**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**FORM 10-Q**

| **x**                                                  | ** ** | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|--------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|
| **For the quarterly period ended April 1,  2005** |
| **OR**                                                 |
| **o**                                                  | ** ** | **TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For the transition period from            to            **

**Commission file number: 333-05978**

**EURAMAX INTERNATIONAL, INC.**

(Exact name of registrantas specified in its charter)

| **Delaware**                                                     | **58-2502320**                        |
|------------------------------------------------------------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) | (I.R.S. Employer  Identification No.) |
| **5445 Triangle Parkway, Suite 350,  Norcross, Georgia**    | **30092**                             |
| (Address of  principal executive offices)                        | (Zip Code)                            |

 

Registrant’s telephonenumber, including area code: **770-449-7066**

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.

ý Yes  oNo

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Exchange Rule 12b-2).

o Yes  ýNo

Asof May 16, 2005, Registrant had 322,915.17 shares of Class A commonstock outstanding and no shares of Class B common stock outstanding.

 

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**Part I—Financial Information**

**Item 1.**                        FinancialStatements

**EuramaxInternational, Inc. and SubsidiariesCondensed Consolidated Statements of Earnings(Thousands of U.S. Dollars)(Unaudited)**
| ** **                    | ** ** | **Three months  ended  April 1, 2005** | ** ** | **Three months  ended  March 26, 2004** | ** ** |
|-------------------------------|------------|-------------------------------------------------------|------------|--------------------------------------------------------|------------|
| Net sales                     |       |                                                  | $          | 243,496                                                |       |   |   | $ | 195,403 |   |   |
| Costs and expenses:           |       |                                                  |       |                                                   |       |   |   |   |   |
| Cost of goods sold            |       |                                                  | 200,220    |                                                   |       |   | 156,883 |   |   |
| Selling and general           |       |                                                  | 21,675     |                                                   |       |   | 19,876 |   |   |
| Depreciation and amortization |       |                                                  | 5,469      |                                                   |       |   | 5,115 |   |   |
| Earnings from operations      |       |                                                  | 16,132     |                                                   |       |   | 13,529 |   |   |
| Interest expense, net         |       |                                                  | (6,266     | )                                                      |       |   | (5,757 | ) |   |
| Other income, net             |       |                                                  | 2,053      |                                                   |       |   | 771 |   |   |
| Earnings before  income taxes |       |                                                  | 11,919     |                                                   |       |   | 8,543 |   |   |
| Provision for  income taxes   |       |                                                  | 4,480      |                                                   |       |   | 2,944 |   |   |
| Net earnings                  |       |                                                  | $          | 7,439                                                  |       |   |   | $ | 5,599 |   |   |

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

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**EuramaxInternational, Inc. and SubsidiariesCondensed Consolidated Balance Sheets(Thousands of U.S. Dollars)(Unaudited)**
| ** **                                     | ** ** | **April 1,  2005** | ** ** | **December 31,  2004** | ** ** |
|------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| **ASSETS**                                     |       |                    |       |                        |       |   |   |
| Current assets:                                |       |                    |       |                        |       |   |   |
| Cash and cash equivalents                      |       | $                       | 41,337     |                        |       | $ | 43,877 |   |   |
| Accounts receivable, net                       |       | 143,087                 |       |                        | 131,317    |   |   |
| Inventories                                    |       | 170,846                 |       |                        | 134,280    |   |   |
| Other current assets                           |       | 13,850                  |       |                        | 10,722     |   |   |
| Total current assets                           |       | 369,120                 |       |                        | 320,196    |   |   |
| Property, plant  and equipment, net            |       | 159,650                 |       |                        | 161,288    |   |   |
| Goodwill, net                                  |       | 138,539                 |       |                        | 140,483    |   |   |
| Customer  relationships, net                   |       | 39,916                  |       |                        | 41,302     |   |   |
| Other intangible  assets, net                  |       | 4,316                   |       |                        | 4,385      |   |   |
| Deferred income  taxes                         |       | 6,159                   |       |                        | 5,934      |   |   |
| Other assets                                   |       | 12,632                  |       |                        | 13,453     |   |   |
|                                           |       | $                       | 730,332    |                        |       | $ | 687,041 |   |   |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY**  |       |                    |       |                        |       |   |   |
| Current liabilities:                           |       |                    |       |                        |       |   |   |
| Cash overdrafts                                |       | $                       | 1,189      |                        |       | $ | 2,376 |   |   |
| Accounts payable                               |       | 117,876                 |       |                        | 103,978    |   |   |
| Accrued expenses and other current liabilities |       | 55,255                  |       |                        | 64,250     |   |   |
| Current maturities of long-term debt           |       | 8,087                   |       |                        | 8,285      |   |   |
| Total current liabilities                      |       | 182,407                 |       |                        | 178,889    |   |   |
| Long-term debt,  less current maturities       |       | 317,474                 |       |                        | 276,086    |   |   |
| Deferred income  taxes                         |       | 51,245                  |       |                        | 52,716     |   |   |
| Other liabilities                              |       | 28,532                  |       |                        | 32,187     |   |   |
| Total liabilities                              |       | 579,658                 |       |                        | 539,878    |   |   |
| Shareholders’ equity:                     |       |                    |       |                        |       |   |   |
| Common stock                                   |       | 500                     |       |                        | 500        |   |   |
| Additional paid-in capital                     |       | 155,495                 |       |                        | 155,495    |   |   |
| Treasury stock                                 |       | (69,836                 | )          |                        | (69,836    | ) |   |
| Restricted stock                               |       | (2,424                  | )          |                        | (2,616     | ) |   |
| Retained earnings                              |       | 65,989                  |       |                        | 58,550     |   |   |
| Accumulated other comprehensive income         |       | 950                     |       |                        | 5,070      |   |   |
| Total  shareholders’ equity               |       | 150,674                 |       |                        | 147,163    |   |   |
|                                           |       | $                       | 730,332    |                        |       | $ | 687,041 |   |   |

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

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**EuramaxInternational, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(Thousands of U.S. Dollars)(Unaudited)**
| ** **                                        | ** ** | **Three months  ended  April 1, 2005** | ** ** | **Three months  ended  March 26, 2004** | ** ** |
|---------------------------------------------------|------------|-------------------------------------------------------|------------|--------------------------------------------------------|------------|
| Net cash used in  operating activities            |       |                                                  | $          | (25,348                                                | )          |   |   | $ | (24,979 | ) |   |
| Cash flows from  investing activities:            |       |                                                  |       |                                                   |       |   |   |   |   |
| Proceeds from sales of assets                     |       |                                                  | 11         |                                                   |       |   | 40 |   |   |
| Purchases of businesses                           |       |                                                  | (13,650    | )                                                      |       |   | (1,219 | ) |   |
| Capital expenditures                              |       |                                                  | (3,988     | )                                                      |       |   | (1,270 | ) |   |
| Net cash used in investing activities             |       |                                                  | (17,627    | )                                                      |       |   | (2,449 | ) |   |
| Cash flows from  financing activities:            |       |                                                  |       |                                                   |       |   |   |   |   |
| Net borrowings on revolving credit facility       |       |                                                  | 46,000     |                                                   |       |   | 11,404 |   |   |
| Repayment of long-term debt                       |       |                                                  | (2,067     | )                                                      |       |   | (1,449 | ) |   |
| Changes in cash overdrafts                        |       |                                                  | (1,187     | )                                                      |       |   | 64 |   |   |
| Expenses relating to stockholder transactions     |       |                                                  | (77        | )                                                      |       |   | (463 | ) |   |
| Deferred finance fees                             |       |                                                  | —     |                                                   |       |   | (434 | ) |   |
| Net cash provided by financing activities         |       |                                                  | 42,669     |                                                   |       |   | 9,122 |   |   |
| Effect of exchange rate changes on cash           |       |                                                  | (2,234     | )                                                      |       |   | 661 |   |   |
| Net decrease in cash and cash equivalents         |       |                                                  | (2,540     | )                                                      |       |   | (17,645 | ) |   |
| Cash and cash  equivalents at beginning of period |       |                                                  | 43,877     |                                                   |       |   | 48,227 |   |   |
| Cash and cash  equivalents at end of period       |       |                                                  | $          | 41,337                                                 |       |   |   | $ | 30,582 |   |   |

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

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**Euramax International, Inc. and SubsidiariesNotes to Condensed Consolidated Financial Statements(Thousands of U.S. Dollars)(Unaudited)**

**1.   Basisof Presentation:**

Forpurposes of this report the “Company” and “Euramax” refers to EuramaxInternational, Inc. and subsidiaries, collectively.

Thecondensed consolidated financial statements of the Company have been preparedin accordance with U.S. generally accepted accounting principles for interimfinancial information and with the rules and regulations of the Securitiesand Exchange Commission (the “SEC”). Accordingly, they do not include allinformation and footnotes required by U.S. generally accepted accountingprinciples for complete financial statements. In the opinion of management,these statements include all adjustments considered necessary for the fairpresentation of all interim periods reported herein. All adjustments are of anormal recurring nature unless otherwise disclosed. Management believes thatthe disclosures made are adequate for a fair presentation of the Company’sresults of operations, financial position and cash flows. These condensedconsolidated financial statements should be read in conjunction with theyear-end consolidated financial statements and accompanying notes included inthe Company’s Annual Report on Form 10-K for the year ended December 31,2004.

TheCompany’s sales are somewhat seasonal, with the second and third quarterstypically accounting for the highest sales volumes. Operating results for theperiod ended April 1, 2005, are not necessarily indicative of futureresults that may be expected for the year ending December 30, 2005.

Per share data has notbeen presented since such data provides no useful information, as the shares ofthe Company are closely held.

**2.   Summary of Significant Accounting Policies:**

For information regarding significant accountingpolicies, see Note 2 to the consolidated financial statements of the Companyfor the year ended December 31, 2004, set forth in the Company’s AnnualReport on Form 10-K.

*Goodwill*

The change in goodwill, net from December 31,2004 to April 1, 2005 is a result of the change in foreign exchange ratesused in converting the local currency goodwill balance into U.S. Dollars.

*Stock Based Compensation*

As permitted by SFAS No. 123,“Accounting for Stock-Based Compensation”, as amended by SFAS No. 148, theCompany has elected to apply APB No. 25, “Accounting for Stock Issued toEmployees” and related interpretations in accounting for stock options issuedunder its equity compensation plan. Had compensation expense related to thesestock options been determined based upon the fair value method under SFAS No. 123,net income would have been impacted as follows:
| ** **                                                                                                                            | ** ** | **Three months  ended  April 1,  2005** | ** ** | **Three months  ended  March 26,  2004** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------|------------|
| Net income, as reported                                                                                                               |       |                                              | $          | 7,439                                              |       |   |   | $ | 5,599 |   |   |
| Less: Total stock-based  employee compensation expense determined under fair value method for all  awards, net of related tax effects |       |                                              | (46        | )                                                  |       |   | (46 | ) |   |
| Pro forma net income                                                                                                                  |       |                                              | $          | 7,393                                              |       |   |   | $ | 5,553 |   |   |

 

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The fair value of eachoption was estimated using the Black-Scholes option-pricing model using a riskfree interest rate of 3.20%, an expected option life of 5 years, no volatilityand no dividends.

*AccountingPronouncements*

In October 2004, the American Jobs Creation Actof 2004 (the “Jobs Creation Act”) was signed into law. The Jobs Creation Actincludes a temporary incentive for U.S. multinationals to repatriate foreignearnings at an effective 5.25 percent tax rate. Such repatriations must occurin either an enterprise’s last tax year that began before the enactment date,or the first tax year that begins during the one-year period beginning on thedate of enactment.

FASB Staff Position 109-2, “Accounting and DisclosureGuidance for the Foreign Earnings Repatriation Provision within the AmericanJobs Creation Act of 2004” (“FSP 109-2”), indicates that the lack ofclarification of certain provisions within the Jobs Creation Act and the timingof the enactment necessitate a practical exception to the SFAS No. 109, “Accountingfor Income Taxes,” (“SFAS No. 109”) requirement to reflect in the periodof enactment the effect of a new tax law. Accordingly, an enterprise is allowedtime beyond the financial reporting period of enactment to evaluate the effectof the Jobs Creation Act on its plan for reinvestment or repatriation offoreign earnings. FSP 109-2 requires that the provisions of SFAS No. 109be applied as an enterprise decides on its plan for reinvestment orrepatriation of its unremitted foreign earnings. The Company is currentlyevaluating the details of the Jobs Creation Act and, as of April 1, 2005,management had not decided whether, and to what extent, the Company mightrepatriate foreign earnings under the Jobs Creation Act. Accordingly, theconsolidated financial statements do not reflect any provision for taxes on theunremitted foreign earnings that might be remitted under the Jobs Creation Act.However, it is reasonably possible that the Company will repatriate some amountbetween $0 and $130 million during 2005, with the respective tax liabilityranging from $0 to $6.8 million. The Company expects to be in a position tofinalize its assessment and the impact, if any, it may have on income taxexpense by December 30, 2005.

In November 2004, the FASB issued SFAS No. 151,“Inventory Costs, an amendment of Accounting Research Bulletin No. 43,Chapter 4.” SFAS No. 151 requires that abnormal amounts of idle facilityexpense, freight, handling costs and wasted materials (spoilage) be recorded ascurrent period charges and that the allocation of fixed production overheads toinventory be based on the normal capacity of the production facilities. SFAS No. 151is effective for the Company on December 31, 2006. The Company does notbelieve that the adoption of SFAS No. 151 will have a material impact onthe consolidated financial statements.

In December 2004,the FASB issued SFAS No. 123 (revised 2004), “Share Based Payment” (“SFAS No. 123(R)”).SFAS No. 123(R) supercedes APB Opinion No. 25, “Accounting forStock Issued to Employees,” and amends SFAS No. 95, “Statement of CashFlows.” Generally, the approach in SFAS No. 123(R) is similar to theapproach described in SFAS No. 123. The Company must adopt SFAS No. 123(R) bythe beginning of its fiscal year 2006. Currently, the Company has elected touse the intrinsic value method permitted by APB 25 to value stock awards issuedunder equity compensation programs. The Company is evaluating option valuationmodels, including the Black-Scholes formula, to determine which model theCompany will utilize upon adoption of SFAS No. 123(R). The Company plansto adopt SFAS No. 123(R) using the modified-prospective method. TheCompany does not anticipate that adoption of SFAS No. 123(R) willhave a material impact on the Company’s stock-based compensation expense.

**3.   Acquisitions:**

On January  31, 2005, the Company acquired substantiallyall of the assets and assumed certain liabilities of Gutter Suppliers, Inc.The purchase price, including approximately $0.6 million in acquisition relatedfees and expenses, was approximately $13.9 million, subject to adjustment basedon the amount of working capital of the acquired business on January 31,2005. The Company has allocated the purchase 

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price in excess of the net assets acquired to GutterSuppliers, Inc.’s assets and liabilities under the purchase method ofaccounting based on preliminary estimates by management of fair market valuesof identifiable assets and liabilities. Gutter Suppliers, Inc.manufactures metal roof drainage products, primarily for the residential contractormarket, and will be included in the U.S. Fabrication Roof Drainage segment. Theresults of operations of Gutter Suppliers, Inc. are included in theCompany’s consolidated statement of earnings from the acquisition date.

**4.   Inventories:**

Inventorieswere comprised of:
| ** **               | ** ** | **April 1,  2005** | ** ** | **December 31,  2004** | ** ** |
|--------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Aluminum and  steel coil |       | $                       | 116,022    |                        |       | $ | 91,431 |   |   |
| Raw materials            |       | 23,578                  |       |                        | 22,553     |   |   |
| Work in process          |       | 2,846                   |       |                        | 2,617      |   |   |
| Finished products        |       | 28,400                  |       |                        | 17,679     |   |   |
|                     |       | $                       | 170,846    |                        |       | $ | 134,280 |   |   |

 

Inventoriesare net of related reserves totaling $3.6 million at April 1, 2005 and$3.2 million at December 31, 2004.

**5.   Long-Term Obligations:**

Long-termobligations consisted of the following:
| ** **                                | ** ** | **April 1,  2005** | ** ** | **December 31,  2004** | ** ** |
|-------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Senior Secured Credit  Facility:          |       |                    |       |                        |       |   |   |
| Revolving Credit Facility                 |       | $                       | 93,950     |                        |       | $ | 50,095 |   |   |
| Term Loan                                 |       | 29,414                  |       |                        | 31,977     |   |   |
| 8.50% Senior  Subordinated Notes due 2011 |       | 200,000                 |       |                        | 200,000    |   |   |
| Mortgage Note  Payable                    |       | 2,021                   |       |                        | 2,081      |   |   |
| Capital Lease  Obligations                |       | 176                     |       |                        | 218        |   |   |
|                                      |       | 325,561                 |       |                        | 284,371    |   |   |
| Less current  maturities                  |       | (8,087                  | )          |                        | (8,285     | ) |   |
|                                      |       | $                       | 317,474    |                        |       | $ | 276,086 |   |   |

 

As of April 1,2005, an undrawn amount of $13.8 million was available under the revolvingcredit facility.

**6.   Commitments and Contingencies:**

**Raw Material Commitments**

To assure continuity ofsupply, the Company negotiates contracts for minimum annual purchases ofaluminum from several suppliers. Commitments for minimum annual purchases aretypically at an agreed upon cost to convert aluminum ingot into coil. Inaddition, to ensure a margin on specific sales, the Company may commit topurchase aluminum ingot or coil at a fixed market price for future delivery.For further discussion of the Company’s raw material commitments, see Note 15to the consolidated financial statements of the Company for the year ended December 31,2004, set forth in the Company’s Annual Report on Form 10-K.

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**Litigation**

The Company is currentlyparty to legal proceedings that have arisen in the ordinary course of business.Certain proceedings involve claims by plaintiffs for reimbursement or damagesthat in the aggregate approximate $11.0 million. The Company has and willcontinue to vigorously defend itself in these matters. It is the opinion of theCompany’s management, based upon information available at this time, that theexpected outcome of these matters would not reasonably be expected to have amaterial adverse effect on the consolidated financial position, results ofoperations or cash flows of the Company and its subsidiaries taken as a whole.

**Environmental Matters**

The Company’s operations are subject to federal,state, local and European environmental laws and regulations concerning themanagement of pollution and hazardous substances.

The Company has been named as a potentiallyresponsible party in state and Federal administrative and judicial proceedingsseeking contribution for costs associated with the investigation, analysis,correction and remediation of environmental conditions at various hazardouswaste disposal sites. The Company continues to monitor these actions andproceedings and to vigorously defend both its own interests as well as theinterests of its affiliates. The Company’s ultimate liability in connectionwith present and future environmental claims will depend on many factors,including its volumetric share of the waste at a given site, the remedialaction required, the total cost of remediation, and the financial viability andparticipation of the other entities that also sent waste to the site. Once itbecomes probable that the Company will incur costs in connection withremediation of a site and such costs can be reasonably estimated, the Companyestablishes or adjusts its reserve for its projected share of these costs.Based upon current law and information known to the Company concerning the sizeof the sites known to it, anticipated costs, their years of operations and thenumber of other potentially responsible parties, management believes that theCompany’s potential share of the estimated aggregate liability for the costs ofremedial actions and related costs and expenses is not material. In addition,the Company establishes reserves for remedial measures required from time totime at its own facilities. Management believes that the reasonably probableoutcomes of these matters will not be material. The Company’s reserves,expenditures and expenses for all environmental exposures were not significantfor any of the dates or periods presented.

In connection with the acquisition of the Company fromAlumax Inc. (which has since been acquired by Aluminum Company of America in May 1998,and hereafter referred to as “Alumax”) on September 25, 1996, the Companywas indemnified by Alumax for substantially all of its costs, if any, relatedto specifically identified environmental matters arising prior to the closingdate of the acquisition during the period of time it was owned directly orindirectly by Alumax. Such indemnification includes costs that may ultimatelybe incurred to contribute to the remediation of certain specified existingNational Priorities List (“NPL”) sites for which the Company had been named apotentially responsible party under the federal Comprehensive EnvironmentalResponse, Compensation, and Liability Information System (“CERCLA”) as of theclosing date of the acquisition, as well as certain potential costs for siteslisted on state hazardous cleanup lists. The Company does not believe that ithas any significant probable liability for environmental claims. Further, theCompany believes it to be unlikely that the Company would be required to bearenvironmental costs in excess of its pro rata share of such costs as apotentially responsible party at any site.

The facility that BergerBros Company (“Berger”), an operating subsidiary acquired as part of the BergerHoldings acquisition, leases in Ivyland, Pennsylvania has contaminatedgroundwater resulting from the migration of contaminants from an adjacentproperty which was formerly the Naval Air Warfare Center, currently an NPL siteunder CERCLA. The United States Navy is conducting a clean-up of the Naval AirWarfare Center NPL site under the Environmental Protection Agency’ssupervision. The 

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owner/landlordof the Berger property obtained liability protection under Pennsylvania’sBrownfield Law by demonstrating to the Commonwealth of Pennsylvania that thecontamination is from an off-site source, and under Pennsylvania law thatprotection benefits the tenant as well. Moreover, under Berger’s lease, the landlordretained any liability for this contamination. Accordingly, although thefacility leased by Berger is on an NPL site, the effects of this contaminationwould not reasonably be expected to have a material adverse effect on theCompany’s consolidated financial position, results of operations or cash flows.

**Product Warranties**

TheCompany provides warranties on certain products. The warranty periods differdepending on the product, but generally range from one year to limited lifetimewarranties. The Company provides accruals for warranties based on historicalexperience and expectations of future occurrence. A summary of the changes inthe product warranty accrual follows:
| ** **                                                          | ** ** | **Three months  ended  April 1,  2005** | ** ** | **Three months  ended  March 26,  2004** | ** ** |
|---------------------------------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------|------------|
| Beginning balance                                                   |       |                                              | $          | 3,941                                              |       |   |   | $ | 3,993 |   |   |
| Payments made or  service provided                                  |       |                                              | (592       | )                                                  |       |   | (729 | ) |   |
| Warranty expense                                                    |       |                                              | 833        |                                               |       |   | 728 |   |   |
| Change related to  changes in foreign currency exchange rates  |       |                                              | (88        | )                                                  |       |   | (20 | ) |   |
| Ending balance                                                      |       |                                              | $          | 4,094                                              |       |   |   | $ | 3,972 |   |   |

 

**7.   ComprehensiveIncome:**
| ** **                                    | ** ** | **Three months  ended  April 1,  2005** | ** ** | **Three months  ended  March 26,  2004** | ** ** |
|-----------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------|------------|
| Net earnings                                  |       |                                              | $          | 7,439                                              |       |   |   | $ | 5,599 |   |   |
| Other comprehensive  earnings (loss):         |       |                                              |       |                                               |       |   |   |   |   |
| Foreign currency translation adjustment       |       |                                              | (3,465     | )                                                  |       |   | (1,903 | ) |   |
| Gain (loss) on  derivative instruments, net:  |       |                                              |       |                                               |       |   |   |   |   |
| Net changes in fair value of derivatives      |       |                                              | 1,110      |                                               |       |   | (997 | ) |   |
| Net gains reclassified from OCI into earnings |       |                                              | (1,765     | )                                                  |       |   | (498 | ) |   |
| Comprehensive income                          |       |                                              | $          | 3,319                                              |       |   |   | $ | 2,201 |   |   |

 

**8.   IncomeTaxes:**

The income tax provisionfor the three months ended April 1, 2005 and March 26, 2004, iscomputed at the effective rate expected to be applicable in each respectivefull year using the statutory rates on a country by country basis, adjusted forchanges in valuation allowances relating to the Company’s state net operatingloss carryforwards and capital loss carryforwards.

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**9.   Employee Retirement Plans:**

Netperiodic pension costs for the Company’s non-contributory defined benefitpension plan covering substantially all U.S. hourly employees include thefollowing components:
| ** **                                   | ** ** | **Three months  ended  April 1,  2005** | ** ** | **Three months  ended  March 26,  2004** | ** ** |
|----------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------|------------|
| **Components of net periodic  pension cost** |       |                                              |       |                                               |       |   |   |   |   |
| Service cost                                 |       |                                              | $          | 115                                                |       |   |   | $ | 102 |   |   |
| Interest cost                                |       |                                              | 65         |                                               |       |   | 54 |   |   |
| Expected return  on assets                   |       |                                              | (67        | )                                                  |       |   | (55 | ) |   |
| Amortization of  prior service cost          |       |                                              | 1          |                                               |       |   | — |   |   |
| Recognized  actuarial net loss               |       |                                              | 4          |                                               |       |   | — |   |   |
| Net periodic  pension cost                   |       |                                              | $          | 118                                                |       |   |   | $ | 101 |   |   |

 

Netperiodic pension costs for the Company’s single employer pension plan coveringcertain employees in the United Kingdom include the following components:
| ** **                                   | ** ** | **Three months  ended  April 1,  2005** | ** ** | **Three months  ended  March 26,  2004** | ** ** |
|----------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------|------------|
| **Components of net periodic  pension cost** |       |                                              |       |                                               |       |   |   |   |   |
| Service cost                                 |       |                                              | $          | 308                                                |       |   |   | $ | 274 |   |   |
| Interest cost                                |       |                                              | 532        |                                               |       |   | 461 |   |   |
| Expected return  on assets                   |       |                                              | (410       | )                                                  |       |   | (349 | ) |   |
| Recognized  actuarial net loss               |       |                                              | —     |                                               |       |   | — |   |   |
| Net periodic  pension cost                   |       |                                              | $          | 430                                                |       |   |   | $ | 386 |   |   |

 

**10.   Segment Information:**

*U.S. Fabrication Roof Drainage*—The U.S. Fabrication Roof Drainage segmentprimarily fabricates coated aluminum and steel coil to produce gutters,downspouts, soffit, fascia, gutter accessories and other products. Suchproducts are primarily sold to home centers, distributors and home improvementcontractors.

*U.S. Fabrication BuildingMaterials*—The U.S.Fabrication Building Materials segment primarily fabricates coated aluminum andsteel coil to produce roofing and siding panels, doors, windows, vehiclesidewalls and other products. Such products are primarily sold to RVmanufacturers, rural contractors, home improvement contractors, industrial andarchitectural contractors and manufactured housing producers.

*EuropeanRoll Coating*—TheEuropean Roll Coating segment primarily roll coats aluminum and steel sheet andcoil for RV, transportation and building panel manufacturers.

*EuropeanFabrication*—TheEuropean Fabrication segment primarily fabricates aluminum extrusions and glassto produce windows, doors, shower enclosures, sunroofs and other products. Suchproducts are primarily sold to transportation manufacturers, distributors, homecenters and industrial and architectural contractors.

The accounting policies of thesegments are the same as those described in Note 2 to the consolidatedfinancial statements of the Company for the year ended December 31, 2004,set forth in the Company’s Annual Report on Form 10-K. Segment data includes intersegment revenues. TheCompany evaluates the 

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performanceof its segments and allocates resources to them based primarily on EBITDA(earnings before income taxes plus interest expense, net, provision for incometaxes, and depreciation and amortization).

The Company is organized primarily on the basis of sevenoperating segments. Certain operating segments with similar economiccharacteristics have been aggregated according to similarity of products,nature of production processes, types of customers and product distributionmethods. Two European subsidiaries have been aggregated into the European RollCoating segment, two U.S. subsidiaries have been aggregated into the U.S.Fabrication Building Materials segment and two European subsidiaries have beenaggregated into the European Fabrication segment. The U.S. Fabrication RoofDrainage operating segment is reported separately. The table below presentsinformation about reported segments for the periods indicated. Expenses, incomeand assets that are not segment specific relate to holding company and businessdevelopment activities conducted for the overall benefit of the Company and,accordingly, are not attributable to the Company’s segments.
| ** **                                     | ** ** | **Three months  ended  April 1,  2005** | ** ** | **Three months  ended  March 26,  2004** | ** ** |
|------------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------|------------|
| **Sales**                                      |       |                                              |       |                                               |       |   |   |   |   |
| U.S. Fabrication  Roof Drainage                |       |                                              | $          | 59,059                                             |       |   |   | $ | 43,339 |   |   |
| U.S. Fabrication  Building Materials           |       |                                              | 95,190     |                                               |       |   | 71,133 |   |   |
| European Roll  Coating                         |       |                                              | 57,460     |                                               |       |   | 49,522 |   |   |
| European  Fabrication                          |       |                                              | 33,104     |                                               |       |   | 32,856 |   |   |
| Total segment sales                            |       |                                              | 244,813    |                                               |       |   | 196,850 |   |   |
| Eliminations                                   |       |                                              | (1,317     | )                                                  |       |   | (1,447 | ) |   |
| Consolidated net sales                         |       |                                              | $          | 243,496                                            |       |   |   | $ | 195,403 |   |   |
| **EBITDA**                                     |       |                                              |       |                                               |       |   |   |   |   |
| U.S. Fabrication  Roof Drainage                |       |                                              | $          | 4,082                                              |       |   |   | $ | 2,159 |   |   |
| U.S. Fabrication  Building Materials           |       |                                              | 3,042      |                                               |       |   | 3,091 |   |   |
| European Roll  Coating                         |       |                                              | 10,091     |                                               |       |   | 8,796 |   |   |
| European  Fabrication                          |       |                                              | 4,451      |                                               |       |   | 4,132 |   |   |
| Total EBITDA for reportable segments           |       |                                              | 21,666     |                                               |       |   | 18,178 |   |   |
| Income that is not segment specific            |       |                                              | 1,988      |                                               |       |   | 1,237 |   |   |
| Depreciation and  amortization                 |       |                                              | (5,469     | )                                                  |       |   | (5,115 | ) |   |
| Interest expense,  net                         |       |                                              | (6,266     | )                                                  |       |   | (5,757 | ) |   |
| Consolidated net  earnings before income taxes |       |                                              | $          | 11,919                                             |       |   |   | $ | 8,543 |   |   |

 
| ** **                            | ** ** | **April 1,  2005** | ** ** | **December 31,  2004** | ** ** |
|---------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| **Assets**                            |       |                    |       |                        |       |   |   |   |   |
| U.S. Fabrication  Roof Drainage       |       |                    | $          | 203,902                     |       |   |   | $ | 175,832 |   |   |
| U.S. Fabrication  Building Materials  |       |                    | 206,529    |                        |       |   | 188,349 |   |   |
| European Roll  Coating                |       |                    | 182,488    |                        |       |   | 182,256 |   |   |
| European  Fabrication                 |       |                    | 110,925    |                        |       |   | 115,342 |   |   |
| Assets that are  not segment specific |       |                    | 26,488     |                        |       |   | 25,262 |   |   |
| Total assets                          |       |                    | $          | 730,332                     |       |   |   | $ | 687,041 |   |   |

 

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The following table reflects revenues from externalcustomers by markets for the periods indicated. Revenues from externalcustomers by groups of similar products have not been provided as it isimpracticable for the Company to do so.
| **Customers/Markets**                                | ** ** | ** **                                                                                                                                                    | ** ** | **Primary Products** | ** ** | **Three months  ended  April 1,  2005** | ** ** | **Three months  ended  March 26,  2004** | ** ** |
|------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------|------------|
| Original  Equipment Manufacturers (“OEMs”) |       | Painted aluminum  sheet and coil; fabricated paintedaluminum, laminated and fiberglass panels;  RV doors,  windows and roofing; and composite building panels |       |                      | $          | 108,272                                           |       |                                               |       | $ | 92,755 |   |   |
| Home Centers                                         |       | Raincarrying  systems, roofing accessories, windows,  doors and shower enclosures                                                                             |       |                      | 31,936     |                                              |       |                                               | 27,092     |   |   |
| Rural Contractors                                    |       | Steel and  aluminum roofing and siding                                                                                                                        |       |                      | 29,944     |                                              |       |                                               | 25,274     |   |   |
| Home Improvement Contractors                         |       | Vinyl replacement  windows; metal coils, raincarrying  systems; metal roofing and insulated roofing panels;  shower, patio and entrance doors; and awnings    |       |                      | 28,158     |                                              |       |                                               | 16,375     |   |   |
| Distributors                                         |       | Metal coils,  raincarrying systems and roofing accessories                                                                                                    |       |                      | 25,450     |                                              |       |                                               | 21,421     |   |   |
| Industrial and Architectural Contractors             |       | Standing seam  panels and siding and roofing accessories                                                                                                      |       |                      | 12,491     |                                              |       |                                               | 7,251      |   |   |
| Manufactured Housing                                 |       | Steel siding and  trim components                                                                                                                             |       |                      | 7,245      |                                              |       |                                               | 5,235      |   |   |
|                                                 |       |                                                                                                                                                          |       |                      | $          | 243,496                                           |       |                                               |       | $ | 195,403 |   |   |

 

**11.   Subsequent Event:**

On April 12, 2005, the Company entered into anAgreement and Plan of Merger (the “Merger Agreement”) with GSCP EmaxAcquistion, LLC (“Parent”) and Emax Merger Sub, Inc. (“Merger Sub”), awholly owned subsidiary of Parent. Pursuant to the Merger Agreement, Merger Subwill be merged with and into the Company, with the Company being the survivingcorporation of the merger. The aggregate purchase price to be paid by Parentfor all of the common stock of the Company (including shares of common stockissuable upon the exercise of options) is $1,038.0 million less outstandingdebt, net of cash and cash equivalents, and certain of the Company’stransaction expenses. The aggregate purchase price is subject to furtheradjustment based on the amount of working capital of the Company immediatelyprior to the closing. Following the merger, former stockholders of the Companywill also be paid the amount of certain tax refunds that may be received by theCompany relating to the periods prior to the closing, on the terms set forth inthe Merger Agreement. The closing of the transactions contemplated by theMerger Agreement is subject to customary closing conditions, including withrespect to Parent’s debt financing of a portion of the aggregate purchase price.The financing of the acquisition is subject to customary terms and conditionsfor closing. The Merger Agreement permits the Company or Parent to terminatethe Merger Agreement if the merger has not been consummated on or before June 30,2005.

On May 3, 2005, theCompany commenced a tender offer to purchase for cash any and all of itsoutstanding $200.0 million 8.50% senior subordinated notes due 2011 (the “Notes”)on the terms and subject to the conditions set forth in its Offer to Purchaseand Consent Solicitation Statement dated May 3, 2005 and the relatedConsent and Letter of Transmittal. In connection with the tender offer, theCompany is soliciting consents to certain proposed amendments to the indenturegoverning the Notes (the 

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“Indenture”).If all conditions to the tender offer and consent solicitation are satisfied,holders of the Notes who validly tender their Notes pursuant to the tenderoffer and validly tender their consent pursuant to the consent solicitation by May 16,2005 (the “Consent Date”), will be paid a total consideration for each $1,000principal amount of the Notes equal to the present value (minus accruedinterest) of (a) $1,042.50, the amount payable per $1,000 principal amountof the Notes on August 15, 2007, the first date on which the Notes areredeemable at a fixed price (the “First Redemption Date”), and (b) anamount equal to the interest that would have been paid on the Notes from thedate of payment up to and including the First Redemption Date, in each casedetermined on the basis of a yield to the First Redemption Date equal to thesum of (i) the yield of the 3.25% U.S. Treasury Note due August 15,2007, plus (ii) a fixed spread of 50 basis points. In addition, holderswho validly tender and do not validly withdraw their Notes in the tender offerwill receive accrued and unpaid interest from the last interest payment date upto, but not including, the date of payment. In connection with the tenderoffer, the Company is soliciting consents to certain proposed amendments to eliminatesubstantially all of the restrictive covenants and certain events of default inthe Indenture and to modify the defeasance and certain other provisionscontained in the Indenture. The Company is offering to make a consent paymentof $20 per $1,000 of principal amount of the Notes (which is included in thetotal consideration described above) to holders who validly tender their Notesprior to the Consent Date. Holders who tender their Notes after the ConsentDate will not receive the consent payment. The tender offer is scheduled toexpire on June 1, 2005, unless otherwise extended or earlier terminated bythe Company (the “Expiration Date”). The tender offer is conditioned on, amongother things, (i) there being validly tendered prior to the ExpirationDate and not validly withdrawn at least a majority in aggregate principalamount of the Notes outstanding; (ii) the receipt of consents of holdersof at least a majority of the then aggregate outstanding principal amount ofthe Notes with respect to, and execution of a supplemental indenture providingfor, the proposed amendments to the Indenture; (iii) receipt by theCompany on or prior to the Expiration Date of net proceeds from the RelatedFinancing Transactions (as defined in the Offer to Purchase and ConsentSolicitation Statement) or other available sources of cash, in each case, onterms and conditions satisfactory to the Company and in an amount sufficient topay the aggregate total consideration payable pursuant to the tender offer,plus all fees and expenses related to the tender offer and the consentsolicitation; and (iv) the consummation of the proposed merger of theCompany with Emax Merger Sub, Inc., on or prior to the Expiration Date.

**12.   SupplementalCondensed Consolidating Financial Statements:**

On August 6, 2003,Euramax International, Inc. and Euramax International Holdings B.V. (eacha “Co-Obligor”) issued $200.0 million of 8.50% senior subordinated notes due2011, which were subsequently exchanged for new notes with substantially identicalterms. Each of the domestic restricted subsidiaries, as defined in the relatedbond indenture (the “Guarantor Subsidiaries”), fully and unconditionallyguarantee the obligations of the Co-Obligors. The following supplementalcondensed consolidating financial statements as of April 1, 2005 and December 31,2004 and for the three months ended April 1, 2005 and March 26, 2004,reflect the financial position, results of operations, and cash flows of eachof the Co-Obligors, and such combined information of the Guarantor Subsidiariesand the

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non-guarantor subsidiaries (the “Non-GuarantorSubsidiaries”). Euramax International Holdings B.V. has no operations otherthan equity interests in consolidated subsidiaries that were acquired on March 16,2004.
| ** **                               | ** ** | **Three months ended April 1, 2005** | ** ** |                                                       |
|------------------------------------------|------------|---------------------------------------------------------------|------------|------------------------------------------------------------|
| ** **                               | ** ** | **Euramax  International Inc.  (Co-Obligor)**            | ** ** | **Euramax  International  Holdings BV  (Co-Obligor)** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Consolidated  Totals** | ** ** |   |
| Net sales                                |       |                                                          | $          | —                                                     |   |   |   | $ | — |   |   |   | $ | 153,334 |   |   |   | $ | 90,227 |   |   |   | $ | (65 | ) |   |   | $ | 243,496 |   |   |
| Costs and expenses:                      |       |                                                          |       |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                       |       |                                                          | —     |                                                       |   |   | — |   |   |   | 131,246 |   |   |   | 69,039 |   |   |   | (65 | ) |   |   | 200,220 |   |   |
| Selling and general                      |       |                                                          | 825        |                                                       |   |   | 8 |   |   |   | 13,955 |   |   |   | 6,887 |   |   |   | — |   |   |   | 21,675 |   |   |
| Depreciation and  amortization           |       |                                                          | —     |                                                       |   |   | — |   |   |   | 3,436 |   |   |   | 2,033 |   |   |   | — |   |   |   | 5,469 |   |   |
| (Loss) earnings from  operations         |       |                                                          | (825       | )                                                          |   |   | (8 | ) |   |   | 4,697 |   |   |   | 12,268 |   |   |   | — |   |   |   | 16,132 |   |   |
| Equity in earnings of  subsidiaries      |       |                                                          | 8,722      |                                                       |   |   | 6,237 |   |   |   | — |   |   |   | (2 | ) |   |   | (14,957 | ) |   |   | — |   |   |
| Interest expense, net                    |       |                                                          | (3,121     | )                                                          |   |   | (1,543 | ) |   |   | (1,179 | ) |   |   | (423 | ) |   |   | — |   |   |   | (6,266 | ) |   |
| Internal interest income  (expense), net |       |                                                          | 264        |                                                       |   |   | (40 | ) |   |   | (1,575 | ) |   |   | 1,351 |   |   |   | — |   |   |   | — |   |   |
| Other  income (expense), net        |       |                                                          | 1,578      |                                                       |   |   | (222 | ) |   |   | 2,166 |   |   |   | (1,469 | ) |   |   | — |   |   |   | 2,053 |   |   |
| Earnings before income  taxes            |       |                                                          | 6,618      |                                                       |   |   | 4,424 |   |   |   | 4,109 |   |   |   | 11,725 |   |   |   | (14,957 | ) |   |   | 11,919 |   |   |
| (Benefit) provision for  income taxes    |       |                                                          | (821       | )                                                          |   |   | (571 | ) |   |   | 1,854 |   |   |   | 4,018 |   |   |   | — |   |   |   | 4,480 |   |   |   |
| Net earnings                             |       |                                                          | $          | 7,439                                                      |   |   |   | $ | 4,995 |   |   |   | $ | 2,255 |   |   |   | $ | 7,707 |   |   |   | $ | (14,957 | ) |   |   | $ | 7,439 |   |   |   |
|                                          |            |                                                               |            |                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 
| ** **                               | ** ** | **Three months ended March 26, 2004** | ** ** |
|------------------------------------------|------------|----------------------------------------------------------------|------------|
| ** **                               | ** ** | **Euramax  International Inc.  (Co-Obligor)**             | ** ** | **Euramax  International  Holdings BV  (Co-Obligor)** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Consolidated  Totals** | ** ** |
| Net sales                                |       |                                                           | $          | — |   |   |   | $ | — |   |   |   | $ | 113,838 |   |   |   | $ | 81,668 |   |   |   | $ | (103 | ) |   |   | $ | 195,403 |   |   |
| Costs and expenses:                      |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                       |       |                                                           | —     |   |   |   | — |   |   |   | 94,371 |   |   |   | 62,615 |   |   |   | (103 | ) |   |   | 156,883 |   |   |
| Selling and general                      |       |                                                           | 633        |   |   |   | — |   |   |   | 12,975 |   |   |   | 6,268 |   |   |   | — |   |   |   | 19,876 |   |   |
| Depreciation and  amortization           |       |                                                           | —     |   |   |   | — |   |   |   | 2,701 |   |   |   | 2,414 |   |   |   | — |   |   |   | 5,115 |   |   |
| (Loss) earnings from  operations         |       |                                                           | (633       | ) |   |   | — |   |   |   | 3,791 |   |   |   | 10,371 |   |   |   | — |   |   |   | 13,529 |   |   |
| Equity in earnings of  subsidiaries      |       |                                                           | 7,581      |   |   |   | 2,152 |   |   |   | — |   |   |   | — |   |   |   | (9,733 | ) |   |   | — |   |   |
| Interest expense, net                    |       |                                                           | (3,343     | ) |   |   | (1,500 | ) |   |   | (274 | ) |   |   | (640 | ) |   |   | — |   |   |   | (5,757 | ) |   |
| Internal interest income  (expense), net |       |                                                           | 9          |   |   |   | 1,022 |   |   |   | (1,588 | ) |   |   | 557 |   |   |   | — |   |   |   | — |   |   |
| Other  income (expense), net        |       |                                                           | 718        |   |   |   | (13 | ) |   |   | 743 |   |   |   | (677 | ) |   |   | — |   |   |   | 771 |   |   |
| Earnings before income  taxes            |       |                                                           | 4,332      |   |   |   | 1,661 |   |   |   | 2,672 |   |   |   | 9,611 |   |   |   | (9,733 | ) |   |   | 8,543 |   |   |
| (Benefit) provision for  income taxes    |       |                                                           | (1,267     | ) |   |   | (169 | ) |   |   | 1,071 |   |   |   | 3,309 |   |   |   | — |   |   |   | 2,944 |   |   |
| Net earnings                             |       |                                                           | $          | 5,599 |   |   |   | $ | 1,830 |   |   |   | $ | 1,601 |   |   |   | $ | 6,302 |   |   |   | $ | (9,733 | ) |   |   | $ | 5,599 |   |   |

 

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| ** **                                     | ** ** | **As of April 1, 2005**        | ** ** |
|------------------------------------------------|------------|----------------------------------------------------|------------|
| ** **                                     | ** ** | **Euramax  International Inc.  (Co-Obligor)** | ** ** | **Euramax  International  Holdings BV  (Co-Obligor)** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Consolidated  Totals** | ** ** |
| **ASSETS**                                     |       |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current assets:                                |       |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                      |       |                                               | $          | 1 |   |   |   | $ | 18 |   |   |   | $ | 1,698 |   |   |   | $ | 39,620 |   |   |   | $ | — |   |   |   | $ | 41,337 |   |   |
| Accounts receivable, net                       |       |                                               | —     |   |   |   | — |   |   |   | 69,774 |   |   |   | 73,313 |   |   |   | — |   |   |   | 143,087 |   |   |
| Inventories                                    |       |                                               | —     |   |   |   | — |   |   |   | 134,470 |   |   |   | 36,376 |   |   |   | — |   |   |   | 170,846 |   |   |
| Other current assets                           |       |                                               | 2,609      |   |   |   | — |   |   |   | 8,934 |   |   |   | 2,307 |   |   |   | — |   |   |   | 13,850 |   |   |
| Total current assets                           |       |                                               | 2,610      |   |   |   | 18 |   |   |   | 214,876 |   |   |   | 151,616 |   |   |   | — |   |   |   | 369,120 |   |   |
| Property, plant and equipment, net             |       |                                               | —     |   |   |   | — |   |   |   | 75,639 |   |   |   | 84,011 |   |   |   | — |   |   |   | 159,650 |   |   |
| Amounts due from affiliates                    |       |                                               | 126,888    |   |   |   | 183 |   |   |   | 91,508 |   |   |   | 86,653 |   |   |   | (305,232 | ) |   |   | — |   |   |
| Goodwill, net                                  |       |                                               | —     |   |   |   | — |   |   |   | 94,176 |   |   |   | 44,363 |   |   |   | — |   |   |   | 138,539 |   |   |
| Customer relationships, net                    |       |                                               | —     |   |   |   | — |   |   |   | 25,466 |   |   |   | 14,450 |   |   |   | — |   |   |   | 39,916 |   |   |
| Other intangible assets, net                   |       |                                               | —     |   |   |   | — |   |   |   | 4,316 |   |   |   | — |   |   |   | 4,316 |   |   |   |   |   |   |
| Investment in consolidated subsidiaries        |       |                                               | 302,574    |   |   |   | 111,853 |   |   |   | — |   |   |   | 1,158 |   |   |   | (415,585 | ) |   |   | — |   |   |
| Deferred income taxes                          |       |                                               | —     |   |   |   | 2,546 |   |   |   | (18 | ) |   |   | 3,631 |   |   |   | — |   |   |   | 6,159 |   |   |
| Other assets                                   |       |                                               | 5,217      |   |   |   | 2,689 |   |   |   | 3,473 |   |   |   | 1,253 |   |   |   | — |   |   |   | 12,632 |   |   |
|                                           |       |                                               | $          | 437,289 |   |   |   | $ | 117,289 |   |   |   | $ | 509,436 |   |   |   | $ | 387,135 |   |   |   | $ | (720,817 | ) |   |   | $ | 730,332 |   |   |
| **LIABILITIES AND  SHAREHOLDERS’ EQUITY** |       |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities:                           |       |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash overdrafts                                |       |                                               | $          | — |   |   |   | $ | — |   |   |   | $ | 1,189 |   |   |   | $ | — |   |   |   | $ | — |   |   |   | $ | 1,189 |   |   |
| Accounts payable                               |       |                                               | —     |   |   |   | — |   |   |   | 71,052 |   |   |   | 46,824 |   |   |   | — |   |   |   | 117,876 |   |   |
| Accrued expenses and other current liabilities |       |                                               | (2,514     | ) |   |   | (1,265 | ) |   |   | 23,658 |   |   |   | 35,376 |   |   |   | — |   |   |   | 55,255 |   |   |
| Current maturities of long-term debt           |       |                                               | —     |   |   |   | — |   |   |   | 317 |   |   |   | 7,770 |   |   |   | — |   |   |   | 8,087 |   |   |
| Total current liabilities                      |       |                                               | (2,514     | ) |   |   | (1,265 | ) |   |   | 96,216 |   |   |   | 89,970 |   |   |   | — |   |   |   | 182,407 |   |   |
| Long-term debt, less current maturities        |       |                                               | 137,255    |   |   |   | 62,745 |   |   |   | 95,829 |   |   |   | 21,645 |   |   |   | — |   |   |   | 317,474 |   |   |
| Amounts due to affiliates                      |       |                                               | 152,307    |   |   |   | 2,133 |   |   |   | 125,998 |   |   |   | 24,794 |   |   |   | (305,232 | ) |   |   | — |   |   |
| Deferred income taxes                          |       |                                               | 748        |   |   |   | — |   |   |   | 29,323 |   |   |   | 21,174 |   |   |   | — |   |   |   | 51,245 |   |   |
| Other liabilities                              |       |                                               | —     |   |   |   | 11,588 |   |   |   | 2,182 |   |   |   | 14,762 |   |   |   | — |   |   |   | 28,532 |   |   |
| Total liabilities                              |       |                                               | 287,796    |   |   |   | 75,201 |   |   |   | 349,548 |   |   |   | 172,345 |   |   |   | (305,232 | ) |   |   | 579,658 |   |   |
| Shareholders’equity:                      |       |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock                                   |       |                                               | 500        |   |   |   | 21 |   |   |   | 1 |   |   |   | 35,023 |   |   |   | (35,045 | ) |   |   | 500 |   |   |
| Additional paid-in capital                     |       |                                               | 155,866    |   |   |   | 29,170 |   |   |   | 119,166 |   |   |   | 110,673 |   |   |   | (259,380 | ) |   |   | 155,495 |   |   |
| Treasury stock                                 |       |                                               | (69,836    | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (69,836 | ) |   |
| Restricted stock                               |       |                                               | (2,424     | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (2,424 | ) |   |
| Retained earnings                              |       |                                               | 65,989     |   |   |   | 18,104 |   |   |   | 41,147 |   |   |   | 37,717 |   |   |   | (96,968 | ) |   |   | 65,989 |   |   |
| Accumulated other comprehensive income (loss)  |       |                                               | (602       | ) |   |   | (5,207 | ) |   |   | (426 | ) |   |   | 31,377 |   |   |   | (24,192 | ) |   |   | 950 |   |   |
| Total shareholders’ equity                |       |                                               | 149,493    |   |   |   | 42,088 |   |   |   | 159,888 |   |   |   | 214,790 |   |   |   | (415,585 | ) |   |   | 150,674 |   |   |
|                                           |       |                                               | $          | 437,289 |   |   |   | $ | 117,289 |   |   |   | $ | 509,436 |   |   |   | $ | 387,135 |   |   |   | $ | (720,817 | ) |   |   | $ | 730,332 |   |   |

 

15

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| ** **                                     | ** ** | **As of December 31, 2004**     | ** ** |
|------------------------------------------------|------------|-----------------------------------------------------|------------|
| ** **                                     | ** ** | **Euramax  International, Inc.  (Co-Obligor)** | ** ** | **Euramax  International  Holdings B.V.  (Co-Obligor)** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Consolidated  Totals** | ** ** |
| **ASSETS**                                     |       |                                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current assets:                                |       |                                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                      |       |                                                | $          | 1 |   |   |   | $ | 18 |   |   |   | $ | 1,113 |   |   |   | $ | 42,745 |   |   |   | $ | — |   |   |   | $ | 43,877 |   |   |
| Accounts receivable, net                       |       |                                                | —     |   |   |   | — |   |   |   | 64,187 |   |   |   | 67,130 |   |   |   | — |   |   |   | 131,317 |   |   |
| Inventories, net                               |       |                                                | —     |   |   |   | — |   |   |   | 97,724 |   |   |   | 36,556 |   |   |   | — |   |   |   | 134,280 |   |   |
| Other current assets                           |       |                                                | 2,609      |   |   |   | — |   |   |   | 6,478 |   |   |   | 1,635 |   |   |   | — |   |   |   | 10,722 |   |   |
| Total current assets                           |       |                                                | 2,610      |   |   |   | 18 |   |   |   | 169,502 |   |   |   | 148,066 |   |   |   | — |   |   |   | 320,196 |   |   |
| Property, plant and equipment, net             |       |                                                | —     |   |   |   | — |   |   |   | 73,595 |   |   |   | 87,693 |   |   |   | — |   |   |   | 161,288 |   |   |
| Amounts due from affiliates                    |       |                                                | 125,722    |   |   |   | 193 |   |   |   | 87,168 |   |   |   | 86,943 |   |   |   | (300,026 | ) |   |   | — |   |   |
| Goodwill, net                                  |       |                                                | —     |   |   |   | — |   |   |   | 94,275 |   |   |   | 46,208 |   |   |   | 140,483 |   |   |   |   |   |   |
| Customer relationships, net                    |       |                                                | —     |   |   |   | — |   |   |   | 25,693 |   |   |   | 15,609 |   |   |   | 41,302 |   |   |   |   |   |   |
| Other intangible assets, net                   |       |                                                | —     |   |   |   | — |   |   |   | 4,385 |   |   |   | — |   |   |   | — |   |   |   | 4,385 |   |   |
| Investment in consolidated subsidiaries        |       |                                                | 300,114    |   |   |   | 114,179 |   |   |   | — |   |   |   | 1,159 |   |   |   | (415,452 | ) |   |   | — |   |   |
| Deferred income taxes                          |       |                                                | —     |   |   |   | 2,231 |   |   |   | — |   |   |   | 3,703 |   |   |   | — |   |   |   | 5,934 |   |   |
| Other assets                                   |       |                                                | 5,422      |   |   |   | 2,937 |   |   |   | 3,701 |   |   |   | 1,393 |   |   |   | — |   |   |   | 13,453 |   |   |
|                                           |       |                                                | $          | 433,868 |   |   |   | $ | 119,558 |   |   |   | $ | 458,319 |   |   |   | $ | 390,774 |   |   |   | $ | (715,478 | ) |   |   | $ | 687,041 |   |   |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY**  |       |                                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities:                           |       |                                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash overdrafts                                |       |                                                | $          | — |   |   |   | $ | — |   |   |   | $ | 2,376 |   |   |   | $ | — |   |   |   | $ | — |   |   |   | $ | 2,376 |   |   |
| Accounts payable                               |       |                                                | —     |   |   |   | — |   |   |   | 58,145 |   |   |   | 45,833 |   |   |   | — |   |   |   | 103,978 |   |   |
| Accrued expenses and other current liabilities |       |                                                | 1,038      |   |   |   | 731 |   |   |   | 26,357 |   |   |   | 36,124 |   |   |   | — |   |   |   | 64,250 |   |   |
| Current maturities of long-term debt           |       |                                                | —     |   |   |   | — |   |   |   | 361 |   |   |   | 7,924 |   |   |   | — |   |   |   | 8,285 |   |   |
| Total current liabilities                      |       |                                                | 1,038      |   |   |   | 731 |   |   |   | 87,239 |   |   |   | 89,881 |   |   |   | — |   |   |   | 178,889 |   |   |
| Long-term debt, less current maturities        |       |                                                | 137,255    |   |   |   | 62,745 |   |   |   | 52,033 |   |   |   | 24,053 |   |   |   | — |   |   |   | 276,086 |   |   |
| Amounts due to affiliates                      |       |                                                | 149,233    |   |   |   | 2,200 |   |   |   | 125,451 |   |   |   | 23,142 |   |   |   | (300,026 | ) |   |   | — |   |   |
| Deferred income taxes                          |       |                                                | 748        |   |   |   | — |   |   |   | 29,986 |   |   |   | 21,982 |   |   |   | — |   |   |   | 52,716 |   |   |
| Other liabilities                              |       |                                                | —     |   |   |   | 13,848 |   |   |   | 3,470 |   |   |   | 14,869 |   |   |   | — |   |   |   | 32,187 |   |   |
| Total liabilities                              |       |                                                | 288,274    |   |   |   | 79,524 |   |   |   | 298,179 |   |   |   | 173,927 |   |   |   | (300,026 | ) |   |   | 539,878 |   |   |
| Shareholders’equity:                      |       |                                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock                                   |       |                                                | 500        |   |   |   | 21 |   |   |   | 1 |   |   |   | 35,023 |   |   |   | (35,045 | ) |   |   | 500 |   |   |
| Additional paid-in capital                     |       |                                                | 155,866    |   |   |   | 29,170 |   |   |   | 119,166 |   |   |   | 110,673 |   |   |   | (259,380 | ) |   |   | 155,495 |   |   |
| Treasury stock                                 |       |                                                | (69,836    | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (69,836 | ) |   |
| Restricted stock                               |       |                                                | (2,616     | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (2,616 | ) |   |
| Retained earnings                              |       |                                                | 58,550     |   |   |   | 13,109 |   |   |   | 41,426 |   |   |   | 33,003 |   |   |   | (87,538 | ) |   |   | 58,550 |   |   |
| Accumulated other comprehensive income (loss)  |       |                                                | 3,130      |   |   |   | (2,266 | ) |   |   | (453 | ) |   |   | 38,148 |   |   |   | (33,489 | ) |   |   | 5,070 |   |   |
| Total shareholders’ equity                |       |                                                | 145,594    |   |   |   | 40,034 |   |   |   | 160,140 |   |   |   | 216,847 |   |   |   | (415,452 | ) |   |   | 147,163 |   |   |
|                                           |       |                                                | $          | 433,868 |   |   |   | $ | 119,558 |   |   |   | $ | 458,319 |   |   |   | $ | 390,774 |   |   |   | $ | (715,478 | ) |   |   | $ | 687,041 |   |   |

 

16

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| ** **                                            | ** ** | **Three months ended April 1, 2005** | ** ** |
|-------------------------------------------------------|------------|---------------------------------------------------------------|------------|
| ** **                                            | ** ** | **Euramax  International Inc.  (Co-Obligor)**            | ** ** | **Euramax  International  Holdings BV  (Co-Obligor)** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Consolidated  Totals** | ** ** |
| Net cash (used  in) provided by operating activities  |       |                                                          | $          | (3,408 | ) |   |   | $ | 468 |   |   |   | $ | (22,054 | ) |   |   | $ | 5,174 |   |   |   | $ | (5,528 | ) |   |   | $ | (25,348 | ) |   |
| Cash flows from  investing activities:                |       |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from sales of assets                         |       |                                                          | —     |   |   |   | — |   |   |   | 2 |   |   |   | 9 |   |   |   | — |   |   |   | 11 |   |   |
| Purchases of businesses                               |       |                                                          | —     |   |   |   | — |   |   |   | (13,650 | ) |   |   | — |   |   |   | — |   |   |   | (13,650 | ) |   |
| Capital expenditures                                  |       |                                                          | —     |   |   |   | — |   |   |   | (2,986 | ) |   |   | (1,002 | ) |   |   | — |   |   |   | (3,988 | ) |   |
| Net cash (used in) investing activities               |       |                                                          | —     |   |   |   | — |   |   |   | (16,634 | ) |   |   | (993 | ) |   |   | — |   |   |   | (17,627 | ) |   |
| Cash flows from  financing activities:                |       |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net borrowings on revolving credit facility           |       |                                                          | —     |   |   |   | — |   |   |   | 46,000 |   |   |   | — |   |   |   | — |   |   |   | 46,000 |   |   |
| Repayment of long-term debt                           |       |                                                          | —     |   |   |   | — |   |   |   | (102 | ) |   |   | (1,965 | ) |   |   | — |   |   |   | (2,067 | ) |   |
| Change in cash overdrafts                             |       |                                                          | —     |   |   |   | — |   |   |   | (1,187 | ) |   |   | — |   |   |   | — |   |   |   | (1,187 | ) |   |
| Dividends paid                                        |       |                                                          | —     |   |   |   | — |   |   |   | (2,534 | ) |   |   | (2,994 | ) |   |   | 5,528 |   |   |   | — |   |   |
| Expenses relating to the 2003 Stock Transaction  |       |                                                          | (77        | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (77 | ) |   |
| Due to/from affiliates                                |       |                                                          | 3,485      |   |   |   | 40 |   |   |   | (2,886 | ) |   |   | (639 | ) |   |   | — |   |   |   | — |   |   |
| Net cash provided by (used in) financing activities   |       |                                                          | 3,408      |   |   |   | 40 |   |   |   | 39,291 |   |   |   | (5,598 | ) |   |   | 5,528 |   |   |   | 42,669 |   |   |
| Effect of exchange rate changes on cash               |       |                                                          | —     |   |   |   | (508 | ) |   |   | (18 | ) |   |   | (1,708 | ) |   |   | — |   |   |   | (2,234 | ) |   |
| Net increase  (decrease) in cash and cash equivalents |       |                                                          | —     |   |   |   | — |   |   |   | 585 |   |   |   | (3,125 | ) |   |   | — |   |   |   | (2,540 | ) |   |
| Cash and cash  equivalents at beginning of period     |       |                                                          | 1          |   |   |   | 18 |   |   |   | 1,113 |   |   |   | 42,745 |   |   |   | — |   |   |   | 43,877 |   |   |
| Cash and cash  equivalents at end of period           |       |                                                          | $          | 1 |   |   |   | $ | 18 |   |   |   | $ | 1,698 |   |   |   | $ | 39,620 |   |   |   | $ | — |   |   |   | $ | 41,337 |   |   |

 

17

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| ** **                                           | ** ** | **Three months ended March 26, 2004** | ** ** |
|------------------------------------------------------|------------|----------------------------------------------------------------|------------|
| ** **                                           | ** ** | **Euramax  International Inc.  (Co-Obligor)**             | ** ** | **Euramax  International  Holdings BV  (Co-Obligor)** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Consolidated  Totals** | ** ** |
| Net cash provided  by (used in) operating activities |       |                                                           | $          | 54,890 |   |   |   | $ | (2,603 | ) |   |   | $ | (24,057 | ) |   |   | $ | 7,872 |   |   |   | $ | (61,081 | ) |   |   | $ | (24,979 | ) |   |
| Cash flows from  investing activities:               |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from sales of assets                        |       |                                                           | —     |   |   |   | — |   |   |   | 32 |   |   |   | 8 |   |   |   | — |   |   |   | 40 |   |   |
| Purchases of businesses                              |       |                                                           | —     |   |   |   | — |   |   |   | (1,219 | ) |   |   | — |   |   |   | — |   |   |   | (1,219 | ) |   |
| Contributed capital to subsidiaries                  |       |                                                           | (28,262    | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 28,262 |   |   |   | — |   |   |
| Transfer of businesses between affiliates            |       |                                                           | —     |   |   |   | (88,262 | ) |   |   | — |   |   |   | 88,262 |   |   |   | — |   |   |   | — |   |   |
| Capital expenditures                                 |       |                                                           | —     |   |   |   | — |   |   |   | (908 | ) |   |   | (362 | ) |   |   | — |   |   |   | (1,270 | ) |   |
| Net cash (used in) provided by investing activities  |       |                                                           | (28,262    | ) |   |   | (88,262 | ) |   |   | (2,095 | ) |   |   | 87,908 |   |   |   | 28,262 |   |   |   | (2,449 | ) |   |
| Cash flows from  financing activities:               |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net borrowings on revolving  credit facility    |       |                                                           | —     |   |   |   | — |   |   |   | 10,000 |   |   |   | 1,404 |   |   |   | — |   |   |   | 11,404 |   |   |
| Repayment of long-term debt                          |       |                                                           | —     |   |   |   | — |   |   |   | (109 | ) |   |   | (1,340 | ) |   |   | — |   |   |   | (1,449 | ) |   |
| Change in cash overdrafts                       |       |                                                           | —     |   |   |   | — |   |   |   | 64 |   |   |   | — |   |   |   | — |   |   |   | 64 |   |   |
| Dividends paid                                       |       |                                                           | —     |   |   |   | — |   |   |   | — |   |   |   | (61,081 | ) |   |   | 61,081 |   |   |   | — |   |   |
| Expenses relating to the 2003 Stock Transaction      |       |                                                           | (463       | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (463 | ) |   |
| Deferred financing fees                              |       |                                                           | (249       | ) |   |   | (112 | ) |   |   | (52 | ) |   |   | (21 | ) |   |   | — |   |   |   | (434 | ) |   |
| Contributed capital from parent                      |       |                                                           | —     |   |   |   | 28,262 |   |   |   | — |   |   |   | — |   |   |   | (28,262 | ) |   |   | — |   |   |
| Due to/from affiliates                               |       |                                                           | (25,915    | ) |   |   | 62,248 |   |   |   | 271 |   |   |   | (36,604 | ) |   |   | — |   |   |   | — |   |   |
| Net cash (used in) provided by financing activities  |       |                                                           | (26,627    | ) |   |   | 90,398 |   |   |   | 10,174 |   |   |   | (97,642 | ) |   |   | 32,819 |   |   |   | 9,122 |   |   |
| Effect of exchange rate changes on cash              |       |                                                           | —     |   |   |   | 467 |   |   |   | — |   |   |   | 194 |   |   |   | — |   |   |   | 661 |   |   |
| Net increase (decrease) in cash and cash equivalents |       |                                                           | 1          |   |   |   | — |   |   |   | (15,978 | ) |   |   | (1,668 | ) |   |   | — |   |   |   | (17,645 | ) |   |
| Cash and cash  equivalents at beginning of period    |       |                                                           | —     |   |   |   | 21 |   |   |   | 19,408 |   |   |   | 28,798 |   |   |   | — |   |   |   | 48,227 |   |   |
| Cash and cash  equivalents at end of period          |       |                                                           | $          | 1 |   |   |   | $ | 21 |   |   |   | $ | 3,430 |   |   |   | $ | 27,130 |   |   |   | $ | — |   |   |   | $ | 30,582 |   |   |

 

18

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**Item 2.**                        Management’sDiscussion and Analysis of Financial Condition and Results of Operations

**Business Overview**

The following discussion should be read in conjunctionwith the condensed consolidated financial statements included elsewhere in thisdocument, as well as the year-end consolidated financial statements andmanagement’s discussion and analysis included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2004.

We are an international producer of residential andnon-residential building materials and recreational vehicle exterior componentsmade of aluminum, steel, copper, vinyl and fiberglass. Our core buildingproducts include roof drainage products, metal roofing, siding and accessories,and specialty coated metals. Our core RV products include aluminum siding,roofing and doors. Our Company enjoys leading market positions in several nichemarkets, including roof drainage products sold to home centers and aluminum RVsiding, in the United States and Europe. In addition, we sell an extensive lineof accessory products, including roofing and siding hardware, trim parts androof drainage accessories. Our products are sold to a wide range of customers,including distributors, contractors, home centers as well as RV and automotiveOEMs. We have extensive in-house manufacturing and distribution capabilities.Our manufacturing and distribution network consists of 57 strategically locatedfacilities, 51 across the United States and 6 in Europe. 

Our financial performance isaffected by, among other factors, underlying trends and activities in the U.S.and Europe related to consumer spending for residential repair and remodeling,demand for non-residential construction, and demand for recreational vehicles. Ourbuilding products sold for residential repair and remodeling include roofdrainage products, vinyl windows, patios and awnings, and doors. Projects forroof drainage repair and remodeling are often low cost, necessary activitiesthat are non-discretionary to prevent home damage. Repair and remodelingactivity related to products other than roof drainage are typicallydiscretionary and more closely tied to trends in disposable income, mortgageinterest rates and general economic conditions. Our building products sold fornon-residential construction include metal roofing and siding, coated metalcoils and accessories. Demand for these materials is driven by overall trendsin commercial construction activity including rural and agriculturalconstruction in the U.S. and industrial and architectural construction in boththe U.S. and Europe. Our products sold for the RV market include siding,roofing and doors. Demand for these RV products is driven by trends indisposable income, interest rates and general economic conditions, as well as similardemographic trends relating to the increased proportion of the U.S. andEuropean population constituted by consumers over age 55, who form an importantsource of demand for our products. 

Our net sales and cost ofgoods sold can fluctuate significantly in a manner unrelated to sales volume.This results from the high percentage of our cost of goods sold that isrepresented by aluminum and steel raw material cost. Changes in these costs aretypically passed along through selling price increases or decreases. Both aluminumand steel raw material costs increased significantly in 2004, driving higherselling prices for our aluminum and steel products. Similarly, reductions in aluminumand steel raw material costs could be expected to result in lower sellingprices. 

The Company’s sales aresomewhat seasonal, with the second and third quarters typically accounting forhigher sales volumes.

19

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**Results of Operations**

**ThreeMonths Ended April 1, 2005 as Compared to Three Months Ended March 26,2004**

Thefollowing table sets forth the Company’s Statements of Earnings Data expressedas a percentage of net sales:
| ** **                        | ** ** | **Three month ended**     | ** ** |
|-----------------------------------|------------|-------------------------------------|------------|
| ** **                        | ** ** | ** April 1,   2005** | ** ** | **March 26,  2004** | ** ** |
| **Statements  of Earnings Data:** |       |                                |       |   |   |   |   |   |   |
| Net sales                         |       |                                | 100.0      | % |   |   | 100.0 | % |   |
| Costs and  expenses:              |       |                                |       |   |   |   |   |   |   |
| Cost of goods sold                |       |                                | 82.2       |   |   |   | 80.3 |   |   |
| Selling and general               |       |                                | 8.9        |   |   |   | 10.2 |   |   |
| Depreciation and amortization     |       |                                | 2.2        |   |   |   | 2.6 |   |   |
| Earnings from operations          |       |                                | 6.6        |   |   |   | 6.9 |   |   |
| Interest expense,  net            |       |                                | (2.6       | ) |   |   | (2.9 | ) |   |
| Other income, net                 |       |                                | 0.8        |   |   |   | 0.4 |   |   |
| Earnings before income taxes      |       |                                | 4.9        |   |   |   | 4.4 |   |   |
| Provision for  income taxes       |       |                                | 1.8        |   |   |   | 1.5 |   |   |
| Net earnings                      |       |                                | 3.1        | % |   |   | 2.9 | % |   |

op
| ** **                          | ** ** | **Net Sales** | ** ** | ** **                                            | ** ** | **Earnings from Operations**                 | ** ** | ** **   | ** ** |
|-------------------------------------|------------|--------------------|------------|-------------------------------------------------------|------------|--------------------------------------------------------|------------|--------------|------------|
| **In thousands**               | ** ** | ** **         | ** ** | **Three months  ended  April 1, 2005** | ** ** | **Three months  ended  March 26, 2004** | ** ** | **Increase** | ** ** | **Three months  ended  April 1, 2005** | ** ** | **Three months  ended  March 26, 2004** | ** ** | **Increase** | ** ** |
| U.S. Fabrication Roof Drainage      |       |               | $          | 58,144                                                |       |                                                   |       | $            | 42,718     |   |   |   | 36.1 | % |   |   | $ | 1,320 |   |   |   | $ | 898 |   |   |   | 47.0 | % |   |
| U.S. Fabrication Building Materials |       |               | 95,189     |                                                  |       |                                                   | 71,106     |         |       |   | 33.9 | % |   |   | 2,393 |   |   |   | 1,941 |   |   |   | 23.3 | % |   |
| European Roll Coating               |       |               | 57,058     |                                                  |       |                                                   | 48,722     |         |       |   | 17.1 | % |   |   | 8,842 |   |   |   | 7,387 |   |   |   | 19.7 | % |   |
| European Fabrication                |       |               | 33,105     |                                                  |       |                                                   | 32,857     |         |       |   | 0.8 | % |   |   | 3,577 |   |   |   | 3,303 |   |   |   | 8.3 | % |   |
| Totals                              |       |               | $          | 243,496                                               |       |                                                   |       | $            | 195,403    |   |   |   | 24.6 | % |   |   | $ | 16,132 |   |   |   | $ | 13,529 |   |   |   | 19.2 | % |   |
|                                     |            |                    |            |                                                       |            |                                                        |            |              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

*Net Sales.  *For the threemonths ended April 1, 2005, net sales were $243.5 million compared to$195.4 million for the three months ended March 26, 2004, an increase of$48.1 million or 24.6%. Net sales in the U.S. increased 34.7% to $153.3 millionfor the three months ended April 1, 2005, from $113.8 million for thethree months ended March 26, 2004. This increase in net sales in the U.S.includes an increase in the U.S. Fabrication Roof Drainage segment of $15.4million or 36.1% and an increase in the U.S. Fabrication Building Materialssegment of $24.1 million or 33.9%. Net sales in the U.S. Fabrication RoofDrainage segment increased primarily as a result of higher selling prices onraincarrying products manufactured from aluminum and steel, together with theacquisition of Gutter Suppliers on January 31, 2005. Net sales in the U.S.Fabrication Building Materials segment increased primarily as a result ofhigher sales volumes, together with higher selling prices, of aluminum doors,exterior walls and roofing panels to U.S. RV manufacturers, higher sellingprices on fabricated aluminum and steel roofing and siding sold to rural andindustrial and architectural contractors, higher sales volumes of paintedaluminum coil to external customers from our Helena, Arkansas paintline, highersales volumes, together with higher selling prices, of patio awning products tohome improvement contractors, and higher sales volumes of fabricated steelsiding and accessory parts to manufactured housing producers.

Net sales in Europe increased 10.5% to $90.2 millionfor the three months ended April 1, 2005, from $81.6 million for the threemonths ended March 26, 2004. This increase in net sales in Europe includesan 

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increase in the EuropeanRoll Coating segment of $8.3 million or 17.1%, and an increase in the EuropeanFabrication segment of $0.2 million or 0.8%. Approximately $2.3 million and$1.3 million of the increase in the European Roll Coating segment and theEuropean Fabrication segment, respectively, were a result of the strengtheningof the Euro and British Pound against the U.S. Dollar. The balance of theincrease in the European Roll Coating segment primarily resulted from highersales volumes of painted aluminum and steel coil to European OEMs, includingEuropean RV manufacturers and commercial panel manufacturers. Partiallyoffsetting the increase in the European Fabrication segment resulting from thestrengthening of the Euro and British Pound against the U.S. Dollar, were lowernet sales of fabricated doors and windows to European RV manufacturers,together with lower net sales of fabricated wall panels to OEMs, primarilycommercial panel manufacturers, from France.

*Cost of goods sold.  *Cost ofgoods sold, as a percentage of net sales, were 82.2% for the three months endedApril 1, 2005, compared to 80.3% for the three months ended March 26,2004. Higher aluminum and steel costsin the three months ended April 1, 2005 have largely been offset by higherselling prices on products manufactured from aluminum and steel. The increasein net sales resulting from higher selling prices, together with a similarincrease in cost of sales resulting from higher aluminum and steel costs, isthe primary reason for the increase in cost of goods sold as a percentage ofnet sales.

*Selling and general.  *Sellingand general expenses, as a percentage of net sales, were 8.9% for the threemonths ended April 1, 2005, compared to 10.2% for the three months ended March 26,2004. Selling and general expenses increased to $21.7 million in the threemonths ended April 1, 2005, from $19.9 million in the three monthsended March 26, 2004. This increase resulted primarily from theacquisition of Gutter Suppliers on January 31, 2005, together with higherselling expenses due to the increase in sales volume, higher employeecompensation expense and higher legal and professional fees. Additionally, astronger Euro and British Pound against the U.S. Dollar in the three monthsended April 1, 2005, used in converting local currency into U.S. Dollars,resulted in higher selling and general expense in the three months ended April 1,2005.

*Depreciation and amortization.  *Depreciationand amortization was $5.5 million for the three months ended April 1,2005, compared to $5.1 million for the three months ended March 26, 2004.This increase in depreciation and amortization expense is primarily related toamortization of customer relationships that were recorded at the time wefinalized our estimates of the fair market values of identifiable assets inconnection with the 2003 Stock Transaction, partially offset by lowerdepreciation expense resulting from changes in the useful lives of machineryand equipment, as disclosed in Note 2 in our consolidated financial statementsfor the year ended December 31, 2004, set forth in our Annual Report on Form 10-K.

*Earnings from operations.  *Earningsfrom operations were $16.1 million for the three months ended April 1,2005, compared to $13.5 million for the three months ended March 26, 2004.Operating margins were 6.6% for the three months ended April 1, 2005,compared to 6.9% for the three months ended March 26, 2004.

Earnings from operations in the U.S. Fabrication RoofDrainage segment were $1.3 million for the three months ended April 1,2005, compared to $0.9 million for the three months ended March 26, 2004.Operating margins increased to 2.3% for the three months ended April 1,2005, from 2.1% for the three months ended March 26, 2004. Higheroperating margins resulted primarily from higher selling prices on productsmanufactured from aluminum and steel in the three months ended April 1,2005, partially offset by higher aluminum and steel costs. The acquisition ofGutter Suppliers, Inc. reduced operating margins in the U.S. FabricationRoof Drainage segment by 1.6% during the three months ended April 1, 2005.This reduction in operating margin primarily resulted from the application ofthe purchase method of accounting to the assets and liabilities of GutterSuppliers. This application of purchase accounting resulted in increasing thevalue of inventory on the acquisition date by $0.9 million. This inventory wassold and recorded as cost of goods sold in February and March of2005. The U.S. Fabrication Roof Drainage 

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segment’s sales volumesare typically lower in the first quarter than in the second, third and fourthquarters, historically resulting in lower operating margins in the firstquarter.

Earnings from operations in the U.S. FabricationBuilding Materials segment were $2.4 million for the three months ended April 1,2005, compared to $1.9 million for the three months ended March 26, 2004.This increase primarily resulted from higher sales volumes of aluminum doors, exterior walls and roofingpanels to U.S. RV manufacturers, patioawning products to home improvement contractors, and fabricated steel sidingand accessory parts to manufactured housing producers. Operating marginsdecreased to 2.5% in the three months ended April 1, 2005, from 2.7% inthe three months ended March 26, 2004. Higher aluminum and steel costs inthe three months ended April 1, 2005 have largely been offset by higherselling prices on products manufactured from aluminum and steel. The U.S.Fabrication Building Materials segment’s sales volumes are typically lower inthe first quarter than in the second, third and fourth quarters, historicallyresulting in lower operating margins in the first quarter.

Earnings from operations in the European Roll Coatingsegment were $8.8 million for the three months ended April 1, 2005,compared to $7.4 million for the three months ended March 26, 2004. Thisincrease primarily resulted from higher sales volumes in the three months endedApril 1, 2005. Operating margins increased to 15.5% in the three monthsended April 1, 2005, from 15.2% in the three months ended March 24,2004. The strengthening of the Euro and British Pound against the U.S. Dollarincreased the European Roll Coating segment’s earnings from operations by $0.4million.

Earnings from operations in the European Fabricationsegment were $3.6 million for the three months ended April 1, 2005,compared to $3.3 million for the three months ended March 26, 2004. Thisincrease primarily resulted from the strengthening of the Euro and BritishPound against the U.S. Dollar. The strengthening of the Euro and British Poundagainst the U.S. Dollar increased the European Fabrication segment’s earningsfrom operations by $0.2 million. Operating margins increased to 10.8% in thethree months ended April 1, 2005, from 10.1% in the three months ended March 26,2004.

*Interest expense, net.  *Netinterest expense was $6.3 million for the three months ended April 1,2005, compared to $5.8 million for the three months ended March 26, 2004.The increase in net interest expense in 2005 is primarily the result of ahigher outstanding average debt balance during the three months ended April 1,2005 that was primarily incurred in connection with the repurchase of shares ofEuramax common stock in the second quarter of 2004, together with theacquisition of Gutter Suppliers on January 31, 2005. The averageoutstanding balance under our senior secured credit facility was $109.2 millionat an average interest rate of 5.7% for the three months ended April 1,2005, compared to $45.6 million at an average interest rate of 6.4% for thethree months ended March 26, 2004.

*Other income, net.  *Otherincome, net was $2.1 million for the three months ended April 1, 2005,compared to $0.8 million for the three months ended March 26, 2004. Otherincome, net in both periods primarily resulted from foreign exchange gains andlosses on unhedged assets and liabilities remeasured into the local currency.

*Provision for income taxes.  *Theincome tax provision for the period is based on the effective tax rate expectedto be applicable for the full year. The effective rate for the provision forincome taxes was 37.6% for the three months ended April 1, 2005, comparedto 34.5% for the three months ended March 26, 2004. This increaseprimarily resulted from a higher effective tax rate in foreign jurisdictions.

**Liquidity and Capital Resources**

*Liquidity*.   Our primaryliquidity needs arise from debt service and the funding of capitalexpenditures. Our liquidity sources at April 1, 2005 include $41.3 millionin cash and cash equivalents and an undrawn amount of $13.8 million which isavailable under our revolving credit facility.

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On April 12, 2005, we entered into an Agreementand Plan of Merger (the “Merger Agreement”) with GSCP Emax Acquistion, LLC (“Parent”)and Emax Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary ofParent. Pursuant to the Merger Agreement, Merger Sub will be merged with andinto Euramax International, with Euramax International being the survivingcorporation of the merger. The aggregate purchase price to be paid by Parentfor all of our common stock (including shares of common stock issuable upon theexercise of options) is $1,038.0 million less outstanding debt, net of cash andcash equivalents, and certain of our transaction expenses. The aggregatepurchase price is subject to further adjustment based on the amount of our workingcapital immediately prior to the closing. Following the merger, our formerstockholders will also be paid the amount of certain tax refunds that we mayreceive relating to the periods prior to the closing, on the terms set forth inthe Merger Agreement. The closing of the transactions contemplated by theMerger Agreement is subject to customary closing conditions, including withrespect to Parent’s debt financing of a portion of the aggregate purchaseprice. The financing of the acquisition is subject to customary terms andconditions for closing. The Merger Agreement permits us or Parent to terminatethe Merger Agreement if the merger has not been consummated on or before June 30,2005.

On May 3, 2005, we commenced a tender offer topurchase for cash any and all of our outstanding $200.0 million 8.50% seniorsubordinated notes due 2011 (the “Notes”) on the terms and subject to theconditions set forth in our Offer to Purchase and Consent SolicitationStatement dated May 3, 2005 and the related Consent and Letter ofTransmittal. In connection with the tender offer, we are soliciting consents tocertain proposed amendments to the indenture governing the Notes (the “Indenture”).If all conditions to the tender offer and consent solicitation are satisfied, holdersof the Notes who validly tender their Notes pursuant to the tender offer andvalidly tender their consent pursuant to the consent solicitation by May 16,2005 (the “Consent Date”), will be paid a total consideration for each $1,000principal amount of the Notes equal to the present value (minus accruedinterest) of (a) $1,042.50, the amount payable per $1,000 principal amountof the Notes on August 15, 2007, the first date on which the Notes areredeemable at a fixed price (the “First Redemption Date”), and (b) anamount equal to the interest that would have been paid on the Notes from thedate of payment up to and including the First Redemption Date, in each casedetermined on the basis of a yield to the First Redemption Date equal to thesum of (i) the yield of the 3.25% U.S. Treasury Note due August 15,2007, plus (ii) a fixed spread of 50 basis points. In addition, holderswho validly tender and do not validly withdraw their Notes in the tender offerwill receive accrued and unpaid interest from the last interest payment date upto, but not including, the date of payment. In connection with the tenderoffer, we are soliciting consents to certain proposed amendments to eliminatesubstantially all of the restrictive covenants and certain events of default inthe Indenture and to modify the defeasance and certain other provisionscontained in the Indenture. We are offering to make a consent payment of $20per $1,000 of principal amount of the Notes (which is included in the totalconsideration described above) to holders who validly tender their Notes priorto the Consent Date. Holders who tender their Notes after the Consent Date willnot receive the consent payment. The tender offer is scheduled to expire on June 1,2005, unless otherwise extended or earlier terminated by us (the “ExpirationDate”). The tender offer is conditioned on, among other things, (i) therebeing validly tendered prior to the Expiration Date and not validly withdrawnat least a majority in aggregate principal amount of the Notes outstanding; (ii) thereceipt of consents of holders of at least a majority of the then aggregateoutstanding principal amount of the Notes with respect to, and execution of asupplemental indenture providing for, the proposed amendments to the Indenture;(iii) receipt by us on or prior to the Expiration Date of net proceedsfrom the Related Financing Transactions (as defined in the Offer to Purchaseand Consent Solicitation Statement) or other available sources of cash, in eachcase, on terms and conditions satisfactory to us and in an amount sufficient topay the aggregate total consideration payable pursuant to the tender offer,plus all fees and expenses related to the tender offer and the consentsolicitation; and (iv) the consummation of the proposed merger of EuramaxInternational with Emax Merger Sub, Inc., on or prior to the ExpirationDate.

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In October 2004, the American Jobs Creation Actof 2004 (the “Jobs Creation Act”) was signed into law. The Jobs Creation Actincludes a temporary incentive for U.S. multinationals to repatriate foreignearnings at an effective 5.25 percent tax rate. Such repatriations must occurin either an enterprise’s last tax year that began before the enactment date,or the first tax year that begins during the one-year period beginning on thedate of enactment. We are currently evaluating the details of the Jobs CreationAct and have not decided whether, and to what extent, we might repatriateforeign earnings under the Jobs Creation Act. However, it is reasonablypossible that we will repatriate some amount between $0 and $130 million during2005, with the respective tax liability ranging from $0 to $6.8 million.

Our leveraged financial position requires that asubstantial portion of our cash flow from operations be used to pay interest onthe senior subordinated notes, principal and interest under our senior securedcredit facility and other indebtedness. Significant increases in the floatinginterest rates on borrowings under our senior secured credit facility wouldresult in increased debt service requirements, which may reduce the fundsavailable for capital expenditures and other operational needs. In addition,our leveraged position may impede our ability to obtain financing in the futurefor working capital, capital expenditures and general corporate purposes.Further, our leveraged position may make us more vulnerable to economicdownturns, may limit our ability to withstand competitive pressures, and maylimit our ability to comply with restrictive financial covenants required underour senior secured credit facility.

Our primary source of liquidity is funds generatedfrom operations, which are supplemented by borrowings under our senior securedcredit facility. Net cash used in operating activities for the three months endedApril 1, 2005 and March 26, 2004 were $25.3 million and $25.0million, respectively. In addition to cash generated from earnings, keycomponents of our cash flow from operations are changes in our working capitalaccounts. The three months ended April 1, 2005 include a use of cashresulting from an increase in accounts receivable and inventories of $11.1million and $23.4 million, respectively. The three months ended March 26,2004 include a use of cash resulting from an increase in accounts receivableand inventories of $16.3 million and $14.8 million, respectively. Seediscussion of working capital management below.

Net cash used in investing activities increased to$17.6 million in the three months ended April 1, 2005, compared to $2.4million in the three months ended March 26, 2004. The three months ended April 1,2005 include a use of cash for the acquisition of Gutter Suppliers, Inc.of $13.6 million. The three months ended April 1, 2005 and March 26,2004 include a use of cash for capital expenditures of $4.0 million and $1.3million, respectively. See discussion of capital expenditures below.

Net cash provided by financing activities increased to$42.7 million for the three months ended April 1, 2005, compared to $9.1million for the three months ended March 26, 2004. During the three monthsended April 1, 2005 we borrowed $46.0 million under our revolving creditfacility, compared to $11.4 million in the three months ended March 26,2004. The borrowings in 2005 were primarily used to to acquire Gutter Suppliers, Inc.and to fund working capital needs. The borrowings in 2004 were primarily usedto fund working capital needs.

*Capital Expenditures.  *Ourcapital expenditures were $4.0 million and $1.3 million for the three monthsended April 1, 2005 and March 26, 2004, respectively. Capitalexpenditures in 2005 included approximately $0.5 million for improvements toour paintlines in Helena, Arkansas; Lancaster, Pennsylvania; Corby, England;and Roermond, The Netherlands; and approximately $1.0 million for severalprojects related to business expansion. Capital expenditures in 2004 includeapproximately $0.1 million for improvements to our paintlines and approximately$0.2 million for several projects related to business expansion. The balance ofcapital expenditures in both periods related to purchases and upgrades offabricating equipment, transportation and material moving equipment, and informationsystems.

We have made and will continue to make capitalexpenditures to comply with environmental laws. We estimate that ourenvironmental capital expenditures for 2005 will approximate $0.3 million.

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*Working Capital Management.  *Workingcapital was $186.7 million as of April 1, 2005, compared to $141.3 millionas of December 31, 2004. This increase in working capital is largelyattributable to higher accounts receivable and inventories, together with loweraccrued liabilities and other current liabilities as of April 1, 2005.These items were partially offset by higher accounts payable as of April 1,2005. Seasonal demands of the business, combined with higher selling prices andhigher raw materials costs, resulted in substantial increases from year end intrade accounts receivable, inventories and accounts payable.

Accounts receivable of $143.1 million as of April 1,2005, increased $11.8 million, from $131.3 million as of December 31,2004. As of April 1, 2005, days sales outstanding in accounts receivablewere 54 days, compared to 49 days as of December 31, 2004 and 64 days asof March 26, 2004.

Inventories of $170.8million as of April 1, 2005, increased $36.5 million, from $134.3 millionas of December 31, 2004. As of April 1, 2005, days sales in inventorieswere 75 days, compared to 66 days as of December 31, 2004 and 57 days asof March 26, 2004. The increase in inventories is primarily the result ofhigher aluminum, steel and copper prices, together with higher volumes of thesematerials in ending inventory.

**Environmental Matters**

Our exposure to environmental matters has not changedsignificantly from the year ended December 31, 2004. For detailedinformation regarding environmental matters, see “Management’s Discussion andAnalysis—Risk Management” set forth in our Annual Report on Form 10-Kfor the year ended December 31, 2004.

***Note Regarding Forward-LookingStatements:*  **The Management’s Discussion andAnalysis and other sections of this Form 10-Q may containforward-looking statements that are based on current expectations, estimatesand projections about the industries in which we operate, and management’sbeliefs and assumptions. Such forward-looking statements include terminologysuch as “may”, “will”, “should”, “expects”, “anticipates”, “intends”, “plans”, “believes”,“contemplates”, “projects”, “predicts”, “estimates”, or variations of suchwords and similar expressions regarding beliefs, plans, expectations orintentions regarding the future. Forward-looking statements in this reportinclude, but are not limited to: (1) statements regarding management’sexpectation that the outcome of legal proceedings and claims that have arisenin the ordinary course of business would not reasonably be expected to have amaterial adverse effect on our consolidated financial position, results ofoperations or cash flows; and (2) statements regarding management’s beliefthat our potential share of the estimated aggregate liability for the costs ofremedial actions and related costs and expenses at various hazardous wastedisposal sites in which we have been named as a defendant in lawsuits or as apotentially responsible party are not material and that the reasonably probableoutcome of these matters will not materially exceed established reserves andwill not have a material impact on our future financial position, net earningsor cash flows. These forward-looking statements are based on a number ofassumptions that could ultimately prove inaccurate, and, therefore, there canbe no assurance that they will prove to be accurate. All such forward-lookingstatements are subject to the safe harbor created by the Private SecuritiesLitigation Reform Act of 1995. Important factors that could cause futurefinancial performance to differ materially and significantly from past resultsand from those expressed or implied in this document include, withoutlimitation, the risks of acquisition of businesses (including limited knowledgeof the businesses acquired and misrepresentations by sellers), changes inbusiness strategy or development plans, the cyclical demand for our products,the supply and/or price of aluminum and other raw materials, currency exchangerate fluctuations, environmental regulations, availability of financing,competition, reliance on key management personnel, ability to manage growth,loss of customers, and a variety of other factors. For further information onthese and other risks, see the “Risk Factors” section of Item 1 of our AnnualReport on Form 10-K for the year ended December 31, 2004, aswell as our other filings with the Securities and Exchange Commission. We 

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assume noobligation to update publicly our forward-looking statements, whether as aresult of new information, future events or otherwise.

**Item 3.**                        Quantitativeand Qualitative Disclosures about Market Risk

The following discussionabout the Company’s risk management activities includes forward-lookingstatements that involve risk and uncertainties. Actual results could differmaterially from those projected in the forward-looking statement. See “NoteRegarding Forward Looking Statements” for additional information regarding thePrivate Securities Litigation Reform Act. The Company’s management of marketrisk from changes in interest rates, exchange rates and commodity prices hasnot changed from the year ended December 31, 2004. For detailedinformation regarding the Company’s risk management, see “Management’sDiscussion and Analysis—Risk Management” and “Item 7A. Quantitative andQualitative Disclosures about Market Risk” set forth in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2004.

**Interest Rate Risk**

This analysis presents the hypothetical increase ininterest expense and increase in other expense related to those financialinstruments and derivative instruments held by us at April 1, 2005, thatare sensitive to changes in interest rates. A hypothetical 10 percent increasein interest rates for one year on our variable rate financial instruments wouldincrease interest expense by approximately $0.7 million as calculated at April 1,2005, as compared to a hypothetical increase in interest expense ofapproximately $0.5 million as calculated at December 31, 2004.

A hypothetical 10 percentincrease in the interest rate spread for one year on our derivative instrumentswould have no affect on other expense at April 1, 2005, as compared to ahypothetical increase in other expense of $0.1 million as calculated at December 31,2004.

**Foreign Currency Exchange Risk**

This analysis presents the hypothetical increase inforeign exchange loss and increase in interest expense related to thosefinancial instruments and derivative instruments held by us at April 1,2005, that are sensitive to changes in foreign currency exchange risks. Ahypothetical 10 percent increase in the British Pound compared to the U.S.Dollar would increase our foreign exchange loss by approximately $3.7 millionas calculated at April 1, 2005, compared to a hypothetical increase inforeign exchange loss of approximately $3.9 million as calculated at December 31,2004. A hypothetical 10 percent increase in the Euro compared to the U.S.Dollar would increase our foreign exchange loss by approximately $3.9 millionas calculated at April 1, 2005, compared to a hypothetical increase inforeign exchange loss of approximately $4.1 million as calculated at December 31,2004.

All other factorsremaining unchanged, a hypothetical 10 percent increase in foreign currencyexchange rates for one year would increase interest expense by approximately$0.4 million as calculated at April 1, 2005 and December 31, 2004,for those financial instruments and derivative instruments affected by foreigncurrency exchange fluctuations.

**Item 4.**                        Controlsand Procedures

As of April 1, 2005,based upon an evaluation of the effectiveness of the design and operation ofthe Company’s disclosure controls and procedures, the Company’s Chief ExecutiveOfficer and the Company’s Chief Financial Officer concluded that as of theevaluation date, the Company’s disclosure controls and procedures (1) areeffective in timely alerting them to material information relating to theCompany (including its consolidated subsidiaries) required to be included inthe Company’s reports that it files or submits under the Securities andExchange Act of 1934 (the “Exchange Act”) and (2) are adequate to 

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ensurethat information required to be disclosed by the Company in the reports filedor submitted by the Company under the Exchange Act is recorded, processed andsummarized and reported within the time periods specified in the SEC’s rules andforms. Further, there were no changes in the Company’s internal controls overfinancial reporting identified in connection with that evaluation that occurredduring the quarter ended April 1, 2005, that have materially affected, orwould be reasonably likely to materially affect, the Company’s internal controlover financial reporting.

**Part II—Other Information**

**Item 6. Exhibits**

Exhibits:

The exhibits listed in the Exhibit Indeximmediately preceding the exhibits are filed or incorporated by reference aspart of this Quarterly Report on Form 10-Q.

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**SIGNATURES**

**Pursuantto the requirements of Section 13 or 15(d) of the Securities andExchange Act of 1934, Euramax International, Inc. has duly caused thisreport to be signed on its behalf by the undersigned, thereunto dulyauthorized.**

**EURAMAX INTERNATIONAL,INC.**
|                       | **Signature** | ** **                                       | ** ** | ** **        | **Title** | ** ** | ** ** | ** ** | **Date** | ** ** |
|-----------------------|---------------|--------------------------------------------------|------------|-------------------|-----------|------------|------------|------------|----------|------------|
| /s/  J. DAVID SMITH   |          | Chairman, Chief  Executive Officer and President |       | May 16, 2005 |
| J. David Smith        |          |                                             |       |              |
| /s/  R. SCOTT VANSANT |          | Chief Financial Officer  and Secretary           |       | May 16, 2005 |
| R. Scott Vansant      |          |                                             |       |              |

 

 

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**Exhibit Index**
| Exhibit Number | ** ** | **Description** |
|----------------|------------|-----------------|
|           | 2.3        |            |   | Agreement and Plan of Merger among Euramax  International, Inc., GSCP Emax Acquisition, LLC and Emax Merger  Sub, Inc. dated April 12, 2005 (Incorporated by reference to the  Exhibit with the same number in Euramax International, Inc.’s  Current Report on Form 8-K dated April 18, 2005.) |
|           | 3.1        |            |   | Certificate of  Incorporation of Euramax International, Inc. (Incorporated by reference  to the Exhibit with the same number in Euramax International, Inc.’s  Registrations Statement on Form S-4 (Reg. No. 333-05978) which  became effective on February 7, 1997.) |
|           | 3.2        |            |   | Bylaws of Euramax  International, Inc. (Incorporated by reference to the Exhibit with  the same number in Euramax International, Inc.’s Registration Statement  on Form S-4 (Ref. No. 333-05978) which became effective on  February 7, 1997.) |
|           | 4.1        |            |   | Supplemental Indenture,  dated as of March 31, 2005, among Euramax International, Inc.,  Gutter Acquisition, Inc., Euramax International Holdings B.V. and  JPMorgan Chase Bank, N.A., as trustee, to the Indenture, dated as of  August 6, 2003 (Incorporated by reference to the Exhibit with the  same number in Euramax International, Inc.’s Current Report on  Form 8-K dated April 6, 2005.) |
|           | 31.1       |            |   | Certification of Chief  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002. |
|           | 31.2       |            |   | Certification of Chief  Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002. |
|           | 32.1       |            |   | Certification of Chief  Executive Officer pursuant to 18 U.S.C. Section 1350. |
|           | 32.2       |            |   | Certification of Chief  Financial Officer pursuant to 18 U.S.C. Section 1350. |

 

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