Cayman Islands.(7)
    
    Investcorp 2005 AMH Holdings II Portfolio Limited Partnership is a Cayman Islands exempted
limited partnership with its address at P.O. Box 1111, West Wind Building, George Town, Grand
Cayman, Cayman Islands.(8)
    
    Investcorp Coinvestment Partners II, L.P. is a Delaware limited partnership with its address
at 280 Park Avenue, New York, New York 10017.(9)
    
    Investcorp Coinvestment Partners I, L.P. is a Delaware limited partnership with its address
at 280 Park Avenue, New York, New York 10017.(10)
    
    Harvest Funds are Harvest Partners III, L.P., Harvest Partners III Beteilingungsgesellschaft
Burgerlichen Rechts (mit Haftungsbeschrankung) (Harvest Partners III, GbR), Harvest Partners
IV, L.P. and Harvest Partners IV GmbH & Co. KG (Harvest Partners IV KG). Harvest Associates
III, L.L.C., which has five voting members, is the general partner of Harvest Partners III,
L.P. and Harvest Partners III, GbR. Harvest Associates IV, L.L.C., which has five voting
members, is the general partner of Harvest Partners IV, L.P. and Harvest Partners IV KG.
Harvest Partners, L.L.C. provides management services for Harvest Associates III, L.L.C. in
connection with Harvest Partners III, L.P. and Harvest Partners III, GbR and for Harvest
Associates IV, L.L.C. in connection with Harvest Partners IV, L.P. and Harvest Partners IV KG.(11)
    
    Includes 131,978 shares of Class B Series I (voting) common stock owned by Harvest Partners
III, L.P. and 18,022 shares of Class B Series I (voting) common stock owned by Harvest
Partners III, GbR for each of which Harvest Associates III, L.L.C. is the general partner.
Harvest Associates III, L.L.C. has five voting members, each of whom has equal voting rights
and who may be deemed to share beneficial ownership of the shares of common stock of AMH. The
five members are Ira Kleinman, Harvey Mallement, Stephen Eisenstein, Harvey Wertheim, and
Thomas Arenz. Mr. Kleinman is on the Board of Directors of AMH II. Each of Messrs. Kleinman,
Mallement, Eisenstein, Wertheim and Arenz disclaims beneficial ownership of the shares of
Class A common stock owned by Harvest Partners III, L.P. and Harvest Partners III GbR.(12)
    
    Includes 286,465 shares of Class B Series I (voting) common stock owned by Harvest Partners
IV, L.P. and 63,535 shares of Class B Series I (voting) common stock owned by Harvest Partners
IV KG, for each of which Harvest Associates IV, L.L.C. is the general partner. Harvest
Associates IV, L.L.C. has five voting members, each of whom has equal voting rights and who
may be deemed to share beneficial ownership of the shares of Class B common stock of AMH
beneficially owned by it. The five members are Ira Kleinman, Harvey Mallement, Stephen
Eisenstein, Harvey Wertheim and Thomas Arenz. Mr. Kleinman is on the Board of Directors of AMH
II. Each of Messrs. Kleinman, Mallement, Eisenstein, Wertheim and Arenz disclaims beneficial
ownership of the shares of Class A common stock owned by Harvest Partners IV, L.P., Harvest
Partners IV KG. Harvest Partners III, L.P., Harvest Partners III GbR, Harvest Partners IV,
L.P. and Harvest Partners IV KG are collectively referred to as the Harvest Funds. The
address of the named entities is 280 Park Avenue, 25th Floor, New York, New York 10017.  92




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(13)
    
    Includes options to purchase 5,314 shares of Class B Series II (non-voting) common stock.(14)
    
    Includes options to purchase 21,256 shares of Class B Series II (non-voting) common stock.(15)
    
    Includes shares of Class B Series I (voting) common stock owned by Harvest Partners III, L.P.
and shares of Class B Series I (voting) common stock owned by Harvest Partners III GbR, for
each of which Harvest Associates III, L.L.C. is the general partner. Also includes shares of
Class B Series I (voting) common stock owned by Harvest Partners IV, L.P. and Harvest Partners
IV KG, for each of which Harvest Partners IV, L.L.C. is the general partner. Mr. Kleinman is a
voting member of Harvest Associates, III, L.L.C. and Harvest Partners IV, L.L.C. and may be
deemed to share beneficial ownership of the shares of common stock of AMH beneficially owned
by them. Mr. Kleinman disclaims beneficial ownership of common shares owned by Harvest
Partners III, L.P., Harvest Partners III GbR, Harvest Partners IV, L.P. and Harvest Partners
IV KG.(16)
    
    Includes 1,319 shares of Class B Series II (non-voting) common stock owned through a personal
holding company in the name of 3755428 Canada Inc., a Canadian corporation. Mr. Vollmershausen
is the sole shareholder of this corporation. Mr. Vollmershausen also holds options to purchase
2,870 shares of Class B Series II (non-voting) common stock. CHANGES IN CONTROL
 PLEDGE AGREEMENT
  STOCKHOLDERS AGREEMENT
   93




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ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
 THE RESTRUCTURING AGREEMENTS
    THE STOCKHOLDERS AGREEMENT
      94




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RELATED PARTY TRANSACTIONS
  MANAGEMENT AGREEMENT
   95




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DIRECTOR INDEPENDENCE
      96




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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  2008
    
    
    2007Audit Fees
    
    $
    938
    
    
    $
    940Audit-Related Fees
    
    
    
    
    
    
    524Tax Fees
    
    
    71
    
    
    
    731Total Fees
    
    $
    1,009
    
    
    $
    2,195
  AUDIT FEES
  AUDIT RELATED FEES
  TAX FEES
   97




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##### Table of Contents



PART IV
 
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
  (A)(1) FINANCIAL STATEMENTS
  (A)(2) FINANCIAL STATEMENT SCHEDULES
  (C) EXHIBITS
   98




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##### Table of Contents



SIGNATURES
  ASSOCIATED MATERIALS, LLCBy:
    /s/ THOMAS N. CHIEFFEThomas N. ChieffePresident and Chief Executive Officer
(Principal Executive Officer) By:
    /s/ CYNTHIA L. SOBECynthia L. SobeVice President-Chief Financial Officer,
Treasurer and Secretary
(Principal Financial Officer and
Principal Accounting Officer)   Signature
    
    Title
    
    Date/s/ THOMAS N. CHIEFFE

Thomas N. Chieffe
    
    President and Chief Executive Officer
(Principal Executive Officer)
    
    April 3, 2009/s/ CYNTHIA L. SOBE

Cynthia L. Sobe
    
    Vice President-Chief Financial
Officer, 
Treasurer and Secretary
(Principal Financial 
Officer and
Principal Accounting Officer)
    
    April 3, 2009Lars C. Haegg *
    
    DirectorIra D. Kleinman *
    
    DirectorKevin C. Nickelberry *
    
    DirectorDana R. Snyder *
    
    DirectorDennis W. Vollmershausen *
    
    DirectorChristopher D. Whalen *
    
    Director
 *By:
    /s/ CYNTHIA L. SOBECynthia L. SobeAttorney-in-Fact
    
    April 3, 2009     99




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    
    Certificate of Formation of Associated Materials, LLC (incorporated by reference to
Exhibit 3.1 to the Companys Annual Report on Form 10-K, filed with the Securities and
Exchange Commission on March 25, 2008).3.2
    
    
    Limited Liability Company Agreement of Associated Materials, LLC (incorporated by
reference to Exhibit 3.2 to the Companys Annual Report on Form 10-K, filed with the
Securities and Exchange Commission on March 25, 2008).4.1
    
    
    Indenture governing the Companys 9 3/4% Senior Subordinated Notes Due 2012, dated as of
April 23, 2002, by and among the Company, AMI Management Company and Wilmington Trust
Company (incorporated by reference to Exhibit 4.2 to the Companys Registration
Statement on Form S-4, Commission File No. 333-92010, filed on July 3, 2002).4.2
    
    
    Supplemental Indenture governing the Companys 9 3/4% Senior Subordinated Notes Due
2012, dated as of May 10, 2002 by and among the Company, AMI Management Company, Alside,
Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 4.3 to the
Companys Registration Statement on Form S-4, Commission File No. 333-92010, filed on
July 3, 2002).4.3
    
    
    Second Supplemental Indenture, dated as of August 29, 2003, among the Company, Alside,
Inc., Gentek Holdings, Inc., Gentek Building Products, Inc. and Wilmington Trust Company
(incorporated by reference to Exhibit 4.3 to the Companys Annual Report on Form 10-K,
filed on April 2, 2004).4.4
    
    
    Form of the Companys 9 3/4% Senior Subordinated Note Due 2012 (incorporated by
reference to Exhibit 4.4 to the Companys Registration Statement on Form S-4, Commission
File No. 333-92010, filed on July 3, 2002).4.5
    
    
    Second Supplemental Indenture, dated as of August 29, 2003, among the Company, Alside,
Inc., Gentek Holdings, Inc., Gentek Building Products, Inc. and Wilmington Trust Company
(incorporated by reference to Exhibit 4.3 to the Companys Annual Report on Form 10-K,
filed on April 2, 2004).4.6
    
    
    Form of the Companys 9 3/4% Senior Subordinated Note Due 2012 (incorporated by
reference to Exhibit 4.4 to the Companys Registration Statement on Form S-4, Commission
File No. 333-92010, filed on July 3, 2002).10.1
    *
    
    Form of Indemnification Agreement between the Company and each of the directors and
executive officers of the Company (incorporated by reference to Exhibit 10.14 to the
Companys Registration Statement on Form S-1, File No. 33-84110).10.2
    
    
    Amended and Restated Management Agreement, dated December 22, 2004, by and between
Harvest Partners, Inc. and Associated Materials Incorporated (incorporated by reference
to Exhibit 10.7 to the Current Report on Form 8-K/A, filed with the Securities and
Exchange Commission on December 23, 2004).10.3
    *
    
    Amended and Restated Employment Agreement, dated as of March 31, 2006, between the
Company and John F. Haumesser (incorporated by reference to Exhibit 10.4 to the
Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May
16, 2006).10.4
    
    
    Management Advisory Agreement, dated December 22, 2004, by and between Investcorp
International, Inc. and Associated Materials Incorporated (incorporated by reference to
Exhibit 10.8 to the Current Report on Form 8-K/A, filed with the Securities and Exchange
Commission on December 23, 2004).10.5
    
    
    Financing Advisory Agreement, dated December 22, 2004, by and between Investcorp
International, Inc. and Associated Materials Incorporated (incorporated by reference to
Exhibit 10.9 to the Current Report on Form 8-K/A, filed with the Securities and Exchange
Commission on December 23, 2004).
  100




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##### Table of Contents



ExhibitNumber
    
    Description10.6
    
    
    M&A Advisory Services Agreement, dated December 5, 2004, by and between Investcorp
International, Inc. and Associated Materials Incorporated (incorporated by reference to
Exhibit 10.10 to the Current Report on Form 8-K/A, filed with the Securities and
Exchange Commission on December 23, 2004).10.7
    *
    
    AMH Holdings II, Inc. 2004 Stock Option Plan (incorporated by reference to Exhibit 10.11
to the Current Report on Form 8-K/A, filed with the Securities and Exchange Commission
on December 23, 2004).10.8
    
    
    Stockholders Agreement, dated December 22, 2004, by and among AMH II and the
stockholders signatory thereto (incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K/A, filed with the Securities and Exchange Commission on December 23,
2004).10.9
    
    
    Tax Sharing Agreement, dated March 4, 2004, by and among AMH, Holdings and the Company
(incorporated by reference to Exhibit 10.30 to the Annual Report on Form 10-K, filed
with the Securities and Exchange Commission on April 1, 2005).10.10
    *
    
    Agreement and General Release, dated as of November 29, 2007, between the Company and
Dana R. Snyder (incorporated by reference to Exhibit 10.1 to the Current Report on Form
8-K filed with the Securities and Exchange Commission on December 4, 2007).10.11
    *
    
    Amended and Restated Employment Agreement, dated as of April 1, 2008, between the
Company and Thomas N. Chieffe (incorporated by reference to Exhibit 10.1 to the Current
Report on Form 8-K, filed with the Securities and Exchange Commission on April 4, 2008).10.12
    *
    
    Amended and Restated Employment Agreement, dated as of April 1, 2008, between the
Company and Robert M. Franco (incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K, filed with the Securities and Exchange Commission on April 4, 2008).10.13
    *
    
    Employment Agreement, dated as of April 1, 2008, between the Company and Warren J.
Arthur (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K,
filed with the Securities and Exchange Commission on April 4, 2008).10.14
    *
    
    Employment Agreement, dated as of April 1, 2008, between the Company and Cynthia L. Sobe
(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed with
the Securities and Exchange Commission on April 4, 2008).10.15
    
    
    Loan and Security Agreement, dated as of October 3, 2008, by and among Wachovia Capital
Markets, LLC and CIT Capital Securities LLC, as joint lead arrangers and joint
bookrunners, Wachovia Bank, National Association, as administrative agent and collateral
agent, The CIT Group/Business Credit, Inc., as syndication agent, the lenders party
thereto, the Company, Gentek Building Products, Inc. and Gentek Building Products
Limited, as borrowers, and Holdings, Gentek Holdings, LLC and Alside, Inc., as
guarantors (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K,
filed with the Securities and Exchange Commission on October 9, 2008).10.16
    *
    
    Form of Stock Option Award Agreement, for awards made in 2008 under the 2004 Option Plan.21.1
    
    
    Subsidiaries of the Registrant24.1
    
    
    Power of Attorney31.1
    
    
    Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a)
of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
  101




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##### Table of Contents



ExhibitNumber
    
    Description31.2
    
    
    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.  102